Transcript of Interview with Marx Acosta-Rubio
Dan: Welcome to another episode of Shoulders of Titans, this is Dan Lok and today I have the privilege of bringing you another titan, a die-hard entrepreneur, a true immigrant success story, Inc. 500 CEO, a good friend of mine – Max, welcome to the show!
Marx: Thanks, Dan. It’s a pleasure to be here. So much fun; I can’t wait to hear what I have to say!
Dan: I can’t wait either! So maybe tell us a little bit about your background and how you got into what you do today.
Marx: Well you know I was actually born in Venezuela and then got here 1997. I spoke no English and my mom drops me off; I think it was third grade at the time and she says, OK tell them I’m going to take you out today and pick you up early so tell your teacher where you’re going to go. So she tells me the sentence to say and sure enough, here I am right, 8 years old and I get in class and the teacher says, “Today our new special immigrant boy is going to tell us something really unique and special”. So I get in front of the class and I said: “Today, I’m going to the bitch.” And they all started roaring laughing and I was like what the hell are you guys laughing about?
I get in the car and I’m like, mom they laughed. And she’s like, what did you say? And I’m like, I’m going to the bitch. And she laughed. She said, son, in Spanish you said [translation] – not a good introduction for your third grade class. So, that was my introduction to English. Dan, I was not a great student. I was a D and F student. I flunked fifth grade; luckily I didn’t get held back. You know, I was not most likely to succeed. But I did have a mindset that was like ants in my pants where I always wanted to be doing something and that led me to a bunch of events that eventually led to being an entrepreneur and it’s interesting because most people think that entrepreneur success is a straight line but it’s jagged, crooked and in some cases, broken.
Dan: And just before the show, you and I were talking about – we have so much in common. We both love martial arts and we were talking about you know we’re both fans of Bruce Lee. Just talking about an entrepreneur, the discipline and focus that it takes. And that’s why I see people with martial arts background or even military backgrounds, they do better in business. What are your thoughts?
MILITARY/MARTIAL ARTS BACKGROUND IN BUSINESS
Marx: Yeah, you know when I was growing up an immigrant here learning to speak English, I didn’t much care for school. It didn’t motivate me. So, it didn’t mean that I didn’t have the focus or discipline or desire, it just meant I didn’t find the vehicle that could bring it out within me. And I think that’s what the military or martial arts or other things will do to some people. So here’s the difference – a lot of guys and gals want to feel good and they go to seminars, let’s walk on fire! And I’m empowered! And this and that and you know, then they go and do absolutely nothing.
A real entrepreneur is the guy that wants to find the truth and the truth in combat of actually getting out, suiting up and doing something. And I think that going to school for me was academic – it made zero sense to me if I couldn’t apply it. If you wanted to teach me math, I didn’t really give a rat’s patooty. But the minute you started putting dollars in front of the numbers, then I began to care. Because it made sense to me. I could something with it in my life where it was no longer just a thought or theory or exercise. I talked about Bruce Lee – I think that’s what separated Bruce Lee, martial arts started to solve a problem, right? Karate guys had wide stance and blocks because they’re fighting samurais. Indonesian has different movements – small frail woman in a crowded city of China.
Every art solved the problem. It reminds me of the story of the grandma teaching the granddaughter how to cook and then she finally goes, OK honey now you take the meatloaf and you cut it in half and the granddaughter goes, why do we cut it in half? And she goes, because our oven only allowed half the meatloaf to fit. So she didn’t have to keep doing something that was done in the past which no longer worked and I think as entrepreneurs, all we care about is things that worked. Wouldn’t you agree?
Dan: I’d say it’s also a results focused and that’s why sometimes entrepreneurs they come to me and say, give me the five step to success or give me that blueprint or road map. By definition, entrepreneurship is about reinventing yourself and finding what works for you – so what works for me might not work for you, but principles are OK but it’s not a straight line.
Marx: Yeah, I was a millionaire cash in the bank after taxes by 31. 10 million cash in the bank. By 38 broke, 39 -2million and by 43 over ten million cash in the bank and by 46 significantly more. The difference was I found what worked for me in the beginning and then I got arrogant, I stopped growing, I stopped learning, I did every single mistake in the book you could possibly imagine. The truth of the matter is, I really believe everybody should lose their first fortune.
Dan: I love that. Take us back a little bit to your first business – what did you do? What were the products and services?
FIRST BUSINESS LESSONS
Marx: Well, I tried a bunch of different things. Printer ribbons – you’re probably too young, but they had these big printers and I got to work for that company because I was trying network marketing but all that did was get me $35,000 in debt. So I went to college, did martial arts for a time, took a year off, went to Law school, decided I didn’t want to be a dick so I dropped out, did network marketing and I worked hard man. Honest to God, up early, late nights, did everything they told me to do.
Only problem was I was 23-24, didn’t have a circle of influence and I didn’t know how to sell. So a guy gave me a job selling computer ribbons, and this is now 1994, dude I was so bad- I spoke way too fast, English is my second language and I almost got fired 3 times. I mean I was really bad. So I looked around and thought, if these guys can do it, so can I. So I started reading the books and courses and seminars and all this stuff on sales – went from zero to five grand in six months, then from 5-10 and then by age 28 making a quarter million and then the guy who owned the company fired me.
Marx: Well, good question. The reason he fired me was that he lacked integrity. He’d say one thing and do another and he sold most of the guys sold cheesily – they cared about the commission, not the client and you know, I was at the time a big Zig Ziglar fan and you know all these guys and I couldn’t do it so I called him on it and he knew. He knew that if he didn’t get rid of me, it was going to be able to change some of the people in his office and he was going to have a problem. It was a smart thing; he did what he should’ve done for his position. But I’m grateful because he made me a decamillionaire.
