Asking 3 young millionaires how they make $1.8M, $5M, & $12M/year

Key Takeaway

Start with a sales process, not a product idea. This week, list 20 local businesses with an obvious, expensive problem, then speak directly to the person closest to that problem before pitching the executive. Build your offer around a measurable outcome—costs reduced, revenue gained, or downtime avoided—and find a cheap way to prove it. The strongest opportunities in this episode were unglamorous but easy to explain: fewer waste pickups, faster generator repairs, and targeted pain relief.

Episode Overview

Three young founders explain how they built businesses around overlooked operational problems: backup-generator sales and service, mobile trash compaction, and a heated jaw massager for TMJ pain. The discussion covers acquiring small businesses, direct sales, using AI to capture field knowledge, prudent risk management, and building toward a future exit.

Full Transcript

Transcript of Asking 3 young millionaires how they make $1.8M, $5M, & $12M/year from My First Million. Auto-generated from episode audio; may contain minor errors.

OK. Today we're playing "Shoot Your Shot," where we invite founders to sit in the hot seat and present their business to us. We have founders with both million-dollar businesses and companies worth hundreds of millions. They have 15 minutes: they start by saying one big number, make a presentation, and, in fact, "make their shot." They can ask any questions they want. Yes, we already did this in New York. This time we are in San Francisco. So, whatever you're doing right now , stop and go to Spotify or YouTube.

Find us on "My First Million" and write in the comments which city we should go to next. Well , let's begin. So, will you invite the first guest? How are you doing? How are you, Nick? What's new? State the main figure. Good. Um, I run a backup generator company in California. Okay. We currently have about 12 million in annual revenue (ARR). Wow. And we see a prospect of 14 million this year, and according to contracts, we are going to reach 25. Okay. So, the main figure is 12 million in revenue.

And what exactly do you provide to people? You provide sales and service of backup generators. What does this mean? Let's say I'm the homeowner here. Right. Do I just buy the device? Do I rent it, or do you sell it to energy companies? Wholesale of generators, generator service. We usually work with higher-end devices . Our clients are mainly luxury real estate, as well as large facilities with strict regulation. So, every telecom tower, every nursing home, every police station , every fire station, every data center. So, is this B2B?

Mostly B2B, the product that luxury real estate receives is an industrial product. You know, there are businesses like this: as soon as someone talks about them, I think: "Oh, of course." Although they have been a "blind spot" for me all my life. I never even thought about them. And I always wonder how this person started thinking about this? So how did you realize this was a business you could get involved in? I started my career in management consulting, where you have to delve into a bunch of different industries little by little.

I worked for a while at NRG Corporation, a large energy company in the US, where I was involved in innovation projects and strategy, and one of the areas where we had the hardest time finding good experts was backup generators. And a backup generator is when you lose power for a minute or for 12 hours because of a storm, an earthquake, or something else, it turns on and everything works. You don't want the lights to go out when you're on the operating table, unless there's a backup generator for safety.

Perfectly. Therefore, every surgical center, every hospital has them . When did you start the company? Um, I bought the first one of these. So it was an asset acquisition project. It all started with a certain idea. I was looking for a service provider to buy it from. We bought the first company in January 2024 , and the second one about five or six months later. Describe the industry. Is it a bunch of family-owned companies or a few big players? What does this industry look like in general ?

It is very polarized. We compete with large industrial giants like Caterpillar, Cummins, and Generac, where we compete for orders from major brands, counties, government contracts, and more. We also compete with small family-owned companies, but the lion's share of the market belongs to large platforms. So, you did a search. Have you quit your job and started looking? Were you looking for a job while you were working? What were you doing? This was my third research project. My first experience was with an office plant company. Um, what?

Office plant company. Plants? Yes. Like, yes. Probably the same ones . How did it all go? I still own it. Um , do you own it? I bought it in 2017. We made 14 acquisitions on this platform. Wait. What is her income? About 10 million. What? You own it completely, right? Me and my partner. Of course. Okay. And what is the profit (EBITDA)? A little more than two. Was it an idea, or did you happen to come across someone who had such a business? It was a failed startup funded by venture capital.

There must be an easier way to make money sitting on the couch and browsing business for sale ads, like many people do with Zillow. instead of you having a venture, uh , company that failed. Yes. So you were kind of a management consultant founder, but you were kind of a nerd consultant. You were just like a scientist. Completely "tower" type. Here is your presentation to the board of directors. Aha. You say, " Okay, now I have to get to work." So, this company, it went bankrupt.

Now we move on to plants. Yes. OK. I'm going to buy something. We purchased this with an SBA loan. It was diametrically opposed to what I had been doing my entire career, which was a mix of management consulting, Fortune 500 boardrooms, and venture capital startups, and I think there's a third pillar to that, the world of small business. You were working with plants, what next? We have isolated a portfolio of commercial landscaping contracts in that plant business and sold it to private investors . How much did you sell it for ?

Uh, a little over a million. Of course. Okay, so it was the same case, but it was bringing in 20% of my cash flow and about 80% of my headaches, and it freed me up. Um, because I was like a business development guy. I was looking for properties to purchase in the plant business. I built this business. I made my first purchase. Then I did four more and then handed over control to my partner. You enjoy doing business scouting and mergers and acquisitions. Do you have a partner who handles operations or what?

Yes, that's right. How much did you raise for this third business? What is his name? It's called On Point. On Point. Yes. So, this is the first time we have raised external funds because we felt that given the macro situation, where the demand for electricity is growing rapidly, the data center market is developing, you know, electrical contractors are thriving, we felt that to take advantage of this opportunity, we needed to raise external capital. So, we raised 6.5 million. We did a significant part ourselves, but there is about 5 million in external investment in this project.

And how big will it get? I don't know yet. I think this business could become very, very big. Hundreds of millions. I think we can get to the point where the only issue will be the amount of revenue. Do we have the technical experts to do this work? I have work contracts. This is purely a performance game at this stage. And describe, you said you compete with Caterpillar and other big players. What criteria should you compete against? Is this the price? What...how do you win a tender?

