Asking 3 young millionaires how they make $1.8M, $5M, & $12M/year

18:11Welcome. How's it going? Good. Excellent posture. Yeah. Oh, yeah. Yeah, you scream good posture. I'll work on it. Yeah. Look at this guy. Jeez, I up my game a little bit here. Yeah, thank you. Yeah. All right, what's your name? What's up, guys? Kevin. Kevin. Yeah. Welcome. Thank you. Welcome to Shoot Your Shot. Hit us with the big number to start. So, big's relative. My number is 1.8 million. I think I'm a little unique with this setup because I actually just sold my business about two or three weeks ago. Nice. That's what I sold it for. Starter business on the board. Wait, so you are - You just exited at 1.8?

18:44Just exited at 1.8. Yeah, that was a sale price. What did you sell for$1.8 million? It was a franchise business called Smash My Trash. Smash My Trash. Oh, I've heard of this. Have you heard of this before? No, what is Smash My Trash? Explain, explain. Yeah, so the basic concept is companies that produce a lot of trash, industrial businesses, warehouses, factories, things like that, throw away a lot of stuff in these open top dumpsters that are these rectangles that hold like 40 cubic yards of stuff. The pricing model is that every time you fill it up and you need a new one, you have to get it replaced and that can cost like$1 ,000.

19:14Sam Parr:Yeah, I used to like get on top of ours and like jump up and down. That's it. Imagine if a giant thing came and smashed the trash down. I thought I was going to hire someone to come and jump on the trash for me. That was it. No, so we have these trucks that back up to the dumpster. Like you said, Sean, there's a crane on the back with this spinning spike yarn that goes in, pushes the trash down. The deal is basically, let's say you get 10 pickups a month,$1 ,000. That's$10 ,000 a month you're spending on trash. We'll get you down to just round numbers five, and we'll split the savings with you.

19:45Sam Parr:Wait, so one, a large company will spend 10 grand a month in trash? Yeah, or more. Who? Like a warehouse? Big factories, production facilities in like agricultural California is where I was doing a lot of work. Wow. Companies that just - So these are like, you just go to the parking lot. There's a huge dumpster back there. That's, that was the opportunity. That's the opportunity. Is to smash the trash down. So you have to do less pickups per thing because you're paying per pickup. That's it. And do smash, smashing trucks exist already? it was a new concept so it's a franchise this guy came up with the idea started growing fast decided to franchise it so these didn't really exist they exist in europe but they're like mounted to the side of the building so those companies would back the dumpster up so the insight was throw these things on a truck have them drive around and do it as like a mobile so you bought a franchise and then now sold your franchise correct one location how many five locations five locations how much did it cost to buy in i bought it in chunks so i think my buy-in was like 185k up front up front and then how did you have money before i worked in tech i was like somebody who worked in sass and uh had like sales or what were you doing yeah i was in like sales and product and stuff like that like the kind of classic bay area w-2 thing so this is so interesting so you're just sitting there at the office you got a good job you're working in tech and yet you're like i need to get out there amongst the trash what was the what was the chain of events that led you to like quit this safe thing and go buy into a smash my trash franchise.

21:14Yeah, it was a couple of things. It was like a growing sense of dissatisfaction. I like, I kind of started to realize late in life that I wanted to work for myself. And I was also like in this venture world where you're like going after like the next round of funding, this eventual exit. And I didn't, I was like blind to the way that a lot of the world worked in terms of like cash flowing blue collar businesses. And I started to get bit by that bug a little bit. Like I started hearing stuff about that and I got interested. And then it was really when I got married and went on my honeymoon and I waited till like the last minute to book our honeymoon.

21:45So we stayed at places that like we probably shouldn't have gone to that were nicer than we otherwise would have started talking about, started talking to people there at the pool and stuff and been like, no way. There's blue collars. People make cash doing businesses that are off the beaten path and interesting. Do you remember like, what were they, what were are they saying? What did they do? So one guy did like real estate. One guy did like a food truck, but like did like a food truck, like as a serious operation, like had many of them. I'd also had the seed planted on my bachelor party. I was there with my friend who was in private equity and he actually got in smash my trash before me.

22:17Gotcha. So he planted the seed and he was a private equity guy.

22:21Sam Parr:Of the 180, how much was that a huge chunk of your savings? I did 85 myself. A buddy gave me 70. And then, so that was like the equity. And then I did a 350 $50 ,000 SBA loan as well. Were you like, I'm all in, this has to work? Or was this like a safe, like I'm putting a small amount in, I'm hedging? It felt like a pretty safe side bet. I had more than that that I would have been able to, but it felt uncomfortable. Okay. So you decide to go in, you buy one. What happens? So I actually bought three out of the gate. Okay. I bought three territories out of the gate. Now territories in franchise world, like a lot of times people picture restaurants where like it's clearly a unit.

