How Max Made Millions Before Turning 22

This 19 year old kid made $5,000 a day selling microscopes on his website and his parents didn't even know he was doing it. This episode with Max goes through all of the different failures that led this 19 year old kid finally breaking out and having a seven figure exit before.

He was 22 years old.

In this episode we go through his systematic thought process for how he tests ideas. And when you listen to this episode, you're going to see how you can test a product idea with as little as $500. And you can find your million dollar winner by just testing 500 bucks to see if your product is going to.

Work in the marketplace.

As a result of Max testing a few ideas, he was able to find the one that had a seven figure exit. And he also shares how he's applying that same methodology for the business that he's building next, which he expects to be much, much bigger. This is a masterclass in testing ideas and finding the thing that will be.

Your seven figure breakthrough. Max, why don't you share how old you are to start?

Yeah, so when I got into E Commerce, I was 19 at the time, but now I'm 22. So, you know, got into the, the, you know, the E commerce journey pretty early, but I've been enjoying it. So.

Yeah, that I ask because I knew you were a young pup.

You don't.

Yeah, young buck.

You don't. When you're 22, you don't feel like you're a young pup, but you've already had an exit under your belt and you got into this world in a really like untapped, it's not fair to say untapped space, but a real niche market. Right. It's not the thing that I talk about. Some of the four core markets, supplements, beauty, pet food, you're in none of those.

Right.

So tell me how you got into this bizarre niche world.

Yeah, so I mean, basically I think it starts in high school, right, Where I just graduated high school. I didn't really know what I wanted to do and I didn't want to spend a lot of money on college because, you know, college is super expensive and it's like a big opportunity cost. Right.

So you're a smart man.

I decided to take.

You're a smart 19 year old.

I decided to take a gap year to the, you know, chagrin. And my parents, my parents were like, no, no, don't do it. Because I come from like, you know, an Asian family and they're really into education. Right. So I took a gap year Parents, like professionals, like computer scientists.

I come from the world of, you go to college and you. You work hard and do that thing, and you're like, I'm going to take a gap year and become an entrepreneur.

And I actually didn't know I wanted to be an entrepreneur.

Okay.

But basically there's a gap year was volunteering full time. So I would go to Florida, do disaster relief there, like, try to help the people who come. Got hit by Hurricane Michael at the time. And I realized that I can only help one person at a time volunteering. Right. But with business, I'm able to help multiple people at scale. So that's when I started getting into the space. I actually launched an FBA business during my gap year, and it was completely bombed. So I've had, like, a lot of mistakes there.

What was the bomb? What. What. What happened?

Yeah, so it was a product that basically prevents you from slipping if you put it on your shoes. And it's like a sticker almost for. For like, a woman. And we actually got.

Because women fall a lot.

Yeah. Like, for heels, it's, like, very slippery, you know? Yeah.

So I'm gonna get some comments for that one.

So in terms of the. The sales, we were actually doing like 500 to a thousand a day, but I didn't keep into account the product quality. So once we got the reviews, the reviews, like, said it was not good, and then we just tanked in the rankings.

So you figured out sales. Yeah. And you're seeing, like, oh, there's money to be made. Yeah, there's an opportunity here, but product quality actually matters.

So that. That's when I kind of got hooked on. Into the whole concept. But, you know, I just had to improve over time. Right. So then after my gap year, I.

Got to ask, were you freaking out about the failure? Because, I mean, if you're 19 and you have a failure like that, that can. That can fuck up your. Your mind a little bit.

Yeah. So when I was volunteering it, I was only getting paid $2 an hour, so. So, you know, losing, let's say 2k, 3k, that was pretty bad on me. But I'm. I'm pretty persistent.

I.

That's just my personality. So I decided, okay, I'll just try again. Because I kind of. I view business as almost like rolling the dice. Right. But the dice is weighted to your favor, and you increase the probabilities of succeeding over time.

I'm so glad you said that, because it's so true that you increase those probabilities over Time. And most people say they roll the dice and it comes up blank and they say it's a failure. I'm a failure. This doesn't work. This'll never work. Rather than being in the mindset of there's more education that I've had from this, there's a higher chance of success if I roll this dice again.

If you just keep doing it.

Yes.

I have to ask, where is it.

Legal to be paid $2 an hour?

Yeah, it's actually a government program. It's called.

Of course it is.

It's called AmeriCorps NCCC. So basically they pay for, like, housing, food, and then you get a small stipend for $2 an hour. Yeah. But the experience was really worth it. I was able to learn how to build houses, you know, talk to awesome people. But after my gap year, I went to college and I kept launching E commerce brands. But I really had a lot of time when Covid hit. Right. So when Covid hit, you know, classes were pretty much done. You could just like, cruise through them. So I just decided, okay, I'm going to go all into E commerce.

So you actually did go to college then?

For like, one semester, basically.

Okay, so you, you go to college, but it's on lockdown.

Yeah.

No one cares.

Yeah, no one. No one really cares.

And so you keep selling stuff online?

Yeah, yeah, yeah. And, you know, college, it was pretty fun, but I felt like once I experienced the real world in terms of, like, volunteering, I felt like college was hindering me. So that's why I really wanted to start my E commerce business. So I ended up going through maybe 10 to 20 different failures, different stores. Again, rolling that dice, having, like, long nights of, like, crying, stuff like that. Yeah, that's a lot of failures.

10 failures.

So I'm actually not that good. Not that good at E commerce, I'll be honest. Like, so I'm like, tell me some.

Of the ones that didn't work out.

Yeah, when Covid hit, I tried making this, like, UV light sterilization kit. That didn't work out. I tried making a roller, like an ice roller, for. For fitness, to relieve pain, for recovery. That didn't work out. I tried, like, a gaming brand. That didn't work out. So many different failures.

But why didn't they work out?

I did not understand my target market. So that's when I stumbled upon your book. I remember reading it on a trip to Vermont with my family, and. And I learned that, okay, you really have to focus on the person, not the Product, even though the product is important for the person. And that's how I was able to succeed with the STEM kids, which is a brand all about nurturing curiosity within children using science toys. And I've always been like a science kid. I love science, so I knew exactly how to market.

