Everything I Learned From Building a $110M Company in 28 Minutes

There are 33 million small businesses in the US, but only 4% of them will actually make it to a million dollars. And of those, less than 1% will make it to 10 million dollars. Yet somehow, with no formal business education or training, I managed to build and sell a company for 110 million dollars in my 20s. But before you get any crazy ideas or try to put me on some pedestal, listen, I'm not special. I'm the guy that had to take a basic math class three times just to pass it. And I looked like a 12-year-old when I started my company. What allowed me to actually crack the code of success were 13 key lessons that I had to learn the hard way. And in this video, I want to share them with you. So you can literally just take them, copy and paste them into your life and see similar results. I'm going to teach you the hidden psychology trick to actually get your first clients as a young entrepreneur. How to build a team that does the hard work for you. so you can enjoy your life, and what I call the anti-rule, which is a critical rule to follow when picking out your business idea. My first business idea was actually a business selling ankle tattoo designs. I literally bought the domain ankletattoodesigns.com, and it went pretty well if I'm being honest. We ranked in the top searches for Google, people came to us, we made money selling ankle tattoo designs, but there was a fundamental problem. The market for people looking for ankle tattoo designs online... market matters so much more than product. If you build a great product in a crowded market with lots of competitors, you're just not gonna do that well. Not only does market determine the ceiling for how big your business can get, but if you build a great product in a crowded market with lots of competitors, you're just not gonna get the traction you need. But if you build a honestly so-so product in a market that is desperate, where there's no other solution and they need something quickly, you can get away with building just an okay or even bad product. still build a massive business so when you're starting out as a young entrepreneur the most important thing to do when picking a business idea is pick a market that will make success so much easier and the way to do that is look for a market that is large as in it has many many customers that would buy your product and there is a gap in the existing solutions something either in the software or the services that are being provided to this market do not match the expectations and needs of your customer The more painful the problem is, the easier it will be to sell it and the more they will pay for it. So read market studies, conduct actual customer surveys, get out and talk to customers, ask them what's missing in life. If I was starting out again, I would spend months just testing the market before I ever jumped to building a product. And only once I knew I had a product that people want to buy, that they will pay money for, that solves an urgent need in their business. then I would consider building what's called a minimal viable product, which is just a super lean test version of your product to see if your research actually matches expectations. Now, one of the most painful lessons I had to learn in business was actually from the process of constantly, brutally, utterly being rejected by investors that I was trying to raise money from. You see, I had gone up and down Silicon Valley Road, and I thought, you know, I'm going to tell them about my business. I'll tell them the metrics. I'll tell them the market size. I'll tell them, you know, what our customers look like. And I was just giving them the data so that they could read the data and make informed decisions. This is how I thought the world worked, but no one was investing. Here's what I missed. When you're doing any business, whether it's raising money from investors, you know, hiring your first team, selling your first customer, all business is people business. So it's not about the metrics. It's about does this person want to do business with you? And sort of the metrics, the pitch, the different things that you show in the middle of that process are just really helping convince them that they want to do business with you. At the end of the day, they're trusting you to deliver on the things that you've sold them on. And once you realize all business is people business, you can change your perspective on the way you interact with people. Rather than trying to sell yourself, what you're really doing is sort of sitting next to them, side by side, looking across the distance saying, hey, Let's go on a journey together. Here's what life will be like if we do this. Here's how your life will change. You're constantly thinking and using the language what's in it for them. And so one simple way to put this into practice is get good at asking specific questions about the desires of the person you're interacting with, whether it's a new employee, a potential customer, an investor. You're just asking, hey, what are you looking for? What are your hopes and dreams? One of the questions I love to ask is if you could wave a magic wand and change anything about your business or about your life, et cetera, what would you change? If you can find that one thing that someone is looking for and help them attach their goal, their dream, their desire to you and what you are doing, you're not selling anymore. You're actually helping them achieve what they want and they're willing to put their time in, willing