The attitude of an entrepreneur might be the most important factor in determining whether a new business flourishes or flounders. Creating a successful startup can take a number of things. An innovative idea, money, time and support from colleagues and friends are important, but the determination, perseverance and the self belief of owners are often a business’s greatest assets. Albert Einstein said: “I am thankful for all of those who said no to me. It’s because of them I’m doing it myself.” To help inspire you and your startup, Business Advice has unearthed some success stories from entrepreneurs, whose mentality helped them transform their startups from small ventures to global players.
Whether you’re a coffee connoisseur or not, the chances are that you’ve visited an outlet of Starbucks – the biggest and most popular coffee retail chain in the world. In 2015, the number of open Starbucks stores reached 23,043 spanning 63 countries, with revenues amounting to $19.16bn.
It wasn’t always this way. The Starbucks we all know today grew out of one small, locally run business selling coffee beans in Seattle, WA, with a startup fund of $8,000 pooled between three friends. Teachers Jerry Baldwin and Zev Siegel, with writer Gordon Bowker, founded Starbucks in 1971, naming the company after a shipmate in Herman Melville’s novel, Moby Dick.
In 1982, current CEO Howard Schultz joined the business as head or marketing and set about growing the Starbucks brand. A visit to Italy inspired Schultz to bring café culture and richer tasting coffee back to the US. In 1987, after having left the firm to launch his own successful coffee company – Il Giornale – Schultz bought Starbucks from Baldwin and Bowker to the tune of $3.7m. Incorporating the Il Giornale business into the brand, Schultz took Starbucks public in 1992, with massive growth experienced thereafter.
Like your business, Starbucks began as a small venture. Three friends that had no clue how to run a business, and who had very little experience, ran with a shared idea that turned out to be a global hit. The Starbucks story demonstrates that continued passion for your idea goes a long way to making your business a success.
Computer programmer Pierre Omidyar didn’t set out to become a self-made billionaire when setting up a small online auction through his personal website in 1995 to feed his girlfriend’s habit for collecting Pez dispensers, but within six months he found himself at the helm of a website worth $3bn and with more than two million subscribers.
Becoming one of the most profitable and widely used websites in history, changing consumers’ shopping habits forever, eBay now employees almost 35,000 people worldwide and had revenues reaching $8.59bn last year.
Omidyar’s entrepreneurial juices began flowing in high school, when, as a teenager, his principal paid him $6 per hour to write a computer programme that would print catalogue cards for the school library. At university a few years later, he wrote a programme that helped Apple Mac programmers manage and store memory.
Together with three friends in 1991, Omidyar started a company writing programmes for the pen-computing market, setting up an ecommerce platform dubbed eShop on that company’s website. The eShop proved to be a good money maker, and attracted the attention of Microsoft, which bought it.
After wife Pamela revealed her unrequited love for collecting Pez dispensers several years later, Omidyar created an online auction for her to buy and sell from. Thus in 1995, eBay – short for “electronic Bay”, a reference to the San Francisco Bay area in the US – was born. Toy collectors across the US seized on it, and the site quickly became so popular that it outgrew Omidyar’s personal account. To cover the costs of moving eBay to a more expensive site, Omidyar began charging users a small amount to list items, collecting a commission on anything sold.
Profits poured in and eBay started doubling in size every three months. After a $4.5m venture capital investment in 1997 and a new management team, the internet giant went public in 1998. Four months after initially offering investors at $18 per share, eBay was trading at $300 per share, making the company a sensation and Omidyar a billionaire.
Having revolutionised ecommerce, eBay continues to grow despite increased competition from similar sites. Unlike many internet startups, eBay’s business model catered for quick, profitable growth, whilst providing users with what they wanted.
As an economics undergraduate at Yale University in 1965, Fred Smith wrote an essay about the process of transporting goods across the US, discovering that shipping companies relied on trucks and passenger planes to transport large packages across the country. Smith concluded that transporting small, essential items quickly by plane would be a better business model – his essay received a “C” grade. Undeterred, Smith ran with his idea, and set up Federal Express in 1971.
Within three years, the company was almost bankrupt. Rising fuel costs resulted in the company haemorrhaging $1m every month, and following a succession of rejections for additional funding, Smith’s business was worth just $5,000.
In a bold and daring move, Smith flew to Las Vegas one weekend and played blackjack with the company’s entire funds. Much to the surprise of his staff, Smith returned the following week with $32,000 – enough to cover the cost of fuel to continue operating for a few more days.
Soon after, the firm was able to raise enough capital to become profitable again, and business boomed. FedEx now operates across 220 countries, with an annual revenue of $45bn in 2014.
At 19 years-old, John Hunt borrowed a £100 deposit to buy a one-bedroom converted property in Woking for £4,500, getting his first taste of the property market to boot. In 1981, at the age of 28, Hunt and school friend Anthony Pelligrinelli set up a two-man estate agency in Notting Hill, London, with a startup fund of £30,000. The pair named the firm Foxtons, after a village in Suffolk near Hunt’s family home.
Despite the economic slump the UK was undergoing at the time, Hunt’s dogged determination and willingness to work longer hours and sell harder than other London estate agencies saw the business grow rapidly.
Over the following decades, Hunt instilled the same determined ethos into Foxtons’ business model, and the company has been able to weather the rise and fall of the UK property market better than any other agency as a result. Foxtons remains one of the largest players in the market, and when Hunt sold the business in 2007, he was able to collect a personal fortune of £390m.
Foxtons has endured considerable criticism for its highly competitive, almost ruthless business practices over the years, but there are important and inspirational lessons to be learned from its startup story. The estate agency was the first in the UK to truly embrace marketing, investing heavily in its online presence since its inception. In 2001, the company launched a large fleet of branded Minis to circulate London, proving to be another massive marketing success which was swiftly copied by other agencies.
Kentucky Fried Chicken (KFC)
When Colonel Harland Sanders was 65 years-old, the pensioner received his first government welfare cheque of $99. He was bankrupt, with just a small house and an old car to his name. Taking the decision that its never too late to make a success of oneself, he began travelling the US attempting to sell the only unique idea he’d ever been praised for, his chicken recipe.
Leaving Kentucky, Sanders went from state to state to sell the recipe to restaurants and supermarkets, telling business owners they could have it for free in exchange for a small percentage on any items sold. Everywhere turned him down. Sanders received over 1,000 rejections before one restaurant gave his chicken a shot, and it worked. His recipe changed the eating habits of the US first, and then the world. At the beginning of last year KFC had 18,875 outlets worldwide and annual revenues of $23bn.
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