I Built a BILLION Dollar Business For Airrack

Inside this box is a billion dollar business that I built for the king of YouTube era.

Walking on water, falling off a six story building.

And today I'm going to show you the entire process from the idea, the strategy to getting the product made and then surprising him with the final product. And I know it sounds crazy, but I'm literally going to show you the math of how we'll make a billion dollars. I'll be following these four key pillars so that you can apply this strategy to either start or grow whatever business that you want. If you don'. Me. I'm Sabri Subi. I'm an investor on Shark tank. I've generated $7.8 billion for my clients. This challenge to build a billion dollar brand started just a few months ago. Eric and I were catching up and naturally we started talking business.

You want to be sold a little bit more?

I do. He had been building pizzafi, a source that turns anything into pizza.

That was a chip. It is now pizza.

All right. And although it tastes great, I have to give it to you. It does taste like pizza.

It is pizza.

We both agreed that this business would not exactly make him a billionaire for a number of reasons. In terms of the sauce category, ketchup, mustard, mayonnaise, barbecue sauce, and hot sauce. Where are you going to put it? In a Walmart? We kept shooting ideas back and forth. A flavored pizza salt. It's low calorie, you use it all the time. It's lightweight to ship, and it's a reoccurring product.

We do like all of that.

I think the question it really comes down to is how big of a business do you want to build? How attached and tired are you of it being within the pizza category? And eventually entered full Shark Tank mode.

Can I pitch you some ideas?

Please. Din, din, din, din. Shark Tank. Here we go. Wait.

This is awesome.

I'm gonna make you an offer.

This is a huge moment for you.

This is your moment.

Okay. Okay. First idea. Savory snacks. So not chocolate, not sweets, not candy, but savory snacks.

I hate it. Hate it. Nah. Wait, wait, wait.

Let me keep pitching.

Some of his ideas were just not.

It types of things like cosmic brownies.

This is absolute tr.

Yeah, but nobody's doing it right now.

I hate it. I'm out. But then he pitched me an idea that was more interesting.

Another idea. Every video I make, I'm always wearing Crocs and I've been begging for a croc sponsorship for like three years straight now. They will not do it. They like don't do influencer deals. It's like very rare. My idea is I use that as a storyline in the content as like they will not give me a deal. So I made my own and then I basically launch a Crocs competitor.

I actually, actually genuinely really like this idea. Really? Yeah.

Okay, great.

I think it's got legs. Now, a YouTuber launching a Crocs competitor. Now that was a business that I could get behind, but not for the reasons that you might expect. Ryan Reynolds sold aviation gin for $600 million and then two years later sold Mint Mobile for $1.2 billion. Then you've got Kim Kardashian skims, which is worth over $4 billion. MrBeast Feastables is valued at over $1.45 billion. And the list goes on and on and on. But when it comes to business, things rarely go to plan. So stay to the end with this one. My reputation as the Internet daddy is on the line. So we have the idea, but how exactly are we able to turn this into a billion dollar brand? It all comes down these four steps. Everybody has a business idea or wants to start a business someday. But here's where almost everyone gets it wrong. On one hand, you've got a whole bunch of gurus who are saying, just follow, brah. It doesn't matter what it is you start, just secure the bag. Then on the other hand, you've got another group of gurus that are screaming at you, just follow your passion and you are going to go out there and make Millies. But both of these people are completely wrong. So the Internet daddy is here to finally put an end to this debate once and for all and to show you, step by step, the exact framework to use to start a business and then make millions. Starting with step number one, which answers the question, what business do I start? And the framework that I like to use is something called ikigai, which is a Japanese concept that refers to giving somebody a sense of purpose and a reason for living. And I like to look at business through that lens and the first thing that you want to look at is what is it that I am passionate about? What gets me fired up? Because if you're going to be selling something to your audience, then you need to be passionate about it. You've got to pick, like, which hill that you're willing to die on, that is like genuinely that you love and that you genuinely use.

Yeah.

The next lens is to look at what is something that you are good at, what is something that you could Deliver a presentation on for 25 minutes with zero preparation. His skill is content. He knows how to make videos better than anyone with each of his uploads raking in millions of views. The next lens is what is something that the world needs solving, a problem that people need a solution for. You already wear it? Yes, and I can assume that a lot of other YouTubers will wear it. And the last lens is what is something that you can actually get paid for. And that's pillar number one, which is to create a business that is authentic to you. So with that in mind, I ventured out to find exactly how we could actually get the shoes manufactured. I found some Crocs and realized that they cost a whopping $50 at retail. I also came across some knockoffs which was selling at my more for just $6. Man, these are very rigid. They certainly ain't no Yeezys. I couldn't help but to cot myself a pair for research purposes. Six bucks. That is so cheap. When you talk about like the cost per unit to get these things manufactured, I'm very confident we could get these made for a couple of bucks a pop. And it just shows me that there is a lot of room to make money selling something like this, but at the same price as the Crocs brand. So for our numbers, we're going to be selling these puppies at 50 bucks a pop. They fly, bro. Once you add the accessories and the jibbitz, let's just call it $60. I'm super, super confident that we can get them for $5 a pair. In terms of cost of goods, I don't want them in sports mode. Take them out for a spin. What do you think of my shoes?

