If You Want to Become a Billionaire, You Need to Build These Traits
Beyonce is rich, with a reported net worth of $290 Million. And so is Kobe Bryant sitting at $350 Million.
But in the tally of America’s 40 wealthiest self-made under-40 personalities, the pop diva trails nearly everyone else at number 38 on the list, while the retired NBA Most Valuable Player—whose superior athletic abilities should have outpaced any competition—came sputtering in at number 33.
With a few exceptions, the list is dominated (90 percent) by young founders, entrepreneurs and investors associated with globally recognizable brands like Facebook, Uber, Airbnb, Snapchat, Pinterest, Instagram and more.
On the world’s stage, there are 56 billionaires under 40 years old according to the Forbes 2017 list. While a number of them—like Alexandra Andresen (born in July 1996 and the youngest person who made the list)—inherited a very large fortune from their parents, more than half (30) built their own wealth entrepreneurs in spaces like technology, healthcare and investing.
At an increasing pace, the world is minting self-made billionaires, some of them still in their 20s.
But what does it take to build a 10-digit fortune decades before you even need to think about retirement?
To answer the question of how to become a billionaire, we need to examine the rise of young tech moguls such as Mark Zuckerberg, the Collison brothers (Stripe), Evan Spiegel and Bobby Murphy (SnapChat), and Adam Neumann (WeWork).
Mark Zuckerberg, Co-Founder of Facebook
With around 2 billion monthly active users, Facebook is the most widely used social media channel and the third most visited website on the planet. The company generated $27.638 billion in revenue for 2016, employs around 19,000 people, and has a market capitalization of $407.3 billion.
In 2003, Facebook started as just a side project that computerized the adolescent practice of comparing the relative “hotness” of students. But Mark Zuckerberg is a relentless innovator, eventually transforming the project into a global phenomenon—and himself into the fifth wealthiest person in the world with an estimated net worth of $63.3 billion. Mark was 23 when he made his first billion dollars.
John and Patrick Collison, Co-Founders of Stripe
Irish-born brothers John and Patrick became billionaires in November 2016 when fresh investments hiked the value of their online payment startup Stripe at $9.2 billion. In their late and mid-20s, each brother attained a net worth of at least $1.1 billion after that round of investment, becoming billionaires before they turned thirty. Prior to breaking the ceiling, both were already millionaires in their teens, having founded and sold a transaction management service called Auctomatic.
College buddies Bobby Murphy and Evan Spiegel founded Snapchat with fellow Stanford student Reggie Brown in 2011. In building Snapchat, Evan handled product design while Bobby wrote much of the code for the early versions of their app. Targeting millennials and younger audiences, Snapchat is a multimedia messaging app used by around 166 million daily active users. Murphy and Spiegel each has a net worth of $4 billion.
Nathan Blecharczyk, Brian Chesky and Joe Gebbia, Co-Founders of Airbnb
By itself, Airbnb delivers significant positive economic and cultural impact in the locations where it operates. By making accommodations more affordable, Airbnb promotes travel and cultural exchange, helping support local communities, residents and businesses in the process.
Founded in 2008 by mostly cash-strapped roommates who perennially struggled with rent, Airbnb evolved into a global brand following a series of funding rounds that lifted the company’s value to more than $31 billion as of March 2017. Founders Nathan Blecharczyk, Brian Chesky and Joe Gebbia—all in their 30s—similarly saw each of their own net worths skyrocket to $3.8 billion.
Adam Neumann, Founder of WeWork
Operating in at least a dozen countries, WeWork provides shared workspaces for startups, freelancers and small businesses. WeWork was founded in 2010 by kibbutz-raised Adam Neumann in New York. Following a series of funding rounds that included JP Morgan Chase and Goldman Sachs, WeWork’s valuation ballooned to $16 billion. Adam’s net worth similarly rose to $2.5 billion.
6 Common Traits of Entrepreneurs Who’ve Become Billionaires Before 40
While it is naive to think that secret “billionaire traits” exist and occur consistently across the one-percent demographic, it’s still worthwhile to probe whether certain behaviors or mindsets can prime a person for extraordinary entrepreneurial or financial success.
