Resources in this Episode

Christine Schlonski [0:02]
This is episode number 133.

Mitchell Russo [0:06]
Hi, this is Mitch Russo, you are listening to Heart Sells! Podcast with Christine Schlonski. Enjoy.

Christine Schlonski [0:12]
I am so thrilled to deepen the conversation with Mitch Russo today because not everybody has built such power tribes and has had such success in his life. Mitch is the person who started a software company in his garage. He sold it for eight figures and then went on to work directly with Tony Robbins, and Chet Holmes. Together they built a $25 million company. Mitch wrote a book called, The Invisible Organization – How Ingenious CEOs are Creating Thriving, Virtual Companies, and his new book, PowerTribes – How Certification Can Explode Your Business Tune into that episode and learn how you can build your power tribe. Have fun. Well, I’m so excited to have Mitch Russo back on the show. Welcome, Mitch.

Mitchell Russo [1:08]
Thank you, Christine. Great to be here.

Christine Schlonski [1:10]
Yes, I love our first episode, and your story is so so amazing. And really what I would love to know from, you know, taking. Well, it wasn’t even a leap of faith that you were just in the right place at the right time with the right people tapping you on the shoulder or the right books, knocking you on the head in a bookstore, to really create this success story. And obviously, you did the work. And you said something at the end of our last interview, which I really, really love, because so many people I feel fall short, you said you just have to do it. You have to take action. And for your company to be built, your business partner took action. So you’re obviously you were both action takers. And you were prepared also to take that next step because you had saved up so much money.

Mitchell Russo [2:08]
Right, so So realistically, there was another element to the story that I started to tell last week about working for this company in sales. Well, I was for 14 months, I made less than 50% of what I had made every month from my last job. But I was very, very confident that I would do well in sales because I had the secret weapon. I had an engineering background, none of the other salespeople did. And with an engineering background, I was able to go into the backroom and talk to the engineers and get our products embedded into their products. So when they sell something, and they sell a million of them, we’re guaranteed to get a million orders, you know, in order for a million of those parts, which is what I had been working on for 14 months. But all of a sudden the dam broke. And from going from one or $2,000 a month in commission. I went on the 14th month to $34,000 a month in commission. And it was going up from there.

Christine Schlonski [3:17]
Wow.

Mitchell Russo [3:18]
And so I was really so unsophisticated financially, all I would do every month is I would take this money, I would deposit it into a bank account got passbook savings account. And when that account hit 100,000, I would go to a different bank and do it all over again. Because that was the limit of the FDIC Insurance in America. That’s how they do that. So I had a sock drawer filled with past books. I wasn’t really sure how many I had. All I knew is that the money was pretty much safe because it was guaranteed. It was earning a little bit of interest, which is all I cared about. So I was basically pretty happy with the situation. But what happened with was that one month, all of my shipments were refused at all of my big accounts. So I got confused. I called up the accounts and what happened here and they said, “Well, we just don’t need the parts in the quantity that we thought. So we’re turning those back to the factory.” It started happening in the account after account. Until finally we realized that what we were experiencing was a slow down in the semiconductor industry. So I went to one of the top people in the business and said, “What’s going on?”, and they said, “Oh, it’s just a slowdown, it happens every five to eight years. Don’t worry, in three or four years, it will come roaring back.” I said to myself, “Three or four years, I don’t have time to wait around for that.” Now I had in my mind that I was going to exit that job. And I was going to start a company because I had three choices, I could either take a year off and travel through Europe or whatever. I could go to work for another company because I had some good experience or I could start my own company and pursue financial freedom, which is what I chose. The fact that my neighbor just happened to move in next door just happened to be an award-winning software programmer who just happened to want to solve the problem that I had told them I had all these things to me, were basically the universe telling me that I was on the right path. So I just kept going. There are lots of stories around that. But from there, and through another fluke accident, we ended up getting reviewed in the most powerful publication of the time called, Info World. That review catapulted us into the future all at once. So we went from selling six or seven copies of Timeslips a week, for $99, a copy, to all of a sudden selling 600 copies a week after that review came out. That put us on the map, it put us into almost 5000 retail locations, and all the distributors were calling us, instead of us begging them to pick up the product, they were now calling us to place orders. Life shifted dramatically. And it was simply because I had dropped off a review copy when I was walking the floors of COMDEX many, many years ago. So as long as you do the work and you are prepared, good things will happen if you trust that they will. And that’s how I live my life.

