Michael Volkin is a serial entrepreneur and former Army Sergeant who built and sold 3 companies before the age of 40. He has also written 5 books, one being a best-seller. His new company, Crowdsourcia, provides a unique way for companies to get feedback.
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Time Stamped Show Notes
(click the time stamp to jump directly to that point in the episode.)
- [00:58] – Michael shares his story
- [01:24] – Michael is a huge fan of crowd sourcing
- [02:05] – How Michael makes money TODAY
- [03:59] – Worst Entrepreneurial Moment: Stupidly franchising a real estate company and burning through all his cash.
- [04:51] – People, Process, Profit
- [05:14] – PredictiveIndex.com
- [06:48] – Are you making someone else’s dream come true or yours?
- [07:36] – Do NOT start executing on an idea without a plan.
- [08:22] – Entrepreneurial AH-HA Moment: How to market to pain points
- [10:38] – Nothing better to spend your time and money on than copy.
- [11:04] – Understand what your product or service does that makes people do business with you.
- [11:35] — Biggest weakness? – Focus
- [12:21] – Biggest strength? – Acquiring and converting web traffic
- [14:04] – What has Mike most fired up today? – Data, data, data
- [17:11] – The Lightning Round
- What was holding you back from becoming an entrepreneur? – A steady paycheck and security
- What’s the best piece of advice you’ve ever received? – You miss 100% of the shots you don’t take
- What’s a personal habit that contributes to your success? –Spend 30 minutes a day to learn something new.
- Share an internet resource, like Evernote, with Fire Nation – Rebump.CC
- If you could recommend one book to our listeners, what would it be and why? – Predictable Revenue
- [23:40] – [email protected]
Michael: Ignición. Ready to drop some value bombs in your audience today. So let’s do this.
John: Michael is a serial entrepreneur and former army sergeant who has built and sold three companies before the age of 40. He’s also written five books including one bestseller. His new company Crowdsourcia provides a unique way for companies to get feedback. Michael, take a minute, fill in some gaps from that intro, and give us a little glimpse of your personal life.
Michael: Yeah, well that pretty much sums up my 40 years on this planet – distilled down to two sentences. My personal life is busy but fun – staying active with my wife and four pets, playing tennis. You mentioned my new company, Crowdsourcia, which is such a great resource for entrepreneurs and doing very well.
I do suffer from a condition known as entrepreneuritis. I have three dozen ideas for businesses. I wanna stay focused on one goal and staying focused is an issue at times. I’m a big believer in crowdsourcing tasks – having multiple people work on the same project together. So when the project is finished, it has the point of view from many people. The result is just so much better. While developing this crowdsourced way of work, I learned a lot of tips along the way. I’m super anxious to teach some of those lessons and tips to your audience so they can kinda take something away from this podcast and apply it to their business.
John: Well, Michael, you know what I say about focus. Follow one course until success. It is a critical element to an entrepreneur’s success. So I feel you, brother. But before we get into your journey, let’s talk about today and the revenues, the dollars coming in the door. How do you make money to support your four dogs?
Michael: So Crowdsourcia’s a two-sided marketplace. We have companies and we have experts. With Crowdsourcia, companies get feedback on their projects from multiple experts at once. So essentially, we’re crowdsourcing intelligence. If a company wanted to increase conversions to their homepage, for example, you would invite various experts like a marketing communications expert, couple designers, a UX expert, a digital strategist.
Those experts would provide feedback and the company pays for that feedback. Our revenue model’s a bit unique. A company will buy points and an expert earns points for providing feedback. So we make money when the company buys points from us and we also take a percentage when the expert cashes out the points. So on one side, the company’s paying for crowdsourced intelligence and on the other side; the expert is paying for access to companies that have projects.
John: I love that model and it’s pretty interesting in a lot of ways. Did you look at some other models to really see if that worked in the past? And if so, who did you compare yourself to?
Michael: Yeah. Crowdsourcia’s kind of a combination. It’s almost the result as if Quora and Upwork had a baby and got together. That would be Crowdsourcia. Quora has that point system that everybody loves – kind of a gamification aspect of it. Then Upwork is where you post business projects. So if those two got together, I think that that would be – Crowdsourcia would be the resulting baby.
