From $17k to $2.5M/Month in 2 Years: Scaling A Premium Brand w/ Matt Clark

Matt Clark runs a $50 million per year coffee brand, but he's best known for helping thousands of people, myself included, get onto selling on Amazon. But today he's saying he's an Amazon second kind of guy. We'll explore why that is in today's interview, but most importantly, we'll talk about how you can build a high margin subscription business that scales all the way to 7 figures per month. Matt actually did that in just 2 years of running this company and will break down exactly the steps that worked then and work today to build a high margin recurring revenue business that can sell for a whack ton of money. Is it true that Lifeboost went from $17,000 a month to $2 million a month in 2 years?

It went from $17,000 a month to $2.5 million per month, you said, or per year? Per month? Yeah, probably 2 years.

Okay.

Because the first year was $17,000 per month to like $600,000 a month by the end of the year. But then, yeah, I would imagine by the end of that next year is probably $2 million because we basically went from before I joined $200K in 2018, $2.5 million 2019, $16 million 2020, and then from there $25, I think $25 million or something.

Yeah. And a lot of companies had that COVID spike, but you had the COVID spike and then you maintained it.

It was, well, for us, like, to be honest, I think it was just a coincidence that COVID happened. I don't think it really mattered for us that much. I mean, there wasn't any like massive spike when March or April or anything like that happened. It was just, we happened to be scaling anyways. I mean, maybe we got some lift, I don't really know, but, um, there's not anything that I can point to that was really because of COVID I think it was just a coincidence for us. Okay.

So the headline reads that you go from 17,000 to 2.5 million. $17K a month to $2 million a month in 2 years. What the heck happened in those 2 years?

Ran some Facebook ads. Charles had a page because Charles had had this business since like 2015 and it was kind of a side project for him. Like he with his old business partner who apparently like me and his old business partner are kind of similar in skill, personality and this and that. That guy's thing was always like creating offers, driving front-end sales. Charles better at you know, taking care of customers, developing products, email marketing, everything happens past the first sale. So Charles had had some supply issues and it was just a different skill set that required to drive those sales. So it was just kind of sitting there. And so he basically had had some page created because he's really good as far as the science goes with the coffee and all that kind of stuff. That's how it was made. But he had this page that was like, I think, you know, 70% of the way there. And so I took that page that had all the details of the coffee, this and that, and I just kind of reorganized some things created some better headlines, some hooks and stuff like that, and then created my own version of that landing page and then started running Facebook ads on my own with the right kind of offer and started that January of 2019 and then started working fairly well out of the gate. I had a buddy of mine who very good at Facebook ads and he was kind of coaching me behind the scenes because I was like, okay, Facebook ads, but that's not really my skill set. But he was like, hey, once you get this up to like, you know, $30 grand a month or something in spend, he's like, then I'll take it over, you know, as an agency. And so that's what we did. So I think, I don't know, like March or something, he took it over and I just kept working on the funnels and iterating on the funnels. And then he took over the ad side.

And when you say working on the funnels, does that mean split testing headlines, working on the average order value? What does that mean when you say you were working on the funnels?

All of that. And so I think the first thing that we figured out or had to figure out, like, what is this core angle that's going to get people to buy this coffee? And we— everyone has ideas. Like if I asked you, and you were partnered with us at the time, like, Ryan, why do you think somebody's going to buy this coffee? You've gotten some opinions. Charles has opinions. I have opinions. So we write down, you know, 10 to 20 of those. And, you know, it's like, is it because Charles is a doctor? Is it because all the other coffee is poisoning you and you're going to die? Like, is a possible angle. Is it because we support the environment and the rainforest? Or is it because the coffee is lower in acidity and is better for your stomach? And so we had all these reasons. And that to me is like the first thing to test. And so we basically created duplicate versions of the landing page. Like everything was the same except for really like the headline and maybe the lead-in paragraph just to test these different angles. And then we created a bunch of different ads that really the only thing was changing was make sure that they fit those angles. And so then that allows us to see like which angle is pulling the best combination of conversion rate, average order value, but which is getting us the most revenue per visitor really. And so that's what we tested first is to figure out like what's going to actually get people to buy.

What angle ended up being the one?

Uh, it ended up being, uh, low acidity, stomach friendly. Um, that was something we were not expecting. We were just like, you know, it was kind of like, you know, uh, I would have been, I don't know, I guess mid-30s at the time, Charles early 40s or something. And so we're like, oh yeah, we're going to attract these cool biohackers and people like us that are into fitness. It's like all old ladies. And they're like, man, I've been drinking coffee for, you know, forever. But for the past 20 years, it's like hurt my stomach. And so we get all these like raving fan reviews of people that are like, oh my God, I could drink coffee again for the first time in 20 years. So it ended up being that which we kind of stumbled into, but it was only through testing this stuff.

Yeah, my mom sends me links to your ads and says, is this legit? Yeah, well, Christmas this year, you know, a whole bunch of Lifeboost coffee. So Matt, you're focused mostly on your funnels and Shopify now, which is weird because I feel like you got me into Amazon and thousands of us into Amazon, and now it feels like you're telling us not to sell on Amazon. And I'm like, WTF, man, what gives? What is your thesis for e-commerce right now?

You should definitely sell on Amazon, but should not build your whole business on Amazon.

Well, I told you that back in like 2015.

I eventually had to learn, you know, it was different time. 2015 was different though. It didn't really become different in my opinion until like, I don't know, 2018, 2019 or something. And that's when, you know, everybody and their mom, like thanks to us and you and everybody else, like started selling on Amazon. All the Chinese started flooding there and dropping prices and all that kind of stuff. And so to me it was no longer like the easy game it was. And so it was like, okay, there's like these windows of time where you'll have these opportunities like that. And it's nice.

Like right now that's TikTok Shop. TikTok Shop is having its window right now where you can just throw something on TikTok and do great.

Yeah. And so, uh, so that kind of ended this weird little time. So then it's like, in most cases you want to build a business where you have the most control and like online anyways, that's on your own website. And so to me that's, the best, that should be the center of your business, which would sound obvious to literally anybody else that's been in any other businesses, but, uh, was not the time for Amazon. So for me, I think the idea is to build the core of your business still on your own website, because then, like, for us, for example, we really have to slow down Amazon. We don't struggle producing more sales on Amazon, but we don't really want it being more than like 40% of our sales. And so, uh, we basically drive as all the sales we possibly can on our own website. Some percentage of that feeds off over to Amazon. And then within that kind of 40% of our total sales, we're optimizing Amazon. We're trying to rank for keywords a little harder 'cause we have a super premium product, but we run a lot of ads. I think we spend like $400,000 or $500,000 a month on ads just on Amazon. And so we, we are getting that machine.

You say $400,000 or $500,000 a month on ads on Amazon?

Yeah.

Oh, that's aggressive. Good work.

Yeah. And so, um, So yeah, that's what I see is like build a center of your business on your website, get traffic however you can. Most cases I think it's gonna be Meta ads, Facebook ads, and then use Amazon as a place where everything bleeds off. I mean, the way I kind of see it, and it took me a while to kind of realize this, even though kind of like that made sense, is that on, if you want the best price and you're willing to buy at least 3 units, you're gonna get it, or subscription, you're gonna get a better deal on our website. If you just want to buy one unit for a reasonable price and get free shipping, like go to Amazon. And so that's why like any given day, like we may get like 1,000 first-time buyers on Amazon, but it's potentially a different kind of buyer. Like we don't really care. And so it's like, you want to be single unit buyer, go to Amazon or you want to try it out, go over there. But then we capture what I think are like the higher value customers on our website.

