I Built a $50 Million Business in 6 Minutes

Summary

In 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

00:00

🌙 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.

05:01

💡 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.

Keywords

💡Nose Strips

Nose strips are adhesive strips worn on the nose to reduce snoring by improving airflow. In the video, the speaker discusses their business potential due to low manufacturing costs and high resale value. He highlights their recurring use as they improve breathing, making them a product people will buy repeatedly.

💡Recurring Revenue

Recurring revenue refers to income that is regularly received. The speaker emphasizes the value of nose strips for generating recurring revenue since users need them daily, ensuring consistent repeat purchases. This makes the product financially attractive.

💡Gross Margin

Gross margin is the difference between sales and the cost of goods sold, expressed as a percentage. The speaker explains that nose strips, which cost pennies to make but sell for much more, offer high gross margins, making them a profitable product to sell.

💡Auto Ship

Auto ship is a service that automatically delivers products to customers at regular intervals. The speaker suggests incorporating an auto-ship feature for nose strips to increase convenience for customers and ensure steady revenue by reducing the likelihood of customers forgetting to repurchase.

💡Churn Rate

Churn rate is the percentage of customers who stop using a product over a given period. The speaker estimates a 10% churn rate for the nose strip business, meaning he expects to lose 10% of customers each month but aims to offset this by attracting new customers.

💡Product Differentiation

Product differentiation involves distinguishing a product from its competitors. The speaker plans to differentiate his nose strips by adding branding elements like inspirational words printed on the strips, making them unique and more appealing to customers.

💡Influencer Marketing

Influencer marketing is a strategy where businesses collaborate with influencers to promote products. The speaker suggests using influencers to reach broader audiences and increase sales, leveraging the influencers' followers and credibility to boost the nose strip business.

💡Personal Development

Personal development refers to activities that improve awareness and identity, develop talents and potential, and enhance the quality of life. The speaker envisions his nose strip brand as a personal development tool, with motivational words on the strips serving as daily reminders for self-improvement.

💡Premium Pricing

Premium pricing is a strategy where a product is priced higher than the average to reflect its superior quality. The speaker plans to position his nose strips as a premium product, setting higher price points and emphasizing the added value of personalized motivational messages.

💡Entrepreneur Community

The entrepreneur community consists of individuals involved in or interested in starting and running businesses. The speaker intends to target this community first for his nose strip business, leveraging his own connections and influence within this group to build initial support and brand loyalty.

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