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Blueprint to a Billion: 7 Essentials to Achieve Exponential Growth
Praise for BLUEPRINT TO A BILLION "A wonderful, well thought out analysis of entrepreneurship and leadership of a growth company."
―Howard Lester, Chairman, Williams-Sonoma, Inc. "If you dream about growing your business to a billion, this is a fascinating down-to-earth study that you must read. Apply the seven essential principles to your business and you are off and running. Learn about strategy, growth, leadership, team building, and a whole lot more."
―Joe Scarlett, Chairman of the Board, Tractor Supply Company "Blueprint to a Billion is a well-researched and thoughtfully written book that quantifies the growth pattern of America's highest growth companies."
―Professor John Quelch, Senior Associate Dean, Harvard Business School "Eighty percent of the top-performing stocks in the last twenty years were small entrepreneurial companies that had an IPO in the prior eight years. Blueprint to a Billion tells you the seven key things these innovators did in common to become America's greatest growth companies."
―William J. O'Neil, Chairman and Founder Investor's Business Daily, www.investors.com "Thomson has written a masterful work that will catalyze, empower, inspire, motivate, and illuminate entrepreneurs, investors, and policymakers. The world needs this book and will profit from it in manifold ways."
―David M. Darst, Managing Director, Individual Investor Group Chief Investment Strategist, Morgan Stanley
―Howard Lester, Chairman, Williams-Sonoma, Inc. "If you dream about growing your business to a billion, this is a fascinating down-to-earth study that you must read. Apply the seven essential principles to your business and you are off and running. Learn about strategy, growth, leadership, team building, and a whole lot more."
―Joe Scarlett, Chairman of the Board, Tractor Supply Company "Blueprint to a Billion is a well-researched and thoughtfully written book that quantifies the growth pattern of America's highest growth companies."
―Professor John Quelch, Senior Associate Dean, Harvard Business School "Eighty percent of the top-performing stocks in the last twenty years were small entrepreneurial companies that had an IPO in the prior eight years. Blueprint to a Billion tells you the seven key things these innovators did in common to become America's greatest growth companies."
―William J. O'Neil, Chairman and Founder Investor's Business Daily, www.investors.com "Thomson has written a masterful work that will catalyze, empower, inspire, motivate, and illuminate entrepreneurs, investors, and policymakers. The world needs this book and will profit from it in manifold ways."
―David M. Darst, Managing Director, Individual Investor Group Chief Investment Strategist, Morgan Stanley
288 pages, Hardcover
First published November 1, 2005
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534 people want to read
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February 3, 2024
Blueprint to a Billion presents the first quantitative dissection of America’s most successful growth companies.
Exponential success is achieved by significant revenues and cost containment.
The odds are one in 50 that an idea becomes a business, one in 20 that a funded business sees an initial public offering (IPO) and, finally, one in 20 that a public company achieves $1 billion revenue. The odds of turning an idea into a billion-dollar business, then, are one in 20,000.
Every company can invest, even over- invest, to grow. However, not every company can create revenue growth. How many times have you heard a CEO announcing quar- terly results stating that earnings did not meet expectations because of a revenue shortfall, yet expenditures met or exceeded budget?
Blueprint Companies represent 5 percent of American compa- nies that went public since 1980 and account for 56 percent of employment in 2005 and 64 percent of market value!
we want to discover the roadmap to $1 billion revenue, not $1 billion market value.
During my tenure as a consultant at McKinsey & Company
• Shapers of a New World, truly create a new market for their products and services.
• Niche Shapers, follow New World Shapers with products or services that redefine a specific market segment.
• Category Killers, optimize a market by attacking the existing incumbents with a better-faster-cheaper value offer.
Right behind Specialty Stores (18 companies) was Property and Casualty Insurance with 15 companies.
Customers can be more than customers. The best of them can serve as an extension of your sales force
Blueprint Companies on the fouryear trajectory delivered an average of 87 percent returns to their shareholders while exceeding analysts’ expectations 80 percent of the time!
Higher-Order Benefits. Blueprint Companies also recognize that there are two kinds of benefits: functional and emotional.
