Ep796: Mitch Russo – Sell It First Before You Build It

Andrew Stotz 00:01
Hello fellow risk takers, and welcome to my worst investment ever. Stories of loss to keep you winning in our community, we know that to win an investing you must take risk, but to win big, you've got to reduce it. Ladies and gentlemen, I'm on a mission to help 1 million people reduce risk in their lives, and I want to welcome everybody in the US, and in particular in the Free State of Florida. Thank you for joining this mission, fellow risk takers. This is your worst podcast host, Andrew Stotz from a Stotz Academy, and I'm here with featured guest, Mitch Russo. Mitch, are you ready to join the mission?

Mitch Russo 00:42
Absolutely. Let's get started. So let me

Andrew Stotz 00:45
introduce you to the audience. So Mitch, Russo is a serial entrepreneur who built and sold his first software company for eight figures, scaled a $25 million business with Tony Robbins and Chet Holmes, one of my favorites, and was twice nominated for Inc Entrepreneur of the Year. He's the author of four books and creator of client folio Mitch. Tell us about the unique value you are bringing to this wonderful world, and don't forget those amazing pictures that I see on your website. Well,

Mitch Russo 01:21
thank you. Well, you know, when you asked me about the value I bring to this world, you almost have to ask me, what, what decade you're talking about. You know, I've been around a while Andrew and I'm each different part of my life has focused on different things in the last 30 years. Like you, I help business owners realize the missing piece that is stopping them from really accelerating past where they've always been. And someone once said to me, Well, what is it that you do? And as you know, that's a hard question to answer, because what you're really doing is you're using your 40 years of experience and your intuitive senses to sort of holistically see a company in a way that the owners and founders don't. That's probably my greatest gift, is being able to it's a forest and trees thing. I can see things simply because I'm objective, and I've gone through 1000s of business models with that many clients as well. So it's really a process of having had a lot of experience with certain types of sales, certain types of marketing. I mean, I don't do medical marketing, I don't operate inside the financial marketplaces. But I do do that with small businesses, with online businesses, with training systems and, of course, product companies. So I just help companies accelerate, and I use very specific ways to do it

Andrew Stotz 02:55
interesting and what is your core product that those people are signing up for and joining and getting the benefit from

Mitch Russo 03:04
they usually sign up. The first thing that I usually do with a client is to bring them into the accelerator. So the accelerator is a 60 day program, and the reason I call it the accelerator is because they I've worked with CEOs who've owned and run their company for 30 years, but still did not know who their ideal client was, or still did not understand or had analyzed the way their company was spending losing or making money. And I have a unique process using mind maps, or in 60 to 90 minutes, I build a two dimensional model of their entire business structure. And once you do that, I'm sure, as you know, Andrew, it's very obvious what's missing, what's broken. And then from there, we just prioritize each of those branches. And then I use my own software, the client folio software, to create priorities, hold people accountable, create dashboards for performance management, and make sure that every week or every session my clients are doing the work they are assigned before our next session. That's the process 4060 days later, we typically have a completely different company, typically about a 40% increase in revenue and maybe a commensurate increase in profits at the same time.

Andrew Stotz 04:26
It's interesting, because I always people when I talk about my profit boot camp and helping people double profit, people are a little bit shocked when they hear that. Now I say in 12 months, but the point is, I have no doubt that you can do that, as long as the company is in the right space. Now, I have a lot of screenings that I do. I don't really work with startups, and I work with mid sized businesses that have an existing business. I work with companies that aren't in like, huge losses and don't know what to do, but, you know, are just not getting the profit out of that business that they could. It's. Not that difficult. You know, it's not, as I say, it's, it's not, it's, it's not complicated, but it is challenging to implement, and sometimes people need to push but I'm just curious, like, from you've talked about a couple things already, like your who's your target, you know, market, I know, Chet Holmes talked about that, you know, dream 100 you know, and thinking about, you know, the way the business works, what would be like, you would say, is the top two or three things that you've experienced that just need to be fixed. And when they're fixed, right? It makes a difference in that business's trajectory.