to put the money in. They will buy from you because you're helping them get what they want. Now, the next lesson comes from one of the lowest parts in our business when we were trying everything, trying to sell, but no one was buying. And I had to actually take over the sales team. We had a sales leader. It wasn't working out. And I just said, let's just throw away the whole playbook and look at how the heck are we going to sell what we can sell? We know our competitors are selling, but no one's buying our product. And as I was working through the script, working through the different pitches, I realized, listen, we're a small company. No one trusts us. And this is the harsh reality when you're a young early entrepreneur, why would they buy from you? Like why would anyone trust you? The reality is they shouldn't. It would be a almost irrational, crazy business decision to trust a young entrepreneur who has no experience, no real credibility, no proof of results with something that you need that is critical for your business. Once I just accepted this harsh reality and said, what can I do about it? then the answer started to appear. And what I came up with at the time was a like ironclad bulletproof money back guarantee. The way it worked was simple. We said, listen, we will up your conversion rate on your leads by six times, which is a massive promise. And if we don't do that within 90 days, I will give you a check for $5,000 personally and we'll rip up the contract. So normally it was a year long contract, but we'll cancel all that. You'll make money because it costs less than $5,000 for those first three months. and we'll part as friends. And when we started doing this, something interesting happened. It wasn't that people were buying because they knew that they could just get their money back. It was more like they were listening and saying, wait a second, if you're so willing to put $5,000 of your own money behind this, then I know what you're selling must be serious. And sure, not everyone bought, but we like almost 10X our sales just by adding this guarantee into our sales process. And yes, I did write a few $5,000 checks, but At the end of the day, like we sold millions of dollars of software and I maybe wrote 20, 25K of checks, like totally worth it. Money back guarantees are like the easiest sales hack and they are such a blessing for young entrepreneurs. They should be your best friend early on the sales process. So I don't care if you're selling a course, a software platform, a service, find a way to first deliver on your promises. If you promise the moon and you consistently miss the mark, you've got to fix your process. You've got to fix your product. But if you have a product that you believe in, that you know works, or frankly, even if you don't believe in it and you just need some clients to find out if it works, throw in a money back guarantee. Make it dead simple for the customer and also set clear terms. Is it a 30 day, 60 day, 90 day lifetime money back guarantee? What do they have to do to actually get the money back? And then explain that to the prospects. at every step of the sale. When you're first reaching out to them, when you're having the first conversation, when they're signing the contract, make it just a part of the language that you're using and you'll have so much trust. It'll be so easy to get your first clients, trust me. Now, the next lesson I learned from Steve Jobs. You see, when Steve Jobs first went on stage to announce the iPhone to the world, he had a big secret. You see, inside his coat pockets and around him, he had secretly stashed a handful of other iPhones because the truth was the iPhone that he was demoing on stage was a pipe dream. It was a future vision of what he wanted to achieve. The real iPhone, which he had to show on stage, was buggy. It would glitch, it would break, it would freeze all the time. And so what he would do is, if during the demonstration it would glitch, it would freeze or anything, he would just, you know, wow the audience with some talk, put it in his pocket, grab the other one out, and continue with his talk. And this is one of the most important lessons you need to learn as an entrepreneur. You see, early on, you are just selling the dream. And the reality is, You don't know what's going to go wrong, but I guarantee you things will go wrong. And when they go wrong, you kind of have two choices. You can either panic, freak out, think everything's falling from the sky, or you can kind of just embrace it. Learn to enjoy the ride. You know, early on, our first employee, his name was Eric, came up with this phrase that he called Ride the Tiger. And it became a sort of rallying cry for our company. Whenever things would go wrong, when things would go sideways, we'd just say, ride the tiger and it's kind of like you're holding on for dear life on this crazy wild tiger and you just kind of smile and enjoy the ride yeah it's painful yeah it's crappy at times you gotta put in extra hours stay up late but it's all part of riding the tiger and learn to embrace this mindset as you're building your business not only will you actually be able to sustain and build your business but you'll have so much more fun you'll be able to smile relax kind of take the blows as they come. And then after all the mistakes, you know, once everything's cooled down, what I also recommend is do what's called a post-mortem, where you analyze, hey, what went wrong here? And do it in a very blameless way. You're not pointing figures, you're not saying, well, Johnny