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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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Ranked: The Most Innovative Companies in 2021

In today’s fast-paced market, companies have to be innovative constantly. Here’s a look at the top 50 most innovative companies in 2021.

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Most Innovative Companies 2021

Ranked: the Top 50 Most Innovative Companies in 2021

This year has been rife with pandemic-induced changes that have shifted corporate priorities—and yet, innovation has remained a top concern among corporations worldwide.

Using data from the annual ranking done by Boston Consulting Group (BCG) using a poll of 1,600 global innovation professionals, this graphic ranks the top 50 most innovative companies in 2021.

We’ll dig into a few of the leading companies, along with their innovative practices, below.

Most Innovative Companies: A Breakdown of the Leaderboard

To create the top 50 innovative company ranking, BCG uses four variables:

  • Global “Mindshare”: The number of votes from all innovation executives.
  • Industry Peer Review: The number of votes from executives in a company’s industry.
  • Industry Disruption: A diversity index to measure votes across industries.
  • Value Creation: Total share return.

For the second year in a row, Apple claims the top spot on this list. Here’s a look at the full ranking for 2021:

 CompanyIndustryHQChange from 2020
1AppleTechnology🇺🇸 U.S.--
2AlphabetTechnology🇺🇸 U.S.--
3AmazonConsumer Goods🇺🇸 U.S.--
4MicrosoftTechnology🇺🇸 U.S.--
5TeslaTransport & Energy🇺🇸 U.S.+6
6SamsungTechnology🇰🇷 South Korea-1
7IBMTechnology🇺🇸 U.S.+1
8HuaweiTechnology🇨🇳 China-2
9SonyConsumer Goods🇯🇵 Japan--
10PfizerHealthcare🇺🇸 U.S.Return
11SiemensTechnology🇩🇪 Germany+10
12LG ElectronicsConsumer Goods🇰🇷 South Korea+6
13FacebookTechnology🇺🇸 U.S.-3
14AlibabaConsumer Goods🇨🇳 China-7
15OracleTechnology🇺🇸 U.S.+10
16DellTechnology🇺🇸 U.S.+4
17Cisco SystemsTechnology🇺🇸 U.S.-5
18TargetConsumer Goods🇺🇸 U.S.+4
19HP Inc.Technology🇺🇸 U.S.-4
20Johnson & JohnsonHealthcare🇺🇸 U.S.+6
21ToyotaTransport & Energy🇯🇵 Japan+20
22SalesforceTechnology🇺🇸 U.S.+13
23WalmartConsumer Goods🇺🇸 U.S.-10
24NikeConsumer Goods🇺🇸 U.S.-8
25LenovoTechnology🇭🇰 Hong Kong SARReturn
26TencentConsumer Goods🇨🇳 China-12
27Procter & GambleConsumer Goods🇺🇸 U.S.+12
28Coca-ColaConsumer Goods🇺🇸 U.S.+20
29Abbott LabsHealthcare🇺🇸 U.S.New
30BoschTransport & Energy🇩🇪 Germany+3
31XiaomiTechnology🇨🇳 China-7
32IkeaConsumer Goods🇳🇱 NetherlandsReturn
33Fast RetailingConsumer Goods🇯🇵 JapanReturn
34AdidasConsumer Goods🇩🇪 GermanyReturn
35Merck & Co.Healthcare🇺🇸 U.S.Return
36NovartisHealthcare🇨🇭 Switzerland+11
37EbayConsumer Goods🇺🇸 U.S.Return
38PepsiCoConsumer Goods🇺🇸 U.S.Return
39HyundaiTransport & Energy🇰🇷 South KoreaReturn
40SAPTechnology🇩🇪 Germany-13
41InditexConsumer Goods🇪🇸 SpainReturn
42ModernaHealthcare🇺🇸 U.S.New
43PhilipsHealthcare🇳🇱 Netherlands-20
44DisneyMedia & Telecomms🇺🇸 U.S.Return
45MitsubishiTransport & Energy🇯🇵 JapanNew
46ComcastMedia & Telecomms🇺🇸 U.S.New
47GETransport & Energy🇺🇸 U.S.Return
48RocheHealthcare🇨🇭 SwitzerlandReturn
49AstraZenecaHealthcare🇬🇧 UKNew
50BayerHealthcare🇩🇪 Germany-12

One company worth touching on is Pfizer, a returnee from previous years that ranked 10th in this year’s ranking. It’s no surprise that Pfizer made the list, considering its instrumental role in the fight against COVID-19. In partnership with BioNTech, Pfizer produced a COVID-19 vaccine in less than a year. This is impressive considering that, historically, vaccine development could take up to a decade to complete.

Pfizer is just one of four COVID-19 vaccine producers to appear on the list this year—Moderna, Johnson & Johnson, and AstraZeneca also made the cut.

Meanwhile, in a completely different industry, Toyota snagged the 21st spot on this year’s list, up 20 places compared to the rankings in the previous year. This massive jump can be signified by the company’s recent $400 million investment into a company set to build flying electric cars.

While we often think of R&D and innovation as being synonymous, the former is just one innovation technique that’s helped companies earn a spot on the list. Other companies have innovated in different ways, like streamlining processes to increase efficiency.