22:58This is the area. So, I mean, it's really one business. The areas are a little arbitrary.

23:01Sam Parr:How many years ago was this? This was in 2022. I got started. Okay, so four years. Four years ago. So got started. And part of the reason I got into it was I was interested in something where I could draw a direct line between like brute force effort and cash in the bank. I felt like in tech world, I was so many layers abstracted away from like eventually making money. That's like a classic Warren Buffett metric, right? Brute force to cash in the bank. Yeah, exactly. So what do you mean? You just meant like, if more people I call, the more money I'm going to make. Right. Like I had this no brainer offer.

23:32I had these people who definitely could use this and 100 % could make money. And all I needed to do was go get them to believe me. And I could just start making cash. And it wasn't like this promise of some future outcome. And I found that really motivating. Okay. So I paid somebody overseas to like zoom in on Google satellite view and put pins on every dumpster. Okay. And like, that was my plan. And I would drive from Walnut Creek down to, you know, San Jose to Salinas, like hour and a half, two hours each way every day. And just like trespass, go into warehouses, try to talk to like the person there who's in charge of the dumpster.

24:10Right. And just kind of wielded into existence, started driving beyond the confines of my territory. Even zoom in. You go, you drive. Okay. Contractor gives you a pin. You drive to the pin. You get there. You weren't invited. Knock, knock. Now what? So not even knock, knock. Walk in. Right around to the back where the dumpster is. Okay. So I built this up over time. I learned. Yeah. You don't want to go to the office because the office, they're going to, you know, they're going to tell you no. So what I would do is I had a red hard hat that I would put on, get the clipboard going, walk into the back and try to find the person who's physically loading the dumpster.

24:44You got the red hard hat on, started asking questions. Most of the time, they would just tell me.

24:48Sam Parr:He's like, dude, there's no construction around here. You're the trash contractor for the company. Right. They're just not sure. They're just like, this guy's asking me like, how many pickups do you get? Who's in charge of it? I start to kind of size the account, get some info. And then I would go to the front armed with info. And then I would, you know, work my way to the decision maker. How many months until your first dollar? Right away. Right away. And the first. How thrilling was that first sale? Oh, it was great. It was great. I was like out with our neighbors when they first, because these are like kind of chunky contracts.

25:18We're talking about like large, I mean, for me at the time, you know, a couple thousand bucks a month recurring revenue. So it only took two, three, four accounts to basically pay my debt service and my driver. So you had a driver right off the bat? I hired a driver right off the bat, yeah. And did Smashboxdress give you this playbook or you were just like, I'm going to red hard hat this? Or they were like, hey, here's why you do it. They didn't tell me about the red hard hat, but they gave you the basic playbook and then I, before I opened, went around to a couple other franchisees, including my buddy I mentioned, and just was like, show me everything.

25:50How do you guys do it?

25:51Sam Parr:What works? It's sort of like, have you ever seen those videos where someone's, my friend Neville Medora, he's an Indian guy, and during South by Southwest, every year he dresses up like a sheik. Like he wears like a white thing and a hat. And then he's just like, I get it.

26:11Sam Parr:and then there's like these instagram videos of guys who like they're like i'm just gonna like look like a dj whatever that means and then they get into the club uh that's like this version of that exactly people just don't ask questions so you this is amazing okay so you said you sold the business now year one do you remember kind of like what was the pnl like what'd you what'd you make in first year of business it's hard to say i because in the first year i bought the two additional franchises. So one day I drove beyond the bounds of my territory and I found like the trash gold mine and I bought those two franchises and bought two more trucks.

26:44Okay. So all the cash went right back in. Were all three territories successful or one sucked, but another one was amazing and made up for it. That was kind of it. There was a great one. There's an okay one. There's a medium one. And then I added on like these two amazing ones. Um, so I had to buy two trucks, had to buy two new, uh, territories. So all the cash went right back into that. I think I probably did like six to 800k of top line in those first two years wow what was the biggest pain in the

27:10Sam Parr:ass looking back the trucks the operators or um not even the operators fixing the trucks when there's issues was something i just don't it's a big truck with hydraulic equipment and i eventually just kind of adopted the philosophy that like i had a mechanic he was going to charge me what he charged me and i he was probably overcharging me but when there was an issue i would just overpay for it. You didn't exactly have like a lot of like shopping around you could do for smashing. Yeah. I just wanted to get it done. Like a lot of our accounts, they're paying us a lot of money every month. And if we can't get to them, I just was willing to pay a lot to just solve that problem and have it not be something we deal with.