Notice where Matt's focus was for 2 years in the business, building up one product on one channel on a premium price point and pushing subscription. That is a simple business model that you can mimic. It is tempting to be on every platform and to be doing all the things that people tell you that you should do. And Matt and I even have some disagreements about whether it's better to start on Amazon or to start on Shopify. There would be people who would say it's better to start on Kickstarter or TikTok Shop What ultimately matters is that you pick one direction and that you go as deep as possible. It's only with that amount of focus that you will build a 7-figure business. And then if you want to experiment with other platforms, that's something that we can help you do once you're at 7 figures. But to get to $100,000 a month, even several hundred thousand dollars per month, the platforms are big enough for you to go on one platform with relentless focus with a handful of products and be extremely focused at being better at those few things than everybody else. That's how you build a multimillion-dollar company. So let's break this down a little bit because there's a lot here. And if somebody is sub-$1 million early in their career, I'm not sure that I would tell them to go learn Shopify first or to learn how to put up long-form sales pages. I'm not sure that's where I would guide them, but I really don't care as long as they pick a channel and go hog wild, really deep and learn that skill set. And crack $1 million. However, you and I have both experienced where you have a 7-figure entrepreneur who now wants to add another channel, and so they try to take the skillset that they learned on Amazon and port it over to running Facebook ads and Shopify and funnels, and it just doesn't work. And it doesn't matter how often you and I say it, it just does not translate from one channel over to another. So I know you're advising some companies who are making that transition. What are you telling them is the different skillset that they need to focus on in order to add a second channel?

Yeah, because I mean, you know, if you've got these people, they're smart people, they figured out Amazon. It's not like they like came out of the womb knowing how to sell on Amazon. It was just a skill set they had to pick up like anything else. And so typically what I find, if they're like an Amazon-centric seller or pretty much they produce like 95% of their sales on Amazon, like a lot of these people, and they don't know D2C, Shopify or that stuff at all, a lot of times they have the wrong product to start. I'm coaching a couple guys that are kind of like in the automotive space. They have the world's most boring product as their core product, but they really know Amazon. They exited one of these businesses, different business for like a few million bucks back in the day. And now they're building another one that they want to take way bigger. But they started like again with their Amazon playbook. So they sell like a very boring Amazon, okay, kind of product. They've got money, they're muscling their way up there and it does pretty well on Amazon. But taking that product and advertising it on Facebook, which we're doing, and it's almost breaking even, which is kind of very surprising, uh, is not easy. And so I think you can, I mean, if you're selling a product really well on Amazon, that means people are buying it. And so you can likely find buyers for that on Facebook as well. It's just gonna be harder than if you have more of an interesting mass market product that you can tell a little bit better of a story with. And so the first thing is to figure out what I typically have been telling people. Let's take the best product you have and start advertising it on Facebook. There's still going to be some buyers there. It may not blow up and double your business and all this sort of stuff, but you'll still be able to make it work because you've already proven that it works on Amazon and humans are all over the place. And so then the first thing to look at is like, what's the next product you're going to add? Like, what would you add if Shopify or direct-to-consumer and you had to advertise this thing on Facebook, like what product would you sell then? And then what I typically recommend people do is like, look at other brands in your space. Like if you're, um, in the sort of health supplement world. There's lots of examples of people out there doing hundreds of millions of dollars. Yes. Direct-to-consumer-centric. Um, tons of these brands selling electrolytes, like Groove selling the vitamin gummies and all those kind of companies. So look at those, like what could you sell? Could you sell the same freaking thing? Like if they're, if you're doing a million bucks on Amazon, Groove is doing $300 million. Yeah. You could probably carve out a million dollars selling the same freaking product. Yeah. They may not like this, but like whatever, who cares? And so, but you can get ideas from them, sell something similar. So that's the first thing. And then I still recommend, because you know, that can take, depending if you're sourcing stuff from China or the US or whatever, that could still take, you know, 2 to 4 months to get a new product live. But if you want to get going now, then the game is actually, to me, pretty straightforward now on Facebook. Like, it's not as hard as you would think, as long as you do all the pieces well. And so, like, there's really all that matters is your, your ads, your page, and then your product. And the page kind of includes the offer. All the ads, you can literally see every ad every other Facebook advertiser runs using Facebook Ad Library, or you can use a tool called 4Play, 4Play.co. And so that one just kind of makes it easier. But you can just literally go to Facebook Ad Library. You can see all the ads everyone runs, so you can just copy their ads. So ads are no longer a problem. Then the page, you go to Facebook Ad Library, you open up their page, you can see all the pages everyone runs, and then you can use AI now just to copy their pages. So that doesn't matter either. And so all that's really left is the product. You can also see their offers, like everything is out in the public. And so all that really matters after that point is the offer and really like kind of how you run your business. And so if you just take those pieces, like model your ads off of what's working, model your page off of what's working, and then you keep trying to work the product and then you, you know, make it as high quality as possible so you get positive reviews. You add those in images, videos, photos to your landing page and just keep running through that machine. Better ads, better pages, hopefully better product, better reviews. Then eventually the machine kind of works.

So what's left at that point? I mean, if you can copy ads, if you can copy pages, What is the differentiating factor between what works and what doesn't work?

Keep getting better at all of that stuff because the, you know, it always kind of shifts a little bit better because the easier it becomes, that means people have more capacity to do stuff better. And so you'll see these people changing their pages, changing their ads. And so they're, they're constantly testing and trying to even within user-generated content, like you could just take like a basic clip that you either get from a customer or you can get like an ad from a site such as Influi, which is literally just creators that'll create little videos for your product. You could just take that and run it. But what a lot of the bigger brands do, you know, like Ridge, Ridge Wallet, for example, they're constantly like chopping those things up. They'll take a piece of that and then maybe they'll pair it with like a really interesting, like, 2-second opener. Like they have one of like a wallet getting drilled into because they sell, you know, sort of fancier wallets. And then the end, they'll have some sort of call to action. So they're like trying to make that ad a little bit better than just like straight UGC, which I believe they could have ran like a few years ago. So they're constantly trying to make that a little bit better. And then they're trying to make the offers and pages a little bit better because there's like a, you're trying to get as much cash upfront, but you're also looking at your lifetime value. And so part of it becomes like how you run the business because there's always a little bit of a tradeoff. Like there's some brands out there like Rise, for example, they sell like a mushroom— instant mushroom sort of product.

Okay, that Rise.

Yeah. And they are not trying to squeeze as much money out of people upfront as possible, but supposedly they're doing like $1 million a day in sales. And so they—

that's an okay amount. Yeah.

They, they're looking at, you know, they sell basically, I believe their offer is $27, it's all only subscription. So $27 upfront, $36 on the rebill every single month. And so they're looking at, okay, what's the lifetime value of these customers and can we acquire customers for some amount less, which is one model. And so what you're kind of looking at as you run your business is do those numbers make sense or does it make sense for you to squeeze as much money as humanly possible outta customers upfront? So the other piece you're kind of playing with is the offer and then also just selling the best product possible and running the best business possible. Because if you're not selling a product people actually like, you're not going to get great reviews, you're going to have customer service sort of nightmares. And so it's like there's like this running the business piece. So it's like those are the components. It's just like constantly trying to get better at all of them. Yeah.

If you're Amazon first, the temptation often is to do everything optimized for whatever keyword you're ranking for.

Yeah.

So if you're selling— we sell a nitric oxide booster at Sheer Strength, so it makes sense to call it nitric oxide booster, right? And to have all the copy about nitric oxide booster. No difference, no, no call out of where, who it's for or where it's different, how it's improved, what the science is, what the proof is. It's just the most boring thing possible is often what will pop out and rank for a keyword on Amazon. That don't work when you try to advertise to a mass market. However, the opposite of going to mass market and then bringing it over to Amazon can work extremely well. Yeah, because you're now you're just managing the listing and the conversion rate on Amazon to show up for those keywords.

Yeah.

So one skill set translates over to another, but the opposite is not true. So for the person who is already doing a few million dollars a year on Amazon, it sounds like you're saying, okay, can we position this to a mass market? But also, do we have something else in our product line that just might be a better fit? To go mass market. Is, is, is that a correct understanding?