So, I get home early which is unusual and my beautiful wife – at the time I had a house, a couple of cars, a one year old son – still $35,000 in debt. And I’ll tell you why I never paid that off in the beginning and I’ll tell you why I crashed and what to avoid and what the signs are that we should look for as entrepreneurs. So I get home and I’m like, hi and she’s like, honey what are you doing home early? And I was like, I got fired. And she didn’t bat an eye – she said that’s fantastic, great, tomorrow we’ll get the business license and you can finally start to do this on your own because you’re meant to be an entrepreneur – you know we had talked about this and so I was like holy crap, what a woman. So next day, I’m on the phones – you know because it’s cold calling and we’re selling toner cartridges and ribbons on the phone – this is not high level stuff. We’re competing against Staples and Depot and we’re not the cheapest.
Dan: And it’s not a super sexy product; let’s face it.
Marx: Dude, it’s like toilet paper. I mean nobody cares about it unless you need some and don’t have any, or it rips in your hands. It’s like that. But it is a necessity which is what I liked. So I started cold calling – now, you could not tell me no. I’m 28. Got a one year old son, wife, $35,000 in debt, zero income, zero money saved up, I have to pay my bills. That is serious motivation. Someone said, how did you become a millionaire? I said, malnutrition. You know. Right? You try that. You know Dan I didn’t know what a P&L or a balance sheet was, nothing – so I sold $800,000 the first year. And I still had no money because we’d send out these invoices and the invoices we never collected them because I was afraid if I called and asked for the money, they’d stop buying from me. I didn’t know business; I didn’t know anything.
Dan: So you were selling but you just weren’t collecting the money.
LEARNING THROUGH MISTAKES
Marx: Yeah, business 101. Get the cash, not the order – the cash. So, some money is trickling in but I’m about to go under so I had a stamp made and it said, “roses are red, violets are blue, this invoice is way past due.” And I stamped all the invoices and sent them out and then money started coming in a little bit so we realized, we had to get on top of it. And then I had a friend of mine and he’s like, hey you know I know you want to sell – by the way I had no intention of hiring him or building a huge company, but he’s like hey dude I got fired too – he was a drug addict – you know, can you hire me? And I was like, sure OK. So I brought him in, in my house because I’m working from home at this time and I hated him working from the house so much that I got a little office and Dan, I don’t know if you’ve had this experience – but I remember, honest to God, I was in this office, I’m 29 years old – it’s a 700 sq foot pretty crappy office – the desks and partitions are all different colors and sizes from salvation army – the phones are from 1970s, right – nobody has a computer – I’m the only guy with a computer and I remember as I was leaving one night – I stopped at the door and I looked at my tiny little office and I said, this is mine. Oh my gosh, I can’t believe this is mine. And that’s when it hit me that the dream of always being an entrepreneur was starting to become a reality. And then we took the company through different phases, 40 under 40 richest guy, all these cool accolades and then I crashed it and burned it and sucked my thumb and rocked myself in a corner for a couple of years and then finally decided to stop acting like a little bitch and get back in the game and I did it faster and better.
Dan: So what happened – sometimes people are afraid of failure but I also think in some cases they’re afraid of success. So at first when you experienced the success, like why crash and burn? What was going through your mind and how can a listener watch out for some of the signs and hopefully they don’t have to crash and burn.
CRASH AND BURN – A STRATEGY?
Marx: Look, it’s a great question and I’ll tell you that leadership has 8 pitfalls to watch out for. And one of them is arrogance, tool seduction, really because leadership- people talk about being inspiring and motivating and that’s cool and dandy if you’re selling motivational seminars and getting asses in the seats and look I do it to my staff every day right – in fact my greatest skill was taking individuals and showing them how to make 2, 3, 4, $500,000 a year selling toner. OK. So but what ends up happening is leadership in a company as you grow really is about avoiding the mistakes. Think of it this way – imagine you are a mountaineer, a guide – and you’re going to take us up and down Mt. Everest. So we get the gear, food, conditioning, we now have two objectives.
Get up the mountain and then down the mountain. And by the way, most people die on the way down, not the way up. So as we move up the mountain, it’s your job to make sure we don’t make stupid mistakes. It’s the mistakes where if I stop and think that I’m at this alone – it’s sort of a lone heroism – that’s a bad thing. If I get seduced by the right clippings and tools, that’s a bad thing. So, what happened with me is I literally went from rags to riches; you know, I still own the house in CA, the condo in Mammoth, the private planes, the Mercedes – and dude, I was spending cash like you wouldn’t believe.
One of my buddies who was almost a billionaire – we get on a plane and go to Vegas and we gamble. So my buddy was like ok we’re going to do a bet, put in $50,000 a piece and then that – just stupid stuff like that. But really was the difference for me Dan was I just didn’t want any of it. I didn’t want the responsibility – I didn’t want the headache. Some of the guys were starting to betray my trust within the organization and I had just hadn’t signed up for coming down the mountain. I’d only signed up for going up the mountain so I literally just purposefully blew it all up. I sold it, but I sort of blew it all up and I think what the listeners can avoid is the minute that you start to feel that you’re not growing or moving in the upward direction, that’s sign number one. Because for me it went from being in the office, to what can I do to stay out of the office – not to be strategic, but to avoid going to the office.
Dan: You no longer love what you do. The hustle, the hunger is gone.
PASSION IS NOT THE DRIVING FORCE
Marx: Yeah, let me give an ADD moment if I may on passion. Because there’s a lot of things I don’t agree on in this industry based on experience. I do not believe that passion is a driving force. I know my buddy Tony Robbins talks about, live with passion. I think that’s bullshit. My own opinion, take it as you will, I think inspiration is more important. Let me tell you what I mean by that. I was never passionate about you know building a company that sold toner cartridges; it’s very tough to get passionate about selling toilet paper or toner cartridges. Let’s be honest. Inspiration is the reason why you do something. So vision, values, goals – those things inspired me.
