Taking Risks and Taking Action: Pat Flynn Writes about entrepreneurship at

Transcription

1 Taking Risks and Taking Action: Pat Flynn Writes about entrepreneurship at Hello everybody. It's J.D. Roth once again. And today, I'm joined by Mr. Pat Flynn. Pat is best known for his blog, SmartPassiveIncome.com, where he writes about the various online businesses he runs and how he makes money working with them. Thanks for joining me, Pat. Hey, I'm so happy to be here, J.D. Thanks for having me. So Pat and I first really had a conversation--a few months ago-- we were both at the Financial Blogger Conference. And I realized that his experience nears, in some ways, my own, and he's gone through some of the same experiences, building an online business and earning more money than he had previously been accustomed to. So I thought it would be interesting to talk about some of that stuff. But before we do that, Pat, can you give us a little bit of your background. Tell us how you got to where you are, where you started from. Absolutely. Well, I went to school for five years for architecture. It was something I've always wanted to do. And when I graduated, I pretty much landed my dream job doing architecture in the Bay Area working on restaurants and hotels, which is really fun. And it was exactly what I wanted to do. And things were going well. I was doing all I could to climb the corporate ladder. I would get raises here and there. My promotional title would advance and things were going well. I was contributing to my 401(k) and I was ready to devote 40 years of my life to this industry and then retire. That was the plan. I wanted to follow in my father's footsteps in that same regard. Not in the architecture industry, but just him as somebody who worked really hard for a single company, and was able to support his family in that way and then retire happily. Unfortunately, come mid-2008, I get called into the office at my architecture firm. And I got sat down, and my boss tells me, "Pat, you're one of the youngest, brightest guys we know, comma, unfortunately we have to let you go." And it was a very weird moment for me. So many things were going through my head. I had just proposed to my wife because things were going so well. And maybe I was just oblivious to the fact of what was happening around the United States as far as the economy is concerned at that time. Right. 'Cause this is right as well, it was just before the real recession began, before the stock market began to crash. But the housing market had begun to plummet.

2 Yeah, that's sort of what went first. And so, of course, nobody needed nobody was building anything, so nobody needed anybody to design those buildings. And I had done so much at such a young age for the firm that I thought maybe I would have stuck around or they would have and they did try to keep me as long as possible, but they had to let me go. And from there, for a couple of weeks, I was in a very depressed state, not knowing really what to do. Luckily, I did have sort of a buffer period of three months before they officially let me go, because I was in charge of certain projects and clients. They couldn't just leave them hanging. Right. So you were wrapping the work that you had. I was wrapping up and that actually was it made it even worse, because there was this inevitable date that I was approaching every single day. Every day I woke up, it was a day close to actually being laid off and not knowing what I was going to do afterwards. But I stumbled upon a podcast called Internet Business Mastery, run by two guys named Jeremy and Jason. And I always had some kind of an entrepreneurial bug. But I never acted on it, again, because I was following this life path that was set out for me. Right. So basically entrepreneurship is something that interested you, but you didn't need to pursue it because you had chosen another path. Absolutely. But when I discovered that I couldn't get back into the architecture industry, I felt like I absolutely had to go down this route. And, actually, it was fortunate because I had listened to this particular episode of that show where there was a guy, he was making a living helping people pass the Project Management Exam. And that was my aha moment, because to help me advance my career as an architect, I had passed this exam called the LEED Exam. And to help me pass that exam, I created a blog which was primarily a resource for me to keep track of my notes. I did a lot of traveling, and it was really easy just to access those notes online and, also, to share those notes with a couple of my coworkers. Well, when I heard this podcast, I had that aha moment. I said, "Maybe I can use this as a resource to help other people around the world pass this exam too. I don't know if it will work, but I gotta give it a shot 'cause I really have no other choice." And I think because I had gotten laid off, it forced me to do a lot of things I wouldn't normally do. It forced me to take those bold actions that are required to see this kind of success that I ended up seeing. And so what ended up happening 2

