They Make $1.4M/Year With AI
Summary
TLDRIn this insightful video, the creators of CM Magic, an AI-driven content creation app, share their journey from zero to $120,000 monthly revenue in under a year. They discuss the importance of identifying real-world problems, leveraging AI to solve them, and the strategic use of platforms like Appsumo for rapid growth. The co-founders emphasize the value of building a brand, using personal networks, and maintaining a lean marketing approach. Their story is a testament to the power of innovative ideas, strategic partnerships, and a strong team dynamic.
Takeaways
- 🚀 The founders of Cast Magic leveraged AI to create content from various media formats, achieving significant revenue growth in less than a year.
- 💡 They identified a personal problem in podcasting and saw an opportunity for AI to solve it, emphasizing the importance of finding real-world applications for technology.
- 🔑 The success of Cast Magic was attributed to solving a personal problem, building a brand with the right creators, and continuously improving product quality.
- 🌐 They utilized platforms like Appsumo for distribution and offered lifetime deals to attract users and build a solid brand foundation.
- 📈 Cast Magic experienced rapid growth with a focus on profitability, ensuring that marketing expenses did not exceed 20% of revenue.
- 🛠 The team used Elixir and Phoenix for backend stability and scalability, highlighting the importance of choosing the right tools for product development.
- 💼 The founders emphasized the value of aligning with co-founders who have complementary skills and shared vision, rather than just personal convenience.
- 🤝 Trust and open communication within the team were identified as crucial for continuous improvement and honest feedback on the product.
- 🏆 The founders chose a product-focused approach over seeking VC funding, prioritizing customer needs and solving real problems over external validation.
- 🌟 They adopted an asynchronous work model with regular in-person meetings to maintain alignment and focus on shipping the product.
- 📚 The script suggests studying other successful businesses to understand their growth strategies and applying similar principles to one's own venture.
Q & A
What is the name of the AI app that the founders created and how does it work?
-The AI app is called 'Cast Magic'. It uses AI to create content from the context of videos, audio files, conversations, or any media, allowing users to repurpose this content.
How long did it take for the founders to scale their app to a $120,000 monthly revenue?
-The founders scaled their app to a $120,000 monthly revenue in less than a year.
What was the initial motivation for creating Cast Magic?
-The initial motivation was to solve the problem of writing show notes for podcasts, which required understanding the context that a random VA might not grasp.
How did the founders approach the idea of distribution for their early-stage startup?
-They focused on building something for themselves first and then getting as close to the customer as possible, either by creating inbound content or finding a distribution partner.
What platform did they use to launch their app and how successful was the launch?
-They used Appsumo for the launch, which resulted in around $350,000 in revenue and approximately 10,000 users, making it one of the most successful launches on the platform.
What was the strategy behind offering a lifetime deal to their customers?
-The strategy was to build a brand and foundation, gather feedback, and establish a solid user base by offering lifetime access to their services.
How did the founders leverage creators for marketing and growth?
-They incentivized creators to produce content on social media, some through payments and others through affiliate partnerships, and used Instagram scraping to find and negotiate with potential creators.
What is the pricing strategy for Cast Magic?
-Cast Magic offers a subscription model with a cap on usage, allowing customers to access the service within a set limit of content creation.
How did the founders ensure the quality of the AI outputs in their product?
-They focused on solving their own problem, building a brand with the right creators, and continuously investing in the product to increase the quality of the AI-generated content.
What is the founders' perspective on the role of VC funding in their current business model?
-They prefer focusing on building something customers want and are willing to pay for, rather than seeking validation from VCs. They believe in solving a problem for themselves and their users first.
How do the founders maintain team alignment and productivity despite being in different locations?
-They operate asynchronously during the workweek, have regular standup calls, and meet in person every quarter for at least a week to align on important matters.
Outlines
🚀 Rapid Growth of AI App to $120K Monthly Revenue
The video script details the story of entrepreneurs who developed an AI app, CM Magic, which skyrocketed their revenue to $120,000 a month within a year. The founders, previously working in the startup ecosystem, became disillusioned with the venture capital system and decided to create their own solution. They discovered a method to generate substantial income by leveraging AI for content creation, which attracted 10,000 paying users rapidly. The key takeaway is the importance of embedding an app into an existing workflow to ease the process of content creation, such as for podcasts. The founders, Blaine Ramone and Justin, share their strategies for developing a million-dollar idea, building it in two weeks, and scaling it to six figures in ten months.