So growing up and not having money but building wealth – that’s inspiration. Giving my kids an amazing house; we just spent a summer in Europe – that’s inspiration. So I will pay the price and burn the midnight oil. I’ll get up early, go to sleep late, I’ll do whatever it takes if I’m inspired to achieve something and the vehicle to me really isn’t that relevant. I have 13 companies that I have an interest in – only a couple of the guys are passionate about their product or business. The rest of the guys are inspired. So give me an entrepreneur who is inspired – and I mean this in my own sort of firms – I’ll help them succeed infinitely more than a guy who’s passionate about some stuff that may not sell – like candles. Oh I’m passionate about candles – I don’t care. I disagree with most people thinking that passion drives. I know very few people Dan who are actually really passionate about what they do.
Dan: I agree. It’s like sometimes I say, I love speaking but I fucking hate traveling. But that’s the price you have to pay if you want to experience and impact people’s lives. Actually, now you explain it that way, I actually 100% agree with you. Because sometimes people say, I want to find something I’m passionate about, something I can be passionate about and they look for that for like fucking ten years and they haven’t done shit, right?
Marx: Yep. And that person may be really passionate about what they do and hey, good for them right. But give me inspiration – I’m telling you – inspiration is like a wild stallion horse and they can’t hold still. You can teach that horse to race – he may not want to race because he wants to be in the wild, and that will be an amazing fast horse. Entrepreneurs need to be like that wild stallion horse until they find the right trainer and right course by which they can win. You know I a formula called V2GP2 which we’ll talk about in a little bit.
I don’t believe in setting timelines for goals by the way. I think that’s bullshit. It doesn’t work. If you look at your experience – all the things in life you wanted, you set it as a goal and even though you might have a timeline and in your mind it’s like I’ll do whatever it takes as long as it takes to get what I want to get and when you do not use timelines, in my experience you actually get there quicker than you normally would. And then building it the second time – I only had one media of distribution which was phone sales.
So now we’ve built it on Amazon and internet and phone sales and distribution and big corporate accounts – Citi National Bank, right – so we moved into a variety of different channels and that gave us explosive growth and I think that’s very important as an entrepreneur. You know, how to get from one into many – and the comment about hating to travel – you know David Allen from getting things done? He’s a good friend of mine and I hired him to consult with me in 2001. We’re co-authoring a book – David’s component is he said – I told him, I love having written, I hate to write. And that is the price and discipline you have to pay to get what you want and if you’re inspired, you’ll pay the price.
Dan: It’s no different than someone let’s say they want to get the six pack abs and want to get in shape. Nobody likes to get up in the morning and go to the gym – oh yeah, I love lifting these damn weights, right? I love having to go on a diet. But no that’s the price you’ve got to pay when you get that body that you want and then it’s worth it.
Marx: Yeah I mean as a martial artist, we don’t like getting our asses beat, we like winning, right? But getting your ass beat is what you have to do in order to win. If you want to win, you’ve got to play the game and take some bruises. I was a bodybuilder for a couple of years and at one point I actually did begin to enjoy lifting weights sometimes but it took me like a year and a half of hating it before I began to actually enjoy it. So you know after I built the company the first time and then I crashed it – and the market did change, this was in 2008 when it crashed and so there were some external sources – but that’s baloney, that’s bullshit right – I could’ve made better choices.
You know, there’s something in business that I call BSH. It stands for – bad shit happens. There’s always bad shit happening and a surprise is going to show up that could have a little bit of an impact or a big impact – both negative and positive. And you’re always either 2 or 3 moves away from greatness. I mean in business, right – it’s strategic and I did three moves that spelled disaster so I take responsibility – and Dan, I really did. Like, I’ve given up, it’s over, I’m done, I have no desire to be a business again – woe is me. And looking back now, I’m kind of embarrassed but I’m admitting it – I felt somewhat defeated. But at one point, I had an epiphany and a conversation with one of my kids and I went back and started journaling – what did I really do to succeed?
Because I built a sales system that was unparalleled – nobody could do as good as I did, right? We were significantly the best on the phone – still are. I had built a system that was duplicatable. I could do it but the question is, could I teach my guys and gals to do it? I took a guy who was an electrician making a grand a month and within a couple of years making $250,000 working for me. I took a guy who was an ex-drug addict literally from crack who was making $53,000 a month commission working for me. And it’s a numbers game – right. Lots of orders, big accounts, how to communicate with people, so those things are important and I understand that but what did I really do, what was my mindset? And I realized I had a formula, right. V2G2P – Now do you remember a guy called W. Clement Stone?
Dan: Yes. Of course. Success system never fails.
FORMULA FOR SUCCESS
Marx: Right. So he was the guy that actually put Napoleon Hill on the map. He was broke and a failure monetarily – when he met Clement at the diner in the 1960s and then Clement bought the right back from his book after his second wife stole it from him for a million bucks – otherwise it would’ve been a book like The Science of Getting Rich, great book but nobody really talks about it because nearly not as popular. So he had a formula called R2A2 – you recognize, relate, assimilate and apply the principles – so whenever I read a book, I do that so that I’m able to use the things in the book that are teaching me – without that, the book is just a fucking novel that you know, it’s entertaining but there’s zero action on it.