Christine Schlonski [6:23]
Yeah, amazing. So let me ask you, what was the very first thing you’ve ever sold?

Mitchell Russo [6:31]
The very first thing I ever sold was candy to my classmates in school. So I would go to the candy store with my allowance, I’d buy the candy, I had 15 cents, which gave me enough money to buy three candy bars, and five cents a candy bar and I go back to school and I’d sell them for 10 cents each. So that was probably the very first thing I did. But all throughout my growing up years, I would go door to door and sell all kinds of things from seeds to greeting cards, I would do car washing, I would do all of these things. And again, you know, I wrote a post about washing cars, waxing or washing and it was the story is all about how to up-level what you’re doing. So instead of just washing cars, you could take the same amount of time and wax a car and make a lot more money. So that’s again, one of the lessons that I learned as a young man, when I was in fact, going out there and trying to sell stuff, best that I can to make extra money.

Christine Schlonski [7:31]
That sounds a little bit to me like you were the born salesperson.

Mitchell Russo [7:37]
I know. So to finish the story. It turns out actually, that 10 years later, and this is going to sound very immature of me 10 years later, after I had basically started my software company and it was growing into the millions rapidly, I decided to buy myself something that was quite a bit of luxury for me. I bought a brand new BMW. What I did is, I drove up to the headquarters of the guy that told me that I was not a born salesman, and I waited for him to show up and come out of the office. I was just sitting there, sort of acting casual, like, you know, no big deal. When he spots me, he goes, “Hey, Mitch, how’s it going?” And I couldn’t wait to tell him how it was going. And I made it clear to him how wrong he was. Because in fact, I had achieved at that young age, so much more than I ever dreamed I would. And I wanted him to know it. I guess that is immature of me. But I did want him to know it. And he did know it. And that to me was a win. I don’t think I do that today. But back then it was important for me to have that little moment for myself if you will.

Christine Schlonski [8:59]
Yeah. Well, you know, I think sometimes that gives us the motivation to do something. And he actually he helped you to maybe to excel even further because now you really wanted to prove something.

Mitchell Russo [9:14]
That’s right. And in fact, he did. And I did in fact, thank him and tell him that as well. So from there, basically, as I was building my software company, we had a problem, we were selling so much software so quickly that we couldn’t support all the people that were buying the product. And yet at the same time, we’re still cultivating relationships in national and state regional bar associations, to get lawyers to use our software, we had gone into the school system and seated 25 or 30 colleges that taught legal courses with our software. Gave all the students software for free, because we knew that they were going to graduate as lawyers, and they’re going to need time and billing system. So we hope that they would use our and it took years. But that turned out to be a very powerful strategy. But what ended up being the most powerful strategy I had ever come up with entirely by accident, was certification. And what ended up happening is because we couldn’t support all the people that we were selling software to, my idea was, “Imagine if we can get our best customers who knew our software really, really well, to help some of our other customers who were struggling with it.” One day, we had a situation where the head of the legal division of the Los Angeles Bar Association, which had bought our software was struggling with it. She demanded that someone show up at her doorstep tomorrow and fix her system because she said that our software crashed a computer. I know that wasn’t true. But at the same time, she’s a very important person. So I couldn’t possibly get anyone out there that fast. Number one, we will spend thousands of dollars to do it just for $99 sale. But more importantly, she was someone of significance. So I had this idea, “Why don’t I call someone in the area who I know is a good customer and who knows the software and asked if she could go in and help this other person.” So I did. I called her up. And I said, “Look, I’ll pay you for this. I need you to go and help this other person with software.” She said, “For you, Mitch, I’d be happy to do it. Don’t worry about a thing. I’ll take care of it.” She really was an expert at our products. So now I’m sitting on pins and needles, I send her over there. It’s four or five hours go by, I don’t know what’s happening. My phone rings, it’s nine o’clock at night. They’re in California. She calls me up and says, “Mitch, it turns out great. She just needed to re-index the database and blah, blah, blah. It’s working great. She’s really, really happy.” I said, “Oh, I can’t thank you enough. I really, really appreciate it.” She said, “You want to know what the best part is?” These are the words that literally changed the direction of my life and my company. She said to me, “The best part is she gave me a $100 bill. Mitch, if there’s anybody else that needs my help, you just let me know.” The light bulb went on. I said, “Well, now imagine if I could take not just one, but dozens, maybe hundreds of my best customers and get them to become certified in our software, how many people they could help and create a business of their own helping clients with our software?” Well, the first try almost crashed the company, what we did is we created a little test didn’t work. We got people through the program. We only charge $500 quality of those people weren’t very good. So I called everybody who had a bad experience. I rebuilt the program from the ground up, relaunched it. It was super successful, we had over 350 certified consultants paying us several thousand dollars to become certified and then several thousand dollars every year to stay certified and even more money to attend our symposiums. So we had created out of thin air, no new products at all just a certification program added. Remember that this is back in like 1989, 1990, it added about a million in profits to our bottom line. It gave us an office in every state and 12 countries because now we had local people in every one of those states that we could refer customers to. They started reselling our software as certified consultants became our third largest sales channel. So that was how we were able to grow so rapidly. It wasn’t until Josh Turner had and I was having a casual conversation. When he said to me, “You know, I read that blog post you wrote about certification. Do you think you could do that for my company?” The light bulb again went off 25 years later, I said, “Sure!”, but had no idea what to charge. I just came up with a number and told it to him. He said, “Yes!”. We built his certification programs, the first one I built after my Timeslips program. That was fantastic for Josh, he made, he generated 100k in fees within six or seven days of launching the program, which I was thrilled for. It was going to continue to generate revenue for as long as he wanted it to. That became really important to now I started to solicit other people to see if they wanted to build certification, which led me to write the book, Power Tribes because the book Power Tribes is the blueprint on how to do it.

