How to become a millionaire in 3 years?
Recently, somebody has asked this question in Hacker News.
The following comment appealed to me a lot. So posting it here.
– Market opportunity– a million dollars isn’t a lot in the grand scheme of things, but it certainly is a lot if the market opportunity is not large enough. Even if you put Bill Gates and Steve Jobs as founders in a new venture with a total market size of 10 million, there is no way they could become too wealthy without completely changing the business (ie- failing).
– Inequality of information– find a place where you know something that many undervalue. Having this inequality of information can give you, your first piece of leverage.
– Leverage skills you know– You can go into new fields such as say Finance, but make sure you’re leveraging something you already know such as technology and/or product. Someone wanted to start a documentary with me. I said that would be fun, but it would be my first documentary regardless of what happened. There was a glass ceiling due to that. If I do something leveraging a skill I know, I’m already ahead of the game.
– Look in obscure places– We’re often fascinated with the shiny things in the internet industry. Many overlook the obscure and unsexy. Don’t make that mistake. If your goal has primarily monetary motivations, look at the unsexy.
– Surround yourself with smart people- smart people whom are successful usually got there by doing the same and have an innate desire to help those do the same. it’s the ecosystem that’s currently happening with the paypal mafia and can be traced all the way back to fairchild semiconductor.
– Charge for something– Building a consumer property dependent upon advertising has easily made many millionaires, but it isn’t the surest path. It takes a lot of time and scale, which due to cashflow issues will require large outside investment probably before you are a millionaire. Build something that you can charge for.
– Your metric shouldn’t be dollars– If you’re going after a big enough market and charging a reasonable amount, you can hit a million dollars. Focus on growth, customer acquisition costs, lifetime value of the customer, and churn.
– Get as many distribution channels as possible– There is some weird sense that if you build something they will just come. That a few like buttons and emails to firstname.lastname@example.org will make your traffic explode + grow consistently. It fucking won’t. Get as many distribution channels as possible. Each one by itself may not be large, but if you have many it starts to add up. It also diversifies your risk. If you’re a 100% SEO play, you’re playing a dangerous dangerous game. You’re fully dependent upon someone else’s rules. If Google bans you, you will be done. Replace SEO with: App store, facebook, etc.
– Go with your gut and do not care about fameballing– Go with what your gut says, regardless of how it might look to the rest of the world. Too often we (I) get lost in caring about what people think. It usually leads to a wrong decision. Don’t worry about becoming internet famous or appearing on teh maj0r blogz. Fame is fleeting in the traditional sense. Become famous with your customers. They’re the ones that truly matter. What they think matters and they will ultimately put their money where their mouth is.
– Be an unrelenting machine– Brick walls are there to show you how bad you want something. Commit to your goals and do not waver from them a one bit regardless of what else is there. I took this approach to losing weight and fitness. I have not missed a single 5k run in over a year. It did not matter if I had not slept for two days, traveling across the country, or whatever else. If your goals is to become a millionaire, you need to be an unrelenting machine that does not let emotions make you give up / stop. You either get it done with 100% commitment or you don’t. Be a machine.
– If it’s a “trend”, it’s too late– This means the barriers to entry are usually too high at this point to have the greatest possible chance of success. Sure you could still make a lot of money in something like the app store or the facebook platform, but the chances are significantly less than they were in the summer of 08 or spring of 2007. You can always revisit past trends though.
– If you do focus on a dollar amount, focus on the first $10,000– This usually means you’ve found some repeatable process / minimal traction. ie- if you’re selling a $100 product, you’ve already encountered 100 people who have paid you. From here you can scale up. It’s also a lot easier to take in when you’re looking at numbers. Making 1 million seems hard, but making $10,000 doesn’t seem so hard, right?
– Be a master of information– Many think it might be wasteful that I spent so much time on newsyc or read so many tech information sites. It’s not, it’s what gives me an edge. I feel engulfed.
– Get out and be social– Even if you’re an introvert, being around people will give you energy. I’m at my worst when I’m isolated from people and at my best when I’ve at least spent some time with close friends (usually who I don’t know from business.)
– Make waves, don’t ride them– There was a famous talk Jawed Karim gave from youtube. He described the three factors that made youtube take off. I think they included (1- emergence of flash, so no codecs required 2- one click upload 3- ability to share embed). Find those small pieces and put them together to make the wave. That’s what youtube did imho. The other guys really just rode the wave they created (which is okay).
– Say no way more than you say yes– I bet almost every web entrepreneur has encountered this: You demo your product / explain what you’re doing and someone suggests that you do “X feature/idea”. X is a really good idea and maybe even fits in with what you’re doing, but it would take you SO FAR off the path you’re on. If you implemented X it would take a ton of time and morph what you’re doing. It’s also really really hard to say no when it comes from someone well respected like a VC or famous entrepreneur. I mean how the fuck could they be wrong? Hell, they might even write me a check if I do what they say!!!!! Don’t fall for that trap. Instead write the feedback down somewhere as one single data point to consider amongst others. If that same piece of feedback keeps coming up AND it fits within the guidelines of your vision, then you should consider it more seriously. Weight suggestions from paying customers a bit more, since their vote is weighted by dollars.
– Be so good they can’t ignore you– I first heard this quote from Marc Andreessen, but he stole it from Steve Martin. Just be so good with what you do that you can’t be ignored. You can surely get away with a boring product with no soul, but being so good you can’t ignore is much more powerful.
– Always keep your door/inbox open– You never know who is going to walk through your door + contact you. Serendipity is a beautiful thing. At one point Bill Gates was just a random college kid calling an Albuquerque computer company.
– Give yourself every opportunity you can– I use this as a reason why starting a company in silicon valley when it comes to tech is a good idea. You can succeed anywhere in the world, but you certainly have a better chance in the valley. You should give yourself every opportunity possible, especially as an entrepreneur where every advantage counts.
– Give yourself credit– This is the thing I do the least of and I’m trying to work on it. What may seem simple+not that revolutionary to anyone ahead of the curve can usually be pure wizardry to the general public, whom is often your customer. Give yourself more credit.
– Look for the accessory ecosystem– iPod/iPhone/iPad case manufacturers are making a fortune. Armormount is also making a killing by making flat panel wall mounts. Woothemes makes millions of dollars a year (and growing) selling WordPress themes. There are tons of other areas here, but these are the ones that come to mind first. If there’s a huge new product/shift, there’s usually money to be made in the accessory ecosystem.
– Stick with it- Don’t give up too fast. Being broke and not making any money sucks + can often make you think nothing will ever work. Don’t quit when you’re down. If this was easy then everyone would be a millionaire and being a millionaire wouldn’t be anything special. Certainly learn from your mistakes + pivot, but don’t quit just because it didn’t work right away.
– Make the illiquid, liquid– I realized this after talking to a friend who helps trade illiquid real estate securities. A bank may have hundreds of millions of assets, but they’re actually worth substantially less if they cannot be moved. If you can help people make something that is illiquid, liquid they will pay you a great deal of money. Giving you a 20-30% cut is worth it, when the opposite is making no money at all.
– Productize a service– If you can make what might normally be considered a service into a scaleable, repeatable, and efficient process that makes it seem like a product you can make a good amount of money. In some ways, I feel this is what Michael Dell did with DELL in the early days. Putting together a computer is essentially a service, but he put together a streamlined method of doing things that it really turned it into a product. On a much smaller scale, PSD2XHTML services did this. It’s a service, but the end result + what you pay for really feels like a product.
Note: The comment was written by Jason L. Baptiste. Check out his website.