The Jay Kim Show #54: Mike Michelini (Transcript)
Today’s show guest is Mike Michelini, who runs the website Global From Asia, which helps global eCommerce companies with setting up cross border businesses in China.
Mike has a great backstory. He used to work on Wall Street for a while and during that time he was side hustling. That was even before that term actually existed. He was involved very early on in eCommerce and sourcing goods from China and selling them online on sites such as Ebay. His business got a point where it made sense for him to actually physically move to China and set up shop. So Mike’s been in Shenzhen for over ten years and he is certainly my go to guy when it comes to anything that has to do with cross border businesses in China.
Jay: Hi, Mike. How are you doing? Thank you for joining us today on the Jay Kim show. We are happy to have you on.
Mike: My pleasure, Jay, thanks for inviting me today.
Jay: No problem at all. You are a fellow podcaster, so I’m extra excited to have you on. There’s not very many of us out here in Asia, so it’s always nice to have some strength in numbers, if you will. So for our audience listening in, many of them might actually have heard of you because you are one of the few podcasters that has been around and been doing it for a while, but for those listening in that don’t know who you are, maybe you can give us a little quick introduction. Who is Mike Michelini and what do you do for a living?
Mike: Sure, sure. My name is Mike Michelini, American Internet Dude is kind of what I fit in some of my social media profiles. I’ve been podcasting a few years now at Global From Asia and even another podcast China Business Cast. So I love creating content. I blog a lot as well in text form. I do video blogs and all kinds of creation of content to help people in China and Asia business. I’ve been out here almost ten years, I’m sure we’ll get into some more details later, but I’ve done a host of different businesses. I mostly talk about eCommerce-commerce and online based businesses and online marketing and just currently I basically do CPA business, I’m a partner of a firm in Hong Kong and Mainland China corporation and audits. And I also have some books and online courses as well as a yearly conference cross border summit, which we just past the second one and we’re planning the third one next April. So that’s a really brief intro of myself. With you as well, there are so many things we do as online business owners.
Jay: Yeah, I think it’s really cool because, first of all, it’s funny because I literally googled podcasts in Asia and there was three and two of them were yours. So I was like, okay. He’s dominating the scene. And then yeah, your site is awesome, Global From Asia, and we’ll obviously get into all of that, but I love how much free value that you give out there, eCommerce, there’s certainly a huge demand for it because people always want to know what’s going on in Asia. Who’s on the ground there. Tell me not only news, what’s going on, but also if I want to set up a business or I want to do any sort of business in Asia, in China specifically, we’ve heard horror stories about people coming in and trying to do something and getting screwed by business partners or just having a nightmare of a time trying to get through the red tape. So I’ve found that your website is one of the best and most comprehensive and also you just give a lot of free stuff. So thank you for putting that stuff out there.
So why don’t we just walk through, you’re also an entrepreneur and part of this show is about entrepreneurship and I think your backstory is pretty cool because like me, we were both finance dudes and fully in the thick of working for a large corporation and you actually went out on your own and made a living out of entrepreneurship and building businesses. So I’d love to hear your story, maybe you could share with the audience a little bit of your story. What was the catalyst that made you leave Wall Street and start off on your own.
Mike: Sure. Basically I thought I always wanted to be on Wall Street, I kind of remember the movies with the cool stock trading floors and the action. I think you know what I’m talking about. There’s some classics out there. I was attracted to the energy. The funny thing is, I have an engineering degree because I went to a catholic high school and my dad was an engineer, so I was pretty good at math and science. They didn’t want me to get a business degree, they were really forcing me to get a technical degree, engineering degree. So I actually went through engineering school, but as soon as I got out I got into Wall Street. The funny story is they wanted me to work in the technology department in Wall Street, but during the interview I told them I don’t like to do technology, I want to do trading and the hiring manager in the interview was like, “You know that I hire for technology and I can only hire for technology.”
So anyway, somehow they like that I was honest, so I ended up coming back for another interview at Deutsche Bank and I picked Deutsche over Goldman, which a lot of people are surprised about, but I feel like I trusted them more. They had a little bit better reputation, I think. But that could be another story or we could dig into that if you’re interested. But basically, I thought I would make as much money as I could, I thought I had to get a normal job. I didn’t come from a family of entrepreneurs, I thought I had to get the normal job. I always wanted to start my own business, but I thought I had to do it later. I thought I had to get the college degree, I thought I had to get the resume, I thought I had to get the MBA, and then I could start a business.