John: If they had a little baby, it would be Crowdsourcia.
Michael: Yeah, a little clever, inquisitive baby.
John: It’d be a cute baby too.
Michael: I would think so.
John: So Michael, let’s talk now about your journey and what I really want to dive in on, specifically, is what you consider your worst entrepreneurial moment. Now I’m sure with your time as a sergeant in the military, you’ve had your ups and your downs and some really trying life experiences as I definitely experienced as well. But on the entrepreneurial side, what would you say your worst moment is to date? And really take us there and tell us that story.
Michael: Yeah. So this is episode 1,371 and out of the 1,370 previous episodes I’ve listened to, this is probably my favorite question because every entrepreneur, every guest you’ve had on this show has at least one story that’s set them back big time. Right? So for me, it was in the early 2000s. I had a thriving real estate company and decided the next step was to franchise it. So without any research, I hired all these expensive consultants. It cost me over a $100,000. And I didn’t just franchise one state. I had a franchise for all 50 states at once.
I had a great business model but I jumped the gun big time and leveraged all my cash, spread myself too thin, and with almost no resources to handle the growth. So, of course, the real estate market crashed less than a year after. I lost everything. I was fortunate enough to sell the company but I learned an ultra important life-changing lesson. I’m sure you’ve heard it before. People, process, profit. What I did was profit – some of the process, and virtually no people. So in the end, I had 12 franchises in five states being run by a staff of less than seven people.
People, process, profit. Every time, every industry. Find the people you trust, which is the hardest of the three Ps. If you have the money to hire an employee, I recommend a website called PredictiveIndex.com. They give a quick assessment to your candidates and the result will show you if your candidate is right for the position. The results are crazy accurate. I’ve seen staff turnover literally halt once companies employ this assessment.
After the people, comes the process. How are you going to handle those leads? What’s your customer funnel? What’s your buyer’s journey? Create a process around as much as possible with the essential idea of making everything scalable. In other words, will the process you set up handle 20 leads a day in the same way it handles 20,000 leads a day? If your answer is no, you need to refine your process.
Then if you get those two right, the profit will follow. How you manage that is crucial. How are you gonna allocate the profit? 29 percent goes to marketing, 15 percent goes here. You have to allocate those in buckets so you don’t leverage yourself too much like I did and allow yourself to create future growth.
John: People, process, profit. Fire Nation, you need to be absorbing these words. You can definitely hear the military background right here with Michael. A lot of people say, “John, of course, you’re so disciplined and regimented, you were in the military. Blah, blah, blah.” Yeah.
But at the same time, I know a lot of people from the military that aren’t that disciplined or aren’t that regimented and aren’t really finding that much success post-military. In fact, they needed that structure to keep themselves so don’t use that as an excuse. If you’re kind of cringing right now and you’re hearing Michael talk about these percentages and numbers and “people, process, profit,” ask yourself this question.
What makes you cringe more: spending nine hours a day in a cubicle making somebody else’s dreams come true or actually getting your head wrapped around “people, process, profit,” making it work, doing the things that aren’t always super fun like these percentages and coming down with exactly what it’s gonna take to run a profitable and revenue-generating business? Weigh that. Weigh those two. What is more painful? And I hope if you’re listening to this podcast, it’s more painful to be sitting in a cubicle making somebody else’s dream come true for nine hours a day for the rest of your healthy life.
Michael: Well said. If I had an applause sound effect, I would play it right now.
John: Applause sound effect. I’ll try to have my editor add that in right there.
John: So that’s my big takeaway. Michael, just in one sentence or so, what do you want to make sure Fire Nation gets from that story?
Michael: Well, I wanna make sure that they understand that being an entrepreneur is as much creative as it is a process. I see too many people with just these fantastic business ideas and they just go out and they execute with very little planning. So the “people, process, profit” model, I certainly did not invent. It is a timeless three-word process that every entrepreneur throughout decades should be able to employ in their company and be able to really run a structured, well-run, well-growth company with those three easy steps if you can follow them.