Okay. So you discover. Oh, the thing I've been missing is I've been selling products, not selling to people.

Yes.

And so you choose your person, which is a younger version of yourself, we'll say. And. But what made you say, okay, I'm going to go in the science route. And it's. It's stem. What does STEM stand for?

STEM stands for science, technology, engineering, mathematics.

Okay. So you just decide that that's going to be your person.

Yes.

And you immediately know what products are going to fit for that person.

It was actually like serendipity when I found the product. Right. So I was browsing Amazon one day looking for products to sell, and I stumbled upon this portable microscope, and they were marketing it very incorrectly. They were marketing it for, like, like, weed and like, like, like, other. Like, other, like. Because, like, apparently that's one way to, like, gauge quality. Like, you just have to, like, look at it under a microscope. So they weren't marketing it correctly. And I knew exactly that if I had this product as a kid, it would have been awesome.

You know, that's a. That's such an interesting teaching point because all you did was change the person that you were targeting. You looked at the products that were being sold and said, this isn't targeted to my person.

Yep.

And sometimes that's all that has to change. Exactly. Is somebody doesn't know that that product is a fit for them because no one's marketing it to them.

Yes.

And that that brand, the weed brand, could be really successful for all we know. Right. But it's a completely different demo than if you're marketing it to science kids who hopefully aren't smoking weed.

Yeah. And in terms of the product, we eventually improved it over time to fit the kid mindset perfect. Right. So we would add, you know, safety lenses so that they wouldn't, you know, break, and we would improve the quality over time. So while we. While we began with a inferior product, I would say, I mean, that's how it always starts. Right. Where nothing is perfect. But we were striving to improve it.

Yeah. So what was the takeoff rate? I mean, you have all these failures and you have these 10 or 11 e comm brands that don't work out, and somehow you have the gumption to do one more.

Yeah.

Because you're targeting a specific person. What. How quickly did that start to gain some traction?

Yeah. So when I officially decided, okay, I'll begin my E comm journey to when I hit my success, that was around six to eight months. So pretty quick. But I was working like eight to 10 to 12 hour days, just full on going into it, studying, learning from mentors. But then once I hit my big win in September of my, well, first semester of my sophomore year, it took off like a rocket. Like within a month we were making 3 to 5k a day at pretty good margins, like around 50% profit margins after ads, after, after paying for all the cost of goods. So, you know, I was balling as a college student, but I always wanted to like improve it over time. So in terms of the highest profit day or highest revenue day, we were reaching like 30k a day. It's amazing in terms of like during the Q4 giftings part. So. But I've had like, like the, during the Q4 I would have a lot of challenges in terms of shipping.

Sure.

So I would do pre sales because we would be selling out very quickly, but the inventory would get stuck in LA for like months at a time.

Yeah.

And I almost went bankrupt because of that.

Really?

Yeah.

You're like, no, not again.

This can't happen again. I would have to start all over. Right.

So you have this, this six month process where it basically feels like nothing's happening. Right. It feels like you're, you're grinding along. And I'm guessing that in the back of your mind you're like, here we go again, this is another one. But six months, you continue to pound the pavement of something that is not taking off yet and then it starts to take off after six or eight months, Is that right?

Yeah. So I would say the only reason why I kept going was because I saw people my age doing it and if they're able to do it, I was like, why can't I? So you know, there are a lot of gurus out there, but they, they do have like a good side to them where they can serve as an inspiration. Right. So that's one of the reasons why I decided to stick to it. Another thing is like E commerce I felt I found is the perfect model for me because I had like no networking, no, no networking opportunities in terms of COVID Right. And I also didn't know a lot of people, but I was able to develop the skills necessary to market. I also didn't have that much money. But in terms of building a community or ads, you don't need that much money to start in the very beginning. So it's perfect for somebody who was 19 at the time with little money but willing to learn the skills.

What was the tipping point? Around six or eight months that got you to, you know, the $3,000 a day in sales. It. It obviously doesn't go from, like, zero and then tip over, but there had to be something that happened where it started to hit.

Yeah, definitely. Focusing more so on the tactics of marketing, at least for me. I decided to really learn direct response marketing, which is basically how can I get somebody to convert through ads in a very simple manner. So I learned a lot about sophistication levels, awareness levels, how to. How to make a good ad, and really tailoring it in a scientific manner, like testing out different hooks, different angles, stuff like that. So once I approached it from that angle, I was able to make good ads. And when you make good ads, you can start making sales.

Where were you advertising and were you sending them over to Amazon? What was the.

It was. It was mostly Facebook. Facebook, yeah. Because Facebook allows you to scale pretty quickly and allows you to test out different marketing angles. So in terms of marketing angles, what I mean is, would this product work for moms? Would this product work for grandparents? Would it work for schools? And you're able to test out different ads that give a different message and allow you to. Okay, let's say moms work really well. Let me make more ads on that.

So you're going from Facebook over to Amazon.

Facebook over to my own Shopify store.

Okay, so was when you scaled the company, whereas most of the sales coming from Amazon or your own store?

My own store.

Oh, interesting.

Yeah, we didn't. We didn't really focus on Amazon. We could have added our own Amazon store, but I really just wanted to focus on Facebook at the time. And if we had more time, we would have opened our own shop, our own Amazon.

When you got to your highest sale point, was it mostly the microscopes or did you have other products?

Yes. So we followed the model of adding extra products. So when people would buy the microscope, they would also want microscope kits. Like, so we would. We had three different microscope kits that allow the students or kids to see a multitude of different objects. And we would also add other science kits to it. So at the peak, we had around seven different products.

Okay, and what did your parents think at that point?

The funny is. The funny thing is I didn't tell them, okay, Okay. I didn't tell them until I knew for a fact I wanted to drop out. And I had enough revenue to prove it.

Right.

Because if I told them ahead of time, you know, I don't think they would have understood, and they would have tried pushing me away from it initially, like, oh, you should focus on school, become an engineer, which is totally valid. But I wanted to make sure that nothing can stop me from. From this. And once I made my, you know, enough revenue, then I showed them the numbers, and I was like, okay, I'm going to drop out.

When. When did you tell them? At what revenue point?