Mitch Russo 05:38
Uh, typically it's the CEO's mindset that we start with. It's the number one thing. And I, I see you smiling and shaking your head, so I know you agree. So it without, without the right mindset, with or a broken mindset or a misaligned mindset, I can't get much done now, I do have a mindset coach on my team. I'm sort of like an amateur mindset coach, I could fix and spot about 80% of the problems. But if I feel like I'm over my head, I bring Hallie in, and she is able to immediately understand what's going on far better than me. And at that point, we can straighten somebody out relatively quickly, and when I mean straighten somebody out, I'm really exposing them to their viewpoints that are barriers to their own success. Most people don't even know they have those viewpoints, or they have that perspective that is stopping them, because no one's ever helped them find it.

Andrew Stotz 06:41
Mindset is such a critical thing. I know in my course, one of the courses that I do in executive education at university here is on company valuation, and it's business owners come in and, you know, we value, I value their company, and I help them calculate the value of their company. And but you know, the exercises I go through is, you know, Okay, step number one, your business is 20 years old. Congratulations. You made it to this point. That's fantastic. Now let's imagine you sold your business today. You're out, and two very smart and strong and dedicated young people have come in, they have funding, and they want to grow this business 10x what would they do. And that type of exercise gets people thinking, you know, and I had to face that in my own coffee business where I have, I have a coffee roasting factor here in Thailand, and, you know, we almost crashed it a couple times. And there we were, you know, in piles of, you know, Rubble in front of a wall that we crashed into. And we said, Okay, how we do this differently? And can we do this differently? And that's where that exercise helped me and my business partner kind of reshape, you know, the direction that we're going. So mindset is, you know, critical, because without it, you know, it just doesn't matter. The other thing I see a lot is that people really ignore entrepreneurs, ignore finance and accounting, and they just put it on as a secondary thing, and what I do is I bring it right up into the face, and I tell them that finance is a mirror. Yep, finance adds no value. I always tell my students and my clients, finance is not there to create value. Finance there to give feedback, and we need that feedback on a monthly basis, or else, what are you doing? And that is always my number one advice from all of the episodes of people that I've interviewed about their startups, I've said the number one guide I would give for anybody starting up a business is have a monthly P and L, you know, and a balance sheet as soon as you possibly can, and meet at least once a month to talk about that. Yeah,

Mitch Russo 08:40
that makes a lot of sense. We use a live dashboard, so we don't wait to the end of the month where it's we're watching our analytics on a daily basis. But I also wanted to add to something, I said, if you have a minute, is it okay if I do? Yep, so, so I told you what we do in the accelerator. Accelerators is basically 60 day program, usually after we fix the mindset, after we eliminate the wasteful practices and discontinue the unprofitable products and let go of teams or staff that are just not producing naturally. Even before we do anything else, we start to see an increase in morale, increase in profits. But then once they graduate the accelerator, I offer them my my other program, if it's a fit for them, which is how to create recurring revenue. So recurring revenue is the key to value in a business. When I built time slips, we were, geez, under under $4 million at the time, and I built a certification program with at one point up to seven recurring revenue streams, and 18 months later, I almost tripled the value of that company when buyers came along and started poking around so recurring revenue. You is the greatest driver of value I have ever found. I know people say patents are and maybe to some that is, but, and of course, when I say recurring revenue, I mean subscription based businesses of any sort. And what a smart operator will do is they will not focus on getting a new subscriber. They will focus on keeping the subscribers that they have, because that's far harder than getting the new one. Yeah,

Andrew Stotz 10:28
that it's interesting. The subscription model is just, you know, blown up, and it's the opportunity is there for every single business. I remember, I don't know what it was, maybe six years ago, 10 years ago, when Adobe switched to the subscription model. And it just seems so odd at the time for that type of company to do it and now look at it. So, yeah, that's the other thing about having a lot of different revenue streams is that it reduces the riskiness of the revenue, overall revenue of the business, and that increases the value of the business when you want to sell it. Because people can say, well, yeah, if one of those goes bad, fine, but we've got, you know, all the other ones that can crank on,

Mitch Russo 11:06
of course. So I would suggest that most people have what I would call lumpy revenue. They either have a product cycle, a seasonal cycle, or an upgrade cycle of some sort. And what that does is it creates feast and famine in the business and in the feast period, people generally add expense, and in the famine period, they are generally suffering losses or reducing profits. So what a recurring revenue model does, including certification, which is my primary way of doing this, what that does is it evens out revenue and turns it from lumpy into monthly and once you implement even two streams of recurring revenue, your days of lumpy revenue are over, and once you then start stacking these recurring revenue streams from there, it's just a matter of it's almost a game at that point. When we did it, we didn't have any clue what we were doing. So I got to tell you, I had no idea that these would be the end results of what we were doing. We were trying to solve a completely different problem. And the problem we were trying to solve is that we had we were selling a lot of software, and we could not support the number of new customers coming on board. So ultimately, the only solution that I could think of was to ask some of my better customers to help me out. And at that point, I realized how powerful a model that could be, and that's how we designed and implemented an incredibly powerful certification model.

