Hello everyone, and welcome to Global Gurus. Every Friday, we explore stories of international business and speak with industry leaders operating around the world. I’m your host, Philip Auerbach of Auerbach International (www.auerbach-intl.com).  Thank you for joining us. 

If you’re just joining us for the first time, we start each podcast with a running segment called “Faux Pas Fridays,” when we explore funny bloopers or mistranslations that do not quite convey the professional image their organization wants to project. And since today’s guest has done some business in China, our blooper comes from a sign in English near the Great Wall outside of Beijing, which says in English, “People, flowers, and help each other in breath. If you pluck the flowers and break the branches, you will reduce your own life at the same time.” That’s not exactly the way you’d like your professional translations to read. 

So, with that, today’s guest is Mario Lanzarotti, known as the Freedom Architect. He is a mindset coach focused on helping business owners overcome the fears that are holding them back from becoming rich and making a massive impact in the world. 

After selling his custom shoe brand, Awl & Sundry in 2019,Mario now travels the world on a mission to raise the consciousness of humanity through his workshops that are focused on transformational mindsets. 

Welcome, Mario. I’m delighted that you’re with us.

Philip, thank you so much for having me on the show. I’m super-excited and I love the story that you just shared, and I can relate to it. You know, having done some business in China, there are big differences in our perceptions of what is the right way to do business.

Well, perhaps you can start with that. Please give us a bit of your background and then plunge in and give us some examples.

Yeah, sure. So, I was born and raised in Germany. Because my father is Italian, I was raised bilingually and spent a lot of time in the US. I also spent a significant amount of time in South Africa, where I attended a boarding school, which opened my eyes to the world of international possibilities, and you know, as you said, two years ago, I sold my custom shoe brand, Awl & Sundry. My partner and I started it in New York. We first sourced our shoes, our handmade shoes, in China in 2014, and while it brought us many blessings, it was a difficult time. It is a challenging way to get there, mainly because of the lack of understanding of quality. 

China is not necessarily known for its approach to making custom products. They’re more, you know, about quantity and repetition but they created great success for us. We demanded a lot of attention to detail, you know, and that went from, “Customers see that the leather is not the same on the heel as it is on the toes. There are slight differences. And you know, then, sending them back to our quality manager and the quality manager pretty much telling us, nicely, to go F yourselves: You’re asking too much. We’re selling custom-made shoes and you’re too perfectionist. We replied that they have to be close to perfect, so you need to understand this. So, you know, there were times when the person that we were dealing with just all of a sudden decided to shut down communication, and we were relying on them, and we were freaking out because we were thinking, “Well, what are we going to do now? They didn’t deliver the shoes because they were unhappy with the way we were communicating with them.” So, you know, I’ve been through my fair share of experiences dealing with international clients and suppliers and have learned a lot in the process.

So, did that force you to change suppliers in that case?

Ultimately, it did.  We ended up looking for two different routes. One was to do the custom route in Italy, where I flew to Italy and I sourced a family-owned business, and they were then making the shoes for us, which went well because they also had a different understanding of what it means to serve a client.

I had a feeling that the Chinese partners that we were working with were more interested in the B2B approach than what the end customer might like. We also had another option, which was India, for a ready-to-wear line of shoes that were coming at a much lower price point, and that also turned out to be quite a difficult adventure because, you know, in Asia, there is this idea of saving face, and it’s not as direct as it is in for instance, in America or in Europe, where you tell people straight to their faces what the map is. They wouldn’t tell us what was happening behind closed doors because they wanted to save face, and then as it came to delivery, they told us all of a sudden, “Oh, the one factory that we were supplying the heels from, they shut down, so we can’t deliver.”  We were like… What!

We lost a lot of money on that. I lost a lot of clients and, uh, a lot of that I’ll sleep on. As you can imagine, that was a challenging experience, and for all of it, I’m very grateful because it taught me so much specifically about what I’m doing today in the mindset realm and how different all of these unique cultures are, and how to approach people differently.

That’s fascinating. So, in India, when they couldn’t source the heels, they didn’t look for an alternative manufacturer. They just dropped the whole order.

Yeah, pretty much. They said, “Sorry. Too bad.”