🛠 Building and Scaling a Business Without VC Funding
This paragraph delves into the founders' journey of building CM Magic, an AI-driven content creation tool, and the strategies they employed to scale their business without venture capital funding. They emphasize the significance of identifying and addressing real-world problems, as well as the importance of personal branding and content creation for attracting customers. The founders also discuss their experience with distribution partnerships, such as Appsumo, which helped them launch successfully and gain significant user traction. Additionally, they highlight the effectiveness of incentivizing creators on social media platforms to generate buzz and growth for their product.
🤖 Leveraging AI for Content Creation and Business Growth
The founders of CM Magic share insights on how they utilized AI to create a content repurposing tool that integrates into existing workflows, making it easier for users to generate content from various media sources. They discuss the technical aspects of building the app using Elixir and Phoenix for stability and scalability, as well as the importance of accepting an imperfect product during the initial stages of development. The paragraph also covers their approach to pricing, which involves offering a subscription model with a cap on usage, and their strategy for maintaining profitability by keeping marketing costs below 20% of revenue.
💡 Embracing the DIY Approach and Team Dynamics in Business Success
In this final paragraph, the founders reflect on their past experiences with venture capital and articulate a preference for a customer-centric, DIY approach to building their business. They advocate for solving real problems, creating products that customers are willing to pay for, and focusing on organic growth rather than seeking external validation. The founders also share their thoughts on effective team dynamics, emphasizing the importance of alignment, complementary skillsets, and trust among team members. They highlight the value of in-person meetings and regular communication to maintain alignment and productivity within their distributed team.
Mindmap
Keywords
💡AI app
💡Revenue
💡Content creation
💡Podcast
💡Distribution
💡Affiliates
💡Product
💡Marketing
💡Elixir
💡Phoenix
💡Webflow
💡Subscription
💡Branding
💡Profitability
💡Co-founders
💡Venture capital
Highlights
AI app 'CM Magic' reached $120,000 a month in revenue in less than a year.
The app leverages AI to create content from various media formats like videos, audio files, and conversations.
The founders discovered a solution to a personal problem which led to the creation of CM Magic.
CM Magic was built in 2 weeks and scaled to six figures in 10 months.
The app offers a lifetime deal to its customers, providing access to services forever.
Partnering with Appsumo helped establish a solid brand and attracted 10,000 users.
Incentivizing creators on social media was a key growth strategy for the app.
The founders operated a marketing team with one person and contractors for specific verticals.
Building an imperfect product initially is emphasized as a part of the development process.
Elixir and Phoenix were used to build the app for stability and scalability.
Webflow was chosen for building the landing page due to its ease of use and templates.
The subscription model of CM Magic has a cap on usage.
The founders believe in not spending over 20% of revenue on marketing to ensure profitability.
The team's success is attributed to alignment, complementary skills, and trust.
Prior experience with VCs influenced the founders' approach to building a customer-centric product.
The founders meet quarterly to align on important business decisions.
Monday and Friday standup calls are used for team alignment and operational efficiency.
The founders advise not seeking validation from VCs but building something customers want.
Transcripts
these guys went from0 to
$120,000 a month with an AI app and the
crazy part is they did it in less than a
year I drove out to Miami Florida to ask
them exactly how it works and how one
platform got them 10,000 paying users in
a matter of days so was a sort of like a
great springboard for us in order to
establish a solid brand the boys started
their Journeys working at VC back
startups
but they grew sick and tired of the
system so they got together to build
something for themselves and along the
way discovered something that would
change their lives the main reason I
think C magic won is in this video
Blaine Ramone and Justin share their
exact blueprints on how to come up with
a million-dollar idea how they built it
in 2 weeks and how they scaled it to six
figures in Mr in just 10 months I think
one of the key things here is
I'm Pat walls and this is starter
story hi right Ramon thank you for
having me we are here in this beautiful
Miami apartment with your two
co-founders Blaine and Justin and we are
here to talk about this amazing app that
you built tell me about what you built
yeah so we built CM magic. which
leverages AI to create content with the
context of your videos audio files
conversations any media really you can
repurpose purp it and we started cast
magic about 10 months ago and today
we're north of 120,000 in Mr let's talk
about the opportunity of AI apps what's
going on here I think if you can embed
yourself into an existing workflow and
radically remove the friction of like
the barrier to entry to doing something
such as creating a podcast those are the
tools that are really taking off and you
know I think these are real needs and
not just a sort of vitamin it's more the
painkiller an allergy thing yeah all
right so we got blae here he's the
co-founder and uh he runs product tell
me about how you found the idea for this
app yeah so essentially I host DTC pod
with Ramone and I noticed this problem
which in my mind at the time was just
about how do you write show notes from
your podcast I can't just like assign it
to a random VA who isn't going to
understand the context of like the
person I talked to and all of that so
that was kind of the inspiration when we
saw AI coming up we're like wait a
minute like I think AI might be able to
