Don’t Just Survive-Thrive: Strategy and Stories from Eddie Hartman

0:01You're listening to Mick Unplugged, hosted by the one and only Mick Hunt. This is where purpose meets power and stories spark transformation. Mick takes you beyond the motivation and into meaning, helping you discover your because and becoming unstoppable. I'm Rudy Rush, and trust me, you're in the right place. Let's get unplugged.

0:27Ladies and gentlemen, welcome back to another exciting episode of Mick Unplugged. And I'm honored to be sitting in front of someone that I've looked up to for a very long time. He revolutionized how America accesses the law by co-founding LegalZoom and bringing legal empowerment to millions. He's not only that, he's a trained thinker. He's a tech visionary and a scale architect. He's helped launch many businesses and mentor the next wave of entrepreneurs. He's innovative. He's disruptive. He is relentless. He is my mentor, Mr. Eddie Hartman. Eddie, how are you doing today, sir? Mick, my friend, you are too kind.

1:04Thank you so much for having me on the show. I'm honored myself. I appreciate you, like I said, much more than you'll ever know. And today I want to kind of talk through those things. You know, I always ask my guests, what's there because? That thing that's deeper than your why. You know, Simon Sinek said, start with your why. And I like to take that a little bit further, right? Like your why is awesome. Your why is cool. But if I were to ask you, but why? Usually that sentence starts with, well, because. And I care about what you say from well, because. So if I were to say, Mr. Hartman, what is your because?

1:39What is your purpose? What is your mission today? Why do you keep doing the great things that you do? Mick, I want people to thrive. I've been an entrepreneur. And here's the thing that nobody tells you. I have been a failed entrepreneur. You talk to anyone and they're going to talk to you about their successes. And of course, you know, that's the sizzle, right? That's what's sexy. What people do not talk about is the failures. I think they should talk about it more. It's very real in entrepreneurship. You know, it's anybody who puts themselves out there, there's always the chance, you know, it's not going to work.

2:08The thing is, the discipline that I've been focusing on, the reason we wrote the book is it does not need to be as bad as it is. That is my message. And I'm not, apart from the book, I'm not selling anything. and I understand I get four pennies for every book sold. So I'm not even really selling that. What I want to do is spread the gospel that you do not have to face the odds, which are daunting, that most people face as entrepreneurs today. You don't have to. There are a few things you can do to radically improve your chances of success. I would consider my life to be an amazing life if 10 years from now, everywhere I went, people were like, you know, Mr.

2:48Harbin, Your stuff helped me to thrive, not just survive, but thrive, you know? So Mick, that's what gets me up in the morning. I love it. And before we get to the book, which I want to deep dive, you've mentored and advised countless startups, right? For those that are watching, for those that are listening, what's the most common blind spot that you see or have seen in like early stage founders? Sure. You create something that you have passion about, that you love. and of course, because why else would you do it? And then two things happen. I'll talk about the first one and then the second one.

3:23First one is you love it so much you think everybody else is going to love it. I like to say you think you're going to bake muffins and you think everyone is going to love these muffins and maybe they do. But if you're only saying, do you love this muffin? You know, hey, would you, you know, seem like a good muffin? You have half the story. The other half is, yeah, but would you pay for this muffin? Would you pay enough that I have the ability to get a business going? If you only perfect the recipe, get it out there, try it with your friends, and only then find out are people willing to pay$6 for a muffin, and that's what you need to cover your costs and get things going, then you are not in possession of a business idea.

4:02You're in possession of a really, I'm sure I would love your muffins. Nick, if you were to make muffins, I'm going to guess I would be like, I will have these muffins all day. But how long can you do that? You have a hobby, essentially. And I think that's the first thing a lot of people go in. Failure rate is 72%. I think it's because a lot of people, they say, I'm going to follow the thing I love without figuring out, is it something other people love enough that they're going to pay for it? The first thing. Second thing is, even if you succeed with a good product where people were willing to pay for it, as an entrepreneur, you have to be a little bit crazy.