I think we're making like 200 or 300k a month. Around that.

I'm making 2.5 mil a year.

Yeah. Yeah. So it was pretty random. They were so shocked. But I think they. They're. They've definitely come around.

They come around. I would hope so.

Alex, would you make a point to.

Get a couple stories of this one? This is fun.

So at some point, as you're growing this, there's an opportunity to have an exit. You know, you get to two and a half, $3 million a year, and you're what, 20 at the time? 21.

Yeah. Like 19. 20.

Yeah. Geez. Okay. So at some point, the opportunity comes to exit. How did that opportunity present itself?

Yeah, so I was actually at a Mastermind event from Alex Fedatov. He's an E commerce entrepreneur, and he had a talk about this aggregator called Open Store. And I decided, okay, yeah, I think it would be a good time to start selling my brand because I want to move on to the next thing. I want to build something that could scale to 100 million or maybe even more. And the STEM Kids was a really good starting point. But what I found after I, like, after I've thought about it. Right. Is that usually the first business that you start comes from a place of scarcity. So it's not always like the. The business that you want to work on for a long time.

Yeah, you just want to make something happen. You just want to make some money. You want to prove to yourself that you can. You want to prove to yourself that you don't have to become an engineer. You want, like, you. You just. You're proving it to yourself.

Yeah.

And at. When you get to, like, 3 million bucks and you're 19 or 20 years old, you're afraid of losing it.

Exactly.

What if I can't repeat it? You're having all these kinds of thoughts.

Yeah, I've had. I've had those Doubts, definitely. So from, from that place of scarcity, I decided, okay, now that I have this money, maybe I can come from a place of abundance where I can decide what to work on, hire the right people. Right. Instead of saying, okay, I need to hire these people because things are breaking now, I can do it ahead of time. I've learned from my mistakes and now I can choose a better opportunity.

Man, I wish I had had these kinds of thoughts when I was 19, 20 years old. These are things I don't learn. I mean 30s.

I mean, the thing is like, there's so many resources out there, like, you know, listening to you and telling, you know, giving advice. Without the advice, I'm not able to come up with these thoughts. Right. So really, really building and like standing on the shoulders of giants. Right. That, that's how I think about it.

I'm a 5 foot 10 giant, ladies.

And gentlemen, taller than me.

So.

So you, you hear that? You can exit.

Yeah.

You have the opportunity to connect with somebody who's at least interested in buying. How did that conversation happen?

Yeah, so, you know, open store, at least they, they really marketed themselves as a way to sell your store quickly. So all you just had to do was upload your shopify and then they would give you an offer. And the offer was good enough. So I decided to take it. In terms of how much I sold it, it's like low seven figures. So sizable amount to. To start my next business. And then in terms of the process, it was very easy. Like I just gave them, I just, it was like a month, month off boarding process. So pretty short at the time. And then I was just pretty much hands off by then.

Were you happy with the. Then like looking back, are you happy with the number?

Yeah, yeah, I was pretty happy with the number.

So you get a low seven figure offer at 20 years old or whatever.

Yeah, like 21, 20.

Yeah. So what do you do on the other side of that? I mean if like a one month offboarding process is extremely fast. Yes, it's extremely fast.

That's why I took it.

That's a fast, clean exit. So you basically get the check and you're out. Which is very rare in this space. But this is also during the time of. There's aggregators competing with one another.

Yes.

There's people who are. It's good timing, right?

Yes.

Not. It's good. Like it's a good. That's the right time to sell the business. Right. So when you get the check and you're done in the business, my Experience is there's this big gap of like, what do I do? But you're, but you're 21, 22. So did you have any of that?

Yeah, I experienced something similar to that. But right after I sold my business, I want to start another one. And this one is called Dottie. And it was inspired because my girlfriend has period cramps that pretty bad period cramps. So I decided, okay, why can't I come up with a solution for this? So I launched like a shake for it, basically a shake that has therapeutic properties for this problem. The thing is, I made so many mistakes with it. I didn't validate the product initially. I hired too quickly. I got cocky. I thought that everything, I thought everything I could touch like turns into gold, you know. And then I ended up losing around $200,000 from that business. So then I was like, dang it, what should I do? And then I decided to launch other brands. It didn't really work out. So I had a lot of self doubt because I launched this brand. I like, I launched a stem kids. I succeeded. But then all these other brands I'm launching afterwards are failing a lot. So I'm like, what am I going to do? But then I decided to take some time off based on the advice from my CEO at the time. And, and that's when I was really able to come up with the idea I'm currently working on right now, which I think is going to work well.

You told me that you stepped away for a while.

Yes.

And then the inspiration came for that. So was it you beating your head against the wall trying to make something work and then you're like, I just gotta get away. Like, what prompted you to just say, I just, I just need to walk away for a little bit?

Exactly. Yeah. There are a lot of entrepreneurs recommending for me to just step away. Because when you're banging your head against a wall, right, you don't get to see the opportunities that present yourself because again, you start operating from a place of scarcity when you do that. But then when you operate from a place of abundance, which basically means lots of opportunities, lots of problems to fix, and you get your head out of the, you know, the gutters sort of thing, then you're able to come up with those opportunities.

Yeah, my, my coach told me today, he was like, it's like this. He says he had a coffee, but I have a coconut water. He's like, if I give you this coconut water and you're like, I want this. And I know that I have 10 of these in the fridge. Like, yeah, here, have your coconut, have it, we'll get another one. But if you have the perspective of this is the only coconut water I will ever have, you can't have this. And I'm going to drink this really slow and I'm going to nurture it and I'm going to protect it. Meanwhile, there's a bunch of coconut waters in the fridge. You can go over to Whole Foods, buy coconut water. And money is exactly the same where if you think that something is going to fail and you're in protective mode, like you have to make it work because this is the one that has to become $50 million, $100 million, you're going to sabotage that whole thing. But if you're looking at it like there's sales over there, there's an opportunity over there is brands over there, you'll operate it from that place of abundance. But you can't see that when you're counting nickels. And when you are or if you're working a full time job with the perspective of I got to make this work so I can that that tenseness prevents you from see that are in front of you. So you wisely take some advice and you're like, I'm just going to step away for a bit and see how many coconut waters I got in the fridge.

