Mike Malatesta: An Entrepreneur's Career Experiences

You're listening to the science of C. X. A. Podcast that hopes to inspire business owners and leaders to learn new techniques and turn prospects into customers, enter customers into raving fans. My name is Steve Pappas. I'm known for my relentless pursuit of all things customer across my career and also in my six startups, I've had to learn how to make decisions in business that customers really respond to. Let's spend some time together and help your business soar grow and accelerate. So welcome everybody to another episode of the science of C. X. I'm Steve Pappas is your host and we get to thinking a lot about who else we should have on the show because we really design our seasons with kind of the mini masterclass or the mini M. B. A. In mind as to what areas of customer experience do we really need to talk about and what haven't we talked about this season. Then we put together a wish list of guests and today's guest was definitely on that wish list. It's Mike Malatesta and Mike is a serial entrepreneur, very successful. He's got his own podcast just coming out with a new book we'll talk about in a moment. But the aspect that we wanted to talk to mike about was the experiences along the entrepreneurial journey. What do you learn from it? What were the missteps along the way? Give us the good, the bad, the ugly. But from a perspective of, we can all learn from that. But what was the experience that he got in each of those steps and then maybe what did he learn and then he didn't do the same thing or fall into the same trap the next time. And I think that's also an interesting story for us because we talk a lot about the customer experience. We talked about the employee experience, but we don't usually center upon the entrepreneurs experience. What is it from the behind the scenes, if we could be in the eyes of the person that's gambling with their family's future, their money, their effort, their time, all of those things that are very precious to us. They're the ones out there gambling to make a better world and to make a better life for themselves. But they're trying to do something. They're trying to solve a problem better than someone else or anyone else. And that's a lot to put on the line. So why don't you help me? Welcome mike to the show today. Let's bring him in from the green room. You know, people, we really don't have a green room. I talk about the green room, but it's a virtual green room and no, we don't give them the green M and M's and the orange Skittles. Well, welcome mike, Thanks for joining us on the show. Let's touch on all these areas in the time that we're here together because I think it's important for all of our business leaders out. There are entrepreneurs are solopreneurs are micro businesses all the way to our enterprises to understand the experiences along the way, as if it's an entrepreneur's journey mapping that we may do in the time that we're here to help them understand the steps along the way and some of the thought that goes through your mind along there. So why don't I give them a little bit of your bio and then from there we can touch upon all of these areas. So he loves supporting and helping entrepreneurs bring their dreams to fruition. He helps them break through barriers, achieve massive success. He's lived in their shoes since he was 26 and he's been through and is still going through the roller coaster that they're going through. He's experienced the excitement, the pain, the grit, the mistakes that come with every entrepreneurial journey and he is definitely an entrepreneur and he's helped start grow and sell to amazingly successful waste management companies, One soul for Mid eight figures and the other sold for low nine figures. So we have the right person on the mic today because he knows how hard it is to be an entrepreneur and what a long shot it can be to really get to that level of success and freedom. That is really the entrepreneurial goal. So he knows where we all are in our business journey and he's lived it and he's been there, hopefully we can get some of that knowledge out of his head while we're chatting. So mike, why don't we start with? just giving us a sense of what were the businesses that you decided and what were the sparks of what made you start those businesses if we could start at that basic level? Sure, this goes way back. But the initial spark happened I think, or I like to believe that it happened when I was four years old Steve and I was sitting on the curb in front of my parents house and we lived across the street from a construction company and in the afternoons in the summer I would sit out there because I just love to watch the trucks and the equipment roll in. I loved everything about it. I loved the sounds and the noises and the dust and the smell of diesel fuel and the guys that drove the trucks, I mean everything about it was cool and I thought to myself, well that would be really neat to have something like that. And then as these things do, went through school and middle school, high school college and I sort of forgot about that because being an entrepreneur in the early eighties, let's say, or mid eighties wasn't really anything like the thing that it is now, nobody in my fraternity for example, was talking about being an entrepreneur, They were talking about being doctors and lawyers and getting corporate jobs and I knew one thing for sure and when I got out of college and that's that I didn't want to go to school anymore. But what happened that I think ended up changing? Not necessarily changing, but adding on to that four year old thing was I got a job between my junior and senior year driving a garbage truck and I got it because I wanted to drive a truck and I thought garbage trucks were cool. But then when I got into doing it, I learned about the industry and I thought