4:39You have to do something that some people are going to laugh at you. Mick, I don't know if you had that experience. launching your podcast and getting out there. But I'm guessing sometimes told people, yeah, I'm going to do a podcast. And they were like, everybody's doing a podcast. Come on, get real, get serious. So you have to have a crazy self-belief as an entrepreneur. If you don't, you will fail. If you don't believe in yourself, you're going to fail. But that self-belief can also be a kind of quicksand. You lean into it so hard. You take the one thing you're good at, it might be sales, it might be product, it might be building a community.

5:11And before you know it, you built the whole company around that one thing. We call it the single engine trap. You lean so hard into it because it's the same self-belief that got you off the ground and it becomes its own kind of trap. So those are the, if I can do two problems, one, yeah, they like it, but are they going to pay for it? And second, did your own self-belief push you into a corner? That's why you are who you are, man. That's why I love listening to you. You know, I was telling you before, like, I love how you break things down simply, and that it's relatable to everyone. And I appreciate you the most for that.

5:47One question that I've always wanted to ask you, Eddie, is this, like, knowing who you are, and all the great things that you do, how do you balance innovation in a highly regulated industry, right? Or industries, because I know you're in multiple industries, but most of the industries you're in are highly regulated. So how do you balance innovation with that? It's like anything, Nick. You have to know what the rules are, right? No matter where you are. And by the way, they're written rules. They're unwritten rules, right? I'll tell you a story. Back in the day, we were getting together a product for LegalZim, legal product, right?

6:21It happened to be divorce. And it was accepted everywhere. And then we kept getting rejected from this one county in Louisiana. And we were like, why do all the filings in Louisiana get rejected? So we checked the letter of the laws, everything, everything was airtight, perfect. And then the clerk said, well, it's supposed to be on pink paper when you file and you've been filing on white paper. I want to let you know, we then took our printers and we took, you know, they got those multiple printer drawers with multiple, you know, paper, took one and we loaded it with pink paper so that we would have those filings in that county in Louisiana, all the right color, right?

7:00They're still getting rejected. So we call back the same county clerk. We say, why? Right. They're legally perfect. They're on pink paper. She says, it's the wrong shade of pink. And we say, really, it's the wrong shade of pink. What would be the right shade of pink? She said, well, you know, the judge here, his brother owns a paper store. And I believe that the pink paper he has there, that would be the right shade of pink. You want these filings to get accepted. So anywhere you go, there's going to be regulation. It might not be the kind of regulation that's written down. You got to find out, like, what are the, what's the hidden handshake that sometimes you need to do to get through?

7:34All I tell people, though, is you got to be aware of it. You can't be the prisoner of that. Find out what you need to do to get through, but don't let that dictate things for you. Wow. So it's fascinating that in that county in Louisiana, which we will keep nameless, the only pink paper happens to be sold. I would recommend, Mick, if you want to get your divorce filing or really any filing through that court, I would recommend going to the Judge's Brothers Paper Shop and buying that particular shade of paper. You know, that actually says something to entrepreneurs too, right? It's like, hey, if you're going to own a market or own an idea, make sure you've got it really nailed down so that they have to use specifics to get things done, right?

8:17Like that's the business strategy right there in and of itself. Yeah, find out those objections. I mean, listen, again, entrepreneurs who tend to be risk takers, people who are willing to do something other people were not, that means that you can't just expect the world's going to give you something back. You got to go the next step and say, if I'm not seeing the progress I hope for, why not? Like, what's going on, right? If you just give up because your court filings are being rejected or nobody's buying your muffins or whatever it is, got to push. You got to find out why. Absolutely. Absolutely.

8:48Absolutely. Well, Eddie, I want to deep dive and go into this book because I have a lot of questions and a lot of praise I want to give you. But for those that are watching or listening, let's talk through the title of the book. And then more importantly, what made you say this book needs to be seen? Yeah, sure. Let me start there. We wrote a book in 2015 called Monetizing Innovation. We're very proud of that book. There is a major company that you know of, and they are in the provisioning of music tracks. You know, I'm not going to say who they are, but when you walked into their office, they had a copy of Monetizing Innovation on everyone's desks, and they called it the Bible.

