Jan 29, 2020
A couple lessons I’ve been learning on my march towards a billion dollar evaluation.
On this episode Russell describes what a unicorn is, and why he set a goal to become one. Here are some of the awesome things in today’s episode:
So listen here to find out why Russell wants to be a unicorn.
What’s up everybody? This is Russell Brunson, welcome back to the Marketing secrets podcast. Today I want to talk to you about unicorns.
Okay, so I’m sure you guys all have seen the Social Network, if not it’s one of the greatest movies of all time. You should go watch it. It is the movie about the Facebook start up story, how Facebook got started. But there’s one scene in there that is very, very impactful for me. In fact, looking backwards now, I can’t remember when the movie came out, 7 or 8 years ago, but when it came out I was on the brink of bankruptcy. I was trying to figure out my next step, I was trying to throw a hail mary pass. I had some friends over in the UK and Ireland doing some crazy things. So I spent money I didn’t have, flew out there to Ireland and met with a bunch of them, tried to talk to them, see what they’re doing, trying to figure out like, what’s the next step for me.
And while I was over there, I remember there was this big yacht party on my buddy Andrew Fox’s yacht, they’re having this big yacht party and you know what happens on yacht partys, I didn’t know. But as the Mormon kid, pretty quickly I was like, I don’t feel comfortable here. I’m going to go bounce. And right next to the yacht thing, because we were docked to the yacht, there was a movie theater. So we’re like, “Oh there’s a movie theater.’
And I remember the movie that was playing was the Social Network. It had just come out, we were all excited to see it. We went over there, and I remember we got Haagen-Dazs cookie dough ice cream. How do I remember these details? It was really good though. And I went in there and watched the movie and ate the ice cream. During the movie there’s this scene, Justin Timberlake’s character is sitting down with Mark Zuckerberg, and they’re talking and everything and then Eduardo is like, “And that’s when he said it.” And then there’s this scene where he says, “You know a million dollars isn’t cool. You know what’s cool? A billion dollars.” Boom.
And that’s the line. That’s the line that’s so cool. So I remember sitting there on the brink of bankruptcy trying to figure out what I want to do with my business that was in shambles, and all I knew was, I wanted to create something big. It would be so cool to build a Facebook or something like that.
I remember a couple of weeks later, I went to Clickbank, which is here in Boise. I remember going to the Clickbank offices and walking around and seeing these huge offices, and they had this section I remember where there were all these people sitting in cubicles, and they had these clocks over each time zone, because they had support for 24 hours a day. So you see what time it was in Germany, and in Russia, and in China, and Australia. And it was really cool. I was like, ‘I would die to have a business like this someday.” But I didn’t think it was possible. I was like, ‘Oh, I’m a dude who creates info products and sells them. That’s kind of what I do.” And there’s nothing wrong with that. By the way, I love that business.
But I remember I was like, I want to build something like that. But I didn’t know what it was, or what it was going to be. So fast forward a couple years later, I met Todd Dickerson, AKA the man. We built Clickfunnels, AKA the product, and the last 5 ½ years has been history. It’s been crazy. I remember a couple of years into it, we were having some success. I think we’d passed 70 million dollars in sales that year. And we were like, “What’s next, 100 million.” Then after that, “What? A billion?” That’s such a far out goal.
And I remember just kind of being like, “Ugh, we’re never going to hit that.” And then I remember Todd Dickerson sent me a gift in the mail and it was this poster board and it said, “a million dollars isn’t cool. You know what’s cool? A billion dollars.” I remember seeing that and I was like, ‘Ugh.” It’s been on my wall for the last 2 or 3 years, as we started moving towards that goal and how do we get to a billion dollar company.
So the question is what’s a billion dollar company mean? Does it mean it did a billion dollars in sales, is it worth a billion if we traded publically for a billion, did the owners make a billion? There’s so many things. So I’ve been trying to figure out what’s the actual definition, what makes something a billion dollar company. And I went on this journey trying to figure out a metric that I could start sinking my life towards and sinking my goals towards, it was interesting because they always talk about companies that pass a billion dollars in value, valuation. That’s what they’re worth if they were going to go and sell to somebody they’d get a billion dollars. They call them unicorns. They’re the rare thing, the unicorn.
And as I studied all these different unicorns, it’s been interesting because almost every unicorn that’s out there, you know, you look at the path. They created a product, they get to whatever, 10 million dollars in sales, they take on venture capital, they get to 100 million, then they take on the next round, and then it goes through the thing and they get there. But very few, very, very few if any have gotten to a billion dollar valuation without taking on any money. In fact, I don’t know if I can even, there’s got to be some out there, but I’m not sure what they are. That’s something interesting I should look at.
Anyway, as they get closer and you look at like, what is the street, that’s what all the cool kids call it, the street which is Wallstreet, or the valley, which is Silicon valley. What do they value, what do they consider a unicorn, what’s the metric, what’s the number? And in the software business, which I am in, the metric is ARR, Annual Recurring Revenue. So the way they base it, as soon as you get to 100 million dollars ARR, Annual Recurring Revenue as a software company, you’re probably going to sell for at least 10x, which means you’re a billion dollar valuation. You’re officially a unicorn.