this is a really neat industry because you're doing good work, you're helping the environment and making money and it's just felt like it suited me. And so I decided that I was going to try to make a career out of that got hired in a management training program and was doing really well. I was moving around moving up saying yes to every opportunity that came along and about five years into that journey. A journey that I thought might end in the executive suite maybe with me as a CEO or something instead ended up with me being fired from the job. And when that happened I was 26 at the time. First thing I did was get another job because I thought I got to get rid of the shame of being fired and get myself another job and I did. But I only lasted there about 30 days because the fellow that I ended up working with or working for was just a miserable person. He made my life horrible. So I thought I was coming there to help, He thought I was coming there to like threaten his status in the company or something. And so I left that after 30 days, I couldn't take it anymore and you can imagine having been fired and then getting another job right away and then quitting that job that I wasn't feeling great about myself. And fortunately a gentleman came along who I had worked with briefly at the place that I had been fired from and he said, hey, there's something about you that I like and if you ever wanted to start a business, I would, I want to start a business with you. And it just so happened that his name was Butch and he'd been a farmer all of his life. And I think about it as this farmer came along and germinated this entrepreneurial seed that was planted in me on that curb outside of my parents house Steve When I was four and I just sat there dormant because it didn't have the fertilizer, didn't have the water, didn't have the confidence to come out and Butch provided all of that. And six months after I had been fired, we started a waste trucking business, trucking waste water from factories to treatment facilities. We bought a couple of trucks and just started knocking on doors and that's how it began. It's interesting because I think a lot of entrepreneurial minded people can draw in their history, There was a spark? Somebody either set the spark or something happened in their lives that made them realize if nobody else is going to do this, I'm going to do it or I can do something like this, but I can do it better, faster, cheaper, whatever it is, there's always that little spark and it's wonderful when the spark is kind of that mentor type that says, I see something in you, they take a shine to you and they see something that you had no clue was there. I didn't know when I started in businesses. I had six startups. I didn't know that very first time, but someone else did too. It's kind of, we're kindred souls that had that special someone. So along the way, I'm sure you rode the roller coaster through the business, whether it be that one or the subsequent one. So you have to start the business then there's a lot of things that you probably don't know in the business and you have to gain the knowledge or you have to find people that have the knowledge and you have to make some decisions whether or not you bring people in to give them a piece of the action or you hire people and you pay them well for their knowledge or you gain the knowledge yourself. So what were the things that you brought to the table and what were the things that you felt you needed others to help you in those early stages? And did it go well? Or did something else happen from it? Well, yes, is the answer to all those questions. Yeah. From the beginning, I will say that I have been exceptionally fortunate to have people cross paths with me, like, butch did that brought something to my life into the business's life that I probably didn't deserve and never expected to have how that happened? I don't know, it has happened and it happened consistently and continues to happen for me. So like I said, I don't know why, but I've been very fortunate that way As an entrepreneur early on, maybe at least for the 1st 10 years, Steve I loved attracting great people, but I also pushed myself really, really hard meaning if I didn't know something that embarrassed me and I did not want to show anyone that I didn't know something, so when something came up that I didn't know, I just got after it, I said to myself, well I can learn this, I wanted to prove to myself that I didn't need help, even though I had great people to help. It was always in my mind proved that you don't need help and not in an arrogant way or anything like that, just in a determined way, that's how I approached it and I break my entrepreneurial journey and I think this works for most people into four stages and I call them the dream stage, the grind stage, the break stage and then the breakthrough stage and the dream stages when everything's a business plan, this is gonna work, it's gonna be amazing. And you have that enthusiasm when you start to everything is a win or everything you figure out, as you mentioned, you don't know what, you don't know right, you don't know a lot, but every time you figure something out, it's a win and what happens a lot of times and that's definitely what happened to me is the things that I loved in the dream stage, I just kept doing more of and more of and more of and I didn't even realize that I was transitioning and had transitioned into this grind stage where the things that I loved doing and the person I loved being and the leader I thought I was wasn't giving me energy anymore, I was taking it away, I resented what was happening to me and I didn't even realize that I was the one who created this system that was rewarding me exactly the way that I wanted it to and some of that is due to things in my control and some of it was due to things outside of my