Yeah, I would say so. I mean, you're looking at, like, I've got some other guys that I'm kind of working with. For example, they sell— they do very well on Amazon selling different health supplements, but they sell kind of these like single ingredient products. And so yours is nitric oxide booster. That's what people are searching for. Some people will search for like vitamin D or whatever. So they sell—

commoditized—

it's still something that the problem they face is like, even if they did a fantastic job with Facebook ads, then all they're doing is promoting that ingredient. They're like, oh, congratulations, you got people to want that ingredient. But now the person's like, sweet, this ingredient sounds amazing. Let me see what's on Amazon. And they may show up and it may help them somewhat, but that's, that's not ideal. And so you're looking for something that, you know, is more of a unique brand. It's like, you know, Nike is trying to build the Nike brand. They're not trying to build popularity of running shoes in most cases. And so you're trying to do the same thing. And so ideally you have something more unique. I mean, look at Groon for example, their main landing page right now is all about GLP-1s. They're like, I can't remember what their, their pitch is. Something if you're taking a GLP-1 Ozempic or whatever, then you should be taking their multivitamin gummy because it makes your poops better or, you know, whatever. And so that's their angle, but they're basically taking the same product and they're trying to appeal to like whatever's hot or whatever angles they can do. And the same thing with Rise, like Rise, you know, they're basically like an instant mushroom thing. And so like, I don't know what their original angle was, but now they push like bloating hard. And so they've tested all kinds of different stuff, skin issues, whatever. And it's like, a little borderline, I think, but a lot of their ads feature bloating. And so they're just testing these different angles for the same product. So ideally you have a product that is, is somewhat open-ended in terms of the angles you can use to promote it. Otherwise you're going to be very limited.

I just want to emphasize again, Matt's thought process for launching on your own website started with ad, then it was your page, and then it was product. Ad can be duplicated from all of the other ads that other companies are running. Even pages can be duplicated from what other people are running, and it becomes about finding new ways to stand out and test against what's working for other companies. The thing that's left is the product that you sell and how you serve your customers. That is the beautiful thing about launching a high-margin subscription business in today's landscape. If you have a great product and you genuinely care about your customers, the acquisition process is more or less commoditized. This did not exist 5 years ago, and it makes it possible for you to focus almost exclusively on creating the best product possible and serving your customers at the highest level possible. Yeah, you made this mention that you sell a super premium product.

Yeah.

And if you were to try and sell that directly on Amazon only, it, might be more of a challenge to do that. But because you're focusing on the difference first and that angle that you're going to take, you can have an easier time justifying a higher price. And I think you're doing like 40% of your revenue all subscription now too. I was hoping you could comment about the premium brand and the subscription side of the business.

Yeah. So you think about Amazon, like I've heard some people say, some like top DTC people, they're like, Amazon's brutal. You know, it's like you've got your product there. But then Amazon doesn't care about your brand. So they've got— all they want is a customer to buy something and they want customers to keep coming back. So their big thing for them is, you know, lower prices and big selection. And so they're okay having premium brands there because that kind of serves the bigger selection thing. But your product is sitting there next to everyone else's. And so it's hard because price is a big factor on Amazon because they're so easy to compare everything else. Even on your own listing, they're showing everybody else's products, whereas on direct-to-consumer or Shopify, is that you get to run people down this like funnel where you have like a captive audience. They may bounce off and go check Amazon, but if you're selling, you know, I don't know, like us, like a $20-something bag of coffee, they could go like take all this information and then they go over to Amazon and they're trying to find all the products that are similar and then they save $5 a bag. In most cases, like some people will do it 'cause some people are, uh, very, uh, anxious to save their $5, but a lot of people, they don't care. And so you've got this like captive audience, so it allows you to charge a premium price because you're not doing all the sort of comparison shopping stuff. And so that's, that's tends to be how it works. Um, and then on the subscription side, people take different models. And so the way I kind of see it now is there's really like two good business models, cuz all that really matters is like you have the highest lifetime value. And lifetime value is just depending on whatever time period you look at, could be 6 months, 12 months, 3 years, you know, whatever total amount of stuff people buy times your gross margin. One model is to get that all up front through a big purchase. Another model is to get that through subscription. The whole goal is still to just get people to give you as much money as humanly possible at a high gross margin, because that allows you to acquire more customers and gives you profit and all that sort of good stuff. So there are companies, you know, we've seen like Yeti, for example. Sure, they've been ups and downs or whatever, but they still built this massive business selling expensive-ass coolers because they got a lot of that money up front. And then maybe people would buy other coolers or whatever, but they're getting a lot of that money from this big purchase, not because they have some great subscription program.

That's a great distinction you just made there is, is getting all the money up front versus subscription. You can have either one, but you gotta pick a lane. That's a great distinction.

Yeah. 'Cause sometimes people are like, oh man, you know, my business sucks 'cause I don't have subscription. And be like, it's okay. Like, I don't know if you know this guy, but, uh, oh, you do, you do probably know him, but we have a mutual friend that's in their survival niche that sells a very premium product. Not really subscription 'cause people are never gonna use it unless the world explodes or something. People just put it in their closet and they never see it again. He makes so much cash flow from that freaking business.

Yeah, he does.

So he just has to manage that and know that, like, you know, he's going to have cycles. He doesn't have the predictable monthly revenue, but it's like still makes a ton of freaking money. It would be recurring revenue if the world did end, you know, because preferably ended multiple times.

Right.

Yeah.

But because the world hasn't ended yet, tends to be just a one-time purchase.

Yeah. So that's totally fine. So, but, you know, it is nice having subscription, you know, so in our business, because it's a consumable product, we sell coffee. Subscription totally makes sense. And so our model historically has been get people to buy a lot upfront. So we typically sell at least 3 bags upfront to every single customer. And then through the backend, through email, postcards, ads, SMS, we basically try to get them signed up for subscription. That's been our model.

Yeah, it's a more complicated business, but the margins and the upside are a lot higher as well. And so I, I mean, I still, I'll probably go to my grave saying you should make your first million on Amazon and then you can scale with other channels from there. But I'm usually working with people who are under $1 million trying to crack that nut. And I still think that is the fastest route that they're going to get there. I'm curious, though, when you are— when you're creating this funnel of ads, product and offer, are you finding that a certain type of conversion style works better in the way that you're running it? Meaning like for a while there it was the day in the sun for the video sales letter and then it was more of like a simple e-commerce checkout. And now I see all kinds of different ways people are doing it. What are you seeing work for Lifeboost?

There are a few different models. And so the one that has historically driven most of our sales has been a long-form sales page. And so these have been around forever. And so basically it's like, you know, we'll have a headline at the top, we'll have a whole bunch of copy, and then we'll run through all the sort of copywriting one-on-one stuff, features, benefits, proof, credibility. Some sort of offer, scarcity, guarantee, tons of social proof. All of those elements on the page doesn't matter how long, as long as it's not like super repetitive. That historically has driven most of our sales. We started testing some shorter pages because there are some people in the direct-to-consumer world that do more revenue than we do that run much simpler pages. A lot of times it can either be like more of a typical e-commerce type page where it's literally got the buy box and everything like that at the top, but you still have some social proof and whatnot below that. We literally just rolled out a page, like, I think as of like last couple days or whatever that we had some people build, um, that's following that format. It's kind of new for us. Another format that works really well for other people is a listicle, um, which is basically just like, I mean, it's like what, uh, Groove has running. It's what Ridge has running. It's what that Armara brand has running. And it's like, you know, 6 reasons why, 5 reasons why. And I looked into actually literally today, I was like, why does this page work so well? Like, it's like whatever, these are $100 million plus brands that are all running this super simple page. And I think it's because, um, few reasons, like it helps us like easily digest content. 'Cause we're like, okay, 6 reasons why I can kind of wrap my head around that rather than like a never-ending piece of content. It's easy to scroll through on your phone. But I think also it's because it's been used so much in content. And so like if you go to like GQ, you know, there'll be like 5 best coats for winter. And if you go to like, you know, BuzzFeed or any of these other websites, you know, they have 6 this, 7 this, 12 this. And so I think it's kind of like one of those, you know, old advertising rules. You really want to blend in, I think, because it feels like native content. And so I think that's another reason that it works. So that to me, if I was starting from scratch and had to pick any sort of landing page format, I'd probably do that like listicle style.

Now, do you think that there is a place for running outside traffic to a landing page that then takes the order on Amazon?

