I had the pleasure of interviewing Michael Lagnese
Michael’s career started in entertainment where he focused on film and television development, co-producing the TBS hit Sullivan & Son and Co-Executive Producing Netflix’s F is for Family, before progressing into strategic private investments and entrepreneurial projects. Michael’s first venture delivered a strong ROI to its investors, leading him to co-found Full Spectrum Biotech, a leading force in the plant-based wellness space, with business partner James Baum. In 2021, Michael launched Mojave Rx, a consumer brand with the mission of utilizing the plant-based active ingredient cannabidiol (CBD) to create highly potent, top-quality products that support physical rehabilitation and muscle recovery to increase athletic performance.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I moved out to California in 2003 with a BA in Film Studies from the University of Colorado looking to pursue a career in the film and TV business. Like everyone else trying to break down Hollywood’s door, I started off as a production assistant, working 80–90 hour weeks. I began working with actors and spent a couple years assisting Orlando Bloom and getting to work on the Pirates of the Caribbean movies, and then working with Vince Vaughn on Couples Retreat and The Dilemma. Eventually I got promoted to producer at Vince Vaughn’s company, Wild West Productions, where I had the pleasure of co-producing the TBS hit Sullivan & Son and Co-Executive Producing Netflix’s F is for Family with Bill Burr. But even though my day job was as a film & tv producer, I was always doing side start-ups. I co-founded an organic smoothie bar called Glow Bio, I managed professional boxers, and I even put together a farmland investment portfolio. After a while, I realized that I was more invigorated by the start-ups, so I left entertainment and focused on my entrepreneurial endeavors.
Was there somebody in your life who inspired or helped you to start your journey with your business? Can you share a story with us?
I know it sounds corny, but I’m truly inspired by my Mom, Joyce Lagnese. She had my sister and was pregnant with me when she started her law firm and was able to juggle a highly successful career in law while still being a present and loving mother. Her work ethic and dedication to her family made a lasting impact. As a kid, I was always looking for the short-cut or easy way out. Inevitably it would always back-fire and she would always say the same thing to me “short-term sacrifice for long-term gratification”. That really stuck with me as I got older and helped me develop a philosophy of doing the hard work up front knowing that the rewards will come in the long term.
What do you think makes your company stand out? Can you share a story?
Mojave Rx stands out from the crowd because we offer extraordinarily potent and top-quality products at affordable prices. And we are able to do so because of our highly efficient supply chain and vertical integration. One of the issues we’ve actually experienced were several retail stores not wanting to carry our products because they were priced so low. The store was worried that it wouldn’t be able to sell any other brands! I feel like that’s a good problem to have.
How have you used your success to bring goodness to the world?
At MojaveRx, we make products that really have the power to improve people’s day to day life. I receive a tremendous influx of gratitude from people who use our products to assist in recovery from injuries, chronic pain, or who are dealing with sleep disorders. It’s a great feeling to know that what you’re doing is making someone’s life better. And while we are a ‘for-profit’ company, we give away a lot of products to those people who need it but who may not have the financial means to buy it. Also, MojaveRx has committed to donate $1 of every sale to charities that support our country’s transitioning veterans. A cause which I firmly believe needs greater awareness as our nation struggles with an opioid, homelessness, and mental health crisis, all of which have a disproportionate veteran population affected.
You are a successful business leader. Which three-character traits do you think were most instrumental to your success? Can you please share a story or example for each?
Determination. You might have a billion-dollar idea that is a guaranteed home run, but you still have to develop the idea and get it to market. Invariably, along the way you’re going to be faced with adversity, and that’s where the rubber hits the road. People who achieve success aren’t just lucky, they’re faced with the same obstacles as anyone else, they are just determined enough to fight their way through them. With the attitude that nothing that can stop you except yourself, you begin to realize that every problem has a solution. And sometimes the problems you encounter force you to evolve and elevate your idea, making it not only stronger but more durable. I remember one of my first entrepreneurial endeavors started going south due to some irrefutable partners. There really was no apparent way out of the hole and it was looking inevitable that we were going to lose everything, including our investor’s money. But I was determined to fight to the end so every day for the next three months I kept poking and prodding the situation, and ultimately a small window of opportunity presented itself which resulted in a profitable exit.
