“In the 10X Rule I discuss using the multiplier of 10 for everything you want to create in life. This article by Christopher Janz is a must read.” – GC
Five ways to build a $100 million business by Christoph Janz
Some time ago my friend (and co-investor in Clio, Jobber and Unbounce) Boris Wertz wrote a great blog post about “the only 2 ways to build a $100 million business”. I’d like to expand on the topic and suggest that there are five ways to build a $100 million Internet company. This doesn’t mean that I disagree with Boris’ article. I think our views are pretty similar, and for the most part “my” five ways are just a slightly different and more granular look at Boris’ two ways.
The way I look at it can be nicely illustrated in this way:
The y-axis shows the average revenue per account (ARPA) per year. In the x-axis you can see how many customers you need, for a given ARPA, to get to $100 million in annual revenues. Both axes use a logarithmic scale.
To build a Web company with $100 million in annual revenues*, you essentially need:
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); or
10 million active consumers who you monetize at $10+ per year each by selling ads
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.
Full article at: http://christophjanz.blogspot.co.uk/2014/10/five-ways-to-build-100-million-business.html
