TPE S2 20 | Entrepreneur

 

Success stories aren’t built overnight. They are a result of hard work, effort, patience, and a lot of failures. Listen to Mike Otis as he dives deep into his entrepreneurial journey. Mike, Founder of Double O, Inc., has been a practitioner and fan of Entrepreneurial Operating System (EOS), Open Book Management, and Entrepreneurs’ Organization during his career as founder of four Companies (there’s a 5th in the works). He is currently fighting cancer with ferocious grace and dignity. Tune in for in-depth insights on leadership, setting objectives, and organizational growth.

For information on how to work with Don visit Work With Don Williams

You can also reach out to Don Williams at https://donwilliamsglobal.comPlease join Don and his businesses in support of St. Jude’s Children Research

Hospital in its Mission to cure Childhood Cancers. You can donate to St. Jude at stjude.org/donate

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Mike Otis – Michigan Husband, Father, Grandfather & Entrepreneur

A Full House & Four Companies Make A Full Life

I have a great entrepreneur, a very good friend, Mike Otis from West Michigan with us in this episode. Mike, welcome to the show.

Thanks, Don. I am excited to be here. These are always fun to do.

Let me take you all the way back to little Mike. Five years old, up through high school. Whichever household you were raised in, whether that was with your folks, your grandparents, or however that worked, it’s different ways for different people, but was there an entrepreneurial example in your home?

I would say there was not. My dad worked as a construction worker. My mom worked as a homemaker, but I had an entrepreneurial bent in me that I did not understand and no one could help me give words to. I have learned to uncover it over the years. I remember as a small child, you would have these fundraiser things for the class. You were given boxes of candy bars or whatever it may be. I loved going door-to-door, and my mom would drive me through the neighborhood. I would knock on doors and it was cute, little tiny Mike there with this box of stuff. I was selling them like crazy. I was more towards those kinds of things. That was a lot of fun.

A little later, I think when I was twelve years old, I took my first contracting job where me and a friend of mine ripped off and re-installed a roof in a shed for a guy down the street. It continued that way. I tore off a section of a house for one neighbor. I said, “Those rafters, I want those.” She said, “You can have the rafters.” It turns out they were solid oak. I did not know that. I loved building furniture even at that age. I turned those into some bedroom furniture for a different neighbor and sold them to them. I made some money on that deal.

You were part of the entrepreneur club for sure. I am a sales guy and I make my living as a tactical sales consultant typically to big companies. I love somebody who says, “When I was a kid, I loved going door-to-door and selling,” because that is a rare skill.

It was fun. I enjoyed it. I have always said I never met a stranger. I have just met people I have not introduced myself to.

Let me ask you, your first contracting job where you tore the roof off for the neighbor, was that your first truly entrepreneurial venture?

Yes, it was. That year, I was doing a few different jobs like that at that time. It was definitely very entrepreneurial. Where it got serious is when I was headed off to college because that summer, I had to earn enough money to pay for a year of college. That is going to sound crazy to anybody because the place I went was very inexpensive. It was a Bible Institute. They only charged me for room and board, and even that was really cheap. All the staff were missionaries and supported accordingly. What I did is, that summer, I took a job working for my church. I was not an employee. I was a subcontractor stripping and refinishing all of the pews in the church that summer. I made enough money that summer to cover my first year of school. It was great.

 

It's far more expensive than paying the price to learn from those that have gone before us. Click To Tweet

 

You went on, finished schooling there, and got your degree. If you went to a Bible school, did you ever enter the ministry?

I never did professionally. I remember a few years of my life where I felt like I should have, and I did not, but I believe God wired me to be in business. It is the place he wanted me to be. It is the place I have spent my life. My very first company that I started, I remember looking back going, “I have no idea how I wound up in this company. I own it. I did it. I do not quite know how it happened. It just happened to me. It was that natural.” It went from there to another company and another company. I am about to open my fifth company that I own. I call that semi retirement, by the way. I have been involved in ministry over all those years. I chair a Bible translation organization that specializes in technology. I chair their board. I am very involved in ministry still. I do not regret my education, although I did not truly directly use it.

