Webinar: Beat the Competition Transcript
Pat: Welcome, everyone. Hey Mike, how are you today?
Mike: Good, thank you.
Pat: Good. Thank you for joining us today. We have an exciting webinar for everyone. We’re going to continue speaking with Mike Mann. I want to introduce Mike Mann a little bit to some of the attendees of today’s webinar. Mike Mann is a social activist and serial entrepreneur who has been proactively involved with the Internet since 1994. At that time, Mike founded and ran the ISP web developer Internet Interstate until he sold the company to Vario in 1997. Mike then founded the world’s largest secondary market for domain names: BuyDomains.com, which is now called Name Media. In 2005, he sold his majority interest in BuyDomains.com and the Seik.com search engine portal to Highland Capital partners and Summit Venture partners. Mike is also founder of several active, successful for-profit corporations, including Phone.com, SEO.com, DomainMarket.com, YieldSoftware, BrowserMedia, and others. In many cases, his companies exchange resources, talent, and technologies in their never-ending quest to deliver innovative, profitable digital products and services.
Mike is passionate about charitable works; and to perpetuate his interest in charity, Mike is the chairman and founder of Grassroots.org, a global network that provides free services to nonprofits and promotes social action. Mike and his team also manage MakeChange! Trust. That’s a charitable fund that supports select 501c3 charitable organizations. Now today we have Mike with us. We’re going to discuss some of the different practices and techniques that have helped make him a success over the years.
First, we began our series of webinars last month with a discussion about what it takes to be a strong entrepreneur—some of the character traits that you need to have. When you’re embarking on starting a business, we discussed what goes into a business plan, and some of the different marketing techniques you can use in the beginning. We touched a little bit last time on Best Practices, and that’s where I want to start today. I want to start with Mike. Mike, why are you such a strong subscriber to Best Practices?
Mike: Well, I think the issue is that every business exists within a competitive environment, and within that competitive environment one has to distinguish themselves from everyone else out there. In order to do so, they have to pick specific activities and methods that will make them successful, or at least invent ideas and try out those ideas to see which ones will make them successful. To summarize that, we call it Best Practices—the best ways of operating each aspect of one’s business. It’s a fluid and evolving set of ideas, most of which are already out in the public domain. It’s just a matter of adopting the Best Practices that your competitors and people who write books and things like that have put out into society—the ones that make the most sense for your business.
Pat: You talk a lot in your book about how your Best Practices need to evolve. You say there’s no limit to the Best Practices arsenal. What do you mean by that?
Mike: So, if you look around at your competitors’ characteristics that are the most powerful and profitable, and you look around at business people in unrelated industries who also have lots of Best Practices, then you’ll find ideas that you should leverage for your business. Some of them are cheap and free, so there’s no reason not to test them, analyze them, use math and science as much as possible to figure out if those ideas are truly valid practices that yourself and your employees can leverage perpetually to make profits for your business.
Pat: Now Mike, what is the difference between Best Practices and standard operating procedures?
Mike: I think standard operating procedures are more of a formal thing where you are actually documenting it, writing it down. I think it probably comes from a military expression, most likely. I’m thinking that’s the primary difference. But essentially, I believe it overlaps to a great degree.
Pat: You make a strong statement in your book—I think it’s strong at least. I’m going to read a passage from your book. “One can just about mathematically prove that working on an evolving model committed to Best Practices and standard operating procedures will produce more profits than a more random process.” Mathematically—those are strong words.
Mike: Yes. Again, it’s a matter of going to your accountant. You can have two businesses where one is adopting Best Practices and the other is operating randomly. Assuming all other characteristics are equal, the company that’s adopting and formalizing standard operating procedures and Best Practices will, in fact, see better math when it comes time to do their spreadsheets and their quarterly numbers. Those are the more profitable companies. It has been proven numerous times that companies that focus on Best Practices and the analytics of those practices will have better results. The ones that are paying attention to the details will deliver higher quality details each quarter.
Pat: Now Mike, I appreciate that. In your book, Make Millions Secrets to Business and Personal Success, you do a great job simplifying some very difficult tasks, it seems. In Chapter Three, which is what we’re discussing today—it’s called “Best Practices as Weapons”—you boil achieving success down into four main strategies: delegate tasks, build efficiencies, learn more, and work more. Let’s start with delegate tasks. Why is that one of these four strategies for success?
