The $150M secret: Turning $1000 into a $150,000,000 company in 3.5 years

“Stop looking for ideas - start looking for problems to solve”

A common misconception about entrepreneurship is that one needs a ‘perfect idea’ first to get started. This belief can get people stuck because there’s no process to actually finding that perfect idea. 

The truth is that successful businesses are based on solutions, not ideas. The ‘perfect idea’ is nothing more than a solution to a problem people face. Think of companies like Uber and Netflix, for example. Both these companies were created to solve problems: Uber made it easier for people to order taxis, while Netflix, on the other hand, made it easier for people to watch series and movies. 

The best way to find the right idea is to look at your own life and see what struggles you commonly face. It’s also useful to be attentive to problems faced by others. Once you start finding problems, coming up with solutions comes next. 

After identifying a solution to the problem, the next step is to figure out whether it’s in a crowded or empty market. If other companies already provide products that solve your problem, your solution is in a crowded market. Meanwhile, if it’s the opposite, or you’d be the first solution for a specific problem, it belongs in the empty market. 

Being in a crowded market indicates your idea has already been validated, meaning others are struggling with the specific problem you spotted and are paying to solve it. In this case, you must ensure you have a competitive advantage over your competitors who are solving similar problems as you. You can do this by niching down your target audience and designing a solution that is specific to them. For example, if your idea is creating an email marketing tool (of which there are plenty already), you can build one specifically for people selling courses. 

If your idea is in an empty market, you can validate it using social networks like Quora or Reddit by asking people if they face the same problem. You can also pretend that you already built the tool and ask if people would be interested in trying the beta version.

Once your idea is validated, you’ll have to decide whether to seek funding from investors. This comes with a cost: pressure from investors because of high expectations and lack of flexibility. Moreover, funding doesn’t guarantee success, as statistics show that 75% of funded startups fail. 

If you want to run a more flexible business on your own terms without pressure from investors, it’s best to start with your own capital. Numerous businesses have grown to millions in revenue without funding.

“Start before you’re ready.”

Many aspiring entrepreneurs are afraid to start their businesses after finding and validating their ideas. They spend too much time “getting ready” to start their business and let their self-doubts hinder their progress. 

The truth behind starting a business is that you’ll never actually feel fully ready to do it, and taking the first step is the hardest part.  What comes next is easier because once you’re in the process, you’ll be learning lessons and growing. You’ll also build momentum, allowing you to turn your passion and ambition into energy. 

If you’re worried about a lack of entrepreneurial skills, starting a service-based business through freelancing or an agency is a great way to gain self-confidence. This will make you realize how capable you are of making money on your own. You’ll also learn and enhance your entrepreneurial skills, such as dealing with clients, solving business problems, and team management. 

Once you've decided to start building and running your business, it’s time to figure out whether you’ll do it alone or with a co-founder. If you want a co-founder, it’s important to look for someone with the right skills and a mindset aligned with yours. 

A great approach to finding the right co-founder is to spend time meeting people and genuinely helping them. This will allow you to form relationships with people who may be the right match. It’s also beneficial to assess the skills of your potential co-founder by asking about their past projects and evaluating how they work. 

Finally, if you want to run your business without funding successfully, there are certain rules you must follow. 

First, you should start charging for your product as soon as possible, even if you feel like your product still requires additional features. Doing so will make you realize that once you start your business, you’ll learn and grow along the way. Your mind will come up with solutions, and over time you’ll get better at what you do. 

The second step is to increase your salary often (rather than re-investing all your profits in the company) as this will boost your ambition. Lastly, you should focus on profitability rather than growth. Don’t invest more money than you can afford in your business; focus on achieving and maintaining profitability instead. This is the key to success.

“Building a business is like getting the keys to a motorcycle that is lying down on the ground. To get started, first, you need to pull it up from the ground, and that’s what requires the heavy lifting.”

