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Dec

5 successful start-ups that beat the odds

5 successful start-ups that beat the odds

Start-ups can be a hard slog, often with more setbacks than triumphs. In particularly challenging times it can be difficult to find the motivation to keep going.

Trust us, we get it.

But in these times, a little inspiration can go a long way.

To give you the boost you need when times are tough, here are 5 start-ups that managed to achieve  stunning success, against the odds.

Canva

Canva has to be one of Australia’s most successful start-ups, if not the most successful. Its story has humble beginnings: a university student with a simple realisation. Melanie Perkins was a studying at the University of Western Australia, teaching other students how to use design programs like InDesign and Photoshop, when she noticed just how difficult people found these programs to use.

As a result of that realisation, she and Canva co-founder Cliff Obrecht developed Fusion Books, an online tool to create school yearbooks. This eventually lead to Canva: a graphic design software that allows users to easily create beautiful designs without needing a single lesson.

Since launching in 2012, Canva has amassed 10 million users in 179 countries, and has offices in Sydney, San Francisco and Manila.

Of course, as with any start-up, Canva has its ups and downs, reportedly going into the red to the tune of $5.26 million in F2015–16, reflecting the “continuing costs to develop and improve new and existing services and to drive global expansion and user growth efforts”, said its founders.

Canva has managed to stem its losses this financial year, however, nearly halving them to $3.3 million, while reporting a revenue of $23.49 million, which was triple its revenue from the previous year. This is a star that will likely continue to rise.

There’s perhaps a lesson here for other start-up entrepreneurs. As co-founder Melanie Perkins says, “There’s a quote that I really like: ‘The reason we struggle with insecurity is because we compare our behind-the-scenes with everyone else’s highlight reel.’ I think this is very true — every start-up takes a lot of hard work over many years and it’s always a rollercoaster with a lot of ups and downs along the way.”

Thankyou

Thankyou exists seemingly in defiance of all the start-up rules. Started in 2008 by three young uni students, with zero business experience and zero funding – nothing, really, expect a strong and, some might say, naïve desire to give people access to clean water – it has since grown into a thriving social enterprise that, as of June 2017, has given $5.5 million to people in need.

“My idea was simple,” says founder and managing director of Thankyou, Daniel Flynn. “Bottled water is one of the dumbest products on the planet. And we as consumers buy into the problem each time we pay for convenience. Why couldn’t 100 per cent of those profits go towards funding water projects?”

Thankyou got its big break when, against all odds, Flynn and co-founders Justine Flynn and Jarryd Burns were able to get Metro Beverage, the largest beverage distributor in the country, to buy 50,000 bottles. In 2013, Thankyou achieved another major coup when it managed to get its water stocked in Coles and Woolworths after a successful social media campaign. Since then, they have extended their range to body, baby and food products.

“We feel like this is just the beginning. But our business model has been flawed from the start. We give out all of our profits quarterly and we have no investors nor shareholders. How do you scale this kind of a social business?” Flynn said in 2016. In order to fund growth, they have started accepting “social financing”, donations in the way of a value-for-value exchange program called Future Funds, and crowdfunding through Flynn’s book, Chapter One, which is sold at a “pay what you want” price.

Thankyou also hasn’t been without its setbacks, announcing this year that it would be cutting its food range. “Entrepreneurial people naturally like doing bigger and more,” Flynn said. “But you have to prune to grow, even if that can be quite counter-entrepreneurial thinking.”

There’s perhaps a lesson here for entrepreneurs too. “We’ve grown up a bit since [we first started],” said Flynn. “But the bigger this gets, the harder it becomes. And I didn’t see that coming.”

GoGet

In 2003, a small group known as Newtown CarShare was launched. The idea was that, by sharing three vehicles, twelve neighbours could drastically cut down the high costs of car ownership while also doing their bit for the environment.

But from little things, big things grow, and Newtown CarShare has since evolved into GoGet, Australia’s largest car sharing service, with 2300 vehicles and more than 95,000 members across Sydney, Melbourne, Adelaide, Brisbane and Canberra. According to GoGet, their service has meant there are 10,000 less vehicles clogging up Sydney’s streets.

