Business

How Whole Foods, HP, and Other Companies Went From Extremely Humble Beginnings to Global Successes

NOW THAT THE BLOOM is off the WeWork rose and legions of napkin-sketch entrepreneurs face the prospect of launching a business without the comforts of on-tap kom­bucha and onsite kickboxing classes, it’s worth remember­ing that many a billion-dollar business started out in an “office” more akin to an Uzbek youth hostel than a W Hotel lobby. Or in spots more associated with personal hygiene than with product development. Here, an unblemished look back at some humble beginnings and aesthetic adversity that led to global success.

Whole Foods: Slumming It in Aisle 3

THE HIPPIES HAD AN IDEA. It was 1978, and college dropout John Mackey had been living in a vegetarian co-op in Austin when he and his girlfriend, Renee Lawson Hardy, decided to open a small natural-foods store. They were 25 and 21, respectively, and borrowed $45,000 to get their dream off the ground. Calling their venture Safer Way, the couple rented an old house and converted the first floor into the market, the second floor into a café, and the top floor into their apartment. When the land­lord discovered they were storing merchandise in their living quarters, they lost the apartment, leading them–naturally–to bunk among the soy­beans and red lentils in the store itself. There was no shower in the market so–naturally–they used the commercial hose to bathe. Two years later, Mackey and Hardy merged with another small natural market and founded Whole Foods–which was promptly devastated by an epic flood, leaving the new business awash in sewage and trashed by looters. They cleaned and merged and acquired, and when Jeff Bezos came calling in 2017 with a $13.7 billion check, they–naturally–took it.

Super Soaker: Launched in a Lav, Not a Lab

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LONNIE JOHNSON was no wet-behind-the-ears kid when he created the Atlas rocket of squirt guns. Quite the opposite: He was an engineer at NASA’s famed Jet Propulsion Lab who spent his spare time inventing. It was around 1982, and Johnson didn’t have a fancy home lab; in fact, he was toiling in his bathroom, noodling with nozzles he’d recently machined, when water suddenly blasted clear across the room. Using PVC pipe and a two-liter soda bottle, he fashioned a prototype that would eventually shift the power dynamics of future squirt-gun skirmishes. He then spent seven humbling years having his water gun rejected by toy companies, before he demoed a prototype for Larami Corp. When Larami execs watched the upstart squirt gun spray 40 feet, they foresaw a gusher. The Power Drencher hit shelves in 1990; rebranded as the Super Soaker, sales topped $200 million. In ’92, it was crowned the world’s top-selling toy.

Reddit: Bless This Mess

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TODAY, REDDIT bills itself as “the front page of the internet,” and its San Francisco HQ glimmers with a straight-outta-West-Elm vibe. This was not what college students Steve Huffman and Alexis Ohanian could have imagined in 2005 when legendary VC Paul Graham shot down their order-food-by-SMS idea and then offered them another concept to work on. The pair, members of Y Com­bi­na­tor’s charter class, moved into a weathered wood-frame house in Medford, Massachu­setts. There, amid a tangle of wires and assorted clutter, the founders stacked their PC monitors back-to-back in the living room, the walls bare but for notes tacked into the plaster and a bikinied girl pin-up taped to a door. Months later, they moved to another apartment–where they purportedly had to tape down chairs so they wouldn’t roll across the slanted floor. And 13 months after that, their emerging company was snapped up by Condé Nast for some $20 million. Reddit’s current value? Six billion dollars.

HP: Shacking Up

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MUCH HAS BEEN MADE of the dingy Palo Alto, California, garage where Stanford engineering grads Bill Hewlett and Dave Packard tinkered under a single overhead bulb. It was there, in 1938, that they began to develop the audio oscillators that, eventually, birthed Silicon Valley. But you don’t hear much about the adjacent shack. After a day of fiddling with circuits, Packard would amble down the driveway to the first-floor flat that he and his wife rented. Hewlett, on the other hand, would roll into the tiny shack next to the garage. From the cot, it was just three steps to the sink, toilet, and tiny desk. Besides its size, the shack’s most notable feature was the floor–dirt. But things changed within a couple of years, when Walt Disney ordered eight of the oscillators to test sound equipment for the 1940 film Fantasia. Soon after, with World War II gearing up, the Army Signal Corps came calling. Today, HP is quite large.

From the May/June 2021 issue of Inc. Magazine

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