9:30Very, very proud of it. What that book was all about was if you think about it, if there are two packages that you're looking at, and one is the silver and one is the gold, or one is the standard and one is the pro, or really anything, you're looking at two options. Part of your brain is always saying, for the extra money, what do I get? I think it's just human nature. And if you think about it, that money needs to match up to the additional value you think you're going to get in the gold package, more valuable. Okay, what's there? If it doesn't match up, you don't buy. If it does match up, you might buy.

9:58and if the money is actually not bad at all for the extra value, you might really be quite eager to buy. But the point is you made a comparison, you made a measurement. Price paid, the amount that you want to pay for something, is a measure of value. It should correspond to the amount of additional value you think you're going to get. Okay, if you flip that on its head, if people are not willing to pay for something, they probably don't see the value in it. That is the core idea of that first book. Think about price not as something you slap on when you're done. Think about price as your guide to where is the value.

10:31Because if they're willing to pay for it, that shows you where the value is. Next thing, we're all different. So the same thing may be valuable to you but not valuable to me. I like to illustrate this with a story. I have an incredibly handsome kid brother. He lives in the city of Los Angeles. He looks like, you ever get a picture frame, you didn't put a picture in it yet, and there's that model? He looks like that, okay? He until recently did not have children. as a child now, and I've got four. Now I've got a minivan. I love this minivan. It is a great minivan. As far as I'm concerned, I paid$45 ,000 for this minivan and it was cheap.

11:07My brother looks at the same minivan. How much do you think he would pay to trade in his very nice little sports car for a minivan? And the answer is he would never do it. He does not want to be behind the wheel of a minivan. He does not want to be picking out some girl in LA on a date in a minivan. So we are all different. What you value, what I value, what my brother value is going to be different, right? So the first thing is price shows you where value is, but not everybody wants to pay the same for something because they may value it very differently. You find a group of people though that they value the same things, which you can determine by they want to pay the same roughly.

11:43You found a segment and now you can speak to that segment with precision. So that's what the first book was all about. It's make sure your company is on the best possible footing and not headed for a cliff because you did the work ahead of time to say, really, where's the value based on what are people willing to pay for? The second book said, yes, but. There are people who create a good product. Now you actually have to put in the work. You have to put in the sweat. That's the second book. It's a roadmap. It says, what do you do about setting the right price so that people are attracted to it?

12:12What do you do about raising prices when you need to? How do you negotiate when things are tough? Like, what should I be looking for? It has all of those real world, very pragmatic steps to go from good product to good functioning business. That's what it's all about. So I'm going to let the viewers and listeners in on some insight here. You know, Eddie, we were talking offline and I was telling you how, you know, I've been fortunate. You're such a huge mentor. And I didn't want to tell you everything, specifically why, but now I do. And I want the viewers and listeners to know. With you and my other mentor, Damon John, and my best friend and mentor, Robert Irvine, the three of you have taught me something about pricing your services and Chris Voss with negotiating your pricing.

12:57But what you specifically taught me was how to have dynamic pricing. And I want you to talk through a little bit what you and your firm do. And I know it's also laid out some in the book, but I would say where entrepreneurs that are in the professional services, even those that have products where we all struggle. And I'm I'm including myself in this where we all struggle is we think our value is X. But sometimes we get afraid that people won't pay for X because we haven't shown enough value. And what you taught me was, and Mick, you're never going to figure it out till you figure it out, essentially.

13:35But there is a method to say or to project what your value is dynamically. So I'd love for you to talk a little bit about dynamic pricing, why that's important, and to help those entrepreneurs that are like me, that are like, I need to figure that part out. Yeah, sure. And by dynamic, of course, what we're talking about here is working your way into the optimal price, right? As opposed to, because there's also a concept called dynamic pricing. They do this in stores sometimes where the price on a turkey will fluctuate during the day based on how many people are buying turkeys. We're not talking about that.