Have you ever eagerly tried a new product, only to be disappointed in its functional shortcomings? Or found a product useful, but neither very exciting to use nor igniting your imagination?
“The perfect search engine,” says Google cofounder Larry Page, “would understand exactly what you mean and give back exactly what you want.”
Companies do not have to be Shapers of a New World in order to create high market value. Our study showed that 43 percent of the top Blueprint Companies were either Niche Shapers or Category Killers. Therefore, great growth companies can be created in existing markets.
Category Killers are typically focused on supply chain innovation in order to deliver better value.
It’s not so difficult to find great teams who knew how to spend and investors who knew how to invest.
Marquee Customers are generally big, prestigious, smart firms that literally uplift the revenue of the up-and-coming Blueprint Company. While alliances are difficult to execute, many of these companies executed alliances early and leveraged them as they scaled to $1 billion revenue. This kind of asymmetric alliance relationships we call Big–Little Brother alliances
The real epiphany, he says, was realizing that people who wanted to stock their offices had to go to several stores— a stationery store for paper, a computer store for hardware and software, a wholesale club for supplies, an office-products store for office equipment, even a grocery store to buy paper towels and coffee. Why not put these products in one place?
“If you can operate with 20 percent less inventory or 60 days less manufacturing time, that is huge leverage,
company flirting with insolvency
We grow two ways, organically and through mergers and acquisitions.
In America, every seven seconds someone turns 50. While we have penetrated the baby boomer market, we have lots of opportunity for new customers
radio frequency identification tags (RFID) for inventory tracking.
Import the talents and lessons from adjacent industries.
Do you sell to customers or do customers sell for you?
It is not just about the number of transactions a company completes; it is not even about just selling hard. Rather, it is about securing deep relationships with a limited number of valued customers who become the rising tide for exponential revenue growth.
Microsoft’s Chief Information Officer, noted that he would not necessarily respond to sales pitches from companies that wanted to do business with Microsoft. Nor did he want to be mailed any more golf club covers that required him to make a telephone call to get the free golf club! He would respond if he heard about the company and its products from one of his peers.
“Instead of sending me golf club covers with a coupon for a free golf club, get me a reference from one of my CIO peers. We all have the same problems.” Markezich wants to do business with companies that have proven themselves with his peers.
Probing higher-order needs
Marquee Customer does not serve as a lighthouse and does not recommend you to others.
eBay relies on a high volume of auctions/customer. On the other hand, buying a home at a high price offsets the low frequency of purchase.
Geographic coverage. Typically, companies measure this variable as revenue per geography. JetBlue would measure this metric by cities served. For companies with products that are applicable on a global basis, it is number of countries served and the revenue per country.
To extend into new geographic markets, Starbucks expanded into licensing agreements
The company had an agreement with Marriott Host International, United Airlines, Horizon Airlines, Barnes & Noble, and Wells Fargo Bank to operate coffee bars in their locations or to have coffee served as part of an airline’s service. Internationally, Starbucks’ strategy was to license a reputable and capable local company
Toll Brothers, a leading U.S. builder of single-family homes, made it to $1 billion revenue on the 12-year trajectory by excelling with three of the variables: price per home, number of homes built, and geographic expansion
Bought land during downturns
Many believe that customers cannot articulate their requirements for breakthrough innovation. Not true. There is a small set of First Movers who understand their unmet needs and options to resolve, and can engage up-and-coming companies that have breakthrough value propositions.
the Big Brother benefited in a significant way from its Little Brother, often in its help in solving a critical strategic or operational challenge.
they often direct them to someone else who may be interested—that even includes competitors.
With us, this started right from day one. When a customer did not produce the profitability that was required, we worked with the customer to reconfigure the arrangement.
Shortly after we formed the company, we sent our top management team to attend a Stern Stewart value added seminar. We designed our executive management bonus incentive system around the value added concept. We assigned the cost of capital to each unit and then the spread—the difference between the return and the cost of capital— we called value added. The executive got a percentage of that. A certain amount went into a pool so that they would average out over a time period. There were some quarters, for example, where the return for some reason was below par. You could then draw some bonus out of the pool and then another quarter the bonus went back into the pool. It was a kind of moving average. We paid these bonuses quarterly. In another quarter, if you were ahead of target, you replenished the pool.
