Business Blueprint

How can you turn a Big Idea into a billion-dollar business? Of all the American companies that came public in the past 25 years, only 5% achieved $1 billion in revenue; in contrast, more than 25% went out of business. We all chase the dream of growth, but very few achieve remarkable success. Is there an actionable success pattern that these elite companies followed?

I believe so. As an executive, I believed there had to be a useful set of guideposts to manage growth by. But as I searched I found no quantitative dissection of the success pattern for turning a "Big Idea" into a stand-alone billion-dollar business. This launched a study to reverse-engineer the success of billion-dollar companies, the result of which I call Blueprint Companies and discuss in Blueprint to A Billion.

While Blueprint Companies represent 5% of the American companies that went public since 1980, the big surprise is their disproportionate impact: They account for 56% of employment in 2005 and 64% of market value created! Blueprint Companies are the heart of America's innovation and growth. Their products enhance our everyday lives.

Need proof? Think how often you use Microsoft(MSFT Quote) software, access the Internet thanks to Cisco's(CSCO Quote) equipment, search the Web using Google(GOOG Quote), sip a Starbucks(SBUX Quote) latte, shop on eBay(EBAY Quote) or Amazon.com(AMZN Quote), go to Staples(SPLS Quote), or Home Depot(HD Quote), take medicine made by Amgen(AMGN Quote), use financial services from Charles Schwab, or ride your Harley-Davidson (HOG Quote) motorcycle.

Blueprint Companies followed a unique revenue growth pattern: exponential growth. Think of exponential growth as growing at least 50% or even doubling every year. This is the only growth pattern that will turn a small business into a billion-dollar Blueprint Company. To achieve this growth, Blueprint Companies implemented these seven essentials.

The Seven Essentials to Achieve Exponential Growth

1. Create and Sustain a Breakthrough Value Proposition.
A value proposition states the benefits customers receive from using a company's products or services in terms that the customer understands. The best Blueprint Companies not only created but sustained breakthrough value propositions.

2. Exploit a High-Growth Market Segment.
Opportunities exist in a lot of industries. Some industries have more opportunities than others. However, industries such as specialty stores generated the highest number of Blueprint Companies with 18 firms: AutoZone, Staples, Tractor Supply, Williams-Sonoma, PetSmart, and others. This occurred because there were multiple market segments to address within this industry: office supplies, teen fashions and pet supplies, to name a few. In contrast, there are numerous cases where a single company arises out of an industry to become the only player to achieve $1 billion in revenues--witness Harley-Davidson.

3. Marquee Customers Shape the Revenue Powerhouse.
Customers can be more than customers. The best of them can serve as an extension of your sales force. They become your most effective sales team. These marquee customers shape the company by testing and deploying the product, by recommending the company to their peers and simply by providing exponential revenue growth on a per-customer basis.

Click here for a video by David Thomson.