At 100% speed. They are slow. They do their job well, but very slowly. What is the difference in speed? uh, how long, how long has AI become an absolutely central part of our strategy for accelerating every process in this business. I want to be able to provide a quote while my specialist is still on site. These are complex machines with a very complicated parts supply chain. It can take a few weeks to go from "hey, your generator broke" to "here's how much the repair will cost and when we can do it." This is a very, very slow business and very complex due to the need for research and the fragmentation of internal knowledge.

You use it to speed up the calculation, if, say, a person is standing there, understanding what the problem is, or is he typing something into his phone and getting what exactly? We did all the background work: every document we ever created as a company was ingested and studied by AI; We built a RAG (search- augmented generation ) system so we could conduct research on the fly and get answers just as quickly. This is great. So, there are companies...my friend owns an HVAC company, it has about 200 million in revenue.

He complained and grumbled: "My business is bad for this reason, his business is bad for another." And he was telling me, "Well, we just need to learn how to buy Google Adwords better." And he is like this: "There is demand." "I just need to get my work done." And I was so jealous of this, because I have a completely different situation. I have to teach people what it is and all that other stuff. Are you involved in training people yourself or is your personal work simply looking for someone else to buy from?

Uh, we've kind of put mergers and acquisitions on hold for now. We are really trying to hone operational processes. And that's what you do. Yes, AI support, and I develop a lot of things myself. Is it difficult to train these technicians? I would say it's more than difficult. This is impossible. Because it's very ... learning or searching for them, what exactly... both , because, firstly, there are not enough of them . Those who are are more likely to leave the profession than enter it. And who is "they"?

Er, field technicians. I understand, but what are they? Are they in the same category as DEC specialists, who you can say, "Give me eight weeks of your time and I'll teach you how to do it," but it's hard to find anyone willing? I would say it's very close. Of course. Um, it's mechanics, it's electricity, and it's all together. And, as a rule, few guys are well-versed in both areas. This is increasingly becoming a matter of instrumentation and automation. So there's more computers and, uh, let's say, troubleshooting, diagnostics.

How much does a field technician earn? Is this a job that people will want to get because it pays well? This is good work. This is an opportunity where elite field technicians earn well over six figures, even with only a high school education, but it takes time to build up experience. And you don't see many generators. Therefore, experience accumulates slowly. Even in the HVAC sector, you can make, you know, three or four calls a day. Our guys do one or two calls a day. And the consequences are huge.

The consequences are huge. How big is the average contract? Hey, I want to tell you about something pretty cool. We have a database of all the business ideas discussed in this podcast. The HubSpot team has processed hundreds of episodes. They have highlighted all the simple, clear, interesting and profitable ideas we discussed, and they are all available for free download. Just click on the link in the description below. Thank you to our friends at HubSpot for sponsoring this podcast and creating this free resource for you. Back to the show.

How big is the average contract? This varies greatly depending on whether you're dealing with, say, a 3- megawatt installation in an AWS data center or Frank and Shirley's generator in the backyard. For, you know, data center installations, it's probably about 25,000 per year in service revenue. Is there an outflow of customers? It happens, but usually they want the supplier to be responsible for the outcome. And that's one of the difficulties of competing with Caterpillar, right? The technicians say, "Well, I hired Caterpillar and they couldn't figure it out." So, of course.

So, let me make sure I understand correctly. It sounds like you sell generators, but you also service them. I assume that service brings in more than new sales. Yes. And you are invited directly by the object or a representative of the company that produced it. They need field service technicians all over the country. So, they subcontract the work to you. So, we are an independent company. So we have to , in essence, earn a living through our own labor. Therefore, it is worth contacting the object directly.

We have to address the object directly. we can work through a project, uh, through facility management companies like JLL or CBRE real estate. and now you say my biggest bottleneck is recruiting enough technicians to handle the workload. How are you going to solve this problem? We are still looking for a solution. We engaged every recruiter, you know, got everyone involved to send us candidates. In part, you can just pay for people to move here. Will they stay here? Open question . I would say we can find guys who say they can fix it .

Can we select those who really know how to fix it? I think it's easier for us to find people, hire them, and convince them to join our company than to be 100% sure that when this guy gets there, he'll find the problem and fix it. But what did, uh, this is the second time we've mentioned him, well, you know Tommy Melo, that guy from A1 Garage Door. Have you heard of him? Yes. Um, and there are a bunch of influencers who are real businessmen. What did they do, because they were all facing the same thing , well, you know, garage doors?

Like, a lot of the people who come to me are a little bit troubled, and I have to teach them, well, I think he was saying, " We teach them how to pet a dog." You pet the dog as soon as you enter. You ask, "Can I come in?" He relies on sales skills, but he still needs technicians to get the job done. One of the things we always talk about is it's easy for an entrepreneur to feel like this problem or burden is unique to them, but there are very few problems in your business that someone else hasn't already solved.

So the easiest question to ask is: who else has solved this problem and how the hell did they do it? So he says, how the hell were garage companies able to scale their technician staff? Who do you look up to who has already done it? So, you actually need to open a vocational school. You are a vocational school. You should bring this friend I'm talking about. He has Hoffman University . You must. Did you do it? Not yet. We're not big enough for that yet. We are working on expanding our workshop.

We are building. We have a third box in the workshop, it's a training box, and we've tasked our lead technician with building our own training facilities. We created the digital part of this process. Turning every job we do into a learning experience that can be transferred to the team, because I need the guys to do more than one rep a day, right? If I can turn each of our reps into a bunch of reps, how do you turn that into something like a simulation? When the guys submit their field reports, we hold a pre-job briefing .

We're preparing these guys to go into the field like CIA agents being dropped into Afghanistan, you know? Here's everything we know about this device. Here's everything we've ever seen . they play it on their phones. They can listen and hear: hey, this is what I'm dealing with. And that's the AI ​​part. They then make a report and document their findings in a report. Um, and we have a pretty nifty data collection process where they can use their voice to create a report. We have AI that reads everything they do and everything they say.