I don't think it's worth it. Tell me why. I think if you've got them that far, I would just take the sale on Shopify. I think you're going to get too much bleed off and distraction on Amazon. 'Cause they're gonna, you're gonna do all this hard work selling 'em on this thing. They're like, all right, sick, I'm almost ready to buy. Then you send 'em over to Amazon. They're like, ah, I'm out of laundry detergent, so I'm gonna go buy that. And then they're like, ah, this other product looks pretty interesting. I'm gonna buy that. And then, you know, 30 minutes later they haven't bought your product. And so it's like, I've, if I've got 'em that far, like I want to actually just take the sale immediately. And nowadays, like to me, like one of the smartest things Shopify ever did as a company was streamlining the checkout page. And they've gone even further with the Shop app and stuff where people have their credit card numbers pre-stored, like brilliant. And so it's like your Shopify store can look like whatever, it doesn't matter. But once you get to the checkout, like even if customers don't really realize it's happening, like it looks and feels very familiar. Yeah. And so I think that's kind of reduced some of that whole like, oh, people have their credit card number stored on Amazon. I think it's helped some of that.

Shopify has done a great job at customer acquisition, like getting people to buy once and then making it a platform so that any other Shopify store has all of that stored already on the checkout. They've done a really good job at that.

And also, like, just like one last little point here is that, like, we've looked at the data and our average order value and 12-month lifetime value is at least— not even— forget the profitability, which is slightly better on Shopify, but just revenue-wise, like, it's at least double than it is on Amazon. Shopify versus Amazon, just because you're able to get those people to come back and buy and all those kind of different things and they buy more upfront and all that kind of stuff. And so we have pretty clear data to prove that a customer is just worth more on Shopify. So we might as well get them there.

You made this statement that if you were starting over, you would start with these listicles.

Yeah.

Could you say more about what you would do as your first test if you were going in this direction?

I, uh, starting from what product do I sell?

No, we've answered that question enough times in our careers, Matt, of what product should you sell? I mean, you take that person who's making the transition from one channel over to another. The first thing that you're gonna test is a listicle.

Most likely. And so what I was saying, what I, what I would do is I would take their brand and I would try to find—

sorry, what product should I sell? I'm sorry.

I'm sorry. We can go back there.

I'm still, still giggling about that.

But I would, I would look for a direct-to-consumer company that's, you know, doing at least $30 million a year, which they all talk about this stuff on podcasts. So it's not as hard as you would think to find these people, but I would find one that's doing at least $30 million a year, ideally more. And that is as close as possible to your brand. So if you sell supplements, look for brands selling supplements. If you're selling like more hard goods stuff, like there's brands like Turtle Box, for example, that I think does $100 million plus a year selling speakers. And so that's going to be much more related to people selling like stuff made in China and that kind of thing than somebody selling supplements. So try to find a brand that's like sort of in your space, as close as you could possibly get. And the first thing I would do is I would look at what pages they're running to. And so a listicle is not typically how you— like if somebody is like, you know, clothing doesn't— I don't know, clothing is a weird market on Amazon, but imagine it was a clothing brand. Just for example, I would be looking at other apparel brands and seeing what kind of pages they're running most of the time because it's a very visual. They're sending people to a product page with beautiful photos and stuff. But depending on whatever market you're in, you find an example, see what ads those are, see what pages those people are running to on Shopify, and then you have a decision to make. If it's a listicle, go with a listicle. If it's not a listicle and they're running to some other kind of page, you can either model that kind of page or you can go with a listicle. I think either route is fine. I'm, I much prefer just to model what's already working. So if there's something in my space that's already working, I'm gonna go there. If I can't find anything like that, I'm gonna go with a listicle. Um, then I would start there. And then same thing with the ads. I'd start modeling my ads off of those people, which there's like, there's really just a few different kind of formats. There's like video and image. And so for the image, everyone either runs like testimonial or like a quote which you can pull from Amazon or some big benefit plus a nice photo of their product. That's like one style of image. Another one, infographic, which is very common with Amazon. And the other one's like a sale. That's basically your entire catalog of image ads for Facebook. And then for video, it's really UGC, possibly AI. And that's really it. That's all you really need for videos. And you know, there's a million variations within there, but that's your entire sort of ad catalog. And you're just modeling those after people that are doing well in your space.

The last time we sat down, you showed me the ad that was converting at the highest rate. And I wanted to spit in your face.

Which ad was it?

It was a squirrel.

Oh, the squirrel.

Yeah.

'Cause it was so good. 'Cause you liked it so much.

Just tell us about the squirrel ad.

Um, so, uh, yeah, so I, so I made this ad for our Black Friday to test it out cuz we, you know, I've got another business going where we're building this AI platform and, uh, you know, keep wanting to test out some of these AI ads. And so I don't remember where I got the idea from, but you know, these big—

you got it from hell.

These big brands have been using cartoons in their ads to sell stuff forever. You remember the owl with the Tootsie Roll and whatever? Yeah. So it's a common thing.

And so like, I like that you just referenced a 1994 ad as your example for this.

People know this has been going on for a while.

Everyone's using it. Remember in 1994 when the owl with Tootsie Rolls?

Should still be running. All right, fine, the polar bear with Coca-Cola, that's still running. But then yeah, so then basically used AI to sort of like help script out this ad. So I said I wanted like a nice, cute, relatable character. Squirrel was one of the options. And so then basically had to go from there to give me the concept. You know, this is just using ChatGPT. And then from there basically to script out like a storyboard for this thing, like into individual clips. And then from there I basically had to generate starting image and video prompts. You know, basically what do I feed into these AI tools to generate like a starting image? Like what does this scene look like? And then also the character as well. And then what does this clip look like? And I wanted to go a little deeper. Normally, like when I create these kind of ads to play around with, I'll try to do like, you know, 3 or 4 clips. But this one I wanted to like do quick cuts, like 1 second each. And I did like 17 clips or 15 or something. Um, and so it's basically just little squirrel running around before Black Friday and like taking coffee and, you know, storing it in the tree, storing it in a safe, storing it under the couch. 'Cause she's like running around all over to like stock up for Black Friday. And then yeah, that video basically, uh, was our best performing video ad during Black Friday.

I remember you showed it to me and I thought you were pulling a prank on me.

Oh, great.

You, you just thrown this together and this was out converting.

Everything else, throwing it together. That was hours of amazing work.

So what I'm hearing you say is that you test everything.

Ideally, yeah.

You test a ton of ads, you test a ton of landing pages, you test a ton of videos, and you just start to figure out what works with structure. You test with structure.

I think it makes sense ideally to know what you're trying to test in each phase. To me, like on the landing page side, first thing is like, what message is going to get people to buy? Like, why would somebody buy this thing? And so you kind of got to figure that out, then figure out like what is the offer that's going to get us the result that we want, which is either the most amount of money up front, the most customers at the lowest cost, highest lifetime value. That kind of depends on your business goals. So what the offer is. So then your landing page is pretty dialed in and then after that, like you can test formats and whatever for the rest of your life, but that's like the first 80%. And then on the ad side, similar thing, like what kind of angles are working and ad side, like the testing never ends. Like Facebook's whole Andromeda update, which you know, there's other people who know this stuff better than me, but from my understanding is like, I don't understand why it was that big of a deal. Cause it's like the whole thing was like Facebook just wants as much creative as possible. You let it target a broad audience and it'll figure it out. Like every smart Facebook advertiser that I know has been doing that for like a couple years. And so it's basically just giving it as much creative as possible, images, videos, like everything. You just keep feeding the machine. Um, and so that's the whole game on the Facebook ad side.

This word that you use of testing the message first. Yeah. I would call this finding your difference. Like where are you different from from everyone else? Why are you buying Lifeboost versus Folgers? Like, what's the difference that allows you to justify a premium?

So, and, and what's that difference? Because there's a lot of different things, but then what's that difference that's actually gonna convince people to buy?

And are you coming up with those yourself and just running them?

