Some people are born and quickly find a purpose. In 1762, at the age of six, Mozart was performing in exhibitions at the court of Maximilian III of Bavaria in Munich. Carl Friedrich Gauss, who lent his name to the measurement, completed his masterwork, Disquisitiones Arithmeticae, at the age of 21, before going on to earn the moniker of “greatest mathematician since antiquity.”
Just like people, some companies are formed around a concept that defines them for their lifetime. In 1708, when Sebastien Artois became the master brewer at Den Horen, the brewery took his name, becoming Stella Artois, which went on to become a part of ABInBev, the world’s largest brewer. Established in 1526 and owned by the same family for over 500 years, Beretta had its humble beginnings as a supplier of arquebus barrels to the Arsenal of Venice.
But there are also those companies who wander aimlessly in the general direction of a strategy. Those companies, who become entrepreneurial magpies, snatch up whatever shiny objects they can find, hoping some consumer, somewhere, might be willing to pay for them. To these companies, adaptability is the raft that has kept them afloat and allowed them to weather the often dicey seas of business.
In their search for profitability and stability, many of these companies have utterly redefined their goals, strategies and marketing techniques. They have overhauled production processes and, in some cases, sought advice from the unlikeliest of sources. When the market laid waste to their best laid plans, these companies took pause, stood up and said, “Hey, wait a minute. What if we put all our money into substandard flophouses?”
So, from the textile brothers who dared turn a tuber into a toy, to the $5 day that became an $11 million company, we’ve assembled a list of six companies that have completely changed their course.
Originally founded in 1998, Confinity Inc. — creators of PayPal — was based around a service that allowed the transfer of funds between two Palm Pilots. The idea was simple and elegant: with millions of people carrying both PDAs and wallets, PayPal would combine the purposes of the two items in a way that allowed consumers to pay their bills and make purchases digitally via their PDAs. At the time, online money transfers constituted a secondary, less viable stream of revenue for the company.
All that would change in 2000, when PayPal enabled eBay payments. Revenue from online transfers and payments for auction items suddenly dwarfed revenue generated from Palm Pilot transfers. By the end of the year, PayPal had discontinued its Palm Pilot service entirely.
By 2001, with over 1 million users, PayPal had gone public on the NASDAQ, and in 2002, the company was purchased by eBay for $1.5 billion.
Formed in 1889 by Fusajiro Yamauchi, Nintendo was originally founded as a purveyor of handmade hanafuda playing cards. By the late 1960s, the company had unsuccessfully attempted to enter a number of markets, including taxi services, a TV network, and “love hotels.” As the public’s interest in playing cards waned, the company’s stock plummeted to an all-time low, and the fate of the company hung in the balance.
The company’s fortunes changed in 1966, when an assembly line engineer named Gunpei Yokoi brought one of his personal projects to work. That project, called the Ultra Hand, marked Nintendo’s first venture into the toy market. The Ultra Hand went on to sell 1.2 million units in Japan and its success led to Yokoi’s promotion to the newly formed Nintendo Games.
In 1974, Nintendo entered the video game industry. A student by the name of Shigeru Miyamoto was placed under Yokoi’s direction, tasked with designing cases for Nintendo’s Color TV system. Miyamoto went on to design one of Nintendo’s most iconic games, Donkey Kong, which introduced the world to Mario, the company’s longstanding mascot.
As of May 2013, according to Forbes, Nintendo has a market capitalization of $14.39 billion.
4 The Gap
The first Gap store opened its doors in San Francisco in 1969. Founded by Doris and Don Fisher, the boutique’s shelves were originally stocked with LP records and Levi’s jeans. The couple’s goal was to entice the younger generation into their store by offering records, and then sell them on a new pair of jeans.
Initially, however, nobody took note of the jeans. Doris and Don were close to declaring bankruptcy when Don placed ads in local newspapers offering “four tons” of jeans at bargain basement prices. Within weeks the jeans were gone, and Don had inadvertently stumbled upon the seeds of a business strategy that would inform the store for years to come: low prices, large selection, and advertising that targeted a youthful client base.
In 1971, only two years after the first store’s opening, The Gap was recording $2.5 million in annual sales. In five years, that number multiplied exponentially with the company’s sales hitting $97 million annually.
Founded in 1923 by Henry, Hilal and Herman Hassenfeld, Hassenfeld Brothers was a company that dealt in the sale of textile remnants. It remained a textile dealer for the next 20 years, eventually widening its horizons to manufacture pencil cases and school supplies.
Everything changed in the early 1940’s when Hassenfeld Brothers produced toy versions of doctor and nurse kits. By 1942, the company had transitioned into being a full-time toy company. Ten years later, it hit pay dirt when it purchased a creation called Mr. Potato Head from inventor George Lerner. The toy was a runaway success and led, in part, to the company becoming a Disney licensee in 1954.
Changing its name to Hasbro Industries in 1968, the company went public. It continued producing popular toy lines such as G.I. Joe and Transformers for the next 45 years, eventually surpassing Mattel as the world’s largest toy manufacturer. As of September 2013, the company has a market capitalization of $6.48 billion.
In 1886, David H. McConnell was a struggling door-to-door book salesman when inspiration struck. Discovering that his largely female clientele preferred the free perfume samples he was offering to the books he was selling, he founded The California Perfume Company. From his experience in door-to-door sales, he knew that many female customers stayed home alone while their husbands were at work. As a result, McConnell, in a time of limited employment options for women, hired women exclusively, tasking them with marketing and selling his products.
The California Perfume Company filed a trademark application on June 3, 1932 that effectively rebranded the company as Avon. In the intervening years, Avon has expanded to over 140 countries and grown to a market capitalization of $6.42 billion.
Tiffany, Young and Ellis first opened its doors in Lower Manhattan in 1837. The store’s initial concept was to serve as a "stationery and fancy goods emporium.” Selling a wide variety of stationary items such as envelopes, correspondence cards and writing utensils, the first day’s sales came in at a discouragingly low $5.
In 1853, Charles Tiffany took control of the company, shortened the name to Tiffany & Co. and shifted the shop’s emphasis from stationary to jewelry. Thus began Tiffany’s long, distinguished history of creating the world’s finest keepsakes. In 1919, the company revised the Navy’s Medal of Honor and in 1968, at the behest of Lady Bird Johnson, it created a china service exclusively for the White House.
As of 2012, the company maintains over 60 stores in the US, with additional stores operating in 22 countries around the world. Today, the company records over $3.5 billion in annual sales, and enjoys a market capitalization of over $11 billion.