control. But the thing that I learned and I think this is a good lesson for entrepreneurs is there's a big difference between having the responsibility for something which we all do as leaders and entrepreneurs and being responsible for it. I internalized everything is like anything that happened, especially anything that happened bad. I really beat myself up over it instead of saying, okay, I have the responsibility for this, so I need to handle it. But it's not a reflection of me what is happening here. It's just a duty that I'm bound to carry out. So hopefully that answers your question. Yeah, it does. Because I think that today I mentor startups and I judge various challenges in part of incubators and stuff and I find that many entrepreneurs today that are starting a business, especially because I've been dealing with technology most of my career, they're either a technologist and have to go find someone to help them sales and marketing or they're a business person and need to go find the technologists and I think what you're describing is kind of the opposite of what I see today, don't want to call it old school, but you didn't have read it back then to say I'm going to just go on a subreddit called co founder and I'm gonna go find a co founder. That is the opposite of me. And you see it. If you just scroll through Reddit co founder subreddit, you'll see thousands of people that are either technology people that are trying to find someone to help them with sales and marketing or the other way around rather than digging in and figuring out maybe I should learn about sales. Maybe I should learn the core principles of that, Maybe I should understand digital marketing a little bit because I tell entrepreneurs almost every day the story of when a cousin of mine had started a restaurant and my uncle and I were at the restaurant like the first week and my cousin was snapping his fingers for people to bring the mop over, go mop here and go do that and go do this. And my uncle kind of grabbed him by the scruff of the neck and he said listen until you can do that and that and that and that, you can't tell them how to do it. So even if you learn the colonel Of those areas now, you know, whether or not if you're outsourcing it, whether you're getting value for your money, whether you're over paying. I mean, how many horror stories are there of people that said, I've got a great idea for an app and then $800,000 later and how sold they may have an app because they didn't go to gain some of the knowledge or some of the beginnings of the knowledge to just understand that part of it. So I think it's a great lesson and I think what you just described is something that entrepreneurs should be thinking about that, okay, we all know our strengths and weaknesses, we all know what we're great at and what we're okay at or what we have no idea on, Try to fill those in a little bit. I mean now with you to me and skill share and linkedin learning and linda, there's just so many avenues for 20 bucks. You can go and work a little bit at night on these things online and at least understand it because how are you going to tell somebody else you need a website if you can't even say, hey, here are my website requirements. You're so right. And it's okay to call me old school. That's fine because it's different now. But when I started I borrowed a computer to type my business plan on and the computer wasn't connected to any internet or anything, it was just a word processor essentially at the time it wasn't easy to find out things and certainly not anywhere close to being as easy as it is now. But the one thing I will say and you sort of intimated this stevens the best way to not have people blow smoke, you know, or B. S. You, is to know a little something about what you're trying to accomplish or what you are asking of them because if you know nothing and you trust that person before that person has proven themselves to be trustworthy. You could be just led astray and the one other thing I'll say old school or new school is when it comes right down to it, the most successful entrepreneurs will do whatever is necessary and they'll do it over and over and over again. And when you look at that, you say to yourself, well, whether you're a technologist or whether you're business person, There's only 5% maybe who are going to do it over and over and over again and just put up with that And have that determination and the other 95, they're going to drop out at some point. We're gonna go to the wayside. The one endearing thing, old school or new school, I think, is that who's willing to just keep going because it's hard to keep going. It is, I think a lot of business owners or franchise owners today are really suffering with the problem with gaining talent today and finding the right people for the right jobs, whether it's pouring a cup of coffee or it's building a website. And I think you're finding that a lot of those business owners or business leaders have to do the job because they just can't find enough talent right now from various reasons. So if they have to do the job and maybe they haven't done it in awhile, maybe they've been too busy growing the business and they weren't in the trenches for a number of years, it's not easy and it's not everyone that's gonna go in and just grind out the day and do what's necessary, keep a smile on their face and make sure that customer is well taken care of because that's their livelihood without those customers, those businesses will fail without the business person going back in and taking those shifts, the business will fail. It's a difficult time that we're seeing right now in a lot of parts of the world and a lot of parts of business that is forcing those to go back and maybe relearn Maybe the way you pour coffee today is different than you poured a coffee 10 years ago when you were doing it as you're