Shownotes
BIO: Mike Michalowicz leads two new multi-million-dollar ventures as he tests his latest business research for his books.
STORY: Mike made huge profits from selling his second business, and his ego as an entrepreneur exploded. He took the gains and decided to fund multiple companies in different industries where he had no experience. They all failed and left him with zero assets.
LEARNING: Stay in your lane. Take time after selling a business to think before you rush into another investment.
“If you don’t know a space inside and out, don’t get into that business.”
Mike Michalowicz
Guest profile
Mike Michalowicz leads two new multi-million-dollar ventures as he tests his latest business research for his books. He is a popular main-stage keynote speaker on innovative entrepreneurial topics. He is the author of eight books, including Profit First, and Clockwork, which have transformed over seven hundred thousand businesses.
Worst investment ever
Mike started his first company out of college. He sold it in a private equity transaction and started another business. The second business was data forensics and computer crime investigation, doing defense analysis. The company had big clients who put it on the map right away. That business grew bootstrapped very rapidly and was acquired by a Fortune 500 company one and a half years after its inception. With this sale, Mike became a self-made millionaire in his early 30s.
Mike’s newfound success made him believe that he knew everything about entrepreneurship. His ego exploded. He decided to amplify his new lifestyle to mega status by becoming an angel investor. Mike decided to start and fund multiple businesses simultaneously. He had no experience in any of the businesses and didn’t even know what the term angel investor meant. The companies Mike funded were all start-ups in different industries that didn’t complement each other. He was just all over the place. Mike thought this would be the best thing he’s ever done. But it wasn’t. None of the businesses got any traction.
One day Mike’s accountant called him and told him he had two options; to declare bankruptcy or liquidate his remaining assets. He chose to liquidate his assets to cover his tax bill. After that, Mike had to fold up all the businesses. He lost his house, his cars, and stuff like that.
Lessons learned
- Stay in your lane.
- Be humble, but not artificially modest.
- When investing in different sectors, ask yourself how each complements the other.
Andrew’s takeaways
- When you get your gains after selling a business, save that money in a reliable fund and take a year to think before rushing into another investment.
Actionable advice
Before starting a business, ask yourself if you’re at a mastery level in that space. If you’re not, it’s premature to take action. Only get into that business if you know the space inside and out.
Mike’s recommended resources
- Mike recommends checking out his ten best-performing articles available as PDFs on his website.
No.1 goal for the next 12 months
Mike’s number one goal for the next 12 months is to be of extraordinary service to small businesses in the process of eradicating entrepreneur poverty.
Parting words
“I hope no one else needs to make the worst investment ever, but if you do, make it your best lesson ever.”
Mike Michalowicz
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