Mike Michalowicz is the Founder of Profit First Professionals and Obsidian Launch. He is the author of Profit First, Fix This Next, The Toilet Paper Entrepreneur, Clockwork, Surge, and The Pumpkin Plan. By his 35th birthday, Mike had founded and sold two companies, one to private equity and the other to a Fortune 500 company. He is currently running his third multimillion dollar venture.
Mike is also a prolific speaker and author, and he was also a former small business columnist for The Wall Street Journal and a former business makeover specialist on MSNBC. Over the years, he has travelled the globe speaking to thousands of entrepreneurs.
In this episode, Mike Michalowicz talks about his new book, Fix This Next, the lessons he has learned along his entrepreneurial journey, and what his business hierarchy of needs model is all about.
Here’s a Glimpse of What You’ll Hear:
- Mike Michalowicz discusses his new book, Fix This Next, and why it’s such a timely publication
- What is the survival trap and what is Mike’s illustrative model of looking at a crisis?
- The business hierarchy of needs vs the Maslow hierarchy of needs
- Mike shares his experiences and learnings in the course of his entrepreneurial journey
- Mike’s advice to fellow entrepreneurs on how to handle unique business challenges
- What businesses struggling with sales should do to cope
- Mike talks about the legacy piece at the top of the business hierarchy of needs and shares a case story of an entrepreneur in Guatemala
Resources Mentioned:
- Profit First Professionals
- Profit First
- Mike Michalowicz on LinkedIn
- Mike Michalowicz’s website
- John Corcoran’s Previous Interview with Mike Michalowicz
- Fix This Next
- The Toilet Paper Entrepreneur
- Clockwork
- Surge
- The Pumpkin Plan
- Michael Port , Public Speaker
- Heroic Public Speaking
- Entrepreneurs’ Organization (EO) San Francisco
- Robert Half international
- Ecofiltro
Sponsor: Rise25
Today’s episode is sponsored by Rise25 Media, where our mission is to connect you with your best referral partners, clients, and strategic partners. We do this through our done for you business podcast solution and content marketing.
Along with my business partner Dr. Jeremy Weisz, we have over 18 years of experience with B2B podcasting, which is one of the best things you can do for your business and you personally.
If you do it right, a podcast is like a “Swiss Army Knife” – it is a tool that accomplishes many things at once. It can and will lead to great ROI, great clients, referrals, strategic partnerships, and more. It is networking and business development; and it is personal and professional development which doubles as content marketing.
A podcast is the highest and best use of your time and will save you time by connecting you to higher caliber people to uplevel your network.
To learn more, go to Rise25.com or email us at [email protected].
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Check out Rise25 to learn more about our done-for-you lead generation and done-for-you podcast services.
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Episode Transcript
Intro 0:14
Welcome to the smart business revolution podcast where we ask today’s most successful entrepreneurs to share the tools and strategies they use to build relationships and connections to grow their revenue. Now, your host for the revolution. John Corcoran.
John Corcoran 0:40
All right. Welcome everyone. John Corcoran. Here. I’m the host of the smart business revolution podcast where I talk with CEOs founders and entrepreneurs of companies and organizations like YPO eo Activision Blizzard lending tree Open Table x offer many, many more, also the co founder of rise25, where we help connect b2b business owners to their ideal prospects and I’m excited today because my guest is Mike mccalla Wits He’s the author of profit first clockwork serves the pumpkin plan. We interviewed him previously on this podcast. He’s back again to talk about his newest release fix this. Next by his 35th birthday, Mike had founded and sold two companies, one to private equity and other to a fortune 500 company. And today he’s running his third multimillion dollar venture profit first professionals. He’s also a prolific speaker and author, former small business columnist for The Wall Street Journal, and former business makeover specialist on msnbc. And over the years, he’s traveled the globe speaking to thousands of entrepreneurs and he’s here today to share the best of what he’s learned. But first before we get to that, this episode is brought to you by rise25 media which I co founded with my business partner, Dr. Jeremy Weiss, and our mission is to connect you with your best referral partners and customers and we do that through our done for you podcast solution. I firmly believe that you have a business you should have a podcast every company can be a media production company these days and easier than it’s ever been before. It’s one of the best things I’ve ever done hands down since I founded my business and allows me to pick The brain of smart people like Mike here today, so I really enjoyed doing it and it’s one of the best things ever so I highly recommend it if you want to learn more, go to rise25media.com and we can talk all about it. Alright, so as I mentioned, my guest is Mike Michalowicz and Mike before I, we get into it here. I also want to acknowledge our mutual friend Michael Port who originally introduced us years ago, portpublicspeaking.com go check it out. If you want to become a better speaker. They moved actually only to a referral only business model that’s how in demand they are, which is amazing. Yeah. But I did want to give him a little bit of a shout out. I’m also active in eo San Francisco and eo organizations a huge fan of your work. I’m sure they’ll be a fan of your work with this work as well. But what better time you know this is April 2020. We recording this. You know the Coronavirus crisis pandemic is unfolding at the moment. And what better time to come out with a book on the topic of what to fix next, because I talked to so many business owners and so many right now are just a little bit overwhelmed with all the different Things to focus on so Nice timing. I know you didn’t intend it
Mike Michalowicz 3:03
that way. Yeah, the planting the virus was my, you know, painful moment.