Tell us what are the five companies, what do they do, and how do you have five companies when you are in retirement?

The primary company is Double O Inc where we do a commercial glass and glazing or on a large commercial building, we would do the windows and the doors. We custom build them and install them. The next three companies are real estate related. In fact, people say, “What do you do for a living?” I like to tell them, “Monopoly and Legos. I build things and then I rent it to people.” I turned four houses into a hotel. The other three companies are Double O Development that I own solely. That one, we buy buildings. I have never built a building. Ironically, I have been a builder my whole life. I have never built a new building with a couple of rare exceptions where I was building for nonprofits.

Other than that, I have always bought ugly old neglected buildings, renovated them, turn them into something beautiful, put them to good use, and then move on to another. Double O Development has done that. Our primary company is called Double O. The second company is called Double O Development because significantly it began as the company as a separate LLC that would buy and develop companies that Double O needed to go into. It has grown over the years. While it still does own the building Double O currently housed in, it also owns quite a lot of other property. The next company after that is called One Enterprise. That one is in partnership with my oldest son. The two of us, together, have done a great deal of real estate development.

It’s a similar idea, but what we do there is not just rehab a building. We rehab a neighborhood and we found great success in doing that. We would buy up all the ugly things on a street in a few blocks. We are not incredibly wealthy. We could not renovate Grand Rapids, but we took on the challenge. He moved to the small town called Allegan, Michigan. We took on the challenge to begin to sell our properties in Kalamazoo, Grand Rapids, other areas, and move that investment into the Allegan area. We are renovating the town of Allegan. That has been a fun thing to do. We are up to ten commercial properties now in Allegan.

The other company is called OPM. I get a kick out of that because that is right on your homepage. For us, it does not mean Other People’s Money. We do not have anyone else’s money in it, but it stands for One Property Management where we manage all the real estate that we own in those two companies, as well as real estate for other clients. That has gone quite well.

The fourth company that we are starting, we have not named. We are working on that. It is a challenge. We, through One Enterprise, bought an old abandoned bar. It is in the town of Allegan. It is a rundown building that is an eyesore to the city. We have been able to buy the ugliest things in that town and turn them into the most beautiful. We want to do that with this, but in order to do that, we are going to partner with another couple in Allegan and we are going to open a bar. It’s something I never thought I would do.

 

TPE S2 20 | Entrepreneur

Entrepreneur: How many places can you go to where it truly is designed to create a family experience? That is what we want to do there.

 

It will be very family focused. It will have three components. It will have the bar, it will have full service kitchen, restaurant. It will have an old vintage pinball collection where people will have to pay by the hour to play these old vintage pinball machines. Fourth, it will have an ice cream shop and we will have a serving window out the side. Its purpose is to be family focused.

How many places can you go to where it truly is designed to create a family experience? That is what we want to do there. It is a transition from a building that was used for quite a few years as a seedy biker bar. It was one of the eyesores and problems in the City of Allegan. We want to turn it around. That is the new one we are working on.

I love that. You’re redeeming old, ugly properties and show them what they could be. That’s great. You are going to end up with five businesses here in retirement. I have a feeling that you have started other businesses since the inception of your career. Can you tell us about the first company you ever started? What was its name and what did you do?

I went to school for ministry. I did not go to school for business, so I had to learn the hard way. I was not a member of the Entrepreneurs’ Organization at that time. I did not have friends to turn to, to help me learn and grow and not make stupid mistakes. That company was called Gun Lake Glass and Screen. It was a very successful company by its own right, but I went through some hard times.

I had an opportunity to sell that company, but I wanted to focus at that time on raising my kids. I took advantage of the opportunity to sell it, but I did not even, in that situation, listen to the advice of my own attorney who said, “This is a bad deal. Do not do it.” I wanted out so bad at that point because of the things I was going through personally. I signed the deal and that individual failed to mention in his contract that he had no intention of paying me.