3 So you were more willing to take risks is what you were saying. Absolutely. And because I think as much as the layoff hurt when it happened, it actually turned out to be such a huge blessing in disguise and the best thing that ever happened to me, because well, to make the long story short, I saw that actually, incredibly, they were already when I checked the stats of my website, which I had no reason to do before this, I saw that already like thousands of people around the world were already visiting this website to help them pass the exam too. And that actually initially scared the crap out of me because I had no idea who these people were or how they found me. I didn't know anything about Google or a search or anything. But I had just written so much stuff on that site for about a year, that Google picked it up. People found it, they shared it and they loved it. And then so when I saw this traffic coming in and I started actually interacting with people there, they saw me as an expert. And I got hooked up with a lot of people who were already successful in online business. And I asked them, "Okay, well what should I do here? What should I do here?" And they were like, "Pat, you should publish a study guide for your audience. They seem to love you and the content you have on your site. Take that content and put it into a nicely packaged conveniently consumed ebook." And I did that, and I launched that in October of That was actually the same month that I officially got laid off, which is incredible. And that first month I released this book [phone ringing] Oop, I'm sorry, sorry everybody. I don't have my phone turned off, but now I do. This is real life, people. That first month I launched that ebook in October of 2008, I had earned, through this $19.95 ebook, $7, And that was more than I was making as an architect in three or four months of work, after taxes and everything. And it was such an incredible mind-blowing feeling. It didn't seem real when it was happening. You must have felt very lucky. It must have a big weight off your shoulders. Yes, absolutely. I mean 'cause the timing of it was perfect. And a lot of people are like, "Pat, you are like the luckiest guy in the world." And, yeah, I am very lucky. But part of that luck came from taking hold of these opportunities that were available to me that weren't that I didn't realize were there until I got laid off. 3

4 Right. So it's kind of the whole notion of necessity being the mother of invention. You were getting laid off. You were desperate to find a way to create an income. And you had nothing to lose and so gave it a shot. Absolutely. So I admire what you did though. Because I feel like many people faced with the same situation, they'd be paralyzed with the uncertainty. Or a lot of people are in jobs that they don't necessarily care for. They are not fulfilling, but they stick with them because it's a known quantity. It's something that's comfortable or at least Right. it They're complacent. Yeah, complacent. That's a great word to use. And so it prevents people from taking risks. Did you experience any sort of uncertainty, or All the time. what was your mindset like then? How I mean afraid we're you. I was deathly afraid. There were so moments in this journey. And even still, today, I face fears in my online business. And I think I just realized that the fears, that resistance that comes your way, that that's always going to be there. You just have to learn how to control it. And it's those who control it and actually see those forms of resistance as opportunities or just things that make it a little bit harder to see what's on the other side. I see those fears now and those that resistance, and I actually move toward them, and I know that something is amazing on the other side. It's like back in high school when I would think about asking a girl out, I didn't want to do it 'cause I didn't want to get rejected. And I didn't want to feel that pain. But how awesome would it have been if that person said yes or actually I had got to go out on a date with that person. So I actually see these fears as opportunities. And I think fear is there, that resistance is there to just sort of weed out the people who don't really want it big enough, or who aren't willing to put in the effort to actually make things happen. That's how I feel about entrepreneurs at least. 4

5 See, I think that's an interesting perspective because I'm very public about the fact that for years I was paralyzed by fear. I was afraid to try new things, to go new places, to meet new people. I was afraid of rejection is what it came down to. And it was only once I began to address these fears and do the things I was afraid of that I actually felt like I was living a more fulfilled life. And so now, it's become my policy that, unless it's gonna violate my personal code of conduct or be illegal, I say yes to opportunities that come along because I want to try new things. And I've found that it's actually a hell of a lot of fun. Absolutely. That also makes me along with saying yes to opportunities, it makes me more willing to take risks in my day-to-day life. And part of that is, because like you, I found that although not every risk pays off, enough do that it's worth taking calculated risks. Yeah, absolutely. And so going back to your original question, there were a ton of fears that were just trying to stop me from moving forward from, you know, "Are people gonna even like what I " When I was publishing my ebook, when I was writing it. First it was just the whole technology aspect. "Well, where do I even start? How do I do this?" And what helped me get over that hump was just being okay with asking others for help. A lot of people won't do that. They have to they feel like they have to do it themselves when there are so many people out there who are willing to help you. You just need to be open to receive that help, and to help you move forward. Another fear I felt was when I was actually writing the book and I was done with it, it took me days to actually move forward with figuring out how to sell it. Because I had this complete product and I was just fearing so much that people would hate it or they would reject, or I wouldn't make any sales. Like all that time was wasted. All of those things were going through my head. And even up to the first sale, my first customer, as amazing as that feeling was, those doubts started to feed into my brain after that. And I started to wonder if the next minute I was gonna get an from that customer saying that book was crap or that they wanted a refund. I mean just every moment, there was some negative aspect. And it was coming from me. It wasn t coming from anybody else. I think this is it's not amazing. What's the right word? I experienced the same thing, I guess is what I'm trying to say. It's called the imposter syndrome, and I talked with Cathy Bigawins about this just the other day. She and I have both experienced it, 5

