Andrew: Hey, everyone. My name is Andrew Warner, I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses.
I have this passion, I guess you should say, for infomercials. I want to admit that up front. I as a kid used to watch infomercials for hours and fantasize about having my own infomercial. As an adult we don’t have a TV in the house, but if Olivia and I are ever away and there happens to be a TV, if it’s on, I’m not watching a movie. Olivia will more likely than not find me maybe in bed in a hotel room watching an infomercial and then another and another and another.
The reason that I love it is, these guys will find products that I have no interest in. If I did, I just go freaking to Amazon and I buy it already. I have no interest in the products, I don’t need anything. I’m in a vacation place and still they’re so good at capturing my attention. They’re still good at finding people like me out in the world who have no interest in buying or else they’d be online, looking for it. They have no interest in buying and they convert us, and they get us to buy.
And so forever I’ve just been amazed by that. Don’t take me to see the ballet. I mean, I’ll sit next to Olivia and watch the ballet. Don’t take me to see that, that’s not performance for me. That doesn’t amaze me. What amazes me is people who are selling, who can get me and get others to pay attention and get them to buy.
All right. So why am I saying all this? Because today I’ve got with me Michael Alden. He is the founder of a company called Blue Vase, Blue Vase Marketing. We’re going to find out why the name is called Blue Vase in this interview. And he markets a bunch of different things, including, let’s see, dietary supplements, testosterone pills, stuff like that. He does it through his company anyway largely through infomercials. And I’m freaking fascinated by how he does it. And I want to understand it more.
And so I invited him here to talk about how he built his business and also to talk about his book. I’ve got an early copy. This is not, if you guys go buy this in the store, it’s not going to look like this, but it’s “Blueprint to Business.” And actually, this is an early copy, right?
Michael: Yeah, it’s an advanced reader’s copy.
Andrew: Yeah. You sent me one before it was published, and I got your autograph right there. And it’s called “Blueprint to Business.” An entrepreneur’s guide to taking action, committing to the grind, and doing the things that most people won’t.”
This interview was sponsored by two companies. The first helps me book guests and helps me close sales, it’s called Pipedrive. And the second will help you get a beautiful design. I’ll tell you about the designs I’ve got from them. It’s called DesignCrowd. Not just one design, they’ll get you dozens, hundreds of designs and then you pick the one that you want. But I’ll tell you more about them later.
For now, Michael, good to have you here.
Michael: Thanks you so much for having me. Really, really appreciate it.
Andrew: Did you grow up also loving infomercials?
Michael: No, I don’t think so. You know, my story of getting involved in the infomercial world is kind of crazy. You know, it’s just . . .
Andrew: What was it then? Did you step into it?
Michael: Yeah, yeah.
Andrew: But I’m surprised that you didn’t have that fascination that I did. You know, since we’re going back in time a little bit, my childhood was spent in Jamaica states watching infomercials largely dreaming of one day getting to be an entrepreneur. Yours was in Beverly. Where is this Beverly? And what was it like to grow up there? Because I think this gives us a sense of what you’re like.
Michael: Sure, so I grew up in Beverly, Mass. I’m actually I’m sitting here right now, it’s where my office is, Beverly, Mass. is just north of Boston. The town that abuts it is Salem, Mass. The Salem Witch trials, right? And so everyone’s heard of that.
Beverly is a great place, it’s a very diverse place. You have the places like where I grew up which was in the projects in Beverly. And then you have uber were wealthy people as well. In fact, Beverly Hills was founded from a guy from Beverly, Massachusetts. So it was a very, very interesting way to grow up. And again, we talked about this early, I mean, I grew up surrounded by crime, drugs and violence. My mother’s HIV positive. My stepfather died of AIDS. One of my brothers did two years in prison for distribution of crack.
Andrew: Wait, wait, hang on a second. Your mom is HIV positive?
Michael: Yeah. She was tested positive in 1987.
Andrew: This is at the height of the freak out before things were . . . do you remember when she told you she was HIV positive?
Michael: Yeah, yeah, I’m getting chills just thinking about. She didn’t tell me, I read her diary. That’s how I found out.
Andrew: Wow. And then what did you think at that point where people were not looking to touch or even get close to gay people on the off chance that they might have HIV, AIDS?
Michael: Yeah, it was crazy, man. Because, yeah, I mean, I remember back then it was like . . . so my mother is HIV positive, my stepfather had AIDS, he was a drug addict, my mother wasn’t. She had no idea.
Andrew: She just had sex with him and as a result to that got . . . oh, man.
Michael: Yeah, it’s horrible. And, yeah, I mean, it was a weird time to grow up because you were like literally like a leper. And then it got out, right? And then I got out and then people knew. And by the way, my brother was born, one of my brothers was born right around the same time. So there was an issue or there was always a concern of whether or not he was HIV positive, right?
Andrew: Wow. Was he?
Michael: No. Thankfully. So he grew up kind of with that stigma so to speak. And my mother, a lot of people, you can go one of two ways, right? You can just curl up in a ball and call it a day and just be upset with the cards you are dealt, or you can go out and try and make change. And that’s exactly what my mother did. She got involved with the organization called AIDS Action. I believe they’re national, but there was what is called AIDS Action North. Met a lot of great people. Most of them were gay men, because of the time. That’s what everybody thought, right?
But she met a lot of great people, she went out, she started speaking. In fact, so then I get to high school and she’s speaking at high schools. And no one in my high school knew. And so someone I knew from a couple towns over approached me, this is pre-cellphone and anything of that stuff, and he’s like, “Man, I saw your mom speak.” And I was like, “All right, now people know.”
Andrew: They distanced themselves from you because they thought maybe you had AIDS or anything?
Michael: No, I don’t think so. No, I mean, they definitely distanced themselves from my mother and even my brother, because there was that rumor that he might have had it.
And me growing up in that household, man, it was wild because I guess I’m borderline OCD now with like germs and stuff. Because your toothbrush or if she got cut or I mean, tears, like everything.
So like I was always even aware of it. And we would have conversations like, “Hey, look, if you’re cut like, what am I supposed to do? Like, what do I do in that situation?” And so it was really, really, really difficult.
But I tell you man, she’s an inspiration. I mean, to this day she’s tested negative a few times. Thankfully. If you’ve seen the movie “Dallas Buyers Club” and about . . . thankfully she didn’t go on AZT. And one of her closest friends is a guy named David Denes, an antique dealer from Salem, Mass, he was a very, very smart guy. He said, “Don’t do it, don’t go on it.” And thankfully she didn’t because that stuff was so toxic it was actually killing people faster than it was actually making them better.
And so she did go on cocktails throughout the years on different things. She was trying a couple of different things. And it’s pretty much kept her alive to date. And she’s 65 right now and she’s just like any other 65-year-old, I guess.
Andrew: That’s amazing. That’s amazing. At the time people thought that no one could recover from it. There was a kid, he was just a boy who wanted to go to grade school, people didn’t want him to go to their school just in case something would happen because no one was sure where it came from or how it happened. Like you said, even watch out for tears because we’re not sure if that’s where you can get HIV.
So that kind of gives me a sense of why you and your mom back then were going trash picking which is what you told our producer. And one day when you went trash picking. And again, this gives us a sense of who you are, and we’ll go into how you started this business in a moment. But trash picking one day you walk through and you find a lawnmower, a junky lawnmower. And what did you do about it?
Michael: Yeah. So growing up poor, man, it’s almost a gift. Again, this all depends on how you approach it, right? So growing up poor I didn’t want to be poor anymore. And so I was always trying to figure out ways . . . and by the way, sometimes those ways were not legal, okay?
Andrew: Like what?
Michael: Like I’d steal shit at a local K-Mart or something or whatever, if I wanted a G.I. Joe, I’d steal it. I mean, that’s the way we grew up. If we wanted a baseball card, we’d steal and just stupid shit like that. But, at the same time, I also valued hard work and money. And the only way I was getting money, I wasn’t robbing a bank. So I needed to figure out a way to get money. So, yes, we would go trash picking all the time.
And we got this lawnmower. And I’m not mechanically inclined even to this day, but this lawnmower, it kind of ran. I played with it, fixed it up a little bit, got the carburetor to work and actually had my next-door neighbor help me a little bit more. I went out and bought a blade, the blade was about $13, I think for the blade, which was even expensive back then. And then I just literally . . . when I grew up in the projects, a couple of neighborhoods over, I felt as though they were the rich people, but they were just middle class. And I would just find them and say, “Hey, look, I’d love to mow your lawn.” You know, 10 bucks, 15 bucks, whatever it is. And that kind of like turned into something where I had a steady . . . I mean, I had maybe five to eight clients, you know, that I would more their lawn every week.
And then I started to even like expand on that where I’d buy hedge clippers. And I bought a weed whacker. And the weed whacker, I thought it was so cool just to have a weed whacker, it’s just loud and it was fun to have. But I started adding value to them and then earning a living. I didn’t buy another lawnmower, my next-door neighbor who helped me actually gave me a beat-up lawnmower and he helped fix it up. So now I had two.
