Underdogs disrupt industries, make us rethink our strategies and provide hope for entrepreneurs and oddballs in business. These companies demonstrate the power of innovation, optimism, perseverance and the role of pure chance.
1. Ben & Jerry’s
Ben Cohen and Jerry Greenfield learned to make ice cream by taking a $5 correspondence course from Penn State. In 1978, the entrepreneurs scraped together $12,000 to open their first shop in a renovated gas station.
By 1980, the hippie team were driving throughout New England in a Volkswagen to distribute to Mom-and-Pop grocery stores. Pillsbury (owner of Häagen-Dazs) attempted to halt distribution of the newcomers in Boston, prompting a "What's the Doughboy Afraid Of?" customer campaign.
2. Clif Bar
At a TEDx Talk, Gary Erickson explained that just eight years before turning down a $120 million buyout by Quaker Oats in 2000, he had worked at a garage and owned a small, money-losing bakery in Berkeley. Erickson's epiphany moment for Clif Bar occurred on a day long 175-mile bicycle ride. Gary started selling the bars out of his mother's kitchen, achieving double-digit compound growth for twelve years straight, pushing past the finish line against PowerBar in 2012. The company's "five aspirations" focus on upholding sustainability standards for its employees, communities, planet, brands and business.
“I didn’t start the journey to end the journey, I started the journey to stay on the journey.” – Gary Erickson
In 1976, Apple (AAPL) was incorporated by young college dropouts Steve Jobs and Steve Wozniak, along with their third partner, Ronald Wayne, who sold his share of the company for a mere $800 three months later.
Dell CEO Michael Dell once said that if he owned Apple he would shut down the company and give shareholders their money back. Jobs did well proving him wrong, once stating, "It's only us and Dell making money. They're making money because they're Walmart, we're making it because we're innovating."
4. Home Depot
Bernie Marcus was the chief executive of Handy Dan, the top home improvement retailer at the time, when he and Arthur Blank were fired in a corporate power struggle. It was a costly setback for Marcus, but Handy Dan investor Ken Langone reportedly told him: "You have just been kicked in the ass with a golden horseshoe. This is the greatest opportunity! Now we can open up that store you talked about when we were in Houston!"
Marcus and Blank started Home Depot (HD) in 1978, carrying out a vision of one-stop shopping for the do-it-yourself customer and upholding exceptional customer service through a "bill of rights." Home Depot went public in 1981 and in 1989 celebrated its 100th store opening.
Netflix (NFLX) reaches 193 million paid subscribers in more than 190 countries. It has won Emmy awards for Orange is the New Black, Ozark, Stranger Things and The Crown, among other programs. (See also: 5 Reasons The Cable TV Industry Is Dying).
Prior to Netflix dominating streaming television, it was a DVD-rental-by-mail company engaged in battle with Blockbuster for market share. In 2000, Netflix executives met with Blockbuster and offered to sell the company for $50 million, which Blockbuster refused. In 2010, Blockbuster filed for bankruptcy and closed 5,600 stores.
Steve Ells, founder of Chipotle Mexican Grill (CMG), originally wanted to open a fine dining restaurant and so started a burrito shop in Colorado to help fund it. He got the idea after observing the brisk business taquerias did in San Francisco. His fast casual concept took off. In 1998, McDonald's began investing in Chipotle, helping it to grow from 15 to more than 500 restaurants. After Chipotle launched an IPO in 2006, McDonald's divested its stake. In 2019, Chipotle recorded $5.6 billion in sales from 2,580 stores in the U.S. and 39 internationally.
7. Life Is Good
Bert and John Jacobs designed their first T-shirt in 1989. Over the next five years, the brothers traveled the east coast selling product door-to-door around college campuses. They slept in their van and ate peanut butter and jelly sandwiches. In 1994, the brothers developed the "Jake" character and "Life is Good" motto, selling 48 shirts at a street fair in Cambridge, Mass. Success soon followed. They did $87,000 in sales that year. They recorded $620,000 in sales in 1996 and $3 million in 2000. The private company reportedly took in more than $100 million in revenue by 2014.
The brand relies on word of mouth instead of traditional marketing. The Life Is Good company has two key initiatives: to spread the power of optimism and to help children in need by donating 10% of net profits.
8. Samuel Adams
Before Prohibition, the beer industry consisted of hundreds of small breweries that produced full-flavored beers. When alcohol became legal again, the domestic brewery industry shifted toward lighter beers that could be produced on a mass scale. By 2008, Anheuser-Busch InBev (BUD) and Molson Coors Beverage controlled 90% of domestic beer production. In 1984, the Boston Beer Company (SAM) introduced its Sam Adams Boston Lager brand of beer, helping to kick off what was then a nascent craft brewing trend. Craft breweries have grown from about 1,500 operations in 2009 to more than 8,000 ten years later, while the big two breweries have seen their market share fall to 70%. In 2019, the Boston Beer Company shipped about 5.3 million barrels of brew.
When the brilliant Nikola Tesla predicted global warming 100 years ago, most considered him a "mad scientist." He inspired other engineers to innovate for the future, as expressed in the fascinating story Mad Like Tesla: Underdog Inventors and Their Relentless Pursuit of Clean Energy and the name for car company Tesla (TSLA), founded in 2003 with the help of billionaire Elon Musk. Not only does Tesla make all-electric vehicles, it builds energy generation and storage products. As of July 2020, the company had a market capitalization of more than $275 billion, proving that all industries have space for startups.
10. The Body Shop
The Body Shop launched in 1976 in Brighton, England, taking on major players such as Revlon and Olay. The company revolutionized the cosmetics industry by sticking to natural ingredients and non-animal tested products. The Body Shop champions corporate socially responsibility and backs groups such as Greenpeace International. L'Oreal Group acquired The Body Shop in 2006 and then sold it to Natura in 2017.
"You've got to be hungry – for ideas, to make things happen and to see your vision made into reality." - Dame Anita Roddick, The Body Shop founder
The Bottom Line
Circumstances surrounding the massive success of these 10 incredible companies differ widely. Uniting themes among all these newcomer, innovative, forward-thinking and underdog brands are the force of innovation and ability to take risks. From the fast food to the electronics industries, these stories give hope to leaders who perhaps lacking funds or a clear track record or way forward possess passion for their underdog brands.