And at the end of the process, when they submit the report, we mark those reports that are the best learning material. When you lie in bed at night and think, if we can do this, this and that, maybe in five years we can sell the business or I can make this much annual income, or whatever the number or vanity goal is. What is it to you, man? I think this is my third time doing this, and I feel like I'm doing this because I chose to.

I wanted to do this . So it's more about what cool capabilities we could build that were never available before. Okay. But be specific, when you think about it, what is it that really drives you? Um, I think creating great jobs for these professionals, helping ordinary people achieve truly extraordinary results. Um, I'm excited about what we can do and how we can support people who have never worked in companies that care about the process . There was this cool company, I forget the name , they took out an ad in the Wall Street Journal, the New York Times, or some big publication, playing on the idea of, "You know how your grandfather used to drive me around town and say, 'See that building?'" I built it.

"He was part of the construction crew, or, you know, look, 50 years ago we installed this thing," and there was a sense of pride in that . And their advertising to attract new employees went like this : do you really want to brag to the kids that you made B2B software a little better? Well, something like that. And I'm wondering if there are any cool mission ideas for recruiting, because I'm passionate about giving regular guys a chance to do something interesting. Yes, it's an interesting thought, and I think there's reason to be proud, because we're working on many elite properties, and it's fun too.

It's like the " lifestyle of the rich and famous," these are the types of properties we service. We install generators there. And at critical facilities like hospitals. Yes. And this is really such important work. It seems like...I coached the school basketball team this year, and our star player, a power forward, is graduating. We asked, "Do you want to play in college?" "We can set up a scouting session." And he says: "I'm going to vocational school." " He said that his vocational school doesn't have a basketball team." He wanted to work, you know, become an electrician, but do crazy things, like hang from a helicopter, doing repairs in incredible places.

And I realized that there are probably a lot of people who have talent, you know? Whether they are veterans or former athletes, they like the idea of doing a certain job, getting paid well for it, and not necessarily graduating from a four-year university. I wonder how to find such people faster or where they are going now so that you can connect to this flow. I think the stigma surrounding blue-collar professions has already disappeared. I think that's behind us. Remember what we were told when we were growing up: that you have to go to college, you better choose a good one, and all that.

I think some of this still remains, but in general the stereotype about choosing a working profession is a thing of the past. And now is the time for the skills of workers to shine, and we are trying to give them the tools so they can develop and learn faster. But no one has built a powerful brand around a vocational school yet, right? Well, like, is there any equivalent to Harvard? What is Stanford for this field, right? A place you can be proud of, a prestigious place to enter, where you emerge like a " seal" capable of doing incredible things.

In my opinion, this is an even bigger opportunity than what you are doing now, because it is $150,000. Yes. This covers all kinds of industries, and some of them are very specialized , related to a specific craft. So there is no one big name that everyone knows as a sign of quality, there is no " Harvard for blue-collar jobs," and I think there is a great prospect here. I would be happy to work on this. I feel like I'm moving towards this right now, and I need to thoroughly understand it, solve a problem for a certain part of the market, and then think: okay, how do I take this to the next level?

You have a very kinetic and contagious energy. I have a feeling that in four or five years you will be much further along than you are now. This is quite obvious. You've chosen a great niche , and that's really cool. You know, we had a guy, the previous guest was in franchises, and you're in entrepreneurship through sourcing and acquisitions. I just love all these different styles. Thanks for stopping by, friend. Yes. Thank you for inviting me. Good. I appreciate it. Thank you . We have another guest.

Congratulations. How are you doing? Good. Wonderful posture . Yes. Oh, yes. I am the one who poses. I will work on this. I'll take a look at this guy too. I'll raise my level a little . Yes. Thank you. Yes. OK. What is your name? What do you say, guys? I'm Kevin. Kevin, yes, you're welcome. Thank you. Welcome to Shoot Your Shot. Well, start with a big number. Well, "big" is relative. My figure is 1.8 million. I think I'm a bit unique in this format because I just sold my business two or three weeks ago.

That's how much I sold it for. Startup business on a chalkboard. Wait, so you... You just went out of business at 1.8. Just got out on 1.8. Yes. What did you sell for $1.8 million? Well, it was a franchise called Smash My Trash. I heard about it. Have you heard of this before? How to crush garbage? Explain. Yes. So the basic concept is that companies that produce a lot of waste—industrial plants, warehouses, factories, etc.— throw a lot of it into open containers, these rectangles that hold about 40 cubic yards.

The pricing model is this: every time it fills up, you have to order takeout. And it can cost around $1,000. Yes. I used to climb onto ours and jump on it. That's all. Imagine if something huge came along and crushed the trash. I was thinking of hiring someone to jump through the trash for me. That was it. No. So, we have trucks driving up to the container. Like you said, Sean, there's a faucet in the back with this spiral nozzle that goes in and presses the debris.

The bottom line: let's say you have 10 takeouts per month for $1,000. That's $10,000 a month you're spending on garbage. We'll cut costs, say, to five, and share the savings with you. Wait, so a large company spends 10 pieces a month on garbage? Yes. Or more? Who exactly? What kind of warehouse? Large factories, production facilities , for example, in agricultural California, where I worked a lot. Wow. Companies. So, you just pull into the parking lot, and there's a huge container . This was an opportunity to...

Compact your garbage to make fewer removals, because you pay for each removal. That's all. Do such compacting machines already exist ? This is a new concept. So, it's a franchise. This guy came up with an idea, started growing quickly, and decided to sell franchises. So they actually didn't exist before. They are available in Europe, but are usually attached to the wall of a building. So these companies drove up to the trash can. So the idea was to put them on a truck, drive around, and provide the service as a mobile service.

You bought a franchise and now you've sold it, correct? One location. How much ? Five locations. Five locations. How much did it cost to enter the business? I bought in parts. My initial contribution was about 185 thousand. immediately. immediately, and then where did you get the money from before? I worked in technology. You were someone who worked in SaaS and had a W2 salary, what did you do? Yes, I was in sales, product management, etc. A classic story about office work in Silicon Valley. This is so interesting.

