Case Study: How Obscure Startups Create Billion Dollar Products Out of Nowhere

The secrets to creating products that impact millions, change the world and make billions


Drew Houston had no idea he was creating what would eventually become a startup with a $10 billion valuation when he began working on Dropbox. The 32-year-old billionaire had this to say about how and why he took on this project:

“I was on a bus from Boston to New York and I had a big list of things I wanted to get done. I fished around in my pockets only to find out I’d forgotten my thumb drive, I was like: ‘I never want to have this problem again.”
— Drew Houston

Houston was a computer science student at MIT at the time, so having nothing to do for the next few hours, he began coding Dropbox — Creating a product that would later reach 300 million users, catch the attention of steve jobs, and make him a billionaire.

The Qualities of A Billion Dollar Product:

  1. They solve the creators problem more effectively, and elegantly than any of their current alternatives. If you’re a fairly normal person, and you find a better way to solve one of your own problems, you’ve probably also solved a problem for millions of others (or 300 million in the case of Drew Houston).
  2. The creator has a personal connection to the product, the problem it solves, and the people it solves the problem for. This way the creator can understand the dynamics of the user experience better than anyone else, and, therefore, optimize the product for it’s users in a way that’s specific to them and their problems.
  3. They have some sort of (usually secret) unfair advantage over the rest of the market that prevents competition from slowing down their growth.

How The Founders of Airbnb Used This Formula to Go From Living on Cereal to A $20 Billion Valuation:

“When you start a company, it’s more an art than a science because it’s totally unknown. Instead of solving high-profile problems, try to solve something that’s deeply personal to you. Ideally, if you’re an ordinary person and you’ve just solved your problem, you might have solved the problem for millions of people.”
— Brian Chesky

Having A Personal Connection to Your Product:

I was trying to convince all these men to try to make a product that they didn’t even wear! Or if they did wear them, they were not admitting it! There was the problem right there. No wonder their hosiery was so uncomfortable.
— Sara Blakely

Sara Blakely, now the youngest (completely self-financed) female billionaire was a door to door office supply saleswoman with $5000 to her name, until she discovered a creative way to solve a problem that was personal to her. She didn’t like how she looked in white pants, so one day she decided to cut the feet off of a pair of pantyhose and wear them under her white pants. She discovered that they made perfect shapewear, and Spanx was born.

Products With Built-in Unfair Advantages:

Uber leveraged technology to make a product that’s 10x faster, more convenient, cooler, and easier than a traditional taxi service. They’ve effectively made regular taxi’s obsolete by designing an overall better experience for the customer. The product itself is designed to make the competition unnecessary.

Creating products that are inherently monopolistic is another strategy companies have used to achieve massive success against the odds. When was the last time you willingly used a search engine other than Google? I personally get annoyed when the default browser is set to Bing on my work computer that still runs on internet explorer. I tend to use chrome whenever possible just because I know it searches on google by default.

Google’s efficient algorithm and user-friendly layout gave them an unfair advantage over Yahoo that set Google on a course to dominate search for decades. Native advertising (advertising built into the searches) allowed them to monetize their searches in a way that was infinitely more efficient and user-friendly than the banner ads Yahoo was using pre-Google.

Yahoo, Pre-Google

Final Thoughts:

Finding creative ways to solve problems that are personal to you is a winning strategy for anyone who want’s to create a successful product that changes the world by impacting millions. Taking that a step further and making clever nuances within your product that give it built-in unfair advantages that keep the competition at bay is a highly effective way to double down on your products chances of being long-term successful, and dominating its market for decades.

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