How To Start A Business #WednesdayWithWyan

Because I gave myself that break internally. I think it, unbeknownst to me, opened all these doors.

Because people could read that I was so free with what I was doing.

Hey, capitalists. It's time to crack open your favorite beverage. I like Zevia. This is Wednesday with Wyan on capitalism dot com.

Hey, capitalists. Today we're talking about how to start a business. This is pulled from our new YouTube show, Capitalism TV. Ryan shares what we can learn from some of the world's most interesting capitalists. Lessons learned from Russell Brunson at the Capitalism Conference, Moise Ali from our brand builder Summit, and a surprising lesson from the career of Will Ferrell. Yes, that's right, Will Ferrell, the actor. Hey, go subscribe to Capitalism with Ryan Daniel Moran on YouTube for more capitalism TV and content you won't hear on the podcast. All right, let's roll.

Let's talk about how to start a business. And let's go through some examples of some that have worked and some that haven't worked as well so that you can learn from both. Come on in. Grab a seat. Let's have.

Now, let me tell you a quick story. I bought a business a few years ago. I bought this business because I liked the numbers and I thought I could get it to make more money. I bought the business for $2.3 million. And two years into owning the business, the business revenues had fallen more than 50%.

It's not good. So I was not doing a good job of operating the business. And here's why. Because I bought it for the money. And you know what we kept doing? We would see the numbers fall and then we say, where's the next opportunity? And then we would pursue that opportunity for the money again. And money kept getting harder and harder and harder in this business. Now, at the same time, I've had other businesses that I started that didn't look like they were the best business on paper. I didn't have any stats or data to suggest that this was a good idea. In fact, my most successful business, I have one business that I started with $600. I then sold it later at a $16 million valuation. Four years later, that business had no data, had no stats to suggest that it was a good. In fact, my peers looked at it and they, like, looked at the market size and they were like, ah, this isn't like, don't go. This isn't a good product to sell. This isn't a good business to go into. And I did it anyway because I wanted to do it, because I wanted the product because I was the customer. Now, how come the business that made no sense on paper versus the business that made all kinds of sense on paper had opposite results? Business is about creating unique value. Business is about creating new things in the world, and new things are unique to individuals. If you want to start a business, you know where the best place to start is. Looking at your life, your interests, and your problems.

That is your best opportunity. You can buy lots of courses on the Internet that will tell you about the strategies to starting or growing a business. And those are all great, but they're only really beneficial if they're plugged into something that is unique, something that's new, something that is exciting to you.

I was speaking with someone this morning. We were talking about Robert Kiyosaki, the author of Rich Dad, Poor Dad. And I didn't know this, but this person knew Robert personally. And he said, did you know that the book Rich Dad, Poor dad was written to sell games? Robert Kiyosaki had created a board game called Cash Flow. It's still around. You can still buy it. And he wrote the book Rich Dad, Poor dad as a marketing ploy, a marketing play to sell more games. There's no money in making board games. But in Robert's case, this educator who just had something that he wanted to share with the world, created this board game, wrote a book to promote it. It was the book that took off the. But all of that was unique to him. Our greatest power doesn't come from reverse engineering what worked for somebody else. It comes from being really, really dialed into what excites us. This is supposed to be fun.

It's not supposed to be a grind. Now, it can have grind moments, like times where you work 18 hours in the sprints because you're enjoying it so much, times that you give up other opportunities because you want to do this instead. But the constant grinding yourself into the ground.

Every time I've done that, I've lost money. So in a nutshell, that's how you start a business. You start a business by amplifying what's fun. Let me give you another example of this. An acquaintance of mine, his name is Moise Ali, he started a deodorant company. Now, deodorant companies are hard. There's not a whole lot of people who tell you, you know, it's a good idea, start a deodorant company. There's some big companies that tend to have a foothold in that marketplace. But Moyes was unhappy with the solutions that were available. To him, he wanted a natural deodorant that worked and he couldn't find one. He was using TOMS and he's like, this stuff sucks. Like I stink, you know, and so does this deodorant.