starting your business, there's a couple of lessons in there. One is what you said, if it comes down to customer needs to be served and there's no one to do it because personnel issues or whatever you have to drop down. You have to do it. I mean many, many, many years in our business for example the driver doesn't show up well we have an obligation to the customer. So that means I have to go do that. Do I want to do that? No. Is it the best use of my time? No, but what if I said no. How does that make the customer better off? Why would they want to stay with me? And I guess the second thing is that's a great reason for any entrepreneur to have what I call a go big mindset. It's much easier and much more satisfying to have a big organization that it can have a small one. You talked about teams earlier and people that can really do things well in order to attract those kinds of people, there has to be a big opportunity for them and you can't create a big opportunity with small thinking in my opinion. So I encourage all entrepreneurs to go big. And when I say big, I don't mean money. Big. It's not about money, it's about going as big as your capability is able to go and constantly having new breakthroughs that help you increase that capability and be able to take on new challenges and add new people to your team. I just feel like there's an obligation on the entrepreneur, grow the business. That's your job. Go big is what I believe in. Yeah, my name is steve Pappas and this is another two minutes. C. X. Thoughts. Today I wanted to ask you the question, can you possibly look the other way on C. X. You know, a recent study by Bain and company saw that 80% of organizations, executives thought that they provided a superior experience. But when the customers of those organizations were pulled, Only 8% thought that they got a superior experience. So what does that mean that there is such a difference in the way we look at our businesses and the way our customers look at our businesses, They're looking at them from the perspective of a consumer, consumer looks at a business to say, okay, do they provide me what I need? Is it easy to work with them? Do they save me time? Do they save me money? Do they save me effort? But it really boils down to the fact that they have access to information of all your competitors so they know who has the best price, who has the inventory etcetera. But the only area that can be a true differentiator is in how great an experience you make interacting with the customer. That's the sincere difference today and it will be into the future. And we're not talking about how much money you're spending on technology. We are talking about the great experience that you're giving your customer and that is the differentiator. I'm steve Pappas and thanks for listening to another two minutes. C. X. Thoughts. So maybe what we could do is we can talk a little bit about your book. I want to make sure that we set aside a little time because your book is a different type of business book. You started talking about the four stages earlier. But can you give us a little synopsis of how the four stages manifest within the book and what you felt you needed to write about and how folks are receiving it because I know it just came out. The book is called owner shift. How getting selfish. Got me unstuck. And the reason for the book for me to want to write this book is because my partner. Butch who I've mentioned, The person who gave me the confidence, gave me the fertilizer, all that about 10 years into our business. He was very badly burned in a fire at one of our facilities and three days later he died and I was deep into the grind stage at this point and when that happened I dropped into the broke stage, what I call the value of uncertainty, it was just a horrible place to be. But unfortunately too many entrepreneurs end up there and then their careers in that type of situation. And I managed to figure out with a lot of help, a way to get out of there, which is the breakthrough stage and then continue to have breakthroughs for many, many years since then. And I wanted to write a book that didn't tell you what you should do because I don't know what you should do, I know what I did and I know what worked for me and I figured, well if I can share my experience with my own stories that resonate with you, your stories are going to be different. But you read one of my stories that will resonate with something that you've dealt with, then we can bond on that experience and we can create through the book a trust level and that ultimately ends up with this go big mindset Bush's death and me dropping into that valley of uncertainty where I didn't know what to do and I thought my career was over. But of course what I figured out after being in there for a while, and I think I mentioned this before, is I was there in that spot, broken because I designed a system to run the business that was perfectly designed to put me exactly where I was. And I'm sitting there thinking, well, who can I blame for this? Like who's responsible? And the fact of the matter is I was responsible and when I was able to except that it was very cathartic, because it made me understand that if I was able to design a system that put me here, I can surely design a system that puts me somewhere else that takes me out of this valley and puts me on a trajectory for a breakthrough progress. And so that's what the book is about, steve, it's not about do this, do that, I don't tell anybody to do anything. As I mentioned, I just take you through a journey with really easy to read, stories that are short, impactful, that will resonate with you. And ultimately, I'm trying to build your trust in your own capability to not only get the business up off the ground and get it moving, but ultimately take it to a level that's beyond what you otherwise might think you