Start-up Stories with Cynthia

EPISODE 6 : Recap of the last 5 episodes?

Today’s start-up story will take a slightly different run, we’ll be doing a recap of all the major lessons we’ve learnt from the past 5 episodes.

In Episode 1, we learnt about Melissa and Doug, the founders of a 350 million dollar toy company that started in the 1980’s and did you know that ever since, they've never paid for a single ad. Melissa and Doug’s story contains a unique lesson on marketing.

In Episode 2, we learnt about how Ben and Jerry, two hippies from Burlington who started a company and basically turned an ice cream shop into one of the most iconic ice cream brands in the entire world worth hundreds of millions of dollars.

In Episode 3, we learnt about Tope Awotona, a Nigerian Immigrant who successfully built a multi billion dollar start-up with very little VC funding at the early stage.

In Episode 4, we learnt about how Henry Ford built the Ford Motor Company worth over hundred billion dollars and how his disruptive innovation methods birthed many of the things we recognise and accept right now in the modern world.

In Episode 5, we learnt about Joel Clark of Kodiak Cakes who built a 200 million dollar company from his mother’s recipe.?

Now let’s take a look at the major lessons.

MELISSA AND DOUG

Melissa and Doug is a multi-million dollar American toy company that manufactures children's toys, including wooden puzzles, arts & crafts products, and other educational toys. The company was founded in 1988 by Melissa and Doug.?

Melissa was working as an investment banker at JP Morgan and you also have Doug working closely with a very incredible Marketing Guru at that time. Pretty much they were both doing things that brought in stable sources of income, but they decided to quit their jobs to build something that children could enjoy and learn from. Let’s take a look at the lessons from their start-up story.

Innovative approach to marketing?

After they built the first product, they had spent about 30 to 40 thousand dollars on the production phase,? but the videos still had to be converted to VHS, because at that time, VHS was what was available, and converting to VHS? would have cost them about 30 to 40 thousand dollars extra, unlike these days when you can easily create something and ship it around the world using YouTube.?

So they had about 5,000 copies of VHS and the next thing was to get it around the world and I really loved what they did. At that time in the 1980s, if you want to distribute a product to retailers and supermarkets, you have to go through manufacturing reps, so those reps then take your products and every other product that they have that to sell and then go to different retailers and introduce your product to them. But knowing the kind of capacity they had at that time, it was almost impossible for Melissa and Doug to give the products to these reps because they couldn’t afford it and secondly because of the fact that these manufacturing reps will not take their products very seriously. So what they did was to get a TV and a VHS video player and they put it in their car and went from retailer shop to retailer shop seeking the audience of the retailers to watch the video and convince them to present their products to their customers. Because of how much pressure they actually put on them, the retailers had no choice but to give them an audience and eventually accepted the products.

And that was how Melissa and Doug were able to get their products to the customers and that is an awesome lesson I believe we can also learn. Many times we feel like we want to or have to go through the traditional route of getting our products to the market, such that when you have a new product and you want to market it, the first thing that comes to your mind is digital art. But trust me, you need to think beyond digital art, you need to tell yourself that a zero-budget marketing plan is what you’re working with. You will find out that the amount of ideas you are able to come up with is incredible.??

You will see yourself taking steps that nobody would have actually thought about because you're not limited by resources. Which is one thing I like about Africa, we might not have all the resources but I think that it is an opportunity for us to think outside the box. You find out that when you have a lot of money, there's very limited things you think about doing. You realise that you just have a few options but when you have little money, you begin to see many many other options you see beyond where you are. But then, even when you have a lot of money, have brainstorming sessions or creative sessions that give you the opportunity to think like you don't have the money at hand, it will allow you to execute a lot.Secondly, they had to look for other ways of promoting what the video program was about so they went to those retail stores and had an agreement with them to hold play dates in the middle of the retail shop just like the way you have bouncing castles and you have Mr Biggs having that whole entertainment area just for children, that's what they did with the playdates. And the hope was that they'll be able to get these young children to enjoy the play date and cause them to buy the video or tell their parents to buy. And it actually worked! They were able to build a customer base that was loyal to their brand.

Click on link for the full story.

BEN AND JERRY'S

Ben and Jerry’s is an ice cream company that started out in the mid 1970s. The ice cream shop was located at Burlington Vermont in America. From Burlington they went on to build this fantastic company worth hundreds of million of? dollars which eventually got sold to Unilever in the year 2000.?

Ben Collins and Jerry Greenfield are the founders of the Ben and Jerry's ice cream brand. If you dig deep into their stories, you'll see that they started out as complete failures. At some point in their lives, they didn't have anything going for them and? so they decided that, “let's just do something, let's just open up a food shop for like a couple of years and move on to become cross country truck drivers.”

