How to build a $10 billion company

You are a venture investor.

Let's say you invest in 100 companies.

What will happen in 10 years or so?

2-3 companies hit the jackpot, 5-10 companies are amid survival, and the remaining 80-90 companies are down. I'm sorry, but I can't help but judge like this, right?

A venture is an adventure

A venture is literally an adventure. But the reality is even harsher than this.

Venture entrepreneur Peter Thiel affirms the case of funds managed by himself and his fellow venture capitalists:

"The best investment by the fund, formed in 2005, was in Facebook, and the related returns were more than all the rest combined."

“The second best investment was Palantir, which is expected to return more than all other investments except Facebook combined.”

“So is Andreessen Horowitz, the most famous venture capitalist.”

"In 2010, I invested $250,000 in Instagram, and then Facebook acquired it. This resulted in a net profit of $78 million, a 312-fold return."

“In other words, it is very risky for a venture investor to have a diversified portfolio, similar to buying a lottery ticket.”

“You have to focus on a few companies that are going to explode and expect one or two of them.”

"Then the uncomfortable truth emerges. One is better than all the others."

If you take into account the fact that venture capitalists select only 1% of startups for investment, it means that very few of the few will take most of the wealth. The rest will be slaughtered quickly or slowly.

This means that any venture should look at at least $10 billion in the first place.

Live or die!

So, how do you make a $10 billion company?

Stereotypes of monopoly

Before I explain, I would like to discuss the stereotypes of competition and monopoly.

Economists often praise 'competition'.

It provides more utility to consumers and at the same time increases the viability of the company.

On the other hand, they claim that monopolies are blocking the dynamism of companies and taking away the utility that goes to consumers.

Is this really true?

The monopolist can enjoy high profits as a winner.

This is so attractive.

So many contenders crave a seat.

We do this by any means or methods.

Eventually, the throne changes.

Just like Microsoft took IBM's place and Microsoft's place was taken by Apple and Google.

In this process, has market dynamics, corporate viability, and consumer utility been damaged, at least one of them?

In a way, progress is when a better monopolist takes the place of its predecessor.

Even the government knows the aesthetics of monopoly. Watch the Korean Intellectual Property Office run while moving the Fair Trade Commission.

A patent is, in other words, a guarantee against a monopoly. That there is no creation without strong rewards

I am using it.

So let's recap the story so far.

However, there are very few places that survive and prosper as venture companies.

Second, you have to be a monopoly to include yourself here.

How to become a Monopolist?

At this point, one question may arise. “Let’s just say so.
But how do you become a monopolist?
“Is it really easy to dominate a specific market like Google or Facebook?”

Of course, it's not easy.

I can only give you one piece of advice.

The idea is not to compete in the same way as incumbents.

And to create 10x better value.

The surest way is to invent something new.

PayPal, for example, has made buying and selling things online 10 times easier.

Amazon has built a near-infinite inventory system due to its online nature and has more than 10 times more books than other bookstores.

Apple introduced the iPhone, a small computer 10 years ago.

Do you think the items will be limited? well.

God bestows on humans at least one talent.

And in fact, the only field that has made dramatic progress over the past 50 years is information and communication.

It means there are many opportunities. This time, let's see how we can proceed with the monopoly in detail.

First, start small. The reason is simple.

It is easier to dominate a small market than a large market. Rather than being recognized by 1 million people, we need to create 100 loyal customers right away.

Second, increase your body size.

A company that has done this well is Amazon.

Starting with book sales, we have targeted albums, videos, and software, and now we cover all products worldwide.

This created a new category for transferring competitiveness and the number of customers increased from 100 to 1 million.

Third, don't destroy it. You have to play monopoly slowly and without anyone knowing.

People have an obsession with destruction. But it will run into obstacles and make enemies.

Look at Napster. They tried to overthrow the record industry, but in the end, they had no choice but to stand in bankruptcy court.

On the other hand, PayPal replaced the business of the credit card company but returned more business opportunities.

When this is done, you will find yourself becoming a monopoly.