We're In A New Era Of Capitalism: My Interview With Tom Woods

Hey everybody, Tom woods here. Ryan Daniel Moran is back on the show after a long absence. Ryan is the brains behind capitalism.com where he teaches entrepreneurs how to build businesses and invest the profits. He has helped over 300 new entrepreneurs build seven figure companies. He happens to be a libertarian. Yes, but what I want to talk to him about today is his brand new book, 12 Months to a Million. Or it's literally 12 months to a million dollars you can see on the COVID but 12 months to a million. How to pick a winning product, build a real business and become a seven figure entrepreneur. I mean, if the times we're living in don't make something like this fairly urgent to know about, then I don't know what would. Ryan.

Welcome back, Tom. It's an absolute honor I consider a pillage to be on.

Look, I want to talk about your book, but before we do that, let's just forget that for a minute. I have to describe for people what I experienced one day when I opened my front door. There's a package on my porch. I bring it inside, I open it up and there are two things in it. Underneath is an advanced copy of your book. On top of it is this little device that I opened up and this video automatically begins and it's you talking to me personally about your experiences on my podcast in the past. This wasn't even a form letter style video.

No sir.

It was a video tailored to me and it even had pause and play and fast forward controls on it. And it was to get my attention so that I would read your book and maybe have you on the show. And I just thought, look, even if I would have had you on anyway, but, but I just felt like if I were not inclined to have this guy on, I think I would just feel compelled to after that.

John, these are the beauties of capitalism right there.

That's an amazing. I cannot to this day believe. The thing is, I can't bring myself. I have no need for that thing now. I cannot bring myself to part with it. I'm gonna have that forever.

I'm so glad to be floating around your house somewhere.

Yeah, I mean, honestly, it is pointless for me to have this thing at this point, but it is, it was such a beautiful, amazing, extraordinary thing. I thought the stones on this guy to send something like this.

Well, Tom, like, I respect the heck out of your work. I mean, I mean I have, I have been a fan of Tom's since the first early days of Campaign for Liberty. What you represent in the world is needed and rare. And I just consider it a privilege to be part of it.

Well, it's very kind of you to say that. Thank you. All right, now we'll turn to your, to your book. And I, interestingly, I mean, I would be interested in at some point to talk about how little details like that, I mean, we're going to talk more big picture today. But a little detail like that, that kind of attention to detail, reaching out to opinion molders or people who are in your area and trying to, to get their attention, I think that's an interesting ingredient. But we're talking about big, major things here. 12 months to a million dollars. All right, You've had a crazy success story. So I wonder if, why don't we start with you giving us some background. I remember you before you owned capitalism dot com. I don't even want to know how much it cost you to buy that. But, but I knew you. I've known you for quite a while. I guess I first. You first came on my radar when you did a video on Facebook about how much you had paid in taxes that year. That's right. It's so funny because I remember Peter Schiff going out to the Occupy Wall street movement and holding a sign saying, I am the 1%. Let's talk. And I remember him saying, well, how much of my money do you think I should give every year? And they all gave a lower number than the amount he is giving.

That's right.

All right, so tell me about your background and how you came to be where you are right now, and then we'll get into some of the advice you have for folks.

