Three Ways To Make $1 Billion

by nils  - June 5, 2013

There are essentially three ways to create a $1b product or business:

  1. The Apple way – Invest a huge amount of money to create an amazing product that innovates in a number of different ways and redefines a market, as Apple did – at least $150 million to develop the first iPhone, (maybe more). Note: This doesn’t always work – Nokia did this with feature phones and the first smart phones, but failed with their second smart phone.
  2. Provide a solution that’s technically superior and solves a problem people don’t know they have, and then grow fast enough that network effects start driving customers to you. Then figure out how to make money. This is the Google and Facebook way.
  3. The normal way – grow a $4-5m product that solves an important market need to a $10m product, then to a $20m product, then to a $50m product, by doubling your revenue ever year (which is fast growth!). Then add to your product line and continue to grow to get to $100m, then grow those and acquire competitors or partners to grow to $250m, continuing to grow your other products. Keep growing 20% per quarter, and pretty soon you’re at a run rate of $1b.

While we all want to be “the next Google,” most companies that get to $1b in revenue do so not in a rocketship, but by consistent, long-term blocking and tackling. And not with a single product, but with multiple products, that grow quickly but not astoundingly, that start with $10m in revenue, then $20m, and so on, managing their growth well. To keep growing they add new products to their portfolio organically, and via acquisition.


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Your host and author, Nils Davis, is a long-time product manager, consultant, trainer, and coach. He is the author of The Secret Product Manager Handbook, many blog posts, a series of video trainings on product management, and the occasional grilled pizza.

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