So, you're just sitting in an office, you have a good job in the tech sector, and suddenly you say, " I need to go out and do some trash work." What was the chain of events that led you to quit that secure job and buy the Smash My Trash franchise? Yes, it happened because of a few things. It was a growing sense of dissatisfaction. I started realizing quite late that I wanted to work for myself. I've also been in the venture world, where you're constantly chasing the next round of funding and exiting the business.

I didn't notice how much of the world, where there are profitable blue- collar businesses, worked. And I was a little touched by this fascination. I started hearing about it and became interested. And then when I got married and went on a honeymoon trip that I booked at the last minute. We stayed in places we probably shouldn't have because they were more luxurious than we could afford. I started talking to people by the pool and thought: this can't be happening. All the rich people deal in garbage.

People make money in businesses that are not obvious. Do you remember what exactly they said? What were they doing? Well, one guy was in real estate . Another had a food truck, but he took it seriously and had a whole chain of them. I was also given this idea at a bachelor party. I was there with a friend from a private equity firm, and he beat me to the punch by investing in a dumpster business. Got it. So, he came up with the idea, and he himself worked in the field of private equity.

Out of 180 thousand, was that a large part of your savings? I invested 85 of mine. A friend gave me 70, which was capital, and I also took out an SBA loan for $350,000. Were you determined? Was it supposed to work, or was it something of a safe bet with a small down payment? Me, me It seemed like a pretty safe game. I could put more in, but it would cause discomfort. OK. So, you decide to get started and buy one . What happens next? In fact, I bought three at once.

Of course. I bought three territories at the start. In the world of franchises, territories are not always individual restaurants, as many people imagine. It's just a square. So, in essence, it's one business. The boundaries of these territories are rather arbitrary. How many years ago was that? I started in 2022. Of course. That is, four years ago. Four years ago. I started doing this because I was looking for a business where I could directly link my efforts to the money in my account. In the tech industry, I was too disconnected from real-world metrics.

From effort to money. That's right. So what exactly do you mean? You meant that the more people I call, the more I'll earn, right? I had a lucrative offer that I couldn't refuse. People could definitely take advantage of this, guaranteed to make money , I just had to convince them. Yes. I could make money right away, rather than waiting for some illusory results in the future. And that motivated me a lot. Got it. So I paid someone overseas to study Google Maps and mark all the trash cans.

Of course? That was my plan. I drove from Walnut Creek to San Jose to sell. It's like an hour and a half to two hours each way every day, just trespassing, going into warehouses, trying to talk to someone who's in charge of the trash can, you know? And you're just trying to make it a reality. started driving beyond my immediate vicinity. You drive, you steer. OK. The contractor gives you a point on the map. You are going to this point. You are coming. You weren't invited.

Knock-knock. And what now? So, I don't even knock. I'm going straight back to where the trash can is. OK. I...I've worked it out over time . I learned. Yes. You shouldn't go to the office, because in the office, you know , they'll just say "no." So I did this: I took a red helmet, put it on, took a tablet with papers, you know? I went in from the back and tried to find the person who directly loads the trash can. You are wearing a red helmet.

You start asking questions. Most often they just worked. He's like, "Dude, there's no construction going on here." You're a garbage collection contractor for a company, right? They're just not sure. They're like, " This guy asks me, 'How often do you take out the trash?'" " Who's responsible for this?" I would start by estimating the size of the order, get the information , and then go to the main entrance, armed with the data, and there I would go to the decision-maker. How many months did it take to get the first dollar?

Immediately. Immediately. And the first How exciting was this first sale ? Oh, that was great. I was with the neighbors when it was the first time...because these are pretty big contracts. We're talking big... for me at the time, it was a few thousand dollars in monthly income. So two, three , four customers were enough to cover the debts and pay the driver. So you had a driver from the beginning? I hired a driver from the start. Yes. Did Smash Rush give you this instruction, or did you come up with the "red helmet" yourself, or did they say, "Hey, this is how to do it"?

They didn't tell me about the red helmet, but they gave me a basic plan , and I went to a few other franchises before opening, including the friend I mentioned, and I just said, " Show me everything." How do you do it? What works? It's like... you've seen those videos where someone... my friend Neville Madora, he's Indian, and every year at South by Southwest he dresses up in fancy clothes, puts on a white thing and a hat, and just says, "I'm going to get..." And then there are these videos on Instagram where guys are like, "I'm just going to look like a DJ," whatever that means.

And they get into the club. Here, this is a kind of version of this. Exactly. People just don't ask questions. So you...that's amazing. OK. So, you said you sold the business. First year. Do you remember what income statements were like? How much did you earn in the first year of business ? It's hard to say. Because in the first year I bought two additional franchises. One day I went outside my territory, found a “trash gold vein,” bought those two franchises, and purchased two more trucks. Of course.

So all the money went straight back into the business. Were all three territories successful, or was one a failure and the other a great one that made up for the losses? That's pretty much how it was. There was one great, one not bad, one average, and then I added these two incredible ones. So I had to buy two trucks and two new territories. So all the money went straight back into that. I think I made about $600,000-$800,000 in revenue in the first two years. Oho. What was the biggest headache, looking back?

Trucks. Operators or... Not even operators. Repairing trucks when problems arose. It was something I just didn't want to do. It's a big truck with hydraulic equipment, and eventually I just adopted the philosophy that I have a mechanic. He charged me as much as he could, and probably overstated the price. But when a problem arose, I simply overpaid to solve it. You didn't have much choice but to look for a better price when something broke. Yes. I just wanted it to be done. Many of our clients paid us big bucks every month.

And if we couldn't reach them, I was willing to pay a lot to just fix this problem and forget about it. So, what is the profit, how much did you get " net" over the last year? So, the first two years and the last two years were like two completely different chapters. For the first two years, I was there every day, taking nothing out, reinvesting everything in new trucks and new territories. For the last two years, from approximately summer 2024 to 2026, earnings before interest and taxes ( EBITDA) were about 450 thousand, but 150 thousand went to debt service .

So in reality my net income was around 300 thousand. So why did you sell it? It, you know, just felt like a startup business. It has always been a kind of startup business for me. I took up this because I thought it would be a straightforward path. This put a lot of pressure on me in many ways. Like these loans, and I took out loans for the next two trucks. It was that first SBA loan for 350 thousand. I took out subsequent loans for other trucks.

