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Entrepreneurship

5 Ways to Build a $100 Million Company

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To build a successful and enduring company, you need more than just hype, publicity, or impressive fundraising skills.

Ultimately it all boils down to one simple principle: you must have a product that solves a pressing problem, and then the right amount of paying customers to make the math work.

Going Hunting

Today’s infographic comes to us from Point Nine Capital, and it highlights five basic revenue models that startups can use to achieve $100 million in annual revenue.

The take home message here is that to build a long-term business, a team must implement a realistic strategy that considers multiple factors including product-market fit, user acquisition, pricing, and revenue per user.

5 Ways to Build a $100 Million Business

Are you hunting flies, or are you trying to hunt elephants?

Just like in real life, these things require very different strategies and tactics. To build a $100 million revenue per year company, you’ll need to have a clear vision of your product-market fit and the customers you’re going after.

Different Tools

While the hunting analogy may be an oversimplification, it does help illustrate an undeniable truth to building large companies: how many users you will need depends on how much revenue you can earn per user.

This has implications.

If you are going to get $10 in annual ad revenue for each user, then you need a lot of users. If you’re going after Fortune 500 companies, you’ll need far fewer customers, but also a sophisticated and detailed sales strategy.

Flies$10 per user x 10 million customers = $100 million in annual revenue

It takes a lot of flies to add up.

To build a big business with flies, you’ll need a product with a high viral coefficient (Instagram, WhatsApp, etc.) that spreads your brand quickly and inexpensively. Alternatively, you can build a platform that allows for the creation of massive amounts of user generated content (UGC) such as Yelp or Reddit.

Mice$100 per user x 1 million customers = $100 million in annual revenue

Mice are still pretty small, but the expectations are higher than for flies. To get $100 per user, these customers will have to be directly paying for something, like a $10 monthly subscription. Music-streaming company Spotify is a good example of a startup hunting for mice.

Rabbits$1k per user x 100k customers = $100 million in annual revenue

Once you hit rabbit territory, we are basically out of reach of B2C customers. That means to get 100k customers, they will likely have to be small businesses.

To do this, you’ll need a fantastic product, excellent inbound marketing, and an extremely high NPS (Net Promoter Score). The latter metric is used to measure the likelihood a customer would recommend you to their peers.

Deer$10k per user x 10k customers = $100 million in annual revenue

We’re now getting up there in size – which makes it likely that deer have to be medium-sized businesses. These customers can afford to spend $10,000 per year, but expect a significant return on their investment.

While revenue per user is much higher than preceding levels, it is still not likely enough to warrant traditional enterprise field sales.

Elephants$100k per user x 1k customers = $100 million in annual revenue

Going after elephants is a totally different world, and requires a skilled sales force, patience, and an enterprise-focused approach. You’ll need to educate Fortune 500 companies on why they should spend $100,000 with you each year – and you’ll need to be able to back that all up with a killer product.

Software as a Service (SaaS) companies like Workday or Salesforce often use this kind of strategy, and it allows them to key in on the features that their most important clients want to see. As we noted in a previous infographic, investors love the predictable revenue stemming from a well-positioned SaaS company.

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Entrepreneurship

Craft Beer Boom: The Numbers Behind the Industry’s Explosive Growth

This infographic takes a closer look at the craft beer revolution sweeping across the U.S,. and its far reaching economic impact.

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All movements start with rebellion, and the craft beer revolution is no different.

Born from the frustration of mass-produced beer made from cheap ingredients, entrepreneurs went head-to-head with global brewery giants to showcase local and independent craftsmanship.

Suddenly, drinking beer became less about the alcoholic content and more about the quality and experience. Craft beer allowed for constantly changing flavors, recipes, and stories. With sales accounting for 24% of U.S. beer market worth over $114 billion, the global craft beer movement has been historic.

Which States Bring Home the Beer?

Today’s map from C+R research demonstrates the growth of the craft beer market, by ranking the U.S. states based on craft breweries per capita.
The Rise of Craft Beer in the U.S.