27:46So how much profit, how much take home income did you do your last year? So it was kind of like the first two years and the last two years were very separate chapters. First two years, I was down there every single day, not taking anything out, reinvesting everything into new trucks and new territories. The last two years, basically 2024 to 2026 summer, it was like maybe around like 450 EBITDA, if you want to call it that, but 150K, that was debt service. So really my take home was like 300K. So why sell? It was, you know, it just, it felt like a starter business. It was always kind of my starter business.

28:20I got into it because I thought it would be like this direct line. It just weighed heavily on me in a number of ways. Like one, these loans, and I got loans for the second two trucks. So this is that first 350K SBA loan. I got subsequent loans for the other trucks. So that's a personal guarantee in my head every day. A lot of people don't realize franchise agreements also have a personal guarantee where you owe them royalties every month as a percentage of revenue. I think most people know that with franchises, but there's minimum royalties, which means you either pay some percent of your revenue or this fixed amount on a schedule, whichever is higher.

28:54And that's a 10-year-long agreement that also has a personal guarantee. So I always felt like I could handle that, but that's like also weighs on you. And just like having these big trucks out every day where like a couple times a year I'd get a call that was like something bad happened.

29:12Sam Parr:What did it feel like when the wire hit? it was kind of anticlimactic a little bit so i had already like i'd worked with my accountant i'm like all right tell me like after taxes after everything what the number is i had like seen that number in a google sheet and then when it happened i was very happy my wife and i for like we had a trip just coincidentally planned for to go somewhere the next day so we did get to enjoy it but now it's just like back to baseline kind of right i feel the relief of not having like the responsibility and like i don't have my phone on me right now i'm used to like you're walking You're raw dogging?

29:44Sam Parr:No phone right now? No phone. What I'm saying is normally I would be stressed out. I could go back and there could be just like a bomb dropped on me on my phone where something went wrong. Who bought it? Was it just somebody else who wanted even more territories? Who's the buyer? It was the neighboring franchisees. So it's a great thing where I was happy with the amount they paid. I think they got a great deal on it for them because they're just going to be able to fold it into their thing. That's how a lot of franchise M &A ends up happening. I have a feeling that you're plotting. You have something that you've been thinking about.

30:15Sam Parr:What is that? What are the list of things? And also, did you know what that was before you sold? Or the space gave you the time to figure it out? So the first two years were a dead sprint. The last two years, I got it in passive mode. I had two kids. And so I wasn't able to go down there every day. So I did a lot of stuff to make it like truly passive. And I spent a lot of that time trying to figure out my next move. I don't want to say too much about what it is. But I do have something in the works. What other opportunities did you consider doing that you did not? So what I got really interested in was like this concept of how you could sell somebody a financial ROI no-brainer where the only objection is that they don't believe you and it would be like cheap or free to prove it to them.

30:56And so I was looking at all kinds of stuff like that. Like I think you can like audit people's utility bills. I think the idea of doing like site speed optimization for e-commerce is kind of interesting. That was like the insight that I thought was like a fun playbook to run that was like pretty straightforward. If you're not that smart and you just want to work hard. What's really smart about your approach that I think very few people do is in business, what most people do is they think about the product. They're like, oh, I love that product or I know about that product or I love this industry.

31:25They think about their college major or stupid shit like that. You work backwards from like, what type of sale process do I want to do every day? because that's going to be like 90 % of my existence as an entrepreneur is just going and trying to sell, get more business. And so you were like, where's somewhere that I can just brute force, you know, get dollars in the bank by going and, you know, calling or showing up on more sites. And then even just now you're like, and the pitch I want to be giving is a, you definitely are going to make more money. All I got to do is prove it to you. And I can prove it to you on a cost that's very little to me or a quick demo from my side to show you that the value is there.

32:03And I think so few people take a sales first approach, but as an entrepreneur, that's actually all you experience in the business is just growing the business mostly. Like the product is very like fungible. You could swap the product out. Yeah. That's I, so what it is for me is I just, I think like you guys, I like business. Like I'm a business nerd. I like hiring. I like selling. I like figuring out the systems and the processes. So when you have that, you kind of have the luxury of being able to pick a business that you think would be enjoyable and straightforward to run. When are you going to start it?

32:33I already started the new thing.

