As an entrepreneur, you’re taking a massive risk. The vast majority of startup businesses fail in the first few years of operation, and only a tiny minority ever strike it big. But there’s a public misconception about how these eventualities play out — namely, there’s a perception that these trajectories are linear. The startups that become successful were destined to become successful out of the gates, and experienced sharp, uninterrupted growth, while the startups that failed were destined to become failures, and had nowhere to go but down from the time they were launched.
In reality, there are far more twists and turns to the average startup’s story. In fact, if you take a look at some of the biggest and most successful companies of our era, you can follow their history back to at least one event that put them in danger of failing. The successful companies are differentiated not because they have some “rock star” quality, but because their leadership was committed and passionate enough to persevere in the face of overwhelming odds.
These are just some of the stories that illustrate this effect:
1. FedEx. It’s hard to imagine that FedEx was ever a startup, but it was, and in fact, it almost failed entirely. The company has been around since 1971, when it was started by Frederick W. Smith. The concept of overnight delivery worldwide was fairly new and exciting, but by 1974, the company was struggling due to fuel costs — in fact, it was losing more than $1 million every month. At one particularly dire point, Smith gambled the last $5,000 in cash he had at a casino, ultimately winning just enough to keep the company going. After that dark moment, he was able to secure a few million in additional funding, and by persevering, he eventually built the company into the empire we’re all familiar with today.
2. Elon Musk’s Babies. Elon Musk is best known for his startups Tesla and SpaceX, both of which are on the forefronts of amazing technological developments. But back in 2008, when both companies were young, the 2008 economic crisis was taking its toll on Musk’s visions. Cash shortages were making it impossible to manage both effectively, and Musk was debating whether to close down one completely or try and split the money between the two. Instead, Musk found alternative options; with SpaceX, he applied for a NASA contract that gave it $1.6 billion it needed to keep going, and then loaned some of that money to Tesla to keep it going as well. Now, both tech giants are doing extraordinarily well, thanks to Musk’s quick thinking and a refusal to let his ideas die.
3. Airbnb. Now worth more than $1 billion and loved by users all over the world, Airbnb almost turned into a very different story. The founders of the company had a fairly basic idea — renting out air mattresses in houses’ living rooms — but what seems brilliant today seemed far-fetched, maybe even ludicrous, back in 2008. Founders Joe Gebbia and Brian Chesky had a hard time generating interest for the model, spending huge sums of money to generate more traffic to their site to get leads. While they were successful in building traffic, they struggled to gain any meaningful momentum, and wound up thousands of dollars in debt. Instead of closing the business, however, they kept going, and eventually made it into Y Combinator, a startup accelerator that put them on the map and helped them build the enterprise you recognize as Airbnb today.
4. Evernote. Evernote is another wildly popular tech company that almost went under before it experienced blowout success. Evernote’s founder, Phil Libin, had already made the decision to close Evernote down for good and lay off his employees back in 2008 when he received a fortuitous phone call from a user in Sweden. This user loved the product so much, he was willing to invest $500,000 to keep the company going. This was enough to avoid succumbing to a complete shutdown. A few years later, the app exploded in popularity, and now the app is worth more than $1 billion.
5. Blogger. Evan Williams started Blogger back in 1999, when the concept of blogging was still relatively new. Created with the intention of making it easier for more people to get involved with blogging, the platform was a brilliant concept — but the timing wasn’t perfect. Blogger experienced massive growth as more users flooded to the platform, but in 2000, thanks to the dotcom bubble, it experienced a massive crash. Ultimately, Williams had to lay off every employee he had. Most entrepreneurs would have called it quits at that point, but Williams continued working on his product singlehandedly. A few years later, Google discovered the platform, and purchased it for an undisclosed (yet almost certainly multi-million dollar) amount.
There’s definitely a time to call it quits, and a time to cut your losses and walk away. But if you truly believe in your idea and see a vision for its success, there’s always a way to persevere and move forward. You might have to take a bigger risk, or come up with an unconventional solution, and you might even have to transform your idea. But for the most dedicated entrepreneurs and the brightest ideas out there, there’s always a potential path forward.