“I remember we called Outback Steakhouse in 1993, and talked to them about servicing [supplying] a few of their restaurants. We wowed them. They couldn’t believe that service could be that good. So they gave us more restaurants.
Companies that create the highest market value are those that create the greatest spread between the return on invested capital and the cost of capital.
Revenue and revenue growth are significant drivers for cash flow, which is another driver for maximizing shareholder value.
We found that gross margins were established early and remained fairly consistent.
Contain expenses (SG&A and R&D) to achieve 20+ percent EBITDA.
Become positive cash flow early and scale.
Jeff Mallett as COO, who had already cut his teeth at Reference Software
in 1988, Microsoft restructured the Applications Division into five business units. The business units would have profit and loss responsibility for their product lines and would be responsible for marketing and documentation of their products, said Shirley. “It gave them a great deal of control to run as a small business,”
preach and repeat
new markets, new alliances, new customers, and new business models
challenge the status quo—and not “fall in love with your own thinking.”
customers and suppliers, too. Any CEO spending over 50 percent of his or her time in the office is doing a disservice. Go where the action is.”
The ideal leader would create a score of 10×10×10=1,000 versus 10+10+10=30. Therefore, failing to execute a single leadership dimension results in a score of zero.
Ever see a “hands-off” leader who focuses only on process with little understanding of the details of the business? Ever find leaders who are focused only on cost reduction at the expense of growth? Ever find leaders who are simply maxed-out with no time to manage all the moving parts? Not the leader of a Blueprint Company.
shifts in human capital from North America to Asia
In the 1950s, the top growth companies were in paper, steel, electronics, and publishing. In the 1970s they were gold and silver, catalog showrooms, hospitals and nursing homes, and oil. Of course, then the personal computer came on the scene in the 1980s
Exponential success is achieved by significant revenues and cost containment.
The odds are one in 50 that an idea becomes a business, one in 20 that a funded business sees an initial public offering (IPO) and, finally, one in 20 that a public company achieves $1 billion revenue. The odds of turning an idea into a billion-dollar business, then, are one in 20,000.
Every company can invest, even over- invest, to grow. However, not every company can create revenue growth. How many times have you heard a CEO announcing quar- terly results stating that earnings did not meet expectations because of a revenue shortfall, yet expenditures met or exceeded budget?
Blueprint Companies represent 5 percent of American compa- nies that went public since 1980 and account for 56 percent of employment in 2005 and 64 percent of market value!
we want to discover the roadmap to $1 billion revenue, not $1 billion market value.
During my tenure as a consultant at McKinsey & Company
• Shapers of a New World, truly create a new market for their products and services.
• Niche Shapers, follow New World Shapers with products or services that redefine a specific market segment.
• Category Killers, optimize a market by attacking the existing incumbents with a better-faster-cheaper value offer.
Right behind Specialty Stores (18 companies) was Property and Casualty Insurance with 15 companies.
Customers can be more than customers. The best of them can serve as an extension of your sales force
Blueprint Companies on the fouryear trajectory delivered an average of 87 percent returns to their shareholders while exceeding analysts’ expectations 80 percent of the time!
Higher-Order Benefits. Blueprint Companies also recognize that there are two kinds of benefits: functional and emotional.
Have you ever eagerly tried a new product, only to be disappointed in its functional shortcomings? Or found a product useful, but neither very exciting to use nor igniting your imagination?
“The perfect search engine,” says Google cofounder Larry Page, “would understand exactly what you mean and give back exactly what you want.”
Companies do not have to be Shapers of a New World in order to create high market value. Our study showed that 43 percent of the top Blueprint Companies were either Niche Shapers or Category Killers. Therefore, great growth companies can be created in existing markets.
Category Killers are typically focused on supply chain innovation in order to deliver better value.
It’s not so difficult to find great teams who knew how to spend and investors who knew how to invest.