Christine Schlonski [14:35]
Awesome. So when we look at our listeners, there some solopreneurs, they’re small company owners, when or what kind of size do they need to have to actually start implementing a certification?

Mitchell Russo [14:53]
Well, you know, that’s it. That’s an interesting question because there is a website that I built called http://mypowertribe.com/ which answers those questions. It basically, it starts a video and you know, a little cartoon video, which describes the program. There are three qualifying questions. So the first question is, are you a coach, consultant, or software company with amazing product or service? Qualification number two, can others learn what you do and get the same results with your health. So if you are a coach, a trainer, a consultant, a software company, a product company, a medical device company, and you create this incredible transformation in your clients, and you could teach others to do it, then all you need to do is work with someone like me, and we will build your certification program together. And by building your certification program, you can sell certification, at first to the best clients in your client base. Now, it turns out that if you address any audience with any product, there’s always the early adopters, and the early adopters will probably buy first. I came up with a number of about 500 clients. So if you have about 500 clients, we know that somewhere around 2% to 5% will be interested in your offer. So we call that the pilot program. So we offer it to the first 15 or 20 people that say yes, in many cases, we charge anywhere from $5,000 to $38,000 per year for certification. Once we get them through the program, which my client and I have built together, then at that point, we help them by generating leads for them. So that’s the difference between what we do and what every other company with certification does. It turns out that Intuit. That’s the founder of Intuit, Scott Cook, and I were friends and he liked what I was doing so much. He asked me if I’d share my program with him. So he could build the Intuit certified advisor program, which I did, of course, and that program ended up having thousands of qualified accountants as certified Intuit advisors. I was happy to do it, I really felt very close to Scott. We became really good friends. In fact, he, he bent one of the rules and gave me access to the Interior, the code base of QuickBooks, so I was able to build the link to QuickBooks for my Timeslip software early on, which was kind of the return favor if you will. Later, he gave me a heads up and says, Look, I just got to tell you, we are building a time tracking into QuickBooks, but don’t worry, it’s not going to be as extensive as timestamps. But you should know. That’s the CEO of the company telling me this, which was incredible. So it makes a lot of sense to get close to your vendors, gets close to your competitors, and ask every trade show, I would always host a party with all my competitors, and bring everyone together and just enjoy the business together, which we did. But that one thing that building certification became the key to success for not just me, but for Infusion Soft, for Intuit. For so many different businesses out there that were actually pretty much struggling until they came up with building certification. And if they did it right, very few do it right. But if they do it, right, what they end up with is multiple streams of recurring revenue, right from certification itself.