John Corcoran 3:08
Yeah, I know, some some video of you and Wuhan, China like
Mike Michalowicz 3:14
you know, it’s ironic it I think this book will be of great service. It’s sad though I’d rather that we’re not experiencing this. They’re just an article broke this this morning that says this. This is the grace unemployment rate we’ve ever experienced since the Great Depression in the 1930s getting worse. So, you know, we are in for some difficult times. And small business owners The irony john is small business owner just got punched in the face got bloody nose were beat up. And the world in the same breath is saying, but you need to save us now because the backbone of the economy is us. So it’s difficult. It’s crazy. And I hope my book is of service because this is why I wrote it for this today.
John Corcoran 3:52
Right in a no it’s it’s hard for someone who’s not a business owner to understand this but I am so glad to be a business owner at this time. Yeah, it’s gonna be scary. But you know, you really diversify your risk that way because yeah, you might lose one client to client, three clients, but you’re never gonna lose 100% at once or rarely does that happen, right? Sometimes some industries? Yes, absolutely. But you can pivot then you can switch to another industry. So, but the topic your book is really what to fix and in what order and how to prioritize these things. And that is such a hard topic to tackle. So let’s start with how did you how do you even write a book on the topic of what to fix? in what order? It’s gonna be applicable to a lot of different businesses?
Mike Michalowicz 4:38
Yeah, so I found there’s a common phenomena or challenge we have is I call it the survival trap. But we’re brothers about the first thing is I emailed my readership and this is about five years ago, takes me about five years to write a book. And I like to do is ask my readership. What’s your biggest challenge? Because I wanted to, you know, the research to it. And it was interesting cuz I sent out multiple requests in the same day. And people responded the same people john responded with different answers on the same day, my biggest challenge is this in the same response and a new big challenge the same day. My conclusion is the biggest challenge entrepreneurs have is knowing what their biggest challenge is. Yeah, that became the thesis. And first it was, what’s the cause, and we’ve come to call is the survival trap. And you can do it in your head, or you can do it a piece of paper. But basically, the illustration is this, you draw the letter A, in the center of a piece of paper and you draw a circle around it. And that A is representative of where we are in this moment. Exactly the crisis we’re experiencing the challenge or whatever. Step two is you draw an arrow away from a so from a going out in any direction you choose. And with an arrow represents is the way out of crisis. But now also step to draw another arrow from a out in a different direction because that’s another alternative path out of crisis. You can continue this you can do it five or six times you do 100 times. Third step is now draw a B in the bottom left corner of that paper. And chances are, you drew very few hours or maybe no arrows and direction of B, yet B represents the vital need your business has. So with this model illustrates is that when we are looking at crisis alone, any decision we make that gets us out of it gives us immediate relief. The problem is it moves us to the next day, the next crisis, there’s only one path one direction you take that gets us out of crisis, a challenge we’re having an mus is consistently with where the business needs to go. So we really need to consider that point B and evaluate what we need to do before we start solving all the the list of problems that we are presented with every day. Which one is the one thing that we need to do most. That was the premise of the book and the understanding of the problem entrepreneurs have then I researched out the process to find that need. And what I concluded was ultimately what I’ve called the business hierarchy of needs. I’ve concluded that the DNA or the makeup of all business is about 99.9%. The same, similar to humanity. Like if you and me were saying as each other people could differentiate us by our height or weight, or our, our accent or our skin color, but if you peel back our skin, the biological makeup of you and me and all of humanity is basically identical. There’s a reason if if I was having like a heart attack or something, and I go to the doctor to hospital, the doctor won’t say, Hey, where do you keep your heart? Is it in your foot? You know, where’s your story?