Mike: Again, most of us are already working as much as we can work. You can only make additional money on a marginal basis plugging away year after year by yourself. But whatever Best Practices you’re employing in your own work, you can train, hire, and mentor others to do those same things, and a portion of the profits that they accumulate would go to you under a normal business arrangement. The more people you can hire and delegate, train, etc.—each one conceptually delivering a portion of the profits that you would make on your own—should constantly compound your own profits as you get your fair share of their work. Does that make sense? Hopefully I didn’t over-confuse that.
Pat: No, I don’t think that was confusing. Your second strategy is to build efficiencies into all parts of your business.
Mike: Right. So, you’re delegating as much as you can delegate, so what else can you do to make things more profitable? The essence of many Best Practices (if they’re not related to sales and marketing) is related to building efficiencies: this will save us money on paper, this will save us money on computing technology, this will get our clients faster delivery speeds. They are all these conceptual ideas that one could look around at again. You can look for Best Practices and standard operating procedures from your competitors and the people delivering the highest profits out there and make them your own Best Practices. Write them down and force yourself and your employees to follow them every day. Again, that’s very much building efficiencies—Best Practices. Building efficiencies is a key component to building Best Practices. So number one, you’re delegating; and number two, you’re building efficiencies.
Pat: And you’re learning more. Apparently, you need to be learning more along the way.
Mike: Right. So again, you’re doing everything you can. You’re already working as many hours as you can—or if you’re not, that will bleed into the fourth point here. If you’re already delegating as much as possible, and you’re as efficient as possible, all you can do is to keep studying Best Practices about businesses in your industry and ways of improving your bottom line, your product or service, your sales, your cost of doing business, your hiring procedures… Again, these are all different types of Best Practices involved in work. This whole chapter is about Best Practices and about breaking down these four points here. You should cover everything you could possibly engage in to make more money for your business, essentially.
Pat: Yes, the fourth point is to work more, which you kind of alluded to.
Mike: Right. I was coming to the premise that people are already working as much as possible, but if they’re not, that’s actually the easiest way to make more money, especially if you get paid hourly. Actually, no matter how you get paid, if you get paid on commission, working more will make you more money. If you get paid hourly, working more will make you more money. That’s obvious in many respects. To the extent you’re already working as much as you can work, the only remaining thing you can do is delegate to other people as much as possible assuming they’re doing a great job and performing at a profitable level and evolving along with the rest of your team. Build efficiencies into every person and every aspect of your operation and get your Best Practices; learn more—study everyone and everything wherever it may be with respect to your industry and business, and that will work.
Pat: Now, I don’t think first-mover advantage is a completely foreign concept to some of the people attending today’s webinar, but how does getting first-mover advantage fit into this chapter, Mike?
Mike: Sure. Particularly in the businesses where I work and a lot of us work—we’re Internet workers, and you have to think of the Internet as a relatively new industry and paradigm—therefore, everything is sort of new, and there’s a lot of hype in one respect and there’s a lot of literal need for those products and services. If you were the first person to present a high quality product—eBay, Skype, Amazon, Google was the first great search engine for example—if you’re the first person to market an excellent product, you get all the hype of being in a marketplace where everybody needs the products or services. You actually get the lion’s share of customers and their loyalty prior to the time your prospective competitors enter the marketplace, so that allows you to get a head start, a running start. If you’re doing a good job like Google or Amazon, you just keep going and going and never let anybody catch up to you. I have attempted to outline ways to beat the first movers, to take their ideas and beat them also, so it’s still a dog-eats-dog world whether you’re a first mover or not.
Pat: You can’t be the first mover every time, can you?
Mike: Yeah. It’s kind of relative who the first mover is. Google wasn’t the first search engine, but they are the first great search engine.
Pat: You talked about how being first means accessing and understanding information. You write in the book, “Make certain you are researching every angle relevant to your industry and operation.” This seems key.
Mike: Sure. We were just mentioning previously the idea of learning more. This goes back to learning more: whatever one’s industry—let’s say you do engineering. You want to belong to the Engineering Society of America, the engineering society of your local neighborhood. You want to read all of their publications conceptually. You would have studied engineering in school or at least read and comprehended all the related books. You would attempt to get mentors in the engineering industry: you’d go to LinkedIn and try to find the very top people in the industry and make them your best friends. You’d go to their conferences, finding them through social media outlets—Facebook, Twitter, whatever. The idea is that you totally enmesh your entire business life in this industry. Nobody is going to know any more than you know, nobody’s going to know anybody you don’t know, nobody’s going to have any better access or connections. You want everything for yourself, not just because you’re greedy, but because you want to paid for your family, etc. That’s why you’re in business. Maybe you are greedy; I don’t know. You’re not, Pat, right?