14:10We're talking about how do you determine dynamically the right price to charge. First thing to know is as an entrepreneur, if you're like me, Mick, I don't know about you, man, but you're probably charging too little. And the reason is this. You start your business and a lot of people said it won't work. Some people laughed. You do not want to hear no. You're like a 12-year-old in love. The only thing you want to hear is yes. And you're willing to do a lot to get to yes. The easiest thing to do is to price it low. Who's going to say no if you price it low? We tend to chronically price ourselves low.

14:41And here's a great story about a guy who created a company called Segment that was purchased for a huge amount of money. The story that he tells is he went into a sales meeting, right, with a friend of his dad's. His dad was very experienced, very senior. Peter was young at the time, early 20s. And the very senior guy that his dad had hooked him up with, just as they're about to step into the room, says, listen, by the way, I need to give you my letter of resignation. Peter said, what? You just started. I mean, you just started. Like, what do you mean you're resigning? He said, I'm resigning unless we go in that room, you double the price that you're asking for.

15:19And Peter said, I can't do that. Double the price, I'm not going to do that. And he said, I understand. I didn't think you would. That's why I've got my letter of resignation. Well, Peter thinks about it. He says, I'll try it. And if they laugh us out of the room, well, they go in and they get double the price that they thought they were going to get. So a week later, they've got another big sales meeting. Same thing. The friend of his dad says, before we go in there, I need you to double the price or I cannot be associated with your business anymore. According to Peter, he did that three times.

15:48Doubled, quadrupled, octupled, eight times. Eight times the price that he'd started with. And now they started to get pushback, but they still won more than they lost. And I think that's the thing. there's something you can do called a Van Vestendorp. You look it up, Google it, you'll find it. Essentially what this does is you ask people three questions, mainly three, you can do four. What would be a no-brainer price to pay for this product or service? What would be a price where you'd consider it a little expensive, you might not buy? You'd have to think about it. Maybe you need to talk it over with somebody.

16:20But eventually you're probably likely to buy, 80 % likely. And then what's a price that's so expensive you wouldn't even listen to me? You'd walk me out of the room, right? We call that the acceptable, expensive, and prohibitively expensive price, right? Here's the thing. A lot of people want to go for that acceptable price. That's the no-brainer price. The price that, like, of course I'd buy it, buy without even thinking about it. It's too low. It's undervaluing yourself. What you should be doing, you should be going for that expensive price. That's the story of Peter at Segment. That is what he did.

16:47He realized, actually, if everyone is buying, it's not a good thing. You're not valuing yourself sufficiently. Go for the price level where 20%, 30 % of the time you're going to hear no, but at least you're asking for your full value. And that changed my business thinking. You know, again, you saying that, Robert Irvine in my ear, Damon John telling me, hey, Mick, if you think your consulting services are worth$75 ,000 charged for it and all you need is one person to pay it to validate it, right? Like it's that same type of philosophy. And then I went to the school of Eddie Hartman again a couple of years ago.

17:24And I know everybody that's listening or watching needs to hear this part of the conversation that Eddie and I are going to have because you taught me about recurring revenue models. round. It's, it's, I don't even want to say it's a fad anymore. I mean, everyone has a community now. If you're on social media, everyone has some type of recurring thing that they're offering. Even celebrities now have access programs and things that are on a recurring deal. And I didn't understand it. Well, I'm sorry. I understood conceptually, but again, I didn't understand how to price it. And I didn't understand the long journey, the long view of it, because I did something that Eddie taught me not to do, which was I put myself in the buyer's seat too long, meaning I thought how I would buy.

18:13And because I probably wouldn't join a community, I said, no, it's not going to work. But there's a billion people in community. So obviously communities work. So I launched the community, but I thought about the recurring revenue strategy and Eddie, bro, I would tell you 60 % of my whole portfolio income comes from a recurring revenue strategy that I needed you to break down for me. So I'd love for you to talk through the power of recurring, in particular subscriptions, because I think everyone could figure out some type of subscription model that works for them. But I'd love for you to talk through that strategy as well, because I owe you that.