32:36Sam Parr:So you only, and that's only three weeks ago that you sold. Yeah. Do you have a new mindset with this new one? Like what's changed now that you had that experience going into the new one? Do you have any new rules of how you want to do this? Bootstrapping. Bootstrapping. I found, and this is probably just because I'm more risk averse than I care to admit, but like this idea of the personal guarantee being tied to a franchise agreement, I really felt like the one-way door, you know, irreversible decision thing. So I think going forward, I'm going to try to bootstrap as much as I can and keep my options open as much as I can.

33:11Sam Parr:What's funny is like, maybe your tech coworkers are like, this is very risky. You know, this is like insane what you're doing. What I've noticed talking to a lot of entrepreneurs on here and through my life is that most entrepreneurs, I don't consider myself to be a very risky person at all. and most say that as well. They're like, I'm not that risky. And like, it's this idea of like, there's a difference between uncertainty, which always exists and risk, which you can reduce. Uncertainty always exists and you just got to get comfortable with that. But you definitely can like limit the risk and taking those personal guarantees, that's actually quite risky.

33:43Sam Parr:And so it's funny to hear that you're a risk adverse person. It's like great fighters. They don't pride themselves on how much, like how much risk they're taking in a fight. It's all, it's really, it's a self-defense. It's hit and don't get hit, right? The best fighters, if you look at Floyd Mayweather, undergoes undefeated. He didn't even really get hit that much. He didn't really get hit that much. It's like the black belts understand that it's about minimizing the damage you take while still winning. Yeah, like there's all these investors and they're like, rule number one, don't lose money.

34:10Sam Parr:Rule number two, pay attention to rule number one. And it's pretty funny. Let me ask you another question. I'm talking to my friend who's a friend from college and he's got a normal job business. He wants to go do something entrepreneurial. And I think he wants to do it very much for the money. but I think truly the benefit would be that he's just going to have a lot more fun. He doesn't like his job and just liking your day matters a lot more. You had a good job. You did it for four or five years. Did you end up way ahead financially versus where you would have been just taking your salary with raises and savings?

34:40Was it a big financial win or was it the life win, the confidence, the fun that you had? Like where was the win? I think about it as like the escape velocity that I needed to go work. I can work for myself for the rest of my life as long as I don't like mess it up. and that's how I think about it. It gave me that escape velocity out of that. And I think - Is it financial runway or it was confidence? It's financial runway, it's confidence, it's experience, it's pattern recognition, skills and everything like that. And for me, I kind of had to like do the, because, and really because I bought the business so far from my house, I was going to try to keep my job for like a second there.

35:14And then I realized I had to quit it. That was the case for me. I think for other people, the move is just find something you can like step into and test it out a little bit. before you fully rip it. We've never done franchises. And I've always been a little skeptical of franchises. It's like franchises seem like great business for the franchisors, not the franchisee. And so you did it. You have a good outcome. What's your current perspective on like, is franchises a good place to go? Or like, did you discover some other franchise along the way that you're like, shit, I wish I had done that one.

35:46Now that I understand what makes these work, that's a way better one. Tell me something smart about franchises. I think there's three situations where doing a franchise makes sense. I think the first one is if the franchisor actually has some secret sauce. And like the nerdy way that I think about is if you listen to like the Acquired podcast, they do the seven powers. If the franchisor gives you one of the seven powers, it could be worth it. So that's brand with like the Midas touch or it's like cornered resource, like the Chick-fil-A recipe. You can only get a Chick-fil-A. That's worth it. Those are rare and in high demand.

36:18And the second one is if you are going into it to do like a roll-up. Franchises are friendly for roll-ups, I think, because you just have carbon copies of each other. Like the systems are like the integration is the hard part of a lot of roll-ups. The integration of a franchise is just like the people stuff. It's pretty straightforward to roll up. And it's like a walled garden. Like if you're in the system and you have the appetite and the capital to do a roll-up, you can do it in a lot of cases. And a lot of franchises are ripe for consolidation because they're incentivized to sell a lot of units because they make franchise fees on each unit.

36:52And then what that means is in a couple of years, it's just like begging for consolidation. And the third reason is basically my reason, which like if you're literally not going to do anything else, you're not going to do something unless you feel like you have the training wheels of a franchise. That's what it took for me to do it. Like, I don't regret doing it. I probably won't do another franchise in my career, but like it played a important role in my... It got you where you wanted to go. Right. I wasn't going to do it otherwise.

37:17Sam Parr:Well, Kevin, you're the shit. Thank you for doing this. Yeah. Thanks guys. Awesome. Thanks for coming on. Yeah.