John: Michael, let’s talk about another story in your journey. This one is going to be an epiphany, a light bulb, an aha moment that you’ve had along your journey as an entrepreneur. You’ve had a lot. But take us to one of your greatest. Take us to the moment in time. Break down that story.
Michael: Yeah. My aha moment came when I understood how to market to pain points. So my first book was called The Ultimate Basic Training Guidebook. I spent months writing it and I just knew it would help every recruit going to military basic training. So I made a website. I put it up.
One month goes by, no sales. Two months goes by, I get one or two sales but no traction. So then I started researching why and it turns out the words in my website weren’t convincing. I needed to match the words in my site with the pain points of my audience which was a military recruit. So I started to think about what I was scared of when I went to basic training. I was wondering if my drill sergeant was gonna beat the hell out of me. I was wondering how I would stay in touch with my family. I was wondering if I was physically fit enough.
Then I started writing website copy that tugged at the emotional trigger points for military recruits. I identified with their problem and I showed them that the book was a solution. So one night, I updated the website with new text and I went to bed. I woke up the next day and checked Google Analytics and I was a little confused because I had the same amount of traffic. But after I checked my email, that’s when the aha moment came. I had 12 sales while I was sleeping. So now I get it.
I converted more of my traffic. I needed to identify the problem and show that I had the solution. So then I started blogging. I started blogging until my fingers hurt. Each blog was touching on a different pain point. I didn’t have a single person reading my blogs at first but eventually the traffic came. It got shared. It got shared again. My first blogs started getting traffic even months after I published them. So month after month, the sales were doubling and doubling again.
Today that book has sold tens of thousands of copies. It was a No. 1 Amazon bestseller for the military section. It won the Military Book Club gold star award. Since then I wrote two follow up books that built on the lessons learned in the first book. So, now one sale usually results in three. I see so many entrepreneurs spending tons of money buying ads to get traffic to their site but not too many entrepreneurs paying attention to the words in their site that should convince those visitors to become buyers. It’s a real shame actually and a complete waste of money.
John: Nothing, Fire Nation, you can spend your time or your money better on than copy. Because what are you doing if you’re not really showing that you understand the problem better than your potential customer, better than your client? Because once you do that, once you show them that you understand their problem better than they even do, of course, they’re going to buy the solution from you. It’s just that simple. Focus on the copy. That’s my big takeaway, Michael. There’s a lot of takeaways in there though. What do you want to highlight for Fire Nation?
Michael: Yeah, it’s the pain points. It understands what your service or your product does that really gets people to want to buy your product or service. If you don’t know what that is, get away from your daily routine. Go to the beach, go to a coffee shop, whatever you do that lets you think. For me, it’s plane trips. I’ve actually taken a plane trip to nowhere before just so I can be away from my phone and focus. Something about plane trips just make me want to focus. Sit down for a couple hours and really understand why someone would need your product or service. It’s that pain point that gets people to buy.
John: What’s your biggest weakness, Michael, as an entrepreneur?
Michael: Staying focused. I was never diagnosed with ADD but everyone who knows me knows, without a doubt, I have it. I see an opportunity as an entrepreneur, I go after it. I’m just now passing up opportunities that are being thrown at me so I can focus on Crowdsourcia. But keeping your mind focused is a real problem for many entrepreneurs. And it’s an easy fix. I’m just now saying no – no to opportunities that take me away from my primary goals.
John: And this is something that might help you out in Fire Nation – that will definitely help you out. When you say yes to something, you’re saying no to everything else. Just really weigh that sentence next time you say yes to something. Guess what? You might still want to say yes and that’s fine. But it will at least be the right yes. What is your biggest strength?
Michael: It’s getting and converting web traffic. There’s such a science around both but even more so around conversion. It is so much easier to run a business if you can double your conversion as opposed to doubling your traffic. Here’s a value bomb for your audience. I recommend checking out StartupStash.com. They list and categorize a ton of awesome resources for startup entrepreneurs and it’s all completely free. I actually teach a popular webinar on how to convert more traffic into customers. A little shameless promotion here. It’s Crowdsourcia.com/ConversionWebinar.