Pat: I don’t think I’m too greedy.
Pat: But I do sometimes hesitate with things. When there’s a big step to make or I’m out to move forward, I hesitate, and I think it can really hurt my plan and hurt my results. How have you been able to overcome hesitation?
Mike: First of all, there are a lot of reasons why people hesitate. They’re scared to put themselves on the line, they’re scared to ask for money from people—their potential customers. They’re scared that they might seem too aggressive. Maybe they’re scared of what they might deliver. They might be scared that they’re being too rough on their competitors if their competitors are their friends. In the domain market where I am, we have rough competition but we’re all friends. Sometimes you feel bad when you’re pitted against your friend on something. People hear that and it sometimes prevents them from being in business.
However, an appropriate perspective is to say: I’m in business for the following reasons. I don’t lie, cheat, steal, break any laws, etc. I’m just out to make the maximum amount of money. Businesses are supposed to have competitors, and those competitors are supposed to get crushed if I’m doing a good job. I’m sorry if they’re my friends outside of business, but that’s just the way it goes. And my customers are supposed to pay me enough money to make a profit or I can’t be in business. That’s good for them because it keeps me in business, and I can hire people and give them better services, etc. There’s just no other way. That’s the issue: if you want to go into business, you have to follow the fundamental rules of business, or else you’re not going to make a profit and your competitors will take all the money.
Pat: In this chapter in your book, it talks about how the fundamental rules of business seem to mimic evolution. In fact, the first line of one section is, “Business success mimics evolution.” Why embrace natural selection in your business practices, Mike?
Mike: So it’s an important point for us to understand that’s the only context any of us have. We’re born, we want to eat, we thrive, we compete in society, we compete in sports, in school, in the military. The world’s a competitive, thriving place. Business is really just to make money—the invention of business finance and commerce is related to money. The question is why do we want money? Well, we want money to feed our families, to be more attractive for dating and marrying, to get more and better food… In other words, we want money for the aspects of natural selection that we thrive on. That’s why we want money. So therefore, business is about money and money is about natural selection; so therefore business is about natural selection. In order to succeed at business, we should apply the fundamentals of natural selection to our businesses. Those fundamentals are very much related to competition, aggression, spreading your message, getting as much exposure as possible—the basics Darwin taught us, essentially.
Pat: And metaphorically, killing your competitors is part of that, apparently.
Mike: Exactly. Again, the guy next door might be your best friend, but if he’s in your business space, what are you going to do? Are you going to go out and say, “I’m going to sell fewer accounts today” or “I’m going to do a worse job today?” It’s okay if your next door neighbor can compete as much as they want—you don’t need to prevent them from competing. Your job is to do a better job. If you happen to be doing a better job by accident, or on purpose by design, there’s nothing to feel bad about. Again, there shouldn’t be any debate in your brain at all. You should just go to work and max out your business process no matter what. Follow your Best Practices and follow your business plan, and your competitors are supposed to get run over. That’s the object.
Pat: Excellent, excellent. Are there any tips you could offer our audience today about being an effective hunter? You speak in the book about: you want to be an efficient and effective hunter to survive at the top of the food chain. Your weapon can be an endless stream of advantageous transactions. Nice writing!
Mike: Exactly. That’s the idea. The main companies are successful related to their sales and marketing practices, so it’s about promiscuity. It’s about going out there and replicating your brand and your message as many times as possible and making offers—putting yourself out there. I’m offering you this service, that widget, that product, etc. And the reason one would make money at the expense of their competitors is if they’ve done a better job out there and hunting their prospects—finding more customers, looking under every rock. To the extent that there are competitors looking under the same rock, pushing them aside and doing something better to get the prey under the rock, so to speak. Again, these are all metaphors. Nobody’s literally hurting anybody or preying anything; it’s all in the business sense to make money. In my case, I try to have an overriding reason for the money, which is related to our charitable work, so it makes me even more aggressive than the average business person.
Pat: It’s very interesting. When in your career did you begin drawing parallels between natural selection and business?
Mike: I think at some point while I was writing my book, I was writing about aspects of business, and so many of them were right along the lines of natural selection that I just drew the parallel and wrote about it.
