Zero to $1M in 12 Months: Step 1 of 8

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The most profitable businesses in the world all start by getting this one thing right at the beginning of their business. And in my experience, it's also the thing that entrepreneurs are most likely to skip over, which is why they struggle. We're going to fix that and show you how getting this right can transform your business and put you back on the path to a million dollar business and beyond.

Imagine that you had customers all around the world who loved your product. And imagine that they loved it so much that they were willing to pay two times, maybe even three times as much for your product as they paid for other people's products. And imagine that they told all of their friends about how great your product was so you had free word of mouth advertising every time you sold a new product. If that was true, then you would have more profit to be able to develop great products. And if you developed great products, then you would have a higher chance of having really happy customers who told their friends about you and were willing to pay a premium versus everybody else. This is possible when you get one thing right at the beginning of your business. Trouble is, most entrepreneurs skip that first step and they go right to, how do I make profit as fast as possible? Now, you can make profit as fast as possible when you address this one question. But most entrepreneurs don't. They go right to the tactics that are going to put money in their bank account. And so they think about what product I should sell and what price point I should charge and what platform I should take, my sales and what advertising channel I should use and what my copy should be, and how do I persuade and cajole and convince other people to buy my product. And they're always thinking about how they can turn a profit so that they can be a successful entrepreneur. But if we flip the order and we answer this one question, which is very simply, who, who are we in business to serve? That is when we have the most profit to be able to serve that person. Here's why. The most profitable businesses in the world start by having one core group of people that they are solving problems for. Now, it doesn't always stay the same group of people. They often branch out and serve a bigger group of people later. But at the beginning of the business, they almost always start with a very small group of people that they're serving. And because they're the only brand or the only business that serves that person, all of those people find out about your product or your business. And because all of those people see you as the brand that serves them, they're almost always willing to pay a premium because you, you are the person that is serving them and helping them overcome their challenges. My invitation to you is to choose one person that you will serve in your business. I'm gonna convince you why that might be the most profitable thing that you can do in your business. In fact, it's why it is the first step that I walk all entrepreneurs through when I'm working with them. That includes first time entrepreneurs who have never built a business before. But read my book called 12 months to 1 million and they see a million dollar business just 12 months away, I put them through this process. But it's also true for the entrepreneurs that are stuck at one or two million dollars because they missed this step. They got good at convincing people to buy their product or they got a lot of free exposure from social media or from search engine optimization or from Amazon.com but they don't have a core person that is willing to pay twice as much money for their product as another product. So they're always worried that they're gonna go out of business or someone's gonna undercut them. I put them through this process as well. This is the first step to building a million dollar business. And it's the first step to growing through a plateau once you're stuck at one or two million dollars. Now, if you're new here, my name's Ryan. I help entrepreneurs build million dollar businesses. I sold a business a few years ago for $16 million and I now run a fund that invests in entrepreneurs. Oftentimes the who follow my work and follow this process that I'm going to be walking you through over the next eight weeks. I have eight steps to building a million dollar business and I wrote a book called 12 Months to 1 Million that sold hundreds of thousands of copies and hundreds of people said was the reason that they built a million dollar business. I'm gonna be laying out all of the steps over the next eight weeks. So make sure you are subscribed to the channel to see the entire series. In this video, I'll be walking you through the first step which is choosing the person that you will serve. And this is more than just conscious capitalism. This is more than just an airy fairy way of being a good hearted person. In business that stuff's important, but it's also the thing that will make you the most money. Because when you choose your person, you are able to charge higher prices, your marketing becomes easier and your pathway to building a million dollar business or breaking through the million dollar Plateau becomes much simpler and more profitable. The most profitable businesses in the world start with an idea of solving a problem for one specific type of person. Before we address what the product is, what the industry is, what your marketing strategy is, what platform you're gonna be on, what tactics to use, we first start with the problem that we are solving for a specific person. Now, to illustrate this, let me show you a clip from my cousin Jeff, who has done this really well.

I believe that if you can focus obsessively enough on customer experience, selection, ease of use, low prices, more information to make purchase decisions with, if you can give customers all that, plus great customer service, then I think you have a good chance. And that's what we're trying to do.

You're not really a pure Internet company anymore either, are you? I mean, you've got millions of square feet now of real estate. You've got a growing, huge and growing inventory of items that you keep inside of. And you've got thousands and thousands of employees now.