The real question is, can the business books you read, classes you take, mentors you surround yourself with, and ideas you tinker on in your free time have a direct effect on your ability to become a billionaire before age 40? And if so, what are some of those common themes that can be applied to everyone?
Well, luckily we now have robust data sets on the global elite, as well as records of how outstanding entrepreneurs create and grow companies.
Incidentally, accountancy firm PwC and global investment bank UBS published interesting research that studied 1,300 self-made billionaires with the goal of determining just what makes them tick.
To lend the study significant authority and scope, PwC and UBS covered a two-decade period, reviewed academic research, case studies and surveys, and interviewed more than 30 billionaires.
According to the study, there are at least four factors that figure prominently in many of the self made hyper-entrepreneurs. These are:
1. Optimistic but smart attitude about risk-taking;
2. Unbounded curiosity;
3. Keen focus; and
4. Determination and resilience to failure.
As gleaned from the under-30 billionaire entrepreneurs we dug into earlier, we can also add:
5. Ardent drive and passion; and
6. Openness to do things differently, as common characteristics among the world’s most successful people.
1. Smart Attitude on Risk-Taking
Unless something is potentially fatal, it’s ok—even imperative—to take risks. Having the passion to pursue a business idea and having seen its potential, some industry leaders—like Mark Zuckerberg dropped out of college to focus on their business, risking a future without a diploma.
The merits of this move is highly debatable or perhaps too extreme but the entrepreneur’s willingness to take a major risk is apparent. Making significant inroads to new, untested markets or considering an unusual merger are also signs of healthy risk-taking.
2. Unbounded Curiosity
You won’t go very far in business without an ample dose of curiosity. Curiosity drives an entrepreneur to observe the world, ask questions, detect problems, and actively look for solutions. Curiosity also keeps her motivated. As a business owner, deep curiosity will drive you to probe existing solutions or user experiences to find customer pain points and develop new solutions.
The Airbnb founders were curious whether renting out their mattresses and bed spaces would work as a business model. They decided to test this concept out in their own home, on the cheap by putting up ads on Craigslist—not rushing out to try and get (spend) millions of investor dollars to test a hypothesis. They embraced their curiosity and worked with what they had to test their business idea without wasting resources. Nearly everybody thought they were nuts but in less than a decade, they evolved a “silly” idea into a multi-billion dollar service used by 150 million people in thousands of cities around the world.
3. Clear Focus
Ultra-successful entrepreneurs appear to have an uncanny resistance to distractions. Once they lock on to a goal they want to achieve, there’s nothing (and nobody) that can stop them from getting there somehow, some way. Smart entrepreneurs are dedicated to their mission, but are flexible on how they’ll get there. They also seem to instinctively identify which area their business should concentrate on.
In 2012, while developing the Snapchat app, Bobby Murphy worked 18-hour days just to build a prototype. To this day, much of Snapchat’s code retains Murphy’s focused imprint.
Most self-made billionaires have had their first business venture before or during their twenties. Before making millions, some have already accrued a string of failures. Without grit and determination, the sting and stigma of failure can completely dissuade people to abandon their dreams and look for meaning elsewhere. In contrast, great entrepreneurs doggedly persist until they have achieved their goals.
None of the self-made billionaires on the Forbes list were lukewarm in their excitement and commitment to the things they chose to spend their time on. Some, like the Collison brothers were writing software code even before they were ten. Mark Zuckerberg continues to drive the evolution of Facebook by integrating new technologies such as AI and augmented reality into the service—before the technology has become mainstream.
Airbnb, Uber, Stripe, Instagram, and Snapchat are prime examples of innovation that were mapped out by young entrepreneurs in their twenties. A product doesn’t need to be totally different or new like Uber and Airbnb. They can be based on existing solutions or platforms but reimagined or reconstituted in a way that better serves a certain market segment. Snapchat at its core is just messaging, but its appeal to millennials has been phenomenal simply because the service resonates with how the particular generation communicates.
The trick to building a business that can propel you into the billionaire club is to be open and actively seek out different ways of looking at a problem and solving it.
Have we missed any traits you think are essential to becoming a young self-made billionaire? Go out there, build a business and prove it!