Building a successful monopoly t

Building a successful, profitable company takes years of work.

As stated in a previous blink, we tend to think of monopolies as behemoths towering over their competitors. But, of course, they don’t start out that way: building a successful monopoly takes time.

This is especially true when it comes to profits: it can take years for a start-up to become profitable. But even if the company doesn’t initially make profits, it can still have value, because value is determined by the profits it will make over its entire lifespan.

PayPal is a case in point: in 2001, it wasn’t making any profits, and when the author calculated the value of the company back then, he found that most of it came from profits that were expected to come in more than ten years later!

The lesson here is that you can’t expect to be top dog in your business from the get-go: you need to be prepared to stick around for the long run. That’s what will make you profitable.

So how can you make your start-up a profitable monopoly?

You need to start small and then expand bit by bit.

First, understand that you don’t need to be the very best in every business, just your business. So it’s important to define your market as narrowly and specifically as possible. That’ll make it easier for you to become its dominant player.

After you’ve obtained a monopoly in this niche, you can move on to the next, broader market.

From the very beginning, Amazon founder Jeff Bezos had the ultimate goal of becoming the world’s greatest online retailer, but he started much more narrowly, selling nothing but books. Only after Amazon conquered the book market did it expand to other categories like CDs and videos, and from there to other products. So, contrary to what many think, Amazon’s success hardly happened overnight.