Where Great Ideas for New Businesses Come From

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Yet their phone rang off the hook.

College semesters came and went, and neither knew the moving industry was strictly regulated until the day, three years later, the Public Utilities Commission knocked on the door and explained that if Starving Students wanted to keep on trucking, the Margaliths needed a license. So they shut down for six months to get licensed -- and take their finals. By then, the neophyte haulers had six trucks and 15 on-call employees. They also had twice the business they could handle.

The little office survived on sheer willpower. "We didn't know how hard it would be, so we didn't say no," says Ethan. It wasn't until he reached law school that Ethan realized they'd been running a company -- and that he liked it. He graduated in 1984 but blew off the bar, deciding instead to take the moving business seriously.

Since then, Starving Students has opened in 14 locations in five states; Abby runs a separate San Diego office, and Ethan the rest. They've reached combined sales of $15 million. And in a low-margin industry, they've funded growth entirely through cash flow. Abby says, "We stuck with it because it's fun, it's exciting, and it's profitable."

-- Phaedra Hise

Curtain Call
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Homemaker Abducted by Alien Opportunity!
Dorothy Noe was just minding her own business -- a small antiques dealership, to be specific -- when it happened: she was abducted by an alien opportunity. Once a mild-mannered homemaker selling a few sideboards on the side, Noe would find herself opening factories, launching a retail chain, and hiring hundreds of employees as she became the willing victim of a rather frilly idea.

It was all very innocent when it began. "I was just trying to spruce up the garage," she recalls, to serve as a showroom for her antiques. Naturally, she couldn't let the windows go bare. So Noe, being frugal as well as fastidious, designed some window dressings of her own. "I thought they would create the right mood and backdrop for the furnishings," she says.

Some backdrop. The curtains stole center stage, as Noe's customers began clamoring for them. "I told them they were nightmares to make. They required so much fabric and labor, I didn't think anyone could afford them." But customers retorted with three magic words: "I'll pay whatever." The "whatever" Noe guessed at and settled on was $45 a pair, pricey for 1975.

Noe quickly began sourcing out production. "I was not a seamstress. I didn't even like sewing," she confesses. But she knew people who did, and so she assembled a cottage industry of locals to sew curtains for the business she dubbed Dorothy's Ruffled Originals. She sold $20,000 worth of curtains in 1975, her first full year, mainly by hanging them in well-placed windows in her hometown of Wilmington, N.C. What she lacked in industry knowledge and marketing experience, she made up for with guerrilla instincts: "I got those curtains hanging in doctors' offices, restaurants, and shops all around town," she says.

In the process, Noe began to see her opportunities shifting. Her curtain sales had been brisk from the beginning, but by her second year, they'd pulled even with sales of antiques. "I could see where the long-term growth would be," recalls Noe. The antiques business was demoted to a financing vehicle for Dorothy's Ruffled Originals.

The ruffles business flourished. In 1978 Noe shipped $1 million worth of sashes, swags, and valances. "I'd be at UPS when it opened at 7 every morning to ship the orders out." When stored bolts of fabric began to bar the way to the bathroom in her house, Noe knew it was time to make those decisions about opening retail and manufacturing operations.

Now a $10-million business with eight retail shops and a direct-mail division, Dorothy's Ruffled Originals sells a full line of home-decor products, from wallpaper to table linens. Noe looks back on her beginnings as not so much haphazard as inspired: "If I had done this in a more calculated way, I don't know if I would have had the same passion and tenacity about making it happen." -- Anne Murphy

The Corundum Conundrum
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Chance Favors the Prepared Mine
It's fair to say that 3M -- the company that brought you Scotch Tape and the Post-It note -- was founded on a grand mistake. The legacy lives on: today big business's best imitation of a small company thrives on encouraging and exploiting mistakes -- like the adhesive that seemed, well, nonadhesive until someone pasted it onto those little yellow Post-Its.

But back in 1902 the new company seemed as right as right could be. In those days, one of the hottest markets for budding entrepreneurs was mining -- the fin de siÈcle equivalent of software. Five successful businessmen from Two Harbors, Minn., banded together to form Minnesota Mining and Manufacturing Co., in search of something said to be even more valuable than gold: corundum. The allure of the rare mineral was its supposed hardness, apparently ideal for the abrasives needed for burgeoning manufacturing industries on the East Coast.

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