Interview with Daven Michaels founder of 123Employee


Interview with Daven Michaels founder of 123Employee

Skillsforfreedom:

This time, we're chatting with Daven Michaels, an entrepreneur who left behind the music business to become wildly successful with multiple business ventures. These days he's arguably best known for 123Employee, which is a virtual employee center based out of the Philippines. Now, alongside that, he's also become one of the world's leading business coaches and public speakers. We're going to talk all about all of that and so much more, but for now let's welcome Daven Michaels.


Daven Michaels:

Hey, it's great to be here. Thanks for having me.


Skillsforfreedom:

Well it's great to have you with us. Now for those people that haven't perhaps come across you before Daven, maybe I could start by asking you just a little bit more about your background, where you're from and how you also discovered your entrepreneurial streak.


Daven Michaels:

Yeah, sure. Mine is an entrepreneur's story. And if you're an entrepreneur and you're listening or reading this, you probably have one too. And I used to think that mine was so unique until I started speaking and teaching and empowering and making a difference in entrepreneur's lives that I realized that all entrepreneurs really have a story. Mine starts at the tender young age of 15. I didn't have any brothers or sisters. I was an only child. My parents encouraged me to do whatever I wanted it to do. All the dumb ideas I had, they encouraged me and I had a few smart ones too. And so at a very young age, I started doing entrepreneurial things. It was something that drove me. I was excited.


I didn't like high school. I just wanted to get out there. I want to make money and see my way in the world. And so my very first business, I was designing clothing for music groups, and it was in the early '80s. And quite frankly, I had no clue what I was doing. I was working with these bands. Most of them were playing their garage. I was designing their costumes. So most of them were playing their garage or very small venues. And then an amazing thing happened. MTV came on the air and it changed the face of music and changed my life. So I was working with some of these bands that had nothing going on. And within about 90 days, most of my bands had record deals. Within about a year, they were selling millions of albums. And I rode that wave and found myself working with some of the biggest bands of the '80s and '90s, Prince, Madonna, Cyndi Lauper . Over on your side of the world, Thompson Twins, Duran Duran, gosh, you name it, so many of those bands.


It was a blast and it was especially incredible touring with these bands, especially at such a young age. And it literally happened overnight. We would play these small venues. They would bring us to the venues. We'd come in through the backstage just before the bands would go on. And I remember there were 600 people in the room, a thousand people in the room and then 5,000, 10,000, 20,000. And within about a year, we were playing stadiums and it was a wild ride. And that was the beginning of my entrepreneurial career.


As you alluded to, most of my businesses were around entertainment communications. From there, I wanted to be a recording artist. Well actually let me back up a second. From there, I had a telecommunications company and then I became the biggest electronic music event producer in the US and I'd throw parties eventually for about 15 to 20,000 people a night. Because I had that built in fan base, I actually had a short career as a recording artist, went on tour for a while. I did a couple of albums and then I started writing and producing for others. And that took off. And I was working with a lot of big bands. My partner, Layla discovered Tupac, which plummeted me into the hip hop world. That was a wild ride. And I really had a good run there.


Quite frankly, I would probably still be in that business today, except Napster came out and there was about 50 million people downloading free music. I saw the writing on the wall and I bounced. And the only thing I really knew how to do was produce. And so what seemed like the next step for me was producing television. And it was right at the beginning of reality television. And I hired a huge staff and unbeknownst to most of them, they were actually training me how to do television the same time I was paying them. And we didn't really have any big successes in television because I was only there a few years and then my outsourcing business took off. And we can talk more about that.


But as you said, that was 123Employee. Started off a small shop with about 10 employees. And today we have nearly a thousand of them. It's been just an incredible ride. Today we work with entrepreneurs all over globe, some of the biggest thought leaders on the planet. We do all the busy stuff or BS, busy stuff in their business, everything from internet marketing, social media, telemarketing back office tasks, inbound and outbound voice. It's basically virtual assistant services for small businesses, customer service for larger companies. And our mission at 123Employee is to rescue lifestyle starved entrepreneurs, give them their time back and their lives back. And we've been doing it for well over a decade and it's been a lot of fun.