I think the more places the better. I mean, I, I think there's like, um, if you've got a ton of experience copywriting or you just know the business cuz you own it, you've been involved with customers and this and that, like I think your importance is a little disproportionate to everyone else's. But I still think you should get ideas from everybody, like anybody you think that can possibly have something useful. I don't think you need to go overkill. You don't need 100 of these. But I think if you have like 10 to 20, and to me, like the metaphor that I've always used is I kind of in my head call it like the coffee shop test. It's like if I was to go sit in a coffee shop with like my ideal customer, they know nothing about my brand though. Like what would I say to them to convince them to buy it if I had like 20 seconds? And so it's like, you know, there's a lot of different ideas that you don't really know. And so that's where you're kind of trying to figure out. So I think the more ideas, the better. And then you kind of whittle it down to the top 10 or so.

Your business model, when you riff about it, sounds like it can get really complicated with all of these landing pages, all these different ads, all these different pieces that you're split testing against each other. But I believe I remember you saying that you work like 2 hours a day.

Uh, depends. Yeah, in most cases, um, on that business anyways. Yeah.

So how does a business that's doing several million dollars a month, how does that stay in place while you're working 2 hours a day?

So I'm not the CEO, which is kind of by design. So Charles is the CEO, but then he's also like, he may say he's working pretty hard, but I think unless there's like some, you know, fire that's going on or something, like he's not putting in that much, like unless he wants to, like he just does what he wants. Like he likes playing around with some AI tools. He really likes developing products and stuff, but he's done a great job of building up like a few key people in the company. Our operations manager, she works 300 hours a day. She's amazing, just loves it. And so she's fantastic. And so he's really kind of nurtured her and she's kind of, you know, she's really good. And so then he also has somebody on the marketing side who also works extremely hard, loves the business. And so he's done a great job of kind of building those two leadership roles. And so then he could any day, which I've told him, it's not like, you know, it feels kind of weird sometimes where I'm like, oh yeah, I barely work on Lifeboost unless there's like something specific we're working on. Like I'm working on a new funnel now, so putting in a little more time. But then, um, while Charles, you know, say if Charles is working 10 hours a day, like pulling his hair out and I'm over there, you know, coasting, wake surfing or whatever. Uh, but I've told Charles like, look, you know, uh, he's got a pretty good life. He loves running the business, but we can hire a CEO anytime you want. Mm-hmm. Like it's just another job. We've got plenty of, cash flow, revenue, everything to pay, you know, whatever, $300 grand a year for a CEO. And but he doesn't want to, like he's got a good lifestyle, he loves running the business. And so, yeah, that's kind of the position we've created.

So when you say you're working on a new funnel.

Yeah.

What does that mean?

So we've launched a new product that we think can double the business by itself. That would be ideal. Uh, but that would be nice. Yeah, that would be nice. Uh, so then that product, because of the huge potential, like if we launch like a new flavor, it's like, I don't need to be involved with this. Like the team, you know, they create the landing page, they send the emails, like whatever, create the product page. But with this product, it's like, it's kind of like go big or go home. Like this thing may just sit there and do nothing. Uh, or we have the potential to really explode the business.

And so can you comment on the product?

Sure. Uh, we call it MindFlow. And so it's, it's an instant coffee product that has mushrooms and nootropics. So it's our first instant coffee product. So different audience, like your average person who's brewing coffee and whatever, it's probably not for them, but it's, it's a product that's been proven well by a couple brands that have absolutely crushed it selling something similar. And so we've created our own version. It took a year. We think it's better than anything else out there. So now we have to dial in same stuff we've talked about, the ads and the funnel and the offer. And so I'm more involved in that.

This is, this is, I'm so glad I asked this question because if you're launching this new product, we, we already said that the first thing that we're gonna do is we're gonna find the message.

Yeah.

You've verified that there are brands and companies that do extremely well having a product similar to this.

Yep.

So most entrepreneurs would look at this and they're immediately gonna look and see how am I similar to everyone else? But we've already established we want to say what the message is, the difference. So how are you crafting a message for Mindflow that is different than all of the other brands that have launched similar products?

So we got a little bit lucky out of the gate. And so we—

don't say that, that ruins watch time.

And so we, I mean, we're very new. This is like 2 weeks in this thing. So it's not like it's blown up the business or whatever, but, uh, so the, the, the product took a year to get live. We created the first version of the landing page like 6 months ago. Charles was like, hey, write the copy for this thing. Cause we're We're almost ready to go, but we were not almost ready to go like 6 months later. So he was, you know, wanted to test out some AI tools. So we had 2 different landing pages, weren't planning on that. And so then we had 2 pages to start that we wanted to test side by side to see which performs better. Um, we kind of centered on the angle early on cuz we'd read a bunch of reviews and all that kind of stuff, looked at all the competitors. We did this like a year ago. And then there's this whole idea of like, you know, a coffee that better enhances your, um, cognitive abilities. It helps you sort of get some of the caffeine benefits without the crashes. Like that kind of thing was kind of what we settled on. And so we basically ran with that angle on both pages. And so we're like, we didn't plan on having two pages live. Otherwise I probably would have tested more angles and whatever. But we're like, we can't be optimizing two pages at once. Like that's where you're talking about things seem very complicated. I think it's when people overcomplicate things, they try to do too many products or in our case, too many pages. So the first thing we did was like, let's see which page works. We actually found the AI-generated page worked better. So that took a week or two to figure that out. And then because pretty much immediately, I think just because we have the right product and generally a good page and stuff, that the cost to get a customer was not too bad. And so for us, we almost jumped straight to the offer part. And so now we're playing with the offer. We almost like skipped the whole like testing the angle part because it worked okay up front.

Meaning you had two pages, one of them outperformed the other, your ads worked well enough. So now you're going to just dial in the offer.

Yeah, exactly. Because what was happening was, is like we sort of went with the model that we have with our other products, which was try to get people to buy like 3 bags upfront at least, and then convert into subscription on the back end. But so many freaking people were hitting the page and then going navigate into our store, which is not easy to do by design. We want people to just buy from the page and they're going to the store and they're buying a single bag. And so we're like, okay, for this product, maybe because it's unique, it's different, different demographic, like maybe people are not super pumped to buy 3 bags upfront, which is why all the competitors in this space sell 1 bag on subscription. So then, which is kind of dumb on our part, I think like our theory was that if we can get a lot of gross profit upfront, we can scale ads faster than all those people. But there's also like very proven model that they literally all run the same offer. So maybe it would have been smarter just to copy them. And so then now we're basically testing a couple of different offers and one of them is going to be that subscription upfront because people seem to want to buy 1 bag. So let's see if we can drop our cost per acquisition a lot while we kind of monitor our lifetime value, which we won't know for months. We won't know how much people are— we can kind of model it out after a couple of months because it's like if so many people buy on month 1, then so many of those are going to stay on the subscription month 2, month 3, month 4. And we'll kind of know what the general drop-off will be without having to wait 3 years or something. And so, but it'll take a few months to know that. So because that's us, we're kind of like jumping to that whole offer testing part because the general angle seemed to work okay up front.

The general angle sounds fairly similar to what most people would lead with. Was there a reason you— did you just copy what you saw working or was— tell me how you arrived at that difference.

Yeah. So we, um, it came from looking at a lot of reviews and so we looked at reviews on Amazon, which are probably more trustworthy than the people's actual websites, but we also look at their websites, especially right now. Yeah. Yeah. And so we looked at all those reviews and we sort of like narrowed down like, why are people buying this thing? What are people talking about in Amazon reviews that they really like about the products? Um, and so that's what we kind of centered on is, is more of the, I mean, literally the name of the product kind of positions us there anyways. And so that's, that's kind of how we came up with the angle. It was working for those people at the time. They've kind of shifted their angles now, so it'll be interesting for us. But they're also like, you don't, not everyone I think is playing the same game. So some of these competitors, like we may not wanna push it as far as they are, as far as claims and whatnot. Like there's some of these guys like you and I are about the same age. And so there's like some of these people, like you and I both came up in internet marketing, like right after, like some people just gotten a lot of crap with the FTC, but some of these younger guys in their late 20s, early 30s, they never seen that before.

Yeah. They haven't seen their friends go to jail yet.