Exactly. Yeah. And what I would say is I think the sequence of things matter. Right. For instance, so there's really no way I could have operated from a place of abundance before starting the stem kids.

Right.

Because I would almost be fooling myself in the sense that, oh, there's lots of coconut water in the fridge, but I really didn't have any. Right. So I think it's really important to just get started, realize that, okay, you're going to fail a lot of times because that's just how the game works. You have to roll the dice. But once you hit your success, then start thinking from a place of abundance.

Yeah. So you stepped away and you got some inspiration for your next thing.

Yeah. So the next thing is actually going to be a sunscreen brand. We're currently waiting for inventory. It's been very hard to source the specific ingredients we're looking for. So we're currently, we tested the demand initially using ads, but the problem that we're solving is lots of sunscreen brands out there are lying about how safe their ingredients are. So we're just coming out with a safer alternative.

And yeah, I want to hear more about this, but you've said several times that you've tested things with ads.

Yes.

And it sounds like you have a thought process for how you validate these ideas and these products. And you mentioned that the brands that lost a couple hundred thousand dollars, you didn't go through that process. So how do you think about testing a product and validating an idea before you roll the dice?

Yeah, that's a good question. So there's multiple different ways people do it. I know that you're really into building community. For me, we like testing the, the concept beforehand. So what we do is, okay, we can build a product page very quickly using, let's say 3D mockups of the product, talk about the specific messaging we want to do on that product page. And, and then we make an ad. Either we ascend the packaging to an influencer. They make, you know, content with that and we see if it converts. If it converts profitably, then we know that, okay, this pro, this idea works.

But that's even before the product exists.

Yeah, yeah. So for this product, it didn't even exist before we tested it out. We had the product page made, we had the ads made, and then we see, okay, are there people who are willing to buy? And we set up like a pre sale type thing. Right. So we say, okay, you're not going to receive this for multiple months. And sometimes people are fine with that. Right. If they're not, then you just refund them. So it's a really scrappy way to get started. But in the beginning you don't want to spend a lot of money because then you end up with a mistake of spending hundreds of thousands of dollars. And again, back to the dice example. You can only roll the dice so many times, so you have to be careful with how often you roll it. Right. Because how many times you roll it represents how much dollars you spend. Right. If you have $5,000, you can probably only roll it five times. So be careful with how many times you roll it.

So you're sending people to like a pre sell page.

Yes.

Collecting the payment. And then if people didn't realize that it's not going to be shipped for a while, you just refund.

Well, we're pretty transparent with the shipping price or shipping time. So like you know, two, three, two to three months. If they're not okay with that, then we refund or they just don't buy.

Yeah, so, so, so basically it's like if somebody is want something enough to be able to wait two months and pay for it.

Yeah.

Then you know, you have an Idea. You've got something that has some validation in the market.

Exactly. Yeah. And we also make sure that we are acquiring customers profitably. So that's just how many. How. How much do ads cost, plus how much does the product cost and is it cheaper than the. You know, how much you're selling?

Could you walk us through the example of how you did that in this newest brand with this sunscreen? So that must be pretty recent then, that you've been testing that. So walk us through how you went about testing that idea.

Gotcha. Yeah. So we launched this brand around two to three weeks ago. So at this point in time, I can make a lot of different product images. So we would use something like midjourney, where they would make the product image for us. And we also have some. Some team members who know how to do graphic design. So then they're able to make the product page. Right. And they're also able to make the ads. In terms of how we make the ads, we really look at something called market sophistication and also awareness levels. So if you want me to go into depth with that.

Yeah, I want to hear more about this.

Yeah. So there are multiple different awareness levels and multiple different sophistication levels. For example, for your brand, I would classify it as a stage four sophistication level where people know about the claims that you're making. Let's say, how do you make $1 million a year or something like that. Right. If you try to market it as, okay, you can make $1 million a year, just like that, people are less likely to buy. But in a sophisticated market, you should talk about the mechanism. So the mechanism that you talk about is the four products at $30 price point, that sort of thing. So once you know the sophistication level of the market, then you can tailor your message, if that makes sense. So that's why you're able to, I guess, succeed, even though you might not necessarily know the concepts of it. Oh, they're the words of it. It's because you understand the concepts of. Okay, if it's a sophisticated market, let me talk about the mechanism on how it works.

So in other words, I have discovered that if I talk about the million dollars, there's a believability factor that's hard to cross. Yeah, but if I talk about. If you get four products to 25 sales a day and people buy a price point, they go, oh, and then I can show you how to plug in those variables. That's the mechanism to the result. Yes, and so I have found that the more I communicate like that, the more the response is on our ads or my content. How does that apply to something like a sunscreen?

Yeah, so the sunscreen is a very sophisticated market. Right. There's so many sunscreen brands out there. So then you have to discuss how this product is better than others through the mechanism. And you have to elaborate a lot about that mechanism. Like for us, it's all about the ingredients. And we even go into depth about how we source it and how it's very high quality. Our, our shtick is it's so safe, you can theoretically eat it. And then people really, people really like that. So really going into the mechanism of it allows us to scale higher. But let's say I didn't know the mechanism, then I probably would have just said, hey, this sunscreen prevent sunburns, which doesn't really make sense. We're all in that market. We know that, you know, people are not going to purchase because all sunscreens are making that. That clean.

Yeah, yeah. It reminds me of, I read this book when I was in high school and it was like a, you know, a natural living book. It was like one right when that trend was starting. And one of the lines in there was, if you can't eat it, don't put it on your skin.

Exactly. Yeah.

That's what we're going for. And when, when I saw that, it sort of changed my frame for, for sunscreens even, and I would have friends. I remember being at an amusement park, Cedar Point in Sandusky, Ohio, and someone said, well, mine has aloe in it, so I can't eat it. And I was like, would you eat the other things that are in there? And what I'm hearing you say is that a lot of the brands out there that market themselves as natural or good for your skin actually have a bunch of crap in them. And we all kind of know this, but we're tricked by the marketing and we know the one benefit of preventing sunburn or skin cancer. And you're saying, well, you can eat it. Theoretically you wouldn't want to, but you could eat it if you want to. And that's sort of the mechanism that is different from everybody else.

