Billionaire CEO Reveals How To Build A Billion $ Business

So everyone asks me, How do you build $1,000,000,000 company? Here's how you build $1,000,000,000 company. The first step is to make sure that cash flows at 1 million. So you never start with $1,000,000,000 company in mind. You always start with $1,000,000 company because that's a lot easier to do. It's a lot easier to grow something to $1,000,000 of revenue a year. The hard part is actually scaling from there. Imagine going from 1 million to 1 billion. That's a hundred X growth. There's a lot t

hat goes out between 1,000,001 billion. So you don't have to look any further than just look at people that have done it, that have been a little more public. For example, I'm from Seattle, so Starbucks started with one little store in the area called Pike Place down in the Seattle area. And then was Howard Schultz perfected that model. He started to replicate it in that area. And then there's more problems. The more that you scale, you have to learn. How do you franchise our new joint venture?

And when he started a franchise, then you start a franchise. States, areas, countries, even the world. And then from there, as you guys know, he left, the company came back in, and there were all kinds of operational problems. Each time that you get bigger, there are things that you'll never foresee ever. When you start with just one. Amazon did this, Airbnb did this, Uber did this. They all start with one proven method or model, and then they perfect that and then they scale it. So the way to d

o it in real estate is the exact same way. Find the model on the system that works and then replicate it and scale it and make sure that it's profitable and make sure that you get lots of mentors, coaches along the way because you'll have a zillion questions that we'll never answer. If you wait until you start and your business evolves as you grow, so you never know quite what's going to happen next. You just have to have faith and make sure the cash flows. As I keep saying, So let's just take S

tarbucks for example. When they opened their very first store, they more than likely never thought that they were going to sell merch, that they were going to sell coffee beans worldwide in things like Safeway and Smiths and all the local grocers. They probably never imagined they'd be serving Starbucks on airplanes or even have those little pods that you use in your curing. All those kinds of things came way later because they just started with how to be the best experience they could be in tha

t one store. The same is true with real estate. You have to perfect things like accounting, customer service, cash flow, the whole experience has to work for your investors or for yourself. And then from there, when it's really tight, that's when you scale. That's when you decide to franchise. And then once you start to do those things, that will start to come off again. There's all kinds of things like the market changes or bureaucracy or even political forces that might even create resistance

for your growth itself. I'll just use Uber as an example. When Uber first started coming out, they started to test in San Francisco and all the major cities. That's where they wanted to try to perfect. Well, the taxi unions started come out after them, of course, because they're taking market share away from the taxi. The same thing is happening with Airbnbs and hotels, and the same thing happened with Starbucks when all these other brands started to come out. So that's a good idea. So just like

Uber and Lyft and just like Starbucks or Seattle's Best Coffee or Peet's or whatever, you're always going to have people competing against you, but they see you paving a way with a new business model. So once in a blue moon, entrepreneurs come up with the idea, and that's actually when you think about it, the right way to approach any kind of a business. You don't actually need to have the whole business figure it out. You just need to see or think of something that nobody's doing yet that make

s everybody's life easier. So many of you might have seen the video with my friend Todd Davis, who started LifeLock. There was a time where personal ID and theft wasn't so prevalent. Now it's very prevalent. There's lots of people trying to steal your data. So LifeLock was way ahead of its time. So my friend Todd, who's a marketing guy. But how do I create an industry to protect the consumer from personal ID theft? And that's how he created LifeLock. And then he went out and found all the people

to help them accomplish that, because it was a good idea and because that was happening at that time. Now we're all under attack for cybersecurity. But back then that was a revolutionary idea and everybody was saying That's never going to work. New entrepreneurs enter the space and they find a better way for the consumer. It takes away market share from old models that are previously broke. So I had the benefit of growing up in Seattle and of course in Seattle we had Microsoft, we have Amazon,

we have Starbucks, we have a lot of real big entrepreneurs that started from that particular area. They all started small and scaled. Now you don't have to have all those skills just like I did. All you need to do is find people with skills and you need to ask the right questions and see what you actually need to take the next step. So at different stages, you need different things. Obviously, in the beginning you just want customers in cash flow to be able to cover your operating expenses. But

then from there to scale it, you actually need better systems and you need a really good accounting system. You need better i.t. You need to understand debt and equity. You understand how to onboard employees and keep them and then attract them and paint a bigger picture together. Maybe a piece of the company later through shares or through equity or something like that. Key to growth is always finding the right people and just getting them on the bus and then send the bus down the road and then