Yeah, we have over 3,000 employees and over 4 million square feet of distribution center space. And those are things I'm very, very proud of, because with that distribution center space and half a dozen distribution centers around the country, and it allows us to get product close to customers so that we can ship it to customers in a very timely way, which improves customer service levels. That's what we're about. If there's one thing Amazon.com is about, it's obsessive attention to the customer experience, end to end.

Now, did you notice in this clip how Jeff was asked, hey, are you even an Internet company anymore? You've got all this office space and you have 3,000 employees. And Jeff is very clearly saying, um, we're in this business to create value for the customer. It doesn't matter how we're doing it, it doesn't matter how that unfolds. We're in the value creation business for a specific person. And because of that, years later, he has the biggest company in the world. At the time, the relentless focus was, how do we create as much value for one specific type of person? And that was the consumer who was buying books. People forget that Amazon was kind of a niche business at the beginning. Sometimes when your business is stuck or something isn't working, sometimes it's not you, Sometimes it's not that your product sucks. Sometimes it's just who you're targeting with your product or your business. And if you don't know who your person is, then it's definitely the thing that is keeping you stuck. And a lot of entrepreneurs go right to the product and the branding and the features and the strategy and the platform and how they're going to advertise without ever asking the question of who it's for and who it creates the most value for. And what that does is make all of the other decisions that they will face much harder. In fact, it makes every decision feel like a crisis of meaning. What's the next product I'm going to sell? What should my price point be? How should I write this ad so that it gets the most conversions? And. And all of those questions are easily solved if we simply choose who we are going to carve a path for to serve and what person we're gonna commit to solving challenges and solving problems for over the life cycle of our business. And we'll explain some examples about how to do that and show you what not to do in the rest of this video. A good way to illustrate this would be to look at a company like Clif Bar. Most people have eaten a Clif Bar, but what you might not know is that the company launched in 1991, and it was basically a food bar for endurance athletes. If you read the story about the founder, he ate a lot of power bars. Power bars were the big player in, you know, the protein space at the time. And the founder was on a basically an endurance race, and he had all these protein bars, and he just couldn't eat another power bar. So he started this whole food bar called Cliff Bar, and he started selling it in bike shops. Not Target, not Walgreens, not Whole Foods, but in bike shops. And in 1991, Clif Bar did $700,000 in sales. Not bad for a brand new business in 1991 that was just selling food bars in bike shops. It started with a very core group of people. Now, fast forward 20 years. Most people in the United States have eaten a Clif Bar, whether you are an endurance athlete or or not. But it started by going after one core group of people, and that core group of people took the product to the masses. Two years ago, Clif Bar was acquired by Mondelez for $2.9 billion. Not bad for an endurance athlete who was selling meal bars out of bike shops. The takeaway here is that most people will look at how Clif Bar ended. They will see big exit for $2.9 billion. How did they do it? Well, I'm gonna need distribution in all of these grocery stores, and I'm gonna need everybody in America to try my protein bar. But the real way to get there is by choosing one specific person that you're gonna make the product for and market it to and let them take it to everybody else. A more modern example of this would be RXBar, which was founded in 2013, and it was basically a protein bar for CrossF. A very similar story to Clif Bar. It's not like there was a lack of food bars in the marketplace. It was just that Peter, the founder, was doing CrossFit, and in the CrossFit community, they were eating mostly Paleo, and there was no good paleo bar. And so he started RXBar. RX is a hat tip to CrossFitters. It's a CrossFit reference. And it had Paleo ingredients, and he started bringing it to his CrossFit gyms. But guess what? CrossFitters started picking up this bar, and they started bringing it to everybody else. And. And then four years later, RXBar was sold to Kellogg's for $600 million. Again, not bad for a guy who was just selling protein bars to his buddies that he was doing CrossFit with. Once again, most people will see this and say, what did they do? Well, they had all this market distribution. Oh, it's the clean ingredients that did it. Maybe it's the packaging that did it. But they missed the most important step, which is that, again, in this example, the founder started with one clear person that he was serving, and all of his marketing and all of his product design went to serve that person, and that customer group took it to everybody else. This is hard for most entrepreneurs to get because they don't want to think small at the beginning. And I get it. Like, I want to build big businesses and have big exits. But the way that you get big is by first creating an outsized amount of value for one group of people, and then that group of people takes you to the rest of the world. It is a faster way to do things unless you raise a boatload of venture capital and you just blitz advertising and lose money for a few years. But that's not the case with almost all of us as bootstrap entrepreneurs. Now, let me tell you how this impacted one of the brands that I built. And then I'll tell you how I got this wrong. I forgot this lesson and had to relearn it when I started my most successful venture. I started in 2013. We launched to people like me. I, at the time was a, you know, a skinny, hard gainer who was trying to put on some muscle. And I had