Wow, but you did have the source in Italy?

Yeah, they did. But they weren’t able to help with this. So what ended up happening was that this was a Kickstarter campaign, and we were collaborating with an NFL professional player. He put his whole name on it and created a whole design for a sneaker, but then the soles of the shoes weren’t matching his designs and they told us yeah, we can make it happen, and then on the date where the order was supposed to be shipped out, they told us oh sorry, it didn’t work out. Can’t make it. Too bad.

Oh, how horrendous. And you’re not bald and grey from that experience. It’s pretty remarkable.

No, I think that’s where my development journey came in with meditation. It helped me deal with that stress.

Well, it’s amazing. You said some of the difficulties. I assume you had some success as well in that field?

Oh yes.

For sure. I mean, we were able to create a custom shoe, so we were selling custom shoes at $495, and we started with 350, and even at the 350-price point, we still had a decent margin for profit. It wasn’t the best, but it allowed us to set foot on the stage, where we got noticed by a lot of magazines and influencers, and great clients all over New York. They were like, “How is it possible that you can make $350.00 of handmade custom shoes that have great quality?” It wasn’t like the materials were still shipped from Italy to China and they were making them by hand there, so they did go above and beyond to make this happen.

So we built, you know, really great connections with them. My business partner flew to China. He was able to learn how things work in China and how you need to know the right people to open the right doors. It’s not so much, you know, just look online and find someone, and then place an order and you’ll get it. Which is the more common approach in Europe or the US. In China, It’s really about you’ve got to shake the right hands, and that allowed us to establish ourselves in New York as a successful start-up and e-commerce brand. So we’re very grateful for that.

So when your partner went to China for the first time, did he know anyone? Or how did He find the connections?

So he did not know anyone. He just knew Guangzhou was the place to go for manufacturing and things like fashion and shoes, and I believe he did some online research to find several suppliers, and he ended up going to many of them and talking to them. And then he found one specific lady, with whom he then developed a relationship. 

And this lady, you know, that’s the one with whom we had a lot of ups and downs, you know, bless her soul, and she did the best she could. And, yes, I believe that if you want more quality, you must acknowledge it at some point, also in the way that you interact with people. You need to be able to invest more. And we did. It was worth it for us because we didn’t want to be stressed anymore.

Invest more money, or invest more time and effort, or both?

All of it, all of it. Invest more money. Making the shoes in Italy for us was a bit more expensive, but also more of an effort. I had to fly to Florence, then I drove out to several of the factories, met up with the families, and eventually found one of them, and established that relationship. Italy is very much a traditional country with very traditional values, and they want you to show up in person. 

They’re not like, oh, there’s this American dude who just opened this cool sexy brand. I don’t care about that. You know, at least they have been making shoes for a lot longer than we have, and so they wanted to see us, and they wanted to see that we meant what we were saying. And so, I needed to go there. I even brought my father from Sicily, who had said, you know, if the two of us show up together, it will create more of an image of trust than appearing my own Indian partner who doesn’t radiate a fashion brand and as a successful entrepreneur. There were a lot of stereotypes that are, you know, clashing together. But it ended up working out well, so we had the factory that ended up making the shoes for us and our family. The clients loved them.

Fantastic. Well, I know you grew up speaking conversational Italian, but I presume you learned Shoe Italian as well?

I had to. I had to… you know, I taught myself and I never went to a school in Italy. But ever since I was a little child, I spoke with my dad and my family in Sicily, so I speak fluently. I wouldn’t say that doing business in Italian is as easy as it is for me in English, but if I had to, I would find a way.

Right? 

Of course. That’s great. What are some of the communication differences that you encountered, either in those experiences or others?

Do you mean specifically in Italy and China, or just in general?

In general, China, Italy, and India. In these countries, in which you’ve done business.

That’s a good question.

I would say when it comes to America, I find people very open about how they feel about your products and their services, and it was never really for me a question of is this going to happen or not? I felt like I knew it straight from the beginning. When it came to China and India, it was often like they might say one thing, but they might mean a whole different thing. 