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37:55It's just has all the stuff that I need in one place. So if you're looking for the best banking product on the market, it's definitely Mercury. I will fist fight anybody who disagrees with me on that, go to mercury.com slash personal and learn more. Mercury is a fintech, not an FDIC insured bank. Banking services are provided through Choice Financial Group and column NA members FDIC. Bring them in. What's up? What's going on? Good to meet you. Great meeting you. What's up, brother? What's your name? Noam. Noam. Yes. Noam, welcome to the show. Thanks for having me. I'm excited. Okay. I don't know if they told you what you're getting into, but maybe start with what we call the Big Juicy Number.

38:33So give us one number that'll get us interested. All right, Big Juicy Number. We're doing$430 ,000 a month selling heated jaw massagers. Jaw massagers. Yes, sir. Okay. That was my nickname in high school. Hey, okay. Damn. Less detailed, the better on that one. So do you have one? What is a heated jaw massager? Okay, listen, I do have one. It fits in your pocket. Is this like a look-maxing thing? See, Steve Jobs had a thousand songs in your pocket. he's got one hot jaw bone in your pocket

39:02Sam Parr:is it kosher to share jaw massagers or is this like a toothbrush it's super kosher actually it's not going in your mouth so I have two actually this one is what we're selling right now it's the gen 1 it's like 3D printed looks like a vape this one is gen 2 I'm flying to China tonight actually so I'm trying to do it but you basically click this button gen 1 doesn't work that one doesn't work I gave all my San Francisco Gen 1s away. I was just at a conference. It's over. I only have this. But yeah, you have the two buttons there. Adjustable heat. Adjustable vibration. There you go. Literally. Okay, so I do this?

39:40Yeah, so it's like a couple things. You have muscle scraping. Is that what we're doing? You know what? Some people are looks maxing. But the main thing actually is it's for people with TMJ disorders. Right. So, I mean, there are like tens of millions of people out there dealing with chronic jaw pain. And generally that audience is not the looks maxing crowd. My main customer is not that, but they do exist. So it is TMJ. Can you explain TMJ, like in America, one out of every, how many people have it? Give us something like that. Yeah. So around 5 % of people seek treatment, but it's many more that have it and potentially don't even know.

40:19So like there are a lot of like really common things that happen. The way I started dealing with it was like five years ago, my jaw started clicking on the right side. I was like, okay. I think my mom got this. You get it like temporarily sometimes, right? Stress and things like that can bring it up. Is it just annoying or is it dangerous? So the clicking, if it's pain-free, oftentimes it's just annoying. Some people say up to like one in three people have this at some point in their life. But for me, it started getting worse. It started clicking on the left. And then my jaw started like locking closed.

40:48And then that would happen like once a month and once a week and once a day. I would wake up and I couldn't like brush my teeth. I couldn't eat. What causes this? It's a good question. Like a lot of different things can cause it. You know, like clenching, for example, a lot of people have a clenching issue, clenching, grinding at night. Some things is like, you know, a lot of looks maxing can actually end up causing this. It could be trauma to the joint. It could be all this. For lockups specifically, there's like a disc in there and it can displace. And you put this on your jaw how often and how long?

41:17So the idea is a couple of things. for the musculature, right? Like most people's pain actually ends up coming from like the muscles and because it's overcompensating, that kind of stuff. So you're using it as like a scraper, a heater once a day or like a couple of times a day, 20 minutes a day. That's what the research says you should do, the doctors say. But honestly, it's just like, hey, I have a flare up. My head hurts. You go in, you work on the muscles or you just have like instant heat in your pocket. And you're at close to half a million a month. Yeah. So you sell like$5 million a year of this.

41:51That's annualized. Annualized. Yeah. And it's called YourTMJPen? It's called YourTMJPen. How much does it cost? So we're normally$249. Right now there's like a clearance sale. And did you raise funding? No. No, no. It's very much fully bootstrapped. Yeah. This is, I feel like I would see this on TikTok shop. I would see this like on IG ads late at night. Yeah, listen. You're that guy. You're the guy behind those ads. I am that guy. I am that guy on Instagram. I'm the TMJ guy. Actually, I think I've seen you. You're the face of this, right? I am the face of that, yeah. I think I've seen you. A lot of rage bait on Instagram.

42:23Why? So what's, you said rage bait. Okay, so one of our like big, most viral videos is like, I'm on this plane, right? And I, this Karen. This character you just went into. This absolute Karen next to me starts like calling me out. She's like, it's like, hey, you can't be vaping on a plane, you know? And I like get really flustered. I'm like, oh, no, no, it's not a vape. Wait, let me explain. And I'm like, I'm like flustered trying to like explain this, that it's like my invention. Like I made this, it's for people to drop in. It's not a vape. And that concept got like 100 million views. Really?