Andrew Stotz 12:33
And what do you mean by certification model? What does certification mean in your context? Okay,

Mitch Russo 12:39
so, so, I mean, let's say you go to the yoga studio, and you show up, and it's, I don't know what the cost of a yoga class these days are. It's 20 bucks or something. And then you'd go outside and you notice that the yoga teacher is driving a new BMW. And you look, wait a minute, there was like 13 people in that yoga class, and they probably do that twice a day. How are they driving that car? And how do they have this lifestyle in this beautiful facility? So I actually had this exact situation happen to me when I was young man. I was infatuated my yoga teacher, and I went over to her, and I said to her, hey, you know great stuff you're doing here. I'm just curious. How do you pull this off? I know your classes are kind of cheap and she laughed, and she says, Yeah, I know it's see my yoga classes are really nothing more than a showcase for my abilities to train people. I said, What do you mean? She goes, well. Every month we bring in housewives from all over the neighborhood, and we charge them $2,995 per person for certification. And I said, Ah, now I under light dawns on marble head, and I said, Oh yeah, get that. I get that. But here's the thing that she did not do. Once she charged them that money for certification, she had no other revenue streams coming from that person. So when I built my certification program. The first rule was that you had to become recertified every year. And the second thing that had to happen was we had to prove why, what the ROI was, why they'd want to be paying that money every year. So what does that do is that motivates you to figure out how to create value for the people you're certifying, or else they won't recertify. So we built an enormous system to create lead flow and follow up and help clients close deals. We brought them into live environments. We used to do a lot of trade shows. We used to invite our certified consultants right into our booth, and they said, does it okay if I try and sell this client a contract? Is it Yes, while you're here, go ahead. That's what we want you to do. We want you to get clients for our software and for your services. Well, I mean, and then it just kept going. I mean, then we started offering more products. Because, again, once a company has a product. Product line and it's successful, then you can have another product line and you already have customers. So from that standpoint, we had 350 live human beings as a unpaid sales force that paid us every year for the privilege of selling our products. Why? A, they made a profit on every product they sold, and B they got to consult on those products and train their customers. And I can go on and on with this. It's, yeah, that's,

Andrew Stotz 15:26
that's genius. Do you remind me about when I first read chat Holmes book, The Ultimate Sales Machine, I was feeling like, oh, man, there's $100 bills everywhere on the ground, and I haven't been picking them up. But let's now put it into the context of a business owner, let's say they have a product and they agree with what you say. They're struggling. It's lumpy. They're like, Oh, but this can't apply to my product, right? You know? And so I'm just curious, like, Do you have a case study or an example of maybe a manufacturing business or some other type of business that you could tell us about, you know, how they could apply that, you know, for their business. Okay, we're back. Yeah, so I was just asking about how, you know how someone could apply this, that they have a traditional manufacturing or other type of business, give us an idea of what are some things that they could do, or how they could think about it.

Mitch Russo 16:31
All right, so let me be completely upfront, this does not apply to every business. It's just that simple. You have a restaurant, fine, you're not going to have your recovery revenue is going to come in a much different form. You're recovering revenue. Recovering revenue is not so much in selling somebody lunch. It's in selling them on wanting the enjoyment and value of coming to your restaurant. And then at that point, you could offer things like loyalty programs, which, again, is similar to a recurring revenue model. And then with loyalty programs, you have different levels and upgrades. You could also do cooking classes, rep packing factory, many years ago, and after they read my first book, which was called the invisible organization, which, by the way, is the story of how we built, scaled and ran the business breakthroughs company with Tony and Chet. And in that book, I describe how people can go from atoms to electrons. They go from physical structures to virtual structures. And guy with the meat packing business said, Well, that doesn't apply to me. I got a meat packing factory here. How could that possibly work. And then after we got started with them, it was actually pretty clear they were running out of space. They were desperate. Moving a meat packing business is akin to moving 12 operating rooms at the same time. It doesn't work. So what we had to do is we had to offload all the other departments. And what that ended up doing is bringing up 25% of their space. So we offloaded sales, we offloaded marketing, we offloaded accounting, we offloaded management, and CFO functions brought them outside the building, and at that point, they built out the rest of that space into more facilities, and they were able to grow their business. So it doesn't apply to every business. It applies beautifully to service based businesses, SaaS based businesses, technology based businesses, training companies and training organizations. It also applies to large corporations that have products that they want others to train on. So in a lot of times, people hire coaches internally to get them to help their clients. Well, that's a waste of money. Instead, why don't you certify people who already love your product and they'll pay you to train your clients? That's the kind of just the that's the kind of reverse thinking. I'm trying to help my clients see when we take them through these models,

