“No one plays this game, or any game perfectly. 

It’s the guy who recovers from his mistakes, who wins.”

Phil Jackson

In my experience, scaling a business to its first $25 million in revenue can be more challenging than scaling a business from $100 million to a billion.

Why would this be the case?

One of the key reasons is that a company with larger revenue has made a lot more mistakes getting there and will pivot quicker from them than a smaller company still focused on making success as straight a line as possible.

Wherever you're at in your business-building journey, here are four inspirational stories from unlikely companies who are known for their pivot.

Trader Joes Makes Grocery Shopping Fun, Cheap And International

After operating a small chain of convenience stores in southern California, Joe Coulombe noticed some key strategic trends creating a gap in the market. Upwardly mobile college grads were steadily increasing, as was the number of Americans traveling internationally. Local American grocery stores didn't sell international foods, and college grads were acquiring more "gourmet" tastes than what 7-11 offered. 

So he pivoted his convenience store strategy, concerned that his stores were not different enough from 7-11.

Here's what he did - he opened a Polynesia/Tiki-themed market in Pasadena, CA (making the shopping experience fun and very un-grocery store-like).

He stocked it with good wine – much of it inexpensive (home of the five-buck-chuck), hired good people, paid them well, added more locations near universities, and added healthy foods and well-priced, internationally sourced gourmet foods. Today Trader Joes has 530 stores and grosses $18.5 Billion.

The North American Junk Company With Great Marketing

Heard of 800-Got-Junk? The company founder, Brian Scudamore, had the idea for his business while he was in a Mcdonalds' drive-thru and saw a beat-up old truck offering junk removal services in front of him, and thought to himself, "I can do better than that". So, with $700 in startup capital and his beat-up truck, Scudamore dropped out of college to build his business.

He started by naming his company The Rubbish Boys Disposal Service Inc. Not very catchy, right?

Fortunately, he pivoted to a much more powerful brand name - 800-Got-Junk which is now described as “the FedEx of junk removal,” Today, it has over 100 franchised locations across North America.

The Tea Entrepreneur Who Used Marketing To Sell His Product Before Perfecting His Brew

The number one selling organic tea brand in America was founded in 1998 by Seth Goldman, who started brewing tea in thermoses in his kitchen.

At the time, Goldman was a Harvard graduate and in Yale's Business School of Management. and wondered how he could make his tea stand out from his competitors?

There were two key ideas behind his company: to bring beverages to market that were organic and not as heavily sweetened, and to conduct the business using fair trade principles.

What Goldman did next was a stroke of brilliance.

Instead of spending the next year perfecting his tea recipe as most founders would have done, he focused instead on sales and marketing. After spending just five weeks getting his recipe good enough, he secured a meeting with the company that is now Whole Foods and brought tea samples and mock-ups of his marketing with him. He hoped they would place a small order.

They ordered 15,000 bottles.

Honest Tea is now the top-selling bottled organic tea in the U.s and was bought by the Coca-Cola Company.

And finally, one more story for you.

The Multi-Billion Dollar Tech Company That Started With A Humble Air Mattress

Airbnb has been one of the fastest-growing tech companies in history. After 13 years in business, their revenue in 2020 was $378 Billion but did you know that they started about as low tech as you can get?

The first Airbnb rental that ever took place was the renting out of 3 air mattresses on the floor of co-founders Brian and Joe's apartment. They made $80 per guest. It seemed like an excellent idea for a startup, so they put up a website and started inviting other people to list their mattresses for hire.

They got bookings here and there and expanded the site to offering rental properties in New York, but things didn't go as planned, and money was tight. So much so that in 2008, the founders started selling cereal to make some extra money. Without realizing it, they had a big marketing problem. They had plenty of listings and plenty of site traffic - but too few people were making bookings. In other words, they had a major trust issue. 

The founders were frustrated about the lack of effort the owners of their NY listings were making. So they took matters into their own hands, grabbed their camera, and knocked on the door of every one of their listings. When someone answered the door, they would persuade the owner to let them in, took lots of photographs, edited the photos, did a bit of photo touch up and uploaded them to the website in place of the old photos the owners had taken. Within a month of starting this strategy - sales doubled. Then quadrupled. Then....well, the rest is history.

Moral Of The Story

Wherever you’re at in scaling your business, remember it’s not about NOT making mistakes. It’s about the speed of your pivot. Or, in the words of one of my mentors “fail forward faster.”