It was the first day in orientation at Deutsche Bank and I sat next to a guy, I was still really good friends with him, and he had turned his senior design project into a mobile app. It was a mobile checkbook. He was a tech guy. I was actually still in operations, I wasn’t on trading, but I was in operations, so I was in tech and operations department. And what happened was, he saw all of my entrepreneurial spirit and I wanted to help him out and I started to dig into web server analytics and I started to dig into email lists. This is 2003 and I was so amazed, the power of the internet. And I was helping him boost his ranking in the app system for iPhone and Android, this was Java J2ME on non Verizon. It was so complicated, but it was these different marketplaces. But I loved, like you said you found me on Google, I loved being able to help how people find the app and download it and I was just kind of figuring out how to get more reviews or more downloads by giving away the app for free. So it’d go back to the current list and it gave them …
So I figured out he just saw in me, I was so in love with marketing online with tech. So I went back into tech while I was working part time at Deutsche Bank, and then I got into my own eCommerce-commerce in 2004 and learned a lot by making tons of mistakes, had no clue at all.
Jay: This was while you were still working at Deutsche?
Jay: Oh, wow.
Mike: I had to go through compliance. I didn’t want to sneak it, so I told Deutsche I had my own startup through their compliance department online portal. But nobody knew anything, my family, my coworkers, my college friends. I was just making mistakes like crazy. It took me almost five years, but I finally … it’s so hard to leave ’cause the money is so good. That’s the hardest thing. The money is really good.
Jay: That’s pretty interesting, though. So just real quick, two points. Number one, how you were saying that you always expected that you would have to go the traditional route and do your job first, maybe make some money and then you could see yourself as an entrepreneur later or build a business. And just a quick comment on that. There’s nothing wrong with doing that, and I think that’s the traditional way that a lot of people ended up becoming entrepreneurs or branching out on their own. And you do learn a lot of skills in large corporations, so I was right there with you. I was at Lehman during that time and there is a lot to be learned there.
and then a second point is, it’s interesting because you were actually side hustling before that term even actually existed. It was pretty cool.
Mike: I was on My Space, hustling with other entrepreneurs. It’s crazy, I still am friends with some people I met on My Space. I know I sound like a weird stalker dude or something, but I remember Friendster and My Space and all this stuff, yeah. Craziness.
Jay: So at what point did you decide, you know what, I know the money is so good and it’s like golden handcuffs, you can’t leave, but at some point you were like, you know what, money is money, I need to make a move. This is what I want to do with my life.
Mike: I did the same with Deutsche over Goldman. I kind of just draw out a matrix when I’m at this point where I’m trying to make a bigger decision and I write the plus and minuses of all of them and then I try to take an average of the amount of pluses and minuses. It’s obviously not a math formula, but some kind of a way to look at it visually. So I do the same. It was one negative, but I had three positives. The money for the eCommerce-commerce business were to mostly Ebay, a little bit of Amazon, before it was insane the way it is now. But it was mostly Ebay and our own website, and I had a partner, my roommate.
My partner was a little bit more conservative. He’s one of my best friends growing up in hometown. He moved out to New York as well and we were doing it together. I just always wanted to just double down, reinvest everything into it. It was making maybe a couple thousand a month for each of us.
Jay: That’s pretty good.
Mike: Yeah, but you can’t live in Manhattan. I was living in lower East Side, my rent was a couple thousand just alone. So the lease was coming up in New York, or anywhere, but especially New York, at least in that time, this was 2006. They were slips under your door, “You have one month left on your lease, please re-sign or we’ll start to …” it was so scary. So that was one thing, the lease was coming up. I had a roommate and partner and he was like, “Are we signing again, are you staying?”
So that was one. [inaudible 00:12:00] I was like, I can get out of this, I can get my deposit and all this crap back. So that was one, and a second was my bonus hit ’cause it was the end of ’06, and the third was my buddy. My hometown is Connecticut. My buddy, he’d moved out to California in Ocean Beach, San Diego and he’s like, “I have an extra room two blocks from the beach, it’s like $400 a month, don’t worry about a contract and there’re so many cool people here. Just get out here.” So those were the three pluses and then the negative was I was at four and a half years on my five year vest.