This is an impressive achievement, particularly for a country like Australia, which has had a long love affair with the car – according to The Australian, more than 90 per cent of the population lives in a household with access to a car. Through services like GoGet, Sydney has become a world leader in car-sharing. One expert has even predicted such car-sharing services will help Australia reach “peak car“ – the point where the number of privately owned and single-occupancy vehicle trips stop increasing and start to decline. This will have wide-ranging positive effects, not just on people’s pockets and traffic congestion, but potentially even property prices.

And with autonomous cars just around the corner, the sky’s the limit in terms of GoGet’s future. “While we have seen substantial growth, I believe we are still in our infancy,” said Tristan Sender, CEO of GoGet. “I think increasingly you will also see businesses and government turning away from their inelastic, privately owned fleets and looking to car share as a way to save money. I, and the GoGet team, find it really exciting that we are helping to create more convenient and liveable cities of the future.”

Purple

In a small rural town in Utah, far from the gleaming windows of Silicon Valley, is a warehouse that is home to a start-up that generated $150–200 million this year. Their product: mattresses.

It may not be the sexiest product, but it’s certainly something that just about everyone needs. And Purple is not just any mattress. Brothers Tony and Terry Pearce have combined Tony’s advanced aerospace materials expertise with Terry’s 20 years of manufacturing and design experience to create a Hyper-Elastic Polymer that “relaxes” under pressure points, redistributing that pressure to other areas, thus giving sleepers comfortable support. In 2016, they launched their mattress, Purple, and haven’t looked back.

Despite facing fierce competition from established mattress brands as well as other mattress start-ups, such as Casper, Tuft and Needle, Purple have managed to carve a niche for themselves, and all without receiving any venture capital whatsoever.

And they seem to continue going from strength to strength. Earlier this year, Purple announced a merger with shell company Global Partner Acquistion Corp (GPAC), a deal that would reportedly value the company at $1.1 billion. And just last month, they struck a distribution deal with mattress retail giant Mattress Firm,, which has over 3500 locations nationwide.

Buzzfeed

It’s hard to remember a time when Buzzfeed listicles and quizzes didn’t populate our social media feed, and even harder to fathom the fact that a media company that publishes articles with titles like “15 Hedgehogs With Things That Look Like Hedgehogs“ or “Which Possible Illuminati Member Are You?“ is now worth $5.1 billion.

Founder Jonah Peretti managed to go viral before “going viral” was even a thing, when an email correspondence he had with Nike was forwarded to a few friends and eventually reached millions of people. “It opened up my eyes to the possibility of the fact that media was shifting so that if people thought something was worth passing on or sharing, you could reach millions of people, even if you don’t own a printing press or a broadcast pipe or the normal ways that you reach mass audiences,” said Peretti.

This experience went on to inform Buzzfeed, whose first incarnation was actually an instant messenger bot who would message users links to the most popular links on the web that day, though that was a short-lived experiment. It eventually evolved into the procrastination palace we know and love today.

Peretti says the social aspect of Buzzfeed was the thing that set it apart. “You were taking that content and sharing it with a friend as a way of connecting with another person in the world. That was really the key for us from the beginning. When we first started, the way that people were connecting with each other online was internet memes and humour and cute animals … That same human connection, that same idea of how do people connect with each other, drove all of our expansion. When people started to share news we said, ‘Wow, we’d love to be in the news industry. We’d love to make news.’”

And make news they did. Buzzfeed ruffled a few feathers earlier this year when it decided to publish a dossier that allegedly showed Trump had close ties with the Russian government, a move that garnered a lot of criticism as the dossier was at that time unverified.

But challenges are, of course, all part of the fun when it comes to start-ups according to Peretti: “I think you shouldn’t be a CEO or even a start-up executive or employee if you don’t like things that are hard or challenging, and you don’t like trying to do things that are difficult where you have to figure out new things that don’t exist yet. That has to be part of why you do it. It has to be part of the fun.”

Despite the odd juxtaposition of cute animals alongside hard-hitting news, Buzzfeed seems to make it work, and Peretti has big plans going forward. “We want to be one of the ones to emerge from the era, redefining how news and entertainment should work for the era of digital, the internet, mobile and social,” said Peretti. “It feels like there’s a possibility to build a media company that’s much more connected with people’s lives, that has a much more intimate relationship with readers.”

At CeBIT we produced a helpful guide to help you avoid common start-up pitfalls. Let us be your guide, with our free comprehensive ebook How to launch a start-up. Download it now! 

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