Exactly. Yeah. So I really recommend people read Breakthrough Advertising by Eugene Schwartz. So that really talks about how you make high converting ads. And once you know how to make high converting ads, you can test out any idea that you want to pretty quickly.

So you're testing like $1,000 or.

Yeah. So for this idea we tested it using $500 for the STEM kids. We launched with around $500. So, you know, right now, of course, I have more money to back it, so we're just waiting for inventory. But for the stem kids, we were able to scale because we were sourcing it from China, so it was way, way cheaper. But for here, we're sourcing it in the US I don't mean to be.

Pedantic, but this is really interesting to me. It sounds like you set up five different landing pages with five different messaging and write ads for each one of those, and then you're just seeing which ones hit and which don't. Is that like a fair scenario?

That's very fair because we tested out the moisturizer angle. Can we do. It's so safe, you can theoretically eat it. But for moisturizer, that didn't work out. So now we know, okay, let's not make a moisturizer. Let's not put more spend into this. And then we tested sunscreen, and sunscreen does work out. We tested out SPF and moisturizer. That doesn't really work out. So we're able to test out all these different concepts, all these different ideas. Because I'm more of an idea guy. I have all these ideas. I want to test very cheaply and quickly, too.

Yeah, 500 bucks is not much to validate an idea.

Exactly.

I mean, so what indicators are you looking for, like $500? I mean, I'm thinking, like, that could be 200 clicks. That doesn't seem like you would get that much data. So how. What indicators are you looking for to know that you have a winner?

Yeah. So for. For this product, I'm really looking for a home run product. Because if you're able to acquire customers cheaply, then you know that. Okay. Even though. Then you know that you can optimize it more and then really, really scale hard. But for. For this product, for instance, we were acquiring customers at, let's say, I'll give an example, $25. Right. And that we were selling the product, let's say, for $75. Then you know that you have that margin and that you can make more mistakes. So you always want to add like a buffer whenever you do something like that.

Is that the price point for the product?

It's like a little bit cheaper.

Okay. That's. I mean, that's a premium price point for. For. For a sunscreen. Right. And so it. It is really interesting to. To be able to test that price point, to know will the market Withstand.

Yeah.

This message and if you can buy a customer for 25 and fulfill it at 75 quickly.

Yeah.

You know you have something.

Yeah. Just because like currently, like, like for me as a person, I make lots of mistakes and I know that I want that margin in case I do make a mistake with a hire or something. And I always want like home run products. I don't want to spend time on a product that's only break even, at least for the initial test just because it wouldn't necessarily be worth my time. And that's just more a tactical like perspective for me.

Yeah. How do you continue to run ads on the winner even while you're waiting for inventory?

No, no, right now we're not.

Tell me why. Because it sounds like if you have a winner, you should just milk that sucker as much as possible. So.

Yeah.

Why do you make this?

So just for this particular product, me personally, we're not able to find lots of manufacturers. It's a really unique ingredient. We tried in China, nobody's willing to work with us. We tried in the Philippines, nobody's willing to work for us. In the US very few people are willing to work with us. So we're really scared that we won't be able to fulfill on our promises. So we're not willing to really milk it in terms of like pre sell orders. What I might have to do is like manufacture the product in my own like apartment for a little bit. We'll see. I don't know the legalities of that yet. I have to like check but if it has to come to that, I'll.

Okay, so tell me the plan for once you have inventory, how you're going to launch this, what lessons will you bring over that worked in the stem kit business and what will you do that is completely different?

Yeah. So for the stem kids, I try focusing on multiple different things. I tried doing SEO, I tried, you know, all the blogs, ads, Pinterest ads, you know, Facebook ads, TikTok ads. That was a big mistake. I should have just focused on one thing at a time. And for this brand I'm only going to focus on Facebook and using influencers as a way to, you know, drive more content for that while also building an email list so that people will subscribe and purchase thing. So really just one or two avenues to acquire customers and focusing on the backend, launching more products, that sort of thing. So really focusing.

Yeah. So it's mostly Facebook ads and influencers and you're sending them to your own site.

Yes.

You're Bypassing Amazon.

I will include Amazon in the future for this.

But you'll build like the launch audience within your locus of control. You'll build the community and the customer list.

Exactly.

And you'll ride that. And then Amazon will be kind of the secondary channel.

Yes.

Yeah, yeah. Have you given thought of what the next products will be once this gets to 50 sales a day?

Not necessarily. We've. Because we tried the moisturizer angle and I thought that would be my second product, but people don't enjoy that. So we're going to have to test out multiple different angles, different products before we hit that next product. But really the, the whole ethos of the brand is that we're really going for skin care that you could. That you can trust. Trust so much that you can theoretically eat it. And then we'll see which gaps in the market that we can fulfill with that. But we can only do that through talking with our customers. And I've actually scheduled calls with the people who've purchased. Purchased in the past. So I'll be talking to them, seeing what they.

That's great. So it's been my experience that everyone who runs a profitable company thinks about the exit, but once you had an exit, you just dream about having a profitable company. So now that you've had an exit and you've had some failures, do you think about, are you going to grow this thing to exit? Or do you think about, I just want to have a nice business that creates profit? Or have you thought that far ahead?

I just want a nice business I can work on for a long time. Because what I've realized, and maybe you're the same way, is that I always need to be working on something of two to not go crazy sort of thing. So if I know, if I sell my business right, it's going to be. I'm going to be sad again. You know, I'm going to want to work on another thing. So it's just going to be this endless cycle. I might as well just stick to this one, try to see how far I can take it and just try to keep scaling it. Yeah.

It's such. You can't understand it until you've gone through it. Right. It's such first world problems. Right? Oh, you've. You had an exit at 21. You must be so sad. And you're like. I mean, once you've climbed the mountain, you realize that the climb is the fun part.

Exactly.

Right. I mean, you, you just climbed Kilimanjaro, right?

Yeah, yeah.

And the Whole point is the seven day journey to the top. You get there and you're like, great, we did it for about five minutes. But the whole journey was getting there.