42:54Wow. That's awesome. How did you think of that to go with the Karen on the plane? It's mostly the vape. How does your mind work? It's the vape on the plane, really. It looks like a vape. Everyone tells me that, so.

43:05Sam Parr:Right. What's going to stop every Chinese knockoff from coming after you? I mean, listen, at some point, like they're going to come. But the reality is like when I started this, Like I looked it up. I was heat and massaging myself like every day with like a mug of water. I'd microwave it, whatever. And I would look it up. And there wasn't a heated massager for the job. There were no products, period, sold for people with TMJ problems. Like not a single one, which was baffling. And so I like not there was no brand. There was no. You developed the actual device. So I developed this. And yeah, like I'm the first brand.

43:41Did you say you 3D printed this? Yeah. Yeah. So the way I started the business is because like, dude, listen, hardware used to be, I think, one of the most risky things you can get into making like a hardware device. Like you'll look at Shark Tank, like people are like, yeah, I spent like a hundred grand making this. And it's like, oh, that was a big mistake.

43:59Sam Parr:How much did you spend to make the first handful? I spent less than$3 ,000. and the idea was like there are like three things that like aligned in this age that we're living in that makes it probably not one of the least risky things that you can do making like a hardware consumer product first having all the access to like information like engineering at this point is like low-key kind of easy like okay don't clip that but with chat gbt with youtube like i didn't know how to make electronics i didn't know how to make a pcb what were you doing before i looked it How old are you now? 24. How old is this?

44:36Three years since I started making it and then two years of selling it.

44:41Sam Parr:And so you're like, I'm an idiot. So you have a 3D printer at home. Yeah. And you're on ChatGPT at the time. And you're like, teach me how to like. You're like, give me a. Well, ChatGPT back in the day was not good enough. But then like, there's a motor. I mean, I don't know how electronic. Okay. So what did you do? You're at home. You never made a thing. So what I did, so I wrote out, what do I need this thing to do? I need it to heat. I need vibration. I need it to charge. It needs to be portable, whatever. You write out what you want. The obvious thing that it needs is like a PCB. It's a printed circuit board.

45:10So it's those little green things. Yeah, it looks like a chip. It has a bunch of things, a bunch of lines on it. So to design that, I didn't know what to do, but I looked on Reddit. I asked for advice. I went on YouTube. I figured out how to design this thing. That was like the first thing I did. Then you design the casings. You look up potential motors. you buy them all test them and and uh so you ended up making the assembling the thing yourself yes yeah so for i was assembling these things myself up until literally a year ago to the day um we we got up to like 80k a month i was assembling shipping i had two 3d printers running my closet in like in my apartment and then i i kind of went like alex hermosi mode i was like wait what if i just you know do this but more you know so i found like a 3pl uh and normally a 3pl i mean you know this but um they just ship stuff for you uh they like fulfill your stuff but i was like hey let me use your employees like i'll put my 3d printers in your place you guys can use them and make them on the spot there yeah you can make them and so now my 3pl makes it and that's how we were able to grow to this point so you're flying to china tonight i'm flying to china tonight you're going to get, you already have, because this is made.

46:23Yeah. So we, I bet a prototype, you found something on Alibaba. What'd you do? No, no, I did not do that. That would be risky. Um, no, I, I got connected. So I, I'm like pretty big on Instagram now and like YouTube. So I, I, I made sure to like get connected via word of mouth. Um, so I found a factory together with them. We, we designed this thing. I flew there like a couple of months ago. We, um, we got to this sort of like golden sample and now production is like sort of done like the molds are done ish so i'm going there now to like get the final samples and then we'll be able to how many employees do you have i don't have any like like full-time employees uh but i have like you know contractors i have like um five contractors so have you taken money out of the business yet are you like i took a million bucks out of the business last year yeah so like this year it'll do let's say let's say hypothetically

47:09Sam Parr:you do 5 million in total revenue in 26 how much cash flow like how much uh profit i don't know if you measure uh yeah it's around like 20 percent like net uh income i don't know i i kind of look at it it's just like my business like some of it's in the business bank some of it's my vanguard some of it's in my personal bank i don't know i just kind of like take it as i see fit and there's no repeat purchase right like nobody's gonna buy yeah there's no again yeah but what is like uh i I remember years ago when Theragun, I have a Hypervolt that I use forever. I love it. And I remember they came out and people were like, dude, all the Chinese companies are just going to knock this off.