Skillsforfreedom:

I was going to say it sounds like you've done so much in quite a relatively small amount of time. To hear that you've rubbed shoulders with the likes of Prince Madonna, Duran Duran and so on. That's impressive enough as it is. But then to go on to have this wildly successful business as well. Was that always part of the plan, would you say Daven? Or is it something where you just got lucky, would you say?



Daven Michaels:

What I've found over the years is that most entrepreneurs or successful people will take credit for their success. They'll take credit for their luck. And I believe wholeheartedly that luck is when preparedness meets opportunity. Luck doesn't just fall typically on your lap. You get to that point where you have good luck. You build a network. You become proficient in business. But I have to say that if you've had any level of success, you had to have had luck in your life. And I've met plenty of people that worked hard that had the qualifications and didn't achieve what they wanted achieve. And a lot of that is luck. A lot of it is being at the right place at the right time.


I have a dear friend of mine that is a perfect example of luck is when preparedness meets opportunity. He hustled in the real estate space for decades. For decades, he paid his dues. But on top of that, he happened to be at the right place at the right time. Today, he's making insane money. But it's a combination. He worked, he paid his dues, but there's plenty of people who've paid their dues. But then he was at the right place at the right time. But if he didn't have that network and those skills, he probably wouldn't have taken that very far. So anybody, I believe that's had any level of success, definitely there is luck in the mix. And then of course there's skill and there's resources and there's everything you built over the years.


The reality is I have had a lot of success and when you zoom out on it, it looks incredible. But if you zoom in, there was trials and tribulations and it wasn't over that short a period of time. The reality is I'm old. I just look a lot younger than I am. And so it was several decades really. But I was fortunate enough to have some early success, which definitely helped out a lot. But it's a process and being in business for yourself is full of ups and downs. But eventually you get to a point you've been doing it long enough, you can zoom out and go, "Look at all my success."


Skillsforfreedom:

It's true. It's true. And how do you balance your family life? Because with 123Employee being based out of the Philippines as you mentioned, does that mean you have to in normal times travel a lot?


Daven Michaels:

In the early days I did. I was in the Philippines on a quarterly basis. I used to average about three to four, sometimes five months a year in the Philippines in the early days. But I knew early on that unless I was going to move my family there I wouldn't be there for long periods. And quite frankly, in the early days of 123, I was just going to live in the Philippines. That was my plan. And then I met my girlfriend, Liz, and she's in the States. And then we had kids and it just didn't really make sense for us to live full-time in the Philippines. So I realized pretty early on that I would have to put a lot of systems in place and a lot of staffing and management in place to make my organization run well without me. And that's what I've been able to do.


It took a long time to get there, but today whether I'm there or not is not that big a deal. I'm able to run the business virtually. Of course COVID probably made it more virtual. But in reality, my business was pretty virtual for many years now. I have a tonne of managers. I have my C-Suite, all of the finances of the company are handled in the US even though we're a Philippines company. So really it's really hummed for many years. And I am intimately involved in every aspect of our business on a daily basis, but I don't micromanage the business. I have a lot of really talented management that do an exceptional job at running the company. And that allows me not to be there all the time.


Now at the same time though, I do spend a lot of time traveling because one aspect of the business is I'm the spokesperson for the company. And I speak on stages all over the globe. And quite frankly, that's probably my favorite part of the business. And the cool thing about being self-employed is that you get to call the shots. You get to decide what your business is going to be. You get to mold that business. And about a decade ago, I got to a point in my business where I said, technically, I don't really have to work anymore. Technically I don't. I'd have to alter my life a bit to not do that. But I didn't really have to. And I said, in this decade, I've hit a point in my life that if I'm going to keep doing what I'm doing, if I'm going to keep working hard, keeping really dedicated to my business, then I'm going to make some big shifts.


