How 94% Of Billion-Dollar Entrepreneurs Harmonize Speed & Dominance
Survival and dominance
In high-performance entrepreneurship, finding the harmony between speed and dominance can be the key to venture control and industry leadership. But how do you find this harmony to dominate your industry and lead your venture without ceding control to VCs?
94% of billion-dollar entrepreneurs did just that. They leveraged the right speed for their ventures, like gazelles, but also became dominant leaders in their industries, like lions. Entrepreneurs who select speed without dominance may be ceding control to VCs – up to ~85% of VC-funded ventures replaced the entrepreneur with a professional CEO.
Choosing Your Path: Speed or Dominance?
Consider this: in an analysis of 85 billion-dollar entrepreneurs, only 6% prioritized speed, while a staggering 94% chose dominance. Should you chase the speed of the gazelle or seek the authority of the lion – or find the right balance to grow with control?
Gazelles: The Quest for Speed. For some entrepreneurs, speed seems synonymous with success. Speed-seeking entrepreneurs accept VC as soon as it is offered, which is usually after proving their strategy, but before proving their leadership skills. However, this haste can come at a cost – losing control of their venture, being replaced by a professional CEO, and heavy dilution by the VCs and the hired CEO. In an analysis of 22 billion-dollar entrepreneurs, speed-seeking entrepreneurs only retained about 7% of the wealth created by the venture, illustrating the high price of Early-VC (The Truth About VC from www.dileeprao.com).
Lions: The Pursuit of Dominance. Dominance-minded entrepreneurs took off without VC. By avoiding or delaying VC, these entrepreneurs kept control of their venture and dominated their emerging industries and improved their chances of building a unicorn by about 16x. They also kept about 2x – 7x the proportion of wealth created compared with the speed-seeking entrepreneurs and did not need to exit at the wrong time just to satisfy VC goals. Perhaps most important, they stayed as leader rather than letting someone else build their venture.
5 Secrets of Billion-Dollar Entrepreneurs to Harmonize Speed & Dominance.
How do Billion-Dollar Entrepreneurs harmonize speed and dominance at each stage of their venture? They used 5 key strategies:
#1. Focus to preserve control.
Top 20 VC funds, who are said to earn about 97% of VC returns, invest after Strategy Aha, and before proof of entrepreneurial leadership. By doing so, the Top 20 VCs grab control, recruit new CEOs, and replace entrepreneurs. Entrepreneurs who prioritized dominance grew at smart speeds. By focusing on control, Bill Gates stayed as CEO. By not doing so, Steve Jobs lost control and was ousted from Apple.
#2. Move smart to beat first movers.
Only ~11% of first movers ended up dominating. 89% of first movers lost to smart movers who analyzed the industry to find the strategy to dominate the industry. Dominance-minded entrepreneurs focus on smart timing, not just being a first-mover. Mark Zuckerberg was not the first mover. He was the smart mover.
#3. Focus strategically to dominate.
Instead of fixating on ideas, dominance-minded entrepreneurs focus on analyzing the market to find the potentially dominating strategy. Sam Walton dominated by applying the big-box strategy to small towns. Steve Jobs imitated the iPod, the iPad, and the iPhone. He “just” improved the strategy. First-movers often focus on the idea and pitch competitions to find angel capital and VC. Billion-dollar entrepreneurs analyze the market and industry to pick the dominating strategy.
#4. Use passion and skills to beat opportunism and capital.
While elite school students may have a leg up in accessing VC, most of the billion-dollar entrepreneurs leveraged passion and skills to build ventures and dominate industries — without VC. Michael Dell, like 94% of billion-dollar entrepreneurs, used his passion and skills to takeoff without VC and dominate the PC industry
5. Harmonize speed and dominance to takeoff without VC.
By resisting the allure of premature VC and scaling strategically, 94% of billion-dollar entrepreneurs took off without VC to keep control of the venture. By retaining control, they minimized dilution. Dominant entrepreneurs, from Sam Walton and Bill Gates to Jeff Bezos and Mark Zuckerberg took off without VC, stayed in control, and kept more of the wealth created.
MY TAKE: Master the harmony. If you can dominate with speed, seek speed. If dominance is independent of speed, seek dominance. Remember, VC only helps a mere 20 out of 100,000 ventures. Skills and dominance help all 100,000.