Yeah. They think you can do anything you want. And I'm like, guys, like you have a large business and you've got a huge target on your back. Um, it's not the way to play the business long term. I think some of 'em are gonna have like a reckoning at some point. And so there's some things that they're doing, there's an angle side, like making claims and stuff that like we don't feel comfortable making. So we almost like can't play that game. Um, but that's kind of how we ended up centering our angle, just doing a lot of research.

Why do you think that that product could double the business?

Because we've seen it work for other people and we think we have a better product now. So that was part of what we had to do was create a product that's as good or better. We think actually better taste-wise and ingredient-wise and quality. And then we're, we know all the same marketing they know. I mean, it's all public anyways, but So it's like we can see their ads, we can see their landing pages. There's not a lot of mystery here. So we can— all that's laid out for us. But then we also have like the underlying sort of experience that we're not just copying landing pages and whatever. Like we've got a lot of experience doing direct marketing that we know how all the fundamentals of the copy and the sales structure and that kind of stuff works as well. So it's like we've got the same skills, same abilities. We've got the ability to, if we want to burn cash acquiring customers that we know are going to make us money later on, we've got all those pieces in place. So there's not a lot of reasons why we can't do pretty well with this.

Yeah. When I sold— when I, when I launched my first product on Amazon, remember, we hit the number one in the category with 25 sales a day and the number one seller badge, 25 units a day. Yay, we did it. It's actually the starting point of how I came up with this beautiful math formula. 4 products at 25 sales a day is a million-dollar business. And when I sold the company, that same product was doing about 200 units a day. So when I bought the company back out of bankruptcy from the private equity group, I was like, okay, this product can do 100 to 200 sales a day. So I started looking up what the other competitors are doing, and now the top competitors on that same product are doing 1,000 to 2,000 sales a day.

Amazon exploded.

And the market, the market just keeps getting bigger and bigger. And it was a big aha moment for me when I just looked up what my competitors in the same market were doing. And I saw how big this space was. And a lot of people are afraid to do that for whatever reason of seeing how big this can get. And so it sounds like you're taking the exact same process, not just with Shopify, but with brands and companies overall that are doing direct-to-consumer marketing. And you're saying, okay, product is obviously in an industry that's big enough to be a 9-figure business. My marketing can be just as good as theirs because I can look at all the marketing. So now I've got to optimize for the business economics. I've got to optimize for having a great product. I've got to optimize for having happy customers that want to come back and buy from me over the long term. Is that a fair summary of how you look at your businesses?

Yeah, I think so. I mean, it's, um, with all that stuff being public, I mean, um, there's, you can get pretty far just looking at what other people are doing and then the rest of it comes down to, I think, just like not being an idiot with how you run your business. Which is harder than, you know, people think sometimes, you know, not spending money on a lot of dumb stuff because then like imagine you got all the same stuff as everybody, but you're just blowing money left and right on every hire or agency or internal expense or personal compensation or whatever. And so you've got no money left to reinvest in marketing. Like we ran our business for the first, for sure, the first year, maybe in the first 2 years, it was basically like our gross margin was 50%. So we produced some revenue after that. We've got 50% gross profit. Of that 50%, like 45 of the 50, uh, basically went to advertising. Yep. So that left 5% left in all operating expenses. Super lean. Like we paid ourselves nothing for the first year. And so we don't go to that extreme now, but it's still like, that's the game you can play. Um, as long as you do everything else right. And that still requires like, you know, the pain in the butt stuff, like not going to jail, making some promises, you know, that you can't keep with your advertising.

Very important if you wanna stay in business that you don't go to jail.

Yeah. And then managing people, keeping people happy, um, running an efficient company, being not adding too many products, you know, not getting too much shiny object syndrome. There's all those fundamental pieces of running the business that you still have to do well. Now that a lot of the marketing stuff to me is like more straightforward. Yeah.

It, it's almost like the customer acquisition side of the strategy is no longer a mystery. Like that—

Monetized.

That used to be the superpower, and now that doesn't necessarily have to be the superpower anymore. It is about having a great product, a great experience, a good team in line with a vision that you feel comfortable running for the next 3 years. Would you add anything to that?

Ah, really picking the right product. I know you didn't want to talk about picking a product, but it matters a lot. Um, well, you pick coffee. Yes. And so that's, I don't, you know, I don't want anybody else selling coffee, but I think the model still makes sense where it's kind of like what I tell people now as far as picking a product, what I think the ideal way to go is find the biggest market possible, go the biggest market possible. Um, this may change in 5 years, but right now, huge market. But then carve out like your little niche that can grow, like not some little thing, you know, where you're like, I'm only selling to, you know, one-legged people that live in Indiana or something like that. And that's all it's ever gonna be. Uh, but for us it's kind of like we went with like this low acid angle.

I knew a one-legged man that lived in Indiana.

Yeah.

One customer. He's listening right now.

Yeah.

Shout out.

So then it's like with this coffee thing, like we, we went after, you know, we ended up kind of centering on the angle of this low acidity, but then now we've kind of like always played around with like the little bit, like we just wanted to be the healthiest coffee possible, which everyone's interested in health. So that's what's allowed us to like, not everyone is looking for low acid coffee, but everyone wants to be healthier. Um, and then maybe not everyone's willing to spend money on that with coffee, but it gives us a huge market to go after. And so I still think that kind of approach makes sense as you take huge market, carve out your little niche that can expand forever into a larger portion of the market. Because the beauty of that to me is like, you never need more products. Sure, we'll all eventually add more products. But to me, like the holy grail is like Red Bull that gets to a billion in sales with one 8.4 ounce can. That's the ideal. And some of these brands are not that far off. Like some of 'em have literally one SKU and they're doing over like $100 million a year in revenue, which is insane.

Notice the thought process here of reverse engineering a really successful business. We start with a big market. You don't go after something small that no one has ever done before. You go after a big market, but Then you carve out your own niche in that market. I like to do that by choosing one specific person that you are going to serve within that total market. Then it is about finding your difference, and that becomes your marketing of how you're going to acquire customers. And then it is about maintaining those high price points, getting people on subscription, and having the best product possible that serves your customers. If you wanna launch a business in this direction, a high margin business with a high valuation, with relentless focus that can get to 7 figures and beyond, I'm inviting you to get onto the waitlist for the next time that we open up a group where we take people through the launch process of building a subscription business with high margins. You can get on the waitlist over at Capitalism.com/bootcamp. This is gonna walk you through choosing that product bringing it to market, launching it, getting those first 100 sales, carving out your difference so that you can build a high-margin subscription business that has the potential to scale and possibly be sold in the future. That's Capitalism.com/bootcamp. How important do you think it was for you to come out with a premium price point?

That's the model that I know best.

I would not get into e-commerce today if I was not launching a premium brand.

Yeah, I think in most cases that's true. I think, um, there's some people, like, I got like a couple, like, pod— I don't like, uh, a couple podcasts I need to go through because like I wanna learn more about the brand, but you know, there's Comfort that sells their hoodies and all that kind of stuff. I don't know if you've seen it. Yeah. It's more of like a Gen Z kind of thing. Um, but they sell like $45 hoodies and stuff. Like they're not that expensive. They're doing supposedly like $500 million a year in sales. And so they are not selling the most expensive product they possibly can. But in most cases, I think the premium is the way to go because the premium allows you to have like more gross profit that you can invest in marketing, which kind of builds the flywheel. And the more you invest in marketing, the more you can charge a premium price. And that's how that machine works. That has always been more familiar to me. I don't think it's the only way to build a business, but it's just— it's what I know best.

I don't know that you can be a new entrepreneur and come out with a low-price product, which is so counterintuitive to a new entrepreneur who's just starting out.

Yeah.

But I mean, any new business, I have no idea how people try to get these products with these tiny margins to, like, how do you run any advertising and get your foot in the door? It makes no sense to me. So I wanna come out with at least a 60% margin, at least coming out of the gate. And I want to be as close to the top tier in my market as possible. I think people use pricing, dropping pricing as an excuse to not do marketing. And instead it would be a much better thing to set a really high price and discover what type of marketing was required in order to justify that price.

Yeah.