And then so it was just kind of a thing that I did. And the one part I didn’t tell your producers, then other kids in the neighborhood started seeing what I was doing. So then I had competition as well. But it was a lot of fun. And it was something that I needed to do. If I wanted to buy something, I needed to figure out a way to earn money. And that’s how it got started.
Andrew: I see. And you had enough clients because your neighborhood was close enough to that nice part of town that you could go over to them, sell to them and then come home bring the money to your neighborhood.
Andrew: I just imagine like that kid, that teenager who was trash picking, looking where you are right now, seeing how far you’ve come. I looked you up to see what kind of revenue numbers I could get for you. You were in Inc. a few years ago. And Inc. Magazine said that 2014 revenue was 11.7 million for Blue Vase Marketing. I’ve got that number right, right?
Michael: Yeah. But here’s the interesting thing about Inc. So that’s just one company. And so with Inc. in order for you to get on the Inc. list you have to be in business for at least three years and in that first year you have to have at least $100,000 in revenue, okay?
And so we’ve done close to probably now over 300 million total in sales. And so in my business and when we set up the businesses, and we talked a little bit about it as well, Blue Vase is like an umbrella, so to speak, or a professional employment organization, where when I build another business, when I create a new product or a new dietary supplement or whatever it is, we form a new LLC for that, for a whole host of reasons, right?
Andrew: And it’s under the Blue Vase Marketing umbrella.
Michael: Right. So when you look at the Inc. list it says 11 million, but that year was, you said 2014?
Andrew: That was 2014 revenue, yes.
Michael: In 2014 we probably did closer to $50 million total. But Blue Vase, that’s what Blue Vase did. Yeah.
Andrew: So what are the different businesses?
Michael: Okay, so I’m an attorney by trade. And so from an intellectual property standpoint and from just straight up asset protection standpoint, there are certain things that most businesses don’t pay attention to that I pay attention to.
So when we create a new marketing campaign or a new product for a whole host of reasons, including one of the other things which we have done before, which is packaging something so that you can sell it, right? So now I have the single standalone LLC with its own bank accounts, with its own merchant account, with its own intellectual property and I grow that under Blue Vase. And if I want to sell that, I can sell just that.
Andrew: Just that. But what are these products that each of these LLCs own? I’m trying to get a sense of it. It seems like the dietary supplement business, that’s its own business, what’s that called?
Michael: So I have a network marketing company called CloiXonné, where we have independent distributors all over the country that represent our products and services. But for instance, I’ll give you one, so our first host was called Arthri-D, okay? It’s a joint health supplement. There’s a million joint health supplements out there.
We sat down, I interviewed a gentleman who had been taking essentially this product before. And we had a conversation about it. And he tells his story about how he was in pain. And then that product is Arthri-D LLC, right? And that business has probably sold over a $100 million worth of just that product.
We have another one, we had a book called “The Health Club Diet,” which was a diet plan. So I have Health Club Diet LLC. Generated a bunch of money with that one as well. So that’s kind of how it works.
Andrew: I see. And so last year, 2016, actually, we’re close enough to the end of this year, 2017. Where are you guys going to be in revenue?
Michael: This year, it’s been interesting. The past, I want to say the past 18 months, the world is changing as it relates to infomercials. I think you mentioned you have children, right?
Michael: Yeah, yeah. So my daughter, I have a daughter, she’s 11, and kids now that are being born today, that big 50, 60-inch rectangular thing that’s on your wall, they’re not even going to know what that is because they’re consuming the media in different places.
My daughter watches Netflix and YouTube on her phone. Television is not that important. So in the world of direct response in infomercials, it’s becoming increasingly even more difficult to run infomercials.
So the past 18 months our revenue has dipped, and we will probably end up around only about $25 million this year. But it was a conscious decision because with CloiXonné we talk about that or not. With CloiXonné, which is this network marketing division, we saw there was a need for that, for a lot of people that want to work from home. And we have all these great products and services and all this great intellectual property as well that can be brought online. And people could leverage our intellectual property in order to grow their brand.
So infomercials, if you do them right, they can still be a great thing.
Andrew: I see. You’re saying though revenues dipped largely because infomercials are going down. Meanwhile, the multi-level marketing business, CloiXonné is picking up. But it hasn’t over taken any other business. Let me ask you this, you’re generating millions in sales, your profits are, what? Over 5 million, 4 million a year?
Michael: It’s funny. I was on another show. And someone said to me, “How much profit do you make?” And I’m embarrassed to admit this, but I’m going to do it anyway. I don’t look at profit. People say, “What do you mean? How can you not look at profit?” This is how I look at it. I grew up with nothing, okay? And we built a great company. And I have a lot of great things. I just built a beautiful house in Beverly, Massachusetts, in a private neighborhood in the same town in which I grew up in the projects, okay? I have a group of people that have been with me since day one that have bought houses and gone places and built families and made a lot of money with our business.
So when I look at profit, I look at how much I can pay myself really. And if I want to go . . . for instance, my house, right? I don’t want to . . .
Andrew: I guess what I’m trying to figure out is, you’re doing a lot of work here, do you get to take money out of it other than your house?
Michael: Yes. So that’s the point.
Andrew: What do you put the money in? Is it sitting in a bank account somewhere, or as a lawyer have you found some clever way to protect it from taxes? Tell me, be open. I see you’re smiling because you know what I’m looking for.
Michael: Yeah. So for me as far as like where the money goes, for me, whenever there is a significant amount of money that comes in, it usually goes back into the business. And so for instance, like CloiXonné, that’s a separate business. That took a lot of money to build.
Andrew: So you take it from the other businesses, you put in CloiXonne.
Michael: Right. And by the way, a lot of times things don’t work. So I launched the vodka, right? And that’s actually doing okay. But that cost a bunch of money. I launched a daily fantasy sports company that cost me about $500,000, gone.
Andrew: What about when you sell? You said you set it up as different LLCs makes it easier for you to sell it. Have you sold one and then gotten to pay capital gains tax as opposed to income tax on it?
Michael: No, I mean, the only thing actually that I’ve really sold, and actually the ink isn’t dry yet, is I also own an escape room, are you familiar with the escape rooms?
Andrew: Yeah. You solve a puzzle with a bunch of friends and if you do, then you get out, is that what it is?
Michael: Yeah. And so it’s not a huge amount of money there. I’ve been offered . . . one deal we had, Arthri-D, when we first started, okay? We were doing tons of revenue. I was spending $600,000 a week in media, right? We were rocking and rolling. And we had a deal for $20 million to buy it, to buy Arthri-D in the very beginning.
And we’re like, “All right, let’s do it.” And so they said, “Okay, we had an agreement principle.” And then we go, we sit down, and we meet with the CEO, we’re in Vegas, and they bring us in this big hotel and blah, blah, blah. And they sit us down and say, “Look, we can’t do 20.” And I said, “Well, what do you mean you can’t do 20? That’s the deal we had, it was $20 million.”
Now, I kind of had a partner in that deal too. And he said, “Oh, well, we can only do eight.” And then my partner, he’s all about the money at the time, and I’m like, “Well, I’m not doing eight. This doesn’t make sense to me.”
And they said, “Yeah, and not only that, eight, but we also want,” this when the profit comes into play, “we also want to fund it by the revenues that are coming in from Arthri-D.” And I said, “What kind of fucking . . .” I swear a lot by the way, I don’t make all, “What kind of a deal is that? Are you kidding me?” So I walked away from it.
Andrew: I see. So basically what you’re saying is, “Hey, Andrew, look, every dollar that comes in it’s either going into like taking us out, which is a nice seller, but not a huge salary, and I get to buy a house in a nice neighborhood and live my life the way that I’ve dreamt of.” Or, “It goes into me reinvesting it in a business and developing these other assets.” Each one of these assets is its own LLC, which means I could at some point sell it in the future. I haven’t sold it yet, partially because sometimes when you try to sell people are jerks because they are trying to take advantage of a sale. And I’ve seen that.
All right. I get where you are. I get now the picture of how you did it. What I want to understand is how does this guy, well, I’m looking at your head shot, your team is right, you should change this headshot, you look good. You look like someone I would want to invest money in. I hope . . . maybe we should just keep this head shot to put on the site. You’ve got a nice cropped hair cut. You’re wearing a suit and tie. It does not look like the guy I’m looking at right now. The guy I’m looking at right now . . .
Michael: Yeah, well, that guy’s the lawyer. I’m a lawyer too, so, I mean . . .
Andrew: A guy that looks like that became a lawyer, ends up in this kind of bad ass look that you have right now creating this set of companies. And I also want to understand like, how do you feel about being in the dietary supplement and the multi-level marketing business?