Andrew Stotz 19:00
one of the things I have, I have an online course called valuation master class, and it's a, it's a pretty long and intensive course for people who want to build a competitive advantage in company valuation in the field of finance. So there's real value there, because if you can really build your career in finance, there's good money there. And I've had 3000 students come in, and then I've had about 1000 students come into my boot camp, which is this intensive. I split it into two parts. I have an intensive part for six weeks, and then the remainder is a longer term thing. But once they graduate, you know, it takes a huge amount of effort to graduate, and I only have about 60 graduates, eight, maybe 70 graduates that made it all the way through the end. But I don't have anything else to offer them, you know, and I feel and they want more for the rest of their life.

Mitch Russo 19:54
Oh, my goodness, I knew, yeah, I'm astounded. You have so much more to offer. It's. Most unbelievable. So first of all, and this is the foundation of why you're, you only have 60 people out of 3000 and in most, and I'm not saying it's you or anything about you. This is what I'm seeing in general when I work with a client now, and I like to tell us stories to illustrate points. So yesterday I met a mastermind, and a very, a very young lady comes up to me. She's got to be in her mid or early 20s. She goes, Oh, I have a breathing, a breath work business, and I already have certification. And I said, Great, so let me make a guess here. I'm going to guess that. Oh, I said, How many people have you certified pictures? Oh, we've certified hundreds and hundreds of people. And I said, Well, let me make a guess. I'm going to guess that less than 15% maybe even less than 10% ever really used or even attended your certification. So how would you know that? I said it's because you don't engage them. It's because you they don't see the value of doing it. Here's the other thing, the people who are going for training like financial training, what are they not? They're not sales people, they're not marketing people, they're not actually business people, in most cases. So what does that mean? They don't know how to sell, they don't know how to market, they don't know how to offer their services unless they're working for a company. So when you talk about, what do I sell them next? Why don't you talk about how to build a consulting firm with the knowledge I just shared with you, and why don't you create levels on how to do that? And then you go one step further and say, Well, you know what? I've done. It for you. Why don't you enroll in my program for a monthly fee, and I'll provide you with the back end, CRM, with lead flow, with a website template that you could use to advertise your services, and the back end systems to respond using an AI agent, which you can then answer, and you can give them yours as the front end and have it answer questions to get them enrolled into the into the program. And I mean, we could riff on this for another hour and keep going. But I think you get the idea,

Andrew Stotz 22:03
yeah, it's the opportunity is huge. And like what you said, I started out in 2017 when I put this online, and I had basically had 2000 students in the beginning over a period of time, until about, let's say, three years ago. And what I realized was exactly what you said. Only 10% of them would make it to the end of the whole thing, even much less, because mine is really intense. And then I switched my model to break the course in two pieces. And then I created the pro the valuation master class boot camp, which is six weeks intense. I meet with them on Monday. I meet with them on Friday, each time for about an hour, and then I have a whole process of dripping them content. I've got a team. We support them. We get them through, and all of a sudden I'm at a 5060, 70% pass rate where there really are getting the transformation that I'm trying to deliver. And now then they, if they want to continue on, they go into the valuation master class professional. So definitely step one was really building engagement, and I think that that really helped me. But now you're giving me some ideas, and I've got to think about, you know, because these guys, these men and women, are some of the brightest young people out there who have proven their determination, because it takes about 500 hours to get to the end of my course. So I get it and they're totally committed to me, like I've definitely delivered to them what they wanted. And so it's my tribe, and I really now most of them want to go work. They don't necessarily want to have their own businesses, but they want to go work in investment banking, and they want to build a career in finance, similar to what I did, you know, when I built my career over the years. And so I just got to keep thinking along these lines, you know, of what you're talking about, to be able to build something maybe, maybe what I need to do is go out to them and say, What? What's lacking, what do you need?