didn't put up the server or whatever. You're just saying, oh, it looks like our server wasn't configured before launch. Okay, in the future, we need checklists to make sure the server's configured. Find whatever went wrong, fix it, and then move on to the next thing, which again, we'll probably inevitably... go a little sideways. The next lesson I actually had to learn when one of our investors tried to bankrupt us. You see we had just raised 5.4 million dollars and I thought that was like so much cash I could barely believe what we were gonna do with it. And then we started hiring. We started expanding the team and the next thing I knew we were burning $250,000 a month. Poof! Every month gone. And I was meeting with one of my investors And I was like almost ashamed to bring up our burn because I was like, this is crazy. But I brought it up. I told him about it and he said, listen, go to your office, double it next week. And I was like, what? Like, that's crazy. Like $500,000 a month? And he's like, listen, we have billions of dollars. What is $250,000 a month? Whenever you're running low on cash, come back to us. We'll help you out with the next round. We'll give you funding. No problem. And I was really hesitant because I was like, you know, I just don't feel comfortable spending that much money. And I didn't do it. I actually stuck at 250 grand. And I'm so glad I did. Because about 18 months later, we were getting low on cash and we went out to raise our next round. Naturally, I called up this investor. You know, we'd been keeping in touch the whole time. And I said, hey, listen, we're going to go out and raise our next round of funding. We'd love for you guys to, you know, lead it, participate it. You know, what are your thoughts? He gave me the crappiest answer I've ever heard from an investor. Mind you, they still manage billions of dollars. And he was like, ooh, you know, yeah, money's a little tight right now. you know, we can probably do $100,000. And I was like, this is freaking ridiculous. I knew they had hundreds of millions of dollars, but they didn't give it to me. And if I had listened to them, I would have gone bankrupt. However, by staying lean, by reducing our burn and extending our timeline before we run out of cash, it did allow us to ultimately win. Because what it was doing, it was giving myself time as a young entrepreneur to figure things out. I didn't know what I was doing. I had so much to learn and so I needed those months to learn how to hire a sales team, how to build a better product, how to actually retain customers. These lessons are things that sometimes you just need to experience firsthand and it just takes time. One of the smartest things you can do is just extend the timeline of your business before it runs out of cash. reduce your burn higher slower give yourself more time to actually learn these things and you will just become a better entrepreneur until your learnings catch up to your effort and that's when success actually arrives next lesson came again from one of my early businesses i had built this company where i sold dvds of myself teaching self-defense on the internet sounds ridiculous but i was multi-time world champion and i only knew how to do karate and build websites so i kind of combined the two but my business had a massive flaw you see if you bought Look around you. Have you noticed that every freaking thing is a subscription? I mean, sure, you've got Netflix, you've got Spotify, but even cars have monthly subscriptions now. Everything is being built to what's called recurring revenue. Sales are always the chokehold of the business. And if every time you need money, you need to go find, convince, and sell people a product, you're going to have a nightmare of a time. What you want to achieve is something where you can sell something once and then every month, every quarter, every year. they continue to rebuy that product and you can even raise prices. So you're actually getting more from your customers over time. And doing this doesn't just make it easier for you to make money because you're selling the same customers over and over. It also makes it easier for you to acquire customers. See if you just sell something once, then you can only pay in marketing as much as you make from that product to acquire that customer. If you pay more to get the customer than you make from them, you just lose money every time you sell someone. But if they pay you regularly, you can actually pay more to acquire them on say the first month and over time they will become profitable and this gives you a massive advantage against anyone who's just selling a one-time offer because you can spend more on marketing and still make more from every customer so if you are building any business like my number one ask is make it a recurring revenue business it will make your life so much easier and you can sell the business for significantly more. Now if you had been at my company when I was building Prodigy you would have noticed something really interesting. I would often come into work with black eye or bruised lip or sometimes even a bloody lip. What's going on? Well I was kickboxing. What I had found is that the stress of building a business is just too much to bear and the inevitable ups and downs means that. Some days you walk home from work feel like king of the world you just like crush on sales calls your team was motivated some days it doesn't go that way some days you walk in customers hate you employees hate you they quit if you just rely on your business and