Pat: Just as evolution is the result of a series of mutation tests, you also say that you should be creating mutations in business to succeed. What exactly do you mean by that?
Mike: A lot of it is trial and error and analytics. If you go to our site InternetApplications.com, it talks about trying lots and lots of little tests. Some of those tests work and some don’t, and some of them are average. So those things that are outstanding are mutations—they’re anomalies in the data. The ones that are outstandingly bad, you would throw away. The ones that are outstandingly good are mutations that are positive. They enhance the genetic code of the business. Those genetic improvements in genetics are adopted in society, and in business it should be the same thing. You want to try out as many genetic mutations of your business as possible quickly and inexpensively, and look at the math, science, and analytics that determine which mutations were positive and helped your business move forward to the next generation. Those ones you would adopt and reinforce. Those aspects that you tested that didn’t work, you’d drop off.
Pat: Sounds like great advice, and I think it meshes nicely with another section in this chapter: Hype Theory. You go from embracing natural selection into welcoming readers to Hype Theory. I think Hype Theory is an invention of yours, is it not?
Mike: Yes, that one’s actually mine. Most of the things in this book are things I learned somewhere working in business, but I think I invented the term “Hype Theory,” which is kind of an explanation of how business mimics natural selection. It’s an idea of a way of how we can think about our businesses in order to ___.
Pat: In fact, you compare Hype Theory to a DNA strand in your book.
Mike: That’s right. In a DNA strand, there are stable characteristics that form your bones, your blood, your skin—the things that make you a stable, healthy human being. And then there are other characteristics that allow you to expand and try new things and look for potential mutations to expand your family and to compete, essentially. Those things are naturally within one’s DNA. What we’re saying here is that in business, one can try this Hype Theory which has a similar paradigm. And within Hype Theory, you have the reality that you have to:
- work hard every day
- show up a certain number of hours
- have investors, financing, a business plan, an accountant, computers
These are the fundamentals that every business has to do in order to break even, to stay even with the competitors, to survive.
But the other side of it is hype and mutation and experimentation. Once you have those fundamental processes in place, and:
- you know you can provide customer service
- you know you can do your bookkeeping
- you know you’re operating within the law
- you can hire people
- you can train people
- you have your fundamental DNA together
Then the object is to get out there and buy everything and meet everybody and test everything and read everything and expand your brand, etc., and again, that gives you opportunities to mutate.
Among those mutations, you’ll find statistical anomalies that are positive, that are profitable, and you’ll see where those came from—which experiments were profitable. You can reinforce the profitable experiments and dump the ones that weren’t. Again, you want to do a lot of experiments relatively quickly, carefully, and scientifically, and get your results back and move forward.
Pat: Wow. It sounds a bit academic. I wonder if you can share with me an anecdote from your career where you used this theory, where this reality and this hype were put into effect.
Mike: Well, I can use the example of building and selling a company. We could do this several places, but the best one was BuyDomains.com. We worked really hard, did a really good job, made good money, did good accounting, and did everything by the book—so we had our fundamental DNA together and we were doing a good job. Then, we and everybody else made the marketplace full of domain insanity, and the investors came running.
Pat: Wow. Excellent example.
Mike: So again, the reality of an excellent business is that the height of the market space delivered the dollars.
Pat: And we’re actually going to speak later in the presentation about some of the ins and outs of selling a company. But first, let’s talk a little bit about gaining consensus. You have some ideas, you think some of them are strong ideas… should you consult others and get their opinions about the ideas?
Mike: Yes, absolutely. If you’re running a business, hopefully you have trusted advisors—whether they’re your lawyers, your business partners, your accountants, people you’ve done business with in the past, whoever they are. They’re people that you trust to give you advice. When there are significant decisions to be made, you need to get out there to see your community of trust and figure out what those people think about your ideas.
Pat: Can you go too far with that? We hear often about—and you even write about—groupthink in managing by committee. We sometimes call it “designing by committee.” You can take that too far, can you not?
Mike: Yes. When I say, “you need to go out there and get their opinions,” hopefully you’re going to be the decision-maker and the leader. If not, then you’re one of the people giving the opinions, but there’s got to be some final decision-maker. A committee or a group is not the decision-maker—there’s a person who is the decision-maker. The group gets to give their opinions politely, correctly, efficiently, whatever the group leader needs to encourage a good dialogue and encourage feedback, and then he or she needs to move forward. When moving forward, you don’t need 100% consensus and 100% vote unless the rules of your business require that.
