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These Billion-Dollar Companies Started As Side Gigs


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Unbeknownst to many people, some of the world’s biggest and most famous companies were born out of a wonderful mix of serendipity—happy accidents that turn what looked like disasters to resounding successes.

A good number started life as little bootlegging projects, hobbies or an obsession--e.g. Howard Head, inventor of the iconic Head Ski, found his inspiration after going through a humiliating skiing experience with clumsy hickory skis. He had to endure 40 failed attempts and burn through $6,000 in poker earnings before he struck success.

Others have pretty shady beginnings …

Coca Cola shot to worldwide fame during the Prohibition when John Pemberton mixed his sweet ambrosia with cocaine and marketed it as a temperance beverage that people could drink to ease off booze. Of course, the modern beverage bears little semblance to its predecessor.

And did you know that Nintendo, the famous video game maker, was initially owned by the Japanese Mafia?

Here are five billion-dollar companies that sprung from relatively humble—or at least unorthodox--beginnings.

#1Facebook (FB)

Dustin Moskovitz, former Chief Technology Officer at Facebook Inc., talked about the company’s early days in the book, Valley of Genius: The Uncensored History of Silicon Valley. Turns out the world’s largest social network had pretty humble origins when it was launched in 2004:

“Back then there was a really common problem that now seems trivial,” Moskovitz says in the book. “It was basically impossible to think of a person by name and go and look up their picture.” While the idea of a college “freshman face book,” a catalog of students with their photos and information, already existed in some form at Harvard and other schools, they were often limited by dorm, or not accessible online. “So we decided to create a unified version online and we dubbed it 'The Facebook' to differentiate it from the individual ones,” Moskovitz says.

The rest, as they say, is history.

Today, Facebook boasts more than two billion users and a market value of more than $600 billion. Meanwhile, Zuckerberg is ranked third on Bloomberg’s ranking of the world’s richest people, with a net worth of $84 billion.

#2Lego Group

Kirk Khristiansen was a Danish carpenter in the 1890s. His main occupation was building houses for local farmers--a job he did until 1924 when his workshop got razed to the ground by one of his sons.

It was around that time that another disaster struck—the Great Depression. Business got so bad that Khristiansen was forced to use his creativity to make wooden toys. In 1949, he got the idea to produce plastic toys using interlocking bricks he called "Automatic Binding Bricks." His reputation for never skimping on quality and company motto det bedste er ikke for godt (only the best is the best) made his products world-famous with Lego replacing Ferrari as the world’s most powerful brand in 2015.

To date, more than 600 billion Lego parts have been produced, with the Lego Group valued at around $15 billion.

#3Sharp

In 1912, Tokuji Hayakawa was a young man who owned and operated a metal workshop in Tokyo. At 21 years of age, he invented a mechanical pencil that he named Ever-Ready-Sharp. Sales of the pencil were low at first before he finally landed as large order from a trading company in Yokohama.

But as happens so frequently, life was about to throw him a curve ball. The Great Kanto Earthquake hit Tokyo and completely devastated his workshop leaving young Hayakawa with no product, no income and a mountain of debt. He had little choice but to sell his patent and set off for Osaka to try and find something to do. He was in the process of restarting his pencil business when he heard about the magic of a newly-invented machine called the radio. True to his innovation DNA and sharp business acumen, Hayakawa decided that he was going to give Japan the best radios ever--and voila, the Sharp Corporation turned from a struggling pencil maker into one of the world’s largest electronics companies.

#4Slack

Cloud-based workplace chat platform Slack is one of the newer chat apps having been founded in 2013 by co-founder of photo-sharing site Flickr, Stewart Butterfield. Despite his past tech success, Butterfield says that Slack’s development as more accidental than planned.

Butterfield had founded gaming company, Tiny Speck, in 2009 and hired a team of artists and developers to create an online multiplayer adventure game known as Glitch. When working on Glitch, Butterfield and a group of developers created a workplace collaboration app that allowed the entire team that was scattered around Vancouver and San Francisco to communicate easily. Funny thing: Glitch was shut down in 2012 due to a lack of interest from online gamers while the chat tool, which Butterfield named Slack, went on to become one of the trendiest collaboration apps with a valuation of more than $5 billion.

#5Ferrari (RACE)

Enzo Ferrari was a racecar driver. In fact, that’s all he ever wanted to do—and was pretty good at it, too. By 1929, Ferrari had become a big enough deal in the racing world and even ran his own stable of drivers—the Scuderia Ferrari. They mostly raced Alfa Romeos, the company that would eventually hire Ferrari to head up their motor racing division.

But then World War II broke out, fascism came to Italy, and the Italian government took control of Alfa Romeo. Ferrari could no longer race and wound up making tools and airplane parts for the war effort.

But racing was his true love, and Ferrari figured a way to build cars so that he could race them.  But he soon discovered that he could hardly pay the bills that way and was forced to sell some of his cars to fund his passion.

Turns out that some of the finest automobiles ever made by man were made for the same reason that a struggling Hollywood actor would take a job at a local Starbucks. In fact, it’s said that Ferrari didn’t think too highly of his customers whom he thought of as being snobbish, arrogant and privileged. But they loved his cars nonetheless and kept the orders--and the money--flowing.

The Ferrari Enzo, named after its founder, was launched in 2002 and now sells for a princely $3 million making it the most expensive Ferrari ever made.

By Alex Kimani for Safehaven.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Stocks , Entrepreneurship , Investing Ideas
Referenced Symbols: FB , RACE



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