Risk Tolerance. Ben Franklin’s quote “nothing ventured, nothing gained” is as true today as it was when he said it. I’ve always had a high tolerance for risk, which is kind of a prerequisite for entrepreneurism. One time, I remember committing to purchase a very expensive piece of capital equipment with my business partner, I think it was $350k or so. Our company wasn’t even funded so we were committing our personal assets, and it was basically all the money I had at the time. But if we waited until we were funded then it would be too late because it was a four month lead time and we were dealing with a two week harvest window. The risk was that we wouldn’t close funding and would be personally stuck with a very expensive machine that we had no use for. We purchased it, we got funded, we used the machine, and because nobody else took the risk we did, we were one of the few people with this equipment when the rest of the country needed it, so we were then able to sell it for a 67% profit that same year!
Decisiveness. Being able to act quickly and make decisions based on limited information has served me well throughout my career. However, if you’re making a lot of decisions, not all of them are going to be right. So, I think its important to maintain a ‘learn and burn’ philosophy when it comes to the bad ones. Learn from them and move on. If you end up second guessing yourself, losing confidence, or becoming fearful of making a mistake, then you’re likely going to spin in circles until your company crumbles out from under you.
Often leaders are asked to share the best advice they received. But let’s reverse the question. Can you share a story about advice you’ve received that you now wish you never followed?
“Great is the enemy of good”. This is a saying a contemporary used to say and at the time I thought it contained a lot of wisdom. Good is good, right? “If it ain’t broke, then don’t fix it.” But the truth is that being good is the bare minimum starting point. At every level of your company, from HR, to manufacturing, to design, you have to strive for greatness. Constantly push yourself and your team to achieve. If you fall short of a very high goal or standard, then chances are you’re still in a pretty good spot. But if your goal is simply ‘good’, then falling short of that is untenable waters. Frankly, settling for good can be seductive because it’s the easy way out, and it’s lazy. Every time I’ve settled for good, my project has eventually failed, been beaten by competition, or has not been as successful as it could have been.
Can you tell us a story about the hard times that you faced when you first started your journey?
One of the most challenging times I’ve ever experienced was while running a manufacturing company. In the 2 years since it was founded, we saw a 97% price compression in the market for the product we were making. When you build proformas based off one unit selling for $10,000 each, and now it’s only worth $300, it’s hard for any business plan to hold up. Basically, the market became over-speculated by manufacturers, there was an oversupply and the price margins quickly evaporated. Something like this is hard to process and even harder to navigate. You can do everything right on the operations side but sometimes market forces outside of your control can decimate your business.
Where did you get the drive to continue even though things were so hard? What strategies or techniques did you use to help overcome those challenges?
We had to face the ugly reality we were dealing with and make some tough choices. The ‘sunk-cost fallacy’ is real, and as humans we become emotionally connected to investments and decisions, leading us to throw good money after bad even when any rational person would see that further investment is a wrong choice. So, recognizing that, we reframed the conversation away from, “how do we salvage this division”, to “assume we are starting from scratch, with all of our assets and the current market landscape, what’s the best path forward?” So, we did a hard pivot, completely shutting down that entire division, finding a higher margin vertical within the same sector while investing into a long-term project into a new sector that would utilize all of our capital assets and intellectual property. I’ve learned that you must always be willing and able to move on a dime and completely restructure your company. This may mean layoffs and other pain points, but the alternative is worse. As soon as you know that you’re not positioned where the market is heading you need to move mountains to get there.
The journey of an entrepreneur is never easy, and is filled with challenges, failures, setbacks, as well as joys, thrills and celebrations. Can you share a few ideas or stories from your experience about how to successfully ride the emotional highs & lows of being a founder”?
I recommend channeling both the good and bad into motivators to achieving your ultimate goal. Unless you’re getting your ‘big exit’, the fight isn’t over and celebrating too soon can lead to complacency. Conversely, don’t let setbacks get you deterred. What seems like a setback today may actually end up being a huge benefit tomorrow. So take both ups and downs with a grain of salt.
Let’s imagine that a young founder comes to you and asks for your advice about whether venture capital or bootstrapping is best for them? What would you advise them? Can you kindly share a few things a founder should look at to determine if fundraising or bootstrapping is the right choice?