It's what we call a dad joke. Anyway, Moyes is like, I think I can do this better. So on his own, he like starts researching what ingredients would make for a good natural deodorant. And he tells the story about how he just posted on a forum to see what other people thought of the idea and it ended up getting voted up to the top. And, and then when people started buying the product, then he started making it. Here's a clip of him telling that story.

The other thing that we test a lot, and this is a little unusual, is product. We're based in San Francisco and so we're iterating on our product like software companies iterate on software. You won't see like, you know, one of those itunes pop ups where you have to accept it, you'll just get it.

So early on, when we launched the business in 2015, we realized that we had a pretty mediocre repeat purchase rate. It was somewhere around 20%. Our reviews were coming in and they were about an average of 4 stars. It was pretty clear that we weren't going to be able to build a sustainable business on four star deodorant and a 20% repeat purchase rate. And so what we did is we started asking customers for feedback. We're like, why aren't you buying this again? This is a deodorant. You were willing to spend $12 on it once. What's preventing you from buying it again?

The answer was a resounding application. Back then, people didn't like the deodorant applied under your arms. It was really flaky. And so we spent the first year of the business trying to solve that issue. We're like, how do we make this thing apply to your arm easier? And at the same time, one of the things that we were focused on was like staining. Nobody wants a deodorant than stains. So I literally would a b test products to see if they'd stain. I'd rub them all over my T shirts. They throw them in the wash and see what would happen.

And so we'd iterate on our product all the time. In May 2016, we launched a new formula of native that was just infinitely superior to our old one. We saw Reviews go from 4 stars to about 4.7 stars. We saw repeat purchase rate more than double. And we knew we had a winner on our hands. And that's when we really started scaling the company. We still do that product testing today.

So today what we'll do is we'll send the Ryans of the world 1 formula and the moises of the world another formula, and we'll send 5,000 or 10,000 bars to each, and we'll look at the reviews. Six weeks after they make their purchase, we'll look at their Repeat purchase rate 12 weeks after they make their purchase, and we'll say, okay, is Ryan's formula better than Moyes formula? We actually have a number that can tell us. We can look at repeat purchase rate. And we're operating at a scale where we know whether one formula is superior to another.

Now, what happened on the other side of this story is he built the business for two years, and everybody else was telling him that he should do it differently. They were telling him that he should launch new products and he should do this and he should do that, and he's like, no, I want to do this my way. I know what we're good at. We're going to stay in this lane. That business sold two years later for $100 million. There was no data or stats telling him that it was a good move. There was nothing at the beginning that said, you know, if you do it this way, you'll make $100 million.

No.

Moyes just did what he wanted to do. He did what he thought would be valuable to him and to the people that he was around, and he got deliriously rich as a result. You know how Will Ferrell got rich? It's a great story. When Will Ferrell was young, Will Ferrell kept getting fired from different jobs. And he was in his early 20s when his mom said, you know, willy, why don't you just do something you enjoy? He was failing at everything else anyway, so why don't you just fail at something that you enjoy? And so he stopped pursuing jobs, and he went and joined an improv school. It was there that he had a great time, and he got discovered and he got on snl. They started doing movies.

Growing up in Orange county, every kind of local restaurant was starting to have a comedy night. And so I was going up at, you know, the Cannery in Newport beach and all these local places and getting up there, and I would come back home, and my mom would be like, how did it go? And I was like, thank God I have a college degree. Really? Yeah. So I had this thing in the back of My mind, like, okay, just give it a shot. And I actually sat down and had lunch with my father. I said, so, Dad, I think I'm gonna. I think I'm gonna give this a shot. I don't know what that means exactly, but I'm gonna. I'm gonna try to get into comedy and any words of advice. And he said, you know, if it was only about talent, I wouldn't worry about you. Cause you really have some talent. But just know there's so much luck involved and that if you go down this road and it's starting to feel, you know, like you don't, you're not getting anywhere. It's okay to quit.