Jay: Oh yeah. So for the audience listening in that is unfamiliar with that, Mike had some company stock that was awarded to him as part of his bonus that was on a schedule, so you have to stay a certain amount of years before you actually get that. It’s all tied into your compensation, it’s a way of the firm to retain you and not make you leave. So he was six months away from unlocking another large windfall.
Mike: Yeah, it was a big amount. It’s hard to log into it all. There’re so many different log ins, at least where I was. You had all these log ins, so I would try to log in, but it was a decent number. It was contributing every month or so. But I thought to myself, yeah, that’s six months, that means I’ll be back on my lease, I’ll be halfway closer to my next bonus, you know what I mean? And then I’ll have to stay another year. I guess I could sign the lease and I could wait til that comes in, but then I’ll probably be like, well, another six months I can get the next bonus. And I know so many of my friends still are waiting.
Jay: I did that, yeah. We all did it.
Mike: So I was like, I’m gonna walk from that. That was the one negative, a little bit. But now Deutsche Bank stock is a lot lower now than it was then.
Jay: You made the right call. What did your parents think about this whole thing? Were they supportive?
Mike: I remember, they’d moved down to Florida, so I would go down and see them. It was around the holidays in ’06, so I spent Christmas with them telling them about it. I was already kind of made my mind up and they already kind of started to give up on me already a little bit on influencing my decisions ’cause I kind of throughout my childhood would try to hear them, but I would usually do what I was thinking. So they were pretty supportive. They were just still in shock ’cause I was doing really well. It’s hard every two weeks in your bank account you get a huge deposit. But they were happy for me and they could see that I liked to do my own business. My dad listens to talk show radio. I remember I even called in to Bruce Williams. My dad was kind of supportive of me to get out there.
Jay: That’s awesome. Okay, so you took your friend’s offer up and you moved out West. What was your first … at this point you said you were doing some online stuff, Ebay and this and that. What was the big catalyst that made you move to China?
Mike: We were doing Ebay and eCommerce-commerce, so I was buying off Alibaba and we were moving up the supply chain slowly. I was drop shipping products, so I didn’t want to have to stock too many, but I started to stock. Of course drop shipping is great, ’cause you don’t have too much investment, but you’re also not differentiating. We started to get into wholesaling and then buying direct. So we’d already been buying from China even while I was working in New York with my partner.
Jay: What sort of products were you-
Mike: Bar supplies, kitchen and bar. Cocktail shakers, kitchen and bottle openers, pour spouts, just fun stuff. Really random. The way I even started to figure out what to sell was I just sold a lot of different stuff and then I just keep narrowing it down and then made a specific Ebay account for the bar products, made a website, newyorkbarstore.com, and just kept on getting out there, figuring out, listening, tweaking, pivoting or flossing and growing.
Jay: That’s pretty cool that you were literally doing it by trial and error. Now if you just google search how do I flip products on Ebay or Amazon from China, there’s like formulas and there’s an entire world out there that teaches you exactly what the products are that you should be selling. But you were the pioneer, man.
Mike: Yeah, they say pioneers come back with arrows in their backs sometimes. But I loved it. I had a couple of professors that were adjunct, and that means they had worked in the real world, so they were nice enough to stay in touch with me, specifically one of them. But he gave me some tips, just a couple of keywords. I remember third party fulfillment. I was using my fraternity house as a shipping center. I was already alumni, but I was still recent grad, so I was using … well, I wasn’t using, but I was leveraging my younger brothers in the fraternity and they were finally saying man, this is getting to be too much, it’s almost like pallets coming in.
So I was talking to one of my adjunct professors. He’s like, “You ever heard of third party fulfillment?” I’m like writing down on a notebook, holding the phone on my shoulder like, “Third party fulfillment.”
Jay: So the volume and this sort of thing, as you moved up the supply chain it was such that your business was moving to another level, it sounds like. Either that you just saw an opportunity that if you were on the ground in China that you could just-
Mike: Yeah, so China I was already dealing with it and I was frustrated. There’s so many details. But basically, actually there was a little bit of a conflict of interest with my quitting the job because I wanted to convert from side hustle, which wasn’t a word then, to full time. But my original partner was still a major shareholder, but we cut in some fraternity brothers and friends. So it’s one of those stories of friendship and business partners, which is okay, but also we didn’t have clear goals. So they liked the side hustle. They like a couple thousand in the bank while they were working. I wanted to do it full time.
