Today I have the pleasure of interviewing Ali Maadelat, the President of the Lorenz Marketing Group. Ali has a great story because, like other young millionaires, he's only 22 and he's the founder of a world renowned company and a millionaire! You can also find Ali on Twitter @AliMaadelat. Hopefully Ali's story will resonate with you because he started young and has been very successful.
For some background, Ali Maadelat was nominated as one of the 2012 Marketers of the Year by the American Business Awards, and Forbes Magazine recently named him as one of the Top Ten Consultants who Stop the B.S.
Ali has some great insights about getting started in business at a young age, so let's get to know him a little better…
Getting Started – The Early Years
Tell me about yourself and your company?
Ali: I got started in the field of marketing when I was only 14 years old. It was just me and my mother and I wanted to help her out. While others were doing homework and studying, I was up until 3 AM every night reading up on marketing and whatnot. My age was a bit of a novelty, so the big names in the industry were more than happy to “take my calls” and mentor me. At the age of 16, I was already speaking in front of high-ticket, sold out seminars.
At about 16 1/2, I officially opened up the Lorenz Marketing Group and started officially taking on clients. I started with small businesses in the area and businesses I had met at seminars. I slowly started branching out and hiring people because my client list was racking up.
Now, I have been nominated “Marketer of the Year” by the American Business Awards, I have been listed by Forbes as one of the “Ten Consultants Who Avoid the BS” (I was the only “marketer” if I remember correctly too! Most were IT consultants, etc.). I have a long list of clients ranging from small businesses to multi-million dollar international corporations… all of whom do damn well from working with us (for example, one of our clients had ~1400% growth in 2 years and just won the grand prize in the FedEX “Small Business Grant” Contest).
How did you make your first million?
Ali: I've made my money from one thing and one thing only: Marketing. Between hourly rates, flat fees, and the percentages of profits brought in that we charge… it's a GREAT business. David Ogilvy, one of the “old school” bad ass marketers (one of the guys who “Mad Men” is essentially based on) lived in a straight up French castle. Marketing is insanely lucrative…
In great economies, people want to make more money. In “bad” economies, people need to make more money. There is no downtime. There is no cooldown. People will pay whatever it takes to make a profit… it's stupid not to.
Where do you currently invest your money and why?
Ali: I invest my money in businesses— I've always loved the “business side” of things and it's something I know best. I don't try to fool myself and pretend I am the best at everything: that is how you lose money. I do things that I know work. Some people kick ass at stocks and can make lots of money with it… I kick ass at growing businesses so I choose that.
It takes more effort, but it is a stream of income that, if done correctly, not only leads to much larger rewards, but leads to larger rewards continuously without you needing to lift a finger after a certain point.
Has that changed over time?
Ali: Not at all— I've played around with stocks and have been relatively successful. But I love building up businesses and seeing that others are gaining from it as well. I love seeing people give a new company their all and see that it is, in fact, worth it. I love knowing that this person can now care for their family, etc. and has freedom. I love it.
Many millionaires have made money through real estate. Why do you think that is?
Ali: Real estate is a very safe way to make money if you have a basic understanding of what you are doing. I have clients who are in the real estate industry and I speak to them about this on a daily basis. If real estate isn't your ONLY source of income, you're even more in the clear– because, worst case, you just wait. Cheap property almost always gets more expensive (especially in “new” areas). Property that has taken a dive will come back up in 5 to 10 years (unless you bought at the top of a bubble for some reason– again, remember, you still need to know what you're doing!)
Plus, you aren't just investing money into someone abstract– you have a very useful and REAL “product”: real estate!
On Business and Entrepreneurship
Is there another way to become a young millionaire without starting your own business?
Ali: A YOUNG millionaire? I guess you can inherit money… but unless you have that entrepreneurial drive and SKILL (that's just as important as having drive), you will squander your money away. I've met lots of idiots who inherited money, who blow it on cars and stupid business ideas and end up in debt. Here's a great story: I knew a guy who had an idea to make a phone company that makes high end cell phones, but that also gets you in to clubs… so you just show the phone and then they walk you in. The guy had no idea about either of his markets. This was a real idea, and turned out terribly.
