Reinventing Yourself After the Government Crushes Your 8-Figure Business with Michael Jackness: An EOFire Classic from 2021

0:01Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire. Brought to you by the HubSpot. Podcast Network, the audio destination for business professionals with great shows like No Straight Path. Today, we're pulling a classic episode from the archives, and we'll be breaking down how to reinvent yourself after the government crushes your eight-figure business. To drop these value bombs, I brought to Michael Jackness in the EO Fire Studios. Michael is a lifelong entrepreneur who has been immersed in e-commerce for the past seven years, and he documents his entire journey along the way via the e-com crew blog and podcast.

0:35In today's foundation, we'll talk about the bad thing about affiliate sites via e-commerce is that you don't own anything except for the content on your site, how to differentiate a little bit and how to dig deep and realize that entrepreneurship is a long road and so much more. And the big thank you for sponsoring today's episode goes to Michael and our sponsors. Marketing Made Simple, hosted by my friend, Dr. JJ Peterson, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Marketing Made Simple brings you practical tips to make your marketing easy and more importantly, make it work.

1:07A recent episode all about how Liquid IV is using marketing to shake up the beverage world, dives deep into the strategies that have propelled Liquid IV to remarkable success. A must listen. Listen to Marketing Makes Simple wherever you get your podcasts. Ever thought about giving a TEDx talk? It's one of the most powerful ways to share your message with the world. And four-time TEDx speaker, Taylor Conroy from Thought Leader can help you get there. Visit thought-leader.com slash fire to join Taylor's free training where he teaches you how to land a TEDx talk and spread your message to millions.

1:40Michael, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. You have to be a little bit lucky, right? Everybody always says you have to work hard and be persistent, which I also agree with. But I think there's some luck somewhere in there that you have to have as well. Well, I like to say that luck is where effort meets opportunity. So Fire Nation, keep putting in the efforts, the opportunities will come up and people will be like, man, that dude or dudette is just so lucky. Michael, I'm excited to break this down for us today because we have some really cool conversations.

2:18But first off, I mean, what exactly was the business that you were in before for what you're currently got going on? Well, it was in affiliate marketing, but specifically in the online poker space, which kind of had a black cloud over it for a long time and still kind of does in a lot of ways. And it was quite interesting because along the way, there were several beat downs, you know, the government shut things down. Some of these poker rooms were doing some pretty nefarious things. And, but I mean, just talking about creating your own luck. I mean, I've been working hard my whole life, always was kind of an entrepreneur, but, you know, being at the right place at the right time being really in the poker and having some online skills and being there in 2003 wasn't a bad place to be.

3:02I mean, it's all about being cutting edge about being a first mover advantage, like the people that can get there first, and know what they're doing and hang on to it. I mean, there's a lot of different opportunities. But what's interesting is that you now believe that e commerce is actually better than affiliate marketing and affiliate sites in some ways. And in some ways, it's actually worse. So let's talk about both of those sides. Why is e-commerce better than affiliate sites? And why also is it worse? Yeah. I mean, I think when you've done both, you can obviously compare. And only having the pleasure of doing affiliate marketing to begin with, I think that there's this relationship when whoever you're marketing for needs you way more than you need them.

3:43And as they get bigger, the relationship kind of flips its head a little bit. And so there was a lot of times where we had worked really hard to build up affiliate pages and reviews and et cetera, et cetera. We, you know, legitimately put a lot of work into it and felt like we were partners with these people. But at some point, a bean counter is like, yeah, we really probably shouldn't be paying these guys that much or at all. And they reduce or eliminate their affiliate program. And you realize how little control you have over your destiny at that point. And it's a pretty brutal feeling. That is a brutal feeling.

4:15And, you know, one thing I kind of want to dive into is some more details about e-commerce first. But what's specifically worse about affiliate sites via e-commerce? You don't own really anything except for the content in your site. And you can build a brand and you can own the content. But if you're the type of affiliate site that is built around, let's say, online poker, and you're sending traffic to the number one or number two poker room, and it's all based on reviews of that room or things that you've done about that, then that goes away. It's kind of a kick in the rear. I mean, Amazon's kind of famous for this as well.

4:53It's ironic because we'll be talking about them today as well. But people that had built affiliate sites around Amazon when they were paying 12 % affiliate fees, and then they knock it down and knock it down again. I think they're down to like the 1 % to 3 % range now for some products. And so you build your whole livelihood, put all the work into building these sites. And again, you realize how little control you really have over it when the 800-pound gorilla comes into the room. And that's one thing that I had a lot of conversations with my friends that are in the affiliate marketing game is like they said they would wake up every morning, just like stressed out of like, what happened today?