Exactly.

And now you're looking for the next mountain to climb. Yeah, that's in business or fitness or whatever it is.

That. That does remind me of this phrase I've heard. I forgot who I've heard it from. But it's like, it's probably Abraham Lincoln. Abraham Lincoln. It's like people believe that money doesn't give happiness, but then they always want to find out for themselves.

So I think it definitely is true to an extent. But money is really just, I think, a form of energy. You can use it for good or bad, but for me, I use it for business, trying to see how I can help people with that money.

So let me just throw a wild card at you, Max. So just theoretically, we know this isn't going to happen, but theoretically, let's just pretend that this brand fails.

Not again.

Since you've been through that before, what would your mindset or your thought process be to process that, to deal with that and to move on to the next thing? Because it's. It's pretty rare that someone of your age has had that has this much of a healthy understanding of what failure is. It's not the end of the world. It doesn't mean you're a failure. It's just something that didn't work out. So how do you, how would you process that and then pick yourself up and go on to the next.

Yeah, so I mean, at least for the stem kids before that, I would just process it by looking towards the next thing. Okay, what's the next brand I can launch? Are there any ideas that I think could work for this brand? I do have a list of other ideas that I would test out. So I have this whole like spreadsheet of problems that I think I could solve and I would just hit the next item on the list. Right. So I would probably take a week off, try to like recover that sort of thing. And. But one thing that is personally pushing me is I do have a team that I really care about that I want to see them succeed because they've been loyal, they've been through, they've been working with me throughout all the failures since the stem kids. And I want to give back to them. Right. So that's also been pushing me. It's not just, oh, how much money can I make? But how much money can I make for my team?

Yeah, it's beautiful. How did you continue to finance the team while you were having businesses go under?

Yeah, yeah. So I'm Filipino, so I understand the Filipino culture well. So we've been.

Were you born there?

No, I was born here in the States, but I.

Because I've. I've. I've been there several times, and I love that culture.

Yeah.

I mean, I. Some of my. The best memories of my life are in Cebu in the Philippines. I mean, just is the people, the culture, the food's awful, but everything else very salty. Awesome. Pig face. Sig Sig. Is that what it's called?

Yeah.

And I had a ballute.

Oh, yeah?

Oh, yeah? Yeah. So I actually haven't had that. You've never had a balloon?

I'm too scared.

Oh, man. Well, so when I was in third grade, there was a missionary that came to my school, and he told us stories about eating balut, which is fertilized duck egg. Right. So it's basically duck fetus. And he talked about. It's the strangest story I ever heard. And I. Ever since then, I wanted to try balut. And then one year on Survivor, they ate balut, and everybody's throwing up. I'm like, I want a ballute. And I've always wanted to be on Survivor.

Why wasn't I on this season?

So when I went to the Philippines, I had to have a ballute. I almost threw up.

Was it crunchy?

I got one of the really soupy ones that was just like. It was like fetus soup. Yeah, it was. It was. It was disgusting. I hate. I did. I didn't enjoy it. It was. But I had to eat it. But. But anyway, I love that culture.

Yes.

And so you're from there, and it sounds like you're saying that the team is based.

Yeah, the team is from there. And it's cheaper than in the U.S. right. So we get our COO is from there, our graphic designers, our copywriter, which I just recently hired. We've been having some trouble finding copywriters, but I think eventually we'll. We'll get a good one.

So how did you find and build that team based here?

So there's a website called onlinejobs. Ph, yeah.

John. John something built that company.

Really? Yeah.

He came up to the ranks years and years ago. Yeah.

Yeah, it's a. It's a really good place to find high, high talented Filipinos. So we source him from there. And our CEO also knows a lot of people, and we found our CEO.

From there, and a lot of the people who are based There have been, like, really high education. Exactly. Perfect English, have experience, and they're just based in the Philippines, so they make way less than we would expect.

Yeah. If you're gonna hire remotely, might as well just go, like, go to a cheaper place. Right. So at least for me, it's been a struggle trying to. Because it is slightly harder to hire from the Philippines. Right. Because the talent is a little bit, like, less in terms of, like, the pool of talent that you can choose from. So you have to be very good with the interviewing process. So it's been a struggle initially, but finding the CEO really helped, and then he was able to develop the processes.

It's been my experience that people who are based in the Philippines are. They're wonderful and thoughtful, but not. I don't want to say not creative. They're. They're not go getters. Like, they. They will do exactly as they are told to do, and they're afraid to kind of go against the system, which is very. It flies in the face of what we do in America. It's like, let's break the system and let's break it quickly. And the Philippines are really good about, like, systems and following the process. Has that been your experience too?

So, yeah. The Filipino culture, in a sense, really respects the elders and people in positions of authority. Yeah. There's, like, terms for it. Like, if you're gonna call somebody your brother, it's like.

I'm actually kind of blanking it right now, but there's, like, a lot of terms for.

For.

For respect. Right. So in terms of that, my employees. You really have to tell them, yes, you can talk. You can talk back to me. Right.

If you.

If you feel like you have something to say, please say it. And if you also give them responsibilities, like, okay, you're in charge of hiring people, and you give them specific metrics, then they take initiative.

I see.

Yeah.

That's really helpful. You're inspiring me to want to go build a team in the Philippines just so I have an excuse to go back over.

It's our, like, secret weapon, you know? It's like. It's like 70, 80% cheaper. Like, in terms of our CEO, we're paying him $10 an hour. It's a good price for. For the.

And he's living like a king.

Yeah, it's. It's good for him.

Yeah, man, I want. I want to go back to the Philippines. Okay, so the reason that you were able to afford this team is because the costs were really low. How big is that team?

Right. Now it's four people.

Okay.

Yeah.

So you've basically been self funding that based on your winnings from your, your exit and keeping them on, saying, I have this team, I want to keep this team and I'll take them into the next success no matter how long it takes me to find. Okay, yeah.

Because I just feel like they deserve to. They deserve it just because I feel like I am indebted to them in a sense because they've helped me a lot.

When you, since you had this pile of money that got smaller as a result of a couple failures and you're paying a team, like that's.

That.