When building and launching the first version of your product, known as the minimum viable product (MVP), several rules should be followed, depending on whether you’re in an empty or crowded market. 

MVPs in empty markets can be simple to build. Here, your customers are already ‘starving ‘ for a solution, and they’re just likely to accept your product as long as it solves their problem, regardless of its extra features and interface. 

However, if your product is in a crowded market, you should be more careful not to launch too early. Your target audience here has certain expectations as they have competitors to compare your product to.

When launching a product that belongs in an empty market, it’s best to create first a private beta version that is accessible through invite only. You can start by advertising your product to your network and then making it more accessible to the public through an invitation by early adopters. This makes your product seem exclusive, making other people want to try it too. However, if this is not possible for your business, the alternative is to launch your product directly to the public. 

As for crowded markets, the process is the same, but your private beta should be accessible through an application form. This allows you to manually onboard users and shares your mission with them. To acquire customer feedback, you can create a Slack community and invite users to join. Then use their feedback to improve your product. 

If you want to boost your income, one step you could take is to offer lifetime deals, in which you’ll sell your software for a one-time fee. You can do this through AppSumo, a platform that offers software at discounted prices to its audience of entrepreneurs. Offering a lifetime deal will help you have your software promoted to hundreds of thousands of people, allowing you to generate cash very quickly and gather feedback. 

However, you’ll need to offer customer support to these users for life. It will also be hard to up-sell these users to a monthly plan, and their feedback is arguably not very useful since they’ve paid a one-time fee, and the audience you’ll be targeting might be different in the future. So before you decide, consider the pros and cons of offering a lifetime deal first, and then assess whether it’s something you would like to do from there.

“If you want to be part of the 1%, you need to be ready to do the things that 99% of people won’t do.”

At this stage, your idea is probably validated, and you already have proof that people are willing to pay for your product. Now it’s time to grow your audience by creating valuable content and sharing it on various channels. 

The most important channel to focus on is Facebook, where you need to create a group and invite users of your product to join. To maximize your social and online presence, you can also use other channels such as Linkedin, your own website (where you can write blog posts), and paid advertisements. 

The golden rule when creating content is to make them valuable to your users and aligned with the purpose of your product. For example, if your product aims to help businesses generate leads, your content could be something like “How to turn leads into customers” and “How to ensure customer loyalty.”

In addition, you can also share company milestones, mistakes, and setbacks since transparency allow you to build an emotional connection with your audience. Once your content is created, make sure to distribute it on as many channels as possible. It’s also important to repurpose content by changing its format based on the platform. For example, turning a blog post into a LinkedIn post. 

During the growth stage, it’s also crucial to be user-centric. Understanding your users allows you to gain insights necessary for improving your product, and genuinely caring for them allows you to build a family-like community.

Some user-centric approaches include sending surveys, engaging with users on your Facebook group, encouraging users to share their experiences with your product, and always asking their opinion before making changes to your product. It’s also important to experiment with your product to find areas for improvement. 

When hiring new employees, keep in mind that mindset is as important as track record. People with a grind mindset and eagerness to learn tend to perform at their full potential and are better problem-solvers, so make sure always to find these qualities in potential candidates. 

At some point in your growth stage, you may feel compelled to seek enterprise deals and affiliate programs. Enterprise deals involve offering your product to big companies like Uber. While they may seem appealing, beware that they require a lot of paperwork. You’ll also need to abide by legal requirements that may require changes in your product. 

Affiliate programs, like enterprise deals, are also appealing. Here, someone brings you a new client, and you pay them a commission. However, some affiliates have strategies to “cheat the system.” So it's important to be careful in your selection process and remain attentive to their actions if you choose to develop an affiliate program. 

In terms of pricing, remember that raising your product’s price is okay as long as it’s justified by the value you provide. Unfortunately, too many entrepreneurs fear increasing their products’ prices because they think their customers will disapprove of them. However, this is unlikely to happen if the additional features or benefits that come with raising your product’s price are useful to them.