Mitch Russo 23:57
There's another part to this that might be helpful. Most companies that do something like this and want to build the base of students to monetize later, don't start with the fundamental key that makes everything work, and that's culture. So I lay out how to do that in my book, which you can see on the screen, called Power tribes. And what I mean by culture is I like to think about it as a mental model. I call it the part of the culture, Parthenon. And so if you think about the basic floor of the Parthenon building is, is really your the values, your personal values, the values you're trying to instill in the people you're working with. And when you think about the ceiling of the Parthenon, it's your why, why do you do what you do? And if you could translate that into why they will want to do it too, then that makes it very, very effective. The poles or the columns are. Around the sides of the Parthenon are what I call the codes of ethics. Now this is a very important concept, because without a code of ethics, people don't have any rules. So like, if I said to you, in the world, you could do anything you want. I mean, here's a gun, here's a car, here's a bomb, go do anything you want. It's okay and nobody will bother you. Clearly, you're not going to last very long. However, if I said, here's the rules, you could do this, this, this, this, this, and not this, not this, not this, and this. Now you could do anything you want. Now people feel free, and they understand, and now they won't violate the code of ethics. And you get an extra bonus here. The bonuses is that it's self correcting. So what does that mean? So inside of a community, when someone says, You know that guy, Andrew, he's kind of a pain in the butt, normally, others will go, yeah, yeah, he might really be that way. But in a self correcting culture, one's going to say the other one, well, what's your problem? I mean, Andrew has been totally clear about what he said he's going to do, and he's done it and over delivered. You got a problem with that? You got to speak to him. That doesn't happen in most cultures. So this code of ethics thing and the whole culture paradigm is more important in some ways than the content itself.

Andrew Stotz 26:19
It's uh, just while you're speaking, and I click Buy on power tribe. So it wasn't the objective today was to get your worst investment ever story, which we're going to get to in a second. But I really love that idea. And in the in the final module of the valuation master class, there is ethics in finance course that I have for them, which is a short course where I teach them the ethics of finance and how to behave in a way that you can have a career in finance without any trouble for your whole life by serving your clients and the like so. But now I can see, too that I can build that into a more simple framework of how we operate within our tribe and all of that. So

Mitch Russo 27:03
yes, and the other thing is, is I'd move that course to the beginning instead of the end. Yeah, okay, that would help. That would help somebody get really clear up front on why they're taking your course. You know, again, when you have the kind of completion rate that you do, the obvious question is, why, and when you start digging down as to Well, why is the completion rate? I mean, if you're telling you got 60 out of 3000

Andrew Stotz 27:29
Well, it's 60. It's 60 out of, let's say 900 or let's say 1000 roughly,

Mitch Russo 27:36
okay, well, it's, it's pretty low, I mean, but here's the reason why. I mean, look, they paid their money and they're not asking for a refund, so they understand that. You know, they signed up for that. In fact, I know because you're a course operator, you know that many people pay for courses and never show up, which is actually, most people would think, Oh, you're probably happy about that, but the answer is absolutely not.

Andrew Stotz 28:01
You're not delivering, I'm not delivering the transformation. I can deliver

Mitch Russo 28:05
exactly. And number one, they'll never be a client again either. So it's like, it's just so but if you, if you are as clear as possible up front, and you really state the outcome in advance, sure, maybe a few people won't, won't want to join, but that's better,

Andrew Stotz 28:20
yeah, okay, I got a lot of thinking to do on that, and I appreciate that. I think for the listeners and the viewers out there, you're definitely getting some great feedback to think about your business, about how you think about how you can create recurring revenue, and also, we talked about ethics and other things and what you can offer next. What is next? Because we spend so much time and energy acquiring our clients, then we just let them go. Come on, that's crazy. Last thing before we go in. Can you just explain what is client? Folio? Sure.