Christine Schlonski [18:41]
But you need to have at least 500 clients so that it’s kind of worth looking into it?

Mitchell Russo [18:47]
Well, you do, because you number one, you need to cover the cost of my fees, which if you have at least 500 people who are already your clients, that’s easy, you’ll cover that in the first launch and more. But you don’t really need 500 people in your client base to build certification, you could build it if you have 12 people in your client base. But it would be expensive to pay me and then go out and have to raise the money that you ended up spending for consulting. on my part. That’s part of why I wrote the book. The Power Tribes book is a blueprint for certification. Now obviously, it’s going to leave out some of the things that I’ve spent a lot of money to develop. But still, the pathway is all there in the book. And I know people who have built certification programs from scratch, just on the book itself. Now, anyone who gets the book also gets a free course. And that course will go into even more detail about the power of certification and how to set up your tribe, and how to make your tribe very receptive to the things that you’ll be offering.

Christine Schlonski [19:58]
So what would your advice be for a small business owner who let’s say it’s maybe in their second, the fourth year of business still trying to figure out how to set it up? What to offer? How could they get the idea of certification and make something out for them?

Mitchell Russo [20:19]
Well, if you follow the template I just gave you and it’s already, it’s on the http://mypowertribe.com/ site. It will like for example, if you have some intellectual property that’s truly just yours, that you’ve invented, created, and you cause this fantastic transformation and other people when you work with them, then you probably are in a position to do it. Now when you do it is based on how much experience you have, how many clients you have, but there’s no doubt that you can do it. In many cases, certification buyers are other coaches too who want to incorporate what you do into their existing practice. So would they pay, someone like you $25,000 for certification? The answer is absolute, they already do. They’ve probably purchased the certification, they probably purchase coach certification of one form or another already from two or three different companies. So we know the John Maxwell organization self-certification with $18,000. But all you get from a company like that is typically a course, a test, and a certificate, and then you’re done. But when you work with my type of certification, what you’re doing is you’re building a tribe of connected people who support each other, and who appreciate the company supporting them. So when I build certification, you know, one of the key elements in creating lead flow for your certification partners. And you’re making so much money from the fees. If you dedicated just 15% of what you collect towards lead gen for your partners, they’ll be very, very happy, and they’ll stay with you forever, and you’ll happily pay to be recertified the following year. So it’s a combination of things. Like for example, if you’re a coach, and you don’t have any intellectual property, or you haven’t created anything on your own, keep going, you will. That’s how people do it by getting experience, finding what works for them. It means how I’ve done it, I’ve been coaching, business coaching now for over 30 years. I have an entire range of intellectual property that I built and created. That’s what I use when I work with clients. So the bottom line is that, “Sure! I could certify people in that, but I don’t, right now I’d rather help other people get certified than start creating the program on my own right now.”

Christine Schlonski [22:39]
Yeah, totally get that. So, like looking at your story. Have you ever dealt with rejection, by sides that one time where you then went to the competitor? How do you deal with rejection today? How did you deal with it back then?