Why don’t we take a moment though and talk about my sponsors? Do you know DesignCrowd?
Michael: I don’t. But I’m going to write it down as soon as you say it.
Andrew: You really should. This is freaking amazing. Here’s the deal with DesignCrowd, you tell them what you’re looking for, like, let’s say you need a new homepage, you need a new cover for . . . well, your book has a really nice cover, so you don’t need it. But I needed a logo to give people who went through one of our trainings, so they could have a certified logo to put on their website. I needed a new cover art for my podcast.
Any time you need a design for anything, small, big, whatever, you go to them, you explain what you’re looking for. And then these hundreds of designers could potentially come in and start creating their version of what you’re looking for. You end up with, no kidding, I don’t think I’ve ever gotten less than 100 designs, fewer than 100 designs back.
And then you start to see, “This guy’s taking it in a different direction than I expected. I kind of like that.” So you give them positive feedback. And that fires them up and they create more, and other people see that they like it. You see someone doing something stupid, like someone took one of our logos and adjusted it and made it look ugly. So I gave him feedback, I gave him one star. And I said, “Don’t mess with my logo, just add my logo to this new certified professional logo that I want.”
And it takes a little while to explain things when you go back and forth. But it’s super easy. I get fired up with excitement when I see people re-imagine my vision and give me this design that I never thought I would want. And I also get fired up in a negative way when I see someone create a pretty crappy design. I give them feedback either way.
They go back and adjust it, you get 100, sometimes hundreds of different designs. You pick the one you want. You pay for that and boom, you’re good to go.
Now, why would a guy like me or a guy like you, you are a producer, I imagine you have a designer on the team, right?
Michael: Yeah, yeah. But as you’re talking, I’m not sure. I mean, it’s possible we have used them before. The CloiXonné logo was developed that exact way.
Andrew: Which one was?
Michael: CloiXonné, the logo was designed in very similar . . . it might even be, I don’t know, I mean, I have an entire [inaudible 00:21:08] division.
Andrew: You know what? There are a couple of different companies that do this. I tried the other companies too. The reason that I like DesignCrowd is the number of designs that I get back. I like the feedback mechanism for giving them feedback. I like the quality, it’s so much better and a reasonable price.
Michael: I think we did use them and it sounds, the way you’re describing it, it sounds . . . yeah.
Andrew: I wouldn’t be surprised. And the reason that I use them even though I have a designer and Jose is freakingtastic, he’s working on new stuff for us and I love it, is because Jose will give me one perspective. A lot of times what I want is multiple perspectives. And then I could continue to work with the designer and iterate. So if he gives me a home page design I could pay for that home page design. And of course not pay for the others because I only pay for the one that I like, but I also continue to work with the designer if I want to get more designs. Maybe I want a landing page, maybe I want another customer service page, whatever it is.
So, if you’re out there and you’re listening to me, really, go check out DesignCrowd. Look, I’ll be honest with you guys, I took money from them when they were sponsoring, and I knew that they were good because my friends had use them, but I hadn’t used them. Go back and listen to my early ads, they’re good but they don’t have this kind of heart and enthusiasm.
Then I, one evening, used them, I just made a really loud noise with my hands, one day I used them, I couldn’t freaking stop talking about it. I started talking about it with friends. I started like doing a podcast on the street telling people about DesignCrowd.
And so once you experience it you will feel the same kind of excitement that I do right now. Go check them out at designcrowd.com/mixergy, it’s important to put that mixergy at the end because I get credit. But frankly you don’t care about giving me credit. So I’ll tell you what’s in it for you. If you put that /mixergy at the end of the URL you’re going to save up to 100 bucks.
So go to designcrowd.com/mixergy, get any of your designs done beautifully. Hundreds of people, hundreds of designs will often come back to you. All right, and only pay for the one you want, and it is guaranteed, designcrowd.com/mixergy.
All right. So, how’d you end up being a lawyer? Considering that you had hustles, considering that you knew how to start businesses, why did you end up being a lawyer?
Michael: You know, it’s funny. I always knew I wanted to be a lawyer. In fact, I remember, in like in second grade when you write down what you want to be. I wrote down lawyer. But I didn’t even know what a lawyer was. And the only reason probably why I did know what a lawyer was is because the police would be in my neighborhood so often and I probably heard the term and they probably spoke about these lawyers in high regard. So fortunately I played football, so I was able to get into college. I graduated high school with a C minus grade point average. But I was decent at football. So I was able to get into college, play college football. And then I did really well in college and well enough to get into law school.
When I graduated college, I was still poor and everything. So I wanted to work a little bit. Started working a little bit and then I applied to law school. And like anything else in my life it was difficult because I graduated with a 3.0 GPA. That’s like okay. And then I took the LSAT exam. And the LSAT exam is the exam that you need to get into law school. And I scored in the low 30th percentile, twice.
And I said, “You know, man, fuck, my life is over. I’m not going to get into law school.” And then I did anything I possibly could. I reached out to everyone that I knew who knew . . . I didn’t know lawyers, I reached out to everyone I possibly could that had any sort of connections. And I said, “Look, I want to go to law school. Can you help me? Will you write me a letter of recommendation?” And they did.
And then I got to the point where the law school I ultimately went to which is Suffolk, I got an interview with one of the deans, which they don’t do in law school. They don’t interview you, it doesn’t happen. There’s a couple of law schools that do it, but most don’t.
And I got in to a couple other law schools. And I’ll never forget, you’ll like this story actually, I was on my front lawn because we had moved by then, moved out of the projects, in this little kind of a summery type cottage place in Danvers, Mass. And it was the summertime and there was a product on television called Mega Speed Reading, an infomercial product.
Andrew: I remember it, yes.
Michael: That I bought because I knew that I was going to go law school, so I needed to figure out how to learn quickly.
Andrew: I bought that too, yes. They even sent you two novels with that.
Michael: Howard Berg was the guy, right?
Michael: And I got a phone call from Suffolk and from the guy who actually did interview me who was the dean. And he said, “Look, we have a spot for you.” It’s nights and it’s the only spot. And it was a Friday. And by the way, I’d already accepted to a law school in Connecticut. And he says, “You need to make a decision right now. What do you want to do?” And so I said, “All right, let’s do it.” And so I called up the other law school. I had lost the $1500 deposit which is a huge amount of money then.
And then I went to Suffolk. And I loved every moment of it. I graduated with honors. I graduate top of my class. And here I am today.
Andrew: You know, I got to take a moment to talk about Howard Berg for a second. He did have that speed reading course. I think he was handed a book [inaudible 00:25:55] and then he was tested, right?
Michael: By Kevin Trudeau, by the way.
Andrew: Kevin Trudeau, right. The guy who I think might be in jail right now.
Michael: He’s in jail right now and I have tons of Kevin Trudeau stories, if you want to hear them.
Andrew: You know what, let’s take a moment. I do want to. I could geek out on this for a second but here’s the thing. Howard Berg goes in, he does this thing, I buy the books. It’s the same speed reading course, same material that I heard forever. And I still could never speed read.
Michael: Mega Speed Reading.
Andrew: And, you know what? Even though the infomercial product didn’t work for me, when I heard that he was available through the Learning Annex in L.A. which is where I was living at some period, I went to watch him in person. This guy comes in, looks a little bit schlubby and fun. Teaches the same stuff that didn’t work for me and all these other ways that I learned it. And still, I wasn’t to like shocked by that, but what shocked me was several times during this Learning Annex program he puts out these CDs that he made at home to sell it and tells us, “I’m not making that much with the Learning Annex, that’s why I’m trying to get you guys to buy these CDs.”
Like, I thought you were a hero, you’re on TV. You know how to sell this stuff. You have magic powers of reading. If a guy who could read a lot still can’t make it so big that he doesn’t have to like sell these homemade CDs. If a guy who is on an infomercial still can’t do it, what kind of lie have I bought into?
Andrew: He was a guy who did the memory course, where he basically took all these memory books and he turned them into a CD or tape collection. He sold it on television and then he ended up with this book about health and then a bunch of other stuff and he ended up, I forget why in jail. Tell me how do you know him and what would he know about him?
Michael: Man. So, all right. So, I’ll back up to . . . let’s see. So, I’ll back up into like 2000, okay? I had a business, I talk about it in my book, I declare bankruptcy, I was broke. But I was also in law school, okay? And I needed a job. And I had heard that there was a call center in Beverly that people were making a lot of money. A friend of mine was working there and she was like killing it.
And I said, “Well, if you’re making that kind of . . .” She was making 1300 bucks a week, to be exact. And I said, “If you’re making that kind of money, I’ll triple it.” I mean, I sold cars right out of college, I was a recruiter, I had a sales background, I’m in law school, like I can sell ice to Eskimos.
And I go into this place and it was literally like a boiler room like you see on television, what have you, there were people on the ankle bracelet in this place, but the phones are just ringing like you wouldn’t believe. It was like being in Vegas, you know.