One of them is today I only work on what I'm wildly passionate about. So if I didn't enjoy doing interviews like this, I wouldn't be here with you today. If I didn't enjoy traveling, speaking all over the globe, I wouldn't be doing that. One of the things I do in my business, I write books because books bring a lot of attention to the business. We've just released my 10th book. And that's something that I'm passionate about doing, something I enjoy doing. I'm an advocate for entrepreneurship. I love speaking and teaching and helping entrepreneurs all over the world. And that's just something I love to do. And also coming out of the music biz, I'm an entertainer, I love to entertain. And speaking on stage allows me to get that entertainment side out of me. So I am still traveling quite a bit.


So to answer your question, it was a long answer, is balancing work and your home life for the entrepreneurs is probably one of the most challenging things there is. And I'd say probably most of my business career, I didn't do a great job at it. It's just not easy. It's just not easy. Your business consumes you. Today I think I'm a lot better. I spend a lot more time with my family. I don't have to work as hard as I used to in the early days. But I still work plenty hard just because I'm driven and I'm passionate about what I do. And I think most successful entrepreneurs always feel like the clock is ticking for some reason. We have so much we want to achieve and do before the clock stops ticking and it's all over. So that drives me.


Skillsforfreedom:

With much of this, there's pressure but it's a different type of pressure now for you. When you first started, as you say, there was a determination to get this thing working. Whereas now there's almost a determination to have the lifestyle to go with the business as well. And that must be a nice position to be in. How long has it taken you to get to that position would you say?



Daven Michaels:

Oh my God, too long. The lifestyle component has been there for the last decade. But I always tell people I've been self-employed for 30 years because if I said how many years I've really been self-employed it would make me sound too old. But I'm probably just a few years from being self-employed for almost 40 years. So I'd say the first couple of decades, I worked my tail off and then right around decade three, I started to craft that lifestyle for myself. But even then I'm just really driven by wanting to make an impact on others.


Quite frankly, I've always been grateful to be self-employed. I don't think I could have really worked for somebody. I had some jobs early on, but I wasn't a good employee. And I took pride in my work, but I wasn't a good employee. I didn't really find my true Nirvana until I started speaking, teaching, empowering, making a difference in entrepreneur's lives and other people's lives. And so that's what really drives me. And I just want to do more and more of it, make a difference. And the cool thing is the more I do of that, the more clients we end up picking up at 123Employee anyway. So we end up making more money by making more of an impact.


Skillsforfreedom:

In terms of the business itself, when did you start 123Employee? And as you say, you started out with one person, how quickly did you see the growth and how did you know there was a gap in the market for something like this?


Daven Michaels:

Sure. Well, I'd love to say I was this incredible visionary and it just took off like a rocket. But unfortunately nothing could be further from the truth. So what happened was we started the business well over a decade ago. So I want to say almost 14 years ago, maybe 12 years ago. And back then big companies were outsourcing, but small businesses were not. Entrepreneurs were not outsourcing. There was no outsourcing company for entrepreneurs. We were literally first to market, which people always think, "Ooh, first to market. What a great advantage." I will tell you first to market is a disadvantage. I always say you can always tell the pioneers because they're the ones with the arrows in their back. And we were certainly not an exception to that rule.


So what happened was when we originally started the business, I thought it was this tremendous idea. I knew entrepreneurs needed it. It was a need, but it wasn't a want because entrepreneurs didn't know it existed. And on top of that, I had a problem with the fact that I was a US company doing business in the Philippines and outsourcing was a dirty word. So what happened was we would get calls and emails on a regular daily basis that said something to the effect "F you, we're going to burn your building down. F you, we're going to come kill you. F you." And so it wasn't pretty in the early days. So in the early days, we were definitely too early to market. Entrepreneurs didn't know that they wanted us yet. And you have to fill a want, not a need. And the other people just hated us and wanted to kill us. And so that wasn't so good.


So what was nice is within a year or two, a couple of years, Tim Ferriss's book came out, 'The 4-hour Workweek', which was huge for a lot of entrepreneurs. But also it was a big tipping point for us because we could switch gears from d