🤷They make $354,000 a month selling nothing

They are like Tinder for software.

Author

Zachary Alabre
November 10, 2023

These 25-year-old sneaker-heads make $354,000 a month helping people sell software.

“Nowadays, everyone and their cousin is creating a software company.”

- Steven Schwartz: Age 25, CEO of “Whop”

đź‘źYo!đź‘ź

How is my favorite business squad doing? This week your boi is back with a couple of co-founders who are changing the game of selling online software. We’re going to look at Steven Schwartz, Jack Sharkey, and Cameron Zoub, and their company Whop. Whop is an online marketplace that lets people sell their own software.

And in 10 minutes or less, you’re going to learn:

✔️Why you need a niche business

✔️How they used the “Gold Rush” method

✔️Why you should build “with the garage door open”

QUICK SUMMARY
TLDR:

Steven and Cameron started Whop when they were just 21. Before then, they were friends who absolutely loved sneakers. But getting limited edition sneakers was very difficult, and most people used a special software called a “sneaker bot” to get them. Steven learned how to make sneaker bots, and he started to sell them online through large sneaker forums.

The sneaker bots were selling like crazy, and Cameron made so much that he bought a Tesla Model S at just 16 years old! Once they went to college, one of their friends showed them a website that was a marketplace for people to sell their software online. But the website was straight garbage, so Steven and Cameron decided to make a similar website that was better.

They added new features and responsiveness to the software, and that website became Whop.com. After 3 months, the website had no traction which worried them. However, an early investor saw their potential and put them in touch with the CEO of Tinder. After that, they continued networking and raising capital, and in their first round, they raised $17 million in funding from investors!

Bro these guys are business geniuses.

Even my boy Jimmy Neutron would be jealous!

I want you guys to recognize one thing…

There is a pattern with every business they have started.

The pattern is that they create tools to help people get the products they want.

But they never sell the products themselves.

1. They sold shovels in a gold rush.

Everyone says that you gotta take risks in business.

And that is true.

Well, kinda.

I mean it’s true that you gotta risk it for the biscuit.

Unless it’s a Popeye’s biscuit.

But people think you need to take MASSIVE risk to start a company.

That’s just not true.

There are plenty of ways to start a business with almost ZERO risk.

And one of the best ways is to use the “Gold Rush” method.

This is where instead of selling a product, you sell people the opportunity to get that product.

It’s a perfect method because you will make money regardless if the market is up or down.

My boys Steven and Cameron found their “Gold Rush” in the sneaker market.

And they “ran” with it.

Get it? Because you run with sneakers on?

OK, moving on…

Steven and Cameron were 21 when they started Whop.com.

But before that, they were huge sneaker-heads.

They would obsess over the newest Jordan, and collect each pair.

This was fun and nice, but there was one problem.

Getting the right sneaker is hard AF.

Because of this, people create software called “sneaker bots” to go buy a pair of sneakers online faster than any human could.

So Steven went online to learn how to cheat the sneaker game.

Once they built a sneaker bot, they decided to sell it on an online sneaker forum for others to use.

And it blew up overnight.

They were selling hundreds of them at around $500 a pop!

This is when they were still in high school too!

But Steven and Cameron noticed one thing about the buyers of the sneaker bots.

It was that every single one of them wanted a Discord server.

That is where the idea to start selling software clicked for them.

Fast forward a couple of years, and Steven and Cameron are in college.

A mutual friend showed them a forum that allowed people to sell software online.

It was similar to how they sold their sneaker bots.

And the best part is that the website was straight GARBAGE.

So Steven and Cameron knew they could make a better product, and Whop.com was born.

The three keys to Steven and Cameron’s business being successful were:

1. They created a platform for other people to sell products, which is a lot less risky than selling the products themselves.

2. They had specific expertise in building and selling software, so they knew exactly what their customers wanted.

3. They created a company that already had a market, which guaranteed they would get customers.

PRODUCT DEVELOPMENT
Takeaway and Tips:

When choosing a product to sell, make sure to narrow down as much as possible. Focusing on a very small target audience, in the beginning, makes selling a product so much easier because it makes finding a customer and identifying their problems so much easier. Steven and Cameron focused only on selling sneaker bots to sneakerheads. Then, people asked them for Discord servers, so they began to sell those as well. This then snowballed into creating Whop which helps people sell their own software.

Build a product that is already validated. When they started to build the first version of Whop, Steven, and Cameron already saw a marketplace that existed. They made sure that their product was better than the competition, and then they pushed the product out into the marketplace.

Make sure to build a platform where people can conduct business. This is the best way to make the most amount of money with the least amount of risk. Look at Uber, they don’t own any cars. Airbnb doesn’t own any houses. YouTube doesn’t own any videos. However, they make billions giving people the opportunity to conduct business through their platform.

2. The power of an idea.

After 3 months of coding and building, Steven and Cameron launched Whop.

And it kinda flopped…

It was looking like Bron in the finals!

They would post about it on forums, but it didn’t gain much traction.

They also promoted Whop by selling these sneaker bots to their initial customers.

Then, they would ask those buyers if they wanted to use Whop to sell their own products.

That gave them a little more traction…

But the one thing that helped them blow up was Twitter.

Even though Elon ruined it, Twitter is still a great marketing channel.

Elon is smoking on the ashes of Twitter

Since they were getting some clout, they were discovered by Cory Levy.

Cory is an investor in VERY small startups, and when he saw Whop he fell in love.

He loved their product so much that before they spoke to investors he said:

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Don’t sell this. Don’t be stupid.

He then put them in touch with the CEO of Tinder.

They kept networking and began to raise money for their project.

After a round of networking, they raised over $17 million in funding!!

Good lord Mr. Krabs would be proud!

The main reason they were discovered is because they used a method called “working with the garage door open.”

This is when you document the work you do on your business for other people to see.

This method was genius for his brand because:

1. It gave them credibility because it showed that they were currently working on their brand.

2. It would cause interest, which would bring potential customers back to the brand.

3. They could get immediate feedback from customers on how to improve their product.

MARKETING
Takeaway and Tips:

Some of the best marketing is to ask recent customers to try your new product. Asking their old sneaker bot users to sell on their marketplace, was perfect because they already established trust with that audience.

Make sure to document your journey of creating your product. This creates trust with your customer and it will ultimately entice them to buy. You can document by posting on various social media platforms like Twitter, YouTube, and Instagram.

🎮You just leveled up your mindset today!

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Thank you for reading like always!

- Zach