Yeah. So, I mean, Tom, first of all, what a great time to have this conversation, because I know that there is a lot of individuals who believe how we believe that entrepreneurship and capitalism is the way that we are going to pull ourselves out of economic slowdown, solve problems profitably, and to be the actual stimulus in the world and in the economy rather than waiting for $1200 checks or any government policy to do anything about anything. And my background was as an entrepreneur of someone who wanted to have a, a different type of life. And my education was in economics. And I could kind of see where the trend was going, where things were going to be digitalized over the next several decades. And also starting to see this trend of big brands starting to have their market share eaten by small brands because you have this growth of places like Amazon.com, and you have the ability to put up web stores on Shopify and you have the ability to go direct to consumer. And all of a sudden these bloated industries that were dominated by these big players were going to start to have creative destruction. They were going to start being innovated out of business. And we're starting to see now Procter and Gamble buy up these small Internet brands. You're starting to see big investment and private equity groups start to say all of the attention and is in E commerce and they're starting to buy up these brands. And it's really interesting what Covid has done. It's accelerated that process where now all of the action is kind of happening in E commerce rather than in brick and mortar and old businesses. My background was in starting and growing those small brands. And I think we did an episode together. I kind of outlined my model which is I, I build small brands around micro groups. So for example, the business that I'm working on right now is a food company that is targeted directly to police officers. And so that small micro brand would be hard to do on a, like a. In the old way of doing business, but in the new way of doing business where you can put up a Facebook ad or a product on Amazon and directly target your customer, you're able to build six and seven figure businesses by serving a very specific group of people with a very specific need and opportunity. And that is really how direct capitalism is supposed to work. Us being able to exchange mutually in a way that is exactly tailored to the needs and wants that you have. So I kind of built up a name for myself by promoting the idea that if you just had four products that sold 25 sales a day at a $30 price point, that was a million dollar business. We can run the numbers. It ends up being like 1.1-ish million dollars. And teaching that and helping people do that was how I built a bit of a name and a following. And it was the impetus for my book which is called 12 months to 1 million. And in that book I tell the story of starting a small health and fitness brand with about $600. I sold those products on Amazon and through some other Internet marketing strategies and then over the course of about five years took that business from a $600 investment to a $10 million a year business and then sold that business for the eight figure exit as I call it now and seeing it happen in action. This idea that these big brands, these large financial institutions were waiting for small entrepreneurs to build cool, exciting new modern day brands that could then be scaled and sold and, and that were in this opportunity to be able to create those micro brands that are kind of ushering in the new era of capitalism.

I want to go right to your table of contents. I could easily spend the rest of the conversation talking to you about Russell Brunson, who wrote the foreword, and we could talk about some of his ideas. But I don't want to get diverted. It's great that he wrote the forward to your book, but I want to just tell people the 10 steps because they're going to want to read this when they hear the 10 steps. So choose your customer. Develop your first product. Funding your business. Stack the deck. Launching your first product, growing to 25 sales a day. Build $1 million brand. Getting to 100k per month and beyond. Putting it all together and the big payday. All right, now I'm going to jump, given that we have just a regular podcast amount of time here, into the maybe the step that seems the most foreign to people. And that's the idea, I think, of developing a product. That's where people think, this isn't something I do. It's like telling somebody to go write a book. Most people think, well, other people write books, I don't write books. Or if I say go make a product, what are you talking about? That's not something I do. It just seems like first of all I have to come up with some outrageously original idea. Then I'd have to figure out what would I have to do, like get an assembly line. Like they don't even know what this consists of. And the thing is, I've created products, but they're all online, they're all immaterial. I've written some books, but I didn't really create those, I guess. But I have a subscription based site and I sell some courses and stuff, but I haven't built a new mousetrap or anything like that. And that's what I think people think when they hear that. How can you make people feel like creating a product isn't something that only aliens do or only a superior race do, but that they can do?

Yeah. So to contextualize this, the first thing that I do is I start with a person in mind. I start with myself or someone that I know of who the heck would want whatever my crazy idea is. And it's also how I decide what my next crazy idea is going to be. I like to pick a specific group of person, like just say crossfitters. What do crossfitters buy? They buy straps, they buy whey protein bars, they buy bench press machines that you could go on and on with what they buy to have a build a CrossFit box in their home. And then the question comes up, well, how the heck am I going to get one of those made? And the truth is, with about 500 bucks, usually less, but definitely with about $500, you can at least begin the process of building out a prototype for a new business. And in most cases, for less than $500, you can have one product made that we'll call a prototype. And there are groups that do this. There are businesses that are in the business of doing one of two things. Either being a contract manufacturer to make whatever your crazy idea is become real, or number two, being a private label manufacturer who have products already on their shelf and they'll put your brand name on it and ship it to you. And now you're in business. Now that's really easy to do in things like supplements, food, beauty, any type of small consumable iPhone cases, custom gear swag T shirts. These are all things that are extremely easy to do. You can get a prototype for less than $50 and then the next level up would be innovative spins on existing products. So I think the story I tell in the book is the yo yo that that barks when you do walk the dog. Because it was like when I first started looking at this stuff, yo yos were real big when I was in elementary school. And you could have a differentiated version of a product that would be looking at a type of weight bench and making a change to it. That would be kind of the next step up. And then the third type is going to a contract manufacturer and having a brand new, innovative type of product made. That's going to be the most expensive and the longest timeframe. Now, when you're a new entrepreneur, coming up with a brand new idea is not only expensive, it's unnecessary. 90% of people, 90% of all ideas are really innovations on existing goods and services. They're incremental improvements. So if all you do is Google food manufacturer in your local area or food private label in your area, you can find a host of suppliers and manufacturers that can take your idea and bring it to reality. And then in the rare case that you want to invent a peloton bike competitor, that's going to be a different type of business. But in my experience, more than 90% of entrepreneurs are creating innovations on existing ideas. And, and that is extremely fast and cheap to create.

