Brilliant Article - 5 Ways to Build A $100Million Business

[aikay77]

Hello Fam,

I was browsing around the interwebs this morning when I stumbled on this gem of an article.

It's from 2014 but EVERGREEN

It's titled: Five Ways to Build a $100 Million Business

Go on and enjoy.

http://christophjanz.blogspot.com/2014/10/five-ways-to-build-100-million-business.html

 

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[juggler619]

interesting!

 

[Weaponize]

I've read this in the past but totally forgot about it! This is really a great article, thanks for sharing!

I'm currently in the hunting mice category, love the overview:

Hunting mice

To acquire one million consumers or prosumers who pay you roughly $100 per year, you need to get at least 10-20 million people to try your application. This is – again – a gross simplification, but I believe it's order-of-magnitude correct. To get to 10-20 million users you almost certainly need some level of virality, too – maybe not Snapchat-like virality, but some social sharing or "powered by"-virality. Great examples of this category include Evernote and MailCheat(Chimp). If you're an eCommerce business you might be able to acquire one million customers using paid marketing, but it requires huge amounts of funding.

What's interesting to me about all of this is it's a very nice benchmark. For example, I'm not looking to build a $100MM business, I'm looking to add enough value to "prosumers" that will build a $10MM business that is within an industry getting a 3+ multiple on net revenue for buyouts. The interesting part is that I can scale this back for the "hunting mice" category and at least get a good understanding of this authors projection in relation to my business.

So if the author is claiming I need 10-20 million users "trying" this (avg. 15 million) then if I'm calculating this correctly for my specific goals I would need to get 1.5 million users (avg.) "trying" my product.

Good stuff!

 

[Ubermensch]

Hello Fam,

I was browsing around the interwebs this morning when I stumbled on this gem of an article.

It's from 2014 but EVERGREEN

It's titled: Five Ways to Build a $100 Million Business

Go on and enjoy.

http://christophjanz.blogspot.com/2014/10/five-ways-to-build-100-million-business.html

Great find.

Excerpt below:

• 1,000 enterprise customers paying you $100k+ per year each; or
• 10,000 medium-sized companies paying you $10k+ per year each; or
• 100,000 small businesses paying you $1k+ per year each; or
• 1 million consumers or "prosumers" paying you $100+ per year each (or, in the case of eCommerce businesses, 1M customers generating $100+ in contribution margin** per year each);

Salespeople sometimes refer to "elephants", "deers" and "rabbits" when they talk about the first three categories of customers. To extend the metaphor to the 4th and 5th type of customer, let's call them "mice" and "flies". So how can you hunt 1,000 elephants, 10,000 deers, 100,000 rabbits, 1,000,000 mice or 10,000,000 flies? Let's take a look at it in reverse order.

I think you're in the kill zone when you have three to five of those categories in your sights.

Interestingly, this guy posted three more ways to create a $100M company: (<<-- link)

A reader by the name of "Vonsydow" commented that another way to get to $100 million is by having 100 customers, each paying you $1 million per year, and mentioned Veeva as an example. True! Veeva's ACV is around $780,000. That's almost an order of magnitude higher than the $100,000 ACV of the "elephants" category, so it's a different kind of animal. I'd suggest that we call Veeva's customers Brontosaurus (or Apatosaurus, which seems to be the correct name) but I'm open to other suggestions by people who know more about biology (or paleontology) than me.

Salespeople can think on this scale as well.

A $100M revenue company is probably a $5M - $20M company, in terms of net profit.

A salesperson that wants to make $5,000,000 in a year only hast to land five seven-figure accounts.

Or, fifty clients that make him $100,000.

Or, five hundred that make him $10,000.

 

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[Aaron W]

Thanks for the share, was a good read.

 

[Motivationcity]

Great job! Thank you for posting this, gave me a lot of insight...

 

[nradam123]

I even made a picture for this recently lol

Here is the summary -
1) Hunting Microbes – If you profit $1 per year per client and you have 100 million clients, you have a $100 million business. Example – Whatsapp (If they plan to monetize this way)

2) Hunting Flies – If you profit $10 per year per client and you have 10 million clients, you have a $100 million business. Example – Yelp.

3) Hunting Mice – If you profit $100 per year per client and you have 1 million clients, you have a $100 million business. Example – Evernote and MailCheat(Chimp).

4) Hunting Rabbits – If you profit $1,000 per year per client and you have 100,000 clients, you have a $100 million business. Example – Most SaaS companies.

5) Hunting Deers – If you profit $10,000 per year per client and you have 10,000 clients, you have a $100 million business. Example – Some SaaS companies.

6) Hunting Elephants – If you profit $100,000 per year per client and you have 1,000 million clients, you have a $100 million business. Example – Biggest SaaS companies that have enterprise clients such as Workday, Salesforce.

7) Hunting Brontosaurus – If you profit $1 million per year per client and you have 100 clients, you have a $100 million business. Example – Veeva

8) Hunting Whales – If you profit $10 million per year per client and you have 10 clients, you have a $100 million business. Example – Palantir (Peter Thiel’s company). Another example could be celebrities signing million dollar contracts.

 

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