The Exchanges

Q Okay. 2000 per month. And, and what do they get from that? Is it like live coaching or four meetups per year or what?

A Yeah. It's a combination of they get our, all of our courses are in there. So courses on building businesses, scaling businesses, and we're adding to it all the time. So our, our training platform, then we do a coaching call every week with either myself or one of our, you know, one of our team members or one of our coaches. And then we do a yearly summit or Where they fly to Austin, we bring in some people who are doing really well, some people who are investing or buying businesses, and we also incubate that deal flow. So if somebody wants to get funding, if somebody wants to sell their business, if someone needs a strategic introduction, they can fill out an application, put it on their desk, and we'll make that introduction if we have that.

AI assessment note: “It's a combination of they get our, all of our courses are in there.”

Q So you paid a hundred grand for capitalism.com. You have enough money to buy a Tesla. You have a kid, you have a wife, you have, you know, you put on a conference that costs money, had big name speakers. You're obviously generating revenue. How are you generating revenue?

A Yeah. So when I was on the show in December, I think our revenues were about half a million dollars a month. And now they're about, now they're about a million dollars a month. We generate our revenues in a couple of ways. One, I have some physical products businesses, mostly that are based on amazon.com. And, uh, I, I sell quite a bit on Amazon. The other piece is, I, I guess the, the, you might call it a coaching business or Our incubator really. I have a, a, a coaching program, an incubator that we call the, the tribe where we bring in people who own businesses and connect them with people who fund businesses, people who have audiences and we kind of bake and incubate them together. And we've got a few hundred members in there and that's how we pay for the operations of freedom.

AI assessment note: “We generate our revenues in a couple of ways. One, I have some physical products”

Q the last conference, how you sold it, ticket prices, costs and revenue and all that stuff. And I flat out asked you, Ryan, you actually own your Tesla and you gave me the right answer, which you do. It's a beautiful car. It's a beautiful, beautiful car. So you guys can go listen to that episode. But Ryan, tell me about capitalism. Why go from freedom, fast lane to capitalism.com?

A Yeah, so an interesting story was I was having a conversation with one of my business advisors and with my team, and we were analyzing where we wanted to go over the next couple of years, and my brand has always been called Freedom Fastlane, and when we were looking at our goals and how big we wanted to be, the conversation came up of would anyone be proud to feature that they were on Freedom Fastlane, and now as a podcaster myself, I like to I like to think that I'm more important than I really am. I like to think that my reach is bigger than it really is. But at the end of the day, we kind of looked at ourselves and says, Freedom Fastlane is a great name for a podcast and a show. It's a terrible name to build a business around. So we wanted to go out and get something more authoritative. And when we were looking at who we wanted to be and really what we wanted to talk about, there were a couple of single word domains that stood out to us. And really, I Have a political side. I really believe in entrepreneurship as the solution to all of our problems. I think that one of the biggest problems in the world is the push against that and that we need to fight that. And at the same time, I think we just need more entrepreneurs in the world. And that has been my message over at freedom fast line, but that name didn't capture the idea. So we opened up the conversation with two domains…

AI assessment note: “Freedom Fastlane is a great name for a podcast... terrible name to build a business around.”

Q So what was the deal? What'd you pay for it?

A So it was a 100,000, which I thought was an, uh, the steel of the century. Um, it was, and, and it was also financed. So it's broken up over several years. So It was actually structured in a really cool way where this and this individual's goals were different than getting a lump sum of money for the domain. What he wanted was to maximize his passive income over time. So he wanted it to be financed and he wanted to write off some of that. And apparently I didn't know this, but apparently there's a rule where if you finance something and someone's buying it, um, it can be If you're paying in payments, you can write part of it off or something. So he didn't even want the lump sum.

AI assessment note: “So it was a 100,000, which I thought was an, uh, the steel”

Q Wow. Okay. And so like, how does this, well, I guess this is probably a big math equation, but is it, is this just ranking? Is it like homepage, Google SEO kind of stuff?

A Yeah. I mean, it, as of right now, as we're recording this, Amazon is still, it is still kind of rudimentary in the way that they rank everything. They're trying to get smarter. And I have, I For over a year now predicted that Amazon would smarten up and make this harder. And I've been wrong up until this point. Um, it's still fairly easy to game the, the, what has happened in the last six months or so is you've had a bit of a consolidation of the people who can spend the most end up ranking the highest because Amazon's algorithm is all based on sales. So whatever you can generate, as far as quantity of sales, that will determine how you rank.

AI assessment note: “Amazon's algorithm is all based on sales. So whatever you can generate”

Q You have to sell the revenue multiple on your yoga company. So if your yoga company was doing 10,000 dollars a month in top line sales and you sold it for a hundred, the revenue would be 10. What was the revenue multiple?

A So it was the, the revenue multiple was less than three. I don't, I don't know what it came down to exactly, but it was, it was less than that. If you don't factor in the other pieces that were involved that are variable, meaning Some interests in some, some other projects. The actual cash hole was, was less than three. And that's like, that's typical for a website, right? I mean, if you were to sell a website, you're looking at like a two X on, on profit or revenue, depending on how they evaluate it. Now I'm not in that game anymore, but that's, that's the case with how most people build a business that's selling physical products on Amazon is, is within kind of that mindset. Cause they build it like a cashflow business. But if you want to have an exit, then you have to build it like you're going to build a business that's acquiring customers and disrupting the marketplace a bit and adding unique value. You can't just white label something random, stick it on Amazon and think you have a sellable business, and most people think they are, they can, and they can't.

AI assessment note: “the revenue multiple was less than three.”

Q Why do you do that? Just to get a higher ranking in Amazon? Cause they see more sales.

A There's actually a couple reasons for it. We'll, we'll do it because we want to get more, we'll do it a lot for new products. So we'll take, that's one of the things we do to get somebody to really like buying from us, rather than saying, I bought this thing on Amazon. So we'll do certain things in order to get people to, to, to really marry into our idea or our vision as a company. So we'll do it for the customer. We'll do it in order to drive sales to something. We'll do it just to cause noise in the marketplace to get people used to repeat buying from us. So there's a lot of different reasons why we might do something like that.

AI assessment note: “There's actually a couple reasons for it. We'll, we'll do it because”

Q Okay, so of that 500 grand, talk to me about the expenses, like, are you manufacturing the goods? Tell me about that.

A Yeah. The primary expenses when it comes to having physical products businesses are the cost of goods sold, which is kind of interesting because I come from the info product world. And one of the things that was interesting to me was when I first started doing this business, I was like, where the heck is all my money going? Oh, right. I have cost of goods sold. So that's, that's where the primary expenses are. There's a little bit of marketing costs when it comes to a pay-per-click And we, we give away, you know, a decent amount of products in order to get reviews and to get our rankings up. And then the team from there, those are our primary expenses.

AI assessment note: “The primary expenses when it comes to having physical products businesses are the cost of goods sold”