He gave me a small down payment and never gave me the very first payment that was supposed to be a land contract term. He never gave me the very first payment. You would think I could sue him, but the way the papers are written up, my own attorney advised me, “File bankruptcy and move on with your life.” I did. I had filed bankruptcy at that stage after being in business almost fifteen years. I had to file personal bankruptcy and lost everything that I own and started from scratch.

At that time, I had met my wife, Linda, and we were getting remarried right at that time. She said yes, when I was unemployed, bankrupt, and did not have a job. I had nothing. I have 4 kids to support and she had 4 kids and she was working part-time. We bought the house that we live in where I am sitting right now. A house where we had ten bedrooms, we had all eight kids here and we had another part-time youth pastor who lived here too, because after all, when you are home, it contains a youth group and your own family is going to need it. That was about the time I took a job for a company for a couple of years as a salesman, and then started Double O as a side business because there was no way I could support that whole gang on just one job. Double O, gradually, took over my world.

Tell me about the genesis of the name Double O. I am guessing there is some meaning there.

We have already touched it and we did not notice. We went right over it. Double O, my four kids, their last name is Otis. My wife’s four kids, their last name is O’Brien. Our family just took home the nickname of the Double O clan. We named our home the Double O Country Club. We have ran with that name throughout a couple of our companies and had a lot of fun with that. I remember realizing that name. I think, in many situations, names are that important when it comes to a company. We give meaning to the name. The name does not give the company meaning, it is in the reverse.

 

Learn from someone who can bring in an outside objective. When we can do that, we can learn so much more. Click To Tweet

 

I remember hearing the story that George Eastman, the Founder of Kodak, decided that he needed a good name for his company. He thought and thought, and he came up with Kodak. Now, Kodak is synonymous with a picture, especially when it is printed out. In those days, nobody knew what it meant. The reason is George Eastman invented the word. He invented the word for one reason. He loved the letter K. Kodak starts with a K and ends with a K because he loved the letter K. I ran with that story. We were like, “You can give the name Double O a meaning.”

George Eastman, one of the great entrepreneurial stories for American history and that one time, a Fortune 10 company and then probably missed the boat. I think they invented digital photography but downplayed, “This is never going to make it.” The amount of pictures taken with film only in the professional arena and even then, a minority of all pictures taken.

Even in professional, I do not see film used anymore whenever we hire a professional photographer for real estate or for our entrepreneur organization and local meetings. We have a photographer at every one of them and they are all digital. They have got amazing expensive equipment, but it is all digital.

I am going to ask you to look back across your career. The title of our show is he Proven Entrepreneur. We only bring people on that are proven. The tagline is Success Stories. The interesting thing about success stories is they almost always include a failing or two because failure is not the opposite of success, but is a part of success. It takes some years and mileage to understand that, but our years and mileage is pretty much the same. I know you do. Do you have a hard lesson? You have already shared that you remarried. There was something there that happened that was probably hard, but do you have a hard business lesson you can share with the readers?

I will not go into my marriage failure. I do not think that is helpful for this conversation. I am certainly open to do that, but I do not think it would be helpful to the train of our thought here. I would say one is to listen to your attorney or get a second opinion if you do not like what he says. Do not just blindly ignore it all like I did back in the day.

There is another one. For me, I have had to learn the hard way to bring in consultants and experts, someone like yourself, Don. This is not meant to be a pitch just for you, but it can be. I have always learned the hard way, jump in, do it, figure it out, make mistakes, learn, and move on. First off, that sounds like it is an inexpensive way to go. I am a tightwad. It is an inexpensive way to go and it is for a minute, but in the end, it is far more expensive than paying the price to learn from those that have gone before us.

When we can do that, learn from someone who can bring in an outside objective, we can learn so much more. I hired one consultant to come in years ago and he came in one day a quarter. We paid him $6,500 for that day. They did no prep work or anything. He just gave us that day for $6,500. We hired him at a time when we could not afford it. We were losing money. We were out of control as a company. We were not doing well. We were the opposite of success.

I brought my leadership team down to meet with him for an hour. I said, “I know that none of you are in favor of hiring this guy right now. I am okay with that. What we are going to do is we are going to pick his brain and learn everything we can from him in an hour for free. We are going to leave and we are going to take advantage of this.” We did that. We rode together in a van so that we could talk about it on our way down.