It all depends on the type of company you’re trying to launch, and the resources required to do so. I personally recommend bootstrapping as much as possible for two reasons. First, it forces you to be hyper-efficient while you refine your offering, which creates a valuable corporate culture as you scale. Second, it allows you to increase the valuation prior to taking in outside investment and preserving your equity ownership of your own company. Capital needs are just one component to consider, relationships and intellectual property are another and sometimes more valuable than money. It may make sense to deal with a VC firm that can strategically place you with the right partnerships that will propel your start-up much faster than bootstrapping ever could. But no matter which way you go, do the math to understand what you’re giving up versus what you’re getting in return.
Ok super. Here is the main question of our interview. Many startups are not successful, and some are very successful. From your experience or perspective, what are the main factors that distinguish successful startups from unsuccessful ones? What are your “Five Things You Need To Create A Highly Successful Startup”? If you can, please share a story or an example for each.
Vision. First and foremost, you must have a clear vision on how your service or product is going to be successful in the marketplace. Imagine the end goal and then begin deconstructing the steps it will take to get there. Clear vision and an enthusiastic belief in what you are doing is infectious. Remember, most of the time people are investing in the person more than the business.
Define Success. Too often we equate success with market share, profits, and revenue when success can mean something different for everyone. For some people, bigger isn’t always better and their goals might be more oriented towards a slower but more stable growth trajectory. Or for some people, success isn’t based on profitability at all but rather social impact. It’s a good mental exercise to conduct prior to starting your business and important to implement into your strategy from day one as it will affect every decision that is made.
Team. You can’t do it all yourself, but in the beginning you’re going to probably have to. Though as soon as financials allow, you will start to build your team. Most of the time, people tend to hire their close friends or other convenient options. While it’s nice to have people you can trust, too often their skill sets aren’t actually what’s needed for the position. And furthermore, because of the close relationship, it becomes very difficult to manage them effectively. I’ve made this mistake before and it not only hurt my business but it cost me a relationship. I recommend taking the time to really understand what your core team needs to be and find the best candidates available to fill those roles. It may take longer and feel like you’re treading water, but you will absolutely make up that time and save money in the long run by starting with the right team.
Financial Planning. This should be self-evident but it’s not. Really get under your budget and burn rate so you can properly get ahead of your capital needs. If you have to go back to your investors for an unscheduled capital call, it reflects poorly on the management, organization, and leadership at the company. You’ll end up getting in tight spots where you’ll be forced to take worse deals because you don’t have any alternatives.
Timing. You can have the right idea and the right team, but if you miss on the timing you’re going to likely strike out. I’ve been guilty of being on the tail end of a market trend and it’s not a good place to be. You end up fighting a crowded market for customer share and dwindling margins. But conversely, being first to market or pioneering new sectors comes with increased risks. Be sure to know where you are on the spectrum of timing and build your company accordingly.
What are the most common mistakes you have seen CEOs & founders make when they start a business? What can be done to avoid those errors?
The most common mistake I see is people spreading their young company too thin, trying to take advantage of every opportunity that comes across. Focus on your core competency and maybe one or two other initiatives. Saying ‘no’ to things is important. You have limited resources and you need to allocate them where they will generate the greatest ROI. Saying ‘yes’ to a mediocre opportunity may end up forcing you to say ‘no’ to a great opportunity down the road.
Startup founders often work extremely long hours and it’s easy to burn the candle at both ends. What would you recommend to founders about how to best take care of their physical and mental wellness when starting a company?
Make personal growth a priority in your life. It can come in many forms, exercise, meditation, reading, journaling, ongoing education, etc… but maintaining a focus on personal growth will not only make you a more effective leader and prevent you from burning out, but it will give your life balance. If everything you do is work related, and work isn’t going well, then it follows that you will feel like your life is not going well. Personal growth outside of work will help you maintain a healthy life perspective which in turn will lead to better decision making and innovation.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
Paying it forward. This is not an idea I came up with, but I’m going to suggest it because it’s a beautiful concept that’s self-perpetuating. The philosophy is simple, repay a kindness done to you by doing a good deed or kindness for someone else. After the past few years, I think we can all agree that the world could use a good dose of this medicine. Just imagine the amount of goodness that would go around the world, wave after wave in perpetuity, if this was a common practice. Not to mention the example it would set for the next generation. And the businessman in me loves it for its efficiency and simplicity.
Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them.
Hands down it would be Wile E. Coyote of Looney Tunes fame. Talk about relentless pursuit of a goal, constant failure, and refusing to quit. I think we could all learn a few things from Mr. Coyote.
How can our readers further follow your work online?
This was very inspiring. Thank you so much for the time you spent with this. We wish you continued success and good health!