Ask most companies to name the holy grail of business and they may talk about meteoric growth and the increased revenue and new customers that come with it. For David Steinberg, CEO of New York City-based big data and digital marketing firm Zeta Interactive, it was a number--$100 million in sales. Not only has he hit the mark with Zeta--which is on pace to reach $175 million in revenue for 2014--his former online wireless company, InPhonic, also achieved nine digits.
While Steinberg attributes these huge numbers to some degree of luck, in other ways he has learned in more than two decades of running companies to get a few things right. Here's what he says you need to do to become a company selling hundreds of millions of dollars in products or services.
1. Figure out the problem you're trying to solve.
In other words, look for inefficiencies that plague consumers or companies and make them go away. For example, in the early '90s Steinberg started selling cell phones through Sterling Cellular, a bootstrapped company he launched from his basement. While he knew mobile phones would eventually take off with regular people, he focused on helping companies understand how the devices could be used as business tools to increase productivity. "It might sound odd today because it's so obvious, but at the time they were a very expensive product," he says. "Everybody else [was] coming at the wireless space by looking at consumer retail distribution. We built an outside sales force to do it, because we saw an inefficiency in that business people weren't going to come into a retail store at that time. That worked really well."
2. Keep abreast of trends daily to identify where the hot markets will be tomorrow.
Before terms like cost per acquisition or ad exchange even existed, Steinberg was carrying around stacks of magazines and reading voraciously about how internet content was projected to grow 17,000 percent whereas online advertising was only growing at 100 percent. "That created a massive arbitrage opportunity, where there was going to be so much more content than the advertisers could fend for," he says. The result? InPhonic, a collection of online properties--including the award-winning Wirefly.com as well as thousands of private-branded sites--that allowed companies like AOL, Yahoo, and MSN to acquire customers cheaper than they could through brick-and-mortar stores.
3. Make sure you can continue to satisfy customers in the event of meteoric growth.
InPhonic's rapid growth also contributed to its demise. Along with a credit squeeze precipitating from the early days of the recession, the company was unable to retain customer service levels and filed for bankruptcy in 2007.
"In many ways, InPhonic became a victim of our own success," he says. "We grew rapidly and raised a lot of capital quickly, so we didn't have as disciplined a process for vetting strategic choices--most things looked like an opportunity. Additionally, we didn't establish the people and processes necessary to realize the full potential of the choices we made."
In contrast, Steinberg says Zeta Interactive constantly monitors its investment decisions and focused early on building a strong foundation--people, process, and platform--to support fast growth.
4. Triangulate your research.
Steinberg founded Zeta, now a 700-person company, hinged on the promise of big data--a concept he says many companies still don't understand. In essence, he triangulated what he knew about harvesting vast amounts of information with his experience in wireless and customer acquisition. His thinking: Big data's sole purpose is to help people make decisions and take action.
"So we set out to build a big data customer acquisition and retention vehicle. We call it a customer life cycle marketing platform based on all of the confusion around data and analytics and most companies' inability to make it actionable," he says. "[It's] huge. This is a trillion-dollar-a-year space globally when you look at marketing and CRM combined."
5. Nail the basics.
Growing a quality company involves fundamentals you can't do without, such as hard work, transparency, living the Golden Rule, and paying employees more than they could make elsewhere. "I want to bring the best possible people in," Steinberg says. "That human capital is the most valuable thing a business has. Entrepreneurs need to truly invest in that if they want to grow their businesses to $100 million."