Pat: And who do you go to for opinions? How do you create a circle of trusted advisers? I imagine there are several people who you turn to when you want to bounce ideas off of them, or even for business advice and other types of advice.
Mike: Yes. In my case, there’s no reason not to get lots and lots of advice, particularly when it’s free and cheap feedback. I’m a firm believer in crowd sourcing. For me, I’m happy if we have a new logo or choices for three new logos. I like to go to a website called MTurk.com where there’s millions of people, put our logo on there, and let a few hundred of them vote on which logo they like the best. That’s just an example. Again, I’m the final decision-maker, but I went out into a group and I got some consensus as to what was best. The vast majority of the time, I go with the consensus. The President of the United States usually does the same thing. He goes into a military committee or his cabinet committees, and 95% or more of the time, they have a consensus recommendation by the time he walks in the door. Only once in awhile will he go outside of that consensus recommendation because it’s physically impossible for him to have all the information. He has to trust that he would have made the same decision given the same information as the people he’s delegated that responsibility to.
Pat: Now, you joke in the book that probably advice coming from your mom may not be the best advice. Have you bumped into a few “yes men” over the years?
Mike: Absolutely. Most people who are starting a new business say, “Everybody thinks it’s such a good idea.” And I say, “Where is your spreadsheet? Where are the analytics that tell me it’s a good idea?” Does it really matter if your mom thinks you have a good idea?
So the point is that you have to have serious advisers; not people who are just “yes men” going along. In my case, a lot of times I’m talking to people and we’re looking for some information and they’re my employees so they feel like they have to go along with whatever I say. But the vast majority of people will argue with me and fight it out until the end, so I really don’t have that problem usually. You just need to avoid “yes men.” Everyone needs to give their opinion and preferably not fight tooth and nail for everything.
Pat: Now we have a pretty strong audience today. I appreciate everyone attending the webinar. A couple questions are already coming in. I encourage you to post your questions in the question box, and Mike will get to as many of those at the end of the presentation.
We’re moving through some complex subjects here, but that’s one of the cool things about Make Millions Secrets to Business and Personal Success. In that book—a quick read, fewer than 200 pages—Mike hits on a lot of these concepts. He hits a lot of these ideas that maybe weren’t accessible in school to all of the aspiring entrepreneurs and business owners. And frankly, he makes sense of them. The next section we’re going to go into is efficiency, leverage, and scale; and mastering these three concepts. It sounds like a huge question, Mike. Why did you include this section in the book?
Mike: There’s this ability to take a phenomenal business and turn it into an outstanding business and really create your dreams. The idea that people’s dreams are related to business success is really not that farfetched. There are viable dreams that are going on constantly in your community, and you can adopt the practices of others, community, your business space, books, seminars, etc., The point is: if your dreams are related to making millions of dollars, because you can buy your vacation house or send your kids to the best schools or give to your favorite charities, those are your dreams. These things are tangible. There’s information right in front of you within your communities that will enable you to do the stuff that you really want.
Pat: It’s not easy, though. None of this comes easy.
Mike: No, none of it comes easy. And it’s really not a great idea—it’s not worth it—for everybody. It’s just for a minority of people. But the point is that the people who want to have a really hardworking lifestyle and they want to go for the gold, then that’s their thing. Other people—the vast majority of people—don’t live that lifestyle, which is perfectly understandable; but in this case, we’re talking about that lifestyle.
Pat: Absolutely. As you’ve said, everybody is not cut out for that lifestyle. In an interesting passage in your book, you say, “Plan in advance for each task you undertake to be bankable, meaning it will lead to real profits within a reasonable period.” You write that, “Merely filling time by “faking it,” or producing academically good yet unprofitable work rather than making serious, planned and measured financial accomplishments, will not help one reach his goals.” Could you elaborate on that?
Mike: Absolutely. You can’t just make up a high-in-the-sky idea. You need to go back to that same idea we spoke about where you’re testing things, and the reason you’re testing them is because you’ve looked at as many ideas as possible, and you’ve filtered through for the very best concepts. You’ve done some basic mathematics and analytics in your head to give you an idea of what you want out of this:
- Now what are you trying to get at?
- Why is this a good idea?
- Why is this a good test?
