I saw a post the other day from a mostly nutty high school friend (Hey Jeff!) that postulated “I don’t think there are any innocent billionaires”. That bothered me. Not because I am a billionaire, or because I was offended on behalf of billionaires, but because I have built a business worth a million without killing anybody. I think a billion is the same thing, just a matter if scale.
How? This is not really that mysterious. You should probably read Tony Robins or Gary V but since you are here, this is how we did it. Start with the premise that there are buyers in your industry at five times gross revenue. That means, to get to a billion valuation, you need $200 million a year. Assume your product or service is $50/mo, that’s 4 million subscribers. To get to 4 million, you have to spend $$ to create market share or pull it away from a competitor. For us, it was easy because our service worked better, and the competition was $250/mo. So, to get to a billion, you can start with 100,000 subscribers, and with compounding, low churn and growing adoption reach 4 million in 2 years.
That’s zero to a billion in two years without hurting anyone, except for the people that were charging $250. But that’s creative destruction. To move on, it is sometimes necessary to tear things apart in order to grow beyond legacy constraints.