So I started going back and thought, well is there a formula that I followed that got me to my success and did I stop that formula that then allowed me to crash and burn purposefully? And it turns out there was. So I started thinking, Ok what is it? And I wrote down, well I had vision, values, goals and principles. Let me explain. I had, you know, when I became an entrepreneur I had a vision of what I wanted my life to be like. I didn’t know it was going to be toner cartridges and supplies – it could’ve been women’s stockings or nutritional products – it’s irrelevant, right? But I had a vision of what my life was going to be like. I had values that I wouldn’t violate. Love to my kids, loyalty to my wife and character. And then based on my vision and values,
I had a set of goals. See, goals are overrated in the sense that everybody talks about goals. No, no – goals exist to help you achieve the picture in your mind that is your vision as long as it doesn’t violate your values. And then the principles – what do I need to learn or apply in order to achieve my goals to live my vision and protect my values? So I did that and I went from zero to hero like that, just because I kept on focusing and look, it’s a short conversation and there’s a lot more involved with this right but it’s to give you the idea of how this actually works because you already do this naturally. Now, here’s what happened – so I went back and learned a bunch of great lessons and now my peers start to notice, wow – he’s not sucking his thumb anymore. He’s not the little bitch in the corner whining and complaining; he’s actually back fighting. And they said, hey can you help me? My business is doing OK but I think I can do better and I know you’re pretty good at this stuff.
So I took in a couple of guys where they paid me the percentage of the profits of the company from where they were on future growth and they weren’t making any progress and I’m like son of a gun, this is working for me. And like a scientist, you know if I can prove a principle that I can do and I can show you the same thing and you get the results, that shit works. That’s a good principle, right? So, this wasn’t working. And I was like, oh man, what’s going on? And then I had a conversation with one of the guys – this is a few years ago – and I said OK let’s go through this to get you started. Vision – got the vision. Clear. He’s pumped up and excited right. Yeah, this is good. Values – his kid, his wife, OK good. Things that we protect and grow. OK what goals do you have to put in place? I got to put this and this OK super, fantastic. OK what principles do we employ? These, these, these – and then I said OK great. And I said, are you ready to get started and he goes – *sigh* and I was like uh-oh – what’s going on?
Well it turns out that he had all those things but he didn’t know if he wanted to pay the price to get that stuff done. So we came to V2GP2. So I added the second P because I realized I was willing to pay the price; it was what I had to do. So as soon as we uncovered that, I said Oh, well if you’re not willing to pay the price, you can’t do shit. I mean, it doesn’t matter.
Dan: Just like shooting the breeze.
Marx: Yeah, it’s like mental masturbation right? You feel good and then nothing happens. So, I employed that with the rest of the guys and then things really began to change. See, because in order to be productive and successful and make millions and live your life, you don’t have to be stressed. I don’t believe that. So I understand how to get things done and science tells us stress is the opposite of being productive.
Fight or flight vs the archiving brain or the thinking brain. Right? So we have to be like martial artists in the zone but we do have to have certain principles to apply and certain beliefs that we incorporate otherwise we can’t get things done and one of them is, the mindset of I can learn it, it will work and I’ll keep at it until I get it. If you have those three principles and you know where you’re going, chances are something will show up that will benefit you and you’ll make good money and have a wonderful time. My own opinion. What do you think?
Dan: And I think also W. Clement Stone in his book he talks about you have to be dissatisfied with what you have so that you would pay the price and make changes and do whatever it takes. I always say this, you don’t have to know how to do something before you do it. If I’m going to run a marathon, maybe I don’t know how but I could put on my running shoes and run around the block. Anybody can do that. But most people don’t even start. So what did you do with the few guys you were working with – let’s say they don’t want it bad enough, they didn’t want to pay the price – did you try to kick their ass and motivate them or like, no you have no hope – what’d you do with them?
HOW TO MOTIVATE FOLKS
Marx: So, great question. Nobody asked me that question but I think it’s one of the most insightful questions. And by the way, W. Clement Stone was inspirational – I totally agree with you and David Allen says, you can’t see yourself doing something until you see yourself doing it. Because it starts with the image of yourself doing it and then you go out and do it. So here’s what I did – now I happen to be able to cheat a little bit when it comes to empowering people to actually take action and be motivated because I studied influencing and it’s helped me really well and I have something called metaprograms.
Those are things people get motivated by, right? Some people avoid something or want to gain something – so I know how to communicate to them where it gets their juices flowing. I also know how to continue that so they keep on being motivated. Some guys might love I’m going to kick you in the ass because that’s how they get motivated. Other guys are turned off by that – I’m not a one trick pony right so I can be very thoughtful, pensive, meticulous, deliberate, and specific – or I can be fun and crazy and wild and outrageous.
I will find the best way to communicate with my guys that gets them to where they need to go. If that means I got to talk super proper with somebody, great. If I have to say fuck, shit, motherfucker with another – great. So for me it’s all about what things and tools can I use to get them to take action. Because really, some people – and this might be a really smart component – say look man, I don’t want to fucking motivate anybody, I’m going to find motivated people. Cool. That’s good. That’s probably a very smart thing to do. However, when you’re selling toner cartridges, we’re not getting MBAs knocking on my door. Right?
We’re getting guys and gals that probably haven’t been very successful up until now. So, if I can get them to feel good while they’re on the phone, learn the language patterns, learn to manage their state, focus on the outcome, keep the conversation moving forward, track their numbers, do the ratios, they’re going to succeed. Now, how I get them to do that depends on their personality. So to answer your question is, every entrepreneur can be communicated to in a particular way that allows them to get that inspirational dissatisfaction so they can actually be moved in the right direction because direction is more important than goals.
Dan: And would you say also it’s for us, for entrepreneurs ourselves, we need to kind of inspire ourselves so we will do whatever it takes?
Marx: Yeah you know, moving away from something can motivate, not towards something. You want to motivate someone? Tell him something he can’t do, he can’t achieve that or help him move away from something. Easy guy to manipulate and motivate – he was the guy working for me or the guy I mentored, it’d be easy to get him going. But if that’s how he communicates to everybody, you know to answer your question I think motivation is also overrated. I think discipline is significantly more important.