do this the real lesson there for any
founder is just by doing something and
putting yourself in a situation where
you're constantly doing you're going to
unearth problems that are worth solving
and maybe those problems have bigger
implications than you thought they would
in the first place yeah yeah you figured
out this problem that you have and then
you decide to make it a product what
happens after that I think distribution
for an early stage startup is something
that's like super super critical
starting with yourself at the core of it
build something for yourself and then
very quickly get as close to the
customer as you can either create
content that attracts people to you and
so they can kind of come inbound so
that's why I think personal brand
putting out content is such an important
thing or find a distribution partner
that can like really help you scale so
we're talking with the team at appsumo
and they said hey we we've got this
opportunity would you guys be down to
like launch 2 weeks from now and we're
like oh 2 weeks but that's a really
good opportunity to get distribution and
start growing basically yeah let's talk
about marketing and growth you guys grew
zero to 120k Mr in 9 months how did you
do that so appsumo was a sort of like a
great springboard for us in order to
establish a solid brand we launched with
them and I think it's been one of the
most successful launches ever on appsumo
so you know around
350,000 in revenue generated gave us
probably around 10,000 users or so we
offered a lifetime deal which means that
our customers have access to us and our
services forever for people that self
subscription say well in this world
would I ever do that when I can get
recurring subscription but we needed to
build a brand we needed to build a
foundation we needed the feedback the
other thing that worked really well for
us was creators we started incentivizing
people to create content on socials you
know some people we were paying some
people we were reaching out as to be an
affiliate and one of the best ways to do
this is like scrape Instagram scrape the
platforms find companies that might be
adjacent Industries look up those
hashtags and then build volume once you
build volume and respon responses now
you have leverage to negotiate with the
rates and then just go from there and
start paying out based on cpms and then
decide who's worth sponsoring and get
enough volume to test if it's a viable
channel for you or not yeah you have a
oneman marketing team you don't have
some big marketing team you've grown
this business to 100,000 120,000 Mr how
do you operate a marketing team with one
person I have contractors that help me
on a specific vertical but something
people don't do enough is like research
you can actually go and like map out how
did this company that is similar to us
that serves our same exact customer base
how did they get distribution and so in
our case I went back and tried to find
businesses that really grew through
Affiliates so like how do I set a system
here and a tangible example here is I
noticed myself going back and forth with
a bunch of the creators on like ideating
content Concepts and then I was like
this isn't going to scale so I created a
whole notion document of a bunch of
Concepts now I don't have to get on a
call with them and iiz on the content so
it really just all comes down to systems
rone and the boys are proof that you
don't need funding to start and build a
million-dollar business in less than a
year all you really need is a simple
idea and the right strategies to bring
it to life and the best way to do that
like Ramone said is by studying other
businesses so if you're serious about
building your own product like the boys
at Cass magic but don't know where to
start well right now you can download
our Deep dive SAS report for free it'll
break down over 52 different micro SAS
business ideas making millions along
with trending ideas growth strategies
and tons of other stuff you'd want to
know just head to the first link in the
description to get it now let's get back
to how these guys actually built this
thing all right let's talk about tools
what coding languages and what tools did
you use to build this app in the first
two weeks I can't emphasize enough how
much you have to accept building an
imperfect product a bit of a
unconventional choice to a lot of people
I built this with Elixir it's very
stable it's a language that scales
really well and because Elixir has a
tool called Phoenix and live view you're
able actually to build the entire front
end and back end in the same language
for the landing page we built it in
webflow we could make it look good using
templates and therefore we could spend
all of our time as a development team
working on the part that mattered most
to our users which was the product all
right let's talk about pricing how how
is cast magic priced and how did you
come to that strategy we offer a
subscription build monthly with a cap on
usage it's funny we really just kind of
threw out numbers that we wanted to test
and found that it worked and we are
always analyzing what we're spending on
llms and transcription making sure that
we have enough margin to justify the
outputs that we're giving our customers
and so far we've been able to keep those
in Balance so that both our customer and
us can win from the relationship okay we
are back with Ramone to talk now about
AI it's changing like crazy
differentiation tell me why was cast
magic successful when there are
thousands of other AI apps that weren't
so the main reason I think cast magic
one is for three reasons number one we
solved our own problem number two we
build a brand by partnering with the
right creators and number three we build
and continue to invest in the product to
increase the quality of the outputs
that's really what it boils down to in
an AI product it's not just how does a
platform work but what is the quality of
the output that I'm getting here and are
they taking any shortcuts in the back
end and clearly we weren't so so then
the customers are now invested into US
you have to ask yourself how do I
position myself and how do I build a
brand for the long term here all right
