How He Hit $100k Per Month in 60 Days

Gary Vaynerchuk says that there are two ways to grow a company. You can grind organically and be really engaged with your people or you can spend money via advertising. Both of them are very predictable ways to have growth. One is free and one is fast. Most of my work is helping people build four products to 25 sales a day at a $30 price point, which is a million dollar business. Doing it the grindy way, building organic relationships, going deep with your audience. But, but the person I'm going to introduce you to today went the other direction. He went the aggressive advertising route. The result was that he built a million dollar run rate business in just a few months. The downside is that he had a really hard time making those margins work. So in this conversation you're going to get a fresh perspective about what it takes to build a million dollar business. Josh did it the more VC route. He had a board and he raised capital and he spent a lot of money on advertising. But he says in this conversation that he kind of wishes that he had followed more of the 12 months to 1 million strategy. And so I think you're going to leave this conversation with a more balanced view of the ways that you can get to $1 million business by running ads or being super grindy in the early phases. All right, let's go hear this entrepreneurial story with Josh.

Josh, why don't you give a quick overview of what you do for work because it's one of the most fascinating businesses and then we want to talk about your launch and your new brand and all that. But first tell us about, you know, the thing you've been working on for the last several years.

Yeah, well, I'll start back 10 years ago. 10 years ago I helped a pre revenue company like that was doing some weird things with mushrooms get off the ground. We had no idea what we had at the time. We were actually doing this out of a basement in Colorado where we're just playing around and doing weird things with mushrooms. And we eventually started to, well, we basically I joined the company as Employee 3 and we're like, let's figure out what to do with this thing. So we raise, we quickly raise about a million bucks for the company, kind of get it off the ground. We're like, yes, we'll never need to raise any more money again. And then $200 million later, we're still raising funds. We're actually doing even bigger range raises for joint ventures all over the world with countries to like enable food security and all this. All, all this Crazy stuff. So. So I kind of, after a while, started to get like, I mean, 10 years into the business, you start to get a little bored and want to try the next thing out. So basically what. Basically what I did was I was like, you know what? Let's see if I can actually spin this company off into like, a different way that would still keep me, like, energized and, like, excited to do things. So I proposed this idea of actually, because we are an ingredient, like a ingredient and research company, basically.

You're basically selling ingredients. Yes. To big food manufacturers and big food companies.

Exactly. So what we would do is. Well, I was like, you know what? There's. There's so much that I want to see in the market. There's so many products that I wish they would just take this little bit of a spin on it and. But everyone would always play, like, the safe route. So I ended up proposing this idea. What if we created a brand called Shroom Junkie and basically created cool products that we wanted to see in the market in the first product? That after like two years of massaging that idea and creating the products, we actually launched on January 3rd of this year. And finally. And then we. We scaled that company up and it's been kind of a wild ride. And there's a lot more developments that have happened recently.

Yeah. So I want to hear about those. But from my understanding, you were pacing seven figures after about like 60 days or so. Is.

Am I remembering that?

Less than that. So you're doing 100 sales a day, like 45 days in?

Yeah, I'd say that's about right.

And you weren't profitable every day. Like, you're. You were going pretty aggressive with that acquisition, but in terms of top line revenue, you're going full throttle and got to 100 sales a day pretty darn quickly. Walk us through the launch and how you got to that so quickly.

I.

Really wouldn't even call it a launch. I would just say we kind of.

You had no audience or anything, right? Yeah, I ignored all my advice and didn't launch an audience or any of that.

Yeah, yeah. Basically, I started off where there was no real. There was no real, like, plan there, like, on how to actually launch it. So like, when I. When I started the launch, I was like, okay, I could. Leading up to the launch, I would say I was like, what? Like, do I spend my time on building an audience and launching to that audience and spending all my energy there, or do I focus on building out all the systems that I need in order to get paid traffic working. Because, like, I knew that once I launch, it's very hard to sustain that, like, relational value through the entire process to keep them buying from you over and over and over again. So I was like, do I invest my time in building this list that may only buy once for me, or do I focus on getting the customer acquisition strategies down that are going to help scale the business? So I ended up just spending the first month. I mean, we did. We barely did any sales. I think we did, like, 220 sales in the first month. And it was all about just dialing in the creative. So what we did was we basically took a bunch of different ad creatives and then tested each of the individual pieces of an ad. You have your headline.

Your creative. You have your thumbnail. You have your audience testing. Basically, you just continue to test every little element until you create the perfect ad. You know what works, what doesn't, and you know that every single piece of that ad works. And then once you find that, like, hero creative, you just scale it up with ads and test it against different audiences and stack those audiences on top of each other to really get the scale that you need.

And how long was that process of figuring out?

A month.

A month?

Actually, it was exactly 28 days.

28 days of rotating different ads, testing them against one another, testing different headlines, different images to see which ones have the greatest pull. And then you spent more money to make that one work.