how it's going to really provide your emotional stability and your identity what you will find is that you are just all over the place and it's not fun what you want to do is get a second passion that helps you balance out those things If business is going crappy, maybe you had a good kickboxing session. Kickboxing sucks? Hey, maybe it's a good business day. By just having two, you drastically increase the chances that at least one thing in your life is going well. So I don't care what it is, it doesn't have to be kickboxing. Find what works for you and then schedule it in. The same way I schedule a meeting with my team and that is a thing that I don't miss, like it's a critical part of my week. Some days you might not feel like it. Some days it might be easy to go. Just commit to going. It will balance you out so well. Now, one of the mindsets I had when I first started my business is that one day I would probably be fired. And I know this sounds crazy. Like I literally started this business on my couch. I built the business plan. I picked the market. I did everything with me and my co-founder. But I knew being fired from your company is not that uncommon, especially in Silicon Valley, where you have these really high growth startups. You often see the early CEO does not make it to the sale. And the reason for this is really simple. You see when you start your business it is so small that it's going to grow fast naturally. It's not likely that you will grow 10% a year like a public company. You might be doubling revenue every year or tripling it. What this means is your skills need to at least increase as fast if not faster than the business. So if your business is doubling revenue every year you better be twice as good at being a CEO every single year. This is the only way that you'll actually be able to stay one step ahead of your challenges. And sure, you may not have a board, so you may not be worried about getting fired like I was, but what will actually happen is your business will just flatline. It'll be going well and then you'll hit a plateau and the next thing you know it'll probably actually go under because competitors come in, take your market, take your customers. So what you need to do is actually regularly analyze your own skill set and understand like what are the gaps. What is required of me in this next season, the next 12, 18 months of the business? What are the top skills I need to master and where am I right now? If it's sales, where are you on a sales skill from like one to 10? If it's marketing, again, one to 10. Find the biggest needs for what your business needs combined with your biggest gaps and then go proactively seek to level up in those areas. It can be books, it can be mentors, it can be friends. Go find ways and constantly be nourishing your mind. The same way you would nourish your customer base, make sure that they're happy. You need to constantly spend time and schedule in time to level up as an entrepreneur. Now, one of the things that I'm almost embarrassed to look back at now is my pitch decks from my early days. These were my investor decks that I would show and show projections of the company. I had like five-year projections. It's just so embarrassing because I didn't hit a single metric on that spreadsheet. Not only that, I didn't even come close. Like the projections were ridiculous. But as a young entrepreneur, I didn't understand this important concept. When you're building a business, planning past one year is basically just a fool's tale. There's no way you actually will know what's going to happen in your business a year out because things are so dynamic. Things are changing and they should be changing. But this presents the conundrum. If you only plan one year out, like... Do you go left one year, right the other year? And you kind of like swing the company around too much and you don't really have a vision for where you're going. The way you should solve this is get a five year vision. What does the company look like in five years? What do you hope your revenue is like? What is your product like? What are your customers like? And then from that, say, okay, well, what do we want to achieve in the next year? and the one-year goal should move you closer to that five-year vision but don't build a five-year plan it's a total waste of time instead take that five-year vision and figure out what is called your north star metric this is the metric that you will judge your success of your business by for many businesses it's revenue but for you it could be like number of app downloads number of customers whatever makes sense for your business but pin that thing up in your mind as the number one thing that we're going to focus on for the next year and then build your plan around how do we move the needle for this north star metric and so take that one year goal break it down into four 90 day sprints and say how much do we want to change this north star metric by each 90 days and if you don't have a product you don't have a business maybe the first 90 days is like we're gonna find a business idea Second 90 days is we're gonna get our first five customers. You know, if you're so early on, you literally don't have a metric, you can just start by getting things off the ground. But eventually, you want to have one North Star metric that you're aiming to every 12 months and then a five-year vision for where that metric should be. The next lesson came actually from one of my competitors. You see, it was Tuesday night. I still remember the day I was hanging out with