Dan: I know also, always say you know willpower is very overrated. I think your environment is more powerful than your willpower. Like who you surround yourself with, the environment you operate in, your office, everything around you.
Marx: Yeah, I find that what motivates me the most or inspires me the most is inspiring others. Because I get to hear myself inspiring somebody else therefore I have to be inspired to inspire them. I have to be motivated to motivate them. One of the things that we do in our office is I coach live on the calls as we’re opening accounts for my new sales guys, right. So they’ll pick the phone up, turn it around, hold it like a microphone, I’ll repeat the lines, they follow me as if it’s an echo- I mean, they don’t wait, it’s one right behind the other because I teach them that way unconsciously through osmosis and then they actually see me do it and so I’m implanting in them the strategy that I’m using so when I’m not around, boom. It goes out and they do it. I think, you know and by the way, motivation is a motive or reason for doing something. Inspiration is a whole different game because inspiration basically says, hey look – I mean do you have kids Dan?
Dan: Not yet, I just got married last year.
Marx: Well congratulations OK. Does your wife inspire you?
Marx: OK, so that is significantly more powerful than you getting motivated or someone else motivating you because success isn’t about doing the things you’re passionate about – it’s about doing the stuff you have to do especially when you hate it but you know if you pay that price, you’ll achieve what you want to achieve. That’s inspiration.
Dan: And I’m also curious – how do you view success or wealth back then and how do you view success and wealth now?
Marx: Wow that’s a really great question. So, back then – remember, I had the vision in my early 20s of being a millionaire you know? So I get to the point where I’m a decamillionaire right? I’m driving my CLS55 AMG Custom Made racing Mercedes with an amazing engine – that thing would burn rubber at 65 mph I mean that was a beast. I loved that car. I’m in my beautiful $2 million house with my marble flooring overlooking the valley, I spent $300,000 on the outside with the pool and inside – I mean I’m living the American Dream – three beautiful kids, and I’m driving down in CA to my office and it hit me – I was not happy. It was and I thought – where the fuck is my ticker tape parade? I made it dammit, I’m the American Dream immigrant made rich, starts from scratch, and nobody gave a shit.
And so I thought, wow that’s interesting and so I realized success to me is defined by different factors. The one thing that I did not screw up thank God were my kids. That’s one thing that always stayed as my number one value – so I viewed success back then as monetary success and I still do view success, don’t get me wrong, I love making money. And I love making it and spending it too, right. But I view success now in terms of I think life is nothing more than a collection of experiences, their intensity and their frequency. Because if you’re 50, I’m 46 – I know you’re younger than I am. Let’s say you’re 50 and you’re going to live another 50 years. You only have 50 more Christmases – not 50 years, just 50 more Christmases.
So, for me, success and happiness is all about – am I reaching my full potential on a regular basis? Am I doing the best I can? It’s the same philosophy I had when I was big into martial arts. It wasn’t about – you know – am I getting better and then the results show up, wow he kicked this guy’s ass really bad compared to last week so he’s getting better right? So I think when guys come to me and start working for me as sales guys for example – the fact that I can get them up and running fast gives me a sense of success. Are my kids getting better? Are they moving in the right direction? All these things. So money is now the way I keep score but what I measure success with is effort – not force, let’s work hard, no no – give it effort. Effort is very different than hard or force and, to me, effort is defined as you do your absolute best – and you let the chips fall where they may.
Dan: Is that also why you have the philosophy of setting goals without a deadline because like you said, sometimes you can get there faster and in some cases sometimes they might have the wrong expectations and it takes a bit longer to get there but they don’t feel discouraged and think oh shit, I failed. No, it just takes a little bit of time.
Marx: Yeah, so goals are like seeds right? You plant the seed and you don’t dig up the seed and go, oh shit it’s not growing. Right. You leave the seed, water it, tend to the soil, sunshine and rain, all that fun stuff and then it begins to grow. So goals are like that. I mean I’ve had, listen, Dan I’ve had some goals where I did not – there are some goals where I’m like, honey I want to open up a training center here in Dallas, here’s the office I want and my broker says, nope. Within two weeks I found the exact office the way I described it. Sometimes it just works that way. Like hey I want to buy this or achieve that and meet this person and it just shows up and I think that’s why it’s important not to put goals on it because if you put goals on it, to some form you’re repelling things rather than attracting things.
Dan: Correct, correct and it’s almost restricting our creativity, the people, the resources, things might show up but when we have a very limited view of goals, I totally agree. It could happen faster than we thought. Absolutely.
Marx: Yeah, goals to me are not the primary objective, your vision is. And look, you know Jim Rone says you set a goal to become a millionaire for what it will make of you to achieve it, not for the million dollars. Thank you very much however I think what he meant to say was, goals help us set direction and the direction is more important than goals. I’ll give you an example. I wanted to buy a Rolex ever since I was broke because to me it meant opulence and success and money and when I first saved my first $100,000 I could easily afford a $10,000 Rolex – I didn’t. And then my first million, I still didn’t. First ten million, still didn’t. The fact that I could buy it made me not want to get it. But wanting the Rolex inspired me to work harder. I eventually did buy the Rolex by the way. And I bought it when I was broke. I was like fuck it, I spent my last penny.
Dan: I’m buying this damn watch!
Marx: Exactly because at that point it was low self esteem and all kinds of crap – I almost lost my wife, everything – it was pretty gnarly and at the time I was like oh my God this is terrible. When I was out of it I was mopey but now that I’ve gone through it, I thank God it happened.
Dan: And that’s why you said, you know you believe every entrepreneur should lose their first fortune. It’s amazing because I’ve gone through similar things at an earlier age so I totally get what you’re going through and I think that’s why we connect so well – both immigrants with ups and downs. I’m curious with some of the principles you’ve learned over the years. Like if you give me like top two or three business principles that you believe are critical to your success.