 

TPE S2 20 | Entrepreneur

Entrepreneur: Listen to your attorney or get a second opinion if you do not like what he says.

 

We had our one hour session. We got in the van on the way up. One by one, around that van, every single one of them said, “We have to hire him. It does not matter what it costs. We need what he has to offer.” We did. It turned our company around fast. That was soon after I had become a member of the Entrepreneurs’ Organization.

When I joined, I remember the meeting because we were forming the chapter here. I remember the meeting well because I felt like I did not have the money to spend. One of the other guys in our group, he knew me. We sat at a table that evening after having met with a number of Detroit EO members. The speaker sat at the table with us. We talked about how much it was going to cost. This buddy of mine, Aaron, he goes, “Otis, give me your credit card.” I do not know what he is doing. I handed my credit card. He just filled out the form and said, “There you go. You are a member now.”

I did not have the money, but somehow, I found a way. I was sure glad I did. It was a fantastic investment. I would never have met you, Don. I would not have gone RLA, Regional Leadership Academy, which was an incredible great investment to be a part of. I think that is my other advice is spend the money for consultants and also spend the money for the best staff.

I hired a president to take over the management of our company. That is how I call this semi-retirement. Double O now has a president, and it is not me for the first time in its history. Double O is much healthier because I am not involved because it reached a point that I needed to step back. Someone else with a different set of eyes, more experience, needed to step in.

This gentleman has done a tremendous job. He is earning more than I earn. I am happy to pay him that. I had a vice-president and after a few months, he realized the vice-president needed to go. Again, another lesson, I had person after person telling me, “This guy is a problem on your team and your leadership,” and I would not hear it. Instead, I kept him on. When I brought the new guy on, he saw it as a problem and he let him go. It’s something that should have happened years ago.

We have a local billionaire here in Fort Worth Texas. When I spoke with him, I came up with two great thoughts. One was to hire the best people on the planet to get the job done for your company. The question I asked was, “How do I know if I am paying them too much?” His answer was, “You cannot pay them too much. If they are the best people on the planet, they will ensure, demand and guarantee that you have ROI.” I thought that was great counsel.

The other thing, he became a billionaire when they had an exit that he owned a little less than 1% of the company. That was a big exit at $35 billion, so 1% would be $350 million, which he has since grown that. That opened my own eyes and my own career. I had always thought, “I must own 100%,” or if I am in partners, “I must own 51%.” I have learned that is not actually the case.

It is interesting you bring that up because on One Enterprise and One Property Management, I own exactly 50%. My son and I were partners in One Enterprise for fifteen years. I was president and I was the majority by 1%. He is working hard and we had always gotten along well. I was very nervous about a partnership. I did some things to change it around so that he had 50% because it was the right thing to do in that situation. I have never regretted it. We both still work really hard. It is gone. It did not change anything in our relationship or in our business. It was the right thing to do. When we started One Property Management, we started it with 50%.

 

Step back and learn from someone else with a different set of eyes and more experience needed to step in. Click To Tweet

 

The foundation is you start out with the best people on the planet, and then the details are not quite as important because you started with real quality. Thinking back across your career, what about a warp speed moment? Things are going pretty good in your business, but all of a sudden, you make a hire, you make a strategy change, you do something. All of a sudden, you have this hockey stick of growth. You are in one of those times when it is explosive. Got one of those you can share?

We have experienced that. We were on the Inc. 5,000 list, three years in a row, and that is challenging to do. It is not necessarily challenging to get there. You have got to be one of the fastest growing companies in the nation, but to hold that position three years in a row, the way they do their calculations, the second year is a little tougher. The third year is even harder because it is average in the prior three years. We were able to do that. We could not have achieved at the fourth year, fifth year or whatever, but the reason was because we had that one hockey stick year where we grew 156% in one year.

I know there are a lot of companies on that list that grow thousands of percent a year. That was not us, but we are in construction. We are not in an industry where we can easily ramp up sales. We have to ramp up a lot of people, facilities, overhead costs. Those are some of my excuses. We had that experience where we really ramped up.

