The technology sector is responsible for producing more billionaires than any other sector today. Two of the most famous billionaires in this sector are Elon Musk and Peter Thiel. Elon is a true citizen of the world. He was born in South Africa, raised in Canada and is currently living and making a fortune in America. He is an engineer by profession and inventor by choice. He has founded a number of innovative companies such as Tesla Motors, SpaceX and Solar City. His varied ventures have given Elon a total net worth of $12.4 billion. Peter Thiel is also a mover and shaker in the world of technology. He co-founded financial giant PayPal and is one of the main members of venture capital group, Founders Fund. The fund helped to prop up a variety of tech startups which became tremendously successful over time for example Facebook, LinkedIn and Yelp. Peter Thiel has a net worth of $2.7 billion. These two billionaires know a lot about how to build a business. Here is how to model Elon Musk and Peter Thiel and build ultra successful businesses.
Be obsessively focused on product quality
Your product experience is the best marketing that you can do. This is according to Elon Musk, founder of electric vehicle company, Tesla Motors. Elon believes in quality as a marketing strategy so much that Tesla Motors has a $0 marketing strategy. Elon always seeks to make his products tremendously attractive to the customer. He does this by paying attention to detail and ensuring that only a perfect product is presented to the consumer. Ever since the company's IPO in 2010, Tesla Motors has struggled to satisfy demand because the market is so in love with their high quality cars. Therefore, to guarantee sales, don't spend too much time on marketing but invest as much time as possible on quality development.
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Strive to get critical feedback on your products
Whenever Elon Musk asks for feedback about the Tesla Model S, he does not want to know what is right about the car but what is wrong about it. While other business leaders seek to avoid getting feedback on their products, Elon actively seeks it out. He is not afraid of being told what is wrong about his product. This is so that he can gain knowledge which he could never have got on his own on what to improve in the product. As such, to build successful businesses, you need to ask for feedback about your product as often as possible. Ask specifically about what is wrong about the product instead of what is right about it. As a result, you will gradually create a product or service that is appealing to your target market.
Forget about the process of multitasking
You have limited time and energy. As such, to make your entrepreneurial effort successful, focus only on one company and work on it as much as you can. Elon Musk says that you should dedicate all the hours of your day into it and take no breaks, even on weekends. This is what to do when you are building a company. Focus all your time, money and attention into one business or idea until it works. You might have to pivot if you have already spread yourself too thin. Instead of serving multiple markets, seek to specialize in one. Secondly, instead of trying to provide a product and a service, why not put the product on hold to focus on the income-generating service? Elon encourages focus on one company, idea or process to achieve success in it.
Create technology or a product that is 10 times better than anything available now
According to Peter Thiel, the objective of every entrepreneur should be to create a monopoly with their product or service. In their product road-map, every entrepreneur should aim to capture up to 70% or more of their target market. Anything less shows a problem with the entrepreneur's vision. This level of performance is only possible if your proprietary technology, product or service is head and shoulders above the rest. Even at startup stage, your product should be able to outperform the closest substitute by a factor of 10. Therefore, maintain this approach to the business as an entrepreneur and you will create a very successful company.
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Thrive on network effects
A network effect is where a company becomes successful due to sheer appeal to a large number of people. The more people use it, the higher its appeal to the market. Examples of companies that thrive due to network effects include Facebook, PayPal and Amazon. Everybody uses them so it makes sense for a new person to join the group. This creates success by numbers for the companies. Peter Thiel advises that this is the way to go if you are at startup stage. That is because startups are actually not as attractive as the large players who are already successful in the market. Therefore, if you have a startup, go for a small market which you can take over quickly using network effects. After that, replicate the domination of small markets one by one. This will eventually make your business grow and become ultra successful.
Strive to create economies of scale
The concept of economies of scale is where a business is able to gain a tremendous profit simply because of the low production cost compared to the sheer number of sales. In economies of scale, every subsequent customer is highly valuable to the business not because of the purchases they make but the value which they add to the company as a result of joining its market. Peter Thiel indicates that a business can become successful due to economies of scale achieved in production and also word of mouth marketing. As such, try to reach as many people as possible in your market by using strategies such as low prices, great customer experience and high quality products or services. After doing so, keep your production cost low through strategies such as automation. After that, wait for the mix to catch on so as to create an ultra successful business.
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The Important Take Away
Elon Musk and Peter Thiel are some of the greatest business people in the world. They command companies worth billions of dollars. The tips above come directly from these titans and show you how to create successful and potential billion dollar businesses too. Following them can transform you from a player to a dominant force in your industry.