It’s always in the same spot. So that the triage process the healing process, the medical process is always the same. When you know the disease. Well, we need to pinpoint the disease and the beautiful thing is the inherent makeup if you peel back the skin of businesses, if you will, is identical. And so I created this business Hargrave needs and Real quickly, it translates or it’s similar to what’s called Maslow’s hierarchy of needs with one distinct and critical difference. So quick primer, Mazda, Mazda studying human needs, finds that the base need for all of humanity is physiological needs oxygen, air, you know, water, food, and those needs must be satisfied first. Once those are satisfied, we can elevate and address higher level needs like safety, protection from harm and shelter. And it goes up to belonging which is community goes all the way to self actualization. But he argued that anytime a high level need is not being met, we will automatically in biologically revert to satisfying the base that’s being compromised. So if you and I are talking now and people are listening in, you can consider as maybe self actualization it’s very intellectual stuff. You may be comprehending How do you apply this to your business? But if if I’m eating a hamburger while we’re talking here, and all of a sudden, a piece of junk a burger gets caught in my throat, my biological response is to reverse to immediately start coughing to try to expel that blockage from my air passageway. That’s how we work. Now the business Hierarchy of Needs is similar that if a base level needs not being satisfied, the business will start to choke or, or suffocate. The problem is, and the great distinction here is in our own personal needs, we are biologically and neurologically wired into our mass lobbying hierarchy of needs. I know, you know, instinctually if you’re choking, you know, if you’re walking down a dark alley, and you get frightened or this feeling that there’s me harm thrust upon you, you better turn around because it’s likely you will experience harm, because we are wired instinctually but we’re not instinctually wired into our business, we are not biologically or neurologically wired. Therefore, trusting our gut becomes very dangerous. Yet that is the default protocol for myself for four decades. And for so many business owners that I studied, is that we say well, my gut says, I need more sales, or right now as we’re experiencing COVID. The gut instinct is I need loans. I gotta borrow money. But we’re not investigating the empirical data behind that. If my guess is I need money, I need a loan, there’s clearly something not working properly my business that’s triggering that need, that maybe I should focus my attention on the resolution of that challenge, before I consider a bridge or a gap or bridging the gap or Band Aid with a loan. So just real quick, and I know I’m kind of soapboxing here. So I want to make sure that I’m no,
John Corcoran 10:25
it’s great. It’s great overview. Yeah, and I think a lot of people are familiar with the Maslow’s hierarchy of needs and the ideas behind it. So it’s a great analogy, I think for business owners. Good but continue.