So what happened was a lot of those My Space guys I met in the bar products industry for link trading and networking also were saying, “Oh Mike, you’re buying from China? We’re buying from China, too, can you help us?” We were chatting about it, so I started to make a training business on top of my eCommerce-commerce. So what I did was, which may be a bad thing, but instead of fighting my old business partners on eCommerce-commerce business, I set a new company up as a B to B business, sourcing for that company as well as for other companies.
Jay: That’s smart.
Mike: So I turned my old business into my client and other guys in the industry already knew into potential clients which were very warm leads to work with. So that gave me a client base to start with for sourcing and I kept eCommerce-commerce as well.
Jay: Cool. So you moved to China in which year? 2000-
Mike: Seven. Yeah, I said ’06, it was Christmas ’06 when I was kind of ready to leave Deutsche. I gave my month’s notice in January, so it was maybe a half year in San Diego, trade shows in the fall and in Asia, like Canton Fair, a couple sources shows. I didn’t think I was gonna live here, honestly. I didn’t know where I was gonna live, it sounds really crazy. I blogged this. This was when I started really enjoying blogging, ’cause I started a blog after I quit Wall Street to just let people find out what was gonna happen. I was like, I’m moving out of San Diego, ’cause I came to China for a month in ’07 for trade shows and I kind of just put everything I owned into storage, kind of. Or more like closets. I came out to China not knowing if I would stay in China, go back to California, go to Florida with my family, go to China, go back to New York. So I decided to spend more time in China, which was end of ’07.
Jay: That’s awesome. So I want to fast forward now to present day. What has your business transformed into? You still run Global From Asia. What has that business transformed into? Who are the types of clients that you can help with your business?
Mike: Sure. So there’s been actually a few other businesses in the middle. The eCommerce-commerce business I ended up selling in a couple different parts to my team, actually. My staff in China and the Philippines. I started a mobile app. I went to China Accelerator, which was definitely the first and I’d say one of the best incubators in mainland China for Western tech startups. And I did a mobile app for a couple years and then merged with a Chinese company.
Now I’m full time in Global From Asia, which I’m really starting to build it out after making all this free content. But it’s a few different things. There’s all the amazing free content, which we’re still creating regularly. But the way we monetize is we have a membership program for people that want to get on the inside. We’re targeting, of course, SMEs. We’re trying to help Western SMEs in Asia and China, so we have monthly calls and a private forum. We also have these job boards. We have a marketplace for service providers and we have this expert platform for private workshops and meetups. So basically it’s freemium for the super fans or the super supporters can become a member. That’s our main way.
We also have our yearly conference which has grown every year. We just passed our second one with 200 people, it was a two day full conference with over 30 speakers, all about cross border eCommerce-commerce, cross border business. So it’s really exciting. We’re trying to kind of bridge that gap here in China.
Jay: That sounds pretty cool because again, when you come out here, and I’m just talking first hand experience, when you come out here and you don’t really know what’s going on and what the relations are and how to set up business and how to do even something like a bank account. We’re working together, you’re helping me out on some things. But you know, that sort of thing, you kind of need someone that you can trust and that’s kind of Western and has gone through it before. When I first came here, I was referred to all these local firms and I was like, they’re not gonna understand. I’m American and let me be careful here what I say, but I’m American but I’m living offshore and I want the most favorable tax structuring possible for any sort of business I do over here with exemptions and this and that. I didn’t have a guide or anyone to hold my hand and show me the way.
So I think that there’s a lot of value for Global From Asia. Who would you say is your sort of avatar? I’m probably not your time type of client, even though you have helped me in the past. Who would you say your avatar of that site would be?
Mike: Sure, it’s definitely people that are not really in Asia, or they travel here, but maybe not fully based here, and they want someone, like you said, that they can trust, that they understand the local markets, but also understand the international markets. I love newbie entrepreneurs, it’s more for people maybe like I was when I was in New York City and frustrated with trying to figure out what to do. I was already doing my own business, I already had revenue, I was trying to scale up and grow into Asia. So I usually target people that are operating business, especially if you’re gonna set up in Hong Kong or in Asia, you should probably have at least a half million in revenue a year, is what we usually say. Better to have a million.