For instance, in 2021, Coca-Cola performed an analysis of their beverage portfolio and ended up cutting their brand list in half, from 400 to 200 global brands. This ability to pare down and pivot could be a reason behind its 20 rank increase from 2020.

Innovation Creates Value

As this year’s ranking indicates, innovation comes in many forms. But, while there’s no one-size-fits-all approach, there is one fairly consistent innovation trend—the link between innovation and value.

In fact, according to historical data from BCG, the correlation between value and innovation has grown even stronger over the last two decades.

Most Innovative Companies 2021

For example, in 2020, a portfolio that was theoretically invested in BCG’s most innovative companies would have performed 17% better than the MSCI World Index—which wasn’t the case back in 2005.

And yet, despite innovation’s value, many companies can’t reap the benefits that innovation offers because they aren’t ready to scale their innovative practices.

The Innovation Readiness Gap

BCG uses several metrics to gauge a company’s “innovation readiness,” such as the strength of its talent and culture, its organization ecosystems, and its ability to track performance.

According to BCG’s analysis, only 20% of companies surveyed were ready to scale on innovation.

Scaling Innovation

What’s holding companies back from reaching their innovation potential? The most significant gap seems to be in what BCG calls innovation practices—things like project management or the ability to execute an idea that’s both efficient and consistent with an overarching strategy.

To overcome this obstacle, BCG says companies need to foster a “one-team mentality” to increase interdepartmental collaboration and align team incentives, so everyone is working towards the same goal.

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Timeline: Looking Back at 10 Years of Snapchat

A high level look at Snapchat’s 10-year history, including user growth, innovative product design, and the twists and turns along the way.

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10 years of snapchat

Looking Back at 10 Years of Snapchat

Over the years, many ideas have emerged from the dorm rooms at Stanford University, but not all of them evolve into billion dollar companies.

Snapchat, however, has beaten the odds. The company’s stock has recently shot up during the COVID-19 pandemic, a bright spot in a decade of highs and lows.

The graphic above is a high level look at Snapchat’s 10-year history, including user growth and financials. Snapchat’s wild ride from start-up to massive success is well documented, so we’ll focus on key elements of story—product design, the Facebook rivalry—and look at how the company is doing today now that the hype surrounding the app has died down.

But first, a quick history…

Setting the Scene

Snapchat originally began its life as a project called Picaboo in 2011.

Cofounders Evan Spiegel, Bobby Murphy, and Reggie Brown, who were attending Stanford, began building an app that could send photos that disappear after a certain amount of time.

Picaboo was renamed Snapchat in 2012, and by the end of that year, it was clear that the start-up was onto something big. A $13.5 million Series A financing in early 2013 helped fuel the company’s explosive growth.

Positive Momentum: Product Design

One of Snapchat’s biggest strengths over the years has been innovative product design. Many of the features we now see baked into every social app originated from Snapchat.

Here’s a quick rundown of Snapchat’s key feature and product development over the past decade.

snapchat feature product timeline

Of all the features listed above, the concept of stories is perhaps the most significant contribution to the digital landscape. Disappearing short-form videos started off as a messaging tool, but ended up transforming the way people share their lives online.

As well, the forward-looking acquisition of Looksery in 2015, helped introduce millions of people to augmented reality (AR). AR continues to be a major growth driver for Snapchat today, as advertisers embrace the Lenses feature.

Negative Momentum: Facebook Rivalry

To Mark Zuckerberg’s credit, he realized the potential of Snapchat early.

When the company was only one year old, the Facebook CEO offered the Snapchat founders $60 million to buy the company. When they rejected the offer, Facebook almost immediately launched an app called Poke which was extremely similar to Snapchat’s offering. You’d be forgiven for not knowing what Poke is, as the app received a tepid reception and was quietly shut down in 2014.

“I hope you enjoy Poke.” – Mark Zuckerberg, in an email to Evan Spiegel

For Snapchat, Poke was a blessing in disguise as it brought even more attention to their growing app. Mark Zuckerberg, however, was not done trying to steal the company’s thunder. After offering $3 billion in cash to purchase Snapchat (the offer was once again rebuffed), Facebook copied a number of features from Snapchat and integrated them into Instagram.

Stories were a massive hit for Instagram, and Snapchat, which could not yet match Instagram’s scale, took a big hit. Growth began to slow noticeably after that Instagram update.

Snapchat Today

Snapchat hit rock bottom in 2018 after shares dropped below the $5 mark, and user growth had stalled out. As well, underwhelming sales of Snapchat’s Spectacles product garnered negative press and hurt the brand’s “cool factor”.

Today though, the situation looks much different. The app still has a strong market share with the younger demographic, and close to 300 million daily active users. Snapchat was one of the many digital companies to benefit from the COVID-19 pandemic (or, at least, the increase in digital content consumption), and the share price has rocketed to new highs. One other promising indicator is the company’s rising average revenue per user, or ARPU.

arpu revenue per user snapchat

Of course, as the last 10 years have shown, success is not guaranteed. TikTok is still a significant competitor with a lot of momentum, and tastes can change quickly in the digital world. That said, there is a positive path forward for Snap Inc.

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