And for me it's the same thing. You go with message and finding your difference first, and that is what you uncover first. And you put that into your advertising or your content, and that's where the snowball begins.

Yeah, I think it's ideal to do less discounting. We historically have done quite a bit of discounting, but over the past couple of years, like, we've really pared it back. Part of it, we want to increase profitability. Part of it is just we think it's better for the business, like, to have like an everyday kind of premium price. You know, like an example to me that's like fantastic is like Rogue Fitness. Very hard to find any discounts. Like, I don't know if they may run Black Friday thing, but it's really not even that great. And so for them it's like you pay what you pay. It's like you want the like best brand anyways when it comes to fitness equipment, like you go to them and then like, you know, Callie, my wife, like buys all kinds of stuff from Sephora. And so they run like one 20% off sale a year. Otherwise it's like you're paying a premium price. Like I think that's what to sell a premium product means. And we've sort of like, I've slowly, we didn't wanna just kill the business and change our whole strategy overnight, but over the years we've slowly transitioned to that, like way less discounting. Um, I think it's the way to build a premium brand.

Do you make an exception for a first-time customer?

Typically, I will. So that's why I ask, mainly just because like that's been our way, our main way to get customers historically is through a specific long-form landing page that has a significant discount. And so we've— that's only for first-time buyers. That's how the coupon code is coded. And I may not go that big, I guess, but I think in general, yeah, it's probably fine to give people like a first-time customer discount. I don't think it's 100% necessary though.

I think that's how something like Groove is able to do some customer acquisition by sponsoring all these podcasts. Yeah, like you have a code, use the code, save this on your first order, and then you're making all your margin on the subscription order.

Yeah.

So I will make exceptions for first-time customers.

Sure.

I am curious from your perspective, you've been in Lifeboost for what, 7 years now? But if you were starting today and you've got $25 grand to start a brand, are you going Amazon? Are you going your own website? Are you doing a hybrid? How are you investing that?

Uh, I would— I just don't know. It's like, you know, I should probably listen to more what you have to say. It's like, I don't really know how you start.

And that concludes our episode here at Capitalism.com.

I don't really know how you start on Amazon today, like from scratch. Like, I don't really even know it's just so hard in my opinion. And so like—

You don't start on Amazon. You start with a small audience and then you launch it to Amazon.

Sure.

And that's the fastest route to get to the million.

Okay. I think. Yeah.

And the thing that I see website or Shopify guys missing is that you guys are so good at ads.

Yeah.

That you miss the whole brand building side of it, which is fine if you're, if you're, I mean, if you're gonna make $50 million a year selling coffee, Who am I to tell you that you should, you should start a podcast for goodness sake? But for most people getting to the first million, it's, it's building the audience of 500 people. Yeah. Oftentimes less. My homie Ty, who's listening to this right now, launched with like 300 people and saw a really good launch and now has almost 7-figure business. So it's building the audience first, then Amazon, 'cause it's the fastest way to get them to order. And then you use those profits to reinvest from there. I think that's the fastest way to a million.

Got it. Yeah. So, yeah, I mean, I would say like based on my skill set, what I know and all that sort of stuff, like I would just start with Shopify and then paid ads. I have heard other people, which seems more like theoretical than like this is what they've actually done. Like there's some people out there that, you know, own a couple hundred million dollar businesses or they're the CEO anyways and they're like, oh, if I was starting all over today, like I would just post organic content like 3 to 5 times a day, see what pops off. That's going to help you get sales for free. And then the best content of that you can turn into ads, which sounds nice theoretically. It's just not what I've done. So like for me, I would pick one product, one product. To me it's like, that's the most important thing. Pick one product that can scale to whatever goal that you want. Like, don't do this whole, like, I need a whole catalog of things. Like, to me it's a nightmare. It's like, find one product. If you wanna build a million dollar business that can get to a million or that can get to 10 million or 100 million, just depends on how big your goal is. Uh, find one product that can support that. And then I would create the best landing page possible, then I would create the best image and video ads possible, and then I would just keep rinsing and repeating that machine until the numbers kind of like back out.

Yeah. So you wrote an email to your newsletter that I thought was so good where you, you argued that getting to building a business with one product is actually easier than having 4 to 10 SKUs. And where I think the market has changed since we got into it 15 years ago is that the market is so much bigger now. That you can have just one product and have an 8-figure business. So would you walk us through what led you to that conclusion?

I've seen so many people, you know, I've been teaching like e-commerce and Amazon stuff for— what the hell year are we in? We're in 2026. 14 years, I think, are going on 14 years, almost exactly 14 years because it's March. And so I've seen so many people's businesses blow up because they try to add too many products.

Yeah.

I've avoided some of those mistakes. We've had to pare back our catalog at, um, at Lifeboost. At one point I was partners with a guy, kind of technically owned half of the business that sold like cell phone accessories and stuff. Nightmare. Always having to roll out new products and manage new listings and all that kind of stuff. So I've experienced some of it myself. A lot of it has just been like watching other people. It's like one of the most common reasons some of these e-commerce businesses blow up is because they add too many products.

Yep. Agreed.

'Cause then they're spending all their time basically doing, trying to get new listings, trying to manage inventory. They're having to dump cash flow into these new products that aren't selling well, doing low price discounting to get sales going. Yeah. All those kind of things. Whereas if they just spent all of that effort on marketing the one product that can actually scale, like everything is better. It's kind of a compounding thing because if you put all that effort into one product, then that means you get that many more sales of that product, which whether you're on Amazon or Shopify, it almost doesn't matter. That means you get that many more customers, that many more reviews, which allows you to produce even more sales. And the— and then you get sort of economies of scale with lower cost products and ordering and all that kind of stuff. You can really focus all your attention on making that product better, making your marketing better for that one product. So I've just seen it over so many times of like people's businesses imploding, me having some pain in my own businesses, and then watching other businesses that are very simple and they literally have just like 1 or 2 SKUs and they reach revenue levels that are as good, if not better than what I've achieved so far. So to me, it just makes so much sense.

So what, what is your thesis around upsells, cross-sells, and maximizing that day one order value then?

I think kind of going back to the two models. And so if you have like a consumable product that people can buy again and again, if you're selling them subscription upfront, your upsells almost don't even matter. It's like, to give you an example, like in the space that we're getting into with the whole MindFlow instant coffee thing, one of the biggest competitors, like we had our team go through their upsell sequence, like literally buy their product and screenshot the whole thing. And their first upsell is literally just another bag of the product. Like there's nothing mind-blowing happening here. They're like, ah, we squeeze an extra, you know, $5, $10 in gross margin out of this order. And that helps our AOV a bit. And so I think that is, is totally fine. But in general, like if you're selling subscription upfront, your whole goal is to just get people to keep subscribing. And so like your upsells and stuff don't even matter. And now if you're selling also a consumable product, but you're not doing subscription upfront, just get them to buy more of it. Like for us, Somebody buys 3 bags of coffee, we're going to try to sell you another 3 bags of coffee before you get to checkout. After you get to checkout, we're going to try to sell you another 3 bags of coffee. Like, we don't get very complicated here. And that's— we test everything on the planet. Like, we've tested all these different upsells and 9 times out of 10, that's going to work better than trying to sell a complementary product.

It's true. Yeah, that's that. And you don't have— you don't have to come up with a new marketing angle for it. You don't have to come up with a new headline for it. It's just like, do you want more coffee? I love it.

You get an even better deal. And most— and like, I think if you're doing it right, it's 100% honest. Because like we'll make them offers post-purchase that are better than they can get anywhere else. And so we can make an honest statement that says this is the best deal you get anywhere in the store. It's not publicly available, it's not BS. And so that's cool. So it's a nice, honest thing. And it's like, you know, as you're— as you know, your shipping costs don't scale. Like for us, like I think shipping a single bag is like $8, shipping 3 bags is like $10. And so it's like the more you can get them load up on that first order, the better it works for you. Now, if I was selling a product that was just like super high margin, kind of one-time purchase, most of that profit is going to come from that main product anyways. People get very excited about elaborate upsells and funnels and whatever, and it's all good. And it's— there's a place, there's a time and place for it eventually. But the vast majority of your profit is going to come from this buying that first freaking thing. And so maybe you can squeeze an extra 20% or whatever out of your like pre and post-purchase upsell sequence. In most businesses, there may be some exceptions. And so I think at some point it's going to make sense like, Yeah, we like that extra 20% on every sale. If you're producing like hundreds of thousands of sales a year, like it makes sense to add some complementary product or a more premium version of the thing you already sell. But I think in most cases, like that's, that's not really what matters up front.