so what do you do when chat gbt comes
out with a new model and then they
essentially replace your product how do
you think about that we are solving our
workflow problem and there's always ways
in which you can continue to optimize
that process more and more that isn't
Chad gpt's business Chad GPT is there to
provide the infrastructure they have a
future not a prodct
they solve one small pain point they
don't solve like an entire solution that
only a platform that covers a workflow
from A to Z can solve yeah tell me some
of the numbers some of the financials
behind this business turn single digits
like net turn is single digits that goes
back to the value of like you know
solving like a existing problem not not
creating a novelty we have over 120,000
in Mr we're growing over 20% month over
month I think one of the key things here
is we don't spend over 20% of our
revenue on marketing marketing always
has to be less than 20% and that is
because we want to make money we want to
be profitable so far it's working and
you know those are principles I think
that we'll continue to to use to grow
the business yeah so you guys built this
three friends tell me about why your
team works and why why you guys work so
well together I think the reason we work
so well together is because we've all
been through the Journey and we know
it's a long one and initially in the
beginning we're not getting stuck in the
small details
and we also know when to have fun
yesterday we were meeting we did our
whole road map thing and we took out
some time to go and play nine holes of
golf it's not that serious so I'm
curious on Blaine's take here though in
Justin's yeah I mean I think the biggest
thing is just like alignment right I
think so many co-founders especially
maybe first time around they partner
with people out of personal convenience
or because out of necessity almost
rather than like true true alignment the
second thing that I think is so so
important is that you have skills that
compliment each other so everyone can
stay in their Lane having a team that
doesn't like overly overlap and step on
each other toes I think is massive so I
think finding not only alignment but
also people that you can build with that
you like Vibe with but also compliment
each other other's skill set is like the
best thing that you can do I think a a
big part of that is the trust that we
have in each other too and we're very
honest about what we're building like
we're not afraid to say like hey this
isn't as good as it could be and I think
that shows and where we are today and
and what we've built let's talk about
about VC you guys have all gone through
the
VC I'm going to be the anti- VC poster
tell me a little bit about your past
with VC and how you're thinking about
these days yeah so I've had two Venture
back companies in the past the first was
seated their series C they've raised
over $80 million to date the second one
was called Omni panel we were backed by
CRV we raised a $2.5 million seed and
this time around it just feels very
different it feels like we spent all the
time we would have spent like talking to
VC's exping like the broad vision for
our product and we just spend it talking
to customers and building crap for
ourselves that we ended up using um so I
think that's something that's really
valuable for anyone who's getting to
start don't seek validation elsewhere
build something that customers want
they're willing to pay for and that you
yourself that solves a problem for you
and you'll be in good shape and then if
you want to take VC to accelerate that
growth that's up to you and you can
figure out if that's the right decision
for your business yeah I think in my
experience I built a business called
trend. iio I tried Racing for that
business for almost 4 years the effort
that it took to actually get good at
fundraising it's a skill set in itself
if you're not great at building a
business and generating revenue and you
choose to get great at fundraising
you're just going to have the whole
thing backwards how do you guys all work
together how do you stay aligned how do
you meet as a team I think from a team
perspective what's really cool about how
we operate is you know Ramon's in Fort
Lauderdale I'm here in Miami Justin's in
Austin a lot of the work is async during
the work week but what we're really mind
F and the reason we're all here today in
Miami is because every quarter we get
together for at least a week to like
meet on all the important things so I
just think it's like a really great
model for startups or Founders who are
like looking to get the business started
it's not like where you are where your
office is ETC it's like find a great
group of people wherever they are in the
world and you know do your own thing but
like make sure that you know you also
get together to get like really aligned
on the things that need to happen in
your business the other thing that we do
just in terms of operationally is we do
a Monday 30 minute standup call and a
Friday 30 minute standup call just to
align on product what everyone's doing
but we really try to block out the
calendar and not be stuck on calls all
day and more focus on like just shipping
yeah all right thank you guys for having
me in this amazing apartment this
amazing business that you guys built do
what they did follow this advice and you
have a $120,000 Mr AI app good luck guys
hey guys I hope you took away some
golden nuggets from that video that'll
help you along your business Journey and
for anyone that still feels a bit lost
maybe you don't know where to start or
you need some inspiration on some good
marketing strategies well I got
something for you right now if you head
to the first link in the description you
can download our Deep dive SAS report
for free it has over 50 different micras
businesses making millions along with
the tools they use the business models
they run and tons of other stuff that
will help you on your journey just click
the first link in the description to
grab it and if you're serious about
building something consider joining
starter story it will help you do it
much love and see you guys in the next
one peace
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