15 Times Wildly Successful Entrepreneurs Failed
Crashing and burning isn’t forever, as Bill Gates, Sara Blakely and other resilient business leaders can personally attest.
15 Times Wildly Successful Entrepreneurs Failed
“It’s fine to celebrate success, but it is more important to heed the lessons of failure.” — Bill Gates
No matter how successful someone is now, it’s almost a guarantee that they’ve failed along the way.
Let’s take a look at the failed first businesses and business attempts of very successful entrepreneurs. From an awful rice cooker to tax fraud to a dating site flop, these 15 successful business people had to deal with failure long before they found success.
Reid Hoffman, SocialNet
Before changing the way we do business and becoming a billionaire, LinkedIn co-founder Reid Hoffman’s first foray into the startup world was a dating site.
Founded in 1997, SocialNet wasn’t the first dating site (Match.com began in 1995), and it struggled right out of the gate. At launch, Hoffman partnered with a Phoenix newspaper. In the first month, SocialNet had only six customers.
“Our product distribution strategy was to partner with newspapers and magazines, which for online was a disaster,” Hoffman told Startups.co.
Hoffman also admitted he didn’t really have a strategy to raise money, and eventually the board lost confidence in him. Hoffman left SocialNet to join PayPal.
George Steinbrenner, Cleveland Pipers
Long before becoming synonymous with the New York Yankees, George Steinbrenner’s first sports team, the Cleveland Pipers, was a flat-out failure. The Pipers were an American Basketball league team founded in 1959; the team folded at the end of 1962.
Steinbrenner purchased the team in 1961.
The Pipers probably didn’t seem like a bad investment at the time as they were title winners, had great players and were one of the first racially integrated sports teams in the nation. Steinbrenner, though, wasn’t much loved during his tenure — he reportedly sold a player to the opposing team during halftime. But the team was fraught with debt too, and ultimately, the team folded. The ABL shut down in 1963.
Rowland Hussey Macy, Several Stores
Macy’s founder Rowland Hussey Macy — better known as R.H. Macy — failed numerous times before hitting it big with the department store.
In 1844, at around 19 years old, and after sailing for four years on a whaling ship, Macy opened a needle-and-thread store in Boston. That failed. Then, he and his brother, Charles, started a dry goods store in California during the Gold Rush. That failed. In 1851 Macy and Charles tried yet again, once again in Massachusetts. That didn’t do so great, either.
Not willing to give in to failure, in 1858 Macy tried once again with another dry goods shop — this time in New York City. After one year, the shop, named R.H. Macy & Co., pulled in $85,000 in gross revenue — roughly $2.5 million today. The rest, as they say, is history.
Another fun fact — that whaling trip we mentioned earlier? That’s when Macy got a tattoo of a red star on his forearm, which he used for Macy’s emblem.
Sir James Dyson, More Than 5,000 Tries
Back in 1978, Sir James Dyson — then just plebeian James Dyson — decided to create a vacuum cleaner that didn’t suck. Or should we say, sucked a lot better.
It was a monumental task.
See, Dyson vacuums might be a brand name now, but it took a very long time and thousands of mock-ups before Dyson’s inventions came to fruition. Fifteen years of time and 5,127 prototypes, to be exact, and he was broke the whole time.
“By [prototype] 2,627, my wife and I were really counting our pennies. By 3,727, my wife was giving art lessons for some extra cash,” Dyson wrote in Wired.
But there’s no penny-pinching needed in the Dyson household now: he’s worth more than $5 billion.
Evan Williams, Odeo
Before co-founding Twitter in 2006, Evan Williams had some success by creating Blogger, which he sold to Google for undisclosed terms in 2003. But his next creation wasn’t so successful.
In 2005, Williams created Odeo, a podcasting platform launched at a terribly inopportune time, as iTunes introduced its new podcasting feature shortly thereafter, rendering it nearly useless.
By 2007 a company called Sonic Mountain purchased Odeo for a rumored $1 million.
Masaru Ibuka, the Rice Cooker That Couldn’t
During post-World War II Japan, Sony co-founder Masaru Ibuka founded a radio-repair company in a bombed out building, helping supply the Japanese people with news from around the world. The business, Tokyo Telecommunications Research Institute — which would eventually become Sony — was a good idea.
Its other idea, a rice cooker, was not.
Ibuka’s electric rice cooker was a “primitive product” that was made by connecting aluminum electrodes at the bottom of a wooden bucket, according to Sony. The device made either mush or crunchy undercooked rice.
“No matter how many times we tried, it just wouldn’t come out right! This is such a simple device, there was nothing to fix!” Ibuka once reminisced.
Over one hundred of the wooden rice cookers were made, but none actually made it to market.
Colonel Sanders, Many Jobs
At 10 years old, Harland Sanders was fired from his first job as a farmhand. He dropped out of school at 13 and worked as a lamp salesman, tire salesman, insurance salesman, a soldier, a streetcar conductor and a lawyer.
But, as The Verge and Snopes point out, he didn’t really fail at all of these jobs as much as he just kept switching them, whether it was to make more money or restlessness. However, one story says he was fired from the railroad business, and another says he was fired from an insurance salesman job.