I think the other obstacle that people have in their minds first it's what could I create and how could I create it. And there are a lot of things they could read about that certainly they should read 12 months to a million your, your book here. But then it's don't I need a lot of money to start out as an entrepreneur? And in a way, it depends in part on what it is you're doing. If you want to start creating something like a simple information product online, you could do that for almost nothing. I mean, I mean very, very little. Almost. Not as long as you have an email autoresponder service, you could do that for almost nothing. But in this day and age, there are multiple ways for you to raise the money because you, you're not always dealing here when you're speaking to audiences with people who have a lot of cash ready to go. But maybe they do have some good ideas. And in this day and age, you have more opportunities than ever to raise that money. As you say in your book repeatedly, it does not come out of your own pocket. You got to be creative about this. So again, how can you put their minds at ease about that?

Yeah, there's a few ways that you can fund the development of your business. I think what most people default to is raising money through an investor. And in the book I walk through how to put together a basic business plan to pitch an investor to give you the 25k. That would be way more than you need in order to get your business off the ground. But assuming that's not the case and you don't go that route, there's a few other ways. One is when you take the 50 to $500 to have your prototype made, you can, in today's world, you can pre sell all of the product you need in order to fund the development of the business. You can do that through something like Kickstarter, where you just put up a video of the prototype, talk about your vision and be off to the races. Or you can do that with real presales, which means that you are using basic free marketing strategies to take pre orders from customers and then once they are ready and developed, ship those out. That's the second way. That's also the most common. The third way is a little bit creative. The third way is I like to negotiate with my suppliers on terms of, so that I'm not putting up the money that I need to make large inventory purchases. So right now I'm working on an opportunity in which I'm willing to sign an exclusive deal with my manufacturer to get terms on my payments, which means they're basically going to finance my inventory. And they're going to, they're going to run as little or as much inventory as I need in order for me to stay in stock, but also not spend the farm on inventory. And they're going to finance it for me too so that I can pay for it as I sell them. So this is beautiful because I can go to my manufacturer and have terms on the product that I want. I can have them for sale on Amazon. And Amazon be doing all of the marketing, all of the fulfillment, most of the customer service have, sending customers my way, doing all the shipping, all of everything. And I am paying my manufacturer out of the money that Amazon is sending me from sales. And so the only job that I have at that point is to create great products is to make sure my customers are happy and to do some basic marketing in order to get the word out about the unique offering of my product and service. We live in this environment now. We're starting a business is almost free. And so we are liberated to focus exclusively on the service of the customer, which is exactly what we're supposed to do as entrepreneurs.

I myself have thought about offering a service. It would have to do with travel, that would be now. Obviously we have to wait for, you know, normal life to resume, which I favor sooner rather than later. But it's something I've been toying with for a while. That that would be a very high ticket purchase and I would do it only if I thought there was a critical mass of people who would be interested in it. And there's no way to know that off the bat you can have an instinct for it. There's no real way to know that. So I was thinking of doing something like pre selling where I would say, here's my idea, if you want to be part of this, then I'll give you some huge discount on it if you'll commit to it right now and you'll get. No one's ever going to get anything like this price ever. And If I get 25 people agreeing to do that, then that tells me, especially in a short amount of time, that tells me it's a go, that probably I could get another 25 at A, at a higher price. We have the ability to do these things. I mean, it's just at our fingertips. I don't have to send direct mail. I don't have to buy a mailing list, send direct mail. I can just set up a squeeze page somewhere and publicize that. And now I can test my idea. It the tools at our fingertips are it's almost, it's an embarrassment of riches, really.

That's right. And so it's almost ashamed.

So no excuses, in other words. That's my point. No excuses.

Yeah, so it's almost like a shame to waste all of the creative ideas that you and I have sitting around. You know, Tommy will appreciate this. When Andrew Yang was running for president.

I used to tell people that the need for something like a universal basic income was completely unnecessary because we now live in a world where we are all able to focus on our creative pursuits. And my daughter, my 4 year old daughter, she will probably never have a real job. She will make some riff on GarageBand, upload it to Spotify, and get $600 a month in royalties from people streaming it. And that will be the career that, that, that will be what people do for money. The traditional way of earning a living is not only no longer necessary. What we've seen in the last two months has been that.

