Published: 8. 9. 2017 in President word

How to make a billion dollars

This is a simple instruction on how to make a billion dollars, which is based on principles brought on by the digital revolution, and which uses the basic elements of digital economy: automatization and digitalization of processes, utilizing the efforts of others (users, partners, etc.) in business processes, lack of regulation and digital economy legislation. The instructions are simple, but it is not easy to choose the best idea, nor to accomplish and apply everything properly. If it doesn’t end up being a billion dollars, I do hope you’ll be satisfied with 100 million.

Here’s the recipe:

Step 1: Search for industry branches that are strictly regulated and limited by expensive territory-based licenses. The companies working in these areas today usually use a great deal of manual processes, and therefore have a high number of employees. For instance, telecom companies must pay for licenses and permits, and purchase frequencies on which to broadcast for each territory or country. The same situation applies to financial institutions which are regulated and must also be licensed and certified, and must adhere to rules of business (Basel accords 1, 2, 3, 4). To ensure compliance with these regulations, business processes are manual, they demand a high number of employees, and thus they drive the cost of business up high. In some countries, companies in these industry branches pay extra income, profit or transaction taxes. Even so, the great majority of them make a significant profit.

Step 2: Analyze the services of companies in the chosen industry branches and single out the products and services which generate the most profit. Find the services that earn the most for telecoms, banks, insurance companies etc.

Step 3: The hunt for a billion dollars begins by selecting the services with the highest profitability, and would be more efficiently offered through digital channels and with process automatization and digitalization.

Analyze which of these services could be simplified and expedited through mobile apps or webpages, thus significantly lowering the cost of providing them compared to the traditional approach. Take into consideration that the digital economy enables global access (no borders, no special permits, initial investments for entering the market is low, capacity is unlimited even though the market is vast).

Step 4: Choose the most promising service and begin developing the app. Make sure the app is user friendly, that it’s transparent, and that it adds value for customers compared to today’s process.

Step 5: Consider which model would be most suitable for the selected service. New value proposition could be based on price (free for customers), but the app would gather data on the customer. Another option would be to make it drastically cheaper than traditional competitors, but for instance it would also offer instant execution, whereas traditional operations would take days.

This model has been used by Skype, Viber, WhatsApp and many others, and they have taken over a huge income and profit share from telecoms for calling and messaging services. SMS and MMS based messaging used to generate over 100 billion dollars a year for telecom operators just a few years ago. In another few years, this income will fall down to 50 billion even though the number of messages will multiply manyfold.

This is the model of global specialization – one service is offered on the global market at a much lower price (or free), with very simple application. The expenses of these companies are small (few employees, infrastructure and many business functions are given over to partners), and growth doesn’t demand large investments. New hiring is much slower than the growth of business volume (number of users, transactions or income).

Digital wallets, various payment services, international money transfer and exchange are just some of the examples within the financial services area. has already exceeded the value of one billion dollars for the service of easier, quicker and cheaper money transfer between countries with reasonable currency conversion rates.

If you’re not very innovative, you still have a fighting chance, as long as you carefully follow what is happening in certain industry branches and are able to catch sight of interesting solutions to improve, or simply apply in another industry branch or geographic area. Based on analysis of successful companies, it has been established that they are not always the original creators of innovations, but they have rather just managed to apply someone else’s innovation in a better and more efficient way. This was always the case, and it especially holds true in digital economy.

Facebook, Apple and Google have used existing ideas and solutions in many areas, and combined it all in a new way at the right moment, thus achieving enormous success.

Branislav Vujovic

Branislav Vujovic

President New Frontier Group
Strive to become better

Branislav Vujovic is founder and also president of New Frontier Group and has overall responsibility for the New Frontier Group, with special focus on Innovation, M&A strategy, group strategy and investor relationship.

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