How To Build a $10M business
Do you hunt rabbits, deers, or elephants?
(Vegans/Vegetarians please read until the end).
I was recently reading a book on business growth and they talked about one of the largest mistakes companies can make when trying to scale is hunting the wrong animal.
Everyone loves the idea of an elephant, you essentially get endless bragging rights and enough meat to feed you for months.
Think Fortune 500 clients.
The issue with elephants is they require an entire team to take them down.
It can take months (even years) to close them and then you spend so much time/energy curating your services to match their needs (hiring new personnel, learning new skills) that you end up straying from your MVP (minimum viable product) and in the end, the headache ends up almost not worth it.
The next category I see a lot of our clients go after are rabbits.
They’re crafty little buggers (have you ever seen Looney Tunes) that seem to be everywhere but are almost impossible to catch, keep, or even find.
They provide little to no meat and (similar to elephants) consume an enormous amount of energy trying to capture them.
Think Dropbox or Facebook.
Sure, you can create an incredibly successful company hunting rabbits, but as an example let’s do some math (you know how much I love to do math).
If your goal is $10M annual recurring revenue and your average annual revenue per customer is $100, that means you must onboard 100,000 customers a year.
In order to convert 100,000 customers you’ll essentially need 5,000,000 leads or free trials (assuming a 2% conversion rate).
5,000,000 engaged, active leads/free trials, not just 5,000,000 people that have heard of your name.
You can start to see why this is a little difficult to do (unless you’re the magical Facebook or Dropbox).
Finally, my favorite category, deers.
Deers are easy to hunt and can feed you for days or weeks.
They don’t require special teams, special tools, or for you to stray from what you do best.
Think small to medium businesses with 1-2 decision makers.
This is who we recommend going after.
This is how we’ve scaled multiple companies to the 7-figures in under 12 months.
This is who our most successful clients help.
So, my question for you is, who are you hunting?
Have you actually done the math as to what it would take (hunting your current target) for you to actually hit those numbers?
Have you factored in the overhead that’s associated with managing millions of users or crafting custom $100,000 offers?
If you need any help creating a machine that hunts the deer, captures the deer, cooks the deer, and then feeds the deer to you on a silver platter every morning when you wake up.