can, that's great. Well, just for folks to be able to get the book its owner shift. How getting selfish, got me unstuck. And it's by mike Malatesta and I hope you guys will check it out because it is a different book. It is not your typical business book. It is much more done from the perspective of how did things go and maybe that will work for you to help you get unstuck. If you're confused, if you're feeling sorry if you're in that valley of uncertainty that Mike talked about. So I just want to point that out. So hopefully folks will take a look and pick up the book and gain something from it too. Yeah. Thanks steve. So if you don't mind now you're doing something a little different. E. R. C. Midwest can we talk a little bit about what it is that you're doing to help folks out there today? I sure can. So we talked about my first business which I started when I was 26, ran that business for 22 years. And a lot of the story but not the whole story of owner shift is that experience and not my more recent ones. But when I sold that business in 2015 I did so with a lot of good reasons I think one of those was to explore my creativity whatever much of that I may have. And that's what got me into podcasting and I had no desire to get into the same kind of business that I was in before I just wanted to just explore these goals that I had set for myself years earlier. one of which was to do something creative and write a book. But podcasting came first and I just so loved doing the podcasting that I thought, well this is kind of what I'm built for, and this is what I'm going to do. And along came a private equity firm that started talking to me about building another waste business and I hadn't been thinking about that, but I looked at the opportunity and I thought, well maybe this is something that I can, you know, help them with and gain a lot of value from. So we partnered up and we basically did what I had done the first time. We just did it at a very accelerated pace steve because we had funding and the combination of my connections, my understanding of the business, their funding and their assistance, we put together another company and created a platform for it. And actually in a little less than three years we sold that business a couple of months ago steve that we sold it and it was a really nice outcome for everyone that was involved, including the team because now they're part of a larger organization with a lot more potential opportunity and just like I was talking about the go big thing, I mean, go big isn't just for the entrepreneur, it's for everybody in the organization, if they feel like their future is going to be bigger than their past by being involved with the company, they will surely stay there. So that makes me feel good about both of the outcomes that I've participated in when it comes to starting a business and then selling it. I'm at least four behind you though. So I've got some work to do to catch up. Yeah. Well you probably wouldn't do the crazy things that I did. My last one was a charter airline who in their right mind would ever think about starting a charter airline. This guy. And I didn't realize because I did all the work myself. I did all the government approvals, putting up the bonds, doing all of that work negotiating the planes, the roots, everything. I didn't know anything about the charter airline business, but I learned and I learned quickly and I did that it was very successful because I found a gap in the market that wasn't being satisfied. But that was my last one. And who knows what my next one will be. There's something brewing, I can feel it. Are you a pilot steve? So you just had this sort of idea that there was a gap. Yeah. Some of the businesses that I had started along the way, we're in the travel business. So I had a chain of travel agencies. I started the first cost plus cruise outlet in the US that we sold in almost every city in the U. S. I had a contact center of 600 people taking calls for cost plus and we had the best prices. So I was the guy that put those little half inch ads in the new york times, the L. A. Times the boston globe in all the newspapers, back when we read newspapers and we read classifieds and that was a great business. So kind of an extension of that got me to understand where the gaps were in the transportation market and I figured out how to fill a gap did that for a few years and it went well. But now I was not part of the airline business. I didn't approach it from that perspective. I approached it from understanding what the customers needed and had enough data from our chain of travel agencies and the other work we did, we did conventions, we did all types of things too that I could see from kind of a 50,000 ft view where there was really a need and that's the way it went. I stumbled in it. It wasn't something I set out to do. Matter of fact, it was probably the third business I started in the travel and hospitality genre, if you will, but it was mostly because I gained so much knowledge along the way that I could see an area, but others saw the area after me too. Don't get me wrong. I saw the competition in the third year coming flying in from all angles they were flanking me and I turned to the airlines that I was leasing all the planes from, and they said, hey, what about next year? We're getting ready for the fourth year. And I said, nope. They said, what do you mean? I said, no, I know when to get in, and I also know when to get out. So I didn't do it that year. And sure enough, there was a lot more competition and the airlines had caught wind that they needed to put more inventory into those places too. And that was it. I was able to fly under the radar and develop something good and we made good money, good for you. And that's a great point that you made to find a need and fill it. That's what entrepreneurs do find a need to fill the