The Porn Blocker App That Prints $100K a Year

16:26Jason Yormark:I wonder if there is some, if you had the right skillset and the right background and knew what to do with this business, I wonder if there's some structure here with the seller where you, you come in at a much lower purchase price and maybe it's negligible or nominal and you're really just helping provide some growth equity. They get diluted, you bring growth equity and you participate meaningfully in the upside. if there is a path for that.

16:54Alex A. McClafferty:Tell me if you guys would do this deal. If you have capital and you're interested in doing the work, you go in and you tell them, I'm going to give you$100 ,000 down and we're going to do a profit split of all free cash flow from this business over the next five years. And we're going to do it, say, 60-40 in their favor until they get, let's say,$500 ,000 out of it. And then over time, that will go down to zero, say, ratchet down 50, 40, 30, 20, 10 over the next five years. Do you do that deal if you're a person trying to do an earn-to-own type situation, grow-to-own type situation? I like it a lot, especially if you can convince the seller that you're bringing marketing chops or something like that, some value add to really grow it.

17:44Alex A. McClafferty:And if you're offering the seller to basically make a little bit more than they would just selling it straight out. Yeah. Big thanks to High Level for sponsoring this video and helping us pay for our editors. High Level is the all-in-one CRM that handles your emails, text, funnels, and more all in one place. Think of it like the Swiss Army knife for small businesses, and you can try it for free for 30 days at gohighlevel.com slash Michael Girdley.

18:08Jason Yormark:I think Travis could do that deal. I could not. I don't have the skill set.

18:12Alex A. McClafferty:Well, I just imagine you, you're up on a roof, you've got your phone, you're doing SEO. Like, yo, here's how you stop your porn addiction. You turn around, you put down some roof shingles, and you come back on, you work on your next platform to operate on SEO. See, I'm not looking at porn right now, thanks to this. Here's the downside of those schemes. No comment. There's a ton of risk for the seller and they routinely just say, no, I'm not interested in that. I won't cash up front and they'll keep looking for somebody else. But Bill loves putting them out there. Look, you keep making those offers eventually.

18:47Alex A. McClafferty:You know, somebody says yes to them. I want to pivot on talking about this one a little bit. This is one of those deals that I feel bad for the seller because they're putting it out. And my first reaction as like, as you know, somebody who has more of a zero to one bent of entrepreneurship is like, shit, why don't I just copy them? Like, that's the problem. Like I, sometimes I see deals like this out and I'm like, oh, they're putting their, this is such a cool niche. That's going to be durable. But by putting the business up for sale, they're putting that business up at risk because people are going to copy it.

19:20Alex A. McClafferty:And so that's kind of, I don't know. Is that the wrong feeling about this or how do you guys think about that idea? I think that's right. Right. I'm friends with the Empire Flippers guys and talking to them about the privacy of the deals. And they always said that they're trying to keep it really private, not for the seller, but it's for the buyer.

19:38Jason Yormark:Yeah.

19:38Alex A. McClafferty:Because all these people looking at like, ah, I can do that. I can just take over that niche and it can screw the buyer. So that's the reason for the privacy. So hilarious story. You know, Mark Cuban's, this is totally off topic, but relevant to this. You know, Mark Cuban's like cost plus drug thing. that deal where he basically like they manufacture drugs and they sell them at cost and it's kind of a costco anyway so before mark cuban got involved in a deal like that i saw one of their competitors was out looking for investment like three years earlier and it was in the category of oh i wish i just hadn't been pitched investing in this deal because i would totally copy this idea and uh as a general rule like i don't do that like i think that's wrong if somebody told me he's on a confidential i don't do it but that happens routinely when you're looking at investments You're just like, oh, I would so start this idea if I didn't have ethics and morals.

20:27Alex A. McClafferty:I think you told me that about my business.

20:33Jason Yormark:He's been in stealth mode on something he's going to tell you about later, Travis.

20:36Alex A. McClafferty:It's called Papital CAD.

20:43Alex A. McClafferty:Total secret business plan.

