“How do you build a billion-dollar business?”
I get asked this question a lot, probably because of my background. As the first CMO of Salesforce.com I was part of building that company from ten guys in a room to a billion-dollar run-rate. As the CEO of Zuora I started my company with two other guys — Cheng Zou and K.V. Rao — and while we’re not at a billion (yet), we’ve managed to raise a quarter of a billion dollars and grown to over 500 employees. So far, so good.
With all the lessons I’ve learned along the way (and there have been many), these days when I am asked this question, I find myself coming back to the story of The Climb (with all due respect to Miley Cyrus).
Lots of people think that success is a linear path. When they look at success, they look at the end result, jumping to the outcome and skipping over the boring, hard stuff that must have happened along the way. But the path to success isn’t straight. Success is achieved through a series of twists and turns, through a series of challenges that must have been solved, not through one brilliant move.
Similarly, the path to a billion is not a single path, but a series of journeys. I like to say building a billion dollar business is a lot like climbing a mountain. Now, unlike those two crazy guys that free-climbed El Capitan, most of us don’t scramble straight up 3,000 feet of granite when we go up a mountain. Instead, we make our way along a route that has lots of switchbacks.
I like the metaphor of a switchback, because at each turn you’re doing an “about face.” You’re completely switching directions. Similarly, when a company enters a new phase, it practically becomes a new organization. And the things that made it successful in the last stage may actually hold it back from succeeding in the next one. You have to throw out the rules, bring out a clean sheet of paper and redesign the company.
After working with many companies, I’ve come to find it useful to use the ones and threes to mark off the stages of growth, e.g. $1 million, $3 million, $10 million, $30 million, etc. For a Software-as-a-Service company, these number represents ARR, or Annual Recurring Revenue. These are good places to pause and say “Okay that was fun, but how do I tackle the next leg of the climb?” So what are the phases that define the climb to a billion, what are the things that you need to work on in each phase? Let’s take a look.
So what are the phases that define the path to a billion, what are the things that you need to work on in each phase? Join me for a webinar on Tuesday, June 30th as we break down the climb.
- Key revenue milestones and the priorities they entail
- Red flags to watch out for, and distractions to avoid
- How to prove an idea, a product, a market, a model and an industry