The data for this visualization comes from The Brewers Association—an American trade group of over 7,200 craft brewers, suppliers, and distributors, as well as the Alcohol and Tobacco Tax and Trade Bureau.

According to the data, Vermont has emerged as the craft beer capital of the U.S. with 11.5 breweries per 100,000 people. That’s equal to 151 pints of beer produced per drinking-age adult. Following closely behind are Montana and Maine, each with 9.6 breweries per capita.

You’ll notice that in Southern states such as Alabama, Georgia, and Mississippi, that there are only 0-0.9 breweries per capita. This is actually because of tighter liquor laws—for example, only 10 years ago, it was illegal to sell specialty beer in South Carolina that contained more alcohol content than a typical Budweiser.

Becoming a Brewery Nation

In 2008, there were only 1,574 breweries across the United States.

However, as you can see in the below data from the Brewers Association, the total amount of craft breweries, microbreweries, and brewpubs has climbed to 7,346 in just a decade.

 20142015201620172018Change ('17-'18)
Total U.S.3,8694,6725,6066,5967,45012.9%
Regional Craft13517818620223013.9%
Microbreweries2,0762,6263,2513,9334,52215%
Brewpubs1,6031,8242,1022,3552,59410.1%
Total Craft3,8144,6285,5396,4907,34613.2%
Large/Non-craft4644671061041.9%

Of the three categories of craft beer, microbreweries have contributed the most to recent production growth. Last year, they accounted for 80% of this growth, up from 60% in 2017.

The term microbrewery refers to the maximum amount of beer the brewery can produce. For microbreweries, that number is 15,000 barrels (460,000 U.S. gallons) of beer per year. They also have to sell 25% or more of their beer on site, which is why we are witnessing a surge in breweries that double up as a restaurant or bar.

Comparing this data to figures on larger breweries available from the Breweries Association, it is clear that it is the larger, more established breweries that are feeling the heat. While their growth slows, more small breweries open, and sales are further cannibalized.

The Economic Impact of the Craft Beer Market

When it comes to pure dollars, C+R Research notes that Colorado comes in at #1 with an economic impact of $764 per person. Vermont is at the #2 spot with an economic impact of $667 per person, despite having a higher concentration of breweries per capita.

How do the rest of the states compare?
Economic Impact
The global craft beer market is expected to reach $502.9 billion by 2025—while the craft brewing industry contributed $76.2 billion to the U.S. economy in 2017, including more than 500,000 jobs.

Will Craft Remain a Growth Category?

While many argue that craft beer is approaching its peak, the data is promising. Experimentation with new processes and ingredients will continue to drive the market forward.

Craft brewers all over the world are tapping into the novelty factor by exploring weird and wonderful innovations, like deer antler-infused beer and take-home brewing kits.

While the overall beer market lagged in sales by 0.8% last year, the craft brew category grew by 3.9% using the same measure. Further, craft still only makes up 13.2% in total beer volume in the U.S., meaning there is still plenty of market share to gain.

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Economy

The World’s Most Innovative Economies

What countries have the most innovative economies? This index uses seven equally-weighted variables, including R&D spending and patents, to rank countries.

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The World’s 10 Most Innovative Economies

In the 21st century, innovation has become the heart and soul of economic policy. Developed and developing nations alike are in the race to leave industrialization behind, adapting instead to technology-focused, entrepreneurial societies.

Customized cancer treatment, faux meat products, and the smart home technologies are frequently positioned as ‘the next big thing’. But which countries are consistently innovating the most?

Today’s graphic comes from the seventh annual Bloomberg Innovation Index and highlights the 10 most innovative economies, and the seven metrics used to rank 2019’s top contenders.

Measuring Innovation

Bloomberg calculated each country’s innovation score using seven equally-weighted metrics.

