If you want to start a billion-dollar company, there are three things you should know:
The odds aren’t good
At the moment, there were only 39 companies in the United States that are worth over $1 billion that started within the last 10 years. But, about 50,000 new companies get funded every year, so the odds of becoming the next billion-dollar company are slimmer than slim.
You’re going to need money
Cash flow will be a problem from day one, so you will be spending a substantial amount of time on fundraising efforts. The more time you spend trying to raise money, the less time you’re going to have for your company. Time is our biggest virtue. Know that going in.
Forget “Normal Life”
If you get lucky – if someone decides to invest in you – life as you know it is over. The only thing that matters from that day forth is the company.
You will work harder than you ever imagined and your entire focus will be on the company. People will try to have normal conversations with you, but all you will want to talk about is the company. As for sleep, forget it. Even your dreams will be about the company, and, trust me, not all of them are going to be pleasant. Finding healthy balance in your life will be challenging, if not impossible.
I started my first company at 16; eighteen months later, I sold it for $40 million. Not long after, I launched BlueLithium, put my experience to work, and sold it three and half years later for $300 million.
Over the past four years I’ve been building RadiumOne, and I’ve put everything I learned from those first two ventures into it. The result, in terms of revenue, geography, profitability and product, is that RadiumOne is already more successful than the other two ventures -- combined. The goal is to make RadiumOne my first billion-dollar company soon.
It didn’t happen overnight, and I didn’t expect it to. And while I’m not there quite yet, I’ve learned a few things along the way the way:
The more fearless you are, the more creative you will be with your solutions, and successful businesses are really all about finding solutions. You’ll also have to keep reinventing yourself to stay ahead of the competition, and that requires its own brand of courage. You need that to the point of madness, because until you prove yourself, the only people who believe in you are your family members (if you’re lucky). If you have any doubts, get out now.
Do I know what exactly I’m trying to do?
Get traction. Generate revenue. Keep recreating that formula. Don't get lost in hype.
Before you start, make sure you are crystal clear on your mission. The goal has to be so clear that it would make perfect sense if you explained it to a child. And even if it’s a great idea, have you done your homework? What exactly are you trying to create? Why is your company different from every other company? Even if the company is doing something similar, are you solving a different problem? In a fresher way?
If you want to succeed, make sure you ask yourself the right questions, even the ones that might frighten you. In a phrase, know what you don’t know.
Do I truly love what I’m doing?
If the answer to this question is no, don’t bother. You’re not going to succeed if you don’t love what you’re doing, and you better love it with all your heart. Absolute conviction is an absolute prerequisite. The voyage will be hard under the best of circumstances, but if you don’t believe in this with all your heart, it will be impossible. Passion has a way of solving some of the toughest problems, but without it you’ve already lost. That’s the difference between a company being good versus being great.
Am I in it for the money?
If you are, you’re not going to make it. You are going to get kicked to the curb relentlessly, and the promise of untold riches is fleeting. It will not be enough to fuel the forward journey.
To compound matters, if you’re lucky enough to get financed, you will be forced to dilute your ownership position in the company. First, you give away half of it. Then you need more money and you give away another 10 percent. Before you know it, you own only a piece of the pie. It’s your baby, but in order to keep it going, you keep diluting. My advice? Don’t do it for the money. Greed is not a real lottery ticket worth betting on.
Can I handle the highs and lows?
How badly do you want success? As a famous saying goes, “When you want to succeed, as bad as you want to breathe, then you will be successful.” Can you stomach these highs and lows? I hope so, because there are going to be plenty of both -- mostly lows -- and you’re going to need a lot of strength to weather them.
Every day, you are going to face decisions, large and small, that are going to determine your entire future. One day you feel you’re the king, the next day your wondering how your going to make payroll.
Have I thought about my team?
There’s an old saying: “Good people only want to work with good people, and great people only want to work with great people.” Well, good people don’t build billion-dollar companies, great people do.
Hire the smartest people you can find. Smart people make beautiful music together. Lots of smart people, working in unison, can have the power and beauty of a Beethoven symphony.
And if it turns out you were wrong, get rid of them fast. Whether it’s a product or a person, be ready to fail fast. A bad hire can be cancerous to a company. Trust me, I’ve seen it happen. Success or failure is all about the team you put together, so hire the right team and make sure passion runs through everyone’s veins.
This applies also to your board. The board is not your friend. It is there because the people share your vision and are willing to put you back on track if and when you veer off course. Even the best-intentioned board can destroy a company if it doesn’t share and understand your goals.
Do I know how to listen?
This is critical. You may think you have all the answers, but I assure you, you don’t. No one does. As CEO, you need to learn to listen, and you must listen especially closely to the people you disagree with. Nobody is telling you to take bad advice, but even bad advice can help you formulate your final decisions. The idea may not be great, but a different point of view can make for greater clarity.
Clarity opens new doors. If you’re on a certain track, and someone says something that opens another door for you, and it turns out to be the right door, don’t be afraid to step through it. A good listener always listens for new and exciting possibilities. A brave listener acts on them.
Am I playing to win?
If you’re playing for second place, you’re not playing to win – and you almost assuredly will not win. You can’t play it safe. You have to swing for the fences with everything you’ve got, or you don’t belong in the game.
And it’s a long game. If you think you’re going to succeed in a year or two, you are not only deluding yourself, you are going be making short-term, short-sighted decisions. Don’t read the headlines for success. Be your own headline.
Don’t take your eyes off the prize. Don’t become distracted. Don’t be deterred by failure – there most certainly will be failures – and don’t be seduced by success. Success is often short-lived.
And never, ever think about getting your ass kicked. That’s a recipe for defeat.
And here’s the good news: If you don’t succeed, which happens to everyone who takes risks, at least you failed at something you loved. And you’ve learned something that should come in handy the next time around. After all, as I’ve said in the past, the big secret of life, and of success, is simple: You fall down, you get up.
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