That's scary. I mean, because you don't know if you can repeat it and you're 22 years old and, and you've had a taste of freedom. But now the bank accounts in the, like you're going in the red. Yes. What did, did you do anything to supplement that? Were you, how did you stay afloat or were you just confident that eventually you'd find the next thing?

Yeah, I'll be honest. Like we like at this point it's like 70% less than what I had initially at the peak. So the bank account has been dropping. Really? Really?

Yeah. That's. That scared, that's scary.

And it hurts. Especially with like maybe there might be a recession coming, who knows? But at this point I just know that I'm familiar with the E commerce space. So if I try venturing out to other things, then it's not necessarily going to work. I would have to start from zero. So I just should focus on the one thing I know, which is E commerce, which. And that focus sort of mindset is what I learned from the STEM kids and other things I've done in the past.

Tell me your sense of the E commerce market right now because your thought process is a little bit different than a lot of people I talk to where you're still rolling the dice on new ideas and you're still looking for the next breakthrough. A lot of people have followed my work for years and have watched the trend of E commerce, have the Amazon boom and then the aggregator boom and now the bust and now new opportunities and then you have the Shopify boom. And there's all these times that you have reasons to think, oh, the best days are behind us. You always have an excuse to think like that, but you continue to be aggressive, looking for the next thing. So give me your sense of what you think kind of the state of E commerce is.

So it's definitely been much harder. So in 2019, before iOS 14 changes, which is basically privacy changes by Apple, it's now much harder to launch ads that convert on Facebook. So what that means is you can't just like put, put together a ton of videos and be like, put a caption and then expect to make lots of money. At this point you have to know the marketing fundamentals. You have to know, you know, sophistication levels, you have to know awareness levels, you have to know how to make good headlines, stuff like that. So it's just an evolution of the, the marketing in a sense. And it also is a little bit harder. But I don't think it is impossible to succeed in this space in terms of the trend growth. I did read something from, I think his name is Sean from Ridge Wallet, that we're actually below trend in terms of E commerce penetration. If Covid never happened. Right. So let's say if Covid never happened, we would actually have more E commerce than now. I think that's because really, I think that's because people, since they were locked up, now they want to shop, they want to go out. Right. So maybe it's like a compensation thing.

Meaning that there was this big boom and now there's been over correction. Over correction buying or in brands being.

Started in buying in terms of terms of E commerce in general. So like, so like there's more retail like on the ground sales.

Okay.

So that's probably why people in the E commerce space are suffering in a sense. But in general, like, I just feel like if I stay in this space, it's still going to grow over time I'll be able to succeed.

Yeah. I feel like now is the time to be planting seeds.

Exactly.

I mean it is. Winter has happened.

Yeah.

You know, things have died off and, and now is the time to be planting seeds. And then you have spring where things start to like pop a little bit. Summer, you work like hell. And then there will be another boom. Right. And that other boom may not come for 18 months or three years, but it will come. And if you think about even where the e commerce space was two years ago, TikTok was just starting. You know, Instagram reels weren't a thing. Influencer marketing was completely different. You went for people with the big follower count, not the people with the big engagement count. Also two years ago, ads, super expensive, they've come down in price because you have fewer people who are trying to squeeze the market. You have these aggregators who are just buying up everything. And so you have all this Competition for a few things and now that competition's out and so you have kind of a reset of the market which to me is really exciting. I think, I think I, I am so bullish on new ideas right now. I just, I'm. A lot of people are scared and I'm like rubbing my hands together, just pumped.

Yeah. If you think about it almost like the stock market, like you wouldn't buy a stock that's super overvalued. Right. And that maybe that was like a couple years ago when E commerce was booming sort of thing. You always want to wait until it dips or if it's undervalued. And right now I think E commerce is undervalued because people are being cleared out because it's getting more difficult. But if you're able to hunker down, just plant the seeds as you said, then you're going to succeed. When you know, summer.

Yeah. It's like you, you have to be competent now.

Yeah, exactly.

Idiots could get rich three years ago. Now you have to learn to be good which just, just like you experience can take six months. Exactly six months of. Feels like nothing's happening. Yeah, I got a product on its way, I got a few reviews, I'm getting some sales and after about six months something happens, things start to happen. You may not be swimming in money, but things start to pop. And then after a year you're doing 100 sales a day and you have some momentum and you still feel behind but things, things are starting to move. What would you tell your 19 year old self today that's dealing with all these failures and is wondering what he's going to do next? What advice would you give that person?

Yeah, that's a, that's a good question. I mean even though I didn't know I would, I would tell my 19 year old self that if you just keep trying, you will eventually succeed. And while I did have that mindset when I was, you know, younger, it still hurt a lot, every single failure. Right. But you know, if anybody's young that's watching this, I mean you just have to keep rolling the dice and then you'll eventually get better and better over time. Right. It is an inevitability because you know, like even if, let's say you have a 10% chance of succeeding, I think if you roll 10 times then you have a 65% chance of succeeding. I think that's how the math works. I'm gonna have to double check that. But you know, if you think about it, that Way. Right. Where let's say you roll 10 times. Okay. Yeah, that's a pretty good chance. 50%, 60%.

I once heard Robert Kiyosaki say that when he read the statistic that 90% of businesses go under, the way he interpreted that was, oh, I need to start ten businesses. Yeah, okay, no problem. I'll start ten businesses, and the one that works will outperform all of the other failures, and I'll be fine.

Yeah. You only have to hit big once, right?

That's right.

Even though I lost maybe 500 to $1,000 each time I. I failed. But then make like seven figures for the big one, then, you know, you're pretty much.

I don't. I'm stuck on this idea of how you test things so cheaply. It. I mean, I started my first business $600, but it was in 2013 when there was a lot more white space. Right. And I chose a good product out of the gate, and I, you know, bankrolled that all over, all the way until I had a $10 million business. But you're. You're testing ideas just as cheaply, but in a completely different way.

Yeah.

So again, I can go more into it. I want to hear all. I want to hear everything that you can share about this.