a supplement company that served that demographic, because that was me. I understood those pain points, and I wanted to solve my own challenges on that journey. And for two years, we increased at least 100% year over year. And then in year three, three and a half, we made a mistake. And that mistake was that we stopped launching products that served that core demographic. And we started launching products that we saw the competitors in our space starting to launch that were growing really quickly. And we said, wow, that brand over there, that doesn't serve our core demographic, they're selling this product, and they're selling a ton of it. We should copy them and try to get some of that market share. And we launched a bunch of products on a generic line of the business. And that was the one year that our business didn't grow. And we ended up cutting all of those products because our core customers did not want those products, and they did not expect to buy those products from. From us. They expected to buy those products from other people that specialized in that niche. They wanted more products from us that were about gaining muscle and exercise performance and overall optimization of health. That's what we should have stuck to. And when we went back to that, the business started growing 100% per year again. And then we had a $16 million exit. Had we not come back to the core demographic, the core person that we were serving, the business would have plateaued. And this happens often with entrepreneurs. They can't figure out why they're stuck, why they plateaued, or why nobody wants their product. And it's because they skipped over the most fundamental question, which is choosing who it's for. If you're struggling with this question, you're not sure where to go or how to navigate this. Don't worry, I got you. We'll cover that next. Have you ever seen Lord of the Rings or Star wars or Harry Potter? All of these stories have to do with the average person becoming a hero. And they don't start out as a hero. They become a hero. And the only reason why they become a hero is because they overcome challenges along the way. In fact, without challenges, you have no hero. Nobody respects the character in the movie that starts as the hero and just stays the hero. The they love the story of the person who becomes the hero by going on an adventure and overcoming challenges along the way. I think maybe the best way to illustrate this is to look at wwe. Now, I've never seen wwe, but everyone knows that the universal champion right now is Cody Rhodes. Now, of course, Cody Rhodes didn't start as the Universal Champion. He started as the son of Dustin Rhodes, who was a wrestling hero in the 1980s. And of course, Cody Rhods is the half brother of Dustin Rhods, the controversial character from the 1990s and early 2000s. But what everyone knows is that no Rhodes has ever been a champion, and Cody Rhods has this long road ahead of him. In order to become champion and quote, finish the story along the way, Cody Rhodes had to overcome all kinds of challenges in order to become the hero. I mean, everybody remembers that period where he played Stardust, this ridiculous character, or undashing Cody Rhodes. What a horrible character he had to play for a long time just to make his way in the industry. Which of course is why he left WWE and became one of the chairmen of AEW before his heroic return back to wwe. But of course, that's not where it ended. When it looked like he was going to win the Universal Champion after winning the Royal Rumble in 2020, it was stolen from him by Solo Sokoa at the very last minute and he lost the championship match to Roman Reigns. We all thought it was over at this point. Well, those of you who watched it thought it was over at that point until his triumphant return when he won the Royal Rumble in back to back years and then finally finished the story at WrestleMania in 2024. Now, I've never seen it. This is just what people have told me. But this is a story that perfectly matches the hero's journey of the every man with a dream who has to overcome challenges along the way. And without the challenges along the way, there's no story, there's no payoff, There is no hero. The hero's story requires that there are challenges and obstacles along the way. And every living person in the world is on their own hero's journey. They have a dream, they have a vision for their life. They want to become something. But there are things along the way that are in the way of them becoming the hero. Your job as a brand is to alleviate those problems so that other people become the hero and in their own journey. But what does this have to do with profitability in business? Well, if you want to have a screamingly profitable, successful business, then you need to be in the business of helping one type of person become the hero in their own story. That means that your job is to alleviate the challenges and the roadblocks that your customer will face as they become a hero. And if you do that, you will be extremely successful. If you become the business that is known for helping one specific person become the hero in their story, then you will be wildly profitable and wildly successful. But most businesses can't because they never choose who that person is and they never define what that story is going to look like and what challenges they will help that person overcome in the context of their story. I think I'm thinking of an example of someone in our community, somebody that I mentored, that I then hired as a mentor later because he started a business that helped dads get in shape. I'm a dad and I've had a dad bod in my life. And this person's name is Kyle Carnahan and he sells workouts and food plans and accountability for dads. This is a saturated market, my friends. You can go on Google or this thing called ChatGPT and have your workouts and your meal plans made for you for free. But because Kyle is so good at speaking to the hero's journey, meaning who I will become, who other dads will become as a result of going through this transformation. And because he is the brand that helps people like me and other dads become that hero, the business and the story and the