And I go in and I interview. And the guy says to me . . . I’m in a job interview, I’m in a suit, I’m in law school. Guy says, “We don’t have room for you here. We just can’t hire you.” But I’m broke. I need money bad.
So I go around this guy and I go to the customer service department. I go to the customer service department and I get that guy to hire me. He hires me, and I start killing it in customer service. By the way, that infomercial, one that was [inaudible 00:28:47] was for a product called coral calcium which was Kevin Trudeau. Kevin Trudeau was the host. And he was interviewing this guy named Bob Barefoot.
So that’s kind of how like I started out in the infomercial world. When I started out in customer service, one day they needed help in sales because that’s where I wanted to be anyway. I go over to sales, I made 500 bucks in like an hour. I called up my manager and I said, “Listen, I’m not coming back to customer service anymore.”
Grew it out there, did really well and became essentially a sales manager. All the while I’m in law school, okay? And this is where the story starts to get interesting. And my boss at the time, his name was Donald Barret, he approaches me and says, “Look, we’re going to need a lawyer.” This is great. I’d Love to. He says, “When you pass, come see me.”
Well I didn’t pass the bar exam the first time. And that was a problem because I was like, “Man, I got a job now.” And it was like the greatest thing ever. But I didn’t pass.
Second time around I smoked it, passed it, no problem. The day, they hired me, the day I started with this company they were sued by the FTC, the FDA right behind them, the IRS, then the Department of Justice, criminal charges came after that. That’s how I learned this business. So literally from call center, customer service, to sales, now I’m this in-house lawyer, they get sued.
When I was telling the guys I went to law school with, they couldn’t believe it. I mean, I have friends that went to Harvard, MIT, Cornell, and they’re like, “Wait a minute, you’re in federal court like defending a $54 million . . .?” Like, “How did that happen?”
Andrew: Like how did that happen so fast.
Michael: And so, I get chills just thinking about it. It was an amazing journey. And so as far as Trudeau was concerned, my boss was just infatuated with Trudeau. Trudeau was from around here, from Lynn, Mass, which is a couple of towns over. And Trudeau was just a legend in the infomercial world, right? The problem is that Trudeau doesn’t know the difference between true and false. And he’s truly the definition of a narcissistic sociopath. And so he didn’t care about anybody else. He only cared about himself and he only cared about just generating revenue and making money.
Andrew: What do you mean? How did that express itself when you were working with him?
Michael: What do you mean?
Andrew: When you say, “He didn’t care about anyone but himself.” Was he walking around the office telling people, “Just do what I say”?
Michael: Oh, yeah, yeah. I mean, yeah, basically, I mean, he only cared about himself. And what I mean by that is he’d be willing to put forth an advertisement, which ultimately ended up in jail, knowing that it was just straight up not true. And he didn’t care because it was generating millions of dollars.
Andrew: And that was the attitude internally, “We don’t care, just go with it.”
Michael: No, no. That was his mentality. And so what happened was Trudeau and how we kind of got involved with Trudeau is, my boss, my old boss, bought out Kevin Trudeau, okay? And I was the lawyer at the time when this whole thing happened. But I did everything I possibly could to stop it. Everything I could do to stop it.
Michael: Because I knew Trudeau. And I knew Trudeau like most of everything he said wasn’t true. If he was speaking, he was lying, okay?
And I just knew it wasn’t a good thing. My boss didn’t care. We actually went to Chicago where Trudeau lives, we’re actually at the Ritz in Chicago, he had a condo there. Oprah Winfrey is literally his neighbor. And the guy was making tons of money. We buy him out and that’s how we essentially got involved with Trudeau.
And it was for me, again as a lawyer, crazy because I knew it was not a good deal. And by the way, the company I’m talking about had already been sued by the FTC, the FDA was all over them, and the IRS was all over them, the Department of Justice was all over them.
Andrew: And now they take this other mess in addition to it. Why would they, you are saying that they took this other mess, but why were all these government agencies going after them?
Michael: Because, again, when I mentioned this infomercial called Coral Calcium, right? In the very beginning back in the early 2000s, the claims they were making on television were just beyond the unsubstantiated claims, they were just crazy.
Now, at the time my boss was 28 years old, the classic like story where he was running the business out of his parent’s garage. It went from zero to like $80 million, like really fast, okay? He grew up in this working-class town. He didn’t go to college. And so, I have to kind of like give him a little bit of slack saying, “Shit, you probably should have had a lawyer take a look at some of these claims before you put it up on television.” But he didn’t really care and by then it was already too late. Like it was already out there. And once it’s out there, it’s out there.
Andrew: And then you build up the whole infrastructure people around it. When you say you do sales, I understand customer service, what kind of sales are you doing where you can actually generate more money because of your phone call? I thought all these things were, you call up customer service, customer service . . . I mean, you call up the 800 number, you buy it. They might do an upsell that the guy on TV introduced you to. But that’s it. What other sales are there?
Michael: It’s great that you say that because a lot of people actually in my industry don’t do this. And we had to do this out of necessity here at Blue Vase in the very beginning. Even my old company didn’t do this.
So look, we generate thousands of phone calls sometimes a day. And my database has over 10 million phone numbers, right? And so when you’re building this database and you’re building these customers you can sell them a product and then just be done with it and hope that they call back. Or, you can develop a rapport with them, reach out to them, try and sell them other products, cross-sell other products.
A lot of times what happens is they’ll buy a three-month supply and then they’ll just never buy again just because maybe they forgot. And so, what can you do with that? Well I have an entire outbound division as well. They call the customers and say, “Hey, look, Mr. Smith, I know that you ordered from us three months ago. We’re running a special, would you be interested? Yes or no.” And that’s really kind of how you do it. I mean, if you’re not maximizing your database you’re doing yourself a disservice and it’s crazy how much money you can actually generate by just being more efficient.
Andrew: I see. And so that’s what you were doing. And that’s why you started rising up in the organization because you can actually get on those calls, make those sales. You then got involved with some of the FTC and the IRS issues that the company that you worked for had. You guys end up buying Kevin Trudeau’s company. And so you do some of the legal work there. At what point do you say to yourself, “It’s time for me to go off on my own. I’m ready.”
Michael: It’s a great story. So about 2008, so this lawsuit kind of came to a head with the old company, the company’s name was ITV, by the way.
Andrew: What was it called? ITV?
Michael: ITV. Yeah. And it was 2008. And so I went to them, there were two bosses actually, there were two guys. There was one who was kind of like a silent partner. And I went to them both and I said, “Look, here’s the deal. I’m going to start my own thing. Are you guys okay with it?” I was the lawyer. Now, you got to just think about this for a second, and I tell the story all the time, “You’ve got the FTC, the FDA, the IRS, state AGs and the Department of Justice all going on and it’s at this exact time.” And then I say, “I’m out and I’m starting my own thing.”
It was a very, very precarious move and a very, very kind of difficult move to make. But I knew that I wasn’t going to go to Boston and make the kind of money I was making. I mean, I was making $250,000 a year. And I went from nothing just to a decent law school making more money than my friends that went to Harvard because of what I had done. I mean, by the way, from 2004 to 2008 or 2009 when the company ultimately collapsed, this company ITV, they didn’t have really, they had a few but, hardly any legal challenges during that time, because I was all over it. I made sure I cleaned things up really, really, really well.
And so then I said, “Look, I’m going to start my own thing.” And I had them sign releases and the whole thing. And by the way, I licensed stuff from them too which was a crazy move.
Andrew: How do you license stuff from them when you’re still working for them? You licensed some of their intellectual property or you bought some of their intellectual property?
Michael: Yeah, so no, I walked away. So I walked away as their lawyer. And on the way out I said, “Look, you guys, the business is over. And so I can do two things for you. One, I can do a better job than you.” I told both of them that. “I think I can do a better job than both of you. But the business is essentially done. And so why don’t you license me some of the stuff. I’ll buy it from you.”
Andrew: Wait a minute. You were saying their business is done?
Michael: Their business was done, it was over. They were done.
Andrew: It was over.
Michael: They were done, it was over.
Andrew: I thought when you said you cleared up all the government issues that you meant they were fine and they were . . .
Michael: No, no.
Andrew: The government finished them.
Michael: Oh, the government, yeah, they came to a $54 million judgment. One of my bosses got a year.
Andrew: A year in prison.
Michael: Yeah, I mean, it wasn’t prison, it was jail.
Andrew: You’re seeing all this stuff, you’ve seen Kevin Trudeau who you think is a liar, right? You’ve seen people around you sell stuff that they don’t believe it. You’ve seen your bosses, your company go under because of not just one government agency that you say is a little over aggressive, but multiple and you still say to yourself, “I’m going to get into this business.”
