Five ways to build a $100 million business, Christoph Janz, 2014

To build a Web company with $100 million in annual revenues*, you essentially need:

  • 1,000 enterprise customers paying you $100k+ per year each; or
  • 10,000 medium-sized companies paying you $10k+ per year each; or
  • 100,000 small businesses paying you $1k+ per year each; or
  • 1 million consumers or “prosumers” paying you $100+ per year each (or, in the case of eCommerce businesses, 1M customers generating $100+ in contribution margin** per year each); or
  • 10 million active consumers who you monetize at $10+ per year each by selling ads

Salespeople sometimes refer to “elephants”, “deers” and “rabbits” when they talk about the first three categories of customers. To extend the metaphor to the 4th and 5th type of customer, let’s call them “mice” and “flies”. So how can you hunt 1,000 elephants, 10,000 deers, 100,000 rabbits, 1,000,000 mice or 10,000,000 flies? Let’s take a look at it in reverse order.

Knowing what type of customer you’re going after – especially when you are averse to the default “sell user data” concept of the advertising-based business model – is good to think about.

I love this thinking, it is also especially useful when starting out what a company needs to do to only get to $1m revenue