brand is much bigger than dads getting abs or dads getting in shape. It's about dads becoming the hero in their story, which means they become leaders of their family, which means that they are models to their kids. This is much more than being about what workout they follow. It becomes about who the customer becomes. And as a result, people like me gladly pay a premium. Some of his programs are tens of thousands of dollars and people are happy to pay it because they're not going through a transformation that is just about what they eat or what they lift. They're going through a transformation of becoming a superhero father. That, my friends, is a good example of being a part of your customers hero's journey. Your job is to make them the hero in their own story. So what does choosing and serving one person have to do with profit? Let me be very clear about something. People pay to solve their problems. And the price that they are willing to pay is not relative to to what other people charge for the same product. The price that they're willing to pay is in direct correlation to the confidence that they have that your brand can solve their problem. Most entrepreneurs price their products and their services relative to what the competitors are charging. And then they try to charge a little bit less. But when you speak to a specific person and when you help them overcome the pain points en route to them becoming the hero in their own story, they will choose you not based on price or features relative to what everybody else is doing. They will choose you in comparison to what it costs for them to not become the hero in their story. When a customer believes that you are part of their solution to them evolving into their vision of themselves, they will pay any price and they will give no regard to the difference in price or to the difference in features. And you get to be the brand that advocates for their transformation for not just one or two purchases, but sometimes for decades. That's when your brand has a ton of value and you have loyal customers who are willing to pay a premium. And even if your competitors are selling the exact same thing at a cheaper price, this is also where you get other people who talk about you to others who are going through the same transformation. And those customers don't even know that the competitors exist. They only see you as the solution to their problem. And so you become the go to brand that serves that group of people in that transformation. And, and you have the highest profit margins to be able to serve that person, which means that you've got more to work with to do a great job at serving that person. Therefore, the most profitable thing that you can do in your business is be very clear about who you serve and what story you are gonna help them become the hero in. Cause if you do that, you'll have lots of people who want to go through that transformation and are willing to pay you a premium for it. When people don't know who their person is, they're just thinking about what copy is going to convert the best. Or they're thinking about where they can advertise to get the most exposure or what celebrity we sponsor that would give us the most visibility. That's hard. It's really hard to write things from a place of just what will convert what happen will without having any idea of who the buyer is. That's really hard. You will stay in your head trying to figure that out because there is no good answer to it. But if you know who the person is and you speak directly to them, it becomes effortless to decide what my next product should be, what it should look like, how I write copy about it, and who I partner with. And as a result, getting to a million dollar business is much easier. I don't mean to insult your intelligence, but when I first started working with Internet entrepreneurs and brand owners, I noticed that people would take a product and they would get it to 25 sales a day and then they would launch a completely other separate product that had nothing to do with the first one. And they try to get that to 25 sales a day. And I said, guys, you will get to a million dollar business. Four products, 25 sales a day, 100 sales a day at $30, that's a million dollar business. If you launch a second product that is in service to the same customer base that bought product number one, I thought I was gonna insult them when I told them that. Cause I just thought that was obvious. But some entrepreneurs who are just thinking about how I can make money quickly, they don't think about launching four products to one specific type of person. But if you do that, then it becomes much easier to decide who. What's product two going to be? Product three going to be how do I advertise those products? How do I get more of those people into my sphere of influence so that when I talk about the next product, it hits a lot quicker. So what makes growth much easier and more profitable once you have one specific person that you're creating value for? To bring this home? I want to tell you one more story about an entrepreneur that I was working with here in my home. I used to do workshops here at my home in Austin, Texas. And I would have 10 people around a table and we'd be working through their businesses and I'd be helping them with this kind of stuff. There was a young entrepreneur in the group that had built a business to about $40,000 a month in top line revenue, so about half a million dollars a year. And he was selling a very basic medical device like knee sleeves or compression socks or something like that, a very basic commodity product. And I told him that the way that he would grow is by choosing one specific person that he was going to advertise his products to. This was so hard for him because he was stuck with, well, runners, buy my product, and geriatrics buy my product. And this type's a person, but buy my product. How do I choose one person when all these different people buy my product? So I did a little exercise with him. I said, I want you to pick one of those people. Anyone. It doesn't matter who you pick. And I won't hold you to this. Just pick one of those people. And he said, okay, athletes. And I said, if you were