I Built a $50 Million Business in 6 Minutes
Summary
TLDRIn this video, the speaker discusses launching a nose strip business, outlining strategies to scale it to a $40-60 million enterprise. The nose strips, which are cheap to manufacture, can be sold at high margins and benefit from recurring purchases. The speaker emphasizes the importance of product differentiation, branding, and appealing to a mass market. He proposes using motivational words on the strips and offering customizable options. By leveraging influencers and focusing on a high-margin, recurring revenue model, he envisions building a highly profitable and valuable business.
Takeaways
- 😴 The speaker uses nose strips to prevent snoring and considers launching a nose strip business.
- 💰 The manufacturing cost of nose strips is low, allowing for high profit margins when sold at a higher price.
- 🔄 The product is sticky, both literally and metaphorically, as it encourages recurring purchases due to its effectiveness in improving breathing.
- 🌐 The speaker prefers products associated with daily activities that don't require willpower, like sleeping, over those that do, like working out.
- 🏷️ The speaker suggests branding the nose strips with a single word that serves as a daily reminder for personal development.
- 💡 The idea of having a clear nose strip with a visible word is proposed to make the product stand out.
- 💸 The speaker estimates potential earnings by calculating the cost of goods, shipping, and potential sales volume.
- 📈 The business model includes a focus on customer retention and growth, aiming for a stable user base through consistent marketing efforts.
- 🌐 The target audience is initially the entrepreneur community, with a broader market potential for different walks of life.
- 🔑 The speaker emphasizes the importance of a strong brand promise that helps people feel better about themselves, which can justify a premium price.
- 🚀 The speaker envisions a unique competitive advantage through customizable nose strips, allowing customers to choose their own word for personal motivation.
Q & A
Why does the speaker choose to wear nose strips?
-The speaker wears nose strips to prevent snoring at night.
What is the initial step in launching a nose strip business according to the speaker?
-The initial step involves understanding the cost and profit margins, as nose strips cost pennies to manufacture and can be sold at a high markup.
Why are nose strips considered a 'sticky' product?
-Nose strips are considered 'sticky' because they can improve breathing, leading to recurring purchases, and do not require willpower to use.
How does the speaker suggest differentiating the nose strip product?
-The speaker suggests focusing on product quality, incorporating branding elements with motivational words, and offering disposable options.
What pricing strategy does the speaker propose for the nose strips?
-The speaker proposes selling the nose strips in packs (30, 60, 90) with a premium pricing range around $19.99 to $24.99.
What is the importance of auto-ship in the business model?
-Auto-ship is important as it provides convenience for customers and ensures consistent recurring revenue.
Which community does the speaker initially target for marketing the nose strips?
-The speaker initially targets the entrepreneur community for marketing the nose strips.
How does the speaker plan to incorporate personal development into the branding of nose strips?
-The speaker plans to associate the brand with personal development by including motivational words on the nose strips that serve as daily reminders.
What is the projected monthly profit with 5,000 users?
-The projected monthly profit with 5,000 users is approximately $80,000, leading to a million dollars a year in profit.
How can custom words on nose strips create a competitive advantage?
-Custom words can create a competitive advantage by allowing personalization, which can justify a higher price point and enhance customer engagement.
Outlines
🌙 Launching a Nose Strip Business
The speaker discusses wearing nose strips to prevent snoring and outlines a plan to launch a successful nose strip business. They emphasize the high profit margins, the product's recurring use, and the potential for convenient auto-ship. The speaker highlights the advantage of nose strips over supplements due to the regularity of sleep, which does not require willpower like fitness or supplement products.
💡 Product Differentiation and Branding
The speaker shares insights on improving and differentiating nose strips through product design and branding. They suggest incorporating motivating words on the strips, using disposable options, and offering customization. The speaker explains how branding can enhance product appeal and drive sales by providing constant subconscious reminders to users, drawing parallels to the impact of motivational words in sales environments.
📈 Financial Projections and Pricing Strategy
The speaker estimates the financial potential of the nose strip business, projecting significant profits. They propose selling packs at premium prices and focus on minimizing costs, mainly shipping. The speaker explains how to calculate gross margins and churn rates, projecting a steady growth to 5,000 monthly users and $1 million in annual profit. They emphasize the importance of targeting the entrepreneurial community and broadening the brand appeal through personal development themes.
