I Built a $50 Million Business in 6 Minutes

Summary

• I use nose strips to prevent snoring, and if I started a nose strip business, I'd aim to make it a $40-$60 million enterprise.
• Nose strips are cost-effective to produce, selling for a hundred times the manufacturing cost, which means huge profit margins.
• The product is sticky; it creates recurring sales because if someone's breathing improves, they'll continue to purchase it.
• I prefer products like nose strips that don't require daily willpower, unlike supplements and fitness products.
• By using nose strips myself, I've developed a preference for disposable ones and a disdain for reusable types; personal experience has informed my product knowledge.
• I'd differentiate my nose strips by adding motivational words like "volume," "persist," or "endure" on them as daily subconscious reminders, similar to the positive impact of having motivational words in sales rooms.
• I'd use my face as a walking billboard for the branding, with the chosen word spelled backward so it's readable in the mirror.
• For pricing, I'd consider premium positioning, selling a pack for around $19.99 or $24.99 and running split tests for optimization.
• With minimal production costs, I'd plan for a large gross margin and offer upsell options, with discounts scaling up to 15% for bigger commitments.
• Assuming 10,000 monthly page visits with a 5% conversion rate and a conservative 10% churn rate, the business could potentially attract 500 new users monthly and grow to 5,000 users. This equates to about $1 million a year in profit.
• I'd initially target the entrepreneurial community and shape the brand as a personal development tool, helping people become better through the product.
• The branding would resonate across diverse demographics by focusing on common personal development goals, using words like "patience."
• A short, relatable brand name like "Better Be Better Nose Strips" would be ideal for ease of understanding and sharing.
• The concept of personalization would add value, offering custom words on the strips for a premium price, creating a competitive edge.
• Influencer collaboration could amplify reach, with the flexibility of paying influencers a significant share due to high gross margins.
• A diversified influencer strategy might result in substantial added revenue, even with reduced margins due to partnership commissions.
• The business model's strengths would include recurring revenue, high gross margins, a diversified customer base, and a unique competitive advantage.
• A mature business with these attributes and $4 million in EBITDA could be valued between $40 to $60 million.

Video

How To Take Action

• A good way of doing this is to start with a product that is cheap to make, like nose strips. You want to sell it for way more than it costs to make. Big profits, folks!
• Make sure your product is something people keep buying. If your product makes life better, like helping with breathing, they'll buy it over and over.
• Pick something easy for people to use. No need for willpower. If using your product is as simple as sleeping is for most folks, you're on the right track.
• Use the product yourself. Learn why you like some types and not others. Like me, I prefer disposable nose strips. It means you know your stuff.
• Think about how to make your product stand out. Maybe put cool words on it that inspire people. Like "persist" or "power". It's a boost they'll see all the time.
• Put those words backward on the strips! People can read them in the mirror and get a daily dose of motivation.
• When pricing, try higher prices, like $19.99 or $24.99 a pack. Do some tests to see what price people like best.
• Offer upsells! Give discounts if people buy more. Like 15% off if they get a year's supply.
• Set a goal for how many people you want coming to your site, like 10,000 a month. Then aim for a good number of them buying—5% is a solid target.
• Offer something that makes people want to be better, and target groups like entrepreneurs first. They love personal development.
• Use a simple name for your brand that sticks in people's heads. "Better Be Better Nose Strips" is short, sweet, and easy to remember.
• Let people personalize their strips for extra cash. They can pick a word that's special to them.
• Team up with influencers. Since you're making good money on each sale, you can afford to give them a nice cut.
• Remember, you want a business that keeps making money, isn't tied to one person, and can spread out to new places. It needs to be something unique that you can charge more for.

Quotes by Alex Hormozi

"If you can improve how someone breathes, they're gonna buy it again and again and again"

– Alex Hormozi

"I would want my face to be the walking billboard for my brand"

– Alex Hormozi

"It has to stick all the way through"

– Alex Hormozi

"If you can help someone feel better about who they are, people will pay anything for that feeling"

– Alex Hormozi

"Value is there for people and they would get a text they would say hey what word you want to work on this month"

– Alex Hormozi

Full Transcript

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