Last week, I met with a good entrepreneur friend who asked me this question: If I would start a company today that I scale from 0 to $100MM what would it be?
This question made me think: what does it take to build a $100MM company? Apart from a structured approach to marketing that I have highlighted previously in this article. Eventually 3 things came to my mind: Passion, Perseverance and Vision. And all of these 3 are somehow interconnected but still independently important.
If you had a chance to read through some of the From Entrepreneurs For Entrepreneurs interviews you will see one common theme: everyone was passionate about building his/her business. Without passion: why would you sacrifice so much? The sleepless nights, the underlying pressure, the hundreds of No’s or as Patrick said it so well: The highest highs and the lowest lows. I recently finished the biography of the Nike founder (Shoe Dog) and the biography of Richard Branson (Losing my Virginity) they all had one thing in common: they did not start with the thinking “what would be the $100MM company”. They all started their business out of passion.
Perseverance is interlinked with passion and vision. Essentially, every (successful) entrepreneur that you are deeply talking to will have one of the following stories: running out of cash, nearly (or several times) bankrupt, losing (or firing) of a friend/co-founder, countless of big slaps. The one thing they all have in common: they continued what they were doing. Yes, they all adjusted but no one gave up. Something that I realise when I speak to professionals is that they often talk about “opportunity cost” – for me this is an alarm bell. If you think of opportunity cost you will always look for the “better” option which is a safe & comfortable job. No harm, you can take this option but as entrepreneur you have to go through hell (sometimes). Or as Winston Churchill said it: “if you walk through hell, keep walking.”
I often quote the number 1 success factor of any company is not human, financial or social capital. It is time. 90% of companies fail within the first 3 years. So if you make it post the 3 years mark you are part of the TOP 10%. So I always joke about that “we have to make it post-year 3”. This is for me one of the key milestones: if you make it past year 3 you have had the hard lessons learned that hopefully keeps you going (and thus growing).
“If you do something, do it big” this was one of the favourite quote of one of our Professor in Vienna. You can also read it from the biographies of multiple entrepreneurs who highlight that “if you are not scared of your goals than you are not thinking big enough”. Yes, there is a balancing act between vision and reality that most entrepreneurs (incl. myself) have to regularly balance. But having a guiding vision helps to keep track of the bigger picture. The vision can be “the next $100MM company” but for me it is something that no money in the world can give me: Freedom. Independence. Happiness. Yes, money is partly needed to fulfil some of these values (e.g. freedom or independence) but money doesn’t make you happy. Believe it or not there are studies that show that even sport makes you happier than money. So having a vision is your guiding compass to decide whether you will embark on a new venture or not. Vision should not be confused with ideas. A lot of people have ideas but having the vision to do something means you have to make it a reality. Otherwise it will stay as an idea (only).
So the next time I get the question about what will be the next $100M company that I will start, it will come down to 3 things: You have to be passionate about the topic, persistent with your endeavour and have the vision to make it reality.