So this is a personal guarantee that was in my head every day. Yes. Many people don't realize that franchise agreements also have a personal guarantee, where you owe them royalties every month as a percentage of revenue. I think most people know this about franchises, but there are minimum royalties, which means you pay either a certain percentage of revenue or a fixed amount on a schedule, whichever is higher. And this is a 10- year contract that also has a personal guarantee. I always felt like I could handle it, but it also puts pressure on you.

And just keeping these big trucks running every day, where... A couple of times a year I would get a call saying something bad had happened, and... How did it feel when the transfer came? It wasn't as epic as expected. I've already worked everything out with the accountant to understand: okay, tell me what the figure is after taxes and everything else. I had already seen this number in a Google spreadsheet, and when it happened, I was very happy. My wife and I just happened to plan a trip for the next day, so we were able to enjoy it.

But now everything is back to normal . I feel relieved that I don't have that responsibility, and I don't even have my phone with me right now. I'm used to it... You walk around without a phone, with absolutely nothing on you ? Without a phone. I mean, normally I would be stressed because I could come back and there would be a "bomb" waiting for me on my phone that something had gone wrong. Who bought it? Was it someone else who wanted even more territory, or who was the buyer at all?

These were neighboring franchises. So that's great, I was happy with the amount they paid. I think they got a good deal because they can just add it to their business, right? This is how many franchise merger and acquisition deals happen. I have a feeling you're up to something. You have something you think about all the time. What is this? What is the list of things? Also, did you know about this before the sale, or did this free time give you the opportunity to find out everything?

The first two years were like a mad sprint. For the last two years I have been working in passive mode. I had two children, so I couldn't go there every day, and I did everything I could to make the business truly passive. I spent a lot of time trying to figure out what my next step would be. I don't want to say too much about what it is . But something is already in the development process. What other options did you consider but ultimately not choose?

I was very interested in the concept of how to sell someone a financially viable idea, where the only objection is that they don't believe you, and you can prove it cheaply or for free. So I was looking at all sorts of things like that. For example, I think you could check people's utility bills. I find the idea of optimizing the speed of e-commerce sites interesting . It was an epiphany that I thought could become an interesting plan of action—quite simple if you're not very smart but willing to work hard.

What's really smart about your approach, which I think almost no one does, is what most people think about the product. They say, "Oh, I love this product, or I know this product, or I like this industry." Or they think about their college major or some other nonsense. You started from the bottom, based on what sales process you want to conduct every day, because that will be 90% of your life as an entrepreneur—just trying to sell and acquire new customers. And you're like, "Where would I go to get so involved that I can just rake in money by calling or visiting more properties?" And even now you say : "And my pitch will be this : you will definitely make more money." I just need to prove it to you, at minimal cost to myself or through a quick demonstration to show that the value is indeed there.

And I think few people take the "sales first" approach, but for an entrepreneur, that's all you do in a business—mostly just growing it. A product is something that is highly interchangeable and can be easily exchanged for another. Yes, that's right . For me, it's simple: I, like you, love business. I'm a real business geek. I like hiring people. I like selling. I enjoy developing systems and processes. So when you're like that, you have the luxury of choosing a business that you think will be enjoyable and easy to run.

When do you plan to start? I have already started a new business. So, it's only been three weeks since you sold the previous one ? Yes. Has your thinking about the new case changed? What changed after that experience? You are taking on something new. Do you have new rules for how you want to do it? Bootstrapping. Only by our own efforts. I've realized—perhaps because I'm more cautious than I care to admit—that the idea of ​​a personal guarantee tied to a deductible scares me. It felt like a " one-way door," an irreversible decision.

So I think in the future I will try to develop as much as possible with my own money and leave myself as many options as possible. It's funny, but your colleagues in the tech sector probably said, "This is very risky, you're doing something crazy." Talking to many entrepreneurs here and in life, I've noticed that most of us don't consider ourselves risk takers at all. Most say the same thing. Like, I'm not that risky. There is a difference between uncertainty, which is always there, and risk, which can be reduced.

Uncertainty is always there, and you just have to learn to live with it. But you can definitely limit the risk, and taking out these personal guarantees is actually quite risky. And it's funny to hear that you're a risk-averse person. It's like great fighters: they're not proud of the risks they take in battle. This is actually defense: to hit and not to be hit, right? The best fighters, for example, Floyd Mayweather, who remains undefeated, he hasn't even taken many punches. Khabib also didn't get many punches. Black belts understand that the main thing is to minimize damage while winning .

Yes. There are all these investors who say, "Rule number one: don't lose money." " Rule number two: remember rule number one." Yes. And it's quite funny. Let me ask you another question. I'm talking to my friend from college, he has a regular job. He wants to do something entrepreneurial. I think he wants to do it for the money, but the real advantage is that he will have much more fun. He doesn't like his job. And enjoying your day is much more important. You had a good job.

You worked on it for four or five years. Have you become much more financially successful than if you had simply received a salary with raises and put aside savings? Was it a big financial win or a victory in life, confidence and satisfaction? What exactly was the gain? I think of it as the escape velocity I needed to get started. I can work for myself all my life, as long as I do n't screw everything up. Here's how I think about it. It gave me that escape speed to get out of that situation.

Is this a financial reserve or is it still confidence? This is a financial reserve. This is confidence. This is experience. These are pattern recognition skills and all that . I had to do this because I bought a business far from home and I was initially trying to keep my job. And then I realized that I had to quit. This is how it was in my case. I think for others, the best way out is to find something you can join and test out a little before diving in fully .

We have never dealt with franchises . And I've always been somewhat skeptical about franchises . It seems like franchises are a great business for franchisors, not franchisees, but you did it and got a good result. What is your current opinion: is it worth getting into franchising, or have you found another franchise along the way and thought, "Damn, I wish I had chosen that one," now that I understand how it works? Say something intelligent about franchising. I think there are three situations where franchising makes sense. The first is if the franchisor really has some kind of “ secret ingredient .” To put it bluntly, like in the podcast "Acquired", where they analyze the seven forces of business: if the franchisor gives you one of these seven forces.