Have you run the numbers or done any calculations on the valuation of the type of business that you're building? I mean, in our world, we have many peers who sold e-commerce businesses for 5x, 6x, depending on what the marketplace is doing. Now that you're doing cold acquisition at the scale that you are on subscription, have you run the numbers on what that does to evaluation?

It very much depends on timing.

Sure.

We actually tried to sell the business last year because that was the goal from the day one when we partnered up was eventually to try to sell it. But we still like running the business. We love the products. And so we're not like eager to get out. And so we literally had like our exit call with the investment bank. The investment bank did a fantastic job, no complaints. They helped sell a friend's business for like $200 million. Like they did a first-class job. So it was not their problem. He sends us a chart while we're on that call, 'cause we're kind of like, oh, you know, here's what went right, here's what went wrong, here's what you can focus on in your business. Like, see you later. The guy's like, I just emailed you a chart. And so the chart was like basically showing like this is the worst time, uh, since 2008 to sell a consumer brand. I was like, fantastic. Like maybe we could have got that chart 6 months ago. Uh, and so that's, it's very much based on timing. Like I think if we had our same business, like, you know, 2021, very euphoric period. Of course. But it's that same business would've sold for like, you know, like my buddies like sold for over 3 times revenue. Um, that's just where the world was at at the time. You can't really bank on that. But we're at the opposite of that where we got like 5 offers, but none of them were exciting enough. Like they were okay if we just wanted to walk away, but it's like, no, we still like the business. We still want to build it. We see a bigger picture.

Um, This was a year ago.

This was in the last 6 months.

Okay. Interesting.

And so, uh, so I think you've gotta wait on the timing. I think that matters almost more than anything. Like me knowing what I know now with my little bit of experience, having been through this process of trying to sell a business and all that sort of stuff, I think it's almost like not even worth doing until, um, until the timing is right. It doesn't have to be euphoric 2021 sort of timing, but you want it to be in your favor. Other, like, what's the point?

I think the last 3 years have definitely been winter.

Yes.

For selling these brands, but I'm starting to see spring. I'm starting, there's definitely more acquisitions happening. I think we've bottomed and now I'm starting to see valuations come up. The reason I ask this question is because you have such a strong recurring revenue base. Yeah. And you have so many customers that it seems like this is going to be valued at higher than your typical 5, 6, 7x times EBITDA. So even, you know, 6 or 12 months ago when you were getting offers, were you seeing— can you share, like, in the range of EBITDA multiples, what were you seeing?

So we were hoping, like, minimum for more like 12 to 14 times EBITDA. Okay. What we actually got offers for was more like 8 to 9 times. And so that was just not exciting enough for us 'cause we, you know, we're still growing this thing by, you know, over 25%.

Okay, so it didn't match your expectations, but with the structure that you have in place, you're still getting higher than what a lot of standard e-commerce businesses are getting because of your size, because of the subscription amount. Were there other things that were going into that valuation that got you above that 6?

I mean, the size premium helps. The biggest thing I think almost by far is that the business is growing. And so, uh, I think what dinged us a little bit is that, you know, we had basically been reinvesting everything into growing the business. And then 2025, uh, we produced really strong profit, most profit ever. Um, very good. The year before that was like, okay. But then like, you know, the typical kind of acquirer, you know, they want a stronger history. Of those levels of profits. So that kind of dinged us a little bit. But what really sort of matters is like having the highest EBITDA possible, highest growth rate possible. And then like everything else kind of trickles down from there. You know, how, um, how big is the market you're selling into? Do you have any real differentiation that they can kind of bank on? Like your business not just imploding the next day. Um, those are the things. And then part of it was like us, I guess, but I think that mattered less cuz we're like, yeah, we'll, we'll do whatever, you know. Are we super thrilled to like be employees for a few years? Like, no, but it's like, if that's what it takes to get a deal done at the size we want, like, sure. So I think those are the factors that really mattered.

This was my favorite part of this discussion because did you hear how Matt was disappointed getting offers of 8 or 9 times EBITDA and were complaining about the market being cold? That made me laugh because that still would have been a ridiculous amount of money. Now let's break down a little bit about why Matt was able to get an 8 or a 9x on his business and why he thought that wasn't high enough. The reason is because, first of all, we're living in a time where you can build a high-margin subscription business that gets to 7 figures a month, and he's working a couple hours a day. That is possible because of the technology that exists now. Number 2, he's got a lot of customers on subscription. That is a huge driver of valuation. If you've got a large number of people on subscriptions, then that is gonna drive up your valuations. And the third thing was simply the size of his business. The bigger your business is, the higher the premium that somebody is going to be willing to pay to buy that business. This is why I like subscription businesses. This is why I like niches like supplements and beauty and topicals. And food in some cases, because you can build these big companies with a couple of products and they can be on subscription and they've already been proven that they can be really big businesses. That's why I like those types of markets. If you want to launch a business in one of those markets, I think that it is the best route to take if you're gonna build an e-commerce business today, cuz you can go high margin, you can be subscription. They're easy to brand. And you can have really big businesses with a few products. If you want to get one off the ground and follow our playbook for getting your high-margin subscription business live, you can go over to Capitalism.com/bootcamp and get on the waiting list for the next cohort. Matt, you are finally starting to make content on the internet. You know, I know, I know it takes you a few years to realize I'm right sometimes, but you just started making some content on the internet and I've really enjoyed your newsletter. I am curious when you're— you've got like a handful of people that you're working with directly, mostly on this transition from— you do Amazon over to Shopify.

Yeah.

I'm curious who you like to work with, who should reach out to you, and then how do we find the newsletter?

Yeah, thank you. Yeah. So for me, it's like the people that I, that I can help the best, I think immediately are people that own an e-commerce business. They own their own consumer brand. They're, you know, founder, some sort of owner still involved, like doing things in there. And, you know, they're doing at least $1 million a year in revenue. And I think with those kind of people and they want to scale to, you know, $10 million or at least double their business and they're really trying to figure out especially the whole like Shopify game. Like I didn't really plan on this thing being for like only Amazon sellers because it's like I see Shopify sellers, like if they're doing $1 million or $2 million a year, they're missing stuff all over the place. There's like a few levers you can pull and they'll probably like increase their sales by 50% in like 30 days. It's nuts just because they know they don't know everything. Um, so those people are great, but they're just kind of harder to find, or I don't really know what's happening. So if like Amazon sellers for sure. And so like, I think if you're willing to put the time in to learn these new skills, you know, with my help on how to scale on Shopify and invest in at least one new product over the next 5 months or so that can really be D2C specific. Like those are the people that, that I'm, uh, having a lot of fun working with.

And the newsletter. Yeah.

And it's, uh, just go to Matt C as in Matt Clark, but just Matt Capitalism.com/newsletter.

Yeah, Matt, this is great. It's, it's so fun to see how fast this thing has grown. So congratulations. Great to see you. Thanks for hanging out with us. If we were to summarize this discussion, it would sound something like this: find a big market where there are already big players, find out what they're doing, and do something similar, but be different enough where you can have something better. If you do that, there is such opportunity in today's landscape, especially when you factor in AI tools and the things that make automation so easy. We are about to enter into an, an era where you can have a one-person business that does $25 million a year. It's gonna be really interesting to watch what happens in the high-margin subscription verticals over the next several years. And if you are thinking about getting into this space, it's a really exciting time to make a splash. I'm Ryan Daniel Moran with Capitalism.com. Thank you for watching. If you want to send feedback, I'd love to hear it in the comments wherever you listen to this, or you can send me an email. I'm Ryan@Capitalism.com. Thank you so much for being here. I'll see you guys on the next episode. Take care.