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BUSINESS STORY 🗞️

Five Examples Of Founder Scrappiness

We’ve all heard the stories. Founder builds rocket-ship stuck together with duct tape. These stories are real. And I think if every successful company out there were to document things from day 0 you’d find these incredible stories of scrappiness would be more common again.

Business is the act of staying alive longer than your competitors. Do that consistently, sprinkled with a little growth and you are likely to be successful. But it can come at a cost. And may also need a little ingenuity along the way.

Today we will take a look at six well known companies who thought outside the square to get off the ground. And I have thrown a bonus company in there for good measure. Let’s dive in.

Airbnb - Cereal entrepreneurship

One of, if not the most famous example of founder scrappiness came at the hands of Air Bed & Breakfast, or Airbnb as they are known today. This example is not only scrappy, it’s wildly off the mark of what they actually do as a product.

The year was 2008 and the Airbnb team were running out of money. They’d not yet made $5,000 in total in revenue and no one in Silicon Valley — or elsewhere for the matter — would back them. So they took things into their own hands.

Brian Chesky and Joe Gebbia you see, had the idea during the Democratic National Convention, of shipping their Airbnb hosts free boxes of cereal — Obama O’s and Cap’n McCain’s.

They thought it would make thing unique for the guest and therefore their Airbnb stay more memorable. During the convention though, they shelved the plan. But with no money coming in and one final last ditch effort needed to keep the company alive they decided the resurrect the idea. This time, not for a fun talking point for their guests but for bulk cash — for revenue.

They originally planned to print off 100,000 boxes of cereal, which was absurd, but a friendly Berkeley alum who had a printing shop agreed to do a small run of 500 if he could share in the profits (of the box not Airbnb unfortunately).

They would go on to sell between $20-30k in political cereal over this period, enough to pay off some debt and give them hope. It wasn’t the funds from the cereal that saved them though — it was the story.

After hustling their way to a Y Combinator interview, back in the days when Paul Graham was still running them, the guys bombed. It was only at the very last minute that — to the chagrin of Brian and third co-founder Nate Blecharczyk — did Joe go and place a box of Obama O’s on Graham’s desk.

After a weird glance or two and an awkward smile from the investors, Joe blurted out that the cereal stunt was how they kept their company alive. “Wow” Graham responded. “You guys are like cockroaches. You just won’t die.” The trio of founders were offered a spot in Y-Combinator’s Winter 2009 batch and the rest is history.

Fun fact: The story is so famous internally, they went as far as to name their custom font after it.

Reddit & the fake user growth hack

When Steve Huffman and Alexis Ohanian launched Reddit in 2005, they were met with the sound of crickets. An empty platform is a lonely place, and they knew they needed to inject life into it to attract real users. Their solution? Fabricate the community.

The co-founders rolled up their digital sleeves and got to work, creating fake accounts to populate the site with content and discussions. This move was a masterstroke in community building. It gave the illusion of an active platform, which in turn attracted genuine users, intrigued by the conversations and diverse content.

This strategy highlights the importance of appearance in the early stages of a platform's life. An empty space is uninviting, but a lively one is magnetic. For entrepreneurs, the lesson is clear: sometimes, you need to build the stage before the actors will come.

The Reddit story teaches us that a little creativity and elbow grease can go a long way in turning a ghost town into a thriving metropolis.

Spanx and the reinvention of hosiery

Sara Blakely's journey to founding Spanx is a story of innovation born out of necessity. As a young saleswoman, Blakely was frustrated by the lack of seamless undergarments to wear beneath her white pants. This led her to a moment of inspiration: she cut the feet off a pair of pantyhose, creating a makeshift solution that sparked the idea for Spanx.

With no background in fashion or manufacturing, Blakely was up against it. She spent two years researching the industry and developing her product, only to be rejected from countless hosiery mills. Undeterred, she finally found a manufacturer willing to take a chance on her idea. Blakely's scrappiness extended to her marketing efforts; writing her own patent, creating the packaging, and even using her savings to buy product placement in department stores.