🤝 Leveraging Influencers for Growth
The speaker outlines a strategy to collaborate with influencers to expand the business. They suggest offering influencers a share of the profits to promote the nose strips, potentially increasing sales significantly. The speaker discusses the benefits of high gross margins, enabling investments in new channels and premium pricing. They project a potential $3-4 million EBITDA business with a valuation of $40-60 million, highlighting the business's recurring revenue and competitive edge.
Mindmap
Keywords
💡Nose Strips
💡Recurring Revenue
💡Gross Margin
💡Auto Ship
💡Churn Rate
💡Product Differentiation
💡Influencer Marketing
💡Personal Development
💡Premium Pricing
💡Entrepreneur Community
Highlights
Discussing the launch of a nose strip business and its potential to become a 40 to 60 million dollar enterprise.
Nose strips are inexpensive to manufacture but can be sold at a high markup.
Nose strips are a 'sticky' product with potential for recurring sales due to their daily use.
Auto-ship feature can be incorporated for convenience and recurring revenue.
Nose strips don't require willpower to use, unlike supplements or fitness products.
Product knowledge is deep, focusing on disposable nose strips and their benefits.
Innovative branding ideas, such as having a word visible on the nose strip.
Using a single word as a daily reminder for personal development.
Estimating retail prices for nose strips and considering premium pricing.
Calculating cost of goods and shipping costs to determine profitability.
Strategic pricing and upsell options to maximize revenue.
Projected monthly sales and churn rates for the business model.
Targeting the entrepreneur community for initial brand outreach.
Developing a personal development brand with daily action reminders.
Considering a broad brand appeal by focusing on common human deficiencies.
Creating a unique competitive advantage with custom word printing on nose strips.
Exploring the potential for premium pricing with custom word options.
Collaborating with influencers to promote nose strips with their community's preferred words.
Estimating the business's enterprise value based on projected EBITDA.
Transcripts
i get asked all the time about these
nose trips that i wear i wear nose
strips so that i don't snore at night
in this video i'm going to break down
how i would launch a no-strip business
if i were to launch one and how i would
get it to be a 40 to 60 million dollar
enterprise and how you can use the same
thought process to apply to any physical
products business or service business
that you use to sell stuff to people
that you don't know
no strip costs pennies to manufacture
you can sell them for a hundred times
that price so if it cost you two cents
and you can sell for a buck you're
making huge margins on the actual thing
the second thing is that it's sticky
quite literally but also from a
recurring standpoint if you can improve
how someone breathes they're gonna buy
it again and again and again i could
have auto ship built into it which would
be nice and it makes it convenient for
people it's also something that doesn't
require willpower to use you don't have
to remember to do it like the problem
with supplements is that people have to
remember to take them most people sleep
every day most people don't work out
every day and so i'd rather associate a
product with something that people are
doing on a regular basis without
willpower it's the reason beauty
products to me are more interesting than
fitness products by and large i have
deep product knowledge i've used the
ones that are like pieces not a huge fan
walk around within the morning and i
take it out i put in my pocket leave it
on my kitchen table out of bed to go get
the fit i like the disposable ones and
the things that i probably do to make it
different is i'd focus a lot on the
product i would also probably try and
tie in some sort of branding element i
would put like volume or persist or
endure across the bridge of the nose i'd
like to have one that was clear that had
the word so the only thing you see is
the word which i think would be really
cool it has to stick all the way through
the different flavors of the nose strips
would be the words that people are
working on and so i like having those
constant daily subconscious reminders
around things they actually found in
sales rooms that having a single word on
the wall affected performance from the
team even if it was just huge so if you
just have like one more on the wall then
everyone sees that as this daily
reminder that they need to keep it i
would want my face to be the walking
billboard for my eye and i would have it
spelled backwards said that in the
mirror someone could see it and they
could see it every day and it would
remind people of like a word that
they're trying to focus on for a season
and so i'll give you a basic estimate of
what i think would end up happening
money-wise let's say that we retailed
the product for let's see what uh some
strips go for real quick so they
currently sell for about 30 cents a
strip and i'd probably sell 30 60 90
packs i would want to be a little bit
premium 1999 would probably be a price
point that i would look at 24.99 i would
split test the price points there but
it'd probably be in that range my cost
of goods would almost be entirely based
on the shipping cost that's associated