And just do something else. And for some reason, it's like the anti. Pep talk. Pep talk. For some reason, that took the pressure off.

Cause he was saying it was out of your hands. It's like one in a million if you take it.

Exactly.

So I just approached it with, like, this is probably not gonna happen, so I might as well just have a blast. And because I gave myself that break internally, I think it, unbeknownst to me, opened all these doors.

Because people could read that I was so free with what I was doing.

I think Will Ferrell is one of the pinnacles of success because, you know, he's having a good time all the time.

Tom Cruise user, Witchcraft homie. To get the fire off me, I.

Was having a discussion with Russell Brunson once. Russell Brunson is the founder of ClickFunnels. He's been on the capitalism.com stage. He's been here on the capitalism.com podcast. And Russell Brunson said something really interesting. He said, I've noticed a difference between people who succeed and those who fail. And it's a very, very clear line. The people who fail are the ones who are doing it for the money. The ones who succeed are the ones who are doing it because they have something that they want to bring forth.

I have some people who are like, Russell, you don't ever like, you don't play nice in your business, okay? And in fact, there's a quote on this video. The other day, one of my guys sent me where basically somebody told me that they didn't like the way I was doing things. I was being too aggressive in my marketing and my business. And they said, you know, my dad taught me to play fair, or my dad taught me to play fair. I said, oh, well, my dad taught me to win. I'm in this business. Cause I want to win, okay? I honestly feel and anyone's been around me at all. I honestly feel that my competitors are screwing my customers out of the happiness and success they could be having. Like, that's how deeply I believe it. That's why I market so aggressively, consistently, on and on and on, because I believe that so much in my soul that I, like, I need to save my customers from my competitors. Okay? And you guys need to have that kind of attitude if you're going to have the chops. You need to really market and get your message and your business out there.

But the truth is, the way that you get rich, the way that you start a business.

Is by amplifying what's unique to you. We're not trained to cultivate our uniqueness. We're trained to look at the media, to model everybody else. We see what other people are paying attention to. But you know what people are paying attention to? They're paying attention to the uniqueness of other people. Athletes get paid a lot of money because they're uniquely good at throwing a ball. Singers get fabulously rich because they're producing music in a new way. We pay attention to what's new. We pay for what is new. We pay for what is unique. And you know what else happens when you start a business? You start with one. One customer, one follower, one investor, one thing, and then it becomes 2 and 10 and 50 and 100. Many, many entrepreneurs and capitalists want to say, how do I start a business that scales right away and has a thousand customers like this that you don't? It always starts with what you're the first one.

Don't know what product to sell. When you're starting a business, what's the one thing that you want? What's the one thing that you wish you had in the world? What's the one product that you would love to pay money for? What's the one perspective that no one else is seeing? What's the one service that you wish somebody would do for you? That's your sign. That's where your ideas live. That's where the best ideas start. So if you want to change the world, if you want to create change, it starts with you.

I'm Ryan. Daniel moran. This is capitalism.com. thanks for watching. We'll see you on the next one.

Before you go, I want to leave you with a new resource that we have@capitalism.com that is a short PDF and a new audio training that will help you outline what products you should be selling, what makes a good product to sell, what's the right product for you? How do you roll it out? What secondary and third year products should you release around that? There's a guide over@capitalism.com start that will answer these questions for you, and a short training as well as seven markets that I like right now. When you go through that, you'll have ideas for new businesses you can start, and new products that you can either launch or add into your existing business. So go over to capitalism.com start, enter your best email address, and I'll shoot that guide and that audio training over for you so that you can build the business that you want, knowing full well that it will be successful. And when you do, I hope you enjoy it as much as I enjoyed.

Making it for you.