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But quite a few people between five and 10 billion dollars. That is a lot of money, right? People think millions f dollars is a lot of money. No, billions of dollars is a lot of money.
You want to build a billion dollars business. It is not about how had you are working, or how smart people you have on your team. Because you know what, to create a million dollars business, or a multi-million dollars business you need that as well. But the difference between crating a business that done hundreds of millions, versus billions of dollars in you need a business that solves a problem for a really big market cap.
Look at the Uber for instance. They are solving transporting problems. They are making it more efficient for you to get to one place to another and spending less money doing that and best of all, you do not even have to drive. You can be a poor person and now you can have a driver just like those rich people have.
Uber is solving a huge problem. It was such big problem that they increased the market size of, the whole taxi industry. That is right before Uber, the taxi industry was actually smaller. They did not just take a portion of the taxi industry, they grew it and making it way bigger. So if you do not solve a big problem and go after a huge market, you are not gonna create a billion dollars business.
Now whatever idea you have, you have somewhat competitors. It may not be different competitors, like Uber’s not directly competing with taxis. A lot of people are not like, should I take a taxi or Uber, to a place, I do rather have an Uber versus having my own car.
Like me, I do not even drive, right, but when I am in New York it is easier t grab a can, then it is to grab Uber in most cases. But if you are not going after a really big market, you would not do well. And a lot of people and you may be thinking, hey if I wanna create the nee category, but no, stop.
Sure you can innovate in a sector but go after something that is a really big TAM. If you are not familiar with TAM, stands for, TAM is total assessable market size. So if you go after something big like a Salesforce market size or the CRM market and let say they are worth 50 billion. Will we be bigger that Salesforce? If you dream it, maybe it will happen. But chances are you are not, but that is Okay. If you are, you know, 5% of Salesforce you are still a billion dollar company. So if you go after something that is really huge like the advertising space or the CRM space or support, or if you go after transportation or automation or trucking or shipping containers, how boring that may sound, like companies like Docker or Dock or whatever they are.
They are huge, it is because they are going after something that is totally big. And if you go after a really huge market size, even if you take 1% of it, you can do well.
The company called Nextive, which offers voice over IP phone services. And they are already doing over 100 million dollars in revenue. The voice over IP market you know like those Vonage commercials. That market has only 8% penetration. That menus 92% for the people out there are still using landlines. That is a small market penetration. But that means 5, 10 years from now. It can grow to be even bigger and bigger. Yah Nextivas dong over 100 million dollars and they are not even the biggest player in this space.
These are companies like Ring Central and Vonage that are already worth a billion plus. But as you can see, you probably have not heard of Nexttiva, yet they are still marketing hundreds of millions of dollars. So if you go after a huge market, you have a much better short tor creating a billion dollars business. If you go after a big market, what does that mean? You can have a big company. So if you are not sure if your idea is going to be big enough, where you can hit that billion dollars mark.