Yeah. So in a more tactical sense, right. You can analyze ads before a purchase happens and see if it's good. And the way to do that is by looking at the cost per click. For my sort of industry, we're looking below a $2 cost per click. So basically, somebody going to Facebook to the page for less than $2. If not, then it probably means the ad is bad or the messaging is bad, so you have to change it. But that means you can cut ads pretty early. Instead of waiting for, like a couple hundred dollars for that ad, now you can cut it very quickly, maybe at $50, $100. So then you save money there.

And we're able to find ads that operate pretty cheaply. And we're also getting better over time because we have this system in place where we monitor, we analyze it in a scientific sense. We have a hypothesis. We say, okay, will this message work with this awareness level? If it doesn't work, then we don't. We don't test that again. We do something else. So really, having a scientific view of testing allows us to operate.

How would you apply that to a brand that is doing a modest amount of sales? So, like, if somebody is selling on Amazon or on Shopify and they're doing 50 sales a day where they haven't hit the million dollars yet and they know that they're not, they haven't really validated their marketing message. They just have a product that has some sales. How would you apply this methodology to testing messaging to get that brand to break out?

So you'll have to come up with a hypothesis. But the best way to do that is to talk to your customers. You have to figure out, okay, where are their wants, where their, their desires, what things do they believe about the world? Do they think that, oh, this product won't work? And you're able to convince them through XYZ messaging. And then once you talk to maybe a couple customers, figure out what they want, what they dislike, then you come up with your ad. Right. And then you test out again what you think will work and then you see if it works. If it doesn't work, then you do something else. It's pretty much like trial and error, Right? Just like launching businesses is trial and error making ads, is trial and error making product pages are trial and error making advertorials.

Trial and error. Yeah. And today you can just go into ChatGPT and say, come up with five different reasons why someone should buy X.

Exactly.

And then test, rotate different ideas until something starts to hit a little bit, then grow from there.

Yeah. So if for instance, an ad has a lower cost per click, then you know, okay, let me make more of this. Let's see what happens here. If it goes the wrong direction, stop doing it.

Right.

I think people just need to monitor their results and then make changes. Because if you keep doing the same mistake, then you're not really like learning.

You're not rolling the dice at a higher quality dice at that point.

Yeah, yeah. But then you also have to like, like keep track because scientists keep track of their experiments. Right. They have a notebook that keep track of. You have to operate in an analytical sense or else you're not going to be able to reference.

Yeah. Do you want to give a plug for the skincare line or is it too early?

Too early.

Okay. Okay.

Yeah, I think it's, I think it's going to be pretty big. So when you cross, when you cross.

The million, I would like to have a follow up with you because this is, this is exciting. I mean to have this high confidence that something is going to work based on testing and then applying your experience level into this new business. This is, it'll be really interesting to see how that unfolds.

Yeah. And by then I can give you some samples or you can we can eat it on camera or something. You know.

I have a selfish question for you. So we met. We had not met at all until you joined the Capitalist Pigs, which was my crazy experiment a year ago where I just, like, wanted an excuse to do a mastermind and do cool things together. And we. I don't even know if we had interacted. You just came to the event and you told me a little about your story, and that was how we connected. I'm just curious after not having any interactions before, why you joined that group and what your experience has been so far.

I've been following you for a long time. Yeah, for, like, since. Since 2020. Since I read that book. And then, you know, being able to meet you, that was awesome. And being able to talk to you in this. This format is pretty cool. But I know that you talked originally about how you're. I guess your cycle from, like, conversion is 18 months or something like that. So I also experienced, like, something similar. But the Capital Capitalist Pigs was an awesome time to, like, you know, talk to people in the. In the space and. And learn a lot.

It's. This is like, the NFTs are a dirty word right now. So, like, I haven't promoted it in quite some time. Are you coming to. In San Diego?

I have to keep testing. Like, I have to. No, like, right now we're trying to perfect the formula. So you have ads to run. Yeah, I wanted to, but I think for me, like, I need to go to an event, learn a lot of things, and then implement.

I'm exactly the same way. I'm exactly the same way. But we're planning on doing three to four meetups a year in just great places where we stack. The one that we're going to in a couple weeks is there's a pool, pickleball, a baseball field. We're getting. Bringing chefs in.

That was really fun last time.

That is fun. Is it?

And we're just.

Just gonna have fun for two and a half days because that's where all the inspiration comes from. And you're people that just are doing cool things and the ideas just flow. So I did it selfishly. And I'm always curious how people got hugged.

Yeah. And I was able to talk to Sam, which is like a partner of yours, and he also recommended to take some time off before I started my next thing. So I was able to take that advice. And now I have. Have a brand that I think is going to succeed.

Yeah, that's great.

You know, just having those conversations have been really helpful.

Well, I'm really excited for it. This was really fun. Max, thank you for following my work. Thank you for doing what you do. And I can't wait to see what you do next. And call me when you need capital.

Oh, thank you.

All right, Max, good to see you, man.

Thank you.

Max shared in this episode that he had multiple failures before he found his seven figure thing and that is very common in Internet businesses.

But if you're comfortable knowing that you're.

Going to test a few things before.

You find your seven figure breakthrough, you.

Can be light about it, you can be easy about it, and you can simply follow the process of getting four products to 25 sales a day at.

A $30 price point.

And that only needs to work one time for you to have a multimillion dollar business. If you want to see our playbook for how we stack the deck to get a brand to 100 sales a day and position it for a multimillion dollar exit like Max did, you can find our free resources over@capitalism.com playbook. This is our most up to date resources of what's working right now with case studies from our community who have had success like Max had in this episode. That's capitalism.com playbook. If you want to see how we get our brands to 100 sales a day, I'm Ryan Daniel Moran with capitalism.com thanks for watching and I'll see you.

On the next episode.

If you found value in this podcast and you're ready to go Deeper, here are three resources where we can help you. One, you can grab my book 12 months to 1 million on Audible or Amazon. It has over a thousand reviews and it's the playbook to building a seven figure business. Second, you can join our community of entrepreneurs who are following a plan to build a 1% net worth by building businesses and investing the profits you can get plugged in@capitalism.com 1. And third, if you're looking to go deeper and build a seven figure business that you can sell, you can work closely with us inside the Capitalism incubator and you can get on the waiting list and find out what we do over@capitalism.com inc. That's capitalism.com incident.