6 where we feel like why are we in a position to be an authority on something. What do we know that other people don't? And so it's almost like we're afraid to take action because we're uncomfortable being placed in this position of authority. And, for me, that's manifested itself on this very project. I've been working on this book now for four months, and I keep starting over and starting over. And part of it is because I want it to be so perfect, and I'm afraid that I'm going to put it out there and people are going to say, "Oh, my gosh. This sucks. I can't believe J.D. did that. And so, I finally had to just surrender and say, "You know, I'm going to do the best job I can possibly do. And if that's not good enough, so be it." Yeah, I mean I would so much rather live looking back, like I would be an old person looking back on my life and I would so much rather live with the "Oh wells," than the "What ifs." I would rather say, "Oh, well, at least I gave it a shot and I gave myself a chance," as opposed to, "Gosh, what if I actually did that and it worked." Yeah. And from what I've read, it tends to be people, as they're dying, they tend to regret the things they did not do more than the things they did do. Um-hum. It's a scary thing to think about. But it just if you start thinking ahead in that way, it'll get you to sort of get up off your butt and start taking action and realize that really and another thing I another strategy I use all the time is I ask myself, "Okay, when I'm feeling this resistance and fear, well what's the worst that can happen?" I always ask myself that. And, initially, I'll think, "Okay " like before I started doing a lot of public speaking and actually it was FINCON-11 where I had my first presentation ever. And I remember having feelings before that. Just my mind goes crazy. I always think about the absolute worst possible scenario which, in fact, would never, never happen. I imagined going on the stage and my pants falling down and people throwing tomatoes, and then tripping off the stage and getting a bloody nose, and end up waking up naked in a ditch somewhere. I actually had those exact thoughts. That would never happen in a million years. And when I think, "Okay, realistically, Pat, what is really the worst that can happen. You go up on stage. You maybe present. People aren't gonna throw anything at you. "Maybe they'll say, 'Oh, that wasn t that good,' and that's it. Well, you can learn from that and just move forward, and use that feedback to help you become a better speaker the next time." 6

7 That's really what the worst thing that could happen would be. But what's the best thing that can happen? Well, I started speaking. I got obsessed with it. I started speaking even more. Recently, I just landed the opening keynote at New Media Expo, after my most recent presentation and after getting such great amazing feedback for it. And now, I'm getting paid to speak, something that I was completely and deathly afraid of before is something that I solely enjoy, and I'm so happy that I took that first step and was given the opportunity by FINCON as well to do that. And so I was given the opportunity by Phillip from FINCON, and I took it. I could have easily said no, but I took it because I knew that it was going to be scary, but that there was something amazing on the other side. I think that that's great. Now, you seem it seems like you've got the type of personality that's willing to take these risks and kind of has an entrepreneurial mindset. Not everyone has that. My ex wife, for example, she has no desire ever to own her own business. She's comfortable working at the job that she's been at for the last 10, 15 years, and wants to stay there for another 10 years. And I suspect like Absolutely. like you said, when you were describing your plans when you landed the job at the architecture firm, you might have stayed there 40 years if that opportunity had presented itself. So I guess one question I have is do you have any advice for people who they are in a comfortable job or they are complacent, or they do find it hard to take risks. What kinda things can people do to start a business or maybe be willing to look for another job that might provide better opportunities? Sure. Well, I think, first and foremost, you have to understand well, what is your single mode of any purpose in mind. You know, understanding what it is we work, and we have jobs. But why? And a lot of people they just work for work's sake. They work to stay busy, but they don't realize why they're doing it. And I think once you realize the true understanding of why you do what you do, like ask yourself as many whys as possible. This is sort of a technique they use in the toiler factory to figure out what's broken. And that Just ask why. Yes. You ask yourself why. Well, why are you doing this? Well, okay. Well, why that and why that? And you'll get to the deep root of why you do what you do, and you'll be able to understand, "Okay, well, maybe I am doing something that fulfills that purpose, and I can be happy doing what I'm doing and better 7