If you want to be an OLDER millionaire, you can work your way up a ladder… but at the end of the day you will always work for (and answer to) someone else. I never wanted to have to ask someone for permission to go on a vacation when I was older… Life is too short for that.
What's the biggest risk you ever took? Do you regret it?
Ali: The biggest risk I ever took, without a doubt, was actually following through with my plans. I mean, think about it, I was 14, in high school… I didn't study for tests or do homework… I tried to start a marketing firm. My grades suffered because of it. I got a 34 on my ACT but had a low GPA. My teachers spoke to me once a week about how I needed to “get my priorities straight” and how “I was so smart and shouldn't be wasting my life away.”
Had I NOT been successful, I'd be screwed right now. I would have been a kid with a 2.5 or so GPA out of High School. I would have had a tough time getting into a good college and whatnot. My life would have been VERY different. No Italian sports cars, no dinners at nice restaurants, no freedom to go on trips or do what I wanted. I'd be living in my mom's basement.
But, since it all worked out, I wouldn't have it any other way.
Actually, that is the REASON (or one of them) that I am successful: I had a gun to my head. I knew that if I DIDN'T make it work, I was screwed. I wouldn't be able to help my mom, I wouldn't be able to have freedom… and, more importantly, I had NO backup plan. That was crucial. I didn't have the luxury of quitting. I was too deep into it.
If you could make one change, what would it be?
Ali: Really, nothing. I named my marketing firm after the Lorenz Attractor which, in the most simplest sense, is the scientific principle behind the “butterfly effect”— the idea that everything is interlinked and that small things impact much larger things: a butterfly flapping its wings in Brazil can cause a tornado in Texas.
I am a product, right now, of ALL of the things I have done. Just as you are. You probably will have someone who clicks something on Facebook in a week. This will make him or her want to search something on Google. That might end up with them coming to your site and reading the article you wrote with me… and that might be the reason they end up starting the next multi-billion dollar company. Them being on Facebook that day would be crucial… And we can keep drawing that down further: What if they didn't have a profile? What if Facebook wasn't invented? What if they had a job interview that day? And so on.
I wouldn't change a thing.
What advice do you have for young adults and college students when it comes to entrepreneurship and money?
Ali: Don't ever choose a job solely because you think it will make you money. You'll end up compromising in the rest of your life too. If you truly love what you are doing, you will stay up until 3AM becoming the best at it. It won't be work, it will be fun.
If you are the best at something, the money will follow. Sounds corny, but it's true. I've met hair stylists that pull 6—almost 7— figures a year. I've met lawyers who struggle to make the monthly payments on their Hyundai.
There are people who started off modifying their rifles who now own firearm companies worth so much money your head will spin. There are people who loved working on cars and now make millions as the mechanics for Ferrari's F1 cars. There are people who loved cooking and now own restaurants where they get $600 per plate and have reservations backed up for the next six months.
Remember, too, that NOBODY will ever care as sincerely for your success as you do… and nobody will ever live your life but you. Take advice from people, don't be closed minded, but never forget that.
And– money, by itself, isn't important. It is only important because of the things it lets you do. Never let the actual goal of getting money stop you from doing the things you actually want to do. At that point, the money you have has no purpose.
What I Learned from Ali Maadelat
First, what an incredible story and I appreciate Ali sharing it with us! For me, one of the biggest take-aways I have is the “back to the wall” mentality. Ali sums it up pretty good when he says “Had I NOT been successful, I'd be screwed right now.” But I love that. I love the idea of taking a risk, putting all your effort into it, and then reaping the rewards of it. Not only does it take great courage, but it is a truly life changing experience.
I also am a fan of Ali's advice for young adults. Nobody will ever care as sincerely for your success as you do. It's not going to happen. On some level, everyone is selfish. You have to understand that in business and the real world. If you want to be successful, you need to make it happen yourself.
Finally, I love the passion argument that Ali makes. It's nice to hear that a young millionaire still believes that anyone can make it doing what they love. While I don't know any hairstylists making 6 figures, I do know my share of doctors and lawyers who make nothing and are miserable.
The bottom line is the world is changing, and the advice that your parents give doesn't always hold true anymore. You have to do it yourself, and you have to make it on your own.
What are your thoughts on passion? What about going “all-in” with a “back to the wall” mentality?