Marquee Customers are generally big, prestigious, smart firms that literally uplift the revenue of the up-and-coming Blueprint Company. While alliances are difficult to execute, many of these companies executed alliances early and leveraged them as they scaled to $1 billion revenue. This kind of asymmetric alliance relationships we call Big–Little Brother alliances
The real epiphany, he says, was realizing that people who wanted to stock their offices had to go to several stores— a stationery store for paper, a computer store for hardware and software, a wholesale club for supplies, an office-products store for office equipment, even a grocery store to buy paper towels and coffee. Why not put these products in one place?
“If you can operate with 20 percent less inventory or 60 days less manufacturing time, that is huge leverage,
company flirting with insolvency
We grow two ways, organically and through mergers and acquisitions.
In America, every seven seconds someone turns 50. While we have penetrated the baby boomer market, we have lots of opportunity for new customers
radio frequency identification tags (RFID) for inventory tracking.
Import the talents and lessons from adjacent industries.
Do you sell to customers or do customers sell for you?
It is not just about the number of transactions a company completes; it is not even about just selling hard. Rather, it is about securing deep relationships with a limited number of valued customers who become the rising tide for exponential revenue growth.
Microsoft’s Chief Information Officer, noted that he would not necessarily respond to sales pitches from companies that wanted to do business with Microsoft. Nor did he want to be mailed any more golf club covers that required him to make a telephone call to get the free golf club! He would respond if he heard about the company and its products from one of his peers.
“Instead of sending me golf club covers with a coupon for a free golf club, get me a reference from one of my CIO peers. We all have the same problems.” Markezich wants to do business with companies that have proven themselves with his peers.
Probing higher-order needs
Marquee Customer does not serve as a lighthouse and does not recommend you to others.
eBay relies on a high volume of auctions/customer. On the other hand, buying a home at a high price offsets the low frequency of purchase.
Geographic coverage. Typically, companies measure this variable as revenue per geography. JetBlue would measure this metric by cities served. For companies with products that are applicable on a global basis, it is number of countries served and the revenue per country.
To extend into new geographic markets, Starbucks expanded into licensing agreements
The company had an agreement with Marriott Host International, United Airlines, Horizon Airlines, Barnes & Noble, and Wells Fargo Bank to operate coffee bars in their locations or to have coffee served as part of an airline’s service. Internationally, Starbucks’ strategy was to license a reputable and capable local company
Toll Brothers, a leading U.S. builder of single-family homes, made it to $1 billion revenue on the 12-year trajectory by excelling with three of the variables: price per home, number of homes built, and geographic expansion
Bought land during downturns
Many believe that customers cannot articulate their requirements for breakthrough innovation. Not true. There is a small set of First Movers who understand their unmet needs and options to resolve, and can engage up-and-coming companies that have breakthrough value propositions.
the Big Brother benefited in a significant way from its Little Brother, often in its help in solving a critical strategic or operational challenge.
they often direct them to someone else who may be interested—that even includes competitors.
With us, this started right from day one. When a customer did not produce the profitability that was required, we worked with the customer to reconfigure the arrangement.
Shortly after we formed the company, we sent our top management team to attend a Stern Stewart value added seminar. We designed our executive management bonus incentive system around the value added concept. We assigned the cost of capital to each unit and then the spread—the difference between the return and the cost of capital— we called value added. The executive got a percentage of that. A certain amount went into a pool so that they would average out over a time period. There were some quarters, for example, where the return for some reason was below par. You could then draw some bonus out of the pool and then another quarter the bonus went back into the pool. It was a kind of moving average. We paid these bonuses quarterly. In another quarter, if you were ahead of target, you replenished the pool.
“I remember we called Outback Steakhouse in 1993, and talked to them about servicing [supplying] a few of their restaurants. We wowed them. They couldn’t believe that service could be that good. So they gave us more restaurants.
Companies that create the highest market value are those that create the greatest spread between the return on invested capital and the cost of capital.
Revenue and revenue growth are significant drivers for cash flow, which is another driver for maximizing shareholder value.
We found that gross margins were established early and remained fairly consistent.
Contain expenses (SG&A and R&D) to achieve 20+ percent EBITDA.
Become positive cash flow early and scale.