8 appreciate it," where you wouldn't have to quit your job in order to be happy. And I think you just have to understand why before you can actually be truly happy. And that's in the book, I described how I think it's important if you are going to act as the chief financial officer of your own life, it's important to craft a mission statement. And it sounds kind of hokey, but I think it's valuable to put down on paper what it is that motivates you, so that you can make financial decisions and other decisions, too, that are congruent with that mission. Right, absolutely. My mission is to be there and support my family, and to provide opportunities for my kids that weren't available to me. And just get have them be able to have the opportunity to do whatever it is that they want to do in the future and to help provide to the world. And so I always think about them in any decision that I make, not just family decisions like buying a house or any of that stuff. But I mean business decisions, too, because I want to be there as a good example for them in business as well. And so anytime I have an important decisions to make in business, I think, "Okay, well, what will my kids say to each other in 30 years about what the decision I'm about to make is right now?" And a lot of times I just don't want them to be disappointed. I want to be there as a good example. If I could be a good example for them, I could be a good example for my audience, and they can follow my lead as well. And that's why you'll see on Smart Passive Income, I never recommend any products I have never used before. I am very honest and transparent and authentic about everything. And if I if money ever becomes the primary motivator, I'm doing it wrong. Exactly. The way I phrase it is money okay, it's just like for life, we need to eat, we need to drink. Our purpose is life is not to eat and drink. Food isn't our purpose. It's the same thing with money. Money is not the purpose of this business. The money helps fund the business and its activities, but it's actual a business' actual purpose is something different. Now, you just mentioned the fact that you're very open and transparent on Smart Passive Income, and you are. And one of the things you do is you publish your income reports. And these are fascinating for a lot of people and they're almost overwhelming, I think for some people 'cause you show, for example, last year, you we're earning $50, or $60, a month, or at least the business was. So one question I have is now that you're earning more money than you were when you were employed as an architect, how has your lifestyle changed? Do you do things differently now that you have more money, or do you approach life differently? 8

9 I mean a little bit. Of course, having more money will help you do a lot of things that you couldn't do if you didn't have that money. But my motivating factors have always stayed the same. It's been for family. And so that's why I'm not driving around in extravagant cars and things like that. And, yes, we're taking a few more trips than we would normally. But we would have been taking trips anyway. I think, primarily, what the influx of income has done for me, it's just in my mind I feel more secure about the future. So it's like a safety net. A safety net, exactly. And yes, I do know I'm making quite enough where I could splurge. But, luckily, I have a wife who is very who I mean we always talk about any purchases that we make and we're always real with each other. And so she's like, "Do you think we really need an Audi RA right now," which is like my dream car. And she's like, "We have two kids. You can't even put a car seat in the back," and I'm like, "Yes, you're absolutely right. That's just the little kid in me who wants that fancy car, and it's not practical." So we're always practical with our purchases. And we are fortunate enough to have the money to have just recently purchased our first home, so we're stoked about that. But we're not at the beach here in San Diego. We are right next to the number one public school in San Diego because, again, our motivating factor is our kids. We want them to have the best opportunity as possible. So we moved right next to one of the top schools in San Diego so that they can have that opportunity. So it just gives us a little bit more options, I guess you could say. But our lifestyle we are the same people and we don't try to show off or anything like that. The income reports, a lot of people initially hear that I do that, and they're like, "Oh, he's just trying to show off," or "He's just trying to get us to pay for stuff." Well, one, I don't sell anything on the site. And, secondly, it's there to motivate and also it's not about the numbers for me. It's about the lessons that happen to make those numbers appear. Right, absolutely. So it sounds to me as if your lifestyle really hasn t altered much. To me, that might be an indication that you've reached a place where you might be considered financially independent. Do you consider yourself financially independent? I do. I'm not at a point where I could sit forever and never touch any of my businesses again, and be able to be comfortable for 40 years, right. I mean I still have to upkeep them. But I'm at a point now, and I've created businesses in a way where I don't have to be there in order for a transaction to be completed. 9

