What it takes to become a trillion-dollar company

In The Four, published by Portfolio/Penguin Random House (October 2017), Scott Galloway examines “four technology giants [that] have inspired more joy, connections, prosperity, and discovery than any [other] entity in history. Along the way, Apple, Amazon, Facebook, and Google have created hundreds of thousands of high-paying jobs.”

How did they do that?

Yes, quite true, most start-ups do not become billion-dollar companies but all of their leaders could learn many valuable dos and don’ts from Apple, Amazon, Facebook, and Google.

Here are eight factors that are prevalent among the four companies, accompanied by comments I presume to add.

Here are the eight factors  prevalent among the four companies, accompanied by comments I presume to add.

1. Differentiation: Yes, it could be a unique product but also “where customers discover the product, how they buy it, how it’s delivered, etc.”

Comment: Keep in mind that “easy to do busy with” and “feeling appreciated” are of greatest importance to shoppers.

2. Visionary Capital: This is the ability to “attract cheap capital by articulating a bold vision that is easy to understand.”

Comment: Jeff Bezos envisioned being able to sell anything online and then created easy access to a “river” of almost unlimited products and services.

3. Global Reach: This is the ability to “go global. To be a truly large, meaningful company, you need a product that leaps geographic boundaries and appeals to people on a global scale.”

Comment: The term “global” is not a synonym for “everywhere.” Rather, it means wherever you want to be doing business. Keep in mind that capacity must always be able to accommodate.

4. Likability: “If you are perceived as a good actor, a good citizen, caring about the country, its citizens, your workers, the people in your supply chain that get you the product, you have created a barriers against bad publicity.”

Comment: You could do a great deal worse that pursue a strategy based
on The Golden Rule. The objective is to become and remain credible because your values are admirable and your performance is reliable.

5. Vertical: This is the ability to “control the consumer experience, at purchase, through vertical integration.”

Comment: That is, thorough, total  control of each point of interaction with a consumer: advertising, website, store environment, packaging, customer service, etc. If you have ever done business with Apple, you know exactly what I mean.

6. AI: This involves “a company’s access to, and facility with, data (what I believe people today refer to as ‘AI’) and have technology that can register the data algorithmically and, in a millisecond, improve the product incrementally every time a user is on the platform.”

Comment: In essence, knowing what needs to be known, obtaining that knowledge, and then processing it in ways and to the extent necessary. The most valuable teams in business involve humans and machines working in seamless collaboration.

7. Accelerant refers to “a company’s ability to attract top talent. This requires being perceived by likely job candidates as a career accelerant.”

Comment: All companies need people who can accelerate efficiency, productivity, sales, and profits. That said, I am again reminded of an African proverb: “If you want to go fast, go alone. If you want to go far, go together.”

8. Geography: It matters. “There are few (if any) firms that have added tens of billions of dollars in the last decade that aren’t a bike ride from a world-class technical or engineering teaching university.”

Comment: To leaders in companies that are not located within or near a major metropolitan area and its centers of higher education, I strongly urge them to check out MOOCs whose resources are most relevant to the given needs. The business schools at Harvard, MIT, Northwestern, and Stanford now offer hundreds of online courses at little or no cost.

Each of these components of the “T-Algorithm” is thoroughly discussed in Chapter 8.

Obviously, very few will become a trillion-dollar company. Who expected Apple, Amazon, Facebook, and Google to do so when each was launched? However, business leaders from all other companies can learn valuable lessons from what those four have accomplished…and more importantly, how they did it.

* * *

Scott Galloway is a professor at NYU’s Stern School of Business and the founder of Firebrand Partners, a hedge fund that joined forces with another hedge fund, Harbinger Capital, in order to force change on the New York Times Company in 2008. He is also part of a think tank called L2 and an expert on branding, luxury businesses, digital strategy, and the emergence of Asia as a consumer base.

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