So, in other words, you’re saying this test could conceptually be bankable. “I’m going to run a little experiment and see whether I can make any money on this thing.” Then you’ll go back and get how much money you made, the amount of traffic to your website, the feedback from your potential customers, what did your competitors do in reaction, or whatever information you can get.
And then you’ll say, “Well, was that a good test? Should I expand that test? Is that money better used on the next test that’s in line?” You keep moving down your list and testing new things. In the first place, you have to be in a positive market space with money, profits, and growth. Once you’re in there, then you should be able to see whether you’re being successful or not. If you’re in a bad marketplace, no matter what you do it may not work.
Pat: And incompetence is a killer, is it not?
Mike: Absolutely. If you’re doing marketing and you mess up your marketing messaging, your branding, your domain, your website; your competitor’s going to crush you. If you do bad math in your accounting, the IRS is going to crush you, in which case you’re not going to have any money and your competitor’s going to crush you. Again, if your competitor’s doing everything correctly as we’re trying to get you to do—following Best Practices, etc.—there’s not going to be a lot of room for incompetence. If they’re competent and people in your business are incompetent, over a period of time natural selection will take its course. The strong will survive, and the strong dogs will eat the weak dogs, or they’ll eat the food that the weak dogs are supposed to get, however that works.
Pat: Nice. Well, I’m curious Mike: how many examples out there of business success, so many companies that have gone from rags to riches—and in Chapter Three of your book, you choose to spotlight Domino’s Pizza. Can you tell me a little bit about why you chose that company to spotlight in your book? Obviously, you appreciate what they’ve accomplished over the years. What is it about Domino’s Pizza? Why did you choose them?
Mike: That’s just a nice, simple example. There are a lot of examples similar to Domino’s Pizza, but that’s an excellent example. I think we can establish that that is not the world’s best pizza, so why is it the world’s most profitable pizza? Again, the reason goes back to this natural selection in their competitive environment—the idea that they’ve tried everything, that they know the marketplace better than everybody else. They have all the costs down and they have training together. So again, they didn’t have to have the best pizza in the world. If you think about starting a business—a Domino’s Pizza store—it costs a lot of money to start one. But forgetting that concept, the rest of it is very simplistic. They have 30 ingredients, five employees, one little store, really simple pretty sign, and excellent branding all around, so it’s something you could replicate.
You can replicate a store of whatever business you are in. It would be one simple store full of Best Practices and good branding. I say store; it could be an online service, a business, anything, but it’s the same idea. You could start one simple thing like Domino’s, and you could take over this enormous marketplace just by following Best Practices and natural selection, starting with that one nice, clean idea.
Pat: Yeah. In your book, you encourage people to become the Domino’s of their market niche or their business niche.
Mike: Exactly. Start with a small, good branding concept, a product or service everybody likes and needs, get your services right, the phone numbers right, the website right, the commercials right, get everything right; and keep pushing forward and breaking down your competitors and taking market share.
Pat: Very interesting. Now, we have a few minutes left in the presentation today, and I think we might end the presentation (before we start taking your questions) with some information about selling your company. It’s probably to a point where many of us haven’t gotten yet. We’ve kind of come full circle over the last two webinars from basically not even having an idea—and how to go about establishing an idea for a company—to talking about selling your company. When are business owners presented with the opportunity to sell their company? What is usually going on, Mike?
Mike: Generally speaking, there is some sort of consolidation in the market space where there’s an active investing environment. There’s a competitive environment for investing in whatever business they are in. The bigger, better, and more profitable they are, the more likely they are to have offers coming from that environment.
Pat: And there’s quite a ritual that plays out or that can play out when you’re selling your company. In fact, I think you even call it the “mating game” in your book. What is that? How does that courting occur?
Mike: Well, the prospective buyers (who come in different shapes and flavors) will contact you through one means or the other. But if you’re an Internet business or you’re related to the Internet mergers and acquisitions frenzy, then they’re essentially venture capitalists or those finance-type guys who work for venture capitalists. They will call or email if you have a good business. When they call, in most cases, they want to take you to lunch and tell you how they know everybody and about all the fancy trips they’re on and how they want to be your best friend, and how they can really help you, and they help everybody and it’s all great. But then the problem is that the vast majority of those people will eventually attempt to get you to agree to a deal that’s not in your best interests.
Pat: And you advise people not to get caught with their guard down in those situations.