Mitch Russo 28:51
So when I sold time slips Corporation, I became a reluctant coach. What I mean by that is other business owners kept saying to me, Hey, how did you do that? How did you with $5,000 scale a company to over eight figures and sell it when you never did it before? Can you teach us how to do that? And I said, Yeah, sure. I guess I don't know. Maybe I can. Let's give it a try. So for the first six times I did it for friends and for other CEOs who I'd known. I didn't charge them anything but I, but I rented a hotel room, and I got a whiteboard, and I developed the process and during those days, and then, of course, at that point, I had the nerve to ask for $500 to teach this and and people were like, of course, there was absolutely no resistance at all, because of all the people who were talking about having worked with me on this project. So that just kept growing. And it kept growing, both in scope, and it obviously grew i. Just felt like it'd be stupid for me, not the price test. So why don't I just keep asking for more and more and more and more until I hit resistance? Well, I didn't hit resistance till almost $20,000 and so what I did find, however, is that what I was doing was somewhat unique, and when I looked for software coaching software to encapsulate my process and deliver it and save me time and energy, etc. I couldn't find anything at all. So this is, this is kind of the story of my life. I find a problem. I can't solve it. I can't figure out how to solve it. So now I know I got to solve it, and that's what client folio is. It's a sell. It's a SaaS platform for coaches that encapsulates every aspect of their business and some proprietary systems that will really help them accelerate their relationship with clients, and by the way, get better testimonials and raise their fees.

Andrew Stotz 30:53
So it says client notes, goals and stats, scheduling, audit trail and history, client portfolio, call recording, all those things that as I move my profit boot camp for mid sized business owners in basically online. It's a little bit different when I do it on site, because I'm there communicating every two weeks for three hours. But now I'm going to need something like this, so I'm going to do some work on that. I have a link in the show notes to it, so we'll talk more about that later. But now it's time to share your worst investment ever. And since no one goes into their worst investment thinking it will be, tell us a bit about the story and the circumstances leading up to it, and then tell us about it.

Mitch Russo 31:34
Sure. I mean, I got to tell you, Andrew, I've made so many bad investments, I'm almost, I'm almost confused about which one I should use as an example. And the reason I say this because I've learned something from many of them. I learned something from all of them, and I have, I'll go through a couple of quick ones, then I'll get to the big one, if that's okay. So a couple of years ago, I made a decision. I said, I'm now. I've taught people how to do this. I'm now going to create recurring revenue in my personal life by buying businesses and buying businesses that I don't have to once I get rolling, I don't have to actually participate in or participate much. So at the time, these Amazon stores were hot, so I started buying Amazon stores, and there was a moment in time after spending, I don't want to tell you how much I ended up generating somewhere between 18 and 20,000 a month from Amazon stores, pretty much passive. And then the whole thing came crashing down. What ended up happening? Two things happened at the same time, Amazon greatly reduced the commissions that they paid to their resellers, and Google changed their algorithm so that now my SEO pages were not was that my SEO was not working and nobody was finding the pages. So that was a major fail, but, but that wasn't my fault, and it really wasn't a bad decision. It was just circumstantial. Here's a bad decision I made that illustrates a very important point, and I'll tell you what the point is up front, never start a business without knowing who's going to buy the product first, and me thinking I knew it all was totally and completely guilty of that. So an earlier version of client folio was called results breakthrough.com it's not even think it exists anymore. What that was, was a peer to peer accountability platform. Now, one of the things I learned in my business, in fact, even with Chet. What Chet and I did is we started an accountability division for BBI where we would charge, believe it or not, $3,000 a month for a low level secretary, type person to call a CEO every week for 15 to 30 minutes and hold them accountable. All you have to do is call this person. Here's their list. Just go down the list and hold them accountable for that. Well, it was an incredible hit. So later in life, I said, Well, why don't I build a platform for peer to peer accountability, and I had to invent some technology to do it. At the time, it worked, fantastic. In fact, I loved it, except nobody bought it. Why? Because I never even went out to see if anybody wanted it, because I was so smart and knew it that it would work, and I would just go ahead and do it. Well, I got great feedback, so coaches would buy it and say, Well, can I actually hold my clients accountable instead of me having to go peer to peer? And at the time, the answer was, No, I'm sorry, it's just peer to peer. Well, once we shut that down and I realized I was about to build clientfolio, I said, Why don't I take the lessons of that and build an entire scaled accountability platform, a one to many accountability platform, directly into clientfolio. And then we added group coaching and mastermind. Then we added invoicing and billing, and then we added a complete learning management system and teaching system based in client folio too. So all of this comes from getting experienced by finding out what clients need. So that, again, that was a huge investment and a big failure.

Andrew Stotz 35:20
So what are the takeaways that you would share with the audience?

