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Mr. Info: Take the Money—It’s Free!
April 26, 2004
Late-night TV infomercial icon Matthew Lesko had advice for entrepreneurs: Take the money the government wants to give you. A report from a recent talk at HBS.

by Wendy Guild Swearingen

Whether you are an insomniac, work the graveyard shift, or are simply a night owl, chances are good that you know Matthew Lesko.

Matthew Lesko, a.k.a. “Mr. Info,” has been an information consultant to Fortune 500 companies, and is a columnist, best-selling author and regular talk show guest. He showed up for his talk, “Building Your Business on a Shoestring,” co-sponsored by the HBS Marketing and Entrepreneurship clubs at Harvard Business School on April 5, wearing a trademark lavender suit emblazoned with dark purple question marks with matching bowtie, violet socks, periwinkle sneakers, and rainbow-hued spectacles.

Speaking about his famed late-night TV commercials, Lesko said, “I don’t pay for any of those ads.” Instead, he has “relationships with media people.” He splits the profits garnered from the commercials with the stations and networks, like ESPN, that carry his ads.

This barter system has worked well for Lesko, keeping his overhead to a minimum. “You make more money if you don’t buy anything,” he said. “My cost of goods sold is really zero.”

There was no mistaking the enthusiasm Lesko has for his product. So, what exactly is Matthew Lesko selling to his bleary-eyed public? For starters, his enormous (as in 1,100 pages), best-selling 2002 book, Free Money to Change Your Life. He has more than fifty books, e-Books, and CDs to his credit, among them Free Legal Help, Free Health Care, Free Stuff for Seniors, and Gobs and Gobs of Free Stuff. Are we seeing a pattern here? But what Lesko is really selling is a chance for his readers to improve their lives.

After getting his masters degree in computer science, Lesko worked as a consultant, helping “fat cats” find money, information, market studies, and competitive analysis to grow their businesses. And where did he find this information? The U.S. government.

Government represents 35 percent of the U.S. economy, he said, and there’s a government expert for everything imaginable. For instance, if an Italian restaurant chain wanted to expand, he wouldn’t have to hunt down all the details. He’d ask the government pasta expert. Lesko said that somewhere in DC, there’s a guy sitting in his office with an entire wall of pasta research behind his desk. All one needs to do to get the information is ask. “Hell, he’d be thrilled that anyone had come down to talk to him,” said Lesko.

After tiring of consulting, Lesko went into business for himself. “My first two businesses failed. And thank God they failed,” he said. He was able, then, to find out what he really wanted to do.

Business school, Lesko said, is a great way to learn how to run a huge corporation, but what if you want your own business? “Can you solve [a] problem without throwing money at it? Can you do it with little resources?” he asked.

Lesko scoffed at all the business-speak employed by b-schools today. “Branding?” he says of his brightly punctuated suits. “I was just trying to have fun.”

Talking about the importance of flexibility and stick-to-itiveness, he said, “I know what worked yesterday. I don’t know what will work tomorrow. Nobody does.” But that doesn’t mean you should stop trying, he said. “If you never fail, you’re really not doing anything. Go out and do it your way.” Taking a page from his own book, he advised, “Take whatever is weird or different about you and make that your best part.”

Who gets the money?

Anyone can apply for a government grant. Some notables are George W. Bush, who invested $600 thousand in a baseball team, then got a $200 million grant to build a stadium, and Donald Trump, who made his first million with a government property in Cincinnati. Halliburton, the big contracting company that Dick Cheney used to run, had more than $300 billion in government grants in the form of contracts “It’s a system,” said Lesko. “Learn to use the system.”

Government contracts are especially lucrative propositions, and they are opportunities that people don’t realize are available. “It’s like elephant hunting,” said Lesko. “Man, you bag one of those suckers and you’ve got meat for a long, long time.”

 

Lesko has a unique writing process: plagiarism. It turns out, he says, that in the government, nothing is copyrighted. He simply cut and pasted text from government publications for his first New York Times bestseller, and has been “writing” that way ever since. His description might be a little breezy, however. The real value Lesko adds is in his rigorous and tireless research efforts, as well as the extremely logical and helpful organization of the material. While it is true that anyone can find these resources on the Web or by calling government numbers or writing government agencies, not everyone has the time or inclination to do so.

The easy part, he said, is finding the information. The real difficulty lies in what to do after you have it. After one of his seminars on how to contact the agencies that distribute grants, one person asked him, “What do you do after they answer the phone?” “People don’t know how to take advantage of [the information I supply]. I make fun of myself to demystify the process.

Lesko acknowledges that information is one thing, but execution is quite another. The less money you have, the less time you have, he said. “Do I say, ‛You may get the money and you may not; it’s a lot of work’ or do I say, ’Free money for life!’ to get peoples’ attention? Maybe I have a chance of educating you, then, if I make an ass out of myself to get your attention.”

Better than the lottery

Tips from Mr. Lesko:

Every state has an Office of Economic Development that keeps lists of data. Find the office that regulates your competitors; the information is public.

He offers a CD
that contains examples of forty successful
business plans. “Some of these are written in crayon,” Lesko joked. “If you brought one of these to your business professors, you’d fail. It doesn’t take a mental genius.” And if you submit a business plan for a government grant and that fails? You can ask the government for a copy of a business plan that succeeded the previous year. “It’s like getting the test ahead of time!”

You can call your congressperson’s office and ask for Congressional Research Service (CRS) reports on any subject.

One million entrepreneurs get money from the government every year to start businesses. Two out of every three people who apply get the money.

The government is not only a great source of dollars; it also provides free legal help. In fact, says Lesko, it’s better than hiring a lawyer because everything is regulated. Say an insurance company doesn’t pay your claim. “Are you going to hire a lawyer for $200 an hour?” Lesko asked. “Their lawyers are better.” Instead, call your State Information Operator. They will help fight the battle for you—for free.

“ If the insurance company loses your business, they don’t care,” explained Lesko. “If they get a letter from the government who issues their license to sell insurance…it’s cheaper to pay you off” than fight the government.

The government also provides free or low-cost healthcare for families and seniors, as well as free prescriptions. “But only if you know where to look,” said Lesko.

For the good of mankind

His motivation is not greed, but altruism, Lesko said. When asked whether the government has given him money to advertise different programs, he responded, “Yes, but money is not important to me anymore.” He said that “some bureaucrats say, ‘Talk about my program,’” but they’re not trying to get rich. “They’re just earnest people trying to help.” After all, said Lesko, the American people have already paid for all of these programs through taxes and fees, so shouldn’t they use what they’ve already bought?

“People are so unhappy working for large organizations, because, really, they don’t care,” Lesko said. “When you have your own thing, you can paint the world your way—the way you always wished the world was.”

Matthew Lesko’s Web site.

Wendy Guild Swearingen is the publications coordinator for HBS Working Knowledge.

 
 
 
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