Exactly. And what we found.

What was. What was the. Say, actually. Say what you were about to say, and then I'll go to my question.

I was gonna say we found one ad that really stood out. And. And mind you, we're getting inspiration from a lot of different sources. Like, I'm taking a look at how Magic Spoon has done their ad creative. Like, what's the structure of how they create their ads so that I can actually, like, oh, well, maybe they. They're onto something because 30 of their ads have the same exact creative. So you're like, swipe, adjust.

And then how are you finding those, by the way?

You could go to, like, Facebook ad library. You can go to all sorts of different, like, places where you can see people's ads. So.

Okay. Okay. So you're. You're modeling off of the things that you're seeing most common in your competitors.

Yeah.

And 28 days later, you've got a treasure trove of different tests that you've run. Yeah. So how did sales reflect that? Where did you start to see liftoff? Because the first month you do 200 sales. Where does the liftoff start to happen?

The next month we had 500% growth.

To about a thousand sales.

Yeah.

Yeah. So now you're doing like, now you're doing like 30 sales a day or so all. Is that right? You could pull it up, mean 200 sales times 5 would be a thousand sales.

Yeah, let's, let's just get the accurate numbers here for a second. Okay.

Because I know it was pretty quick after that that we were like, it's going to be 100 day, 100 sales soon. It's going to be 100 sales soon. And we're texting back and forth and we're like, first hundred sales, we hit it and now we're pacing the seven figure business.

Okay, so I'll just tell you in.

We did.

This.

Dispense is killing all of us, basically.

2000 orders the second month.

2000 orders the second month.

Yeah.

Right. Awesome. And at that point you're, you're, are you breaking even on ad spend? Are you losing money? What do the numbers look like?

Yeah, I mean, the, the whole goal was like, if you think about like an alternative milk, people have a preconceived notion of how much can actually charge for milk, and they also have preconceived notions like, around the brand and being like, is this actually going to taste good? So my whole goal was not to necessarily be profitable on the front end. It was to basically get them to trial.

Yeah.

And then once they get the trial, then we, we had a really good stickiness for the people that actually bought from us to the people that continued with us was really, really good. So I kept testing out different offers where we'd start with like, we started off with like huge quantities that you'd have to buy. And then we started lessening the quantity. Sales started ramping up and we started like, really dial it in.

We were working on getting an offer going where it's a free plus ship offer because like, I'm actually, I could actually be like break even on that offer. So. And then subsequent months, if you look at like the cohorts, you'll see that basically like the, the customer value drastically increases and the frequency in which they buy keeps going down the more that they purchase, which is really interesting.

So, so I'm, I'm curious, Josh. At some point, as you're ramping up scales at scales, as you're ramping up sales, you're, you're going to run into cash flow issues or inventory crunches. Have you hit that point yet?

No, because luckily I've had the funding to be able to, to support this. Like, I mean, no one should go out there and try creating an alternative milk company without sufficient funding.

Yeah, that's, you're, you're going into the big boy spaces.

Yeah. So like, you don't, you don't want to go into that without proper battle armor because it'll get you. Because like minimal order quantities are like, you gotta do basically a million dollars worth of inventory. So. And I'm working up to being able to sell through all that in the time frames that are needed. So. So basically it's, I haven't run into that issue at this point, but if I was more or less bootstrapping, oh my God, this would be a nightmare.

Yeah, I mean it's, it's difficult to scale up when you're selling seven and eight dollar products. Yeah. Essentially what you have, you know, you're at the highest level of non dairy milks. You're selling them for six, seven dollars. So.

So I wish I could charge that much. Okay.

All right. So yeah, I mean the, the numbers are a little bit different as in, in this type of a space. So you, you had capital partners to be able to do that first inventory run and you have experience in this space so that you know that you can make a great product. And there was a lot of work that went into creating a great product. You said that the, as a result, the customers are starting to reorder. But I, I know you've, you've backed off a little bit at this point. So do the, the reorders continue to come in? Where have you kind of stabilized and like where, like where are you in that total process now and with what, what I, what you can share?

Sure. I think. Well, one, I would say there's multiple channels that I'm operating on. So one of them is Shopify, one of them is on Amazon. If you look at Amazon, I'm actually growing very profitably on Amazon. So like even out of the gate it was like, maybe I'd be down like 30 bucks or whatever for the day, but we'd have a couple thousand in sales and then we'd have other days where we're making a lot, a lot more. So, so if you look at Amazon, like the subscriber rate has been great. Like people are subscribed and saving and like all that kind of stuff and it's, it's really working on there. I'd say Shopify, since it's kind of like Our own system that we're really trying to dial in. Yeah, it's really about just.

Just figuring out all the mechanics to get everything working right. I would say that.

Your question was about stabilization.

Yeah. Like, where are you are in the process right now?