So that became the number, that’s interesting that we’ve done, the last 2 years in a row well over 100 million dollars in sales, but those sales weren’t all in RR or recurring revenue. They were in event sales, and coaching sales, and all sorts of these different things. So our annual recurring revenue, which is just the money from the software, from the SAAS subscription is not at 100 million dollars yet. Yet is the key word. But it was close. Last year was close. We’re, I don’t know if I’m allowed to tell the numbers or not. I don’t even know anymore how those things work. But we were about 90% of the way there, I’ll tell you that. There’s the benchmark.
So we were at 90% of the way to hitting 100 million ARR. So my goal, my focus over the last 6 months or so is “Well, how do I increases ARR? What’s the strategy? What’s the secret? How do I do that? What are the levers I gotta turn?” So those of you who have been watching the Clickfunnels story, you notice one of the levers I pulled about 4 or 5 months ago, and at Funnel Hacking Live, you will see that lever pushed the rest of the way down, and then the next lever.
And if I play my cards right, and I think I will. Hopefully. I could screw it up. You never know. But if I do play my cards right, by the time Funnel Hacking Live is over we will have passed the 100 million ARR, annual recurring revenue. So that would officially make us a unicorn and give us a billion dollar valuation. We’re not there yet, we’ve got a long way to go, but I’m excited. I’m not sure why I’m telling you this, other than just it hopefully gives you guys a goal to shoot towards.
It’s interesting, the time in my business when I had a goal it was really easy to get up and to work hard. And at first the goal was just to feed my family, which is a very noble goal. That was the first one, so it gave me a reason to wake up and figure this stuff out. But after my family was fed and my needs were met, then it was like, “Okay, now what?” and obviously I have the impact goals, but it’s hard to quantify an impact goal. “I want to change the world.” Okay, how do you quantify that? I don’t know. So we quantify it with revenue, right. So it’s like, ‘Well, if I could make a million dollars in sales, that means I’ve helped x amount of people. If I can get to ten million it means this many. 100 million is this many.”
So for me each of those tiers, the first was a million dollars and boom, we got to a million dollars. Then it was ten million and it took me a decade and a half to get to ten million dollars a year in sales. Then it was the 100 million, and then when we got there a couple of years later, we just keep going. And again after I passed 100 million dollars a year in revenue, I was just like, “The next goal is so far away.” A billion dollars in revenue. And I think that’s still a goal, but it’s so far away.
It’s kind of like when I got in wrestling in college, the only next goal was the Olympics, and the Olympics seemed so far away from where I was at right then, that I didn’t decide to go on that journey. So for me the next goal was the billion dollar valuation, to become a unicorn. So that’s what we’re going towards, and it’s given me and the team and the people who are pushing this, new motivation, new excitement, new passion to run towards that goal, that vision, that thing.
So I hope that, if nothing else, some of you guys set a goal to become a unicorn because I think that’s such a super cool goal. Number two, I hope it helps you figure out the goal that you’re chasing towards because, you know, it’s funny. We talk a lot about like, “The money doesn’t matter.” And it doesn’t, but it is how we keep score, it’s how we know, what tier am I at? Am I here, am I here? Where do I need to go? What do I gotta do? What do I gotta push to get to where I want to be? So hopefully you’re setting those goals, you’re figuring them out and you’re running towards them.
So I just wanted to share with you guys my goal, becoming a unicorn. So hopefully I get there sooner than later. A couple of other cool things, I won’t spoil this, but I have started working on the next book. Now these three books are done, it’s funny I’m like “I’ll never write again.” And then the second it’s done it’s like, “Unless it’s this book. And then I really want to write again.”
So the next book I’m going to write, it’s not another secrets book. The secrets trilogy is officially closed. There will be no more books added to that. There will be micro books like, Network Marketing Secrets, and we’ll probably do a lot of those little micro books, but there’ll be no more added to the trilogy, to the box set. So the next book for me to write, the next story for me to tell is the story of Clickfunnels. How we went from zero to becoming a unicorn without taking on any money. So I actually bought bootstrap.com, which is crazy. And the book is going to be called bootstrapped. And I’m going to tell the story. Well, we gotta finish the story first. Hopefully we get to the end of the story here soon.
But that’s the story I’m going to tell, it’s going to be fun. And I gotta learn how to write hopefully different, because I’ve written how-to books, a lot of them, but I’ve never written a story book. So it’s going to be my next challenge, my next mission, my next fun thing. I’m going to take a year off, but then that’s the next goal, the next thing I’m going to be running towards. So I’m excited for that, it’s going to be a fun project to kind of tell you guys the stories behind the stories. You guys have heard the story arc of everything as we’ve gone, I’ve been pretty transparent with most things, but there’s obviously things that I can’t, haven’t been able to share yet. It’ll all be coming out in the book, in three years from now. So don’t stress about it, it’s not coming soon. But it’s going to be a fun project.
So anywho, that’s half the fun, creating the story so you can then write it later. Alright, well, I’m in the office. I got about 8 million slides I gotta do. Funnel Hacking Live is a couple of days away. I appreciate you guys for listening, I hope you’ve enjoyed this episode. Let me know what your goal is. If you enjoyed this podcast, take a snapshot of it, go to Instagram, Facebook post it and tag me on it. Use #marketingsecrets and let me know what your goal is this upcoming year and this upcoming decade.
Thanks you guys, appreciate you all and we’ll talk soon. Bye everybody.