Day 26: More Billion Dollar Valuations
Yesterday, in my ONE THING
series I explained the business model Airbnb, Uber and eBay used to create their Multi-Billion Dollar businesses.
In a nutshell, they created what I call a “Two Way Channel.”
Facebook, Linkedin, and Instagram also built Multi-Billion Dollar Unicorns but they used a different model.
Todays ONE THING is understanding the power of INFORMATION.
I love the movie Wall Street… in it, Gordon Gekko says something profound to Budd (Charlie Sheen character) that always stuck with me:
“The most valuable commodity I know of is information.”
Apparently, Mark Zuckerberg agreed and it worked out OK for him.
Have you ever wondered how these companies get these insane valuations of BILLIONS of dollars?
First, let me disappoint you with how predictable we all are.
I cut my teeth in advertising… Have a look at my image:
How annoying was that!
Let me play it out for you.
You go to LinkedIn and create a profile. Your name, where you went to school, whether you graduated and got a degree, the year you graduated, where you work, where you used to work, who you’re friends are, who your colleagues are, the city you live in, the city you used to live in and a description, in your words, who you are and what you do.
When we set up our profiles, we gave them the world’s most valuable commodity.
For free. Then think of how insanely predictable we all are.
They sell targeted advertising to companies looking to find people just like you and me. They can predict with precision what you’re interested in, what you’ll buy and what you need.
They have about 5000 individual data points on you. It’s insane.
The mistake I see companies making is not realizing they should be in the INFORMATION business.
Let’s use an accountant as an example.
Think of the INFORMATION they have access to. And not to mention a tight and trusting relationship with their clients.
How an accountant doesn’t successfully sell “consulting” to their client base… is totally BEYOND ME and frankly, they’re negligent for not providing it in my opinion.
They’re staring at your numbers and with minimal effort (life does continue after tax season) can find groundbreaking financial breakthroughs (wasted money and obvious mistakes!!) in a heartbeat.
Once a month the accountant’s boardroom should be filled with a business building workshop.
Then look at a business broker…
The info a business owner will give a business broker to create a ‘valuation’ (how much they can expect to sell their business for) or to seek someone interested in buying their business.
The business broker gets calls every day from companies wanting to sell and hangs up the phone saying “that’s not my target market – they’re not ready to sell.” $!$#@!&… Huh?!?
Of the ten stupidest people I’ve ever met… I’d say eight of them were business brokers.
Facebook, LinkedIn, Instagram built their platforms on the INFORMATION we gave them for free.
MySpace disappeared because it didn’t go into the information business. The issue was most of the profiles were fake names with fake photos and garbage information.
Can some of your clients go into the INFORMATION business and are they missing a massive opportunity?
There’s a critical second part of why these information businesses are Multi-Billion Dollar Unicorns and I’ll explain that on Monday.
Enjoy your weekend peeps.
We flew my friend Steve and his fiancé here for the weekend to give them a break… I mentioned him a little while ago to you.
His life was turned upside down when he found out he had terminal brain cancer and was operated on within a week.
He’s in rough shape but he’s a proud man and his strength tonight brought tears to my eyes. Makes all my little problems seem ridiculous.
I feel so privileged to be able to be here, of sound mind and body, at 1am writing this to you.
Obsessed with your success,
PS. Enjoy life.
Stop living like you live twice.
And definitely don’t spend your life emailing me mistakes in my grammar and spelling.
Yes, that happens.
Yes, I suck at grammar.
No, I don’t care.
Read more from the One Thing Series