Start Ugly: Why Good Businesses Begin Embarrassingly Small

Every famous company has a polished origin story, and almost every polished origin story leaves out the same thing: how small and slightly ridiculous the beginning actually was. The first version of a good business is rarely impressive. It is a stall, a spare room, a product held together with hope. That is not a flaw in the story. That is the story.

Here is the argument of this post, stated plainly. The first version of your business is supposed to embarrass you a little. What matters is not how it looks. What matters is whether a real person pays real money for it, and what you learn when they do.

Three air mattresses and a rent problem

In late 2007, two San Francisco roommates, Brian Chesky and Joe Gebbia, could not make their rent. A design conference was in town, hotels across the city were sold out, and the two industrial designers had an idea that sounded like a joke: put air mattresses on their living room floor, cook breakfast, and charge strangers to sleep there. They called it Air Bed and Breakfast and charged $80 a night. Three guests came. The rent got paid.

The year after was not a rocket ship. By the founders' own telling, they kept the young company alive during the 2008 election season by selling novelty cereal, boxes of Obama O's and Cap'n McCain's at $40 each, raising roughly $30,000. The cereal, not the website, paid the bills. When the investor Paul Graham later advised them, his famous counsel was to do things that do not scale. The founders flew to New York, went door to door photographing hosts' homes themselves, and watched New York bookings double within about a month. Airbnb, the company that grew out of those air mattresses, is now worth tens of billions of dollars.

Five thousand dollars and a pair of scissors

Sara Blakely spent seven years selling fax machines door to door before she changed her own life with a pair of scissors. She cut the feet off her pantyhose, liked the result, and decided to sell the idea. She launched Spanx in the year 2000 with $5,000, her own savings from those fax machine years, and she took no outside investment. The big hosiery mills turned her down. One North Carolina mill owner finally said yes, and by Blakely's telling he did so only after asking his daughters, who liked the idea. She demonstrated the product on herself for a buyer at Neiman Marcus. Spanx did $4 million in sales in its first full year.

Notice the pattern. No launch party. No big raise. A product one person could carry in a bag, shown to one buyer at a time.

A bread stall in Portland

You do not need Silicon Valley money to start ugly. You may not even need a clean record. Dave's Killer Bread, today the best selling organic bread brand in the United States, launched in August 2005 at the Portland Farmers Market, at an event called the Summer Loaf festival. Its co-founder, Dave Dahl, had spent a cumulative 15 years in prison. When he came home, his family welcomed him back into their small bakery, and he developed a seeded loaf that sold at the market. The company became known for second chance hiring: about one in three of its employee partners has a criminal background. In 2015, Flowers Foods bought the brand for $275 million. It began as one stall, one loaf, one Saturday at a time.

Why the small start is the smart start

A small start is not just cheaper. It is more honest. A beautiful website can hide the only question that matters, which is whether anyone wants the thing. A market stall cannot hide it. Either the loaf sells or you drive it home. That fast, unfiltered feedback is worth more than a year of planning, because planning mostly protects your feelings while feedback actually improves your product.

A small start also keeps the cost of being wrong low. Chesky and Gebbia could be wrong about cereal. Blakely could be wrong for $5,000, not for a million borrowed dollars. Dahl could test a loaf before anyone built a factory. Ugly is a strategy: spend the least possible to learn the most possible.

How to start ugly this month

First, shrink the offer until one person can deliver it this week. Not the app, not the brand, just the smallest useful version: one service, one product, one stall, one page.

Second, sell it before you polish it. Ask for the order, the deposit, the booking. A compliment is not data. A payment is.

Third, do the unscalable thing on purpose. Deliver by hand. Photograph the listing yourself. Ask every customer what almost stopped them from buying, and write the answers down.

Fourth, set a small money goal with a date, like the rent money those air mattresses had to make. A deadline turns a hobby into an experiment.

Fifth, only build the bigger version after strangers, not friends, have paid for the small one twice.

Why this belongs at Starvard

Starvard exists because most practical knowledge is locked behind tuition, and starting a business is some of the most practical knowledge there is. Nobody in this post had permission, credentials, or a large budget. They had a small test and the nerve to run it. That is exactly the kind of learning a free university should hand to everyone.

If this post lit a fuse, keep going with our free course on starting a business, then get your numbers straight in Money. Both are free, like everything here.

Sources and further reading

• From cash-strapped roommates to Airbnb billionaires, AFP via Phys.org, 2018.
• Sara Blakely: Start Small, Think Big, Scale Fast, Stanford Graduate School of Business.
• Dave's Killer Bread brings back fan-favorite bagels, Parade.
• Dave's Killer Bread announcement, Business Wire, 2022.