And I learned a lot from my business partner when he dealt with companies in India. You know, when we would have the first business meetings and we would talk about the shoe lines and the opportunities and the possibilities, they were super hyped. And then, a day later, we got the email: No, this is not for us. And like, wait, what happened here? Because yesterday you were so excited and you were like, “This is amazing!” and today you’re like, “No, this is terrible. We didn’t want to be part of it.” So it was about learning to read between the lines, and it was also about understanding cultural differences.

This is especially important because I find that on the Asian side, they are the ones we have a much stronger focus on compared to the Western realm, especially in the US. The individual has much more of a focus. So when I was speaking to people in China and India, it was a lot more about family values. It was more about making the family proud. It was about you and people were asking what your parents did. Where do your parents live? I rarely get asked that question in the US. It was more about my journey, not so much about what my family does in the world. I was like this at first. Wait, why are you asking me about my family? I’m the one doing business with you. What does my father have to do with you?

Even my business partner. He was from India. He’s now in the US. He’s become a citizen now. And he often kept asking me in the beginning about my family background, and I was like, “That’s interesting. He wants to know what kind of home I come from. And even to this day, I saw him a couple of weeks ago. He still asks me about my family and how everyone is. He still remembers. Every single person you know, some of whom have traveled to New York and met him over the years, and I find that if you want to do business in these regions, you want to play that card. You want to talk about your family. You want to bring in the legacy. Maybe if you are someone who talks about legacy and you want to, you want to talk about the legacy of your family and how you are deciding to move that legacy forward, if you’re someone that takes a stand for generational wealth, these are very important things, and they create trust in the eyes of the other person, and I think that’s something that is valued very highly.

That’s fascinating. I’ve never heard that before. Doing business in Asia is a lot more, as you say, about trust and rapport and building confidence with you personally, well, you and your partner. Of course, in your company.. And trust is much more important than a written contract or written e-mail or agreement, so that trust will last longer than difficulties in production.

And here I can give you another example. That’s where you just brought it up. 

So, when I first came to the US in 2014, I was studying and doing an overseas semester, and part of that semester required me to find a three-month internship, which is where I found the internship at that shoe company. My partner started it and it was just out of the shoebox. I asked that if I work hard, would you be open to taking me on board as a co-founder? He said you’ve got balls, young man.

So, I did the work, and he said, OK, I want you on board as a co-founder, and we got along great. We had an almost brotherly relationship. He never gave me a formal written contract; nothing; no agreement. You know, we just, we pretty much agreed on a hug and a handshake, and I remember coming back to Germany and my stepfather asking me, “So this sounds super exciting. Send me the contract that you guys have, just to make sure that you’re not getting screwed over.”

“Uhm, yeah, or I’ll send it to you,” I said. He asked me once, more like a month later. Yeah, you’re going to send it to me. Yeah, I’ll e-mail it to you. And I never did. Because there was no contract and my father stopped. And to this day, you know, we’ve honored the agreement simply through the handshake, because there’s so much trust between the two of us. But just so you see, the difference between someone from India and someone from Germany, like it’s all has to be in order versus I trust you.

It’s fascinating, it’s amazing. One of the other concepts you mentioned is saving face, which is very prominent in Asia. Westerners  – Americans and Europeans – would generally say the person said yes, and now he’s saying no, and it’s contradictory, and he’s not telling the truth, or he’s not being honest with me. It’s the concept of saving face and truth-telling in Asia. Western values descend from the Ten Commandments; they can be interpreted but they are inviolate and don’t change. But in Asia, what is “truth?” It’s what’s appropriate in this situation. Honesty is what’s appropriate in that situation or in that circumstance. Did you ever encounter that in your life?

Oh yeah, oh yeah, 

That was the biggest challenge because having a conversation or a rumor without a Chinese supplier where we would point out things that needed to be improved was always super delicate. 

You know, she would often respond very defensively and sort of criticizes us back by saying, “Oh, it’s because you have too many demands.” And we would say, hey, this is not about attacking you. This is about coming together and finding out how we can improve this process.