47:47Sam Parr:But they did. And they did. They did. But they did do a good job of kind of branding it where I am into my Hypervolt. But then they also came out with 30 products. There's the things that do my legs. And I love all of them. And it's become my routine. Is there other things that you can do? I do have this vision of being like a brand specifically focused on making products for the TMJ community. The brand is like your TMJ. So it's like your TMJ pen. Then I'm thinking like your TMJ band. We had this guy in the podcast named David. Yeah. And his whole company. And like we started out as a shtick, but it wasn't entirely a shtick where it was like, Sam doesn't believe that picking an important name is actually important.

48:28Sam Parr:And this guy's whole job, he makes a lot of money naming companies. Blackberry and Swiffer. and Sonos, Febreze. He named all this stuff. And I am totally on board with what he's doing now. And his whole, I actually just hung out with him the other day. His whole thing is like, if you're a young entrepreneur, start your company, who cares? But once you get some traction, consider making a name that can last forever because it actually does matter. And I buy into that. I would highly consider keeping that as maybe the TMJ pen, that product, but having like a proper company name. Yeah, that's possible.

49:00I don't know. I feel like it's just like not the main like concern right now because like that maybe it's not for this product yeah like people it's like this is like the tmj pen you know it's like it's like when people say tmj pen it's this like there's no other thing so it's like i think that's a pretty good name but yeah for the company like so you said like you did have a question what was your question going to be well yeah my question was going to be like listen you're gonna you're gonna be like oh money doesn't matter but no no we won't say that we won't say that it's called my first million not just one million and stop i've heard a lot of guests come on the show it's like you know they've made it and it's like oh yeah i'm just like nah i want a couple mil in the bank right i want that so i get this urge to like sell in maybe two to three years or something sell the company yeah and i don't know what therefore i should like really be focusing on because like if it for me like the obvious thing right now is like hey what's the like main constraint it's uh you know going and solving the supply issue, then it's going to be like demand.

49:59Short-term constraint, and then you have your long-term constraint in this scenario. Yeah, and I don't know what the long-term, maybe it is a long-term constraint to not have other products, but the issue is I don't know what would be super important then to weigh against losing focus on just cranking up more ads now. So maybe it's recurring revenue, right? Maybe I should get into TMJ supplements and oils and creams and stuff, or maybe it's having more products on the consumer side. Maybe it's having IP. Maybe it's having registration with the FDA. Maybe it's having like - So you have three options.

50:32Yeah. And you don't have to decide right now, but it's good to know what they are because then when you're doing the business, you'll look for clues that support one of the three options. Either you can go wider TMJ. So you could say, great, TMJ, this helps, but it's not a solved problem. I can sell the creams. I can sell the oils. I can sell the supplements. I can sell the whatever. So you go wider TMJ. You can go wider pain relief. so maybe heated massage for other conditions other parts of your body the kind of hyper rice model the Theragun model where you're going to create you know right now

51:02Sam Parr:they're just like a recovery company yeah they're a recovery company and you would be a pain relief company and you would say okay cool I'm going to go find all the different types of pain I'm going to create like specialty products I'm going to run the same playbook across them and so like right now those heated vibrating slides is like the big one that's going viral right now that I think someone's Nike's doing or somebody's doing. Yeah. So you could go wider in that direction of pain relief, maybe heated massaging pain relief. Or you could just say, actually, I just got good at doing this model of like content-based selling of products.

51:36I now know how to do a little bit of supply chain, a little bit of this, a little bit of that, but I'm really good on the marketing side and I'm fundamentally limited by category and product. And if I just take, you know, I'm a nine out of 10 entrepreneur. I just need to find a nine out of 10 opportunity. TMJ is just a two out of 10 opportunity because of the nature of what I'm doing. And you just take your highly transferable skills of creating content, selling through content, you know, and you just apply it to a better category that has tailwinds. You don't fight the small-tam problem.

52:05Sam Parr:And you'll potentially have liquidity already. And you're so young, you're going to have money in the bank, and you're going to have like a bunch of lessons learned that with a clean slate, like this can be your starter business. Like most entrepreneurs have a starter business, have a thing that they did early that wasn't their lifetime business. And, you know, so that's the other possibility. So, you know, you don't know which one of the three it is right now. Maybe you should write down a hypothesis as to which one of those three it is. And then as you operate the next six to nine months and you're focused on growing this business, you'll at least be aware of and looking for clues as to which one this might be.

52:38Maybe you launch a little test in one of those three areas and you figure it out that way. Yeah. I mean, I think I think it's what it is, is like I like to use the business as like a learning opportunity, like as just like a personal growth thing. It's probably going to be like, hey, is there more juice to squeeze out of that in the TMJ space? There definitely is. I think so, too.