cost to ship the no strips would
probably be in the neighborhood of like
four dollars maybe like two and a half
it depends on like the 3pl that we would
use even after the cost of all the no
strips which is minimal let's just say
we make 16
of gross margin on a 20 product which is
really good for physical products five
options on my upsell one three six
twelve all the way down to maybe fifteen
percent off if they buy you know twelve
months worth and then cascading upwards
in terms of smaller percentages off but
let's do the math on how much money this
would make let's say ten thousand people
a month would go to a page if i said hey
check this out and if i did it
consistently probably about ten thousand
people a month just clicks and then we
converted five percent of traffic on
that page five hundred buyers let's just
keep it at the monthly rather than
getting in the average bundles ten
percent churn and it's not very low for
physical but just leave it at that every
month i would sign up 500 and then i'd
lose 10 percent this business would keep
growing with that level of traffic until
we reached 5 000 users because it's 500
divided by 10 which is the churn which
is the number of maxed out users at a
hypothetical max we're in equilibrium
between number of signups and number of
cancellations i would be at 5 000 users
a month price point was 20 100 000 a
month 80 000 a month so a million
dollars a year in profit from the no
strips and if i was focusing on like a
branding perspective i would probably go
after the entrepreneur community first
because it's obviously a community that
i have access to the brand would
actually be more of a personal
development brand of like becoming the
person you want to be with the daily
actions and reminders of who you want to
become because i'd want it to be mass
market i would show different walks of
life working on different problems moms
and their word is patience patience can
apply to anyone but like a prisoner who
just gets out is the next con it might
be like forgiveness it could be a much
wider brand if you focus on the
deficiencies that people want to fill
and then i have to think of some kind of
sexy word for the brand name i don't
know i feel like it'd be something
around like better be better nose trips
short and simple that people could
understand and share you want it to be
about the prospect and more specifically
about the problem that we're solving and
the person that they want to become and
the promises that we're fulfilling if
you can help someone feel better about
who they are people will pay anything
for that feeling and so the wedge
product is the idea that we are helping
people breathe better but the brand and
the promise is about we're helping
people be better what i would really
want to do is build the capacity to make
the words easy to print on there so we
could have people put their own custom
word in so you can choose from one of my
five words but if you want to put your
own word in it's 30 and i get this huge
premium but it's worth it for a lot of
people to have their own custom words so
that would be like a unique competitive
moat if you develop a manufacturing
capacity that can like on demand create
the word that someone wants you can
literally 2x 3x sometimes the price of
the thing because value is there for
people and they would get a text they
would say hey what word you want to work
on this month they text it back it
automatically goes into the system and
then ships it right out to them and i
would probably ship no strips with two
or three variations of influencers that
i thought were words that their
communities dug so someone sends me
mozination or someone sends me s me 500
someone sends me those terms on a strip
i'm going to be like dude this is dope
and then because i have such high gross
margins i could say hey man i'll give
you 40 by the way if you're making your
own business if you ran 40 margin on
your own audience it's a great business
anyways for me i was able to add a
million dollars to business and then you
add 100 influencers maybe they're not as
big or they're not as no strip centric
like i am but maybe if they did a tenth
of the volume that i could do on average
it's 10 times what i'm doing which is 10
million dollars theirs was only 40
margin to me because i had to give them
40 and there's 20 that was cost so let's
cut that in half again so i get another
20 from the 10x volume that i get from
them mind you stuff to run the business
but let's just keep it simple for now so
now we're probably looking at a three or
four million dollar ebitda business that
is recurring not dependent on one single
face very high gross margin so that they
can go into new channels that has a
unique and competitive moat that allows
it to have a premium pricing which i
didn't even factor in like if we sold it
for 40 rather than 20. that would be a
really interesting business model that
would have huge enterprise values if
you're curious the final piece is that
what would this business be worth if
we're doing 4 million in ebitda for a
physical products business like this
this business would probably be worth
somewhere in the 40 to 60 million range
mosey money business breakdown if i were
to get into physical products what i
would make and how i would make it to be
a cool business
it was mostly on the fly
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