Growing up, being a millionaire was one of my goals. The idea was that having $1 million in something meant you were all set for life; having fancy cars, yachts, houses, and a jet-setting lifestyle. Recently, I found my old freshman year high school project on what I thought my life would be like in the future. Of course, it involved fast cars, yachts, houses, and a jet-setting lifestyle. And I wrote down my net worth was somewhere around a million or two. Fast forward a couple of decades, and being a millionaire still seems cool, but not as cool as it was when I was a kid.
I’ve spent time with a few billionaires and a few “hundred-millionaires” over the past year. The interesting thing I’ve learned is how they think, and how billionaires think different than anyone else. The people worth hundreds of millions I’ve met think about ways to get to be billionaires. They invest in a diversity of industries and seem to take many risks to try to multiply their income into the billions. They seem to want to make time go faster and are always thinking about being upwardly mobile in society. The idea is that being a billionaire means you are all set for life; having fancy cars, yachts, houses, and a jet-setting lifestyle.
The very few billionaires I’ve met have one common goal: don’t lose it. They invest conservatively. They don’t want to be known as the person who lost a billion. Not to their families ,their friends, the world. They live great lifestyles, but they live off the interest in many cases and invest small percentages of their money in conservative means. They count on time working slowly and think very long term.
One billionaire said to me that he wonders who will grow the first trillion dollar company. By this he meant, a trillion dollars in annual revenue. I asked him how to get there. He said that to be a billionaire, all you have to do is sell a billion people something for $1 and you’re done. As there aren’t a trillion people on the planet, we either need to find more people in the galaxy or the universe, or we need to start selling things billions of people want to buy, over and over again, many times a year.
I had a conversation with an executive from NBC/Universal. He was talking about the advertising-supported broadcast model and how international stations/channels can reach billions of people now. He lamented about the challenges of enforcing various production rights across the planet and how that impacts revenue. I asked him why not simply remove the advertising and charge for each episode? At a dollar per episode, accessible globally to the few billion people on the planet, is that enough revenue? He said the Internet couldn’t handle that much video streaming and payment systems today can’t handle that much transaction volume. I offered that if a billion people already have smartphones watching youtube, then I bet most of the infrastructure is already there or at least planned. He said it’s an interesting concept that doesn’t come up much at all in the broadcast houses today. I then thought about if this was one of the ways to create a trillion dollar revenue stream; by offering something people can pay for over and over again within a year.
I let this percolate for a few months. The Wikipedia list of largest companies by revenue is one list. A few companies are just about at the half-trillion mark in revenue according to that table. The sheer complexity of these companies is staggering. The actual profitability is another topic.
What would it take to grow a trillion dollars in profit per year? Perhaps that’s another topic.