Building a Million Dollar Business - A blue print

Building a startup is an infinite game. If you are truly chasing a large market, you will realize that the milestones are never ending. From MVP to v1 to v2, to scale, to IPO (or acquisition) and even post that, with expansion of product ranges, refreshing product ranges, the work is infinite.

So as an entrepreneur, the first advice I would give is to play finite games within infinite goals. Have milestones that will enable you to take a breather.

Goal: Build a million dollar business, with healthy margins, that enable you to pause, bring in the second level of command, so that from the million to the 10 million, you are focusing on strategy, while you have your VPs and BU Heads who will drive goals.

So how do you get to the first million?

There are three types of revenue models. Transactional revenue models, repeat revenue models and continuous value revenue models.

Stop: Do you know the difference between business model and revenue model? In Summary, the business model is how the business operates and creates value. The revenue model is how the business makes money.

Back to revenue models:

Transactional Revenue Models: These are one time (or almost one time sales) of products. It could be selling a product via an ecommerce store or a service. This is a scenario where there is a demand, and the product / solution satisfies the demand - these are by enlarge most revenue models.

Repeat Revenue Models: These are products or services where periodically there will be a need to come back - it could be a restaurant, and the product is a dish. Even though the transaction satisfies the need, there might be further need that will potentially allow for the end user to choose your offering for the second or third time.

Continuous value revenue models: These are scenarios where the demand is continuous, and the end user has a reason to opt in for a recurring subscription of the product or service.

Once you have an understanding of these three revenue models, depending on the sector and industry where you have deep domain knowledge and understanding, you can look at opportunities that allow for untapped value.

If it is a transactional opportunity, you can create an offering that is priced at a million dollars, where you only need one customer, or you can price it at 10,000$ if you can find atleast 100 customers.

On the other hand, say you were able to spot an opportunity where the need is recurring and you will able to provide continuous value month on month, and you are able to price your service at 833$ a month and you are able to get 100 customers, or if you price it at 416$ a month, and get 200 customers, and they subscribe to a Month on Month service, you have a million dollar business in hand.

While this math is simplistic, it a) makes the formula simple and declutters, helping get clarity. and b) it helps you think about an opportunity where the perceived value for solving that problem would be 2-3 times more than the price you are setting to solve that problem.

This allows you to filter out problem statements quite easily and to focus on the top 2-3 that you need to prototype and validate.

I am on a mission to help 150 entrepreneurs build their first million dollars in revenue in their product businesses. If you want to be part of the tribe, do join here: (This group is for founders only. Please make sure you revert with the profile to your LinkedIn URL when requested to get your request approved)