Well, there's a lot of developments around that, and I can share those if you want to share them.

Yeah, if you can go into them, I'd be happy to hear.

So 122 days into the business, the board, we had a board meeting. And in that board meeting, they're like, we're shutting stream junkie down.

And I was like, are you kidding me? Like, why? Like, what is happening here and growing so quickly? Yeah, I mean, we, we were, we were doing really, really well. And the whole, the whole mindset from the very beginning, I was like, look, we can do two different things here. We can grow slow and profitably, or we can grow fast and get the revenue. And they said revenue. So I was like, great, I'll build a model that's unprofitable on the front end and in the back end, we'll make it up over lifetime value. And I had my assumptions and I set my assumptions pretty low to be able to be like, okay, as soon as we hit like, X amount of customers, then the, like, we'll be good. We don't need to scale unprofitably anymore. So when they took a look at that, they're like, why isn't this profitable? I'm like, like, are you kidding?

Having an alternative milk brand launch does not necessarily mean profit.

Yes. And I mean, this is, this is what happens when you have lots of different opinions in your business. Yes, right. I mean, there, the benefit is you have all this infrastructure and capital. The downside is there are other people who get to make decisions. And this is, this is, this is the benefit challenge of the, like, what you decided to do. And, and so then, then what happened?

So literally they just shut it down. I, I, and I couldn't do anything. And first thing that was running in the back of my mind is I, like, started remembering the things that I like, I didn't listen to all your kind of stuff, like, even things I never thought I would use before, like creative financing and all this kind of stuff. And then, like, it all rushed back in that moment and I'm like, all right, like, do I go out and buy this thing and do I do seller financing and structure the deal this way? And like, it was one of those things where it, it reminded me of, like, I, I Like to study everything. And, and it doesn't necessarily mean that it's directly applicable to me right now, but in those moments when it needs to come up, you have something to draw upon, you have something that you can use.

As a benefit to you to know how to handle a situation where it's like, look, I'm losing everything here. And I have a potential of fixing that. So I think it was a real interesting moment where I was just like, this is exactly how I stretch it. Like, literally.

The moment I, I got the news that they were shutting it down was like, I, I probably had that idea 30 seconds later of like, I gotta go buy the business. Like, we gotta do it this way. Like, I'm gonna go talk to this person, this person, this person about financing on the deal, but like, like, basically everything. So. And I'll never forget when I told you this at K capcon, you just kind of looked up at me and smiled and says, great, let's buy it.

And so is that the plan? Is that the direction that you're going?

So I, I've thought about it a lot and it's, it's something that I think I don't necessarily have the funding to do a milk. Like, I'm, I don't even want to raise that much money because the headaches that come with that are extensive and I'll probably need another board, which I don't particularly like right now. So my thought process is like, look, I, I know the right people to get some funding from. Let's start up a new thing that I, I know exactly how the model works. I know exactly what to do. I, I now have the confidence that I can actually create something and, and bring it to market and have it be accepted in the market, which I think is the biggest thing. Like you, you create these own mental roadblocks in your head, but really just get it out there and get it into people's hands. But I, I think that what I, what I would love to do next is I'd love to create this other brand. I have some very unique products that I can introduce that are high value, high margin products which will also help on customer acquisition cost. And, and I'm really thinking about going pretty heavy on the premium side. So kind of going after.

Basically what you've proven, Josh, is you've proven that you can take a product to 100 sales a day and you've, you've shown that you can do it in some of the hardest spaces with the lowest margins.

Right.

I'll be I'll be really mad at you if you abandon Shroom Junkie. But what you've basically proven is, is that you can do it in really hard spaces. Which means that when you go into things that might have more margin or, or lower cost of goods, then you're like, you've proven to yourself that you can take something to a million dollar run.

Yeah.

I've seen entrepreneurs follow two different approaches when building a brand. One is you can just slay the marketplace. You can be super aggressive, raise capital and push, push the product into every home that you can. And sometimes that results in a multi million dollar exit in a very short period of time. And sometimes it means that you run out of money and you try to force a product that the market's not ready for. I like the more organic, grindy approach which is getting four products selling reasonably well, knowing that one of them has a good chance of breaking out and one of them is probably going to get super fans or influencers talking about you and you'll have better data about where to spend your time and attention. I think for most entrepreneurs that's the appropriate approach. That is the thesis of my book 12 months to 1 million. And is the process that we put people through inside of the 1%. If you want to follow that plan for a predictable road to a million dollar business getting 100 sales a day, come fill out the form@capitalismics.com 1. We know what to do. We've done it before and there ain't no problems that you have that we think are special because we've overcome all of them. So if you want to be in the room, you want to be working on your business, come join us inside the 1%@capitalism.com 1. Thank you for being here. I'm Ryan Daniel Moran with capitalism.com I'll see you next time.