They didn't really see anything big coming out of it, they just wanted to do something together that would yield some form of income, and so that's how they started Ben and Jerry's. Let’s take a look at the lessons from their start-up story.

Creativity and Innovation

Around 1983, The Pillsbury Company, big conglomerate in America bought their rival ice cream brand called Haagen-Dazs.?

Pillsbury isn’t just any company, Pillsbury had the advantage of size and they have a large network of distributors. Shortly after the purchase, Pillsbury issued a memo to their distributors saying that they should not distribute Ben and Jerry's ice cream to their retail shops.?

Obviously, that was going to be a big hit because at that time Ben and Jerry's decided to package the ice cream in chunks and distribute them to different retail stores.

Ben and Jerry's was quite a small company compared to Pillsbury and taking them to court wasn't even the best option because they knew that they would not be able to fight it, so they decided to run a campaign and basically put it in the hands of the customers.

To beat them, they decided to run this campaign called “What is Doughboy afraid of?” bearing in mind that Doughboy is the mascot for Pillsbury. They initiated? the campaign by putting up designs, ads on magazines, newspapers, stadiums, buses. The campaign design had a provocative design with the Doughboy mascot hands squeezing Ben and Jerry's’, the design read ‘don't let the Pillsbury's dollars squeeze out the life of Ben and Jerry's Ice-cream’.

It worked and they were able to get Pillsbury to back down.

Basically they were relying on the brand that they had and the place that they had in their customers heart to be able to put pressure on Pillsbury to stop doing what they were doing and it actually worked .

I think there is a massive lesson right there, when you're faced with any situation especially in business space (different situations will come up for sure), don't always try to look at the most obvious way to tackle it like maybe taking up a loan and or going to court etc.

For them, going to court and trying to fight it was the most obvious option but they knew that they could not do that because of the size of their business.?

There are other ways of addressing certain situations. With start-up stories you get to see how founders in the past have addressed certain situations creatively and that could also spur you to think creatively through any challenge you encounter.?

Heart for the people

After the success of this campaign and building the business for a couple of years after, they came to a point where they saw themselves getting engaged in routine activities. And were no longer the ice cream men they knew, there was no passion and fire, at that time it was all about how they could pay back the loans they had accumulated, in Ben's words he said,

“ We were becoming a cog in this economic machine”?

At that point they concluded within themselves that they were going to keep doing business like this. If this is what business is about, they would rather end it to become cross country drivers. They went ahead to put up the company for sale in the early 1990s?

Fortunately, Ben ran into an old buddy who was in the restaurant business, he told this friend about what he was going through and how he desires to sell it.?

His friend was shocked. He asked him why he really wanted to sell the business because he knew how much he really cherished this business like his own baby.?

Ben’s response was that he didn't want to keep doing this because he felt like this company was going to become like other companies that are exploitative. His friend said to him,

‘if there's something you see other companies do that isn’t good, change it. Be the change”

That conversation sparked up a new fire and interest in the company. They called the sale and gave the company a new mission. To stand and be vocal about certain topics and issues, no matter how controversial it is. As far as it affects people and the environment, they would be vocal.

It was pretty much a life changing point for them, we will not be talking about them today if they didn't have that particular experience.?

The big lesson here for us is, there’s always that point in the business where we get caught up in the operational activities and forget that there is a bigger purpose to the existence of the company we started.

It is always good for founders to realise when you get to that point, take a step back and really go back to the beginning.? Ask questions like ‘what is the purpose’?, ‘why did I start this business’?, “what am I trying to achieve with this?” Finding that overarching purpose fuels you to build a trans-generational company.

What is truly satisfying is the impact made on people's lives and that's what you see with Ben and Jerry's.?

Click on link for the full story

CALENDLY

It wasn’t until after seven years of existence that Calendly was able to raise a 350 million dollars investment valued at 3 billion dollars but prior to this time, in January 2021, they had only raised 350 thousand. However, having a billion dollar unicorn wasn’t an easy process.?

Nigerian born Tope Awotona is the sole founder of Calendly. I think that's one of the main reasons why I'm attracted to this story, the fact that it was built by a Nigerian. Although he moved to the US? and stayed in the US for a couple of years, he was born in Nigeria.?

He had started three different businesses before Calendly and they all failed. What made the difference between these other startups and Calendly? Let’s take a look at the lessons from Tope Awotona’s startup journey.

Motive?