speaking to athletes, what would your second, third, and fourth product be? And he went boom, boom, boom. He knew exactly what his next product would be. And I said, if you were selling to the other group, geriatrics, what would your next products be? And he said, it would be this, this, and this and he knew exactly what it would be. Up until that point, he had been in his head for months figuring out what second product do I launch? How do I grow this business? Why am I stuck at $40,000 a month with one product? I got a little business here, but I have no idea what to do next. The thing that took him beyond that was choosing one person to serve. And he knew exactly what the next products would be. He wrote me an email three months later that his business had grown over $100,000. His business more than doubled as the result of one simple decision, choosing who he would serve. That is why the people who make that choice, the beginning of their journey, tend to get to a million dollars faster. And the businesses that plateau at 1 to 2 million dollars get unstuck by coming back and answering this question and then tailoring all of their marketing and future product launches to that core customer that they serve. So how do you choose your person? How do you know that you have this clearly defined? It's real simple. When you can fill in these blanks, I help blank accomplish blank. When you can fill in those blanks, you know your person well enough to be able to move on to the next step. Because the next step is to get a small group of those people into one sphere of influence so that we can start marketing to them, start selling products to them and have a really successful launch or promotion of your product or suite of products. For example, I help entrepreneurs build million dollar businesses and there's a lot of challenges and obstacles that come along that journey. There's choosing your person, there's getting a product made, there's learning basic marketing so that you can sell your product effectively. There's a whole bunch of mindset stuff that comes up. There's outgrowing your friends, there is managing cash flow, there's holy crap, I have a million dollar business. What do I do now? There is, I'm going to sell my business. How do I maximize the value? These are all challenges that come up with the entrepreneurs that I work with. And right now we're doing an eight part series that goes through the journey to having a million dollar business. I'm confident that if you follow these eight steps over the course of a year, you will have a successful business that will at least be in striking distance of a million dollars. My book is called 12 months to 1 million. It sold hundreds of thousands of copies and it sounds like a hypey title. Gary Vaynerchuk even said, as douchey as this title is, I'M confident it will inspire a new type of entrepreneur. But the premise of this book is that if for 12 months you're serving one core group of people and you're adding value to them, you pass everybody else because nobody else is willing to do that even for a year. We're in the middle of the biggest sprint we've ever done to help entrepreneurs get off the sidelines, launch their first product, and be on the road to a million dollars. We've already helped hundreds of entrepreneurs do this, and we're in a sprint right now where we are helping entrepreneurs who have followed my work or newly discovering my work to get off the sidelines and into the game. And the first step of that is choosing who you serve. If you need some specific help, like you need some help choosing this for yourself, or you're already in business and you need to come back and do this work, there's a couple of ways that you can get some help. One, the best place to get started is by downloading our free resources over@capitalism.com playbook. That is where all of our best podcasts, case studies and lessons are available for free. Since my job is to help entrepreneurs be the hero in their own story, let me share this with you. One of the big challenges that a lot of entrepreneurs face at the beginning of their journey is launching the first product. Launching that first product means choosing what it's going to be, building a group of people that actually want that product, and then speaking to them in a way that creates conversions. And if you do it right, there are people in our community who have $25,000 launches, $100,000 launches, and that gives them the momentum to be able to do the additional steps that take them to that million dollar run rate. If you want to go through that process of launching your first product, one of the first steps I would encourage you to take is to sign up for the waiting list that we have for something called the Capitalism Accelerator. This is a week by week sprint where you're given action items en route to launching your first product. You will choose your person, you will build a small group of people to launch to, and you will take sales of your first product. It is not uncommon for people to come out of that process with $10,000 in sales, which is all the funding that they need to be able to develop the rest of the steps that take him to a million dollar business. So if you need help overcoming that first hurdle en route to your million dollar business, you can go over to capitalism.com launch and sign up for the waiting list for the accelerator and we'll let you know when it's open. Next. Knowing your person is the first of the eight steps to building a million dollar business, because it makes all other decisions easier and more profitable. The next step of the process is to build a small group of those people so that you can communicate with them and launch your first product to them. That's what we're going to talk about in the next part of this series. So make sure you are subscribed to the channel so that you see every step in this process. And over the next eight weeks, we will be talking through each of the eight steps of this process so that you see exactly what it looks like like to build a million dollar business over the next 12 months. I'm Ryan Daniel Moran with capitalism. Com. Thank you for being here. And I'll see you in the next less.