putting them in the right seats later because you don't quite know all of the things that you'll need until you actually need it. You'll see that you don't have a good marketing department. You'll see that you're having problems with your accounting. You'll see that you don't have enough investors. So how you pull this off is to reassess where you are each and every year. You have to take a hard look at what you've done from the prior year and then set really, really good goals for the next. Th

at is the right way and that actually sets you on direction. And on course, there's lots of distractions that can take you off a course from your original plan. So the plan has to be agreed to written just like personal goals or business goals are the same thing. You need to know what direction you're heading. Then you need to take a look at am I on track or am I not on track? And why? Each year, as we were growing our company from 1000 units, 2000 units or 10,000 years. You have very specific g

oals and very specific needs based on that kind of growth. It's no different than a Starbucks when you start from one and you want to expand to ten stores, you're going to need ten locations. You're going to need ten managers. You're probably going to need investors to be able to pull all that off. You don't particularly know all that. But while you're raising money for those things, you can always point to that one store or you can always point to those thousand units and you can show them the

track record of everything that you've done. So what everybody's betting on is you. What they're betting on is your team. What they're betting on is that you can replicate what you've just done, and they're going to trust that you hire the right people to pull all that off and hit your goals. So once you have your direction, once you have your goal, let's say to buy 1000 units, for example. Now you got to figure out how you're going to get there. So part of it is going to be debt and equity. So

that might be you or might be somebody else. Part of it is going to be property management, asset management, finding investors, looking at deals, acquisitions, underwriting, whatever it is. And so you can't be a jack of all trades. You have to actually find people either in-house, you hire them or you use a third party. But always you have to make people do what they said they're going to do. For example, if you want to buy a thousand units, you probably have to look at 5 to 10000 units and mak

e offers on at least two or 3000 units to be able to buy a thousand units. So you can work backwards and so you can set your acquisitions person and your analysts and all the people that you need to be able to do the due diligence and everything to pull that off. That all has to be set and everybody stays in their lane. In other words, we have one person that's in charge of due diligence. We have one person that does all the underwriting, and this is our analysts. And then we have our acquisitio

n person that goes out and finds real estate deals and it all flows through my Tuesday meeting. Now, this all happened over a long period of time. And the beginning, of course, it was all me. But as you start to maximize your own time and try to take a look at how you can do that, you actually have to trust and delegate. And then more importantly, make the people accountable and have them stay in the lane and perform as to what they're doing. For example, if I'm not getting enough deal flow, it'

s the acquisition problem. And then, of course, if there's not enough deal flow, there's not enough business for the analysts and of course there's not enough business for the due diligence. So all of it has to do with the acquisition. It might all start there. So that might be where I put all my pressure is how many deals are we looking at each week? How many offers are we making each week? And then that all just flows down to deal flow because it's just a numbers game at the end of the day. So

you don't start with $1,000,000,000 company in the beginning, you're just trying to survive. You're just trying to have enough income to cover your expenses and then scale as much as you can. And then you start to realize the wheels start coming off and then you have to figure all that out. Scaling is really more of a mindset. Like I know a lot of people that just are very comfortable with just owning a thousand units and not having a big company and not having a lot of people. And then for me,

I wanted to scale up to 10,000. I wanted to push the envelope all that I could. So some of it just depends on the individual and the team. And when you have vision, then more people jump on that vision. You're going be able to hire better people because they all want to be part of a great success. I never started with a 10,000 unit vision because it's kind of unrealistic if I'm sitting across the table from somebody and our own anything yet, and I say, I'm going to I want to start $1,000,000,00

0 business. They're basically going to laugh at me and say, Well, why don't you just buy one property? Or you start with that. They're going to expect that you gain the experience and the wisdom that you're able to attract a team to be able to help you pull that off. And trust me, once you start to gain momentum and once you start to produce, more and more people will notice and it'll be more and more easier to hire people and bring the right people on board and get them on the bus. Eventually y

ou'll find that you'll soon get them in the right seat, and then that bus will start speeding down the road and most of it will just create its own momentum and you won't even have to do anything other than be the visionary and just keep it on the right road, on the right track. Or once you get to $1,000,000,000 company, your problems never stop. You just now have more issues of trying to scale from 1 billion to 10 billion. Let's say if you want to see how I'm going from 2 billion to 8 billion,

which is our current next plan, check out this video.