TOP BUSINESS PRINCIPLES
Marx: Well I mean you can’t do a good deal with a bad guy – so who you do business with is significantly more important than the business you do. So, you know for me it’s very important that I do business with people I can trust and who are reliable. You know someone once asked me, you know of all your business partners and friends like what’s the one quality? And people say oh you want them to be honest and I want them to be loyal – no. Reliability. If you’re reliable, you’re a good guy and can be in my midst. Because reliability means you’re going to do something, you’re gonna do it. I can rely on you, right. If I leave and say hey guys I’m going to Europe for three months, and I’ve got staff that’s reliable, I can sleep well at night.
So I think who you do business with is significantly more important than the business you’re in. And then the other component is I think it does take discipline. Not hard work, although I know we all work hard and that’s a whole different topic because you know I have a lot to say about that but you know I think it’s about discipline. I think we need to get out of this you know find your passion, never work a day in your life bullshit because it’s just not reality. I’ve got a lot of really wealthy successful friends and the majority of them hate their freakin’ job. Right, or hate what they do for a living – they’re really good at it, they have an amazing life and they pay the price to get things done, but they also don’t love it.
So I think – the other one is, people throw out certain principles like the 80-20 principle and shit like that. Those things are misused. I think we’ve got to keep it on the basics. I’ll give you an example. Somebody just came to me and said, hey you know I’ve got this company – could you help me? Company looked great, very profitable, I could be making a good amount of money working with this individual and I didn’t take the gig. Because I didn’t trust the guy and I couldn’t rely on him. And so I moved on. And mark my words he will not be around too long.
Dan: Guys like that don’t last. You burn someone once, twice, it’s a small world.
Marx: Yeah you know – I can forgive you for an error in judgement, but not for an error in intent. Meaning you know oh hey Dan I screwed up sorry buddy I didn’t mean to hurt you versus yeah, I meant to screw you purposefully. And look, in my early years right when I was growing, I left some dead bodies along the road. But it wasn’t because I set out to be a bad guy, it’s just that I kept moving forward, they didn’t and so they got run over. That’s just part of being an entrepreneur right – you can’t be loved by everybody but there were some guys along the way who purposefully went and ran people over. And that’s not OK. I think the other component about business is we underestimate significantly what we can do. We don’t think big enough.
Dan: Correct. Correct. That I kind of learned the hard way. I always look back – the two lessons I’ve learned, I wish I would’ve thought bigger at an early age and I wish I would’ve met and connected with more people versus working behind the computers and building my internet business and not connecting with people. Those are the two lessons I’ve learned. So, what do you mean when someone’s not thinking big enough – you mean like, what they can accomplish in a period of time? Can you go in depth a little bit more?
Marx: Yeah. I think boldness is lacking in society because we’re all so brainwashed with be courteous, be nice, don’t be pushy, where I think it’s the opposite. I’ll give you an example right – you’ve got two guys in my office both selling the same thing. One guy gets big accounts, the other gets small. What’s separated? It’s not the language patterns, it’s not schooling, it’s one guy who pushes the envelope more and does things that might seem more as ruffling feathers that allows him to get bigger orders and bigger accounts. I think as entrepreneurs we’re not – I don’t want to say asshole-ish because I don’t believe in being an asshole-
Dan: But a little bit more aggressive.
Marx: Just bold. It’s not even risky, Dan. It’s a matter of – look, my own personal belief is the majority of the universe doesn’t want you to succeed. Even your parents, your wife, your friends – they don’t want you to succeed right? For a variety of reasons. They don’t want you to get hurt, they don’t want to get left behind, you know – who cares, right? But the universe conspires not to let you succeed. And the only way that you’re going to actually succeed is if you’re bold enough to think big and say, hah I don’t care what you say or do, I’m going to make it happen anyway. I’m going to be bold. I’m not going to be scared or afraid and that way you think big. Because the same energy takes a little internet business as it does a big internet business and you’re like oh shit what if I screw it up, I’ll lose my house and I’ve been there too right like oh my God this and that prevents us from thinking big and so we temper our thought process to a smaller level where we think it’s more safe. It should be the opposite.
Dan: I agree. I know, even if you run a small internet business, if you lose it you are still going to lose your house – it makes no sense so you might as well just go big.
Marx: Yeah and I think, the guys that I work with – maybe this is similar for you to – for me it’s about providing a safe environment but let me tell you what I mean by that. When I was doing martial arts, so we all went to class to beat the shit out of each other so that we could get better and we went to the class; we were there to destroy each other to get better but we also had a bond that you couldn’t find anywhere else. Nobody outside the school could understand that and I think that’s really important for true entrepreneurs. Not wanna be entrepreneurs, but true entrepreneurs to get around other entrepreneurs, mentors whatever, who are in the game fighting because if you lose your house, God forbid and you call me – man, you know you can count on me. Dan, I get it – how can I help – you can do it bud, not a big deal – you don’t feel lonely and there’s no shame, there’s no – oh, you suck.
Dan: No judgement.
Marx: No, it’s a clan of brothers who help each other right – if you go fight and get your ass kicked in a fight, when you go back to your camp they still love you, they still want you to get better and although you may be ashamed – there is no shame in that because you fought a good fight. And I think that’s what’s missing in the entrepreneur world right is that camaraderie because if I feel great and I’ve got guys and gals on my side, so long as I’m truthful and honest – I’ve got a guy that called me and goes, I want to make my company $50 million in three years.
Awesome. Cool. What are you now? Well we did under four million. How old are you? I’m 62. Fuck off. Come on dude. And they do that because they’re like oh well you know I could’ve been a contender, I didn’t want to really try – that’s a lame excuse. I don’t have time for that stuff. But if you’re really with a band of brothers so to speak, you can achieve a lot more.