Mitch Russo 35:26
As I said, first takeaway is, please do not create a product until you first understand exactly what the client needs. Now a very, very dear friend of mine has a perfect phrase for that. He calls it, you got to find out what your client's blood spurting problem is, if it's not a blood spurting problem, right? Exactly, a neck bleeding problem, however, you want to say it. If it's not that, then you should pass honestly, because there's lots and lots of solutions for lots and lots of problem. But if you find a blood spurting problem that is yet to be solved, then that's a lead. You should then go ahead and and then the other part of that is you should try and sell it first before you build it. I know I've done that with courses. The first time I built a course, I spent six months building a course. Nobody bought it. So what did I learn? I better sell it first next time. So I went out and I started to market the course before I even wrote the first line. And that's how I figured out that the next one wasn't going to work either, but the third one would

Andrew Stotz 36:26
so many great lessons from that. I mean, I the creating the course. I've done that many times, and now, you know the latest, the latest program that I developed was profit boot camp, and I've spent now three years testing the material, doing events, bringing people in, getting customers, getting people to pay, testing it out, you know, and then now, you know, I feel much more, much better about it than the way I've developed other products. So that's exciting, I think, for everybody out there. But I do want to tell a story that you reminded me of. It's, not enough to solve a blood squirting problem, right? And here's why. When I was a I was ranked the number one analyst in the Thai stock market, and I was a very successful guy, and I traveled around the world, you know, meeting with fund managers in Boston and, you know, New York and London, and, you know, talking about what stocks they should buy in Thailand and how they should position their portfolio. I always had a packed, you know, room whenever I traveled and so, but I created a product at my broker that I worked at, which was the 10 stocks to hold in Thailand. And I monitored it, I updated it, I moved stocks in and out at times, and clients loved it, and they raved about it. So here I had the perfect product. So I quit my job, I went and I started my own business, and I provided that type of service, a research service, to my clients. I went to visit them. I brought it to them. They loved it. My prior employer actually said, go ahead and do it. You know, we're not, we're not going to do something like that. So I didn't, it's just I could immediately go out to the same exact clients and say, Here it is, I didn't get one customer. And that is, that's because you also have to validate. And you, you hinted at it by saying, sell the product. You have to validate. They can pay for the product. Number one is the pain. You know, pain is it valuable enough that they'll pay high enough prices? There's a business there. I would say the blood squirting problem definitely tells you, okay, this is serious enough that I gotta, you know, do something. But the other problem was that my solution was they were paying brokers through commissions, almost invisibly, for stock ideas, but for them to go back to their bosses and say, I want Andrew to help me. Do you know, stock picking, and I want to pay him 10, $30,000 a year. The boss would say, isn't that what I hired you to do? Right? And I just didn't figure that out until I tested it. That's why the lean startup is such a great book about the idea of testing and minimum viable product and all that. So Exactly,

Mitch Russo 39:05
yeah, yeah, it's a great book. There's another good book. I don't know if you've probably read it. You've read enough books, for sure, crossing the chasm. I don't know if you've read that book. So when I build time slips Corporation, yeah, it's got to be up there, I'm sure there you go. When I, when I built time slips Corporation. I had no training. I had no business background. I had never graduated college. I, you know, I was able to speak English about as best as I could, you know, but I had no foreign language experience, I had no marketing or research experience. I had no PR experience, but I did know how to sell. That was what I would call my superpower. I knew how to sell, and the rest I had to do on basically trial and error and common sense. So I did what I could figure out what to do. Do, and I did it in many ways for the wrong reasons. So I, I'm I'm not. I was maniacally focused on my product because I was terrified of competition, not for the right reason, but I that's I did the right thing for the wrong reason. Well, it turns out, several years later, Jeffrey released that book Crossing the Chasm, and it felt as if he had been following me around and taking notes. I couldn't believe it. I actually did almost everything in that book without having been exposed to that stuff. But here's the thing that I love about business. If you are smart and you can see what's going on around you, you can make almost any mistake and recover from it and learn from it and grow from it. A lot of people forget that. They think, if they make a mistake, it's over. No, you don't. It's never over until you quit. And that, for me, was like such a big lesson. And that book, by the way, was so beautifully encapsulating the power of focus. Now we there's, as you probably know, there's a very famous American philosopher who basically was my guide throughout the entire time, slips journey, and that's Colonel Sanders. Remember Colonel Sanders? I know what he said, Don't you Andrew, I do, we do chicken, right?