5:26What changed today? What sites got blocked today? What rules, what laws got passed? What got changed? And it was like this always undercurrent of stress. Of course, more times than not, nothing happens. But it was always that like undercurrent of like, what if like, when is the shoe going to drop? It's not a matter of like, if, but when. So you were able to, on the other side, you know, build a seven figure e-commerce brand in a single year. So share some of the biggest lessons that you learned over the course of doing that in 365 days. It wasn't just all, again, luck, right? I mean, you have years of experience in online marketing.

6:02We had done other e-commerce stuff in the past and drop shipping, and then we had been selling some other people's products and eventually felt comfortable enough in e-commerce to create our own brand, our own brand and products, which is really what our business is focused on today. And so that brand was around coloring for adults. And so it was similar, I guess, in a way to online poker where you had this exploding industry, not really a fad, but certainly something where it was popular before, but became way more popular and probably won't be as popular tomorrow as it was in its heyday, but will be bigger than it was before the growth started.

6:40And so we were, again, at the right place at the right time, identified this niche just by doing a bunch of research. And the key is that we didn't just copy what everyone else was doing. We made small improvements to create a brand where people who were fanatics in this space, the people that will be our future customers, really cared about this stuff. And so the way we really went about that was just to read the negative reviews of all the existing products on Amazon. And so people would just be like, oh, man, like when I'm a left handed colorist. And so like when I try to color, the book tries to close on itself and it's really aggravating or the book doesn't lie flat when I try to color.

7:19And it's just it's really difficult. When I try to rip the pages out of the book, it like maybe rips the paper. The paper is like the cheap paper that you might have a novel printed on. Maybe it's it's printed on both sides. And so when I color on one side, it bleeds through. And so we we fix these problems. I'm not an inventor. I'm certainly no Thomas Edison. Listen, I'm not, I barely made out of high school. I'm not really all that intelligent, but I can put together all these pieces. And we made a new class, a coloring book. We're able to charge a premium for it. And people that were into coloring soaked it up.

7:52This is one thing, Fire Nation, I think a lot of people don't really go into really deep research on is what are the major things and sometimes even the minor things that people are actually complaining about right now, right there in plain sight. I mean, you know, as Michael was talking about, he could just go through some reviews. He could like kind of get some complaints that were coming up over and over again. And then he could run some numbers too. He could be like, okay, is it actually worth me going into this product or this service to actually go all in on it? Because like, what would these profit margins look like?

8:25Like, what would the actual reality be of creating a solution to the problem that all these people are having with the current iterations of this product, of this actual item that people are obviously buying, but at least a certain segment, a certain percentage of them aren't finding exactly what they need. So what would be like another great example, Michael, in that kind of vein right there that you were really like, wow, this is an opportunity because of things that I'm seeing? Well, the next product we made were the things to actually color with, right? So we made the books and you start to learn from your customers what it is that they like, what they don't like, what they're struggling with.

9:09And I think that the cool thing about what we were doing, we also built the community. It wasn't just about selling the products, but we would really get a lot of user-generated content. We did weekly Facebook Lives. And I think that what you end up finding is that the next thing that you end up doing can be things that your customers just tell you. You know, it's like it's awesome to get free information. And so when we went to make the actual coloring mediums like gel pens or colored pencils, etc., we knew what they were struggling with. And specifically with gel pens, the average gel pen that these guys were coloring with were just the same gel pens you would find at Staples or Office Depot or on Amazon.

9:47They were kind of cheap gel pens with a big variety in a pack. And we did some small things. The first thing we did was we printed a color name on each gel pen. So when they went back to pick from one of the seven reds that were in the box that they could actually pick the right red to go back and color with again. We put them in a nice little travel case. We included some refills because people would complain about, like, I'm buying these expensive pens and I have to just throw them all away if I need to just buy refills again. And so we just solve those problems. Again, these are very easy things, but we were the first ones to do it, much like you were talking about earlier with being the first mover in online poker.

10:27Ascension, Fire Nation, like think about that. And that's an area that I've actually failed in over my physical product journey is saying, okay, once somebody buys this, what is the next logical thing they're going to want with it or after they complete that or going up and forward? word. I mean, that's just this ascension model that you can kind of take your clients through learning along the way. And I love that Mike was also building community as well and continuing to engage with them, asking them, Hey, what do you like about our product? What don't you like about our products? What do you wish existed?