Mike: Well, the mating game is about the dinners and the trips and the distractions, whatever. It’s basically totally irrelevant—there’s nothing wrong with it. But the issue is that it should never change your parameters for selling your business at all. You should know your own parameters and be in control of the sales price and the sales process irrespective of whatever is happening, whoever is coming at you, however nice they are. It’s mostly a question of money and what the package deal is going to look like.
Pat: And you should not let selling your company distract you from today; distract you from doing business.
Mike: That’s correct. The selling of a business is generally a long process which fails a lot of times. The buyers go through this due diligence process where you expose your books and your legal details, your business plans, and you might introduce them to other people on your team. The issue there is that they don’t care how much time and energy that takes from you. They’re trying to suck you dry. They want to learn everything about your business for one thing. They’re probably feeding on you. And the other thing is they want to buy your company, so they want to know everything they can to make sure they give you a really low offer, generally speaking. So again, they don’t care how distracted you are, but you do care, so you want to basically push them to the side, control the process, and not let them do anything that affects your business operation.
Pat: Very interesting. Let me ask you, Mike. You’ve obviously had a lot of experience buying and selling companies over the years. What has been one of your more successful transactions as far as selling a company?
Mike: We’ve bought and sold lots of companies—mostly small companies, or relatively small. The best one was BuyDomains.com, which we got a big sale on. We’ve sold lots of smaller ones than that, and we’ve bought lots of even smaller ones than that. It’s a matter of public record, mostly; Google me or look at MikeMann.com.
Pat: Yeah, at MikeMann.com, you can learn a lot about Mike and the companies he owns now and the companies he has owned in the past. You can also learn more about Mike’s book, Make Millions Secrets to Business and Personal Success, by logging onto MakeMillions.com. Mike talks a lot about the book at MakeMillions.com.
We’ve spoken about evolution here. We’ve been talking a lot about natural selection and such, and your second book will soon be released in the near future, will it not?
Mike: Yes, sir.
Pat: Applied Evolution. Is that the title?
Mike: Yes, sir. Applied Evolution.
Pat: Can you give us a little hint of what that might include, Mike?
Mike: Sure. The idea is about studying human behavior and natural selection and trying to encourage people to essentially behave differently, to act differently toward their neighbors, go to different people in Congress, do different things with their schools and their school systems, their Boards of Directors, their neighborhood councils, everybody—again, it’s back to Best Practices about operating the world. It’s not about business, but about getting along with other people, about taking care of your environment, about putting responsible people in office. All of these things have a huge payout greater than getting millions of dollars. If we don’t have to worry about warfare as much, for example, then we won’t be paranoid, we won’t have as many social problems, we won’t have to spend many trillions of dollars on the military. Again, there’s a peace dividend which is related to warfare. It’s about peace within your neighborhood, peace within your cities and your environment, less substance abuse, less divorce, less warfare. We’re basically addressing social ills and trying to find succinct Best Practices that everybody can leverage to reduce those social ills. It’s similar to the business book in the sense that we’re addressing a huge global issue and trying to break it down into simple steps for success.
Pat: So, Make Millions was the first in a series of three books, I believe.
Mike: It is intended to be. Right. The second one is Applied Evolution and the third one will be called Fix Government, which will address the idea of fixing the government in order to save billions of dollars and save the world indirectly.
Pat: Now, Mike, considering your vast experience in Internet domains, naming websites, and the importance of a website’s name as it relates to search engine optimization, one of our audience members has a question about SEO.
Pat: They want to know, “How important are exact match keyword .com domain names for SEO and customer recognition as a market leader in that niche?” I just read the question—I think you understand it. Go ahead.
Mike: Sure. So you know I’m a big proponent of keyword domains: domains that are contextual to the type of business you’re in and the type of product you’re promoting. For example, I own Phone.com, which is a phone company, and that’s about as simple and contextual as one can get. The issue is: is that profitable as it relates to search engine optimization? The way Google works is essentially through a big robot full of algorithms that comes into one’s website. The robot looks through there to see whether or not it has specific characteristics and measures the level of those characteristics. It goes through all these analytics, and it’s a robot, not a person. Then it assigns scores—it gives five points for this keyword or this characteristic, these links, this sort of updated content. This information is out there—the type of ___ Google uses for scoring. Yes, with everything else equal, if there was a phone company that had everything identical to my company Phone.com, Google would give my company some extra points for having the keyword-matched domain name. I would get on top of that person in the search results in Google. I am on top of that person in the search results in Google.