Spanx launched in 2000 and quickly became a hit. The success was thanks in part to Blakely's marketing tactics, like sending samples to Oprah Winfrey, which led to Spanx being featured on her show (excuse the crappy link). This exposure catapulted Spanx into the spotlight, and the company's sales skyrocketed to boot.

Blakely's story is a testament to the power of perseverance and creative problem-solving. Her ability to turn a simple idea into a revolutionary product shows that with determination and a willingness to think outside the box —anyone can change an industry.

The Patagonia rugby club

Although Patagonia’s roots date all the way back to 1965 with the successful Chouinard Equipment, the first threads they sold were rugby shirts out of the back of founder Yvon’s car (or so the story goes).

Yvon actually found the first garments he would go on to sell on a climbing trip to Scotland in 1970. The Scottish rugby shirts were of a very high quality — and durable. The perfect kit for climbing in Scotland, or in the frosty NorCal conditions surrounding Yellowstone National park.

This first unofficial foray into clothing had no manufacturing, no inventory management, just high quality supply and “dirtbag” climber demand to match. These kits famous and much of a collector item with climbers, fashionistas and Wall Streets analysts alike. The moral here is that you don’t need much — or even your own product — to get started.

Craigslist’s original email blasts

In the mid-90s, Craig Newmark (yes, that Craig) started an email list to share information about local events with friends. These humble beginning laid the groundwork for what would become Craigslist, one of the most popular classified ads websites in the world, and the best place to buy dirty underwear.

The key to Craigslists’ early success though was its simplicity. Newmark didn't set out to create a complex platform; he just wanted to help people connect and share information.

As the list grew in popularity, it evolved into a website, expanding its offerings to include various categories of classified ads — missed connections anyone? This story highlights the power of simplicity in building a successful platform. You don’t need to start with bells and whistles. Just a simple product that gets the job done.

For builders, the lesson is clear: focus on solving a specific problem or fulfilling a particular need, and do it well. Sometimes, the simplest solutions are the most effective.

Me, AdventureFit and a gambling ring

The final example is my own. In ~2013, long before Athyna, I founded my first startup, AdventureFit Travel. The tagline was clear — improving the world through travel, exercise, mindfulness and conversation. The TL;DR was that we took people all around the world on adventure holidays for the fitness community.

Think Intrepid Travel is it was run by a bunch of crazy yoga loving, CrossFit junkies, that loved a beer from time to time.

The brand was great, the product was second to none, but we never really made any money. And by “never really made any money” I mean the business was kept alive on credit cards and via me Airbnb’ing my room out and sleeping on my own couch. Oh, and a very grey area sportbetting ring.

First, let me start by saying that I despise sportsbetting. It’s s scourge on our society. But a friend of mine, an English geezer named Adam that I met at the gym, knew a system to rob the bookmakers using their own promotions.

Think Robin Hood of the modern era if me and my buddy Adam were Robin Hood and ‘the rich’ we were robbing were the likes of Sportbet, DraftKings etc..

Suffice to say, AdventureFit never made it. And it was never going to make it. But I can say that it was not without me pulling out every stop — including robbing online bookmakers — to try to keep it alive.

Summary

The moral from reading above is simple — business is hard. If you are expecting to get to your third year with full ownership of both of your kidneys, well, you may not be being realistic.

And that’s it! I hope you enjoyed reading this one dedicated to all the scrappy founders out there.

TWEET OF THE WEEK 🐣 

For anyone our there that likes fitness, especially running long distance, but doesn’t want to look like they are on the end of a hunger strike this post is quite interesting. TL;DR — how to run long but look strong.

TOOLS & RESOURCES 🔥

Want to know how to run the world's best meeting? We got you covered. Here is a very basic, but very awesome blow by blow of the perfect meeting by Matt Mochary - Exec Coach to the CEO's of Coinbase, Canva, Open AI, Brex and more.

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