Michael: You know why? It’s because then I fell in love with it, right? And I knew I could do a better job. It goes back to the day when I was, you know, mowing lawns or selling lemonade or shoveling or whatever. I knew I could do a better job. One of the things that I tell people about this, I’ve had people say, “Well, stay away from the ITV stuff, don’t talk about Trudeau or all these other things.” Because that was negative.
And yeah, there’s a lot of negative things. But here’s the one thing that I learned, I learned what not to do. And so there was a lot of great things that they did do. There were a lot of great people. In fact, some of those people are here with me today and they work for me today. And I said, “Look, I can do a better job and I can improve on it and I can be compliant.” You know what I mean? So when I go back to when you were talking about money, like my boss drove a Rolls Royce and he had like six cars. And he had a million-dollar boat. He had all this other stuff. I’ve done way more revenue than him, okay? And way more even “profitable.”
Here’s how I know, because if I were to go do that, if I were to go buy a Rolls Royce, which I could, the company would be paying for it, and it would just be stupid. And I saw that my old boss was millions of dollars in debt. I’ve been a few million dollars in debt before but at the end they were like $25 million in debt plus they had a judgment hanging over their head. Plus he was going to jail.
But at the same time I said, “Man, I can do a better job. I love this business.” And I also . . . the people that were working for us, at the very end, when it was really over, I mean, it was essentially me at this other company. Look, we had 400 employees at this company ITV. I was the one that brought all of them together and told them that it’s over. My bosses were out on their fucking jet skis and just living in just like this La-La Land because they thought there were going to be fine. I was the one that did that. And so they respected me, I respected them, and I loved the . . .
The dietary supplement where you talked about, I was taking ginseng when I was 14 years old playing football. I was taking supplements before anybody even really knew what they were. So I’ve loved the dietary supplement world. And I knew that I could just, again, do a better job, be more compliant, and continue to grow. So when we talk about profitability and things like that, I just know that I’ve built a great life for myself and for other people.
Andrew: I’m doing research as we’re talking about them. The guy who ran the company is done Donald Barrett?
Michael: Barrett. Donald Barrett.
Andrew: Donald Barrett. He ended up suing the government back because he said that the FTC was violating his First Amendment rights by taking [crosstalk 00:39:47].
Michael: Which by the way, my name is on that lawsuit.
Andrew: It was. Okay.
Michael: I actually filed that.
Andrew: He pled guilty to failing to report income and selling the product touted as a disease preventative without approval from the FDA. He was sentenced, I guess, in 2011 to one-year probation including three months in a community corrections center and another three months of house arrest.
At the end of that, did he end up with cash? Do you believe that he ended up at least a millionaire?
Andrew: Wow, man.
Okay, so you get into this space . . .
Michael: I’ll tell you why, because he bought a bunch of stupid shit. You know what I mean? He would spend money like you and I breathe oxygen. And so here’s one of the great valuable lessons that I learned, just because you’re doing millions of dollars in revenue, doesn’t mean it’s yours. You know what I mean? It doesn’t mean that you can put it in your bank account and you can buy Rolls Royce’s and Rolexes and houses and boats and all these other things, it doesn’t make sense.
Now, look, it’s easy to stretch that out because if you buy a . . . by the way, the Rolls-Royce were $6,500 a month, they didn’t buy it in cash, right? So if you want to drive a Rolls Royce, Tim Ferriss talks about this. You want to buy a Ferrari? You figure it out, it 2500 bucks a month, if that’s what you really want to do. But you’re on the hook for 250 grand.
So that was the type of stuff that these guys were doing. So at the very end, man, they had no fucking money man. And it was really sad. Again, a great lesson for me. And the life that . . .
Andrew: Okay, you decided, “I’m going to start off doing something different.” Why don’t we take a moment to talk about my sponsor and then we’ll start back with what you did differently? By the way, I’m still like looking through legal paperwork to confirm. What I love about the government is at least all the paperwork from lawsuits are public. What I don’t like about this case is, I’m not kidding you, as you’re talking I’m finding the court cases, I see 30 different PDFs linking to . . . this is a mess. I’m surprised that you were . . .
Michael: Oh, it was a huge . . . I mean, it went on for five years. We fought for five years.
Andrew: Okay. All right. Here’s my sponsor, it’s a company called Pipedrive. I feel like your business does not need Pipedrive, I’m going to be honest with you, it’s not for everyone. The reason your business doesn’t need it is you don’t do a lot of one on one sales. If you do, if you guys are out there listening to me and you do one on one sales, Pipedrive is going to organize your sales process. And then allow you to bring in other people so that you guys could all collaborate to close sales.
Here’s what I did, here’s how I used it most recently. We started this business where we sell chatbot services. We’re finding that a lot of businesses want to have chat bots, especially on Facebook Messenger. And we have a group of people who can build it for them.
So we sent out emails to our list and we sent them to a landing page. And I’ll be honest with you Michael, we got zero sales. Not a single sale. And when we went back and asked people, because I could see who clicked over, and I’m pretty open, I emailed them, and I said, “I saw you clicked over. You didn’t buy and frankly nobody bought. Can you give me feedback about why?”
And it turned out people had a lot of questions. This isn’t like an easy thing where it’s buy one product, and everyone gets the same, it’s very customized. And so they had a lot of questions.
So I said, “You know what? Let’s bring in someone on the team who’s going to do sales calls and instead of sending people to a landing page where they buy, we’ll send them to a page where they could request a free consultation with, frankly, a salesperson.” So people were requesting it. And then she was overwhelmed, like, how many calls did she make a week? I don’t know. Some days I imagine she was overwhelmed, she was making 10. Other days I know that she might have been like not sure what to do and made zero. I had no visibility into it.
Number one, number two, what was her next process if someone didn’t want to buy? What does she do? If someone did buy, where does it go? There wasn’t an organized way.
So I said, “Wait a minute.” I hesitated to bring Pipedrive into this new sales process because they’re my sponsor. And I didn’t want people on my team to think that I was just promoting my sponsor. But shame on me. They work.
I said, “Listen, we all have to use Pipedrive now for this whole process.” In an automatic way, any time someone requests a consultation, not only do we send them to a calendar to book with her, but we automatically take their name and add it to the first column in Pipedrive with their email address, with what they’re looking for.
She immediately gets an alert that says, “Hey, this person wants to talk to you and they booked this date.” She immediately knows he has a card in Pipedrive on the left most column. What does she do next? Well, the column to the right of that says exactly what you should do, which is follow up via email and then after on the call, what do you do? Everything is laid out in Pipedrive. It’s all very visual. I’m actually, like you guys don’t see it because most people will not watch this video. But I’m like doing this with my fingers and showing Michael how this whole process works. It’s very visual.
You should not be listening to me talk about it. You should be trying it in your business. I promise you it’s going to increase your sales. And the reason I can promise it is because it works for me and because if it doesn’t work within 14 days you don’t have to pay them a penny.
So go try them by going to pipedrive.com/mixergy. You’re going to get 14 days for free, 25% off after that for three months.
Frankly, their prices are so freaking low that they’re making a mistake by charging too little. You know why I just hesitated for a second? I see my face on their website and my face was on their website as a testimonial for years before they bought ads. But for some reason it’s in Japanese, no Korean. How did I end up with a Korean quote? I’m sending you a link. I got to tell them to fix that.
But anyway, I do stand by it and I do urge you guys to go check them out, pipedrive.com/mixergy.
All right. Well, you might see me in Korean. If you guys speak Korean, please tell me what that says.
All right. You get out there in the world. You’re not starting from scratch because you have some of their intellectual property. What is this intellectual property that you brought with you?
Michael: They were infomercials. There were some infomercials that were . . .
Andrew: Fully produced infomercials? And there were no shenanigans in those infomercials?
Michael: No, again, because remember, I’m talking 2004, and all the shit hit the fan, so to speak, right? So from 2004, 2009 we had produced multiple infomercials since then, done some great ones. And so there was a bunch of them.
Now, when I first started I started with just five people and a small office with essentially really no money. So I knew that I could just run 25,000 a week, 50,000 a week, and start building the business. And so that’s exactly what we did.
And by the way, these infomercials that I edited as the lawyer. So I knew that they were all good. And we had already defended them as well because everything that ITV really had done from 2004 to 2009 was always attacked. And so we defended it every single time. So I knew that these infomercials in particular were good to go, you know.
Andrew: You know what? It’s surprising. Why wouldn’t you just start from scratch? I guess, you know what? It shouldn’t be surprising. You know that it works.
Michael: I’ll tell you why. So my boss, at the time Donald Barrett, so you look at Kevin Trudeau, one of the best pitch men I’ve ever seen live on TV. It’s easy to be a great pitch man when you don’t know the difference between truth and fact, right? My boss, Donald, was essentially like his protege. Right? And so Donald watched everything he did and just tried to emulate everything he did, and he did a great job. He was really good.
And I would sit there, and I would watch both of them live. And I’m an attorney, so I ask questions. I’ve been up in federal court, I’ve been yelled at by judges, you know what I mean? So I said to myself, “Both of these guys, they don’t nearly have the pedigree that I have,” just to be honest. And I think I can do a better job.