I think it was difficult to have these open conversations that were a bit more confrontational because I think it went right into this saving face idea and we would then point out, hey, one of the workers, one of the custom shoe workers, you know, did this. You know, there was like a cut on the leather, and it’s him. Those were obvious things. You couldn’t sell those shoes to clients that paid $500 or $600. For them, it was like, don’t point it out because you know it. As you stated, it is inappropriate. And for us, it was like, “Is it inappropriate or appropriate?” You know, the client is going to ask for a refund, and then we end up paying for it out of our pocket, and that doesn’t work. 

So those were big, confrontational points, which also led us to the decision to say, OK, we need someone who’s open to feedback and who’s not going to turn around and say, “You know what, if you keep criticizing me, I’m going to shut down the factory. Too bad for you.” That’s not a way you can sustainably do business.

Right, that’s fascinating. How have you transitioned this knowledge to your current business as a mindset coach?

So it’s interesting because I still have a lot of Indian clients, US-based clients. They grew up most of the time in the US.  Nonetheless, they remain “we” focused. On the whole, most of the people I work with are entrepreneurs and business owners, while they have the strong touch of the American entrepreneurial, let’s say, hustle culture, go for what you want. you know the American dream…when it comes to confidence and when it comes to being vulnerable, especially within their own families, it’s a huge challenge for them because there’s so much pressure on their shoulders already because they followed the traditional path. But if you have Indian ancestors, you’re either supposed to be a doctor, a lawyer, or a software engineer. Anything other than that is considered an ultimate failure.

I have this specific situation with one of my clients whose fiancé’s family, the mother, actually told him that he was a disgrace to the family because he decided to quit his law studies. He didn’t want to be a lawyer anymore, because he was a very successful entrepreneur. He’s young, he’s doing very well, and he loves it. He’s great at it. He’s a super kind and generous person, but for his mother-in-law, this is like the ultimate disgrace, and it caused so much anxiety in him.

Guiding people that are coming from these cultural backgrounds requires having them see if I am correct in understanding that this is such a strong driver in their lives. So, it is about, you know, returning them to the “I” of the individual. You, as an individual, have inherent worth, regardless of what your family might think about your chosen path. That is a significant challenge for them. 

And so, you know, that has taught me a lot too. And it’s also taught me a lot just to see that ultimately. It doesn’t matter what culture you come from; we all want the same things. We all have the same human needs. It’s just that we fulfill them in different ways, and there’s no right or wrong with what we’re doing. We’re just looking for the way that is most appropriate for an individual that comes from a different culture.

That too is fascinating. What about when you work with Europeans? Do they have a similar mindset? Because there has traditionally been an aversion to entrepreneurship in Continental Europe, albeit not as much now as 40 years ago. People know a lot about joining a family business and joining the bureaucracy but not venturing out on your own, because if you fail, you’re considered a failure for life in their countries. In the US, if you fail, in a way that’s a badge of honor, because that means you’ve learned, and you carry on and create a new business and learn from your mistakes.

Spot on, spot on and you know, when we say Europe, I speak mostly for Germany because, you know, I was born and raised in Germany and I think when it comes to Germany, or I’m sure we can find other European countries that are very similar… I have always been looked at as someone very strange because I, especially in Germany, did the unthinkable. So, I was a pilot. I was on my way to becoming a pilot for Lufthansa at the time that I was doing it, that was like becoming an astronaut for NASA in the US. So I was essentially a made man. I had my whole life mapped out. You know, it’s ultimate security and it’s very, very high pay for someone who doesn’t, you know, pursue an executive career. As a pilot, you get paid very well and you get taken care of, and I quit that career.

Is it prestige? People look at you like you’re some sort of a demigod? And now while that’s not true, not even close to true, I did the unthinkable and I said, “You know what? I quit. This is not for me anymore.” And so many people came to me and said, “Why, oh my God, how could you do that?” I even went this far. After that, I went to study in Berlin, just for fun. For the sake of it,  just for fun. I became an extra at place like a talent agency, and I was put into some TV shows in Germany. I just wanted to try it out, and one of the shows was on a bigger TV show in Germany, and a lot of people recognized me, and then online, on Facebook, a friend of mine forwarded me a thread where they talked about how I, you know, sank so low. After having given away my pilot career, how stupid could I be? You know, people would talk about me.

