Speaker 1This is The Road to 1 Million. I'm Ryan Daniel Moran. Several times a month, I make myself available to the members of the 1% to help them on their road to 1 million. And sometimes I invite my friends or some of our previous success stories to have them give their intel and their insight into some of the brands that are on the rise inside the 1%. One of those people is Josh Hahn, who has become a friend and an ally, and he's also done some mentoring for other people inside the 1%. Josh started a business that hit a million-dollar run rate after just a few months, and I was asking him how he did it, what his strategy was, and then we opened up the line for Q&A. What you're about to hear is a conversation between myself, Josh, and one of our members who is at the early phase of her journey, but she's got some interested parties that might want to give her money. So in this clip, we dive into how she should be doing it, and how she should be doing it, and how she should be doing it, and how she should structure things in order to protect herself, protect her decision-making power, but also give her the fuel to be able to build a multi-million-dollar business. This clip is a little bit detailed, and I'm here to tell you that if you come through the 1% or the Capitalism Incubator, these are the kinds of conversations that you're going to have within a few months. There will be people who want to fund your business. There will be influencers who want to take part in what it is that you're doing. There will be mentors and advisors who have built multi-million-dollar companies that want to be a part of what you're doing, because we know what to do, and we've seen what works. And if you want to follow in both of these individuals' footsteps, come apply for a spot inside the 1% at Capitalism.com slash one.
Speaker 2Hi, Ryan. Hi, Josh. Hi. Good to see you.
Speaker 1I heard you had big news this week.
Speaker 2Yeah, we had a lot of news. I've experienced the real Capcom crash, but it was good. It's awesome. Well, update
Speaker 1everybody with what's going on, because I've heard you've had some good news.
Speaker 2Sure, yeah. So left Capcom. My goal was to take a sale. We took 53 pre-sales, so it was really kind of flying high. Congratulations. Thank you. And then I was practicing my pitch deck with some of my family and friends, and I actually was offered not equity investment. I was just offered money to help get the vision going. So pretty substantial amount. So Josh, this is so perfectly timed, and I really appreciate you sharing your story. So I went from that to having. Now I've had three people offer me investment at this point. I've only taken one so far because I need to process through it, and this was exactly why I'm having some trepidation. And then I get an email from our co-man that my low-sugar, high-protein snack has more sugar in it than a Coca-Cola. And I was like, flip it out. So she had my spec sheet. She had everything. She said she was prioritizing the protein content, and in doing so, I think she was trying to mask the taste. Anyway, it was a whole week. Greg is amazing. Greg Johnson, shout out to you for being awesome. But I ended up working with somebody that has a mutual contact from the 1% and from the incubator, and I got a new co-man and a new. Within like four days, a new co-man and a new food scientist. So I just signed my contract with her yesterday, did a lot of research. She's in every grocery store across the country. So it was the right thing, right? It just was a crash, for sure.
Speaker 1Yes. But you've had 53 pre-sales, you've gotten funding, and you've secured a new co-man. If you're doing that during a Capcom crash, you're doing just fine.
Speaker 2Good work. Emotionally, it feels different, but that's good.
Speaker 1I get it. I get it.
Speaker 2Where are you based, by the way? I'm in West Palm Beach.
Speaker 1Okay, cool. All right. What can we help you with?
Speaker 2Yeah, perfect. So I appreciate it. Now that you have the backstory on where I am with the funding piece and the understanding, I'm going to ask you a question. I'm going to ask you a question. What I'd like to ask you, Josh, and love Ryan's two cents as well, is how would you have structured this differently if you were going to redo Shroom Junkie? I understand you're going to take that knowledge and go crush whatever next thing you do. But I am curious, if you had the chance to do it again, would you change the ad strategy and keep the same and also have a board? Or would you have done it a little differently? I'd love to know.
