Small Business Highlights

Big Things Start as Small Packages: 5 Successful Small Business Stories to Inspire Your Growth

Whether you’re still in the “I have an idea” stage of your small business, or are already thinking of expanding, you can bet that a lot of the big businesses we know and buy from today were once where you are now. What if I told you that Spanx started as a wardrobe malfunction of a door-to-door fax machine saleswoman, and Ben & Jerry’s could have been a bagel shop if they’d just had a bit more money? Take a look at these successful small business stories to help inspire your business to become the next big brand in everyone’s home. 

1. Starbucks

One of the most popular small business stories (along with Steve Jobs’ business that started in a garage and Bill Gates sleeping in a hotel basement) is the origin story of Starbucks. According to Britannica, Starbucks (named after Moby Dick’s first mate, Starbuck) started in 1971 with a humble coffee equipment and brews store started by academics Jerry Baldwin, Gordon Bowker, and Zev Siegl in Seattle. While most coffee shops offered cheap canned brews, weak and tasteless, these three strove for better. According to Historylink, Baldwin and Bowker kept their dayjobs to fund the project, with Siegl being the only paid employee.  

Baldwin, Bowker, and Seigl reached out to their inspiration and coffee connoisseur, Alfred Peet, to upgrade their selection to include fresh coffee beans and even apprentice with him for a time. They purchased a used coffee roaster to start experimenting with their own blends, and with their quality and flavors, stood out from the competition. By the early 1980’s, they had four stores in Seattle. 

But it wasn’t all smooth sailing. After Siegl left in 1980, a new partner, Howard Schultz, joined to become head of marketing. With visions of Italian cafés swimming in his head from a recent trip abroad, he wanted Starbucks to become the homey café on every corner that it has become today. But Baldwin and Bowker disagreed, wanting to maintain their original business model of selling equipment and coffee blends.  

Schultz couldn’t be persuaded, however, and left to create his own company, Il Giornale, that blossomed into a major chain. Then, in 1987 when Baldwin and Bowker wanted to sell Starbucks, Schultz used his money from Il Giornale to buy it and combined the companies under the Starbucks name. In the next four years, Starbucks grew from 20 locations to over 100, and the rest, as they say, is history. 

What can we learn?

As you seek out your own successful small business story, it’s important to keep an eye on the market and understand where the demand is. They offered what others in the area weren’t, fresh and flavorful coffee. They learned to brew their own beans in-store. But still, without Schultz’s market research and forward vision, Starbucks couldn’t have reached the audiences it needed to grow the way it has. So don’t be afraid of change – seek it out so you can stay ten steps ahead of the competition and the market. 

2. YouTube

Is it just me, or are all tech stories about businesses that start in a garage? Yep, YouTube is another business that started in a garage created by a couple of tech guys tired of working for the man. Steve Chen, Chad Hurley, and Jawed Karim met and worked together at PayPal. According to Interesting Engineering, they started in Hurley’s garage in 2004, hoping to create a website where people can upload video-dating profiles. That idea was a bust from the get-go, with Hurley offering women $20 to post dating videos.  

While still in beta, they pivoted to being a video hosting platform for all kinds of home videos, though the origins of this is hard to pinpoint. According to Business Insider, Karim says that they drew inspiration from Janet Jackson’s wardrobe malfunction at the 2004 Super Bowl and the tsunami in the Indian Ocean, whereas Chen and Hurley say they thought of it as a place to upload videos they had taken at a party. Chen also told Business Insider that this story was made with the help of an outside PR firm to replace the awkward dating site origins. 

Finally, YouTube as we know it today began with exactly the kind of content we still find there today. Karim uploaded the first video onto YouTube while still in beta, one of him at the zoo, talking about elephant trunks, titled “Me at the Zoo.” 

By 2005, YouTube had gone viral with 30,000 new views per day and a Nike ad going viral with 1 million views. When they finally launched out of beta, YouTube was getting eight billion views per day. Not long later, Google bought YouTube and we’re all still using it to watch Nike ads and guys at the zoo today. 

What can we learn?

Even though this startup took the world by storm, it still wasn’t the perfect startup to begin with. Awkward ads and misguided marketing plagued the idea from the beginning, but Chen, Hurley, and Karim pivoted and found a new way to approach the market. While old business connections and tech know-how were all major parts of what made their venture work, they still had to do what every other startup does, which is watch the market, learn from their mistakes, and keep going to make their own successful small business story. 