This can be beneficial. It could be a brand, where anything he touches turns to gold, or a unique resource, like a Chick-fil-A recipe that can only be obtained at Chick-fil-A. It's worth it. This is rare and in high demand. The second situation is if you are entering this to make a consolidation (rollup). Franchises are convenient for consolidation because they are copies of each other. Systems and integration are the most difficult part of many consolidations. Franchise integration is just a matter of working with people. It's pretty easy to put together, it's like a closed ecosystem.

If you are already in the system, have the appetite and capital to consolidate, in many cases it can be done, and many franchises are ready for acquisition because they are motivated to sell more points in order to receive franchise fees. And this means that in a few years they will simply beg for consolidation. And the third reason—this is actually my reason: if you literally have no intention of doing anything else. You won't start doing anything until you feel like you have "training wheels" in the form of a franchise.

This is exactly what I needed to dare. I don't regret doing it. I probably won't be doing franchises again in my career. But it played an important role in my... It got you where you wanted to go. That's right. Otherwise I wouldn't have done it. Kevin, you're awesome. Thank you for doing this. Yes. Thanks, guys. Perfectly. Thank you for coming. Yes. Invite him. How are you? What's new? Nice to meet you. Mutually. How are you, brother? What is your name? Num. Num? Yes. Num. Welcome to the show.

Thank you for inviting me. I have a feeling. Good. I don't know if you've been told what you're getting into , but maybe we'll start with what we call a big juicy number. So, give us a number that interests us. OK. A big juicy number. We make $430,000 a month selling heated jaw massagers . Jaw massagers? Yes, sir. Okay. That was my nickname in high school. Gay. Okay. Devil. It's better to have fewer details about this. Good. So, do you have such a device? What is this ?

What is a heated jaw massage? Good. Listen, I have one. Fits in a pocket. Is this some kind of appearance enhancement? Look, Steve Jobs had a thousand songs in his pocket. And he has one hot jawbone in his pocket. Are jaw massagers common or is it like a toothbrush? It's, well, all quite hygienic, actually. Yes. It does not fit into the mouth. But I mean, I actually have two. This one —this is what we're selling now. Okay . This is the first generation. It looks like it was printed on a 3D printer.

Similar to a vape. OK. And this is the second generation. I'm actually flying to China tonight . So I'm trying to do that. But you just click this button. Adjustable. The first generation doesn't work. In the sense that it doesn't function. I gave away all my early versions in San Francisco. I was just at a conference. It's all over. I only have this one left. So, well, yes, there are two buttons here. Adjustable heating, adjustable vibration . That's all. Literally. Okay. So, I do it like this .

Yes. It's like a combination of several things. You are doing a scraping massage of the muscles. Is this what we do? You know what? Some people try to improve their appearance, but the main thing is for people with temporomandibular joint disorders. Yes? So, I mean, there are tens of millions of people who suffer from chronic jaw pain, and generally, that audience is not someone who is obsessed with looks. My main client is not like that , but they exist. So is it TMJ? TMJ. Can you explain what TMJ is, for example, in America, how many people suffer from it?

Give us some statistics. Yes. About 5% of people seek treatment, but many more have it and may not even know it. That is, there are many very common phenomena that occur. I started to figure this out about five years ago when my jaw started clicking on the right side , and I thought, "Okay, I guess my mom had this." It's only temporary, right? Stress and things like that can trigger this. Is it just annoying or is it dangerous? So, this clicking... if it's painless, it's often just annoying.

Some say that one in three people experiences this at some point in their lives. But it started to get worse for me. It started clicking on the left, and then my jaw started to jam, at first once a month, then once a week, and then every day I would wake up and not even be able to brush my teeth. I couldn't. What is the reason for this? That's a good question. Many different things can cause this, such as clenching your jaw. Many people have a problem with clenching or grinding their teeth in their sleep.

And, you know, some " appearance enhancement" methods can eventually lead to this. This could be a joint injury. It could be all of these things together, especially when it comes to jamming. There's a disk there, and you know, it can move. And how often and for how long do you apply this to your jaw? The idea is to do a few things for the muscles, because most people's pain actually comes from the muscles due to overexertion and so on. So, you use this as a scraper or a heater once a day, or several times a day, for 20 minutes.

This is what research advises. Doctors say so, but honestly, it's just like, "Hey, I'm having a flare-up." " Headache." You take it, work your muscles, or just have instant warmth in your pocket instead of almost half a million a month. Uh , yes. So you sell this for 5 million a year. Uh, that's on an annual basis. In annual terms. Yes. And is this what your TMJ ( temporomandibular joint) handle is called? Your TMJ pen. How much does it cost? We usually sell for $2.49. We are currently having a sale.

Have you attracted investments? No, no, no, no, it's completely equity. Yes, I think I would see that in the TikTok shop. I would see this in an Instagram ad late at night. Yeah, listen, I, I wish the guy was behind this, I'm that guy. I'm the same guy on Instagram. I'm that guy from TMJ. I saw you. You, you're the face of this, right? I am the face of this. I think I've seen you a lot of clickbait for anger on Instagram. I like it, I love it.

So what, what did you say about clickbait? Okay, one of our most viral videos is I'm on a plane, right? And I, I just walked into this full "Karen" next to me starts making remarks to me. She says , hey, you can't float on a plane, you know, and I'm really worried. I say: no, no, no, this, this, this is not a vape. Um, wait, let me explain. And I, I'm worried, trying to explain that this is my invention. Like, I did it. This is for people to attach.

This is not a vape. Um, and this concept has garnered about 100 million views . Really, wow. Oh, cool. How did you come up with that? Just with this "Karen" on the plane, where it's mostly vape. Vaping on a plane—it really does look like vaping . Everyone tells me that. So, yes. What's going to stop all the Chinese counterfeiters from competing with you? Look, I mean , at some point they're going to come. But the reality is that when I, when I started this, I, I was looking for information.

