I had breakfast this morning with a young man I’ve been mentoring for a few years. He’s doing extremely well in his job but recently figured out that no matter how successful he is in his duties he will barely be able to move up in the organization and never achieve a significant income. He is not totally focused on money, but he would like to have the chance to grow his salary so that he can take care of his growing family. He would also like to be wealthy enough that he can be philanthropic on a multimillion-dollar level. He asked me what I thought it would take for him to achieve these aims. Here is what I told him:
- You will never get mega-wealthy working for someone else, you have to own the company or at least part of it.
- You will never get mega-wealthy selling your time, you have to have a product.
- The best products are digital, so you have development costs, but after that, there is no manufacturing cost.
- There needs to be a large enough audience to bring in significant revenue. Depending on the price of your product that target audience could be anywhere from a few thousand people, to a billion or more.
- You have to create a product that is unique and compelling – highly valuable to your target customer – difficult, if not impossible, to copy – and then be able to deliver it flawlessly to the marketplace.
- You have to be able to sell. Sell to customers, sell to investors, sell to your staff. And it is even better if you LOVE to sell.
- To make millions in sales, you have to have real passion and belief in your product – be highly competent in your business and sales skills – sell something that is highly valuable – to an audience that can scale.
- It also helps if you sell something that people have to purchase multiple times, or you sell to an audience that is constantly refreshing with new people coming in that will need/want your product.
- No matter what, be honest and guard your reputation carefully. From a business standpoint, at the end of the day that is all you really have.
He seemed to find this helpful, and I hope you do too.
John, good article and excellent advice. Unfortunately, entrepreneurship and risk-taking seems to be going out of style. After reading this article, I came across this disturbing statistic in The Rise and Fall of American Growth: “…the percentage of people younger than 30 who owned stakes in private companies declined from 10.6% in 1989 to 3.6 percent in 2014.”
I would disagree that they are “going out of style.” I think you see younger people giving up much sooner. From my experience it is due to not thinking things through, not getting creative, and not seeking good counsel. Just a thought
John,
Great advise for anybody who wants to own a business. Personally I have been through that process several times and I would like to add one more point. This person is very lucky to have you as an adviser, and it is very important to surround yourself with smart people that can offer you advise. Having someone that can offer you clarity and fresh ideas when one decides to be independent I believe is a most
Thank you John
Thank you John. Excellent information and it makes a good checklist to monitor your own progress. I have passed this onto my staff, students, colleagues and mentees. Hope all is well my friend.
Nice one, here. I find it funny how we become comfortable staying at one level and we all have the potential to become much better.
Hi John,
Your point about a digital product makes me curious. I do understand the connection between digital and “mega” wealthy as opposed to someone who is simply well-off or a millionaire. Do you feel this true globally or a recommendation for 1st world entrepreneurs? Are the days of becoming a steel magnate or developing a revolutionary new food product really over? Cheers.
I do not think they are over by any means, it is simply that those businesses are capital and labor intensive. There are massive fixed costs to building and maintaining a steel mill. YES, you can absolutely become “mega-wealth” in businesses that make lumpy objects and ship things all over the world, but for the average person that wants to be an entrepreneur, it seems to me that digital products offer a global marketplace with a much smaller capital investment than other ways to make billions (PS – my goal have never been to be mega-wealthy and make billions – but I do meet a lot of people who do want that – so this blog was for them!)
You got this one on your list #8, but it bears repeating, recurring revenue makes life so much easier. Every sale doesn’t have to be a totally new deal. I worked in a check processing company and they called it “a dime a time”. The other thing I would add is that the product or service doesn’t have to be sexy. There’s good money in blah. Case in point: window washing. How many windows are in a shopping center? They don’t stay clean.
Hi John,
as usual great article and food for thought. I hope your young man takes your advise on like your many followers and becomes a great entrepreneur.
Hi, John,
This is great advice – no matter the age of the person involved. I’m a “woman of a certain age” and I’m not done building my dream either. I’ve really learned that I cannot linearly scale myself to get to where I want to be and I’m taking this one on – again!
Thanks for a great article!