3. Ben & Jerry’s

Can you imagine a world without the wacky sweet and savory flavors of Ben & Jerry’s? Well, if bagel-making equipment hadn’t been so expensive, we might be comfort eating pretzel and caramel bite bagels instead of ice cream! Back when Ben Cohen and Jerry Greenfield were failing at their chosen careers (pottery and medicine, respectively) they casually decided on starting a bagel shop together. However, when the cost of the machinery was way out of budget, they took a five dollar ice-cream making course together at Penn State University. They chose their first location based on demand as well, according to the Washington Post. While more homey towns had their own local ice cream shops, Burmingham, a college town, didn’t. 

According to Time Magazine, funds were still tight when they bought a gas station to convert into their first shop in 1978. Greenfield pitched in $4,000, Cohen pitched in another $4,000 (with half of it coming from his dad,) and together they took out a loan for yet another $4,000 to get their shop started. While they experimented with other foods like crepes and soups in their ice cream shop (Vermont isn’t exactly balmy all year long) their ice cream proved the most popular. 

Their secret, as it turns out, was Cohen’s terrible nose. With very little sense of smell, Cohen was not exactly what you called a supertaster, so Greenfield would try to make flavors that Cohen could actually taste with his eyes closed. That meant intense flavors and textures, rich enough for anyone to enjoy, and that’s where they took over the market. With a business education composed of reading 20 cent brochures, they marketed indulgence with a down-to-earth image. Though a lot of it was trial and error to start, they soon were getting major publicity with the help of Time Magazine, Life magazine, and more. 

But the Pillsbury company didn’t like how Ben & Jerry’s was taking over the market of super-premium ice cream that they had previously been owning with their own Haagan-Dazs brand, so Pillsbury went after them, asking distributors to stop carrying Ben & Jerry’s or risk losing out on business with Haagan-Dazs. Cohen and Greenfield didn’t have the money to sue, so instead they ran a campaign called “What’s the Doughboy afraid of?” turning the people on their side and pressuring Pillsbury to back down, simultaneously giving Ben & Jerry’s the publicity it needed for rapid growth. Eventually in the year 2000, Ben & Jerry’s was sold for billions, allowing Cohen and Greenfield to step down and let the company become the global ice cream giant it is now. 

What can we learn?

Cohen and Greenfield started as two broke college dropouts with a vague plan for some kind of business, no business education, and a five-dollar ice cream making class. So how did they become the ice cream giants of today? Through trial and error, and a refusal to give up, companies that started small and made it big like Ben & Jerry’s are defined by their perseverance. They could have stopped when they didn’t have the funds to make bagels, or when their gas station renovations seemed too difficult to do on their own, or when the Pillsbury dough giant came after them. But they kept going, kept trying to find what works, and in time, they made bank. 

4. Spanx

Moving from the company that adds to our waistline to the one that helps us hide it, Spanx is another example of how an idea took the world by storm and became a household brand. With absolutely no history in fashion, retail, or business leadership according to CEO Today Magazine, Sara Blakely’s successful businesses started at home with pair of tights that she wore as a door-to-door saleswoman, selling fax machines. Wanting to look hot for a party in the late 1990’s, she cut off the feet of her tights, wore them underneath her cream-colored pants, and bam, we got shapewear. 

With just $5,000 of savings and the can-do attitude that door-to-door salespeople survive on, she spent two years travelling to North Carolina manufacturers, researching and seeking out connections to create the prototype of her first pair of Spanx. Once she launched, she was raking in the dough with $4 million her first year and $10 million the second. She got featured on Oprah, partnered with the tv shopping channel QVC, and earned a sponsorship of $750,000 from the show The Rebel Billionaire.  

From the beginning, Blakely stayed very hands on in her business. During pitch meetings, she would model her own shapewear, and personally reach out for marketing coverage. As her company grew, she prioritized a healthy company culture, embraced creative marketing tactics, and encourages women to find their purpose in their entrepreneurship journey. 