I warmed and massaged myself every day with a cup of water. I heated it up in the microwave or something. And I searched, and there was no heated jaw massager, no products at all for people with TMJ problems, none, which was just baffling. So, there was no brand, no development, actually, I developed it, and yes, I am the first brand. You said you printed this on a 3D printer? Yes. So I started this business because, man , listen, hardware used to be, I think, one of the riskiest things you could get into when you were building a hardware device.

Look at "Shark Tank," people say, yeah, I spent a hundred grand on this, and it was a big mistake. How much did you spend on creating the first batch? I spent less than $3,000. The idea was that there are three things that have come together in our time that make creating a consumer hardware product perhaps the least risky thing to do. First, access to all the information: engineering has become pretty easy now, well, don't cut it, but with ChatGPT and YouTube...I did n't know how to do electronics.

I didn't know how to make a printed circuit board. What did you do before this ? I was looking for information. I was a mechanical engineer. I was in college, like ... How old are you now ? 24. How much is this product? It's been three years since I started creating it, and two years since I've been selling it. So you're saying you're an idiot? So, you have a 3D printer at home. Yes . And you were using ChatGPT at the time, and you said: teach me how ...

You said: give me... Well, ChatGPT wasn't that good back then. But there is an engine there. I mean, I didn't know how electronics worked. So what did you do? You are at home. You've never done... So what did I do... I wrote out exactly what this device is supposed to do? I need him to stay warm. I need a vibration. I need, you know , to charge it. It has to be portable, and so on . You prescribe what you need. The obvious thing he needs is a printed circuit board.

This is a board with electrical circuits. I mean, are those little green things? Yes. It looks like a chip. There's a lot of everything on it , a lot of lines. So, to design it...I didn't know what to do, but I looked on Reddit. I asked for advice. I went to YouTube. I figured out how to design this thing. That was the first thing I did. Then you design the buildings. You are looking for potential engines. You buy them all, test them, and... So for the first version, you ended up putting everything together yourself?

Yes. I collected these things on my own until literally a year ago, day after day. We reached 80 thousand per month. I was collecting, shipping, I had two 3D printers in a closet in my apartment. And then I went into Alex Hormozi mode. I thought, "Wait, what if I just, you know, do this more?" And I found a logistics operator. Well, and usually a 3PL provider , well, you know, but, um , they just ship your goods. Well, they kind of fulfill your orders. But I said, "Hey, let me use your employees.

I'll put my 3D printers at your place." You guys can use them. "And made them right there. Yeah. You can make them. So now my 3PL is making them. And that's how we've been able to scale to this level. So you're flying to China tonight? I'm flying to China tonight . You're going to... You already have it, because it's already been made. Yeah. So we made a prototype. You found something on Alibaba. What did you do? No. No. I didn't do that. That would be risky.

Um, no, I found contacts. So I'm pretty popular on Instagram now and YouTube, for example. So I made sure to get in touch through word of mouth . Um, so I found a factory with them. We developed this thing. I flew there a few months ago. We got a kind of golden sample, and now production is like complete. Well, the molds are almost done. So I'm going there now to get the final samples, and then we can... How many employees do you have? I do n't have any full-time employees.

Uh, but I have, you know, contractors. I have, um, five contractors. So have you taken money out of the business yet? You took, like, a million dollars out of the business last year? So this year, let's say, hypothetically, you're going to do 5 million in total revenue in 2026. What's the cash flow, well, how much profit? I don't know if you measure... Well, yeah, it's about 20% of net income. I don't know. I kind of look at it like this. It's just my business. Some of it's in the business bank , some of it's in my Vanguard , some of it's in my personal bank.

I do n't know. I just take it as I see fit. And there's no repurchases, right? Like, nobody's going to buy... Yeah. There's no... Yeah. But what's... I remember years ago when, you know, oh... Yeah. Like, my, I have a Hypervolt that I've been using forever. I love it. And I remember when they came out and people were like, "Dude, Chinese companies are just going to copy all of this." But they did it . They did it. But they did a good job with the branding, so I really got into their Hypervolt.

And then they came out with like 30 other products. There's this foot thing, I love them all, and it's become my routine. Is there anything else you're going to do or can do? I have a vision of creating a brand specifically focused on products for people with TMJ. The brand is called, like, "Your TMJ." So it's like "Your TMJ pen." Then I think about "Your TMJ band." We had a guy on the podcast named David. Yeah. And his whole company, and we started it as a joke, but it wasn't a complete joke, because Sam doesn't believe that naming really matters.

And this guy's whole job is that he makes a ton of money naming companies. Blackberry, Swiffer, and Sonos, Febreze. He named them all of these things. And I totally support what he's doing right now. And I actually met with him the other day. His main idea is that if you're a young entrepreneur, just start a company. Who cares? But once you get some success, think about a name that will stick around forever, because that's what really matters. And I agree with that . I would seriously consider keeping it as, maybe, "TMJ pen," this product, but having a normal company name.

Yeah, that's totally possible. I don't know. I just do n't think that's the main issue right now, because for this product, yeah. People think of it as "TMJ pen ," you know? When people say "TMJ pen," that's what it means, there's no other thing like it. So I think it's a pretty good name. But yeah, for a company like... Well, you said you had a question. Well, what was your question? Well, yeah. My question was, listen, you're going to say, "Oh, money doesn't matter." This and that, but...

" No, we're not going to say that . We're not going to say that. The show is called "My First Million," not " One Million and That's It." Listen, I've heard a lot of guests come on the show. It's like, you know, they've made it , and I'm like, "No, I want a couple million in the account, right?" I want that. So I get the urge to sell the business in two or three years. Sell the company. Yeah. And I don't know what I should really focus on, because the obvious question for me right now is: What's the main constraint?

It's, you know, solving the supply problem, and then it's going to be a short-term constraint on demand, and then you have a long-term constraint in that scenario. Yeah. And I don't know what the long-term is -- maybe not having other products is a long-term constraint, but the problem is I don't know what would be a very important trade-off against losing focus on just increasing advertising now. So maybe it's recurring revenue, right? Maybe I should go into TMJ supplements, oils, creams, and so on. Or maybe it's expanding into consumer products.