So you’re already doing business. Of course, we’re talking about taxes and all this globalization and I wish it was easier for anybody, but especially with the bank environment now and other things, you really to already have some business history. So we’re targeting scaling. I like to say scaling business that really way to go global from Asia. Or Western. I had a couple calls with potential clients today and I sometimes advise them that it’s not ready yet for them. It’s hard for me to do that and even that they really want to do it. But you gotta be ready for it.
Jay: So are there businesses that are onshore in China that are looking to go overseas that you help out as well?
Mike: My wife is my partner, in my life and in my business. She’s mainland Chinese, so that’s how I even met, when I do my app startup, she does business development here. So she’s always looking out for me. I’ve bene out here ten years, so I of course have my own network here. It’s a different type of model, and it’s something we’ve been discussing, but we do localize a lot of the content in the podcast into China on We Chat. Even still, I’m still writing and talking to a Westerner more than Chinese in my current model. I know there’s always people that tempt me, but it is a different avatar.
Sometimes people say I’m racist or something ’cause I’m not helping Chinese, but they’re doing pretty good on their own right now, I think. Selling online. I think I feel like there’s a lot more help for the Western business in Asia. But of course, also they’re not so online. The tools in China are just so different in the way that they consume content and everything. They do come to our events, so the best time for us to help the Chinese seller or service provider is at our cross border summit. We also have some smaller meetups and trips, too. But primarily it’s Westerners.
Jay: That’s awesome. Let me ask you, what are some of your plans for 2017 looking forward? You mentioned the big conference which you just had. It already passed for this year, right?
Jay: But it was very well received, so you’re obviously gonna do another bigger and better one next year. What do you have in store for 2017? An goals for your business and personally as an entrepreneur?
Mike: Sure. The craziest thing, a week before this past cross border summit, we got an email from a logistics company. They wanted to come in as a big sponsor for 2018. And I’m like, wait, it’s still 2017. They’re like no, we have a budget for next year. So basically each year it’s getting more and more serious. We already are talking to sponsors and speakers for next year. Of course some people said, I post on my social media, “See you guys next year,” and they’re like, what are you going to go into hibernation mode? But of course it’s not like we’re just gonna wait until next year’s conference, but of course that’s our big thing. Some people want us to do it twice a year, but I don’t really want to dilute the effect of it, I think.
Of course before that, we’re been building out these tools like I mentioned earlier, like a job board. We’re just kind of trying to be like a hub for these international eCommerce-commerce or cross border eCommerce-commerce business owners, SMEs. So we’re building a service marketplace, so we have QC companies and sourcing companies and other service providers that can help you in China and Asia that are listed on our globalfromasia.com’s directory. And then we also have the jobs directory and we have the expert’s platform. So we’re trying to actually have a more community driven. So in Vietnam we’re planning some Global From Asia meetups. China, hopefully and Hong Kong, we’re finding chapter organizers. There’s other organizations that do something like that, so we’re trying to kind of build out this community and monetize hopefully by having our super fans become yearly members to support the movement and then come to our yearly conference. So it’s a lot of work and there’s also some courses in the works and books all about China Hong Kong business and growing your international conglomerate.
Jay: Yeah, unfortunately we have to wrap up here, but I’ve already in my mind, I’m like I already know I’m gonna have you on the show again and we’re gonna go into a deep dive of let’s say I want to start an eCommerce-commerce business and go over that. Because I know that there’s probably a lot of listeners that are interested in that sort of thing.
Mike: Yeah, there’s tons of opportunity.
Jay: We’ll have to leave it as a cliff hanger for our audience for a couple months. But last question is where can people find you, follow you and connect with you, maybe learn a little bit more about what you do?
Mike: Sure, it’s mentioned a couple times, at Global From Asia. It’s a little bit long, but globalfromasia.com. Then there’s mikesblog.com, which is there I put some of my personal videos. I kind of separate the baby phots. So if you’re into baby videos and baby photos, I separate the two. So business mostly on Global From Asia and mikesblog.com for the family and personal life kind of insights. As well as some more personal life in China. That one’s been around ten years, so those are the two main spots to find me.
Jay: Awesome. That’s another topic that we unfortunately didn’t have time to cram in that we could have gone … that could be a third episode, is what’s it like living in Shenzhen. Which is another thing I’m sure everyone is curious about. Well Mike, thanks so much for our time, and it was such a pleasure having you on the show and we definitely will have you on again, so I’m looking forward to that.
Mike: Great, thank you for having me, Jay.
Jay: All right, take care.
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