10:59If I could hand you a magic button, you could press it right now and the perfect item would exist. What would that look like? Like what's missing? Like all these different things are so key when you're looking to solve people's problems, like create real solutions to real pain points. And we're going to talk a little more about the blueprints that Michael followed when we get back from thanking our sponsors. Things change fast in the online business space. And when you have a team to manage and a business to run, it can be tough to keep up with all the latest and greatest marketing trends. That's why HubSpot created the 2024 State of Marketing Report to pull together the top marketing trends that you need to perfect your marketing strategy.

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12:50Taylor has put together a free training that's going to teach you how to land a TEDx Talk in as little as 90 days. Join Taylor to learn exactly what TEDx organizers are looking for in their speakers, how to write a talk that goes viral once it goes online and more. Visit thought-leader.com slash fire. Join Taylor for this free training and get your message out of your head, out of your heart and out into the world where it belongs. That's thought-leader.com slash fire. Michael, we're back and you built a seven figure e-commerce brands and then another one and then another one. What is this amazing blueprint that you created and then followed?

13:31I think we kind of started alluding to it already, right? It's the differentiate in some way. I mean, the average person that hears about doing e-commerce, selling on Amazon, a lot of these gurus out there are like, oh, this is easy. All you got to do is find something on Alibaba. You order something on Amazon. You're just going to sell it and make a million dollars. and that's just ridiculous right i mean it might have been true maybe in 2013 when amazon was really first getting started with third-party products but now the competition is is really stiff and so you you have to differentiate but as i was kind of illustrating you just have to differentiate a little bit you know it's if you do what everyone else is doing exactly you know just going to the canton fair or going on alibaba buying the products off the shelf trying to sell them on amazon well there's going to be 15 other people doing that exact same thing.

14:22But if you can make small improvements, bundle some stuff together, include a bag, some higher quality packaging, put some better instructions in there, change the colors up a little bit, add a higher quality zipper, you know, small, small stuff like this. It doesn't have to be huge. It can go a long way because now you have something that's differentiated. It's your own product. If someone wants to copy it, they still can, but you're going to be the first one up there. it will take them 6, 12, 18 months to copy you and catch up. And hopefully by that point, you have several other products in the pipeline to counteract the competition.

15:00So one thing that you've done really effectively that we have already mentioned one or two things about, like your weekly Facebook groups and lives, et cetera, is you were able to really build community. You were really able to build content around your e-commerce business. So how can Fire Nation use content? How can Fire Nation use community to start an e-commerce business? Yeah, it's kind of funny because it's really all come full circle now, right? I look back at, you know, my life since 2000, the end of 2003, when I first doing all this, it's 17 years now. It's kind of crazy. It seems like a completely different lifetime ago.

15:35But back then, it was all the same thing. It was content marketing. And so instead of affiliate marketing, you know, it's really just for my own stuff. And so we own several different content properties. One of the ones we talk a lot about is we own tactical.com. And a great way to do this is to build community there. You get people who are into survivalism and things like that, which is really what the site's about. People join your Facebook group, your email list. You start to get attention from Google, get a bunch of organic traffic, start reviewing products. You can send that traffic off to Amazon through affiliate links and start there and see what products are selling.

16:13And once you have that information, now you can develop your own product and start selling that on Amazon and directing the traffic to that. You just change the knob to point to where you want. And now, instead of just earning the affiliate commission, you're also earning the margin on selling that product. Plus, if you extrapolate out all the additional sales from the fact that Amazon's like 57 % of e-commerce these days can become quite lucrative. And so we're really competitive in spots where we never would be if it wasn't without that content play. And I love that visualization, Fire Nation, is that you can kind of turn the knob, kind of turn the hose to spray in a certain direction when that next opportunity arises because you've been building this content.

16:55You've been building this community. And as you and I are talking, Michael, it's 2021. 2021. So let's get specific about a few things that are really working in e-commerce and a few things that aren't working in e-commerce in 2021. The biggest one is we talked a little bit about before you got to differentiate, right? You have to have products that are, that are different than everyone else's, but you don't have to have a patent, you know, so it's not to that level, but something where you put the work in and, and work on making the difference, the different products, do something that's going to be at least somewhat difficult for people to copy.

17:31The other thing that's hard for people to copy because most people just give up is creating a content site and controlling your destiny that way. I mean, the average person that starts out podcasting or blogging or YouTubing or whatever it might be gives up after one to six months because they aren't making a million dollars yet. and you know from running a podcast and I know from running a podcast that the only person you're talking to to begin with is your mother and maybe one or two friends, right? And so you have to stick through it. And once you get on the other side of that, now you have something that's an asset that you can use however you see fit.