Dan: I’m also curious with the 13 businesses, the companies that you’re involved with. How do you structure the deal, how do you work with them?
Marx: You know every deal is different depending on the individual but it’s generally either a retainer and a portion of the proceeds or a portion of the proceeds. So I have one guy that pays me $10,000 a month and has a retainer and their companies are generally pretty big. And I get a piece of the gross profit increase from what we met. Full disclosure Dan, I am not a marketing guy. Right, it’s not like I’m going to this pipeline and unbalanced thing – so that’s not my style. I’m an entrepreneur; I know the numbers to the lock that open the door for things to work better. And by the way there’s a whole different discussion about one of my dear friends who is the highest paid consultant in the world – Apple uses him and I’ll tell you the story of how he actually figured it out but the guy is an anthropological genius – belief, behavior, result, content, process – that kind of stuff.
So some guys will put me on retainer. Other guys are smaller venture capital so sometimes I’ll invest, put money in and I’ll own a piece of the pie. Other times they’ll be like hey you know what, here’s where we are, we’ll pay you this percentage of the profit – can we make it grow? And I get involved, not in the industry, meaning I don’t go oh OK well this guy is pharmaceuticals, this guy is nutrition, this guy is that – I look at the individual, right? I’m like, is this a good horse to bet on? And so far these 13 – I’ve got the V2GP2 and man every one of them bar none is doing fantastic. And I still run my company which has five divisions – so that’s kicking some serious butt, we’re number one on Amazon right now.
Dan: Do you also find that when you mentor these other entrepreneurs, we learn a lot as well because we kind of keep our hands on the pulse of what’s happening in different industries.
Marx: For sure. You know I’ve got to tell you Dan, I still seek mentors of my own you know just because you have your own studio teaching Jiu jitsu and you’re a world class champion black belt that everyone wants to train with doesn’t mean you don’t have an instructor or someone you aspire to to learn more, even if you can kick their ass in the fight – they still might have insight based on experience from when they were fighting which makes you better. So it’s both up and down and I’ve had some really great mentors. David Allen mentored me when I first started in productivity – that was a big help. Dr. Steven Heller who passed away – my very first real mentor. Jim Rone and a bunch of other guys. But I think it’s very important to have mentors and be mentored.
Dan: And I’m curious, do you go through a period of time of personal development, reading all the books getting inspired and motivated – some people it could be a decade or just a few years and then they go into learning a bit more about practical business stuff that helps them to grow and then next phase is just what I’m going through myself – phase 3 is studying something more spiritual and then integrating that into business. Like, what’s been your journey like?
Marx: You know I am a self made guy in the sense that I sought the book and mentors so I could apply things right out – I believe in being a utilitarian. That’s a value that says, if it’s usable and works you keep it, if not you just basically get rid of it so I took speed reading courses, learned speed reading from the second world faster reader so I’ve kind of done both simultaneously where I’ve been reading and applied but however to your point – this last time after I got my ass kicked or lost my first fortune, I did primarily most of my reading and study – because I was looking to what did I miss but I knew what I missed, I was hiding behind the books – and once I got going, my reading level – I mean I was reading 4-5 hours a day, you know 2-3 books in a day but now it’s more about, I try to read 30 minutes a day because that’s what my mentor told me to do and I enjoy it.
But it’s like the seasons, you go through different phases. The spiritual component by the way I found, most people find God or spirituality when they’re getting their ass kicked. Right? Because you look for something outside – this can’t be all. It’s a bunch of bullshit right. Not that God is bullshit because I’m a believer – meaning that, looking for that answer that is a bunch of baloney – I think spirituality is something that comes with behavior, not with study.
Dan: I got to share a quick story with you. So last year in March, I went to NY and I went to Unleash the Power Within by Tony Robbins – right. And I’m a Tony fan, I like his stuff but it’s the first time I’ve ever gone to Unleash the Power Within. So when I went there, and I saw there was a gentleman next to me and he was so proud like you know what I’ve been to this event six times – and I’m like, don’t you get the message? I think what Tony is talking about, you have the power within you so you can go and take action so you don’t need him to pump you up. But he’s like I’m coming back to get pumped up and motivated – so I think they don’t quite get the message.
Marx: No, we call those Tony-ites – so I’ve been to his seminars and knew him pretty well at one point – but you know full disclosure since I am all about the truth; when you go to Tony’s seminar, don’t listen to what he tells you. That shit is recycled and none of it is original. Watch what he does – he’ll tell you one thing but then he anchors all the good feeling towards him so that you keep going to seminars and keep giving him money, which hey – by the way, keep on doing it Tony.
It’s called salesmanship, you rock. Give it a go. But for those of us who are entrepreneurs it’s the message that he gives you and what he does with his audience. He goes to the right hand side, tells you the negative stories, left hand is positive – when he talks to not going to his seminar he goes to the negative stories, goes to the seminars and talks about good stories. It’s all designed to get you to move forward, be in his list, give him money and then along the way – look, I know you’re a fan, I am too right. But I want to make sure that we understand how we can apply what he does rather than getting sucked into.
Dan: I totally agree. Watching him sell and influence the audience -it’s like I’m getting double the value, right. You get pumped up but watching a master salesman at work.
Marx: There’s nobody better on stage than Tony. If you ever go again; I’ll hook you up – if you want to go, I’ll go with you and we’ll sit VIP on the side and I’ll be like OK he’s doing this now, watch this. See what I mean and I’ll strip away and I’ll give you the technique that he’s doing and you’ll watch the audience and man, I’m telling you – that’s the stuff that’s amazing. Don’t look at Tony, turn around and watch the audience as you look at him doing stuff sort of side view. Dude, it is a learning experience worth every penny.