But when I first started, I didn’t think that. I didn’t think that I could be the guy on camera. Right? And so what happened was is I needed to start figuring out generating revenue. And then I said, “Man, you know what? I think I can do it better myself.” And I did. I sat down, and I interviewed my first guy, his name was Jim Schreiner. It’s been on TV now for eight years. And I did a better job. And so that’s why.
But again, I watched those guys, they were great.
Andrew: What does it take? Because, you know what? I’ll be honest with you, Kevin Trudeau, the only reason I watched his stuff was I watched Mega Memory and it was everything that I read in memory books and that stuff really did work for me. And I thought this is so clever that he took the memory books which no one’s reading from the library and he turned them into tapes that people actually want to try.
I didn’t see anything special or magical about his sales pitch. What did you see that maybe I could take away when I do like a pitch for a Pipedrive or for myself somewhere?
Michael: Well, actually I love your style, man.
Andrew: You do?
Michael: Yeah. I mean, so that’s really it, actually, your style. You’re talking about two different people. But his style was very natural. And my style is very natural as well. And so when you’re doing your live read man, it’s awesome. I mean, because it’s authentic. So Trudeau did a very good job of being authentic, even though he really wasn’t. So that’s where it comes in where I say he’s like a narcissistic sociopath, like from a clinical sense.
But he was really, really, really, really good. And I would sit there and watch him live and just . . .
Andrew. Do you remember one technique that he used that would allow him . . . here’s one thing that I remember, he didn’t just say you’re going to remember, he basically in two sentences said, “Your life is a collection of the memories of things that happened to you to this moment. If you don’t remember what happened to you to this moment you have less of a life. So it’s not just about remembering the keys and remembering your wife’s friend’s names, it’s about actually saving more of your life that you experienced.” And I thought, “This is pretty clever, he’s taking this little thing and making it bigger.” What did you pick up from them that maybe is part of your style or that you can communicate or teach us?
Michael: You know, and that’s just classically hitting on a pain moment, right? You know, he’s just saying, “Hey, look, if you don’t remember this then your life really isn’t meaningful essentially.” So you do a very good job of trying to hit trigger points for people and relate to the masses. And that’s really what he did.
Andrew: Trigger, but how do I find trigger points that I should be hitting when I talk to people?
Michael: Well, you already have, like when you’re talking about, Pipedrive, you are saying, “Hey.” I mean, you talked about a challenge that you had and how that challenge was solved as it relates to using Pipedrive. And so that’s really it. And everyone has those challenges, right? So I mean, that’s really it.
So like when I’m telling a dietary supplement for joint now, we’re talking about people who are on pain, we’re talking about arthritis, we’re talking about knee pain, and we’re saying, “Hey, look, if you try this, this can help you.” And that’s it. You know, whatever. And you’ve done it. You’re doing it.
Andrew: Okay, yeah. I do find that the personal story helps, that any examples are always useful.
All right. So you get out there. You’re starting to sell this stuff. Revenues starting to come in. Who’s producing the pills that you’re selling?
Michael: So we use manufacturers all over the country. What they called GMP rated, good manufacturing practices. And some of the biggest ones in the country, some small ones as well. And we make sure that the quality is there. And we buy from them.
And so but I literally do . . .
Andrew: It’s basically like GNC selling, you were mentioning what is called coral calcium. And I thought, “This is still being found online.” Then I realize everyone’s selling it. GNC is selling it. So the problem wasn’t the product. The problem was the promotion of the product.
So you just basically go into the same places where all these other companies are going to, to get your pills. The special thing is not the pills. The special thing is the marketing. You already have the video that’s there that you know works. Am I right?
And so then . . .
Michael: Yeah, and I’m smiling because, yeah, you’re right. I mean, so look, just like any business, there are good manufacturers and then there are not so good manufacturers. There are scumbags out there and there are guys that have the highest level of quality in the world. And so you have to find the right ones. And trust and verify.
Andrew: But essentially, that’s not it. Jordan Belfort, I listened to his audio book when my first child was born because I had to walk him endlessly because he wouldn’t stop crying. And I was listening, and I remember he told the story about how he was selling steaks door to door for this company and he and his friend started talking about how they could take this business to themselves. Because they realized that all it was, was them walking around selling steaks hyping up the fact that the steaks were so juicy, they were going to be so great.
And when he told his friend, “Look, we should just go and get steaks ourselves and sell them door to door.” His friend said, “We’re not going to get the way that they sizzle and the way that they taste.” And he realized, Jordan Belfort did it, they were hyping up steaks so much that his partner in this didn’t realize it’s the same freaking stakes as everyone else. It’s not the steak, it’s the sizzle. And they were explaining the sizzle.
So I don’t mean to put that on the pills. I just mean to say the magic, it’s in the video which you acquired from someone knowing that it worked. And then in the ad placement I’m imagining, right? Am I missing something else and maybe even you got into sales?
Michael: No, no, you’re right. I mean, marketing, look, all right, my joint health supplement, Arthri-D, okay? We were in GNC for a while. And in GNC there’s 50 different joint health supplements, 50. And so you’re right, what separates you from all those? Is it the formula? Well, yeah, our formula is a little bit different. But you look at them, they’re all pretty similar. It does come down in the marketing, it comes down to the story.
Andrew: Okay. And so the marketing and the story was already in the video that you acquired when you left your previous company. Then it was buy ads on TV at the right slots in the right locations. And then also have your people on the phone be able to close the sale. Am I right? That was the next step for you?
Michael: That’s exactly it. Yeah, yeah, yeah.
Andrew: And did you do anything different with either of those? Did you buy ads in an interesting way that we should learn about? Did you do something on the phone? Did your team do something?
Michael: Well, you know, so, I’ve learned from other successful people that if you have a process and it works, don’t change it. So when we were at ITV, of all the processes that were in place were there we’re all blessed by me because I was the lawyer and I needed to make sure that these guys weren’t going to get sued again.
And so our scripting, our script path, our up sales, everything was already developed, and I had already kind of developed it all anyway. But what I did was though is I made it better. And what I mean by that is that I made it more succinct. I made it more relatable. I helped the agents be able to follow the script but also be able to build rapport with customers, spend a little bit more time with customers. So I really wanted to make sure because I come from the customer service standpoint.
And then the other key element, and I tell people this that I do business with, there’s two things that I want in business, a product that works and great customer service. At my previous company they had challenges in customer service, a lot of challenges. When you start having challenges in customer service and you start getting BBB complaints, that’s just the beginning unless you fix it, right?
So I wanted to make sure that our customer service was the best. And that’s exactly kind of how we built it and we just continue to get better and improve upon it. When I say get better and improve upon it, technology has been changing over time and there are certain things you can do now to really improve the overall experience.
Andrew: And still, you’re doing well, and the credit card companies shut you down at one point. You told our producer, “We got to over $350,000. And then the credit card companies froze us.” Which has happened to internet companies a lot. What happened with you guys and how did you deal with it?
Michael: A nightmare, man. So we had just gone from a small office with just a few people and we built out an office, literally, the building that we’re in is called The Coming Center here in Beverly Mass. It’s huge, it’s 11 acres. And you can build out your own custom office, but it costs a lot of money to do that. We had done that. And moved up to the office and I bought this, it was the first thing I did buy, it was this big beautiful desk. It was like seven grand, which is a lot of money for a desk. And it’s ornate, it’s gorgeous.
And I laugh because the guy I was with, he was really conservative, he was the one that said, “Mike, you should buy this desk anyway.” So I get to my desk, I sat down, I open it up, I see a FedEx and it’s from my merchant processor. I open it and says, “We froze your account and grabbed $350,000.”
Now, the day before, I was on the phone with them because I’m an attorney, because I saw what had happened in the past. I’m always trying to make sure and I try and get ahead of it, right, I try to make sure nothing is wrong.
And the FedEx said, “We grabbed your money and we shut you off.” And I’m like, “Well, that’s got to be a mistake.” I get on the phone with them. Yeah, it’s got to be a mistake. Yeah, we think it’s a mistake, we think it’s a mistake. But a few days are going by.
Now, if I can’t process credit cards, I’m not in business. And so thankfully, I had a backup. And so I had to shift everything over to the backup. The problem with that though is when you go from zero to a million a week from one processor to another, that second processor doesn’t actually like it, you would think they do. But they don’t.
So now I’m like in this really delicate . . . I’m really trying to keep one open and trying to figure out why this other one shut me off. And this other one shut me off because, shame on them, they got hit by Visa, MasterCard, from the top down and they were boarding bad business, they were boarding. There’s a lot of guys on the internet. They think, “Oh, well, I can just white label a product, I can do free trials and then I can sell them.” Those are the guys that hurt me. And I got wrapped up in that.
