after this video we'll be right back how to build a hundred million dollar startup in three years now I know that's a huge promise wait with me I'm gonna walk you through exactly why I'm talking about this video and how to do it I mean maybe you just want to build any kind of business and you feel like all the growth options are confusing and how would you do this and how would you fund it now would to me it's like even how do you do it in a way that doesn't turn you into a
stress ball I'm going to unpack that big question and tell you where it came from and and build a sequence for you to just understand you can do it these are the items that need to be true and I think it's really important as a founder to understand the different aspects of a business model to really dissect what would it take to build that level of velocity and volume in your business now I've been fortunate enough to spend a lot of time I lived in San Francisco for five years I've been around entrepreneurs that have
built companies that fast and I understand the economics and the valuations and the structure that's required to get there now for me it came from one of my coaching clients I had a guy that recently sold his company and wanted to get on a call with me because that was the question he emailed me how I want to build a 100 million dollar company in three years how would I do that and I was like I didn't dismiss it because the guy just sold his business so I knew it was capable of you know building
companies but I was like what an interesting thought experiment so I kind of took some a few minutes wrote down some notes schedule a time and we got on a call and this is what I shared with him and at the end of it I think he got real clear on okay now I get now I know what areas I need to focus on I know what needs to be true to make this happen and I thought it'd be really valuable to share it here so the first thing is you need to solve a huge
major problem okay so for you to build that kind of company it needs to be a problem that a lot of people have and it has to be a major problem that they all have and you need to solve it in a unique and potent way and the reason why I say unique and potent is because if other people already solving it then you have a competitor problem so it has to be meek to you and it has to be potent meaning that as fast as possible they have a problem and your solution gets them
the result that's what I mean by potent the time from I've got a problem and your solution has to be as short as possible so that's number one just has to be huge you have to solve it in a unique potent way some people call that product market fit but it's more than just product market fit it's literally like the fastest to product market fit in a non-competitive space so that's a big challenge number one not impossible but needs to be solved two is you need to build a growth engine so when I talk about
growth engines my my whole strategy is around marketing or demand or attract and sales or conversion and getting people essentially to buy and what you need to do and this is the key to build that level of growth hundred million in three years you need to build a repeatable scalable marketing engine so that you need to be able to invest in a channel that's untapped and unlimited or to some degree predominately unlimited and the payback period and this is why it's an engine that the amount of money you spend in the time you recuperate that
investment so if you spend $10 require a customer you need to get that as fast as possible most people on the small business side just so you know in the software space they'll spend about 180 to 200 dollars to get a free trial into their product so you need to be able to recoup that quickly ideally 30 days some companies take them 16 months on average it's about 10 to 12 months so you wouldn't be able to do 100 million in 3 years if the payback period took I would say literally longer than 660 days
you want to make that as fast as possible that's the second thing that needs to be true it's just a growth engine from a marketing and sales and velocity of payback period to your investment the third thing is you're gonna need to build the best team okay and the reason why is you are not that good like I get that you could be the most incredible founder in the world but you are not going to be able to hold the amount of balls in the air and juggle them at the quality level that's required to
be able to scale up the customer accounts to support those customer accounts to build out the product to build up the engineering team all those different aspects the financial structures the dashboards etc again I'm game you can do it three years hundred million but you're gonna have to build the world's best team and each specific function of your business okay so that that is you know how do you recruit how do you compensate how do you bring them together that that's gonna be a big challenge that you need to develop that skill around finding recruiting
convincing leading supporting delegating all these things that come around the people side that's going to be required so that's the third big thing the fourth is you're gonna need to raise money and here's why a lot of people they feel like well if I can get customers to pre-buy the software then I've got a positive cash flow situation and that might be true on the initial cost your cost to acquire customer maybe your marketing cost and then if you can get them to pre-buy enough then it has a positive cash flow but that doesn't hold
true and you got to start investing in the team you know one of the biggest line items typically for a software company is their people so it's not marketing typically it's going to be the people so if you want to you know if you've got an ability to get a short payback period on your on your growth engine on the marketing side in your sales that doesn't support your ability to hire top talent at scale to be able to get the people to run those different divisions so raising money to invest in marketing to invest
in your team is gonna be critical especially if you use a partnership strategy to acquire customers because that's a really viable strategy they're gonna want to get paid in a short amount of time to get for getting those new customers to allow you to keep that ramp the other thing I told them is like map out three years 100 million dollar revenue business and work backwards like the amount of revenue growth you would need to do on a month-by-month basis is is is alarming it's crazy not impossible but you map that revenue growth to the
investment that's gonna be required and that's the amount of capital that you're gonna need to raise so a lot of people think like oh I could just bootstrap this there's no freaking way you know I've grown a business 150 percent year-over-year compounded and I know the sound that makes it's this big swishing sucking sound of cash when you grow a business at scale whoosh it takes capital so making sure that as part of the strategy is gonna be critical because without it you're not going to be able to keep the growth even if you've got
everything else working for you you won't be able to sustain it finally the fifth you've got to build the business in a way that can be sold so a lot of founders they they find growth channels they find team members but they don't build it in a way that's sustainable you know they might find a loophole inside of some Facebook API or some LinkedIn thing or some scraping email outbound system or whatever it is I've seen every variation possible but they're not sustainable so you need to build the business where the com structure for your
executive team where the marketing channels that you're using or not gray area where the product allows it to sell itself those things are required and if you don't do it right then you're just gonna build you can actually hit 100 million in 3 years but then the whole thing is gonna come falling to the ground so that filter saying can I build it in a way that's gonna be sold it's gonna allow you to actually build the right business now here's a tip okay cuz to me it's like okay you want to do this I
love the ambition let's go do it here's the pattern here's the big challenge you gonna have to overcome the tip is and the question I asked to this individual was you know would you dedicate your life the rest of your life 25 years 30 years of your life if you knew that you only had a 50% chance of being successful in that business and I love that question because it gets really clear for what's required I know you think you're gonna build this thing in three years it's gonna be a huge business but what if
it's not and what if those three years ask everything of you your health your relationships your family your mental capacity what if that just sucks everything out of you and still you don't even come close to hitting that is it worth it to you are you willing to dedicate your life with a 50% chance and that question will help everybody get clear of why do you want to build a hundred million a year business in three years is it the right strategy for you and we're at in your business is it doable based on your
skill set your background your experience with the things I just mentioned but I think it's an incredible question so first thing you need to solve a big major problem in a unique way second thing is you've got to build a growth engine that attracts people and allows the payback period to be short you want to put together a world-class a player team to run and manage and lead every different function in your business the fourth thing is you're gonna have to raise money to fund that growth and then v build it in a way that
the business could be sold so that you're not building a house of cards that is my feedback for you those that are Bish's enough to go on that plan as per usual I want to challenge you to live a bigger life and a bigger business and I'll see you next Monday if you like this video be sure to subscribe to my channel for other growth strategies for your startup I'd also invite you to join my newsletter for private invites exclusive contests and other free training and if we're ready to keep going I got two videos
queued up for you I'll see you next Monday