Andrew Stotz 41:26
We do chicken, right? Okay,

Mitch Russo 41:29
hey, they don't do hot dogs. They don't do hamburgers, they don't do chicken, right? They said, You know what we do? Time slips, right? We don't do calendaring, we don't do payroll, we don't do this. And for that reason alone, I kept myself out of trouble.

Andrew Stotz 41:44
Yeah, and time slips are important to be right. Ladies and gentlemen, the book is amazing Crossing the Chasm, and you can learn more about that book and more about Jeffrey in Episode 519 where I interviewed Jeffrey Moore, beautiful, yeah, and his the title of his episode was, Don't mix complex and simple business systems, and He's unstoppable. He continuing to be out there, contributing and publishing. So pretty amazing. So let me ask you, what is a resource that you'd recommend for our listeners of yours? Think about your books, your websites you know, or any other resources that you would have for our listeners,

Mitch Russo 42:24
a resource of what for, what type for, what thing I'm

Andrew Stotz 42:27
thinking about my audience is people who want to build their business, build their revenue. Do subscription is, you know, an idea that type of thing, what would be a resource of yours, that you think would be a place for them to start. Where should they go?

Mitch Russo 42:43
So most people rely on YouTube for free education. And I think that's great. There's nothing wrong with YouTube at all. A lot of people rely on podcasts. Again, that's great. Andrew, you know what we've talked about today. Hopefully somebody will, you know, will get an idea, and it might be of value to them, but, but this is what I'm telling people who, particularly who know you, you gotta hire a coach. It's just, just no way around it. I had hired coaches that when I had to pay the amount, I had to pay it, I almost passed out. It was so much money. But I gotta, gotta tell you, it was worth it. Every time I was able to accelerate the future, I was able to pull a year into two months by having a coach help me. And I've done this over and over again. Even if I don't get out of what the coach tells me I will, I get something typically better, and that's experience, and that's more lessons that I Another thing that most people don't realize is once you accelerate the future that way, and you learn a year's worth of experience in two months, then you can build on that as if you had taken that whole year to do it. But here's the other problem, if you take the year, it doesn't guarantee you'll get the results. That's why coaching, I believe coaching is so valuable, and I'm not. I'm pitching you, not me at this point, because the bottom line is your listeners know who you are, and they should hire you or someone just like you, or better to accelerate them. And the bottom line is that you can't go wrong if you know who you're hiring.

Andrew Stotz 44:17
Yeah, great advice. And it's not only coaching. That's one of the reasons why I love books. Because every single day I can go to, you know, to a book of a person who's an expert on that topic, who has spent a lot of time pulling it all together in a coherent way. And, you know, that's why I love to read books and then talk to people who write them. And I also, you know, obviously I've got great people that advise me. So, alright, last question, what's your number one goal for the next 12 months?

Mitch Russo 44:45
Oh, my number one goal for the next 12 months is to continue to build recurring revenue through internet processes, internet funnels, and the things that I love doing. The other thing you don't know about me is I'm also a fiction. Author and I write, I write fiction. I'm about to publish two fiction books, and one of them is going to become a movie. I'm certain of it, and so I'm building the infrastructure right now to make that future come true for me. And part of that is, how do you get a book into the hands of a million people? Well, I got to tell you right now, it's not traditional publishing, so I'm taking that journey myself right now, and I'm very, very excited about it. And I also have the time I'm 70 years old, so I'm not trying to make the next company. I'm not trying to build another company. I'm not trying to grow another sales force for myself, I love helping people do that. But for me, my goal now is to advance my personal goals more than my business goals. Exciting.

Andrew Stotz 45:51
Well, once we get all the details, we'll put a link in the show notes to that and make sure to update me. Well, listeners, there you have it. Another story of loss to keep you winning. Remember, I'm on a mission to help 1 million people reduce risk in their lives. As we conclude Mitch, I want to thank you again for joining this mission. And on behalf of a Stotz Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience? Keep on trucking. Keep on trucking. And that's a wrap on another great story to help us create, grow and protect our wealth, fellow risk takers, let's celebrate that. Today, we added one more person to our mission to help 1 million people reduce risk in their lives. This is your worst podcast host, Andrew Stotz, saying, I'll see you on the upside. You.