One of the tricks I teach is to have someone, who is not a friend or family, give you feedback on your web copy. I say not a friend or family because they’re gonna tell you what you wanna hear most of the time. They’re going to be nicer to you than someone from the outside. Every time I do this for my own site, my conversions increase because having someone from the outside, not familiar with the business, look at the text and design on your site, give you constructive feedback, it will absolutely open your eyes to even the smallest aspect of your site.
You’ll discover the parts of your site that don’t flow your visitor to your product page or your call to action isn’t convincing enough. Or the big one I see a lot is that header sentences on your page aren’t persuasive enough to warrant the visitor to flow to another page. My webinar goes through how to fix all that.
That’s why I built Crowdsourcia actually. It’s a way for entrepreneurs to have access to top experts in dozens of different disciplines to provide that feedback that will drive value. With multiple experts working with you, you’re gonna get that diverse range of perspectives.
John: What’s the one thing, Michael, that you are most fired up today?
Michael: Oh, one thing huh? In a word, it’s data. There’s so many incredible data resources out there right now and it’s a hot trend to mash them all up. All you really need is a first and last name and a company name. And a wealth of information you can find out about a person or a company is incredible. You can find out exactly who’s most likely gonna buy from you before they ever visit your website. Companies do this now using patterns and history of their online behavior and matching that with other people who have similar audiences.
One of the companies I was just using is called Metadata.io. What you do is you give them your customer data and they create what’s called a lookalike audience. What they do is once that lookalike audience is created, you can take that audience and you can optimize your media spin and you can boost conversion rates because you know who’s gonna buy from you before they ever visit your site. It increased conversions like 300 percent and it’s relatively cheap given the amount of return that you’d get back.
John: Wow. Well, you’re gonna get a lot of return back from your time, Fire Nation, if you stick around for the lightning round. We’re gonna take a quick minute and thank our sponsors.
Michael, are you prepared for the lightning round?
Michael: I’m ready. Let’s do this.
John: What was holding you back from becoming an entrepreneur?
Michael: Oh, a steady paycheck. Look, why would anyone in their right mind want to be an entrepreneur? Right? No steady paycheck, no time off, no vacations, no weekends, an average 90 percent failure rate. Best of all, you’re trading a 9:00 to 5:00 job for a 5:00 to 9:00 job. And you have to understand so many different facets of business.
It sounds like a pretty crappy alternative to a steady paycheck. I’m not saying anything that your entrepreneur audience doesn’t know. I want you to know that I’m in the loony bin with you. You have something special inside of you and you’re telling the world you’re not – you’re gonna choose your own destiny and you’re gonna make your own mark on this planet and not spend your life working for someone else’s dream. And if you play your cards right, you can live on the beach like your beloved host here.
John: What about all those four day weekends from the military though? Don’t you miss those?
Michael: Yeah, those didn’t work out like they should have. But yeah.
John: What is the best advice you’ve ever received?
Michael: Short and simple. Wayne Gretzky, famous hockey player, once said, “You miss 100 percent of the shots you don’t take.” And I think about that often because I’m a certified neuromarketer. In the core of neuromarketing is getting past the instinctual defense mechanism that arises first in the human mind. Our first instinct is to play defense for anything whether it’s hearing an ad or reacting to an emergency. But sometimes going after that risk is well worth the reward.
John: What’s a personal habit that contributes to your success?
Michael: About six years ago, I started a habit to spend 30 minutes a day to learn something new. Listen to a podcast, turn on news, read a blog you don’t normally read, watch a webinar, read a book, whatever. I challenge everyone listening right now to take what I call the 30-30 challenge. You learn something new for 30 minutes a day for 30 days. The results will blow your mind. Six years ago, I started doing this and I am still doing this today.
My friends were actually making fun of me the other day because I couldn’t name a single song that Beyoncé sings because when I’m in the car, I’m not listening to music. I’m listening to a podcast or a recording of a webinar. So while they’re listening to same song, same song, same song, I’m learning tips and tactics that grow my business and make me a better entrepreneur.