Tope Awotona had started three different businesses before Calendly and they all failed. One was a dating site, the second was an e-commerce site based on projectors. He also tried selling grilling machines.

One of the major similarities with these three companies in terms of why they failed, is because he built these businesses out of a need to just make extra money, and make more income.?

These other businesses were about how he could make extra money and not necessarily about how to solve a particular problem or meet a particular customer need unlike Calendly. The major difference between Calendly and every other startup he had founded is that Calendly was born out of a need, he had a burning desire to solve a problem and proffer a solution.

At that time, he was the national account manager for IBM South East Asia and being part of the sales team or being an account manager means you're gonna be setting up meetings with different stakeholders to get them to adopt the software and onboard them etc and that will require scheduling a lot of meetings? back to back. What usually happens is that lots and lots of emails are exchanged back and forth all the time to conclude on a time that works for all the parties and he was in the middle of the mess and was just looking for a way out.?

He went online in search of an option that could help him with what he was going through as a consumer. He did find a couple of options but those did not really fit to his need, the options available were suitable to more or less brick and mortar kinds of companies but not for his own kind of Software as a Service company. The brick and mortar types are suitable for saloons or the barber's shop where you can create options for the customers to book.

For what he needed, both of them have to come to that middle point based on their individual schedules. In summary, the options he found were not suitable. So he started to look into the problem to see if there was a way out.

He started to dig deep and spent about two to three months just doing customer research. When you think about the fact that he spent three months doing customer research, I think that's quite profound because many times when we're developing our ideas, we usually just go in. If we think this is a fantastic idea, we just jump straight and start building, but it should require a lot of research and deep insight. You really need to understand what the customer needs and we're gonna see the steps he took.

The first thing he did was that he signed up for all the available options - about twenty plus platforms, he became part of the community forum. He signed up to these platforms just so he could deconstruct everything and break it down and see how it actually works, really understand how these companies were built, see the gaps and just see how the process works.

Secondly, he joined the community forum of these platforms so he can understand what the customer needs, and what they're saying about the companies or platform they're part of. Also, to just really understand the conversations in the community forums. This gave him insight into what people think about the product itself.?

And then the third thing he did was to raise support tickets to the platforms, just to really understand the customer service, how they go about pitching the products and how they're actually selling the product. So he did a lot of deep research and the whole idea was to get insight, to really understand the problem, to understand the people that have the problem and to understand the people that are currently solving the problem. I think that's really profound, and it didn't have to cost him a lot of money. Just joining the platforms, signing up and interacting gave him enough insight.

He spent two/three months doing that and really understanding the space. He then came back after six months and said “no one else is doing this, this is a big problem”. Some of the things he saw was that customers love the product, although they want more but they really appreciate the fact that the platform is doing something about that problem. So there is that tendency for whatever he was going to build to really get into the hearts of the users and then he saw that these companies are solving bits and pieces of the whole puzzle.

There was no one platform that just put everything together. So seeing that gap, he definitely saw an opportunity to build.

Click on link for the full story?

HENRY FORD

Henry Ford, the Founder of Ford Motor Company is known as one of greatest innovative disruptors of his time. He basically created the middle class through his over-daring startup, and contributed to what we all still enjoy right now in the modern world.?

In Henry Ford's time, this was around the 19th century, cars were a luxury, only the rich and the high class could afford cars. The producers of the cars also prided themselves in the fact that it is something that only the rich and wealthy can afford and there were very limited editions and numbers available. But for Ford, he thought differently, some say he saw into the future, he believed that the average man should be able to afford and own a car.?

He felt owning a car should not be so much of a luxury, and that was it. So, he started building, and kept building. He was looking for ways to make the cars affordable and efficient and he succeeded. This desire to make cars affordable is what birthed the multi billion dollar corporation known as Ford Motors. Let’s take a look at the lessons from his startup story.

Disruptive Innovation

In the 19th Century in America, cars were a luxury, only the rich and the high class could afford cars while the average man had different commuting options, he could use bicycles, horse wagons, street cars or the train, but Henry Ford knew there could be more.?

“Do not be afraid to challenge the status quo.“

He felt owning a car should not be so much of a luxury, and that was it. So, he started building and kept building. He was looking for ways to make the cars affordable and efficient.?

He started building from Model A to B to C to S. After failing 19 times, he arrived at the final model, MODEL T. The Model T was the perfect car. It is generally regarded as the first affordable automobile, which made car travel available to middle-class Americans.

The cost of owning a car went from 3,500 dollars to just 850 dollars. The average person who was earning an annual salary of 500 dollars could now really look forward to owning a car with a good savings culture.??