Pat: Excellent. We still have a few minutes left. Anybody who is out there still listening to the webinar, if you have a question for Mike, please send it in. We’re going to end the webinar today. We’ve spoken about Best Practices and the importance of Best Practices. And at the end of Chapter Three in Mike’s book, he includes a list of suggested Best Practices for your team, and I thought just maybe running through a few of these would be a nice way to close the webinar today. The first on the list today, Mike, is pay attention to details. I know you’re a staunch proponent—as you should be—of paying attention to details. What do you mean by that?
Mike: It’s just a matter of the competitive environment. If I have an awesome brochure and my competitor has an awesome brochure which is very similar in many respects, one of them might have a couple of typos—let’s say a typo in my domain name, my URL—and if he doesn’t have a typo in his URL, over a long period of time he’s going to get more business and eat away at my market share. However, if I had paid attention to the detail and my URL is correct, but he had a graphic design anomaly, then he would have messed up on the detail, my brochure would be better, and over a long period of time I’d eat away at his market share. So that’s a detail in one thing. But there are details in your accounting, legal work, hiring, technology, and you’re welcome to screw all of these up that you want, but your competitors are going to eat your lunch if you do.
Pat: Excellent. You also talk about—let’s roll through a few of these. You talk about how offices should be clean and orderly, and you should encourage random and scheduled client visits. For number 3, you say be patient and polite to all clients and prospects, but move to quality conclusions quickly. Number four is be entirely customer focused. What do you mean by that, Mike?
Mike: All of these things are about your customer, about servicing and selling to more customers. Having a clean, neat, orderly office allows you to move forward with more transactions to bring your customers and employees in and get through the business of the day. Again, being totally customer focused—it’s a matter of the competitive environment. If you call back your customer faster than your competitor calls back their customers, you are going to eat away at their market position, just like all the other Best Practices. Being focused on their needs instead offering the cookie-cutter solutions that you feel like offering will keep your customers happier. The customers will provide more references and they’ll stay with your company for a longer duration.
Pat: Lots of questions about time management, I believe, in the audience today. It leads nicely into one of your Best Practices. You say that 85 percent of your time should be spent doing projects, sales, and customer service, while the remaining 15 percent should be spent improving customer service to enable more sales by offering your present clients better value.
Mike: Again, it’s selling service to customers should be your whole thing. The minority of your work should be the back end processes. The fundamentals of business should just work; they should get set up. But most of your staff and your time should be spent getting more customers, bringing more money in the door, getting more business. And then to expect to be successful, you have to give those customers outstanding services and products.
Pat: Now these and other Best Practices, Mike elaborates on in his book, Make Millions Secrets to Business and Personal Success. More information about Mike’s book is available at MakeMillions.com, and you can learn a lot more about Mike and his many business ventures, both past and present, at MikeMann.com. Now, Mike, we have one more question from the audience. When buying businesses, do you recommend buying companies vertically or horizontally?
Mike: Well, I look at every case as a unique case. You could be purchasing within your market space—one of your competitors—or you could be looking at a new niche, which would be horizontal versus vertical. But I don’t purchase as many businesses. I mostly build them from scratch. I start them from scratch more often. What else can I say?
Pat: I think that’s a good answer, and I think we’ll leave it there today. We’ve run over time, but I appreciate everyone sticking with us through the webinar. It’s always exciting speaking with Mike. I appreciate Mike joining us today. We’ll be having another webinar in the next few weeks. Again, we’re going to work our way through Make Millions. See if we can pick Mike’s brain for some more secrets in the future. I believe the next webinar is scheduled for June 23rd, when Mike will have some tips for dominating your marketplace—a common theme in a lot of the philosophies that Mike discusses.
Now, Mike, is there anything else you’d like to add today? We have somebody in the crowd today—I’ve gotta share this with you—saying, “Mike is the Mann!”
Pat: So do you want to say anything else before we let the crowd go today?
Mike: I just appreciate you putting everything together. You did a great job. Thanks a lot.
Pat: Thanks for joining us, Mike, and I look forward to the next webinar.
Mike: A pleasure.
Pat: And everybody, thank you for joining us. I hope you’ll tune in next time. Again: June 23rd, 1 PM Eastern Standard Time—that’s a Thursday. We’re going to be speaking about the next chapter in Mike’s book, and he’s going to share some tips for dominating your marketplace. So don’t miss that! Thank you everyone for attending. Have a great day!