“Your team will be the most important success factor of your company as you grow.”

When scaling your business, the two most crucial things you need to focus on are scaling your audience and, most importantly, your team. 

One important step when scaling your audience is maximizing the content you produce. You can do this by asking your team members to create and share content that they’re knowledgeable about. You can also perform interviews with industry leaders as part of a podcast or webinar and get media coverage on podcasts, press, and TV. This strategy will boost your brand’s reputation through association. When people see your brand engaged with industry experts and getting featured on various media, they will perceive you as an industry leader. 

To scale your team, you’ll need to create a structured, predictable hiring process that attracts and retains top talent. This process should involve taking recommendations from current team members and hiring based on both mindset and skills. 

Moreover, if you want to make your company appealing to top talent, you should find ways to express the benefits of being an employee at your company. When hiring and firing employees, you should also follow the "hire fast, fire fast” approach. After all, you can only tell if a candidate is a good fit for the job once they start working for the company, and it makes no sense to keep them if they aren't.

If you choose to delegate some of your tasks, it’s best to follow the “70/10/80 rule” of delegation, which states that you should find someone that can do your task at a 70% success rate and teach them the remaining 10%, leaving you with an 80% success rate. 

Your team can only function as well as you manage it, and that’s where the importance of your management style comes in. There’s no silver bullet in management, but one approach is and will always be beneficial: make sure that your employees feel comfortable giving you honest feedback and suggestions. 

While scaling your company, it is crucial to have processes for aspects like recruitment, knowledge sharing, and workflow. Processes are reliable and predictable, allowing your company to perform tasks more efficiently. When choosing a tool to document your processes, consider trying Notion, a project management software designed for these functions. 

Aside from these, it’s also important to adopt a transparent attitude since it offers benefits at various levels. Being transparent with your team helps you build a strong company culture, while transparency with your customers leads them to trust you. Being transparent with the outside world by sharing your progress and future goals allows you to reflect and remain accountable.

“The bigger your company gets, the higher the valuation is and the more pressure you have as a founder.”

Once you reach a point where your company is already generating significant revenue, you’ll be able to sell it. This may sound counterintuitive since your company is growing rapidly, and you may think it makes more sense to keep it. 

True enough, maintaining the ownership of your company has many benefits. From a financial level, you’ll be able to reap the monetary benefits of the compound effect, which means that your profitability will improve at a faster rate year after year. On a personal level, running a profitable business is fun, especially if you’re passionate about what you do. However, selling your company has many advantages too. 

When you sell your company, you’ll have a large amount of money and an opportunity to start a new business. Most importantly, you’ll remove risk and pressure off your shoulders since every decision you make while managing a company significantly impacts thousands of customers. 

If you decide to sell your company, it is important to plan for what you’ll do after the sale to avoid experiencing the “post-sale depression” many entrepreneurs face after selling their company. 

Determining the valuation of your company can be a complicated process since it involves assessing numerous metrics and can be impacted by various factors.  For those reasons, the most efficient option to determine the valuation of your company is to work with a SaaS M&A advisor. The role of these advisors is to determine the valuation of your business and introduce your company to potential buyers. What makes this option even more attractive is that you don’t have to pay upfront fees - the broker only charges a percentage of the total sale. 

When meeting with potential buyers, it’s important to thoroughly understand their future plans with your company to see if you’re aligned with their vision. Once you have an offer, it’s also crucial to be attentive to the terms of the exit deal. 

The exit deal typically involves a mix of an upfront payment and the “earn-out,” which refers to a period where you’ll still be involved in the project and receive gradual payments based on various aspects, such as certain milestones to reach. Earn-out periods can be tough since you may feel like an employee at your own company, so try to negotiate in a way that makes it as short as possible. 

The final stage of selling your company involves the buyer performing due diligence on a technical and business level to check if everything is in order. Once this is done, you’ll sign the official contract, and your company will be sold.