How to turn $5000 into a business worth $1 Billion – The life of Sara Blakely

July 9, 2020

In this article, we’re going to be talking about American Businesswoman, Founder, and CEO of Spanx, Sara Blakely, and how she went from a Florida State University graduate who wanted to be an attorney to a fax machine saleswoman to a billionaire.

Some facts about Sara Blakely:

Our story starts in the city of St.Petersburg, Florida. In the warm weather of the Sunshine State of the United States of America, a woman walks door-to-door trying to sell fax machines. With the Sun glaring right over her head, she looks down at her pantyhose covered feet. Having been forced to wear it for her sales role, she liked how it made her body look toned and firmer, but wished they didn’t cover up her entire feet. She so despised the seamed look of her feet when she wore the pantyhose. A few days later, while getting ready for an office party, she decided to cut the feet off her pantyhose in order to look better in her fitted pants. And this is the moment when the idea for Spanx was born.

The woman in the picture is Sara Blakely – entrepreneur, billionaire, and the founder and owner of Spanx’s shapewear company.

Her Story

Initially planning to become a trial attorney like her father, Sara graduated from Florida State University with a bachelor’s degree in Legal Communications. Later, she appeared for the Law School Admission Test but ended up scoring quite low. Feeling sad but still determined, she studied as hard as she could for the next year’s LSATs, and on attempting the test again, she ended up scoring one point lesser.

She took this as a sign from the universe, telling her to change her path. So, she decided to go to Disney World and audition for the role of Goofy.

While waiting for the auditions, she worked at Epcot. Her job description, at this point, was to wear a brown polyester spacesuit and help people with getting on the Epcot rides. When she finally auditioned for Goofy’s role at Disney World, she was told that she was too short for the costume and was offered the role of a chipmunk instead. She decided to pass on the offer and instead got a job at a local company called Danka as a saleswoman, selling fax machines.

 “It was the kind of place that would hire anyone with a pulse. On my first day, they handed me a phone book and said, ‘Here are your four zip codes. Now get out there and sell.’ There was no list of accounts that were likely to buy from me. I had to 100 percent drum up my own leads.”

– Sara Blakely, in an interview with CNBC

Seven years of Fax Machines

Starting as a salesperson, Sara woke up at the break of dawn every day and then spent the rest of her day going door-to-door trying to sell fax machines. While hustling from 8 a.m. to 5 p.m., she was subjected to countless rejections and brush-offs.

Despite all of that, she never gave in to her misery. Instead, she focused on the positive side of her working situation at the time.

“During my fax-selling stint, I would spend much of my free time trying to figure out what I really wanted out of life and what my strengths were,” she recalled. “I knew I was good at selling and that I eventually wanted to be self-employed. I thought, Instead of fax machines, I’d love to sell something that I created and actually care about.”

– Sara Blakely, in an interview with CNBC

It was during her role as a salesperson for Danka that she was struck by the idea for Spanx. While getting ready for her attendance at a private party, she experimented by cutting the feet off of her pantyhose to wear underneath her slacks. And with that, Sara gave birth to Spanx – unique shapewear that was thin, comfortable, and invisible underneath clothes, without having any idea that it would turn into the multimillion-dollar company that it is today.

After that, Blakely spent the next two years researching, developing, and saving up for Spanx. She ended up saving almost $5000 and then decided to finally make her move. She drove up to North Carolina, the location of most of America’s hosiery mills, to present her idea to potential investors.

Rejected by Everyone

Every representative that she met up with had the same reply – No.

She was turned away and refused by everyone she pitched her idea to. The companies she approached were used to dealing with well established large-sized companies. Hence, upon meeting up with Sara, they were less than interested and failed to see the value and brilliance of her idea.

But Sara never gave up.

She was used to rejection but didn’t let that distract her from her goal.

After trying multiple times, she received a call from a mill operator who offered to support Blakely’s concept. He had gotten strong encouragement from his three daughters, who understood the value of Blakely’s idea. Being women themselves, they had experienced the same problems that had led Blakely to start Spanx.

Blakely further explained that the experience of developing her idea also revealed to her that the hosiery manufacturing industry was overseen solely by men who were not using the products they were producing.

On the rise

Blakely got down to business and successfully created her product’s prototype within a year. She proceeded to got her idea patented and worked on the packaging of the product and finally bought the “Spanx” trademark.