Blakely is still heading her business as a self-made billionaire, with no intentions yet of selling. According to Masterclass, she offers business advice on Shark Tank, and became the first women to join the Gates family and Warren Buffet’s “The Giving Pledge” where the wealthiest people in the world pledge to donate at least half of their money to charity. On top of that, she also founded the Sara Blakely Foundation in 2006, dedicated to supporting women through entrepreneurship, education, and the arts.  

What can we learn?

Every idea starts somewhere, and as Blakely herself says, “Everybody has a multimillion-dollar idea inside them. Edison said, ‘Genius is one percent inspiration and 99 percent perspiration.’ The same holds true for innovation, invention, and entrepreneurship.” Blakely’s successful small business story took off with her determination and ability to push her way through barriers. She also cites knowing your purpose as an essential way to get through the hard times of running your own business, or “remembering the ‘why’.” 

5. Groupon

Groupon thrives on making money by helping us save money, but did you know this billion-dollar company started out as a sinking ship? It all started in 2006 with everything a small business could wish for. Andrew Mason was educated, had a million-dollar investment, colleagues and investors, and a working site called The Point. According to Business Insider, his goal was to create a place where people can fundraise without the risk of losing your money to failed cause. Money would only be pulled from credit cards when a cause hit enough signatures or donation pledges to complete its goal, or the “tipping point.” 

Unfortunately, the site was plagued with problems. The idea was too vague to market properly, with people able to fundraise for anything from saving whales to getting discounts on products. Mason tried everything, including buying up Google search terms like “make weed legal” to try and attract anyone to his site. This backfired horribly, and his site was taken over by a group called the Insane Clown Posse. Not great. In the end, Mason even ended up laying off his partner. 

Finally, Mason tripped on the right idea in a desperate attempt to stop from losing everything. He started blogging deals from different companies every day, calling it “get your Groupon.com.” This got people’s attention, and he started putting his tipping point process behind it. Now, it was businesses who would offer their deals with the promise of a tipping point. If not enough Groupons were purchased, Groupon didn’t get any of the profits, and everything went to the vendor offering the deal.  

This idea finally paid off in a big way, giving vendors an affordable and secure way to offer deals to deal hunting customers, and customers a free place to track down deals on things they want. It boomed, and in three months, it gained locations in three cities, and in 2010, it turned down a $6 billion dollar offer from Google and nearly a billion dollars in funding from investors according to Forbes. 

What can we learn?

Nobody is immune to failure, even small businesses that get a million dollar start and all the smartest people behind it. But when failure hits, do you give up and move on, or do you look for new ways to win? The Point had a great idea and plenty of funding, but was marketing to the wrong audience in the wrong way. Now, with the right direction, they’ve become a household name that budget-savvy consumers can’t live without. 

I wish I had the space to share every hijinck, sidetrack, and mishap these major companies had, from Ben & Jerry’s rubbery ice cream flavor that made spoons bounce to Starbucks founder Bowker’s side partnership with a savvy marketing man named Heckler (lol), but in the end there’s just one message. Find your idea and find a way to make it work. Persevering through tough times while keeping an open mind to new opportunities is how these companies beat the odds and became the corporate giants they are today. Whether you take off in a matter of months like YouTube or take a couple decades like Starbucks, your successful small business story isn’t over yet. 

Sources:

https://www.britannica.com/topic/Starbucks 

https://www.historylink.org/file/20292  

https://time.com/5252406/ben-jerry-ice-cream-40/  

https://www.washingtonpost.com/business/on-small-business/when-we-were-small-ben-and-jerrys/2014/05/14/069b6cae-dac4-11e3-8009-71de85b9c527_story.html 

https://interestingengineering.com/culture/youtubes-history-and-its-impact-on-the-internet  

https://www.ceotodaymagazine.com/2021/10/how-spanx-founder-sara-blakely-created-a-billion-dollar-brand/ 

https://www.masterclass.com/articles/sara-blakely-founder-of-spanx  

https://www.businessinsider.com/groupon-from-the-ashes-of-a-dead-startup-to-a-billion-dollar-company-in-2-years-2011-6#get-your-grouponcom-expanded-quickly-and-took-over-four-major-cities-in-just-six-months-7 

https://www.forbes.com/sites/mashable/2011/01/07/the-history-of-groupon/?sh=7317222bf492  

Katie Yelisetti

From marketing tips to product recommendations, I’m here to help small businesses be their best.

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