At 65, Sanders enjoyed success as a service station owner in Kentucky until the highway it depended on was rerouted. After that, the business went under.
Finally, he figured out that his blend of 11 herbs and spices could be making bank and created Kentucky Fried Chicken in 1956. By 1964, Sanders had 900 KFC restaurants; he sold the business for $2 million in his mid-’70s.
Steve Jobs, the Apple Lisa
In the early ‘80s, Steve Jobs was far from being a tech industry icon with a cult following.
During Apple’s nascent days, Jobs created the Apple Lisa, a Graphical User Interface personal computer aimed at businesspeople. It cost $150 million to develop, and had a price tag of $10,000 (about $24,600 today). The first model sold less than 10,000 units.
Lisa was actually the precursor to the Macintosh, but interestingly enough, the Mac was a commercial disappointment when it debuted in 1984. By 1985, Apple’s board ousted Jobs from the company.
The Lisa is now remembered quite fondly — and maybe it should be. As Wired points out, the Lisa introduced the “undo last change” feature which is now a software staple. Earlier this year, one of them auctioned on eBay for $55,000.
Nick Woodman, Funbug
Before he founded GoPro and became a billionaire, Nick Woodman had two failed startups under his belt.
The first was a website selling consumer electronics at a deep discount called EmpowerAll, which flopped. His next move was Funbug, an entertainment and sweepstakes platform where users could play games, earn points and win prizes.
After securing around $3.9 million in funding, Funbug launched in 2000. By 2001, it was dead.
But the failure drove him to “work my ass off” on GoPro, and unveiled its first iteration in 2004. In 2014, he made $287 million as GoPro CEO, although as of 2018 he’s only getting a $1 salary due to nosediving stock values.
Sara Blakely, Fax Machines and Disney World
Before creating Spanx, Sara Blakely had a few failures. She tried to become a lawyer but failed to pass the LSAT. Twice.
She went to Disney World, where she wanted to play Goofy, but was told she was too tall and offered the role of a chipmunk. Then she went on to sell fax machines for seven years, where she regularly encountered failure.
“I was constantly being escorted out of buildings," Blakely told CNN Money. "People would rip up my business card in my face, which was a typical occurrence."
But in 1998, she started to develop Spanx. By 2000, Oprah listed the product on her “Favorite Things” list.
Now she’s a billionaire.
Richard Branson, Defrauding the British Government
At the age of 20, Richard Branson had a not-so-brilliant idea: he would get a better deal on the record supply for Virgin Records by committing tax fraud.
You see, Branson didn’t want to pay England’s 33 percent tax on all records sold in the country. And Virgin Records also sold records by mail, which didn’t require that tax. So he would load up a car full of albums, pretend that he was exporting them and get all the official paperwork, drive them back to his storefront in London and sell them there.
It went poorly. The British government found out and he did a brief stint and jail. Branson’s mother had to mortgage her house to get him out of the mess.
Adam Neumann, Baby Clothes
Adam Neumann, the founder of WeWork, started out with two failed business attempts.
One was a line of women’s shoes with collapsible heels, which quickly failed. The other was a baby clothes company called Krawlers, which produced clothes inlaid with kneepad cushioning. That didn’t work either, but instead of dropping Krawlers altogether, Neumann doubled down and even dropped out of college.
“For five years, I struggled making payroll each month to my small team of eight employees. It was a constant struggle, and with only four credits left, I dropped out of school, deciding to give every bit of my energy to my business,” Neumann told TechCrunch.
Eventually that business failed completely, and Neumann went on to found GreenDesk and WeWork.
WeWork is now valued at $20 billion.
Steve Blank, Rocket Science
One of the most painful businesses failures for successful serial entrepreneur Steve Blank was the 1990s video game company Rocket Science Games.
Over 18 months the company raised $35 million and was lauded as the next big thing. Ninety days after making the cover of Wired, the company started to fail. Over four years, the company released six games.
All were spectacular commercial failures.
“While I had been part of a few failed startups, none of them had fallen squarely on my shoulders until Rocket Science Games where my business card said CEO,” Blank wrote on his website.
Mark Cuban, a College Bar and Powdered Milk
Mark Cuban might be the king of failing at business before ultimately becoming one of the richest people in the country.
One of his forays into the business world was when he was still in college, where he opened up a bar. It got shut down when a 16-year-old entered a wet t-shirt contest. At one point he tried to sell powdered milk, which also failed.
Cuban was fired from a few jobs before finally hitting it big.
Bill Gates and Paul Allen, Traf-O-Data
Before Microsoft, there was Traf-O-Data. It was the first business venture of Bill Gates and Paul Allen, and it was a failure.
Traf-O-Data was a machine that could chart traffic flow and show a county where there might be problems in their roadways, such as if they needed a stop light or improve road conditions. In 1974, armed with a $1,500 prototype, Gates and Allen went out to sell Traf-O-Data. It did not work.
“Traf-O-Data was a good idea with a flawed business model. It hadn’t occurred to us to do any market research, and we had no idea how hard it would be to get capital commitments from municipalities,” Allen wrote in Newsweek.
When the two finally shuttered the traffic location business six years later, Traf-O-Data had cost them $3,494.
Not that it matters now. Collectively, Microsoft founders Allen and Gates are worth about $113 billion.