And it’s just proof that in Germany today, it’s still changing, but it’s still there. It’s this: Follow what the authority tells you to do, and most of what the authority tells you to do is to go to school, go to university, then get a high-paying job. Stick with that job. Don’t change the job you know. Do one thing. Maybe do two things. But don’t you dare become an entrepreneur. So, for me, that’s always been a big challenge to know whether to pursue this. This individual path is why I feel so called to the US, and to this day I have very few clients from Germany. Very few. Because that mindset shift of “I am an individual and failing, as you say,” is a badge of honor in Germany. That’s like, “ooh, no no, no no, don’t talk about that. That’s taboo.”

That’s fascinating. So, the majority of your mindset clients are in the US?

Yeah, by far.

And I know you’re primarily based in Cape Town, so when you’re there with your clients, you do it remotely. Right? To Europe, which is in the same time zone as South Africa., and then separately to the U.S., right?

Correct, correct

And, well, South Africa, it is a different story. There is a lot more of an entrepreneurial drive in Cape Town establishing itself, especially in the younger generations. And now, you know, with crypto Web 3.0 and all of that fun stuff, a lot is coming up. And what’s missing is a lot of the long-term view, because if you know the history of the country, you know that the recent shift from apartheid has only been like 20-30 years ago. 

That is still sitting in the seats of these young entrepreneurs’ parents and there is a sense of entitlement. It’s like, I’ve suffered so much. Have you gone through so much hardship that you deserve to be given everything? I don’t need to do anything for it, and you see that in a lot of young people. I worked with a lot of youth in South Africa, and they get very excited in the beginning but they lack the consistency and the patience to just wait for something to come back, maybe only in five to ten years. It’s very difficult to find, and that’s another challenge that I’m encountering now.

Are you referring to Black and Colored [mixed race] youth in South Africa? Whites have always been entitled. 

Uh, mostly Black. I mean, at least my personal experience that I’ve had, you know, because I ran a mentorship program in South Africa where I mentored up-and-coming entrepreneurs free of charge and pretty much gave them all of the leadership and mindset training that I went through. 

And there were some amazing individuals. I’ve done well, and I’ve had a few that just disappeared. They just stopped showing up because they got the feeling that this is taking too long. “I need to come back every single week all the time?” I want instant gratification. I want it now.

And I’ve seen a lot of that, even in business circles, especially in the higher business circles. So those are some of the challenges that I experience, and you know, maybe I’m not the only one. I’m not saying that that’s for everyone.

That’s fascinating. Have you dealt with white South Africans? Do they have the same mentality?

I mean, I have more of a partner-level of organizing things together, but I have not experienced that it was more than what I’ve experienced with Black South Africans. And you know, I don’t have a younger brother.  Personally, I don’t personally like to make this a classification of skin color. And I think it’s just a lack of mindset training that they don’t see this as a huge opportunity to empower the nation because there are so many amazing, beautiful human beings who have so much potential and so many great ideas.

Yes, absolutely. It’s a wonderful country of tremendous potential, and yes, but it does come from the apartheid legacy: what the white government did and how they treated people. That’s fascinating. Before we close. Is there anything else you’d like to add?

I guess for your listeners, since this is all about international business, you know a lot of the US, people in the US. I mean, someone like you… I’d say you are a rarity because you’ve traveled so much. It’s really what I found has transformed my ability to succeed on different stages all over the world. It’s because I’ve immersed myself in so many different cultures, I’ve gone down a traditional path and gotten to know people outside of the mainstream. 

You know whether that is sitting around the fire in the Amazon with a shaman or with the locals in South Africa, in the townships, it doesn’t matter. I think there’s a whole world of opportunities and possibilities out there once you get over your ego and do things that you are even scared of like shaking people’s hands and looking people in the eye, listening to their stories, because there’s so much to learn there, and once you do, the sky’s the limit.

That’s very true, and I’m sure you uncover that in your mindset training as well.

I do my best.

That’s superb. Thank you, Mario. It’s been a true pleasure to gain your insights, your wisdom, and your experiences from so many different business ventures around the world. Thank you.

Thank you, Philip. It’s been a pleasure.

So, this has been Philip Auerbach of Auerbach International (www.auerbach-intl.com).  Please join us again next week for another edition of Global Gurus and their stories of international business.