Maybe it's having intellectual property. Maybe it's getting FDA registration. Maybe it's having three options. Yeah. And you don't have to decide right now, but it's good to know what they are, because then as you run your business, you'll look for clues that confirm one of the three options. Or you could expand into TMJ. You could say, "Great, TMJ, that helps, but it doesn't solve the problem." I could sell creams, oils , supplements, whatever. So you expand into the TMJ niche, or you could expand into the pain relief space.

Like, heated massage for other conditions, other parts of the body. Like the Hyperice model, the gun model, where you create, you know, a recovery company. Yeah, they're a recovery company, and you'd be a pain relief company, and you'd said, "Okay, cool." I'll find all the different types of pain. I'll create specialized products. I'll apply the same pattern to them. And right now, for example, these heated and vibrating slides—that's what's going viral, and I think Nike or someone else is doing that. Yeah. So you could expand into that pain relief.

Maybe heated massage pain relief . Or you could just say that I've actually just learned how to sell products really well through content. Because now I know a little bit about logistics and this and that , but I'm really strong in marketing. And I'm fundamentally limited by category and product. And if you take, you know, I'm a 9 out of 10 entrepreneur. I just have to find a 9 out of 10 opportunity. TMJ—it's only a 2 out of 10 opportunity because of the specificity of what I do.

You just take your highly mobile skills of creating content, selling through content, and apply them to a better category that has advantages. You're not struggling with the small market size problem that you have. Maybe you already have liquidity. You're still so young, you'll have money in the bank and a bunch of lessons learned, so from a clean slate, this could be your startup business. Most entrepreneurs have a startup business, something they did early on, and it wasn't their whole life's work. So that's another possibility. You don't know which of those three is yours right now.

Maybe you should write down a hypothesis about which of those three is the right one. And as you work for the next six to nine months and focus on growing this business, you'll at least notice hints of what it might be. Maybe you run a little test in one of those three areas. That's how you figure it out. Yeah. I think I just like to use business as a learning opportunity, as a personal growth thing. It's probably going to be like, can I squeeze something more out of this TMJ niche?

While Absolutely, you can. I understand this because I think so too. A few years ago, I had Lyme disease, and I was looking on Reddit, and I noticed a clear trend among my friends who had come down with various illnesses or injuries. There are dozens or hundreds of illnesses or injuries where people feel like, "Nobody's listening to me ." "Nobody's taking me seriously." What the hell? But I know something's wrong. I feel bad. And so they go to these communities and buy these products, where they finally feel heard and cared about.

And I -- if I had to guess, this is one of those cases, because I've heard the word "TMJ," but when you see that clicking sound, you're like, "Oh, that's not so bad." And then the person who has it says it's terrible. You know what I mean? Uh- huh... and if you go to the doctor, they just say, " Well, you know, it's just a lot of stress." You're like: "Hey, I'm a little stressed because it hurts every day." Also, to top it off , my first, my first specialist that I went to, prescribed me about 2,000 milligrams of Tylenol a day.

I thought, I would, if I had to guess, say that you're going to grow a lot over the next three years and then sell the business. And I think that would be cool. These are, in fact, pretty hard businesses to sell. Um, you know, a niche product with no repeat sales, which is very dependent on your marketing genius . So it may turn out that optimizing for exit is sometimes different from optimizing for cash flow. And so you have to weigh those things. You can even look at the analogies again and ask, is there anyone who's done this before and got out of business?

Well, let me talk to them and see if the factors that led to a successful exit are the same as what I'm saying. I have at the core of my business. But if it's just a cash flow business, that's great. A cash flow business can be amazing. Have you ever talked to bankers or brokers? I haven't. A lot of people only do that when they're ready to sell, but it would be good to do it three years before you realize: I have a certain number in my head.

Just tell me what I need to achieve to make that number possible, and I'll work on it for the next two years. Name three companies that you've looked at that are similar to this. How much did they sell for? Why did they get that valuation? When did they do it? And you're like, "Okay, this could be revenue like this , cash flow like this, and, you know, five or six other metrics." I'll just work on it for three years and then I'll look up and say, "Okay, okay." Yeah.

If you know of anyone... I've been approached on LinkedIn about this, but they seem a little suspicious. So I thought, no thanks. Yeah. No, I would advise. So I would talk to Quiet Light. It's more of an online broker, but they're easy to talk to. If you look at their site, they have a lot of these FBA businesses that they sell, and they're, I would say... less reliable, generally lower quality, but they sell them successfully , so they know how to package it. Quiet Light brokerage.

Yeah, reach out to them, and then look for brokers in your niche. Maybe you should just Google it or say to ChatGPT, "Do some research on who the bankers are selling products like mine." I don't even know what the category is called, but it might be something like... non-medical wellness devices. Okay, cool. And you can write to founders who have already exited the business and ask, "Who did you talk to?" "Because anyone who sells a company talks to three or four brokers. They'll say, 'I worked with this person.'" They were wonderful.

And these two are, well , so-so. But I wouldn't put it off . Sam is absolutely right. You don't talk to them when it's time to sell. You talk to them a year or two before that to figure out exactly what you need to do in the next 24 months to make your business sellable. The good thing about a business that's attractive to sell is that if someone else wants to own it, it's probably for the same reasons that it's attractive to you. So there's nothing wrong with building a business that's easy to sell, because at least you're creating something that's much more valuable to yourself or to someone else.

Yeah, man. Thanks for doing this. You're awesome. Of course. Thanks for inviting me. Good luck in China. Yeah. Okay. So that was part two of Shoot Your Shot. We've got one more episode left from San Francisco. We've got three more founders coming up next. Subscribe to YouTube and Spotify. We've looked at the data. It seems like 80-90% of the people who watch the episodes aren't subscribed . What are you doing? Subscribe so you don't miss the second episode. And do me a favor: if you're a listener, go to Spotify, and if you're a viewer, go to YouTube.

Comment down below the city you want us to go to next . We're filming this in San Francisco right now. We've been to New York. We'll go somewhere else next. So let us know in the comments right now.

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