John Doe feels his life is stuck and nothing exciting is happening. This is not where he thought he would be, at least not financially. John had plans, but then life happened and he found himself in a regular 9 to 5 with average pay. For now, his plans to live the American Dream is nothing but a Dream. This is how the life of Spanx founder Sarah Blakely must have looked like before she took a step that turned her into one of the richest women on the planet with a net worth of over one billion dollars. In this article, we will look at how Sarah Blakely turned her idea into a billion-dollar company with five thousand dollars. If you have been thinking of bootstrapping your idea, then this article is for you. 

How It All Started

In a thirteen-minute interview with INC, Blakely detailed how she started her company from scratch. Here are the highlights of the interview. 

• It started with the need to solve a problem. Blakely remembers wanting to go to a party, the only problem was that she didn’t know what to wear under her cream pants. So she decided to cut her pantyhose and use it as an underwear. It felt great and that was when the idea struck her, “This should exist for women.”

• Getting an idea is one thing, bringing it to life is an entirely different story. Especially if such an idea never existed. Bakely experienced this firsthand as she tried looking for a company that could help her design a prototype of her idea. Once they found out she wasn’t financially backed by anyone, the visit ended the same way “Oh, it's so nice to meet you Sara Blakely, but we're not interested, have a nice day".

• Finding a patent lawyer wasn’t easy either. First, she was told there were no female patent lawyers in her state at the time. And the male lawyers she found were charging between 3,000 to 5,000 pounds. So Sarah had two main challenges, her entire budget was 5000 in savings and it was difficult to explain the concept of a female product to male patent lawyers. 

• She decided to take the bull by the horns and draft out a patent by herself. This cut her cost down to 700 bucks which she paid her attorney to draft the legal part of the patent while her mom who was an artist, drew the product outline.

• There was still one challenge left, finding a company that was willing to manufacture a prototype thankfully, after consulting with his daughters, Ted decided the idea was worth his time. 

• So the patent was done and the prototype was in the works, time to design the packaging. Blakely went for something loud, something different. Most packages were dull and typical, she decided she wanted something that would scream right off the shelves. After a month she settled with red-colored packaging. 

• The final step in her planning was coming up with a name for her product. It took her over a year but eventually, the word Spanks came to her mind while driving and she quickly wrote it down. Later she replaced the Ks with X because according to her research, products named after made-up words sold better than those with real words. 

Sarah was only 27 when she started her journey to become an entrepreneur bootstrapping her way to success. Spanx was launched in 2000 and in its first year made a profit of four million dollars. Blakely owned 100% of the company until 2021 when she sold a majority of her shares to Blackstone. S0 how did she do it? Let me break it down for you. 

Step by Step Guide on starting your business with a small capital

Step 1 - Make sure you are solving a real-life problem

Many startups want to differentiate themselves in the market. That is good, until you find out there is very little or no demand for the product. This is why timing is very important. If the market is not ready for a product, then no matter how great the idea is, chances are that you will struggle to sell it. 

But if you aim to solve an existing problem in the market, then the product sells itself. This is the case with Spanx. Blakely solved a problem that existed in the market and was apparently neglected by major clothing brands. Voids like this exist in the market for many reasons. If you look closely enough, you can see them in nearly all industries. 

Customers complain about a product or service from a company but nothing is done about it. These unsatisfied customers are easy to sway if they find out your product or service solves the problem they have complained about for years. This applies to both B2B and B2C companies. 

Step 2 - Ask the right questions

When Blakely stumbled across her idea, she instantly knew it was a good idea, but she lacked any business experience. She had never done this before and yet somehow, she managed to excel at it. Why is that? The simplest answer is that Blakely asked the right questions. Why is there no female patent lawyer? Where are the women? Why am I not speaking to any woman? 

How does it feel? These were a few of the questions that helped to guide her decisions. Blakely quickly observed that pantyhoses were designed by men who never wore them, neither did they get feedback from those who wore them. It suddenly made a lot of sense why the void existed. There was a huge gap between the manufacturers and their customers

Step 3 - Approach from a customer perspective

It is easy to get carried away by your idea, but do not assume you know what your customers want until you have put yourself in their shoes. Once her questions led her to realize that the industry was male-dominated even though the product was about women, Blakely decided to use the biggest advantage she had, being a woman. 

I knew that I wanted to make a packaging, and I had never gone to class for this or anything, but as a consumer, I knew what I wanted and what I liked and didn't like.

This was when she came out with the idea to give her product a red package. Another instance when she approached the product design as a consumer was while making the prototype. She said, 

As I'm making the prototype, which took me a year of working on it at night, and on the weekends, I learned so much as a consumer, that it never occurred to me.

It is no wonder Spanx was a hit right from the start. It was never about profit but about comfort and customer satisfaction. The last thing you want is to launch a product or service and hear your customers complain about the most basic things that were ignored. 

Step 4 - Keep it simple

If you are starting small then learning to work within your budget is a necessity. This might demand a little bit of creativity and out-of-the-box thinking, but the good news is that it is doable. Spanx's success is a product of word of mouth. If she had wanted to go the regular advertisement route, chances are that she would run into debt, and still not be very successful. 

But Blakely decided to target important figures like Opray Winfrey. After Winfrey tried on SPanx, she gave it a thumbs up and it is said that Spanx made up to ten million dollars in revenue that year. Advertisement undoubtedly has a huge influence on the success of a startup but not every startup can bear the cost. 

This is why you should keep in mind that although most companies cozy up to influencers and spend huge sums of money to talk about their product, that route is not for everybody. I wrote an article about how Elon Musk made Tesla a household name without paying for advertisement. I think it is worth a read. One of the biggest lessons you would take from that article is what I will talk about next. 

Step 5 - Share your story

Stories are endearing, Stories are relatable, and stories make your customers emotionally attached to your product, and it doesn’t cost much. All you have to do is talk about your dream how you built or plan to build your company, the challenges you faced, and how you overcame them. I am sure there is a blog or two that are more than willing to publish it for free. Look, great companies, like great men, have great stories. 

If you enjoyed this, then you can get more content like this on our website www.epirus.vc. We help startups tell their story, and connect with their customers amongst other things. If you’d like to collaborate we us, you can reach out to us via email which is also available on our website. By the way, have you heard of Atlassian? If not, then you should definitely read this article;

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