John: Love it. I just went on a little JLD rant on Snapchat about how every day, Fire Nation – we have to be consuming a certain proportion, a certain percentage of every day. For me, I actually block it off at 10 percent – I’m consuming content from other people who I admire, who I respect, who I know are doing great things. So I’m always staying cutting edge. What are you doing? This 30-30 challenge sounds phenomenal. Can you share an internet resource like Evernotes with Fire Nation?
Michael: Yeah, other than Crowdsourcia, I would have to say my favorite right now is a company called Rebump.cc. You set up drip campaigns super easy. So if a potential customer or lead doesn’t email you back from an initial email, it automatically sends a follow up. When you do this, your response rates skyrocket and the tool’s only like five bucks a month and comes with all these – there’s cool stats on which follow up performs better than another follow up. It’s extremely effective and easy to use.
John: Now, first off, name the books that you’ve written so our audience can get a sense of those. And then share with us one book that you would recommend beyond that and why.
Michael: Well, the books that I’ve written – three of them were military. The Ultimate Basic Training Guidebook and there’s two follow ups. There’s a workbook and a survival pack that – everything teaches recruits how to prepare for military basic training. I also wrote one on social networking for authors but I don’t update that anymore because every time I wake up, there’s a new social network. So it’s so hard to keep that book up to date.
But in terms of a book that I would recommend, I would say Predictable Revenue by Aaron Ross. Aaron turned Salesforce.com into a billion dollar company and he outlines how he did it. He shows you how to scale a sales team without having to hire a ton of people. He shows you how a lead should flow from beginning to end. This book really opened my eyes in how to make a company ultra efficient.
John: So, Michael, this is the last question of the lightning round but it’s a doozey. Imagine you woke up tomorrow morning in a brand new world identical to Earth but you knew no one. You still have all the experience and knowledge you currently have. Your food and shelter – taken care of. But all you have is a laptop and $500. What would you do in the next seven days?
Michael: Well, at first, I wouldn’t even use my computer. Assuming I had clothes and I had 500 US dollars – US being the key – I would see those dollars as a commodity seeing that I was in a new world. On day one, I would sell one US dollar for ten times whatever the local currency is. I did that when I got back from Iraq actually. After my tour of duty, I had all these Iraqi dinars and I sold them for ten times their value. So I know this works.
So on day two, I now have $5,000 and I would walk into a local Applebee’s because I’m sure they have those in the new world. They’re everywhere. And I do two things. No. 1: I would find a good woman because no male entrepreneur is complete without a good woman by his side. And No. 2: I would buy the entire bar a round of drinks to make instant friends. And since I bought them a drink, they all owe me a conversation. So I would work each person. I would find out who the best opportunity is there. I would get a feel for what is missing in their society, see what businesses I can start or see who needs some consulting work.
At this point, I figure I have about $4,000 left. So on day three, I would open my laptop and follow up with the interesting prospects I made and see if I could fit in a consulting gig somewhere. I would spend day three through seven working those contacts until I got my opening. And the rest of the $4,000 would be spent on the woman, of course.
John: Michael, let’s end it today on fire with a parting piece of guidance, the best way that we can connect with you and then we’ll say goodbye.
Michael: For all you entrepreneurs out there, when you hire a freelancer or a consultant to help you on a project, stop niching people into their expertise. The more I work with the experts at Crowdsourcia, the more I see some of the best marketing advice might come from a designer. Some of the best design advice might come from a UX expert. We spend too much time niching people into their profession and not hearing this treasure trove of advice that is hiding inside of everyone.
What I would recommend is to get in touch with me – [email protected] You can also – I got a special gift for all your listeners. Head on over to Crowdsourcia.com/Fire and I’ll give your listeners $50 in site credit to give us a try.
John: Wow. Fire Nation, you’re the average of the five people you spend the most time with. You’ve been hanging out with MV and JLD today. So keep up the heat and head over to EOFire.com. Just type Michael in the search bar, his show notes page will pop up with everything that we’ve been talking about today. Best show notes in the biz, time stamped, links to all you can imagine. Hey, check it out. The gift – Crowdsourcia.com/Fire. Get over there, Fire Nation. Michael, thank you. No. 1 for your service. No. 2 for sharing your journey with Fire Nation today. For that, we salute you and we’ll catch you on the flipside.
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