Mike Michalowicz 10:36
Yeah. Well, thank you. Thank you. So the translation into the business needs is it’s a five level model. Similar to Mazda. Again, we’re not biologically wired. So there’s certain empirical data or questions we need to ask ourselves. There’s simple the base level for all business is sales. Sales is the creation of cash for an organization. No sales, no oxygen, so equates to oxygen. And if you don’t have any sales, of course, As your business is suffocating Amelie above that is profit profit is the creation of stability. It’s actually at these first two levels, john, that business owners already get confused on their instinct. many business owners think that need to sell our way out of circumstance, when actually profitability is being compromised organizational stability, and therefore we need profit. So, for example, you know, we’re experiencing challenges with COVID. Now, my business is losing clients, I need to sell fast as the response. But the question actually is, what is the challenge the business experiencing? Are we experiencing financial instability? Or do we have no sales? Well, we have some sales, we’re just not retaining enough cash. Well, that actually may start translating into a profit problem. We actually may be better served by cutting the associate cost with the sales we’ve lost to bring us back to shore to profitability first, and then revert to sales. So how the hierarchy needs works is we always start at the base, which is sales and say Do we have an adequate space To support the level above it, kind of building a structure? Well, if we want to build a five kind of level structure, and the base is the foundation, you don’t put the first floor on top of a small foundation because it will collapse. But you don’t do the reverse either. Like you don’t build this massive foundation for a skyscraper and put a tool shed above it, and it falls within it. And that’s actually what we see. I see businesses trying to ramp up sales hit bigger and bigger sales numbers, but they’re actually putting more stress on the organization, because sales is obligation to deliver on those promises. They don’t have financial stability, but there’s no profit. So one thing goes wrong. One project cancels, they’re in the cashflow game now that business is folding. So it works relationally the other three levels I’ll see real quickly is level of profit is order order is organizational efficiency. It’s where the business does not have dependency on the owner to carry the business on the back. It’s where there’s linchpin redundancy, that the business is designed to operate as an efficient machine on itself. And there is no No dependency on individuals, its dependency on the collective. The level above that’s called impact impacted the creation of transformation. This is where businesses are not focusing on the transaction. It’s focusing on the transformation that transaction provides. This is where we start shifting people’s lives of being of service example I use Harley Davidson. Anyone can sell a motorcycle, you buy a Harley Davidson, you now belong to a family. You’re a weekend warrior, you may get the tattoo on your shoulder, but you belong to someone that’s significant shift in someone’s life beyond the acquisition of a motorcycle, the highest the final level is called legacy legacies, the creation of permanence. And as I researched out this, this was probably the biggest revelation I’ve had, in that when a business is targeting and serving legacy. This is the day the business owner discovers they were in fact, never a business owner. They were a business steward, that they’ve given life to something independent of them. It’s actually about that business, it’s about the it, the business itself, for it to live on, and to be of service going forward. It’s not about the owner themselves. So that’s the hierarchy.
John Corcoran 14:09
Wow. And so it seems like what you’re saying is you need to first think through each of these five pieces. And then that will help you to prioritize which problem you need to go after next, once you write that you need to have each of these foundational pieces in order. That makes sense.
Mike Michalowicz 14:30
That’s exactly right. And you always start at the Foundation, just like Moore’s law. You know, there’s businesses that say, I want to change the world not for profits are known for this, I want to be of such service and change the world. And we focused on the impact level, but there’s no consideration for sales or profit, meaning contributions or maintenance of the company’s fiscal health. When the business collapses on itself. These great ideas, flounder and fall, because it’s this we will build it and they will come mentality and Sadly, many for profit businesses. Could be relabeled as not for profit business.
John Corcoran 15:03
Certainly, yeah, that’s for sure. Tell me a little bit about, you know, in the context of COVID, what we’re dealing with right now and all the different companies, I want to take a step backwards and ask about your personal experience, particularly the different businesses that you’ve run over the years. Did you have anything? You know, most people are saying that there’s nothing analogous to this, and certainly, it’s seeming like this is the biggest thing since the Great Depression. 911 something, you know, did you go through other types of Rocky periods that were maybe not quite rising to the level of this, but something similar?
Mike Michalowicz 15:38
Yeah, yeah. So you know, I’ve been an entrepreneur since 96. my entire adult life, and I my my one business in 2001. I found there’s there’s a common trend in these situations, there’s a trigger event. So 2001 was the terrorist attacks. a.com bubble 2008 you know, the Great Recession they called it that was the housing collapse? Now it’s COVID. So there’s a trigger event. And I remember in 2000 was it 2008? Or I’m sorry, 2001. In 2001, when as my business was struggling, I 30 employees, I was in computer crime investigation. And I told my staff I had 30 people I told, I think was about 12 or 13 people that we had to lay them off as return before the word furlough exists, and furlough and layoff and firing the the executions all the same, there’s different terms. So I laid off these 12 employees. And I says, I have to do stuff to be fiscally responsible to the business. You know, I think that was the right move was painful, letting go people that trusted me and I trusted them. How
Unknown Speaker 16:46
long was it after 911 that you had to make that decision?
