Sometimes the messages in my posts can be a little obtuse; and why not? Whoever said that making $7 million in 7 years was going to be straightforward?!
For instance, my recent post about partnerships seemed to be about deciding whether one partner can double the value of your business … if two can triple the value … three quadruple … and so on … because that is the true ‘cost’ of partners.
But, if you go back and read that post carefully you will see that the equation varies remarkably according to who holds The Big Idea: you or your prospective partner?
So, the real point is this; if you want to make your Number – and, if it is one that requires a compound growth rate of 50+% – listen up to what Money Blog has to say:
I appreciate the insight but most people will never have a workable $10M business in 10 years.
Seriously, Money Blog is right: you are simply wasting your time trying to reach an [insert Very Large Number] by [insert Very Soon Date] by way of a business …
… at least, if you are without the key ingredient: The Big Idea!
You see, you need to be paid off – big time – but people only pay for value.
So, you have to find a way to deliver that value in a way that others – and, believe me, there are plenty of ‘big guys’ out there just waiting to rain on your parade – can’t themselves deliver; because they [the Big Guys] can throw:
1. Money trying to buy a market
2. Resources to try and bludgeon their chosen market into submission
3. And, they have time to wait the market out
But, the one thing that they can’t offer is creativity, because creativity doesn’t come out of a committee or a corporate training manual.
So, the only way for you to take a business to the levels required to generate that kind of ‘new money’ wealth is by applying big spoonfuls of creativity … hence, The Big Idea.
It can be an idea that:
1. Opens up a totally new market – the highest risk / highest return option: for every YouTube there are thousands of wannabes that come and go. Also, opening up new markets is something that usually does require time/money/resources because your market may be slow to catch on to your revolutionary way of doing whatever it is that you want to do.
One of my businesses created a new market for a service that was previously handled either in house by the large corporates or outsourced to other equally large corporates AJC: none of whom appreciated an ‘upstart’ like me trying to elbow his way into their turf]; being the first on the market with my new way of doing things, I had to spend a long time educating my potential clients before they would ‘hop on board’ … of course, once they did, I had little real competition – at least for a couple of years. But, it’s a looooonnnnggggg road …
2. Improves a product or process in an existing market – to me, the lowest risk / highest return option: You simply take something that works and apply a little ‘magic sauce’ to make it better/faster/cheaper. The Japanese are famous (at least in modern folklore) for taking existing ideas and improving them; and, entrepreneurs have a rich field of existing ideas that they can take and improve upon.
My business really plodded along until I finally realized that I could automate a large part of my call center-based processes; this was late 1999 and I discovered the Internet! For a relatively low cost, I hired a couple of programmers (c’mon $200k a year is cheap compared to how much it would cost a large Corporation to change the way that they do anything!) and created the ‘new process’ that eventually saw my profitability sky-rocket, and my client-base along with it.
3. Provides a way to expand quickly into new markets or territories – not a bad way to go, either, but can require the most capital: simply take an existing idea and find a way to expand geographically (I am not talking about expanding into new product lines … that’s something that the ‘big guys’ specialize in). An example might be the hairdresser who decides to franchise their unique way of doing business. But, it costs a ton of money to make your business ‘franchise ready’ then for marketing to find potential franchisees.
I used my IT-based ‘competitive advantage’ to take my business from Australia, first New Zealand (a smaller market, to test that I could ‘roll out’ the concept elsewhere) and then to the USA; I used a Joint Venture model – I guess it’s like a partnership, [AJC: I broke my own rule here 😉 ] to give me relatively easy access to these new territories … it was a situation where the value of the partner was way more than 50%: their existing infrastructure and client base to ‘incubate’ my new business provided the far lowest cost (and, quickest) way for me to expand into global markets. My plan was to continue growing internationally through the JV model had my business not been bought out …
… and, this is where the Deep Pocketed Big Corporate steps in: to buy your creativity … but, only once your hard work has proved its worth.
So, I applied The Big Idea in many different ways to help grow my businesses shoot me way past My Number.
Oh, and Money Blog, you still may be right; even with The Big Idea very few startups reach the $10 million 10 year sales price mark … but, a GREAT business generates plenty of cash along the way … cash that you should INVEST instead of spend …
… that’s how I made $7 million in 7 years!
Oh, and selling my businesses scooted me way past my Number … whoo hoo! I love it when that happens 🙂
This just shows that you don’t need a “big idea”, at least the way that most people think of them. Not only have you had tens or hundreds of big ideas already, but thousands or millions of other people have had those same ideas. If people started talking about the Big Execution they’d be a lot closer 🙂
@siliconpairie: The way I see it has to be executed in small modules and then replicated. To implement ‘The Big idea’ as AJC puts it see his “How do you eat an elephant?” post…one bite at a time…
@AJC: Thanks for the mention
@ Silicon – Indeed you are right; as somebody famously put it, we each have a $1 mill. idea every day … we just need to pull the trigger. My point is that the corporates don’t (generally) nurture and environment where those ideas even hit the ‘suggestion box’ and if they do, are rarely acted on, either …
@ Money Blog – It was a great comment (short and straight to the point!) … thanks for the inspiration for this post!
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