20:50Jason Yormark:I find it hard to believe. I mean, sellers say lots of crazy things in their listings. I find it hard to believe that an app with 600 subscribers is the number one. Yeah. Me too. Like, it's like people, you know, people will say like, you know, Columbia's most trusted roofer. I'm like, that's, you know, that's a little bit, we don't say that about ourselves, even though we're the biggest, but like, it's one of those things you can't measure. This is something you can measure. and like is it number one in terms of it has more five-star reviews than anybody or it has more downloads it's i don't know i think it's just a little bit i i think if you really clicked on that

21:26Alex A. McClafferty:and pressed on it it's probably not uh before we kind of go to rank this one i think we're going to talk about this level of inconsistency in the listing like i think you listed there's two different lists asking prices mrr is listed as two different numbers between the two up in the top in the bottom like that's a huge thing if you're going to market anything or try to sell you have to be internally inconsistent because people are looking at little signals like that and you know i think it screams like you talked about mills like being unprofessional if you don't kind of internally check especially when the document is only a half page long like like if it's 150 pages cool half page like you got to check your numbers yeah so why did the college kids like this

22:14Jason Yormark:one was it the p word or something said um as a distant second they got a kick out of and were curious how this business would work uh you know last episode we did the vr thing i would rather

22:28Alex A. McClafferty:own this business than the vr thing i think this has more tailwinds better business to be in this

22:35Jason Yormark:just needs marketing it seems like just needs good marketing better marketing so what these kids one

22:43Alex A. McClafferty:of these kids should do is go fill out the nda and go drop out of the nba program after they graduate and go talk to the seller and be like look you're never going to sell this for five times earnings you're also you don't you're not somebody knows how to market it i am young hungry and i have the best MBA in the world from the University of South Carolina. And I would like to do an earn out job here. I'll work for free. Let's make me a partner. And over time, let me buy, make this thing so big that I can generate you more cash than you would otherwise get. And along the way, everybody gets rich and do a structure like I talked about.

23:20Alex A. McClafferty:I think that's, I think this is much more interesting than the VR thing.

23:23Jason Yormark:Travis, if you sign the NDA on this, how quickly could you suss out what, like, if there's real infrastructure there? And, like, if the YouTube traffic is valid and could continue, like, is it one of those things, like, in 30 minutes, you know everything you need to know, if you know what you're looking for? Four minutes. Yeah.

23:46Alex A. McClafferty:Yeah. You can't say, like, oh, this will stay ranking at number one. You can't do that. but you can look like evaluate the whole thing like is it just one video what's the structure look like um no it won't take long at all um there is legitimate growth for just based on like the traffic that's out there and what's ranking and uh how not competitive it is the social ugc channel here is so huge right um i just did a video on buzz balls have you guys ever looked in the buzz video business uh maybe you should wait for my video mills they'll educate you i'll watch no

24:21Jason Yormark:just like a good business partner i will watch your videos thank you i appreciate it no but

24:27Alex A. McClafferty:they are insanely good at uh paying influencers to do videos about buzz balls so like every time a new buzz ball flavor comes out um heather are you familiar with buzz balls should i just only through my 20 something kids uh yes travis your your kids are not at this age yet but my kid will

24:45Jason Yormark:be born in a month so it doesn't exist you're 21 years away so they are single they're if for the

24:51Alex A. McClafferty:audience members if you don't know they are plastic contained single serving balls which are sold at convenience stores um they're the number nine most selling spirits or alcohol brand in the united states and they are cocktails uh they are they are basically prime energy with alcohol on them that's the way you should think about them they are they are nasty um they run about three or four dollars a piece um and they are 17 alcohol so they're 35 proof so at the high end of what a wine or beer can legally be before you become a spirit um and basically you can drink it's it gives you exactly what it says you drink one or two of them and the you're you get a buzz right that's basically how they are and then they also have jumbo sizes but back during uh during the early days of the tiktok era buzz balls discovered that people were like making videos taste testing their different flavors and all this kind of stuff.

25:46Alex A. McClafferty:And that is how they got really promoted and grew. So part of how they grew so quickly. So they have since gone super in and it was interesting. I came back and I was like, Oh, I'm doing a video on buzz balls. And by the way, I couldn't even drink them because I don't drink and also they're nasty. So I just left them sitting outside in the street for somebody to take if they want to drink them. And my wife was like, well, you know, Oh, I know all about buzz balls. It's because all the influencers she follows are getting paid to promote buzz balls and do a b testing on it and i think all the way back looking that back to this this porn app uh anti-porn app like that is precisely a channel that would grow the hell out of this there are so many health and wellness influencers you can pay to promote this app and i think it would grow like crazy and i would bet google trends um porn addiction all this stuff's probably growing like crazy so huge tailwinds huge people people are talking about it too i mean the the conversation on twitter it's happening yeah it's real and i mean that's the best thing about twitter like when things are talking about there they're usually early so that means you can predict what's going to happen with later books and that was my talk about buzz balls thank you for being here guys buzz balls it's like a great business they got acquired by sazerak it said in 2024 half a billion half a billion the oh you know how the lady got it started this is crazy she was uh her marriage was falling apart she lived in plano texas she had two kids and she was making$35 ,000 a year as a teacher.