52:59Sam Parr:When I, a few, a handful of years ago, I had Lyme disease and I like would look on like Reddit and stuff. And I noticed that the very clear trend and amongst some other friends who got sick with different illnesses or injuries, there's dozens or hundreds of injuries or illnesses where people feel like no one's listening to me. No one takes me seriously. What the hell? But I know something's wrong. I don't feel good. And so they go to these communities and they buy these products where it's like, finally, I'm being heard and I'm being catered to. and if I had to guess, this is one of them because I've heard that word TMJ but when you see it clicking, I'm like, oh, that can't be that bad and then the person who has it, it's horrible, you know what I mean?

53:35And if you go to the doctor, they're just like try not to stress so much like, yo, I'm pretty stressed because this hurts every day also, in addition to whatever caused it in the first place My first specialist I went to prescribed me like 2 ,000 milligrams of Tylenol a day

53:48Sam Parr:If I had to make a guess you're going to grow a lot over the next three years and sell it, and I think that would be pretty cool these are fundamentally pretty tough businesses to sell. You know, non-recurring niche product, heavily based on your marketing genius. So it might be that like optimizing for the exit sometimes looks different than optimizing for cashflow. And so you want to kind of weigh those out. You don't even, again, you can go look at some comps and be like, is there any, who's done this before and exited well? Let me go talk to them and understand like, does the factors that made that a successful exit match what I have fundamentally in my business.

54:26But if it's just a cash flow business, that's great. Cash flow business can be awesome.

54:29Sam Parr:Have you ever talked to any bankers or brokers? I haven't. A lot of times people only do that when they're ready to sell, when you should have done it three years earlier and you find out, you're like, I have a number in my mind, just tell me what I need to achieve to make that number possible and I'm just going to go do that for two years. Tell me three companies you looked at that are like this. What did they sell for? Why did they get that money they got? When did they do it? And you're like, okay, it could be like, this revenue, this cash flow, and these are the five or six other metrics. I'll just do that for three years.

54:55Sam Parr:And then I'll look up and be like, okay. Okay, yeah. If you guys know any, I had some people reach out on LinkedIn about it, but they seem kind of skeezy. So I was like, I'm good. Yeah, no, I would. So I would talk to Quietlight. They're more of a online brokerage, but they're easy to talk to. If you go look at their thing, they have a lot of these like FBA businesses that they sell that like are kind of like, I would say lower durability, lower quality businesses overall, but they seem to be selling. So like they know how to package those, what type, what business is working to own. Oh, quietlightbrokerage.com.

55:27So go to them and then go look at brokers in your space. Maybe like, you know, you just have to Google and like tell Chachi BD, go do deep research on who's sold, you know, who are bankers that sell products like mine. Like I don't even know what the name of this category is, but it might be like non-medical wellness devices. Okay, cool. And you could,

55:46Sam Parr:you email the founders of people who have had had exits and say, who all did you talk to? Because everyone who sells at a company. We'll talk to three or four. They'll say, I used this person. They were great. These two were kind of good. But I would not delay this. What Sam said is he's absolutely right. You don't talk to them when it's time to sell. You first talk to them a year or two before to actually understand what you need to do in the next 24 months to be a sellable business in the end. And the good thing about a sellable business is if somebody else is going to want to own it, it's probably the same reasons you would want to own it.

56:14So there's no harm in building a very sellable business because at the very least, you made a business that's higher desirability to own for yourself or for somebody else. Yeah. Dude, thanks for doing this. You're awesome. No, of course. Thanks for having me. Good luck in China. Yeah. Good morning here. All right. That is part two of Shoot Your Shot. We got one more episode coming out of the San Francisco location. We got three more founders coming up on the next episode. Make sure you're subscribed on YouTube, on Spotify. We looked at the data. I think 80, 90 % of you guys are not subscribed who watched the episodes.

56:45What are you doing? Subscribe so you can watch episode two.

56:48Sam Parr:And do me a favor. Whether you're a listener, then you're going to go to Spotify. Or if you're a watcher, go to YouTube. Put in the comments the city that you want us to go to next. Right now, we're doing this in San Francisco. We've already done New York. We'll go somewhere next to do it. So let us know in the comments right now. I feel like I can rule the world. I know I could be what I want to. I put my all in it like my days off. On the road, let's travel, never looking back. All right, let's take a quick break. I want to tell you about Marketing School. It is a podcast that is part of the HubSpot Podcast Network.

57:16and it is run by Neil Patel and Eric Su. And these guys are both marketers who are running businesses. And so if you want real world tactics from practitioners who are actually out there in the field doing it, this is the podcast for you. Check it out wherever you get your podcasts.