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Five top business ideas that made millions
This piece was first published on January 29, 2008.
According to Paul Graham, investor and founder of Y Combinator, the best way to get a winning business idea is to not think of any. Instead, you should be looking at which problems you can solve.
“The very best start-up ideas tend to have three things in common: they’re something the founders themselves want, that they themselves can build, and that few others realize are worth doing,” Graham said in a blog post in November.
“Microsoft, Apple, Yahoo, Google and Facebook all began this way.”
Now that the working year is well underway, there will be plenty of unfulfilled employees wracking their brains for that one business concept that will make them their fortune.
Here are the stories of five great ideas that actually managed to blossom into highly successful businesses:
1. Innocent Drinks
Friends Adam Balon, Jon Wright and Richard Reed appeared to have been pretty well set after leaving Cambridge University.
Two became management consultants. One moved into advertising. They all made good money and lived comfortable lives in London.
But there was a shared nagging feeling that there was a bit more to life. On a snowboarding holiday in 1998, the trio did little else than throw around ideas for a new business.
They realised there was a gap in the market for a new type of smoothie product, one based on natural ingredients and overtly ethical values.
After spending six months blending different combinations of fruit at home, the trio set up a stall at a music festival to test the concept.
The decision whether to continue was left entirely in the hands of consumers. A sign above the stall read “shall we give up our jobs to make these smoothies?” One bin read ‘Yes’, the other ‘No.’ Customers would make their judgement by throwing their empty bottles in either bin.
Happily, ‘yes’ won. Balon, Wright and Reed went on to write and re-write their business plan 11 times, before being turned down by a succession of potential investors and banks for funding.
A desperate email with the subject line ‘Does anyone know anyone rich?’ was sent to everyone the founders knew, resulting in Maurice Pinto, a wealthy American businessman, pitching in £250,000.
Innocent Drinks made its first million in turnover in its second year and now sells around two million smoothies a week, commanding a 75% market share in the UK. In 2009, Coca-Cola took an 18% stake in the company for £30 million. A year later the beverage giant paid £65 million for a 58% stake.
Reed says: “If you’re 70% sure about an idea then go for it. Because if you wait till you’re 100% confident in business… you’ll never make a decision, you’ll never get anywhere.”
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American entrepreneur James McCann had a fairly unremarkable career as a bartender and then as a social worker.
It’s fair to say that this CV doesn’t point to what he did next – shake up the whole retail model and become an early online pioneer.
McCann opened his first floristry outlet, called Flora Plenty, in 1976. But it wasn’t until he purchased the 1-800-FLOWERS mnemonic telephone number in 1986 and, in a radical move for the time, changed the name of the business to match, that his business really took off.
According to his autobiography, McCann decided he would build a nationwide flower delivery service “listening to the radio as he was shaving.”
The company was the first to put a toll-free number in its name and was one of the first retailers in the world to have an online presence after striking a deal with CompuServe and AOL in 1992.
Many of the moves made by McCann in the early 1990s are now standard for retail businesses across the world. Many new operations consider having their name interwoven into their telephone number, while increasing numbers of firms are realising that a website is an essential part of selling.
In 1999, the business went public and added a dot com to its name. Revenue hit $668 million in 2010.
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Category: Business ideas