I’m not sure if you’re familiar with this, but chargebacks are a big thing within the credit card world. If you go over a certain percentage in chargebacks, which is usually about 1%, that’s when you start to have a problem, okay?
I get shut off, I get frozen, they grabbed money from me and they tell me, “Well, it’s because you have a high chargeback rate.” You know what my chargeback rate was then? 0.00, I had no fucking chargeback issues.
And then it continues to get worse with these guys. So now I try and get new processors. I can’t get new processors, I don’t know why. They put me on a list. And I tell people this, “It’s like being a level three sex offender trying to get a job at a daycare.” It’s called the match list.
Andrew: Match list?
Michael: A match list, it’s the worst thing that can happen to you in the merchant processing world, right? It’s called the match list. And it happened to me. And then I’m like, “Oh, what am I going to do?” I’m at the airport, now I’m flying to go talk to these guys. I’m at the airport and I’m on the phone, I’m bitching about it. And this guy comes up to me and he hands me his card. He says, “Listen, I can help you out.” And I said, “No, I don’t think you understand.” I’m like, “I sell products on television in what we call a card not present environment in a continuity basis. I don’t think you guys are going to be able to touch me.” These guys happened to be from Lowell, Mass. They’re pretty big. The name of the company is called [inaudible 00:57:35].
And they looked at all my stuff, they looked at what we had done, and they realized, “Yeah, you guys are running a clean business.” And thankfully they bordered my business. And we were able to kind of grow with them, but man, it was brutal. It was absolutely brutal.
Andrew: You were just hunting for the right processor who was going to listen to you.
Michael: Yeah, but when you’re on that list, man, again, it’s the worst thing that can happen because they don’t even want to talk to you.
Andrew: Are you still on the list?
Michael: No, no, it’s like a bankruptcy thing, it’s like five years ago. And by the way, so I sued that company, okay? I sued them. And because I was like, look, everything they said to me wasn’t true. Like I didn’t have any issues.
And so when you’re an entrepreneur like, what are you going to do? Man, like I had 200 employees at the time. And so like I’m trying to figure this whole thing out. And so I said, I had no choice but to sue them.
So I sued them and because I wanted to go through Discovery because I wanted to be able to prove that these guys were just straight up lying to me. And ultimately, I got on the phone with their general counsel because I wasn’t getting anywhere with my lawyers.
And we had a candid conversation, he goes, “You’re never going to be able to get off that list. We’re not going to take you off. It’s just not going to happen. And if you want your money back we can just give you your money back and call it a day.” And I said, “All right, let’s just do that.” And so for five years I was on that list.
And by the way, now, let me tell you, fast forward it to like right now, like as I’m talking to you. The credit card world went through a whole new mix up again. The whole thing. Just a month ago, I’m sitting in my home. I have a home office and my accountant sends me a text and says, “Hey, one of our processors went down, like no notice, it shut us off.” I’m like, “That’s weird. Well, whatever. They’re a small processor.”
But five hours later our big one goes down, the one that processes millions. They go down . . .
Andrew: This is in the last few hours.
Michael: This was in the last month. Yeah, yeah. So this happened last month but it happened on the same day. Two different processors. I only get three. Two different processors go down. Like this just happened. And I’m like, “Holy shit, why?” They don’t tell you. They just shut you off.
Now, I know why now, because I’m doing all this research. Now the company that I’m talking about in particular, they were a multibillion dollar worldwide entity. They got hit from Visa MasterCard. They come down and they clean house. And they just say, “Well, we don’t like these guys because they’re in a card not present environment.” Which I am, we’re selling dietary supplements and we’re selling them on a continuity basis. And then they just shut us off. Thankfully, because we had a conversation with them. I’m like, “You guys going to match me?” They’re like, “No, we’re not going to match you, we’re just shutting you off.” And so they did.
And now, we’re all back up again. But man, I always talk about this like it’s a constant struggle. Like it’s always, like I used to say to my mom, like, “Mom, why is it always so hard?” And I just realized like I had Les Brown on my podcast and he said, “Mike, it’s the struggle that creates life.” And now that I’m okay with that, I’m like, “All right, good. Let’s just figure it out.”
Andrew: So let me ask you this then, in your book you have a chapter called Stop Caring, but your point is, care, just not that much. So, how do you not care that much when these merchant processors are going to shut you down?
Michael: Yeah. So what I mean by that is, in the essence of that statement and the essence of that chapter is, in this world that we’re in with the Facebook, the Twitter, the Snapchat, in this voyeuristic world that we’re living in, right everybody is trying to create an image that’s not real. And so what I say to people is, “Stop caring about what other people think.” You know what I mean? Like I sell dietary supplements on TV and then one of them, people who call me, call me a dick pill, okay? But it’s not. It’s a male sexual product. So I sell dietary supplements on TV. I’m an infomercial guy, right? But I generate millions of dollars. I do a lot of great things for the community. And I do a lot of great things for people. And I’m changing people’s lives. Other people might think that I’m just a total scumbag, okay? And that kind of hurts.
As a human being. I don’t care what anybody says, there’s no way you can’t feel that. But once you decide, “You know what? I don’t care what these people think. I don’t care what they’re saying about me.” I’ve had people come up to me or reach out to me, when I fired this one guy, I tell the story in the book, I fired this one guy and this woman who works for me, she says, “Mike, this guy saying some nasty things about you on Facebook, like really bad.”
And I had other people taking screenshots of it, sending it to me, like really nasty shit. Like I could have easily [inaudible 01:01:38].
Andrew: Who was this person? What did he say?
Michael: Oh, you know, he says, I’m a scumbag, I steal, I mean, everything you can imagine, right? “ITV recreated, Michael Alden is essentially a reincarnation of Donald Barrett and Kevin Trudeau.” Stuff like that. You know what I mean? It just makes me feel like a bad person.
And when I decided though at that time to just stop caring about what other people think about me and start really trying to live the life that I want to live, and how I really want people to perceive me, that’s when things really start to change. Because no matter what happens people are going to not like me and they’re going to knock me, and they’re going to mock me at the same time. But I know who I am. So I don’t care about them anymore. I don’t care about the fact that, I’ll give you another example, I swore a couple of times on this interview.
Andrew: Yeah, I do.
Michael: Right. I’m not from here, I’m from Boston, we swear a lot, okay? And it’s just the way I grew up, man.
And so I had someone would say to me once, was actually my ex-wife, she said, “Mike, you’re a lawyer, now you need to start acting like a lawyer.” And I’m like, “Well, what does that mean?” I have to start acting like a lawyer? When I’m in federal court I’m not dropping F bombs.
But if I feel as though that I want to express myself and using what I like to call a sentence enhancer, an expletive, than I’m going to do it.
But I was really worried about that. I was worried about how people would think and how people would perceive me. But this is me. So what I tell people, stop caring about what other people think and everything else will fall into place. If you live the life that you really want, everything else will come together. That’s what I mean by stop caring.
Andrew: I see. I’m looking at an old video of you on the Barrett report, is that you in there? Yeah, it was.
Michael: Let me see, I don’t know.
Andrew: No, that’s him, that’s Donald Barrett, okay. That’s not you, I see. I keep looking and searching. Yeah, you’re right, when you were saying somebody said that this is like ITV recreated. I found that comment [inaudible 01:03:29].
Michael: Well, so here’s the thing, so my real name is Mike Sciucco, that’s my real last name, okay?
Michael: Sciucco, yeah. You can’t pronounce it, you can’t spell it, it’s a problem, right?
So when I decided when I was going to go on camera and when I decided I was going to write a book, we needed something that you could spell, and you needed something that you could you could pronounce. And also the last name, Alden, came from the book, “The Go-Getter,” that we talked about a little bit earlier, one of the main characters . . .
Andrew: Yeah, yeah. So that actually has something to do with the named Blue Vase. I said that we would talk about where it came from and I totally forgot. I’m glad you brought it up. Where did the name Blue Vase come from and Alden? Please take us through that.
Michael: Yeah. So I was given a book called “The Go-Getter,” and it chronicles a guy who is a post-World War II veteran. His name is Bill Peck. Actually World War I, I’m sorry. And he’s given the impossible task of getting the Blue Vase, okay? And he’s going through all these different things. He’s treated as a pariah, he’s out dealing with morality, he’s trying to figure things out. And it’s a great book, it’s a great read that teaches people how to get things done.
And so his kind of mantra was it, it shall be done. And so, it’s the Blue Vase. And so I said, “Well, what a great name for a company, what a great culture to build this company around.” So that’s how I came up with the name Blue Vase.
And one of the main characters in the book his name is Alden Cappy Ricks, his first name’s Alden. I lived on 263 Alden Street where I went to college. So then when we said, “Hey, man let’s come up with a name that’s easy to spell, it’s easy to pronounce.” Hence, Michael Alden. And that’s how we came up with it.