They're amazing.

They are literally $6 a puff. The reason that they're so cheap is that they are made using injection molded foam. You don't need. There's no high end materials or labor costs. And once you get your molds done, it's essentially a money printer. So of course we can get these things made for cheap. But they also have to be good and these knockoffs are just not going to cut it. What do you think of my new shoes? After spending days at the drawing board, meticulously sketching, researching manufacturing processes and trying to find factories, I decided to enlist the help of a professional design and development studio based out of LA to take things to the next level. What is the soonest you'd be able to get me? First run prototyping product.

I can get a sample made in just about two weeks.

So we've got the $5 for the cost of goods. Then we're going to say five bucks in order for pick, pack, and distribution and getting these out to people. That's $50 profit per pair that we sell. It's a higher ticket price, higher profit margin. And this is a different type of business model. We have an 80% margin, and that's exactly the type of business that I like to be involved in. And that is pillar number two, which is to choose a business with. Two weeks later, and the finished sample arrived at my office. What do we have here? I have been waiting for this thing. Let's take a look and see what we've got inside. This is the moment, the big reveal. This looks legit. Dude, look at this. Cue the angel singing music. I'm gonna show you guys the shoes at the same time that I show Eric. But the reason that this business will be so successful all comes down to the next step. The magic with these businesses is really done in the marketing, because the marketing cost is zero, because we built the audience in the first place, and we have a genius affiliate strategy that will blow this thing up. Eric and I were discussing how exactly we could get these in the hands of millions of people outside of his audience. You have, like, an unfair advantage with getting access to other YouTubers, and then you would go to all the influences that you want. They would launch their own range of this shoe to their audience, and they would get a revenue split on all of those.

Just because, like, Kim Kardashian wears, like, the dumbest hat you've ever seen, all of a sudden, that hat is, like, the coolest hat.

And I love the competitive advantage that Erak has in this business. He has a network of literally the biggest and most influential YouTubers on planet Earth that he has strong relationships to. So let's break down the math of how this will play out. We have Airrack at 15.4 million subscribers. We're going to say that we're just going to sell 1% of his audience. That's going to give us 154,000 thousand unit sales. At 50 bucks a unit, that is going to give us $7.7 million in revenue. And that's just year one. Next up, we have Mr. Beast. He has 314 million subscribers. We're going to sell to 1% of his audience. That's going to equate to 3 million and a hundred and forty thousand units sold. Fifty bucks a pop. That is going to give us 157 million Next up, we have none other than the homeboy, Ryan Trahan. We are going to sell to 1% of those at 50 bucks a pop. That gives us a nice and clean $8.5 million in revenue, giving us a grand total of $173,404,000 in revenue. That's a profit of $138,723,200. Two, three years down the track, you've got like a hundred of the biggest influencers that all have their shoe line with you. What is that worth to a croc to go and buy? That's right. Yeah. And that's pillar number three to build a business where you have an unfair advantage. But Sabri, you said that this thing is going to be a billion dollar brand. Well, here's where things really start to get interesting. Shoe companies, they sell at a multiple of 5 to 12 times EBITDA. And even if we pay out all of our influencer partners over $83 million, that, my friends, is a billion dollar business. That could be your play for a billion dollar business. Go out there and get Billy hunting.

What's your offer? I'm thinking 1% for $1 billion.

Yeah. I'm gonna make you an offer. I will give you $250,000.

That's a lot of money.

For 30% equity and a $5 royalty into perpetuity. What the hell?

That's a lot of the business.

I've got a whole team I can plug in. We build the funnels. I'm the Internet daddy. I'm the Internet daddy.

Maybe if this video gets 100,000 likes, I'll take the deal.

Let's do it.

This deal going through is completely up to decide.

So we've built the entire business, but what does a shoe actually look like? I enlisted the secret help of his own friend to deliver the mystery package to him. Yo, I never told him that I was gonna send a package, so it was a complete surprise.

What do you what it was? I actually don't know what it is. This is cool. That's the logo. Oh, maybe don't tell him. Looks like a shoebox. I'm nervous. Three, two, one. Okay. Looks like there's a letter.

Oh.

Oh. Yo, Eric, I hope you like the prototype of your billion dollar shoe company. I love this. Dude. That is sick. Sabri, do you remember?

Ay caramba, man. These are a lot better quality. Immediately. You can just feel it. Whoa, whoa, whoa.

They say air rack on them right on the back there. That's sick. Oh, I didn't notice that, bro. That's crazy. We love you, bro. We love you. I actually didn't know what was in here. Thanks for not making it a bomb. You probably wouldn't trust me anymore.

Smash that, like, button to bring this thing to life. And check out the last video that we did with airac, all about influencer brands.