27:09Alex A. McClafferty:And here in Texas, we really value education here in this state. And she said, look, my dream is I want to make$100 ,000 a year, like, so I can provide for my family. And so basically she went to like 20 banks and tried to get a loan to start this thing. And it was her idea. She's like, oh, how can I sell these single serving cocktails so you can drink them by the pool because they're in plastic? And she She went to all these banks and she couldn't get a loan. And she finally went to this like kind of one no-name brand bank. And they're like, well, what do you have for collateral? Like, we're not going to loan you just on an idea.

27:40Alex A. McClafferty:She's like, well, I have a car, a used car. I can give you that as collateral. And my mom has a ranch. And they're like, what's on the ranch? And she said, cows. They're like, okay, cool. We'll take a lien on the cows. So they loaned her like a hundred grand to start the business with a used car loan and a lien on the cows. and then she started to make them in her house and she went door to door she sold them finally got convenience stores to to carry them and then it all went off by then and today her husband her marriage has turned around and her kids all work in the business they're all leaders in the business and they just sold for a half a billion she still runs it awesome this is so texas by the way a lean on the cows and the used car it's hard to get a startup loan so i mean good for her because she

28:28Jason Yormark:had to be very persistent to get to find a bank that would even do that and i went out the next

28:34Alex A. McClafferty:day from where i left the buzz ball sitting on the side of the street they were gone somebody took them so look at me adding value to the universe an 18 year old kid grabbed them on their way on their way by they are so nasty looking i was i don't drink anymore but my my 17 year old who is reminds me he is legally allowed to drink in the presence of parents was like i'm not drinking

28:59Jason Yormark:those things he like couldn't even taste them i think it's interesting when people take a package and make like the package so you know integral into the product itself like there's no like there's no normal shelf space to put these like they had to create shelf space for them it's like when red bull came out and they were doing a different can than everybody else you know it's differentiating it's cool we went to the 7-eleven i had to go ask the guys uh who were working i was

29:24Alex A. McClafferty:like do you have buzz balls they're like oh yeah we definitely do and they've like pointed to this bin like right in front of the register that was like a bunch of single serving alcohol in right by the register yeah yeah with the boiled peanuts right hell yeah heather hell yeah

29:41Jason Yormark:sorry we just got turned explicit for this episode all right on that note uh would you

29:47Alex A. McClafferty:guys like to uh tell us uh what you think about this deal heather you want to go first

29:52Jason Yormark:Yeah, I think that it does. I think there is a room for somebody who's great at marketing. I think I would do more of the deal that you were talking about. I would not try to buy this outright or use an SBA loan. But if there was some kind of profit sharing, someone comes in that can grow it. I like it on that basis. Yes.

30:11Alex A. McClafferty:Amazing. And Travis, I'm gonna be unoriginal. Exactly what Heather said.

30:15Jason Yormark:I'm thumbs down on it. I just don't know anything about like how to grow this business or if it's even healthy. So.

30:20Alex A. McClafferty:You just stand on top of your roof and then hold up and tell people about. Yep. And I would like in closing to tell you guys, this will be the highlight of my day because I think it's the first episode where everybody agreed with my crazy idea. So let's go me. Let's go me. Super. Well, thanks everybody for being here. If you want to do business with Heather, please do. She's at visocap.net. Is that right, Heather? Yes, that's right. V-I-S-O-C-A-P.net for all of your SBA borrowing needs. and uh travis is running capital pad and that's capitalpad.com uh so and you can go there if you're interested in either raising money for an independent sponsor or a small business acquisition or from investors or if you're an investor wanting to put money in so is that an accurate way to just run it accredited investor accredited accredited y 'all's deals they are always so

31:10Jason Yormark:unique like every time i'm like i just want to see what they have going on and i'm like whoa that's Like, that's cool. That's interesting. That's like very, you guys have a good deal. It's interesting to me too, coming through.

31:20Alex A. McClafferty:I'm like, I've never thought of this business. Yeah, they're good. There was like that one you told me about in Florida that, well, I don't even want to like, I don't want to dox it. But I was like, this is the best business I've ever heard. And you were like, it's been around for a hundred years. I was like, I know why. It's a great business. Yeah. Yeah. They're unique. So much curation goes into this though. Like we'll look at dozens or even sometimes a hundred deals for every one that we do say yes to and put on the platform. them so that's why you get the unique ones such good business fully some no copying no not not capital cab capital cad

31:59Jason Yormark:please get that website michael just so we can mess with travis

32:03Alex A. McClafferty:capital cad i get well that it's cad so yeah anyway all right everybody thanks for being here we'll talk to you next week