And by the way, if you Google Mike Sciucco, which you can right now, like the first thing that comes up is my ITV shit.
Andrew: How do you spell Sciucco?
Andrew: S-C-I-U-C-C-O? All right, I see what you mean, that’s Sciucco?
Michael: Yeah. Exactly, how do you get Sciucco out of that? I don’t know, that’s what everyone tells me, right?
And by the way, it’s still my real name. I didn’t change my name. I have businesses, banks, merchant processors, when they do that same Google search, the first thing that comes up is the ITV stuff.
Andrew: Why didn’t you change it?
Michael: Well, because it’s me. It’s really who I am, right? And also, it’s a pain in the ass, I mean, passports and everything else. And I’m not hiding from who I am.
Andrew: By the way, it’s not that hard to hide the Google, if you wanted to, the Google search for Michael Sciucco.
Michael: Yeah, I know, we can talk about . . .
Andrew: Yeah, give one of my guys, like two days, they’ll bury the stuff.
Michael: All right, maybe we’ll talk about offline.
Andrew: You know, the big answer is, put some posts up online on all the major sites, including some of your own with your actual name and they’ll bury all this old stuff. I do know, you’re right, as soon as you told me that, I see articles from 2008.
Michael: I actually had one, in this merchant process thing that I was on, I actually had one merchant processor, I saw the email chain back and forth. And he said, “His credit’s fine, everything looks great. However, once this lawsuit comes down there is a potential for B.K., bankruptcy.” And I’m like, “What the fuck are they talking about? Wait a minute, do they think that this lawsuit, which by the way ended in 2008, do they think that I’m somehow on the hook for this $54 million lawsuit?” And they did. It was crazy.
And so we have to explain that. The reputation management thing is kind of like what we’re talking about, like I said, I’m not afraid who Mike Sciucco is at all. And in a way, it’s almost defiant like, I’m not going to change my name just because a bank does a Google search and doesn’t want to actually look and say, “Well, let’s take a look at Michael Alden, bestselling author, he’s doing all these things for the communities, he’s generating companies, he’s been recognized by all these different organizations. Let’s spend a little bit of time.”
Andrew: By the way, speaking of this, let’s take a look at who this Michael Alden is, so I got your book. Immediately I go to the back, what is this?
Michael: Horrible, the way that looks. By the way, I’m not happy with that.
Andrew: Oh, no, I’m happy with the cover [inaudible 01:07:17].
Michael: No, no, hold on, the advanced readers copy, not happy with that. But anyway.
Andrew: You know what? I’ve had worse. Believe me, I get extra copies all the time.
Michael: That’s my publish [inaudible 01:07:27].
Andrew: I get it. Here’s what bothers me. It doesn’t even say who you are you. You might as well just be one of these guys with nothing but a website and a message because look, the closest that it gets to who you are is it calls you bestselling author. But frankly, these days I could get you guys who will pay to make you a bestselling author, and CEO Mike Alden. Alden. I thought maybe that’s a typo there. I’m ready for typos.
That’s it. It doesn’t say CEO of what, it switches to Mike all of a sudden in like very familiar tone there. But it never says what this guy Mike does. That’s a challenge. And that’s where I think you guys are underselling yourself.
Michael: I was just [inaudible 01:08:12].
Andrew: There’s the actual copy, the hardcover, that’s the book.
Michael: Well, this is actually a mock of it. No, they actually did a really good job of putting a great back cover, it’s a little bit different now in the inside [inaudible 01:08:22].
Andrew: Yeah, it needs more about the author. Why should anyone get “Blueprint to Business”? What is it about this book? This just came in, I think I got it yesterday when I was in the office, so I was wondering why anyone would read this? Answer this for the audience.
Michael: Yeah, you know, here’s the thing.
Andrew: You are going to say, “Who cares?” Don’t tell me who cares. Tell me, you put time into this, you want people to read it, why?
Michael: I’m going to tell you why. So I’ve written two other books, you know, “Ask More, Get More, 5% More.” And then this book “Blueprint to Business.” I didn’t have a plan or an idea to really write this book “Blueprint to Business.” But really what happened was as I started talking about different subjects, I started realizing that there are a lot of people out there that don’t really truly see what it’s like to be an entrepreneur. And they don’t really have like the answers to really what you need to do in order to start a business, how to protect the business, how to grow a business.
And they also don’t talk about the stuff that happens like merchant processing getting shut down. Like, look, I mean, I don’t even know if I tell the story in this book. But, I mean, to this day I still remember waking up one morning, at 4:30 in the morning, I would check my iPhone because that’s what time money would be transferred in from actually Bank of the West in California into my Bank of America account.
And I woke up one morning and it was $-143,000. It was a Wednesday, it was a payroll week. And I didn’t have the money, like I had no more money. I had nothing. And so that was almost 10 years ago. And I’m still here.
Like, these are the things that I think a lot of books are lacking, they’re lacking the authenticity of like what it’s really like. Like as I’m talking to you today I’m doing great things. But it’s always still a struggle. I’m not just be like, “Hey, look at me and my Rolls Royce, look at my nice watch or my nice house or my nice car.” That’s what all these people want to see but they don’t see what really happens and what it really takes.
And when people talk about the grind, most people have no idea what the grind is. And so I really want to give people a real perspective of what it’s like. And if you want this life it can be great, but at the same time you need to understand that the struggle creates life.
Andrew: I’m wondering, why? Why are you writing this book? Why are you doing the podcast? There’s not that much money in it. I’m looking at your website. I’m trying to figure out what you’re selling from this. You’re building a credibility and reputation with this book. You’re getting on more podcast because you’re an author, right? But what’s the upside? What are you doing all this for?
Michael: Because what I realize and it’s something too that took a little bit of time for me to recognize. So I’m 42 years old. You know, again, I grew up with nothing. And I have a bit of a chip on my shoulder. But for a long time I was always kind of comparing myself to others and saying, “Well, so-and-so is doing great things all this stuff.” But I’ve done some great things and I have a great message and I have a great story and I’m authentic. And I just know I am.
Andrew: You said there’s no big goal here. You’re not trying to get more speaking opportunities, you’re not trying to sell something.
Michael: I very rarely speak at all. I love building things, I really do. And I love being able to give this information out. Again, “Blueprint to Business,” my publisher is Wiley, the first book with them, 5% More, did really well. And when I gave this to them it was super raw. I’m like, “Guys. The editing is an understatement of what this needs.” Because a lot of it actually was me talking on the mic, not actually writing it. My first two books are like handwrote everything, right?
This one when they got it, they were like, “Yeah, we like it, we like the subjects, we like the rawness of it, we like the information that’s there.” And also again, I give a perspective from a business person/entrepreneur and also from a lawyer’s perspective. I tell stories about, you know, I have friends that are very successful. And they have no idea that they should have filed for a trademark or a patent or a copyright. And they think that it’s so abstract that they don’t do it. And they can put themselves in some serious, serious trouble.
And so I talk about like little things like that too that’s really not so sexy, but it’s essential in business. And it’s really not that difficult to do.
Andrew: All right. The book is “Blueprint to Business,” it’s available everywhere, published by Wiley. I think that’s the best place to send people, if I send them over to your webpage, unless they’re ready to do like an infomercial or they need to hire someone to answer their phone calls this is going to be useless to them.
Michael: So the book’s available on Amazon, Books-A-Million, Barnes and Noble, you can find me on socials at michaelalden2012. I’m everywhere in every social media with that handle. And, yeah, the book’s available everywhere, pick it up.
And here’s the other thing, as I tell people, I was like, the title is “Blueprint to Business,” but a lot of people need to understand that your life is a business so that the antidote in the book aren’t necessarily about just being an entrepreneur, it’s about how to run your life. You know what I mean? I have a section about, it’s titled “Stop lying to your children.” I know we’ll get into it towards the end.
Andrew: I saw that.
Michael: But there’s a lot of stuff in there that I think anybody can get from any situation and they can truly benefit from it.
Andrew: All right. Thank you so much for doing this. Michael Alden, check him out wherever you can get your books, wherever you can get books.
And I want to thank my two sponsors, which you could check out, the design company is DesignCrowd. Check them out at designcrowd.com/mixergy.
And the software that we’ve been using to sell people but also that’s frankly, Michael, that’s what we use to book these guests, to make sure that the whole team collaborates, gets me research, pre-interview, the whole thing, and close the deal which for interviews, closing the deal means getting you on, which is what we just did here. We also use it to close a deal which means sometimes selling. I really urge you guys to go check them out, pipedrive.com/mixergy. I’m grateful to them for sponsoring.
And please give our team some feedback on the audio, on this interview. They’re working on improving it, so if you could tell them all at contact.mixergy.com, they’re all going to appreciate it. They’re all sitting down waiting to see if they’re doing a good job.
All right. Thank you, Michael.
Michael: Thank you, sir. Appreciate it.
Andrew: Thank you, bye. Bye, everyone.