The impetus to that experience was the very thing I already mentioned, bringing on and spending some money on those consultants. First, the consultant we hired and then secondly, also becoming a member of EO. Joining EO is how I began to get the courage to bring in some consultants. The fact that I am a member of EO gives me access at that base level price to incredible amounts of knowledge and wisdom, even in my own partners or friends. We have access to all of this knowledge as a member, but still hiring the outside consultants to come in and dig deep in our company and still was an important next step. Those two steps are the key. They gave us a hockey stick.

EO has been huge in my life. It’s how we met and know each other. I hired my first coach after I had joined EO. I was a little bemused that I did it because I had already been an entrepreneur 25 or 26 years and started 10 companies. There were a couple of real stinkers in there, but most of them were pretty good. That was huge for me to get. If you could pay someone almost an unlimited amount of money to give you the exact answer, give you the exact strategy where you could explode your business, why would you not do that? That makes no sense.

You would not do it out of fear. That is the problem. That has to be overcome. You have to recognize that, “I am afraid to do this, but I’ve got to do it.” Sometimes we do not do it out of pride, “How could that guy know more than I know about my business. I have been here since day one. I started it and I know all there is to know.” We go through life with blinders on.

Sometimes, that professional distance is exactly what is needed to see things. Just like you already shared, the VP who maybe should have gone a couple of years ago, somebody from the outside comes in and says, “This is toxic, we cannot tolerate this.” Maybe it was not toxic, but it is negative anyway, “We are not going to tolerate it, so we are going to change it.”

We lost a critical people because I did not notice that he was the problem. Even though in an exit interview, they would say, “I am quitting because of him.” The head of HR that would tell me this is my wife.

We’re into the final turn, I can see the checkered flag. They are waving it. I want to put you into a time machine. I want to take you all the way back to twenty-year-old Mike. I am going to give you 90 or 120 seconds to share a piece of advice you know now you would tell yourself then that would speed you along your entrepreneurial journey. Into the time machine you go, twenty-year-old Mike, what would you tell him?

 

TPE S2 20 | Entrepreneur

Entrepreneur: Spend the money on consultants and for the best staff.

 

I would tell him the same things we have already discussed, and that is don’t be afraid to learn from others. In fact, it is the best place to learn. Even primarily your own team, my own employees, my own spells, I had a great team of employees in every company that I have built. I have learned through open book management processes how to gain their knowledge and input into the company. That too has had a huge impact on our growth.

I apologized at one point to Jack Stack, the author of the book, The Great Game of Business, considered the father of open-book management. I apologize to him because I read his book years earlier, and I read it and said, “This is it. This is what we must do.” I felt like it was not quite the time and I did not do it for many years.

Once we finally did, then I began to learn from my own team a lot more. I learned from them and they learned from me in ways they had never learned. That changed how they acted in the company, toward the company, how I acted toward them. It brought us together as a team. As a team, we can do amazing things. Individually, it’s not going to happen.

I loved the book and the concept. If you have not read the book and you are an entrepreneur, The Great Game of Business is a phenomenal read. They even teach it. I think they now have an educational arm to that. Thank you so much for joining us and sharing your wisdom. We are grateful.

Thanks, Don. It was a good time.

That is this episode of the show. See you next time. Thanks.

 

Important Links

 

About Mike Otis

TPE S2 20 | EntrepreneurMike Otis, Founder of Double O, Inc has been a practitioner and fan of Entrepreneurial Operating System (EOS), Open Book Management and Entrepreneurs’ Organization during his career as founder of 4 Companies (there’s a 5th in the works).

Mike’s Companies have won numerous awards like Forbes Small Giant and has been named to the Inc 5,000 three consecutive years. Mike is currently fighting cancer with a ferocious grace and dignity.

 

 

For information on how to work with Don visit Work With Don Williams

You can also reach out to Don Williams at https://donwilliamsglobal.com

Please join Don and his businesses in support of St. Jude’s Children Research Hospital in its Mission to cure Childhood Cancers. You can donate to St. Jude at stjude.org/donate