Stanford Design Report

Topics: Cash flow, Logic, English-language films Pages: 3 (536 words) Published: April 23, 2014

Billion Dollar Company
Summary Report

The Author explains the concepts with his experiences at Indonesia. This helps in understanding his views clearly. The content is divided into three main parts mainly Business concepts, Business Model and Financial model. The 3 stages in a business life cycle are (a) Proof of concept where the revenue is 0-1 million dollars, (b) Commercialization where the revenue is 1-3 million dollars and (c) Scaling the business where the revenue is 3-10 million dollars. The first stage is all about who will buy the product. The 2nd stage is about understanding the customer segment. The 3rd stage is about serving large customer base with positive cash flow. The Billion Dollar Company proposes a systematic approach to develop a business model. The author takes advantage of a five-step process in the development of business concepts. The author also stresses about knowing the customer as an important part of the business. Once the task is achieved propose a hypothesis and convert into a business solution only when the revenue crosses $10 million. To this hypothesis we need to bring in some changes with respect to technology, economic or regulatory environments to keep up the profit margins. This can be achieved by industry analysis which is a barrier for competitors not to enter. There are 3 ways of starting a new business doing something better, doing something a new way or doing something new. The Business Model is the fourth step which is a structured approach to companies’ problems. And the final step is related to an absolutely prominent tool namely Financial Model. The first aspect in a business model is revenue driver that explains company’s growth in revenue or sales. Every company should have only one growth driver. The second aspect is pricing strategy which is often neglected. This helps us answer when how we receive revenue when closing a sale. There are three pricing strategies that provide a means to...
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