Partner Article

The age of $1bn business, with no staff?

The near-zero-employee, $1bn company is nearly here, claim technology specialists Magister Advisors.

The analysis suggests a new breed of super-efficient technology companies is already emerging, capitalising on near-free distribution channels that enable entrepreneurs to find significant markets for their innovations with minimal capital investment and virtually no workforce.

Recent acquisitions and IPO valuations point to this trend, and Facebook’s acquisition of Instagram, a business with 13 staff, for $1bn translates into a value per employee of $77m.

Facebook’s IPO filing implies a value per employee for its own business of $33m, and Microsoft, by contrast, has a value per employee of $3m.

Victor Basta, managing director of Magister Advisors, said: “The potential for this new
breed of super-efficient companies to accelerate revenue generation is unprecedented.

“Microsoft went from zero to $1 million revenues in 3 years ($3.6 million in today’s terms).

“Facebook, by comparison, went from zero to $150 million revenues in 3 years, representing a 40-fold acceleration in real terms. This will only get easier and faster for the right idea.

“The opportunity to create huge value – and create it quickly – has never been greater, with minimal operational risk. The arrival of the $1 billion one- employee business is surely imminent.

“Microsoft and Apple were both built on the entrepreneurial genius of a handful of individuals. The difference was that they needed to build a whole infrastructure to grow.

“The parallels between the early days of Microsoft and Apple and today’s new generation of white hot technology companies are compelling.

“What today’s business models make clear is the huge amount of value that resides in individual employees in successful technology companies, something that hasn’t been visible before.”

This was posted in Bdaily's Members' News section by Tom Keighley .