She managed to arrange a meeting with a representative of the Neiman Marcus Group (an Ameican chain of luxury department stores). During this meeting, to show just how beneficial and brilliant her innovation was, she went to the ladies’ restroom with a Neiman Marcus buyer and changed into Spanx in front of her so that she could show her how it changed the shape of her body in seconds. Blakely’s product was sold in seven Neiman Marcus stores as a result of this meeting.
Bloomingdales, Saks, and Bergdorf Goodman soon followed.

In 2000, Spanx earned the title of “Favorite thing” by Oprah Winfrey, which led to a significant rise in popularity and sales and Sara’s resignation from Danka.

Spanx achieved US$4 million in sales in its first year and US$10 million in sales in its second year. In 2001, Blakely signed a contract with QVC, the home shopping channel.

In 2012, Blakely landed on the cover of Forbes magazine for being the youngest self-made female billionaire in the world.

In 2013, Blakely explained that her ambition is to design the world’s most comfortable high-heel shoe before retirement. 

She was listed as the 93rd most powerful woman in the world by Forbes.

Since 2015, she has been a co-owner of the Atlanta Hawks basketball team, along with billionaire Tony Ressler.

Lessons to learn from Sara Blakely

  1. Failure is a good thing – When she was growing up, at the end of every day, Sara’s dad would ask her, “What did you fail at today?”. By doing this, he wanted to convey to his children that failure is not something to be scared of. Rather, it is a necessary outcome of trying. Failure tells you and the rest of the world, that you’re trying and you are definitely not giving up.
  2. Know your product – Going through Sara’s story, we see her being rejected by so many people she pitched her idea to. Because they didn’t actually know about their own product and didn’t use it, they failed to see the brilliance of Sara’s innovation. Always know your product inside out.
  3. Know your customer – While looking for somebody to support her idea, Sara faced a lot of rejection because she was essentially looking in all the wrong places. She was finally able to find an investor in a man who had three daughters who could understand the value of Sara’s idea. Therefore, when pitching your product or idea, you should know your customer. You wouldn’t try to sell the formula for making butter to a brickmaker.
  4. Keep your ideas private – While working for Spanx, Sara didn’t share the idea with anyone. Not even with her friends or family. She only shared the idea with those people that she absolutely had to. The reason behind this was that in the beginning, an idea is a very fragile thing. If you share it with the world too soon, all you’ll get is doubtful discouragement. Even though it might be coming from your friends and family because they want to shield you from failure, you’ll lose your zeal and will end up losing your drive and scrapping the idea.
  5. Don’t take no for an answer – Sara reached out to a multitude of manufacturers and lawyers to help her patent her idea and create a successful prototype. In every meeting she had with potential manufacturers, she was asked questions like: Who are you? Who are you with? and Who is backing you? When the answers to these three questions remained, “Sara Blakely,” no one wanted to take a chance on her until one manufacturer called her back and said “OK.”. Because he had discussed the idea with his daughters, and they had appreciated its value.
  6. You can build a billion-dollar business starting at $5,000 – When she started Spanx, Sara had only $5000 saved from working as a salesperson, but she didn’t let that stop her. By planning her expenses in just the right way, she was able to build a billion-dollar empire on the foundation of those $5000 dollars.
  7. Understand your priorities – Sara worked tirelessly, creating and packaging her product in her own apartment. She avoided investing in outside office space or other marketing and business tools until much later when the product had finally taken off. She didn’t even have a formal website until she made it on the Oprah show and needed one. Anything that wasn’t absolutely essential to building the product and getting the name out there wasn’t a priority. In this way, she was able to save a lot of funds which came in handy for successfully building her business.
  8. Break the mold – When Sara finally decided to tell her friends and family about her idea, the reply she got was – “Well if it’s such a good idea, why hasn’t anyone ever done it before?”. If she hadn’t pursued her idea, she would still be working at Danka as a saleswoman. But, she had the courage to break out from the mold and create something new, despite everybody’s rejections and doubts,

“Believe in your idea, trust your instincts, and don’t be afraid to fail. It took me two years from the time I had the idea for Spanx until the time I had a product in hand ready to sell into stores. I must have heard the word “no” a thousand times. If you believe in your idea 100%, don’t let anyone stop you! Not being afraid to fail is a key part of the success of Spanx.”

– Sara Blakely

In the end, Sara Blakely’s journey from a saleswoman to a business mogul teaches us what’s possible when we believe, when we’re resourceful beyond measure, and when our passion and commitment to something are bigger and stronger than the discouragement that we face from the world.

Ask yourself: What are you most afraid of failing at? Will you get in the cage with your fears and fight them with courage? Will you take a step towards your dream today?

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