Mike Michalowicz 16:49
Oh, it was maybe six months later. It was it was pretty quick. I wasn’t it wasn’t immediate, but it’s pretty quick, huh? And then I made the grand mistake. I told them Meaning 18 people, I said, we still have to deliver on the same volume of work because our work wasn’t changing by said, what the cast was changing, meaning clients weren’t paying as quickly and stretching. So I said, I need you to continue to deliver this level of work. And I need to take on the work for these people that we just let go. And I’m going to cut your salary by 10%. Because I need to say, and that was the mistake, I asked more of my remaining colleagues. And as a thank you I cut their salaries, in retrospect, I should have done is made the tough decision to lay off two or three more people and then used some of those freed up proceeds to actually pay more to the people that was retaining a small booster shot.
John Corcoran 17:40
That’s a really interesting strategy that actually I’m hearing about businesses are doing exactly what you did that are laying off people and cutting people’s salaries and saying they have to deliver on the same so that’s an interesting approach.
Mike Michalowicz 17:53
Yeah, well, here’s how it played out. Those employees that I just told I’m doing this to be fiscally responsible said Not out loud but in themselves they said no, you’re not you just cut my you, you cut my salary, you’re not being fiscally responsible because you’re cutting me. So they all started looking for alternative jobs. And as jobs opened up, I started to lose key person after key person it was a fatal mistake hmm so better to keep their pay the same or to increase it and to cut a couple more people that that’s what my experience indicate. Yeah, yeah.
Unknown Speaker 18:25
Yeah.
Mike Michalowicz 18:26
What ended up happening with that company? I sold it to a fortune 500 but it wasn’t like this. I didn’t get the grant. I got a nice exit. I mean, it was a multi million exit, but it could have been a much bigger multiple. And it was because I compromise the fiscal integrity of the company and I lost key people I sold it later on Robert Half international was our acquire and the the valuation was reduced because you they do what’s called a recast, they analyze your historical, not your numbers and the numbers. Don’t lie. No, we compromise profitability. We were we lost key people. And while our revenue was continuing to increase, we couldn’t sustain the profitability. And so that that hurt us.
John Corcoran 19:11
Mm hmm. And so how do you approach this challenge now? Because you are speaker and author, but you also have your businesses as well. Yeah, continue to run. So how do you know going into this? What’s your advice for other business owners how to handle the challenge, this unique challenge?
Mike Michalowicz 19:30
So, you know, the business argue of needs is what we rely on. And what’s interesting. I think it was maybe unique about me to some degree as an author is, when I started writing, I start researching and testing the concepts on our own business. So we implemented the bH and the business Harkey of needs, starting about four years ago actively actually have a right above my desk right now. And it simply became a point for consideration. Say all these things are happening rapid fire, we look at it and You know, when we have a challenge, like there’s a decrease in some revenue, we evaluate what’s the cause. And the trigger point and the trigger point for us is simply prospects, that people are no longer inquiring about our core offering. So then what we did is a survey and I think this is a real simple step, every business can still do, and maybe should have done. We started five weeks ago, we surveyed our client list and said, How can we serve you in this new world order so to speak, and the feedback was actually not at all we expected. I thought it’d be more about you know, give me some more business tools. Give me more strategies about my business. Number one piece of feedback we got is my confidence is shaken. I need confidence. How do I get confidence? How we said okay, so we started the confidence course, we did a rapid development, we rolled out a beta product and an hour in full roll out this week, to serve as that and we’ve been packaging new ways, stuff we haven’t done before. So it’s a cost point which is reasonable for what our clients need. But as acquire, they can acquire it, they can they can benefit from it and won’t put them out significant amounts of money. But it’s also responsible back to us. Because I think I think the mistake that I have made I see business owners making now to is the other extreme. They’re still in business for the moment. And they say, this is my responsibility to give. And listen, we all have responsibility to give and serve, but not to the compromise of the stability of our business. So just to care for others and not yourself means at a certain point, you’re going to exhaust your business. And I see I’m seeing some businesses already floundering to be giving and sustaining and they’re going out of business. So we have a responsibility to do both to care for our customers in the way they need to be cared now, but also still maintain that currency that there has to be a way for you to generate sales from that and that translates to profitable Cuz that’s the only way we can sustain. So that’s that’s how we’re adjusting
John Corcoran 22:03
right right now for the companies that are out there that are listening to this. And you’ve outlined here the mccalla lewis’s hierarchy of needs. I don’t think you’re calling it that. But I’m calling it that. Because it makes sense.