Mitchell Russo [22:58]
So what I’ve been telling you is this story of how most of my life has worked out pretty well for me. What I haven’t get shared with you is all the failures, all the stupid investments I made when I sold my software company, I earmarked a half a million dollars to invest in other companies. I invested about $50,000 in a 25 to 50 and each of these companies. I probably ended up with 15 companies, virtually all of them went bankrupt. I did a terrible job of picking companies to invest in. And realize that at the time, I was really not a very good judge of what would work in the marketplace, even though I thought I might be. So then after I sold my company, I came back to Massachusetts, with this incredible experience of having built a company from scratch, sold it for eight-figures. So who do I go, do I go to venture capital companies and say, “Look, I’m here to help you have any portfolio companies that would need some assistance who are in the living dead category. Let me help you get them going and get them solves so that you can make some money. Let me run one of them for you or several of them.” And all I got was crickets, nothing. Nobody ever returned my call, no one ever responded to my sending out a resume. And I was shocked. So finally I started calling all these people. I said, “I can’t believe you wouldn’t hire me. Wouldn’t it be ideal for you, your portfolio companies?” Only one person was honest enough to tell me the truth. He said, “Mitch, you’re 45 years old. You’re too old for this business. We are hiring 20 somethings CEOs because that’s what the market is right now. You’re kind of over the hill when it comes to this stuff.” And once again, those words equity in my mind the same three words, you know, I’ll show you. So I built my own venture capital company, which turned out, did not work out so well as I had explained. But the bottom line was that I tried. And I tried many things that were unsuccessful. But I never stopped trying even after I worked for Tony Robbins and Chet Holmes and after Chet Holmes died, after five years of working with Tony and Chet, I felt like it was time for me to take a break. So I tried building products and selling them most of that failed too. So the thing is, is that failure leads you to the next thing. Failure is only temporary. It is only a failure if you admit defeat and stop. So I never admit defeat, because I like what I do. I enjoy creating, I enjoy selling. And so I just keep going. And you know, like, for example, my first book, The Invisible Organization, was really a blueprint for how I ran the big organization as a virtual company. This book, Power Tribes, is all about building certification programs, after having the experience of having built a huge one myself and helping clients do that for themselves as well. Now, since I published the book, I’ve had several clients because of the book. That’s why I always advise writing a book, because it’s a great way to tell people what you do. Most people even if it seems like you blueprint the entire process, most people will want some help anyway. It makes sense to write your book and get out there and do that. My life has been a series of ups and downs, but I don’t give up, the ups of usually pretty good, the downs can be miserable. But you know, and then there are moments in time when I doubt myself, like, should I keep doing this? Why don’t I just sort of retire like the rest of the 65-year-olds out there? I don’t want to, I probably will never retire because I love what I do. I do it every day.

Christine Schlonski [26:42]
Yeah, what a beautiful finish to the second episode. So basically,

Christine Schlonski [26:47]
if you keep moving, if you keep trying, if you learn from your failures, I think that’s a huge and big important part, then you can reap the how do you say, whatever you brought out, you can reap your

Mitchell Russo [27:05]
You can, you could reap the benefits of all of the experience you have. So if you think to yourself, whatever age you are listening to this show, every single thing you’ve ever done, experienced, every person you’ve ever met, has led you to the point that you’re at today. Right now, you are here because your life was orchestrated by you to be here right now, even if you didn’t know it, even if it seems like the whole thing was chance. It wasn’t. It’s very specific, and it’s very deliberate. And you’re here for a reason. So take advantage of that. It doesn’t mean you can’t take a break, doesn’t mean I just came back from vacation, everybody should go on vacation. I think it’s fantastic. When I was building my company, I didn’t go on vacation for almost three years, I worked seven days a week for almost three years. And I loved every minute of it. I didn’t have a social life, I didn’t care. I didn’t have a girlfriend or wife to distract me, if you will, from my goal and my purpose, which was to build the business. And once I got the business started, I realized that it wasn’t the fact that my true calling was to build legal time and billing software, no. My true calling was to help people with great service and great products. And if it turns out this is it, great. If this isn’t it, it’ll be something else. But that is my purpose in life.

Christine Schlonski [28:32]
Awesome. Well, thank you so, so much for sharing so much wisdom with us and for bringing the spiritual part into this conversation, which I really, really love. Thank you so much for having been on Heart Sells!

Mitchell Russo [28:46]
My pleasure, Christine, thank you for inviting me.

Christine Schlonski [28:49]
Well, what can I say, two amazing interviews with Mitch, thank you so much. I am totally inspired. I love following my heart and listening to the university little nudges. It definitely has helped me on my journey. I would love for you to tune in, to really, really aligned with who you are. What are your desires? Where do you want to go? Get that clarity because, from that place of clarity, you will be able to take massive, massive action, hop on over to https://christineschlonski.com/. Find the podcast tab with all the information on this wonderful episode and episode number 132, where we talked with Mitch about the outstanding results he has achieved following his heart. Also, I have a wonderful, wonderful gift for you, the sales journaling to success. It is my new email course. I’m providing you each and every day with a very empowering journal link prompt that you can think about, that you can feel into that you can have to shift your mindset into a sales success mindset to make sales easy and fun for you and to help you create amazing, amazing results. I use those journaling prompts to actually make millions in sales and to feel amazing in the process and I would love to share them with you. So hop on over to https://christineschlonski.com/ Sign up for the journaling prompts, and have fun with it. Thank you so much for tuning in. Have a wonderful day wherever you are in this beautiful world. I’m saying bye for now.