friends and I looked at my phone and it was the CEO of my largest competitor, Colleen. And I was quite intrigued. So I answered it and I said, hey, this is Micaiah, what's up? He said, listen, we've been talking with your biggest client and we just want to let you know that they're going to be switching to us. And I was like, this is insane. Like, what are you talking about? They just signed the contract with us. This is basically my whole business at this point. And like your product doesn't even do what our product does exactly. We have this whole different component. He was like, yeah, I know, but we can just copy your product and build it. And when he said that, I was like, oh my gosh, I am screwed. All of our eggs are in this one customer basket. Our competitor was stealing them and there was nothing I could do about it. And so I went into the office and I kind of just looked at the team and I said, listen, I got this call last night. This is what's happening. We've got to figure something out. But I'm going to be honest with you. I don't have any answers. I think this is just such a blow to the team that we just need to take a break and maybe like recharge our spirits a little bit. And so I said, let's just. Close your laptops. Let's pack it up. Why don't we drive down and go racing today? There's this cool go-kart place. They have these awesome tracks. Why don't we go there, have a little bit of fun, clear our head, and then Monday next week, let's get back to it. I didn't know it at the time, but this was one of the most important moves I ever made because, you know, oftentimes we think that leaders need to have the answers, but the reality is that's too much pressure on your shoulders. You don't need to have the answers, but you do need to lead. And in times like this, leadership is just about saying, listen, I don't know how we're going to deal with this situation. I don't know the exact answers, but I know we're going to figure it out. So let's keep marching forward. And your team needs to hear that from you, that you can get it done, that you believe in them and they will believe in you. So whenever you're in this circumstance where you just feel, man, I don't know what I'm doing, remind yourself, I don't need to have all the answers. I just need to march forward and the team will help me figure it out. The next lesson came from one of my biggest mistakes, which was getting caught in a lie. You see, early on when we were selling our product, I just wanted customers to believe in us. And the thing that they would always ask is, hey, how many customers do you have using this? You know, they wanted to make sure that they weren't the first customer on our product. I was so scared about like getting found out, getting caught that we were just a small little company. I started stretching the truth. So when we had no customers, I'd say, well, we have a handful of customers. When we had five customers, I might say, well, we have 10 customers or we have 20 customers. And I remember walking around the office one day and just listening to the different conversations my sales team was saying, and they weren't saying we had 20 customers when we only had five, they were saying we had 200 or 500. And I realized things had gotten way out of control and it was all my fault. As the leader, I had set the tone that it was okay to lie to potential customers about how many customers we have. And by setting that tone, my team wasn't doing anything wrong. They were just doing what I, the CEO, had taught them to do. And even worse, it was killing our business because these customers would buy thinking we had 500 other customers on the platform, they would try it and find out there were some basic features that they might need that are missing and we would obviously have if we had 500 customers and they would cancel. So it was only hurting our business by lying. And so to fix this, I called the team in one day and I said, listen, you know, we've started lying to customers about how many customers we have and I want to take full ownership. It's my fault. I'm the one who set this standard, but it has to stop today. Moving forward, we're going to be radically transparent with customers. We're going to tell them exactly where we are in the journey, where we'd like to go, see if they're interested in that. That way we'll attract the right customers, the ones that want to take a chance on a young company like us, and we'll learn from our mistakes. And what actually started happening is we were still getting the same number of sales, but instead of people buying with these mile high expectations, they would buy almost in like a partnership. They were saying like, hey, we get it. You're early in the journey. why don't we buy this product we'll give you feedback along the way and then what actually happened is they were so much happier because they would give us feedback our team would ship it and we would ship it so fast like a week later they'd see that new feature they wanted and they were like you guys are the best company ever because when i want something when i come up with an idea i see it in the product a week later these other companies that i buy software from you know it takes a year or two years What became one of our biggest weaknesses became one of our greatest selling points. Hey, we're a young company. We're nimble. We listen to you. We're learning. Join us on this journey. This is the mindset you want to take when you're building your company. Don't lie. Don't try to make yourself sound grander than you