How a guy sold his company for $1 Billion Dollars

[Tony I]

came across this article on my newsfeed. Awesome Fastlane wisdom. Not one of those generic "retire a millionaire!" yahoo articles.

start with identifying a NEED:

"David Friedberg was driving home from his job at Google, stuck in traffic in the pouring rain. On the side of the road, he noticed a bike rental shop for tourists, shuttered early due to the weather. The next day, he saw the same thing, and the next — for a week. “It got to the point where I’m sure the guy who owned the place wasn’t even showing up — no one wants to ride bikes in the rain. And I thought to myself, that’s a pretty crappy business.”


Never Say ‘I Want to Do a Startup’

For Friedberg, anything worth doing has to start with a deserving problem. The desire to build companies isn’t enough to get you through the process.


“Saying you’re going to do a startup or you want to be a ‘serial entrepreneur’ has about as much meaning as saying ‘I’m going to jump off a plane."

And lastly, this comment. I would love to get the forum's opinion on this:

“There’s a 0.00006% chance of building a company that will grow to be worth more than a billion dollars. Even if you do raise money and sell a company or take it public, your median time to doing that is probably 49 months.

if your motivation for doing a startup is financial reward, you’re better off going to Google, a hedge fund, choosing a career with stable income potential.”


Read the full article here.

firstround.com/article/Theres-a-00006-Chance-of-Building-a-Billion-Dollar-Company-How-This-Man-Did-It#.UwMviLL1R8o.twitter

 

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[healthstatus]

It would be interesting to see the stats on growing it to 8 or 9 figures. The other thing to keep in mind is there IS a chance, and there are at least 16,667 businesses out there that suck, so mine could be the next one. (for the math challenged, .0006% is 1 in 16,667)

 

[NickT41]

(for the math challenged, .0006% is 1 in 16,667)

Try 1.67M! .00006% = .0000006

 

[healthstatus]

Try 1.67M! .00006% = .0000006

crap, I just joined the math challenged

 

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[Kak]

You just have to play on the right sized field. Obviously a consumer products business in a niche market has zero hope of becoming a billion dollar company, however it could be your quickest path to freeing yourself financially and allowing you to play on those fields.

 

[LibertyForMe]

You just have to play on the right sized field. Obviously a consumer products business in a niche market has zero hope of becoming a billion dollar company, however it could be your quickest path to freeing yourself financially and allowing you to play on those fields.

A really wealthy guy I once spoke to put it this way: "You gotta have a lot of runway."

He owns a company that has billions in assets, but it is still only like half a percent of the market. He still has massive room for growth because the runway/market is so big.

 

[Tony I]

would be interesting to see the stats on growing it to 8 or 9 figures. The other thing to keep in mind is there IS a chance, and there are at least 16,667 businesses out there that suck, so mine could be the next one. (for the math challenged, .0006% is 1 in 16,667)

i think the odds really don't matter as long as you don't quit. Eventually, if you learn from mistakes and keep on going, you will build a successful company. Like mark cuban says, "you only have to be right once."

 

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[Enki]

They did so much testing. They knew that they had a product that made economic sense. It was a no brainer value to clients. The problem was it was a new product from a brand new concept. How do you get someone to buy a service that is brand new and never been done before?

This

“Cold calling is something that’s pretty critical, and something you can’t be afraid to do if you’re dealing with customers. You have to do it to understand what your customers want.”

Friedberg was willing to do things that didn’t scale – but ultimately closed the sale.

Obviously He had magnitude. This story is fast lane all the way.

then

“In 2009, we made the decision to focus the entire business around agriculture,” he says. “I told the team, we’re going to focus on farmers because if we do it the right way, we’ll build a product that they can use over and over again. It was the market with the best opportunity for us to build a scalable business.”

These are the kind of people Google breeds.

 

[liquidglass]

I love this story for multiple reasons. It's fastlane all the way, no doubt. He attacked the issue with a singular goal in mind and it worked, surprise!

I also love it because I'm in a similar situation with an insurance and financial planning company, I can totally relate to fail fast, fail often, mentality to make an idea into a success.

Take notes everyone!

 

[100k]

Good article..... let me sum it up for ya.

Find a need, find out what you know and don't know and remove the "luck", hustle (work hard / barrier to entry) and finally keep innovating.

 

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[fivestarredflag]

That is so true though, if you wanted to make big big money it is best to go to a good school and come out to work at a tech giant or a big bank, but most of us don't have the patience to do that..

 

[spaxton1]

It would be interesting to see the stats on growing it to 8 or 9 figures. The other thing to keep in mind is there IS a chance, and there are at least 16,667 businesses out there that suck, so mine could be the next one. (for the math challenged, .0006% is 1 in 16,667)

Try 1.67M! .00006% = .0000006

For fun, let's compare apples to oranges:

To win the powerball lottery (worth around 50% of 1 billion) Odds are: 1 in 175 million.

To get a business to 1 billion (twice as much as the highest lottery) Odds are: 1 in 1.67 Million.

What if we only looked at business that have been around for at least 1 year...

If we look at odds of getting a business to 1 million dollars; the odds jump dramatically. Probably 1 in 100,000 (big guess??)

If we look at odds of getting a buinsess to 100,000 dollars; the odds are even better. Probably 1 in 100

If we look at odds of getting a business to 10,000 dollars; the odds are what 1 in 10?

Seems like pretty good odds for me. I continue to play the business lottery.

That would be fun to use real numbers for that comparison. My made up numbers probably aren't too far off.

 

[Thoelk]

That is so true though, if you wanted to make big big money it is best to go to a good school and come out to work at a tech giant or a big bank, but most of us don't have the patience to do that..

I think you are missing the point of this article and this forum (or the book where the forum comes from)..
True, these employers give some of the best salaries in the slowlane world... But at what cost? And no, not only financial cost..

OT: Great article!

 

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[NickT41]

Seems like pretty good odds for me. I continue to play the business lottery

'Shoot for the moon. Even if you miss, you'll land among the stars.'