Speaker 3Good question. Well, I would say at the beginning, just taking on money, you don't want to really necessarily have people that have voting rights or anything like that. So what I would say is do like a convertible note or something like that, just because that kind of makes the most sense. And if you start growing and getting to a certain size, you can change that over into shares and all that kind of stuff. But that's how I would deal with just getting random investment dollars. And that's probably like, you could even do like a safe, which actually kind of protects you even more. And it's not necessarily as great for the investors, but it's another option. I'd take a look into it. But what I would say around what I would do differently is, like, if you take a look at milk, we have really good margins in milk. But there's not a lot of dollar value in there. So if ingredient prices go up, if really there's like a shift in the tides a little bit, I'm going to have to weather that storm. So when I start taking a look at like, how to make money with a milk product, people already have like a preconceived notion of how much I can charge. If I charge above that, then they're like, what is this? Like, this is ridiculously expensive. So my thought process is I'm going to go after the premium market, especially if like the market goes in weird directions over the next year. People that have money will still have money. So they're willing to pay a premium for products that help wellness. Like, they just will. So I see that as like kind of where I would head. Just as a business, you would do more of a premium product.
Speaker 1Yeah, exactly. So from the investment standpoint, you would do more of a convertible note so that there wasn't as much voting power. And then you would, on the customer side, you would go after a premium
Speaker 3customer. Yes. Makes sense. What I would do from your standpoint of, where you're at today, it sounds like you have high protein, low sugar snack or whatever it is. Hopefully, it's really light and not heavy like milk. So I would focus on trying to find the best shipping rates that you can and minimizing that cost as much as possible. And then I would also focus on creating the bundles of like to get it to where you want it to be. And then I would also focus on creating the bundles of like, to get it to where you could break even on like, how much it costs to acquire customers the same as it would to sell that customer. So whatever that is, because if you have a great product, lifetime value is no problem. So that's why I would really focus hard on figuring out how to minimize your costs as much as possible so that you can actually acquire a customer for how much they they purchase in the
Speaker 1first order. All right, Caitlin, the actual only thing that I would change is that probably would raise more money. I would raise more money than I thought I needed. Because the goal is to create the biggest pie possible not to control as much of the pie as possible. And in those early stages, I like to say I turned $600 into 16 million. So I should just put more in than $600. So at the early stages, when you're getting off the ground, I would raise more than I thought I needed. And until I got to profit profitability, and then I would have a proper, proper rate. Josh, you look like you want to butt
Speaker 3in. Oh, yeah, that's 100%. Like if you heard like the backstory for me, we raised a million dollars and didn't think we were going to have to raise a single dollar.
Speaker 1You're a bit of an anomaly, right? Like a million dollars, I raised 600. You know, the beginning of my business, like it all can work. But let's just say it's
Speaker 3more than scales, though. The idea behind it is that yes, definitely early on, when you don't know a lot of these things, like command issues, or whatever, or there's so many things that can happen. We had a great example where in the middle of our first production run, the piece that never breaks broke. And they don't have a replacement piece to that. And the only place in the world that had it was like France or something. And the problem was, is that we are, we have our product in a tank. And it has a certain time limit until we have to dispose of it. So we had to get a first class ticket for that part, put it on an airplane, fly it, install it and just hope it works. And it luckily it did. And we were able to save it. But the point being, is that you don't know when stuff like that's going to happen. So and if we did that, we'd probably be out of about 100 grand if we didn't solve that issue. So the whole point is, like Brian said, take more money when you think.
Speaker 2Okay, quick follow up question to that. And I realize this is a bit of a novice question. So I'll preface, I'll preface that. So when I'm considering taking investment, one of the trepidations I have is like, where I'm going to put that money? Is that money going like inevitably? Yes. And the larger scheme, it's all going to go to make more money because it's going to make the project run and to acquire customers. But when I think about like where it gets allocated, and so that's the problem.
Speaker 1But I just because the reason I'm interrupting here, is because when you're thinking about if I've got money, where is it going to go away? That's a problem. You see what I'm saying? I'm going to raise money. Where am I going to spend this? You don't. Okay. You don't spend all of it. You keep a six month runway and you keep money there for higher inventory runs. And you still treat the business as if you've got nothing, right? You still be protective of those dollars, but now you have runway so that when you, you can have a six months to test your ad creative and lose money in those six months and break even on ad spend and just, and lose as little as possible until you scale up. Like those are the things that the money it's there to give you a cushion for you to make good decisions, not for you to just go.