Consistency

When people are building businesses, they tend to give up quite early especially in the building process and they forget to realise that even Thomas Edison tried over and over again before he finally figured out the whole light bulb situation. It took him a long time, it took him several experiments and this is the same thing you see with every other startup story, every other founder, there was consistency.?

“He didn’t stop until he got to his destination.”

Ford kept building, he kept building on every single version, kept improving, kept looking for inefficiencies and looking for ways to improve on it until he finally hit that Model T and trust me that Model T was crazy. More than half of the cars driven in the world at that time were Model Ts.

The lesson here is as a start-up founder you need to keep building, you need to keep improving not just repeating the same version but improving on the version over and over again. Don't give up, if you know what you're doing is going to have a great impact on people then you need to keep at it and one day you will hit the right version that will blow up really big and impact as many people as possible, even more people than you can ever imagine.

Click on link for the full story.

KODIAK CAKES

Joel Clark started a multi-million dollar company from his mother’s pancake recipe, but his success was not overnight. It took a period of 15 years of back to back failures and roadblocks and at some point, he had to start side businesses or side hustles to maintain the pancake company.

From starting a cookie dough business to generate income to fund Kodiak Cakes, to getting into real estate to raise some more money to fund the business, to doing promotional ads to generate more customers to fund the business, to running a Healthcare based business.?

Unfortunately, all these side hustles crashed, and Kodiak Cakes was teetering on the edge of failure as well,? but Joel Clark kept picking himself back up, and refused to throw in the towel. Let’s take a look at the lessons from his startup story.

Perseverance

Things became tough for Joel Clark and Kodiak Cakes especially in the year 2007, because there was a rapid increase in price, remember 2008 was the Great Recession.?

The production company he partnered with called them up and said that they had to increase the price by 11% and by that time, they were not even making enough profits as expenses were extremely high.

It was at that point that Joel decided to sell the company. He tried his best to sell the company but couldn't find a single buyer and then he decided he was going to licence it to somebody else who would pay him royalties. He left Kodiak Cakes to get a Job.?

Not so long after he licensed the company. Reports came in that this manufacturing company wasn’t managing the brand of the company well. The manufacturing company had other products they were producing, so they were really not paying close attention to the Kodiak cakes brand and revenue dipped by 25% under their management.

It was a really tough period for Joel. Imagine being in the middle of all of that and you still had to take care of your wife and three kids.

He took up a job as a CEO of a health company, although Kodiak was still being managed by this manufacturing company, but it still wasn’t doing so well.

Eventually,? he decided to leave the job, this was around late 2008. He wanted to focus on Kodiak. A lot of things actually influenced that decision, but one of them was the fact that he had already invested over 11 years of his life into the business. He felt what was the worst thing that could happen because he had already gone through a lot.

Unknown to him, the worst was just yet to come. Fast forward to Christmas, Safeway, the company he partnered with to distribute Kodiak Cakes to 1,200 stores, gave him access to a promotional Christmas giveaway that they were running. He accepted and decided to participate in it.???

Unfortunately, a mistake was made and someone doubled the amount of giveaway and instead of taking out $1 they took away $2 and the implication was that there wasn't going to be any profit for Kodiak Cakes. Don’t forget that this was still within the period when things were a bit tough in America.?

The whole mess left him in debt of 50,000 dollars and it was just after he decided to quit his job to focus on the business and now he had a debt of 50,000 dollars.?

He was in a small office when his father came in, he walked up to him and Joel wept.

He felt like he had given so much into the business and he is now 50,000 dollars in debt. Where did he get it all wrong?

His father started to encourage him and told him he was going to take a mortgage on their house. Note that they had already paid off their house and they were supposed to be debt-free, but the father took the risk on him and decided to take out a mortgage loan for 50,000 dollars and gave it to him, and that was how he was able to clear the debt.?

He kept building the business with his father.?

I would pause here to share this.

A very fantastic Entrepreneur/Founder said that,

‘companies don't fail because companies give up, they fail because entrepreneurs give up’

I think that's the major lesson to learn from Kodiak Cakes, I mean they are successful now but it didn't come easy, it wasn’t handed to them, they went through a lot.

Because Joel didn't give up, Kodiak Cakes is now worth close to 200 million dollars. I will say that if there's any business, or any startup that truly portrays the phrase ‘don't give up’, it is definitely Kodiak Cakes. Joel had so many opportunities to give up, but he stayed steadfast. Have we been able to do that with the startup we currently have?

Click on link for the full story

The next episode will be out on Sunday, 12th September. You can’t afford to miss it! Follow my medium page - Cynthia E. Chisom and get notified whenever a new episode is out.

Cheers!