10 It's a very automated sort of system, as far as people come on to the sites and they buy the products, and they can get them delivered automatically without me having to be there to deliver those products, which is really cool. And that did change my lifestyle. That sort of the way that I generate an income, it allows me to have a more flexible lifestyle as opposed to working 9:00 to 5:00 or in the architecture industry it was often 9:00 to 9:00 everyday, to now working from home with my kids. Again, with my motivating factor. And being able to have more options as far as how to live each day. What would happen if your income went to zero tomorrow? Would you feel panicked? Would you I mean you've got to the safety net we discussed. Or do you feel like your lifestyle is such that you'd be able to manage? I think I am confident enough in myself that if everything disappeared, I'd be able to restart and get something going again fairly soon, fairly quickly. That's a good answer. You know this is yes, I do have savings, and I do have retirement accounts. So if my businesses were to go away, I do have quite a huge safety net for sort of our lifestyle as far as how many months of we'd be able to pay our mortgage and stuff and living expenses. We'd be able to do that for a few years now. But if everything went away, honestly, we are lucky enough to have support from our friends and family, where we'd be if we needed to. We wouldn't be on the streets is all I'm saying. Yeah. And I feel like maybe it's unfair of me to keep pressing you on moneys stuff. But I'm just I'm in a similar position I guess. I built a blog that was very successful and a very substantial income, and then I sold it. And I was able to get a windfall. And that windfall has allowed me to become financially independent. Now, a lot of people think, "Oh, my gosh, J.D. sold his blog for a lot of money." They think I sold it for more than I actually did. But they think, "He could afford to do X, Y and Z." And while I do have a lot of money, I view it as a safety net. The way I look at it is this is my retirement. By selling the blog, I have funded my retirement. But I cannot live off of it indefinitely. So what I try to do is keep a lifestyle that is it's not minimalist. It's just it's modest. It's just the average middleclass lifestyle. And because I'm doing that, because I'm not spending extravagantly and buying fancy cars or jetting off around the world, I'm able to maintain, or I don't feel like I'm in danger of 10

11 running out of money. And it also gives me the freedom to explore some other passions. For example, I want to write a novel this year or next, and these are things that I wouldn't be able to do if I weren't financially independent. Yeah, absolutely. I mean and that's your choice. Everybody has their own choice. And based on how they feel like they want to live, they are making and take the right actions to create the businesses or do whatever it takes to make that stuff happen. And if you're living a more modest lifestyle, there's less that you have to do to generate the amount of income to give you that freedom that you want. And I think the key is to make sure that not everyone can achieve what you and I have achieved, unless they somehow get lucky and get a lot of income all at once. But what people can do is reduce their expenses so that they are below their income, and try to create a great a gap as possible so that they're saving not just 10 or 20 percent, but 40 or 50 percent of their income. And by setting that money aside, it creates this safety net so that you're able to take risks and do things like quit a job that you're not happy with or take a year off to travel around the world. Yeah, absolutely. And on the other side of it, saving is important and earning is important too. So if you can step out of your box or find other ways to generate a side income, that can help you get toward those goals as well. And both of those, in conjunction with each other, can just help you get there much, much faster. That's right. So I have one last question. It's completely unrelated. But I was reading through your site, and you've got a book club, an online book club. What is this? What sorts of books do you read and how many members do you have? I do have a book club. There's about a there's a few hundred. I'd say 500 members there now. And it's basically all done through , an list that people sign up. And every month I share a book that I've read. I try to read one personal development or business or entrepreneurship book each month, and share some quick thoughts about it. And I invite people to come and chat about it. And it's really fun. You can sign up at PatFlynn.com. It was initially created as a way to continue the conversation after I published my book, Let Go, which is really cool. And it's just a great way to because, as an entrepreneur, if people buy something, you want to be able to keep in contact them. Not just to sell them more stuff, but to have them enjoy whatever it is that you have to share with them even more. They can ask questions. 11

12 Yeah, and interact and become raving fans and help promote your sharing and becoming a fan and things like that. But so the book club has been really fun. And one of my most recent books was I read that. was called Moonwalking with Einstein. Moonwalking with Einstein. What's that about? It's about a journalist who once covered the World Memory Championship, and then got so excited about that that he decided to train himself to become a memory champion. And I won't give away what happened. I leave you to sort of deduce what happened. But it actually shares a lot of cool memory tricks. So I'm able to now memorize a list of 25 items in about five minutes, sometimes even less. And I can recall that I can even recall some of the lists that I've memorized in the past, just because of these techniques. It's really interesting and it's not directly related to entrepreneurship. But I'm using I've been using a lot of the strategies in that book to remember people's names at conferences, which is why I picked up this book. Oh, that would be very handy for me. I'm not so good at that. I used to be terrible and I'm still working on it. But it's interesting and it's some people are like, "Wow. You remembered my name." And that makes a big impact when, you know. Well, Pat, thanks so much for taking the time to talk with us today. I appreciate it. And everybody, if you want to find Pat, you can go to SmartPassiveIncome.com or PatFlynn.com. Thank you so much. ### 12