Speaker 2Yeah. I've set a rule, a rule of place. I won't spend it for 90 days because I wanted to make sure I went through a thing, but I still, I didn't realize that was the heuristic. Six month runway. Okay. That was helpful. Thank you. Yeah.
Speaker 1Or three, like it just having a cushion, right? Giving you a cushion to be able to make appropriate decisions for the long-term growth of the business.
Speaker 3Yeah. So you don't have to make the short sighted decisions that will hurt the business growth later on. Last question.
Speaker 2Cause I want to give others a chance. You mentioned testing out your ads and stuff. Is that something you were operating yourself or did you have like a partner that you worked with, like a specialist and then you, you know, you just managed it.
Speaker 3I didn't want to come. I didn't want to tell myself and do everything in the business. So I did hire an agency to help with the ad creative. I had another agency that helped with email marketing. I had another agency that, uh, well actually same agency did Amazon. So anyways, there's, there's agencies that I lean on to be able to get quick support, uh, and to push the buttons. But I, I make sure that I have an understanding of those things and how they work, or I lean on a friend. So I want to make sure that I have an understanding of those things and how they work, or I lean on a friend or somebody that I know, that's really good at that and say, Hey, does this make sense? Like they're telling me this, but this is happening. Does this make sense? And then I can go back and make them better at their own job.
Speaker 2Thank you guys, Josh. I wish you the best. Can't wait to see what you do.
Speaker 1Give a quick plug for your product.
Speaker 2Okay, sure. So snacks by nature, mighty morsels, uh, just close pre-sale. We are high protein, low sugar made by nature for you to go take your kids out and enjoy, uh, doing your business. Yeah. That's awesome. That's awesome. Get back to nature connecting. You can find us on snacksbynature.com. And so you can check on our parenting podcast at parenting on purpose on YouTube.
Speaker 1Good work. All right. We'll see you later. Thanks for being here. If you're on the road to 1 million, or you want to be the fastest way to uplevel is get around people who ask you questions that make you uncomfortable, who bring up topics that you don't know the answer to. Because when we start talking about launch plans or million dollar run rates or raising capital, these are all things that are new to most entrepreneurs. And it's also the things that will take you to a multimillion dollar business. We are here to support you. And we have a plan to get you four products of 25 sales a day at a $30 price point. So you've got a million dollar business after 12 to 18 months. Let's start you on the road to 1 million. Come join us at capitalism.com/one, fill out the form, and we'll see if it's a fit to help you build your multimillion dollar brand. I'm Ryan Daniel Moran with capitalism.com. I'll see you guys next time. And now a quick word from Kyle Carnahan, one of our members from the capitalism.com community.
Speaker 4Yeah. So I'm realizing like, man, I'm a fireman, but like, what am I leaving for my family? I was looking at my retirement because I'm going to get 60% retirement. I got to become an entrepreneur, man. Like otherwise I'm leaving, I'm leaving a lot on the table, man. As soon as that, the opportunity is to join the incubator. It was like, no question. And now I know that feeling, like when it's time to invest in something, it's time to invest in something. That shift mindset of being around these people that are playing this game, elevated my expectations for myself to such a high level that like now I have zero roof of what I believe I'm capable of. You know, it's like in this community, there's this give and give and give, and everyone's just giving back to each other. Right. And everyone's giving back to each other and everyone's making more money and everyone's being more successful. And they're just giving back to each other. And that's the game, like who can give the most. And I'm taking everything I'm learning from. The incubator and I'm starting to use it in my business now. And all of a sudden I'm, uh, you know, like a year later I'm driving, uh, down the road. And, uh, I look at my wife. I was like, holy shit. I was like, I'm a entrepreneur. When I joined the incubator, I had my belief and my trust. All of this takes faith. You have to take a step forward in the dark. You're going to get nowhere. So stay stuck or just make a move. So don't sit on the fence. Stop being a fence there. Make a move. Either, either get out of here or make a move. You get the right coaches in place and the right people around you. I mean, it's just inevitable if you do the work. So, um, man, capitalism.com and Ryan Moran has been just an integral part of my growth and it's been amazing. So thank you.
Speaker 1If 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 at capitalism.com slash one. 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 at capitalism.com slash Inc. That's Capitalism.com slash inc.
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