  1. R&D Spending
    All research and development funding invested in an economy each year.
  2. Patent Activity
    Number of domestic patents filed, total patent grants, patents per population, filings per GDP, and total grants awarded measured against the global total.
  3. Tertiary Efficiency
    Total enrollment at post-secondary institutions, graduation levels, and number of science and engineering graduates.
  4. Manufacturing Value-added
    Manufacturing output levels that contribute to exports and domestic economic growth.
  5. Productivity
    Overall productivity levels of the working-age population.
  6. High-tech Density
    Number of domestic high-tech public companies, measured against the number of domestic public companies and the global total of public high-tech companies.
  7. Researcher Concentration
    Number of professionals currently engaged in research and development roles.

More than 200 countries were initially considered for Bloomberg’s Innovation Index. Any country reporting in less than six categories was automatically eliminated, leaving 95 countries remaining. Bloomberg publishes the results for the top 60 most innovative economies each year.

Notable Countries in the Top 60

The U.S. rejoined the top 10 after dropping to 11th in 2018 for low scores in education. Israel moved up five spots to 5th place, while Romania made the largest overall gain, jumping six spots to rank in the top 30.

2019 RankEconomyTotal ScoreChange in Ranking
#1🇰🇷 South Korea87.380
#2🇩🇪 Germany87.32
#3🇫🇮 Finland85.574
#4🇨🇭 Switzerland85.491
#5🇮🇱 Israel84.785
#6🇸🇬 Singapore84.49-3
#7🇸🇪 Sweden84.15-5
#8🇺🇸 United States83.213
#9🇯🇵 Japan81.96-3
#10🇫🇷 France81.67-1
#11Denmark81.66-3
#12Austria80.980
#13Belgium80.431
#14Ireland80.08-1
#15Netherlands79.541
#16China78.353
#17Norway77.79-2
#18United Kingdom75.87-1
#19Australia75.38-1
#20Canada73.652
#21Italy72.85-1
#22Poland69.1-1
#23Iceland68.411
#24New Zealand68.12-1
#25Czech Republic68.093
#26Malaysia67.610
#27Russia66.81-2
#28Luxembourg66.374
#29Romania64.786
#30Spain64.52-1
#31Slovenia64.11-
#32Hungary63.05-5
#33Turkey62.890
#34Portugal62.79-4
#35Greece62.05-4
#36Estonia61.790
#37Lithuania59.73-3
#38Hong Kong58.9-1
#39Slovakia58.03-1
#40Thailand57.775
#41Bulgaria56.360
#42Latvia55.46-2
#43Malta55.43-4
#44Croatia54.98-2
#45Brazil53.62-
#46U.A.E.52.93-
#47Iran52.812
#48Cyprus52.05-1
#49Serbia51.35-5
#50Argentina51.31-
#51South Africa51.03-3
#52Tunisia48.92-9
#53Ukraine48.05-7
#54India47.93-
#55Kuwait47.27-
#56Saudi Arabia47.18-
#57Qatar46.58-
#58Chile46.4-
#59Mexico46-
#60Vietnam45.92-

Brazil rejoined the list at number 45, after not being included on the 2018 list. The United Arab Emirates made the list for the first time, marking the highest debut ever at number 46.

Tunisia and Ukraine were the two countries with the largest losses, which both fell out of the top 50 this year. To date, South Africa is the only Sub-Saharan nation to be ranked in the index.

Newcomers to the Innovation Index in 2019 are some of the largest emerging economies, such as India, Mexico, Vietnam, and Saudi Arabia.

Impact of Global Innovation

Innovation is complex─many factors play a role in the ideation, development, and commercialization of any new technology. And while innovation success can fuel economic growth, it is generally more accessible in high-income economies, where R&D funding is readily available.

“The battle for control of the global economy in the 21st century will be won and lost over control of innovative technologies.”

—Tom Orlik, Bloomberg Economics

The focus of an economy that prioritizes innovation, however, is not simply allocating resources for a group of people─it’s discovering new methods, models, and products that create a better quality of life for society.

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