Jeff Mallett as COO, who had already cut his teeth at Reference Software
in 1988, Microsoft restructured the Applications Division into five business units. The business units would have profit and loss responsibility for their product lines and would be responsible for marketing and documentation of their products, said Shirley. “It gave them a great deal of control to run as a small business,”
preach and repeat
new markets, new alliances, new customers, and new business models
challenge the status quo—and not “fall in love with your own thinking.”
customers and suppliers, too. Any CEO spending over 50 percent of his or her time in the office is doing a disservice. Go where the action is.”
The ideal leader would create a score of 10×10×10=1,000 versus 10+10+10=30. Therefore, failing to execute a single leadership dimension results in a score of zero.
Ever see a “hands-off” leader who focuses only on process with little understanding of the details of the business? Ever find leaders who are focused only on cost reduction at the expense of growth? Ever find leaders who are simply maxed-out with no time to manage all the moving parts? Not the leader of a Blueprint Company.
shifts in human capital from North America to Asia
In the 1950s, the top growth companies were in paper, steel, electronics, and publishing. In the 1970s they were gold and silver, catalog showrooms, hospitals and nursing homes, and oil. Of course, then the personal computer came on the scene in the 1980s
September 2, 2025
it was okay. a bit dry at times. some good stuff to apply.
Read
January 15, 2024Available from Darren Schindler in hardback
March 17, 2012
Blueprint to a Billion is an excellent book for entrepreneurs who have achieved a scalable, repeatable sales process for their businesses and are poised at the threshold of exponential demand for their product. This book provides insight about how great companies achieved exponential growth to reach $1 billion in annual revenue.
Start-ups have at least four distinct phases - concept, start, build and growth. Each phase has particular characteristics and requires a distinct approach to leadership and management. Thompson understands the growth phase very well. This book is the best guide available for businesses wishing to grow from $5-$10 million in annual sales to $1 billion. It is well-researched, well-organized and brought to life with frequent anecdotes to illustrate Thompson's points.
Thompson was one of my role models in writing Great from the Start. Thompson's 7 essential points are well grounded in thorough research; he studied 387 companies that had an IPO after 1980 and grew to $1billion in revenue to uncover the common traits. Like Jim Collins' work, Thompson's is credible because he works hard to substantiate his conclusions.
Start-ups have at least four distinct phases - concept, start, build and growth. Each phase has particular characteristics and requires a distinct approach to leadership and management. Thompson understands the growth phase very well. This book is the best guide available for businesses wishing to grow from $5-$10 million in annual sales to $1 billion. It is well-researched, well-organized and brought to life with frequent anecdotes to illustrate Thompson's points.
Thompson was one of my role models in writing Great from the Start. Thompson's 7 essential points are well grounded in thorough research; he studied 387 companies that had an IPO after 1980 and grew to $1billion in revenue to uncover the common traits. Like Jim Collins' work, Thompson's is credible because he works hard to substantiate his conclusions.
August 27, 2007
see the full review at http://katemckeon.com/blueprint-to-a-...
What is perhaps most interesting is that there are 3 major trajectories that companies on the Billion dollar path follow: 4 yr, 6yr and 12 yr. I was delightfully surprised to see that it was not technology firms dominating the billion dollar march. What economic sector hits the billion dollar revenue mark with the most frequency….
What is perhaps most interesting is that there are 3 major trajectories that companies on the Billion dollar path follow: 4 yr, 6yr and 12 yr. I was delightfully surprised to see that it was not technology firms dominating the billion dollar march. What economic sector hits the billion dollar revenue mark with the most frequency….
February 12, 2008
This is an excellent book that outlines how to get to a billion in revenue from a start-up.
March 24, 2008
Decent content but so many statistics and technicalities that it became difficult to stay engaged. I found myself trying to read it before bed and falling to sleep more times than not.
July 23, 2008
Awesome book, dry but awesome. It shows the steps (all 7 of them) a company needs to take to make to be that Billion dollar stand out company.
September 18, 2016
Not a fan. Although some of the Grahamn and Dodd bent is appealing for someone new to the markets; I'm more taken a back by what appears to be a lot of backfilling of data.
Read
January 27, 2016Good principles and good examples although the examples feel a little out of date already.
Displaying 1 - 12 of 12 reviews