It'S basically gone. We work virtually, we are all in our creative pursuits. And the bloated bureaucracy that we often blame on just government is now being exposed as also existing in the private sector. And we've now got forced efficiencies that are allowing us in freeing up labor resources to focus exclusively on our creative pursuits and the unique capabilities that we all want to bring to the world. It all exists now. It's getting faster, cheaper and easier. And all the crazy ideas that we have as entrepreneurial minded people are now possible, cheap and fast to bring to market.

You have a chapter in here on launching your product. And it's almost like there's a science to this at this point. As I'm sure you know, Jeff Walker releases his product launch formula every year. It's available for a week. And he rakes in millions and millions of dollars teaching people how to launch products. So I'm actually gonna skip over the product launch chapter and go into the getting to 25 sales a day chapter because there's now obviously it could be 23, it could be 27, but there's some kind of magic about being in just that zone in terms of what it allows you then to do later because you have a section in there called welcome to the growth. So explain what's the idea? Once, once you get to that level, what becomes possible?

So I break my, my 12 months plan into three stages. The first stage I call the grind. And the grind is about making the difficult decisions that you need in order to bring your business to its first sale. So that's Things like who is your target customer? What's the three to five products that you're going to sell them, what's the first one you're going to bring to market? How are we going to do that? How are we going to price it? That whole process takes about three to four months and at the end of it, our goal is to make the first sale, the second stage, that second three to four month period I call the growth. And that is all about getting that first product to 25 sales a day. Why? Because when you've got four products at 25 sales a day, you've got, you've got 100 sales and at a $30 price point, that's a million dollar business. And that's the goal over these 12 months. So in this second stage, our goal is to get to that first 25 sales per day. And when we do that, we kind of unlock the process to make products number 2, 3 and 4 happen a lot faster. It's kind of like we're building the highway and, and now we can add more cars to it once it's built. So when we've got that in place of having those 25 sales a day, we're able to roll out the next products a lot faster. So how do we get there? How do we take something that has just started to 25 consistent sales a day? Most people want to skip straight to that point, but it is a very incremental and then exponential curve up. So for example, I have a student right now who is, was just pittering around like 2, 3 sales a day and she was starting to get really frustrated. And I said, okay, when was the last time that you took one of your customers feedback and you screenshotted it and you posted it to your own Instagram and thanked that person? And she said, I've never done that. I say, okay, do you have someone that you could do that for right now? Yes. Okay, great. And my, the idea there is to go all in on every customer, every review, every piece of feedback that comes in, and by sharing it, commenting on it publicly, we're able to start to accelerate that path forward. So she has been taking those photos of every review, reaching out to every customer and, and the response from her customers is that they are starting to grow, starting to pop. And at any point now she's about to have her first 25 sale day and that's going to be that moment in her brain where she says, oh my goodness, now it's like the million dollar business is done at that point. Because all I need to do, I now have seen that the first product is possible. I just did duplicate this over a few more. So my strategy to get to 25 sales a day is to reply to every comment. It's to screenshot every review and post them publicly. It's to document the journey of the business. It's to reach out to other people who are talking about whatever market it is that we are serving. It is to kill our customers with kindness in those early stages so that people are sharing us on social media. And Tom, it happens so quickly. I've actually had people go all in on this and start to pace a million dollars just less than six months into the process. That's obviously extraordinary, but I've seen it happen. But most people will spend that three to four months getting to that 25 sales a day mark and then duplicate it over several products until they have a seven figure business.

You know that point you just made about responding, it reminds me of an example I've used. I did my own information product some months ago just for newbies online. And one of the things I did was kind of a case study. I brought on somebody who built a really successful YouTube channel that he's monetized very successfully. And he just built it from zero. And he's just a regular person and he didn't know anything about YouTube and he just kind of learned as he went. He's scrap and pallet man on YouTube. He's got 126,000 subscribers now. And if when you have that many subscribers and you're not political or controversial, you're going to do well. And one of the things he did, I said, how did you build that audience up? And by the way, what does he do? He goes through garbage and talks about things that he finds and things that are useful, things he can recycle. I mean, you wouldn't believe it. And he's able to monetize this through all sorts of different ways. And I asked him, how'd you do it? And he said, I responded to the comments and I seemed to people like a real person and I engaged with people. And so people thought of me not just as a video creator, but as a human being. And they kind of liked me. You know, they wanted my mug, they wanted my product, they wanted this and that, and that was it. I mean, yeah, it takes some time, but I think it pays dividends.