are. Bring them along on the journey and say, listen, I want to take you to this promised land. I think I'm the right person to do it. And here's why. Here's my background. Here's my commitment to you. If that sounds interesting, let's do this together. You will get so much more. traction with customers so much more appreciation from what you do for them and they'll stick around for life so the next lesson actually came when i was selling my business we had signed the deal to sell for 110 million dollars but there was a problem because of the ambiguity on some of our employment contracts with our team members and you know they're different living in different countries and things like that many of our team members would receive large six and seven figure payouts when we sold the business but some some of our earliest most loyal employees would actually receive Nothing. We were going to sell this company for tons of money and they weren't going to get rewarded for their hard work. And, you know, I spoke to the acquiring company about this. They were like, listen, we get it, but we have no contractual obligation to pay these people out more than, you know, their basic salary. It's not their problem. It was my problem as the CEO. I could just accept the deal as it is and very clearly with no legal doubt, no question of it. I was in the legal right. to not pay these employees anything other than their salaries. But it wasn't right. And I knew that deep down. You know, these people were so loyal to me. And so I actually had to make the decision to take seven figures of my own earn out and move it around so that I could pay out these other people. Sure, I'm going to be honest, I could use that money. It would be nice to have, you know, that extra millions of dollars. I could buy, you know, fancy cars and fly around the world and things like that. But that's not what life's about. The joy of actually getting to phone up these employees who are expecting nothing and not even telling them it's from me, just saying, listen, I have great news. You know, we're selling the company and this is your earn out. It's, you know, six figures or whatever. Like some of them burst into tears and man, I can buy all the Ferraris, Lamborghinis, whatever, but nothing is going to make my life as meaningful as getting to share that news with them and not even take credit for it. Just say, this is all you, you earned it. I'm just like getting so emotional just thinking about it. My plea to you in this lesson is when you are in these situations, when you get to choose to do what I would consider is the right thing or maybe the legal thing but not necessarily the right thing, the thing that doesn't sit well in your heart, choose to do the right thing. You may be the only one that ever knows about it but I'm telling you it's a feeling that you cannot buy with money and I have to just imagine the CEOs that often choose the other way fall asleep every night knowing that they sold themselves short. They sold their employees short, the people that helped make their dreams possible. So make a commitment now to do the right thing so you don't regret it later. And for the final lesson, I want to teach you a little bit about how I built my mentor network. You see, my mentors were important, incredibly successful, busy people. And I had this mentality early on that I need to do what's called pay the admission price, which meant If my mentor was swinging by Vegas for the weekend and they invited me to have lunch while they're in town, I was flying to Vegas from San Francisco just to sit down with them for an hour. Another one of my mentors ran a social club and that social club was $3,000 a year. And that was a lot of money to me at the time. But I said, you know, I'm going to pay this just so I can show up at this social club and interact with this person. They are feeding wisdom into my life. And it's not like they were saying, hey, pay this and then I'll help you. It's just that I was paying the price of admission to be around these people that I knew would reap its benefits in the years to come. And this is something that you need to take to heart as a young entrepreneur. You see, people want the mentor to sort of meet them where they're at. Like, why don't we grab coffee or... Hey, why don't we have coffee? I'll come to you. Oftentimes mentors are so busy that you just need to go above and beyond to be in the realm of them. I had a mentality, you know, there was almost no budget that I would spend to just get around my mentors. And the hard thing about this is you don't see the rewards early on. It's not like you fly to Vegas, meet with a mentor for lunch, you know, spend a thousand bucks and the next thing you know... You're making $100,000. It takes time. These lessons take a long time to compound and turn into results for your own life. But when you find someone that can actually impart wisdom into your life, pay the price of admission, get near them. Now, if you want to start your own business, I also just filmed this video on how I pick fail-proof business ideas. I'm going to put the link right over here. It's the same process I use to build the business I'm talking about in this video. So click that link. I hope it helps.

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If you're new here my name's Michia (Muh-ky-uh). I'm a serial entrepreneur and investor. Since selling my last startup for 9 figures, I'm investing my own money into the next wave of founders at my VC firm, L7V. 

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