18:08And that's something that we've really seen working very well in 2021. And I believe that this is something that will continue to work well over a long period of time. The need for good content is going to be there in the future. Places like Amazon or large retailers will never offer the type of detailed content about a subject that someone who's really passionate about can do. It's like all the people in the world can go put together e-commerce blogs, but I mean, we've lived it for six years. And so I feel like the content that we have there is really good. And the same thing about survivalism or about coloring, you know, you have to have some passion about it.

18:50And personally, I might not have passion about survivalism or prepping type stuff or coloring, but we made sure that we were surrounded by people who did and put together the right content and community around that stuff to where you start building fans that start talking about the stuff for you. I mean, word of mouth advertising. And so I really see that continuing to work very well in 2021 and beyond. Well, start watching the show alone, Michael, and you'll start getting passionate about survivalism. I'll tell you, that show's addicting. I haven't seen that, but I will check it out. Believe me, my fiance, she's the last person I would have expected getting into that show, like literally like catching a chick monk, like skinning it.

19:27I mean, and she loves it. And it's fascinating. If I was going to guess the title of that show, what it was about, I would have just guessed it would have been sitting home alone based on the pandemic of last year. Definitely what a lot of people, unfortunately, had to go through for sure. And so many great takeaways here. I want to go through a few that I was taking notes on. Number one, differentiate Fire Nation. How are you solving issues that others aren't solving? Look to reviews, look to complaints, create a high barrier. Like the higher the barrier, the lower the competition. Think about that because if it's easy to copy, people will copy it.

20:00So how can you create a high barrier so you have low to no competition? How can you build a moat around what you're creating and then create a content site to control your own destiny? You want to be in control. Great content will always be needed. And don't get frustrated when you hear the numbers of like millions of podcasts, billions of blogs. They're all dead. Literally 97 % of them are not getting new content added to them. They're all dead sites. It's very few people, five to 7 % total that are still creating consistent, great content on a very meaningful basis. So Michael, give us the one big takeaway that you really want to make sure Fire Nation gets from everything that we talked about here today.

20:42Give us the best way that we can connect with you, that we can learn more from you, and then we'll say goodbye. I think the one big takeaway, I just interviewed Gina Wickman on my podcast. He wrote a new book called Entrepreneurial Leap. And so I would encourage you to read that first. And if you're not really an entrepreneur and don't really want to put all the work into doing this, then don't even get started. I see so many people start and just kind of give up. And so I encourage people to dig deep and realize if they're really made to go do this. So that's entrepreneurship and doing these types of things is a long road.

21:13In terms of where to follow me, I mean, I've been blogging and podcasting about my entire e-commerce journey over at a site called EcomCrew, E-C-O-M-C-R-E-W.com. We're EcomCrew on iTunes, almost 400 podcast episodes. Wow. You can go to EcomCrew.com slash free, get a bunch of free resources. EcomCrew on all the Twitters and Facebooks and all that good stuff too. Fire Nation, you're the average of the five people you spend the most time with. and you've been hanging out with MJ and JLD today. So please keep up that heat. If you head over to eofire.com and type Michael in the search bar, the show notes page will pop up with everything we've been talking about today.

21:50Best show notes in the biz, timestamps, links galore. And of course, head directly over to ecomcrew.com. All those free goodies he mentioned, the podcast over 400 episodes. Michael, thank you for sharing your truth, your knowledge, your value with Fire Nation today. For that, brother, we salute you and we'll catch you on the flip side. Hey, Fire Nation, today's value bomb content was brought to you by Michael and Fire Nation. One thing I've identified over the years is that successful entrepreneurs are productive, disciplined, and they are focused, which is why I created the Mastery Journal, which is a gorgeous faux leather journal that will ensure that you master productivity, you master discipline, and you master focus in 100 days.

22:33Visit themasteryjournal.com. Use promo code podcast for a$15 discount. And thank you for listening to my podcast. And I will catch you there or I'll catch you on the flip side.

23:05listen. Listen to Marketing Makes Simple wherever you get your podcasts. Ever thought about giving a TEDx talk? It's one of the most powerful ways to share your message with the world. And four-time TEDx speaker Taylor Conroy from Thought Leader can help you get there. Visit thought-leader.com slash fire to join Taylor's free training where he teaches you how to land a TEDx talk and spread your message to millions.