Unknown Speaker 22:14
Yeah, that will never make it but thank you.
John Corcoran 22:16
Yeah, isn’t quite the same ring as Maslow’s. But I’ve also
Unknown Speaker 22:20
got a little bit of ring. Exactly.
John Corcoran 22:24
But, you know, for those who are listening to this, that that foundational piece of sales is obviously one that every business struggles with in good times and bad, yes. Let’s talk a little bit more about that for those businesses in particular that are struggling in this COVID-19 world that we live in because a lot of people are asking, should I be reducing my prices should I put some kind of inexpensive offering out there I did a LinkedIn live earlier today with my my friend, Kevin Waldron. And that was one of the questions that we got was from someone saying should I have a lot less expensive offering that I put out there? Should I be pivoting and going into a new field, your thoughts on Sam Yeah, so
Mike Michalowicz 23:00
I do have thought I, I feel that we have to do business as usual in unusual circumstances. And what I mean is, our core competency needs to remain. But we need to deliver it in a new packaging. That’s the unusual circumstances. You know, if you’re a business coach, and now you see the opportunity is making masks, that transition is going to be tough or impossible, and you get run over by other people that already versed in that skill set. So the question is, how do we continue to coaching but delivered a new way, the technique we use, we evaluate, we did this to value all of our offerings. We call it the one step back process. It’s a real interesting way to develop new products rapidly. Here’s how it works. I’ll give an example of a restaurant because restaurants are so affected right now is the end product or two final deliverables where you start. So the final deliverable at a restaurant is placing food on the table so the patron can eat it. We simply asked ourselves what happens one step back from that and when happens once that prior is the carry the food’s carried to the table or delivered to the table. Therefore carry out or delivery is a easy option. And some restaurants or many restaurants are doing this. I do see restaurants Oh, amplify it and that’s where the real opportunity is, with one restaurant in our neighborhood teamed up with a food delivery truck. And the restaurant is packing the food, putting the truck and they’re now delivering to neighborhoods. And so basically the the restaurants become a kitchen and the delivery outlet is the food truck. great partnership, great collaboration. But we continues one step back process. So what happens one step prior to carrying food to the table? Well one step prior to the restaurant is the chef prepares the food. Well there’s an opportunity there. Why not? record videos of us prepare 10 most popular meals and include the recipe. sell that to customers. Why not sell them a cooking class where your chef is at the restaurant and now you have families or communities joining in on a live cooking class to prepare your 10 or 15 most popular meals. The beautiful thing is, hopefully you know your patron list to some degree you’ve been collecting email so you can communicate and offer them. So they get to retain that core competency that they’re your favorite meals. Now you’re delivering to them. Well, what happens one step prior to that was the procurement of raw materials, they inventory, meats and vegetables and so forth. Why not procure that divvy it up, if you can still acquire it. And now you become basically a Blue Apron competitor, but for your local market, then what happens one step before that. So the idea is, you keep on taking one step back, and the end prize we deliver is really a combination of many products along the way. So now we can extrapolate those many products and make that our main offering to satisfy the new, unusual circumstances.
John Corcoran 25:46
I love that I love that, you know, it totally makes sense to not completely pivot into something completely new. But you know what I find maybe you find the same thing is that a lot of times, business owners have been doing things a certain way you have kind of blinders on. And they can’t see those possibilities. They can’t see a different mechanism of delivery, but leveraging the same knowledge and expertise that they have, beyond placing that food on the table in the restaurant the way that they’ve been doing it, as long as they have, as you see that as well,
Mike Michalowicz 26:17
it’s Yeah, of course, it is tough. We are all victims of our habits and established behaviors, myself included, are in particular, so it’s hard for me to break out of it. So that’s why we use these tools. And we typically if we can do it in group, and so if you have a team of employees, you can do to your employees. If If you have contemporaries through organizations like eo or something, this is what your forum should be discussing is is brainstorms around this, but I will tell you, if you have access to none of that there is one superior tool that all of us have access to. And it’s our our existing client list. So there’s some businesses, john, they’re saying we’re out of business, and we have nothing and I’m like, well, you may not be getting sales, but you ain’t business, you have that client list of yours. Let’s email them and simply ask them the easiest question ever. How can we serve you now? Your needs have changed, we’re available for you. Just tell us how we can serve you. And what you’ll find is customers tell you, that’s why when we surveyed our database, we were surprised we got responses we didn’t consider I didn’t think about the confidence, the need for confidence, and we’ve been able to respond accordingly. I think every business should do that.