Dan: I agree. Just how he sets up the stage and everything. It’s just incredible. Before we go, I do want to ask this question – I think I have an idea what your answer would be – but what do you think are some of the most important skillsets that an entrepreneur needs to develop?
MINDSET OF AN ENTREPRENEUR
Marx: OK so let me give you two things. First, it’s not a skill set, it’s a mindset. Just remember that right. Mindset first, skill-set comes second. It’s not irrelevant but it comes second. An example would be, if I came to you and said, hey Dan, if you can sell $100,000 of my seminar by tomorrow, I’ll give you $1 million cash. And I wired the check to your escrow so it was there – would you need a skill set or would you go get it done? OK. Right. But now let’s talk about entrepreneurs because I want to give your audience, if they care, what really matters with an entrepreneur because there are really three things that you need to make sure you’re always on top of as an entrepreneur right?
Now the nuts and bolts – number one is, you are the chief strategist. Nobody can be the chief strategist but you and you are – I said earlier, one, two, three moves away from disaster or greatness so you must focus on strategy. There was a report called PIMS – profit, impact, market, strategy – it was done by Harvard Business Review that determined that the number one key to most business success was strategy. Not leadership.
OK the second component is you’re a chief team builder. You need a team that can execute your strategy. If you’ve got a great strategy and a shitty ass team, it doesn’t fucking matter – you’re going to lose. If you’ve got a mediocre strategy and an amazing team, you’re going to do really well. And by the way, strategy is not unique selling proposition, all this little marketing stuff that they teach us – it’s important but think as a military guy. What’s the terrain, right? What’s the marketplace? Who am I fighting? Who are my competitors? What do my customers look like? How do I win? How do I position myself? That’s strategy. So you’ve got chief strategists, chief team builder and then the third one is chief sales officer. Right? And it’s not about you being the sales guy, though you should be. It’s about understanding most organizations fail because they grow too fast; they either burn their people or burn their cash.
So unless your business model – and by the way, hint hint – I design all my business models when I get back into the game to not be broken by growth. Cash flow isn’t going to kill it and people weren’t going to kill it because I learned, right. Most businesses – you have to apply the rule – you have to grow 50-25% a year. Unless you’re starting out. For the first years, you better balls to the wall and give it everything you’ve got – don’t worry about paying your bills. You need to grow grow grow or you will die. And by the way, there’s a lot more about each one of these categories that we could go into – culture is a big thing. And then the fourth piece really is the mindset.
Because you could have a great strategy, great team, and you can be a great sales guy and manage your sales growth but if your mind set is destructive, you’re not going to go anywhere and conversely, if you’ve got those three components and they’re kind of OK but you have a mindset like I did – I had a crazy mindset, I didn’t know anything about finances, I mean I once hired a lady to come teach – she drove to my house. At the time I paid $1.1 million for it. This was a couple of years ago. I had a library built, 3000 books, and she’s coming to my house going how in the world did this guy who obviously makes a lot of money not know how to read a profit loss, balance sheet and cash flow statement? Well, because I had the mindset right I’m going to make this fucking happen no matter what.
Dan: Correct, correct.
Marx: I think entrepreneurs – you’re not the marketer of the thing, that’s just silly. Your job is to allocate resources, get the right strategy, get the right team, make sure you manage sales properly, keep your mindset – do this consistently, you must work on this daily day in and day out – you are a warrior that fights and if you don’t fight daily, you lose your skill.
Dan: I agree. Before we go, any books you would recommend for entrepreneurs? Maybe top two or three that they’ve got to read.
BOOK RECOMMENDATIONS/FINAL THOUGHTS
Marx: Well, yes. The first one is Jonathan Livingston Seagull by Richard Bach. He is the quintessential entrepreneur – the seagull. So, you know for sure. And then I would say read David Allen’s latest edition of Getting Things Done. I don’t care who you are or what system you think you’ve got but nobody has it right but David. I’ve tried it all. It will change your life but it will take you about two years to actually get it unless you get coaching and some help.
And then Brain Chains by Theo Compernolle. Big ass book. 600 pages. He took five years, studying the brain, came up with the three aspects – fight or flight, thinking brain, archiving brain and this will help you understand that as an entrepreneur you don’t need more time, you simply need more space. Because you can’t have great strategic ideas, you can’t be present with your team, you can’t look at your sales growth and manage it properly unless you have space to think.
So it’s not about – from 4:30pm to 4:33 pm I’m going to take a shit. No, it’s about understanding you’ve got to let your intuition guide you. Get yourself space to think. Dan, my guess is you’ve had your greatest ideas after the beach or beautiful love making or hanging out with a friend – you didn’t have it at the office. True?
Dan: Absolutely. Probably when I’m showering or something like that. Exactly.
Marx: So those are the three, not because I think they’re the most important books but because I think most of the guys in your show will give you the same tired answers – they’re awesome books but come on man, expand your repertoire a little bit.
Dan: I agree. Great recommendations. Buddy we’ve got to have you back I mean we can talk another two hours on this. This is so awesome. I’m curious to also know about your sales system and how you work with some of these guys.
Marx: Yeah there’s a lot of fun stuff, I think next time if you keep your wanting to get me back – we should talk about case samples and share some specific examples of things we did in certain industries that allowed us to grow. I think that’d be a lot of fun, I think and the other component of my sales system – I don’t know anybody that can sell on the phone like we can, we’ve really figured it out truthfully.
Dan: I’m also curious about your compensation plan, how your guys can make that kind of money as well. I think it’s very very useful for our listeners – having that sales system and team. So that would be awesome. And culture as well. But I think this would be a good interview and overview so they can get to know you a little bit. Wonderful. Thank you so much for inspiring us today with your story.
Marx: Thank you so much, thanks for having me on the show. I’m so glad we connected. You are a kindred spirit, no doubt.
Dan: It’s amazing man. Let’s connect soon.