18:52I used to tell people, I thought it was a joke, right? I'd say like every business is moving toward some kind of a relationship. It may not be a true subscription, right? But almost every business. And then I would joke, I would say, except for, I guess, coffins, right? Coffin, that's it. You buy one time. And then one of my German partners said, I won't do the funny accent, but he said, you know, Eddie, that's actually no longer true. Funeral homes these days tend to give you a lower price on the first service in the hopes of then getting the whole family and getting you on like a recurring. So apparently even death is a subscription, Nick.

19:27You know, everything, everything. We used to say, we used to joke that I was the guy who turned divorce into a subscription. what we meant by that was we thought that if you i mean could you imagine anything more final than divorce you get divorced why would you ever want to talk to me again as the person who facilitated it yeah i help you with that and it's goodbye the truth is there are so many things that people want you to do if they trust you if you built a good feeling with that i'm sure you have this experience for yourself there are people in this in this life that you enjoy working with that you've gotten to know and you kind of trust them usually if you have more value on offer people will take you up on that if you've built a good situation with them.

20:04So with the case of divorce, it turns out after you've been divorced, if you're the woman, you got to change your name. And that means you got to change all your credit cards. And there's a million things that come after that. If you get your will done, I thought, oh, well, you know, check the box. That's job done. No, turns out people really want to talk to you after that. They want to know how is this, how should my life change? Where should I store it? If I need to revise it, what do I do? So legalism, the whole business changed from transactional to recurring. The world itself, I mean, you get a BMW, you, you get a Mercedes these days in many cars, they are going to give you a subscription for the headlights.

20:37You know that? A subscription for the heated seats. On the Mercedes these days, you can get additional horsepower unlocked in the car you want in your garage. And think about how smart that is. You're on the lot. It's a Mercedes. Do you want the additional horsepower? No, I don't. You bring it home. It's in your garage now. It's my Mercedes. Do you, Mick, want to unlock the additional 50 horsepower that are sitting right there under your hood? The answer is, yeah, now you do. So moving even from a car sale, even a coffin sale, even a divorce into a relationship, incredibly powerful. But then once you've done that, suddenly you have a new problem.

21:10And the problem isn't sales. The problem is retention, keeping people in the subscriptions or potentially expanding the accounts. Like how do you do that? I'll tell everybody, if you wait until the moment that they're canceling, it's like going to the dentist when your tooth is about to fall out, right? Instead, when you onboard people, when you bring them in, they're never going to be happier are with you than at the moment that they sign and say yes, right? So ask them all the data, all the information, ask them where are they going? Like, what do they want to do next? Set appointments to check in with them if you can.

21:39That's your kind of service. But don't let those accounts start to rot and then lead to a cancellation because if you stop them at cancellation, it's too late. During the period, remember that every person who leaves you has one thing in common, which is at one point they said yes. They couldn't be leaving with you unless at At one point, they said yes to you. Figure out what changed. When you look at your customers, say, how do they go from good customers to risky customers to cancellations? Is it about you or is it about them? And is it about the price or is it about the value? It's very simple balance.

22:11You can actually draw out a little grid. Find yourself. Where are the people living? Somewhere in that grid, you're going to find. This is where most people are leaving because the price accelerated too high and you didn't tell them why, right? And they think they can get a better deal elsewhere in the market. Okay, great, that's price and you. It might be value in them. They might have said, you know what? We're full up. We did what we thought it was going to do and now we don't need anything more. And then in that situation, you could say, great, but did you know we do more than just that? If you don't say how did they go from yes to cancel, right, if you don't map that out, you're doing yourself a disservice and you're cheating yourself of an opportunity to de-risk accounts.

22:46I like to say, stop the churn before it happens. Wow, wow. That's, this is a masterclass in and of itself. This is why, again, I'm asking you personal questions because you've helped me. And I know that my audience is going to need that same type of help. And Eddie, I know how gracious you are with your time. And I want to make sure I do justice before we hop off here. But again, I want to talk about the book. We share the same publisher. So Wiley did my book as well, too. So I want to, again, make sure I'm giving you justice. Where do you want people to purchase the book? Where do you want people to find and follow you?