John Corcoran 27:28
That’s a great one. I I’ve interviewed you before we’ve talked about the profitability piece, I want to we’re running, you know, kind of short on time here, but I want to ask about the top of the pyramid, the legacy piece, and I just want to get your further thoughts on that, you know, the title that chapter sparking your companies forever legacy. You know, give some give some some context around that one.
Mike Michalowicz 27:50
Yeah. So I’ll give you a story around it. The objective or legacy and it’s not necessarily for everyone you know, this the very top of the pyramid is choice. Legacy is where you you leave a business behind to continue the purpose has been serving with the intention of it continue on forever. It’s where the business is, is ultimately more significant than you are your contribution to as a business owner. The story is this guy in Guatemala City who I met as I was researching this about four years ago. His name’s Phil Wilson, he’s an expat moved to Guatemala City, and that’s his country. He loves his people, and his country and Guatemala has a very poor population on the outskirts of the city. And he wanted to be a service to them. Well, he created a product it’s called eco Phil tro and what they do is they make these pots, where you pour contaminated water into it or clay pots infused with silver. They take out the bacteria and he created as a sustainable business. He sells it to the population and has a model where it is a very profitable business. Well, the poor population. He says simply seven installment plans they Pay over time. But if you’re living in the poor areas of Guatemala, you make probably $1 a day us equivalent. And with that money, you have just enough money to buy somewhat enough wood to burn for the day, we used to boil your water because the water is written with bacteria. And now you have safe drinking water. So it is a hand to mouth survival and in the epitome of the definition. Well, what Philip did was he sells these pots, which cost about $24. So you’re going to take a month’s pay to get it but slowly over time, he’ll he’ll give you a six months, you know, program where you paying, you know, 20 cents a day or something so you can eke it out. But the power is this. When you get one of these pots, you can pour water into it and you don’t need to buy firewood anymore. So now you’re paying 10 or 20 cents a day. But you’re grossing $1, you’re making 80 cents, which is not big, but it is now forward momentum. So you’re starting to increase your wealth. You’re getting one or two, that’s better. But here’s, here’s where his legacies And he didn’t even know was coming. There was a community a pollution study that was occurring. It’s a global study, they run satellites that called Philip and said, We want to interview you around your pots. And he’s like, What are you talking about? Well, they’re running these satellites over Guatemala, and they noticed that the pollution was dropping almost exponentially, the air quality was improving. And they said, We sent out a ground force to figure out what the hell’s going on in Guatemala. And they said, we found that people are not burning wood anymore. They’re using your pots. You’ve improved not just their financial situation, you’ve improved the quality of the air. And that’s legacy. Philip isn’t the business is running on its own. Philip is Ken and Elton will leave. But this is started such momentum. It ain’t going anywhere. This is a movement that started out a mile and hopefully becomes a global phenomena. But that’s what legacy is about.
John Corcoran 30:57
I love that. That’s so great. Mike thanks so much for coming on the show a second time I always enjoyed talking to you we’ve been talking course on Mike Michalowicz you can google it if you can figure out how to spell it. Am I ch AE l o? w i t z. I believe I didn’t screw it up
Mike Michalowicz 31:14
pretty closely with a Cz but I’ll give you a shot.
Unknown Speaker 31:17
See shortly right.
Mike Michalowicz 31:18
So my nickname in high school was Mike motorbike as in the motorcycle. I never driven one by the way. So that was my nickname because it rhymed. But if you go to Mikemotorcycle.com because it’s my site. All the tools and resources are there for free. That’s smart. That’s smart. Fix this next make the vital change that will level up your business. Did I get that one? Right? You know that?
John Corcoran 31:39
Okay, that perfect. Okay, the last name, it’ll probably take me a third interview with you in order to get that right. But hopefully eventually, Mike. Thanks so much,
Unknown Speaker 31:47
john. Thank you, brother.
Outro 31:48
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