need. Exactly. So in the few minutes that we've got left mike and I really appreciate your time here because hearing your experiences along the way is what our listeners come to this podcast for. It's not just the customer experience. How do we develop a better customer experience or in a better employee experience? It's what is the experience? How do you know, you've got, how do you feel it, what is that experience? And I wanted to give them the experience lessons from an entrepreneurial perspective, but also at the same time, I do want to touch upon how you approached your customers experiences and kept your clients, kept them happy built relationships for the long term to I don't want to be remiss and not touched upon that if you will. So for a long time, I felt like from a customer experience, if we just provided the best service out there, that would be enough, like who wouldn't be happy with that. And over time it became very clear to me that there are a lot of people that wouldn't be happy with that because The whole experience economy became something in the 90s or something. People started writing about that and I started looking at, we called it a client experience, but I started looking at, we can compete on price, we can compete with other people in the market by just doing what I had said, working hard, but how do we really compete by being different? And a lot of people that are in an industry for a long time, they go, well, they do the same thing we do, that's like something you hear all the time. And I say, no, they don't do the same thing you do you think that they do because you discount everything that we do, that's special. And so we sort of went back to the drawing board and we said, what do we do that's different than everybody else. We identified what those things were. And I said, what about our people is different than everybody else. And we started to identify that. And then it made sense to me to just start creating our own language around things because when you create your own language around things, you do two things. One your automatically different than other people. So all the industry jargon we got rid of using industry jargon for example. And we created our own jargon for the industry. So you're automatically different to when you do something like that, you automatically get the client or the prospects attention. In my experience, anyone that's bought your service or your type of service before already is trying to commoditize you by their understanding of what they've been through already. So you have to change that. Um when we use words that they've never heard before, it's a great opportunity for two things. One the client pauses and ask the question and two we have a chance to explain ourselves in a way that they otherwise would not have allowed us. And then internally we created roles and we called them things in our own language. So customer service wasn't customer service was client experience group. And we did that for as many roles as we could and we did that for two reasons. One it added to our differentiation on language because we would use the language of our people with our clients but to it changed the way that people felt about what they do inside the business. So they didn't come in and go well I work in billing or I'm in dispatch or I'm in customer service or I'm in accounting, we had different words for all of those things and so everybody inside the business itself and I say everybody, maybe not everybody, but a lot of people felt like, oh this is special, this is different. I'm not just what the industry defines me, What I'm doing is helping our companies succeed in the differentiation goal that we have. So those are some examples of how my thinking about client experience has changed over the years. Those are great tips and I think that you were way ahead of the curve and figuring out how to differentiate because I think people today don't understand that you do have to differentiate. I mean like you said, you can compete on price, you could compete on inventory, you can compete on service, that's table stakes today, That's the bar. What's beyond the bar is a how you treat the client be the fact that the employees are having a great experience. And that translates to better customer experiences and see. It's how do you build relationships, how do you get their attention and keep their attention and you know, you're winning that when your clients start using your language and it seems normal to them. No, that's perfect mike, I want to thank you again for joining us today. This has been wonderful. I want to point people if they want to learn more about what you're doing, it's probably easiest for them to go to your website and that's Mike Malatesta. So M I K E M A L A T E S T A dot com. You can find mike on linkedin. Mike Malatesta there again and check out his podcast. How did it happen available on apple and probably wherever you find your podcast today and maybe check out his book and I think you'll find it's a great read, but its owner shift how getting selfish, got me unstuck. So, Mike, thanks again for joining us today. Steve pleasure to be here. Thanks so much for inviting me. Oh no, it was our pleasure. So that's another episode of the Science of C X. So everyone, I hope you learned a lot today. It's our pleasure and our honor to bring you these types of information. And if you have any questions, if you have any constructive criticism, please submit it to us. Let us know if we're doing a good job all along the way, we're here for you and we're here to give you this knowledge and we want to have feedback, Tell us where else you'd like us to go. So until we meet again, please stay safe. Stay healthy and do take care. Bye. Everyone you've been listening to the science of C X. My name is steve Pappas. 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