I mean, you could kind of see it like starting a minimum wage job. Of course, those who disagree with us in the political spectrum say should be 15, should be 20, should be $1,000 an hour. And we say, in my world, that was a place that you started, started. You paid your dues, you moved your way up and you worked your way to being a productive member of society. And when you're starting a business, it's exactly the same thing. You don't have a guaranteed wage, you don't have a minimum. You have what you have to offer to the world and you go all in on those who vote for you with their dollars and you publicly thank them and you overserve them and you, and you respond to their feedback.

And you are active in that community. And what happens is you as a genuine value creator in the world start to get rewarded, which is capitalism 101. So as you begin to seed that community with value and presence and listen, the customer base starts to flow your way and you start to build a unique positioning in the marketplace. You start to have your own language within that community. You start to have your own unique way of serving that person. You start to have your own differentiation to the product and to the communication that you have with your customers that makes people want to prefer you over all the people who are trying to do similar types of businesses. And the result is you build a loyal customer base that grows with you, that rewards you, that talks about you to their peers, that starts to send other customers your way. And, and as you continue to pound that pavement, you start to build up traction and you start to build that moat around you from competition that other people can't compete with. That's how you build a million dollar business that lasts.

All right, let me conclude with this. I'd like to know what the difference is, maybe the difference in mindset, the difference in approach, whatever, between somebody who's pretty happy with his, let's say, mid six figure business and somebody who has an eight figure business. What's the difference between one or the other? I mean, to some degree it could be the market because maybe some marketplaces just don't have enough demand for even one eight figure business. But it's, it's not just that. I don't think what's, what's, because, I mean whoever is a six figure person was at one time a five figure or four figure person. And I think at some point mindset has a role to play because you think to yourself, I could see myself making five figures, I could see myself making six, but I can't see myself doing these other things because that, that's just what Bill Gates does or Whatever. What's the big difference?

Yeah. In the first chapter of the book, I tell people that one of the things that I wish I had known at the beginning of my journey was how big this could get. And I wish I had known that because had I known how big it could get, then I would have been more motivated to go all in on every customer, to go all in on every micro win that happened, to go all in on every little inch forward. Because I know that that inch is going to bring in a host of other customers that I can't see right now. So the biggest mindset shift of somebody who makes six figures to somebody who does eight figures is that they are pushing those incremental wins forward, knowing that just like a line of dominoes, if you push over the first one, it has a long lasting effect down the line. So that's number one. The second is something that the mentor that I talk about throughout the book, his name is Travis. He said most people want to focus on the marketing of the bells and whistles and all of the new cool ways to sell whatever it is that you've got. But the best marketing in the world is a great fricking product. It's the product that creates an impact or a difference for a specific group of people. When you can make a meaningful impact in someone else's life and you can do that at scale, you have a seven or an eight figure business. A lot of the info guys or a lot of the, we'll just call them Internet marketers in this world are really after the short term wins. That's what we kind of see in our, in people's YouTube ads and Facebook ads of, of short win to short win. That never compounds. It's nice to have a short win at the beginning of your journey, but it never compounds and builds up enough momentum to go to that eight figure level. So if that is your aspiration, the way that you do that is by doing the right things for long enough over enough people to where you've created enough change, you've created enough deposits into other people's bank accounts to where you have a brand that reaches the level that you want. Otherwise you're going for the scraps. And that's not real capitalism. That is more individualism. And capitalism is about creating something greater for yourself and the whole as well.

Well, the book is extremely worthwhile. It's very, very valuable reading. 12 months to a Million how to pick a winning product, Build a real business and become a seven figure entrepreneur. I am linking to this book, of course, on the Show Notes page, which is tomwoods.com 1651 so go out, pick this up. Do yourself a favor. This is a guy with huge amount of experience, has made mistakes, has had tremendous successes. You can avoid the mistakes. We hope and enjoy the successes thanks to the advice in this book. Well, thanks Ryan. I appreciate the book and the time.

Tom, it's an absolute honor. I love what you're doing in the world and I consider a pillage to be on. Thank you for what you do as well. It's a real privilege to be with your team. Become a smarter libertarian in just 30 minutes a day. Visit TomWoods.com to subscribe to the show for free and we'll see you next time.