It's easy to forget that the best new business ideas are often the simplest. Here are 10 start-ups that will have you wondering, "Why didn't I think of that?"
Cover Story
Ten ideas for businesses you'll wish you'd thought of first
If Fortune 500 companies followed from start-ups as surely as oak trees follow from acorns, then picking which fledgling businesses were destined for greatness would be easy. And where's the fun in that? But happily for the betting folk among us, the annals of enterprise are full of who'd-a-thunk-it success stories. Conversely, even the most promising start-ups can run aground if their technology obsolesces, a market fails to materialize, or a major customer unexpectedly tanks. In each year from 1995 to 1998, an average of 165,000 companies drew their first breath, according to Dun & Bradstreet. And annually from 1995 to 1997, an average of 75,500 gasped their last.
But healthy doubt notwithstanding, some companies are hard not to get excited about--especially those evincing certain early signs of vigor: An idea that makes other people smite their foreheads and cry, "Why didn't I think of that?" A management team with marquee credentials. A well-placed patent. A well-heeled customer. King-size pillowcases full of cash.
What follow are profiles of 10 companies that, judging from their baby pictures, show real promise. All are less than three years old, and all possess some or most of the portents of success mentioned earlier. (Although a few have Internet elements, we chose to swim against the popular current by avoiding companies that hang their hats exclusively on the Web.) We've also thrown in a few interesting resources for entrepreneurs launching companies today. Use them wisely, and maybe in a couple of years you'll be giving us something new to get excited about.
1. Mind games
COMPANY: Cranium, Seattle
YEAR FOUNDED: 1997
CONCEPT: Make and sell a board game that exercises parts of the brain you never knew existed
PRINCIPALS: Whit Alexander, 37, cofounder; Richard Tait, 35, cofounder
PROJECTIONS: Not disclosed, although Cranium was profitable in 1998
FUNDING: The founders' personal savings
BIRTH LEGEND: Tait, a former Microsoft executive, had spent a weekend in the Hamptons playing board games with his wife and another couple. Having excelled at right-brained Pictionary but tanked at left-brained Scrabble, he began on the plane ride home to mentally concoct a game in which players needed more than one skill to win. Back in Seattle, Tait and fellow Microsoft alum Alexander assembled a virtual team--including a crossword-puzzle builder, a children's art instructor, a mime, a college student, a software editor, and a journalist--who designed the game, collaborating entirely by E-mail.
WHAT'S TO LOVE: Even though Tait and Alexander don't advertise and have kept the industry's buzz machine at a distance, as of May they'd moved approximately 100,000 units of the $34.95 game. Cranium sells well on Amazon.com, but surprisingly, the company has racked up its biggest sales through an unconventional channel: Starbucks stores, where it is the only game sold. Cranium also has distribution deals with Virgin Megastores and Barnes & Noble and--after initially bypassing traditional game retailers--with Learningsmith, Store of Knowledge, and the Game Keeper. "I ignored that what we were selling was a game and figured out where our potential players hung out," says Alexander.
FLIES IN THE OINTMENT: Cranium has yet to become a household name to the game-buying public. "It's a difficult sell," says Pam Canfield, an industry consultant and the owner of That Games Store, in Elmhurst, Ill. Canfield also believes the company is too removed from the industry, as evidenced by its founders' early snubbing of game retailers and nonappearance at the annual Toy Fair.
THE "SWF SEEKS SAME" FACTOR: Classified ads are a great indicator of when something enters the popular consciousness. This notice appeared recently in the personals section of The Stranger, a free alternative weekly in Seattle: "Cranium Anyone? 2 prof. lesbians seek new pals, 26-34, who enjoy pool, movies, gin & tonics, and board games." --Ilan Mochari
2. Petal Pushers
COMPANY: KaBloom Ltd., Boston
YEAR FOUNDED: 1998
CONCEPT: Become the first superstore for flowers
PRINCIPAL: David Hartstein, 43, president and CEO
PROJECTIONS: Revenues of $15 million in 2000
FUNDING: $3 million from Kestrel Venture Partners; Venture Investment Management Co.; and Thomas Stemberg, CEO of Staples (a second round of financing, for $13 million, is under way)
BIRTH LEGEND: On several trips overseas, Stemberg observed that Europeans purchased fresh flowers as often as they bought fresh bread. Despite their affluence, Americans ranked only 13th among the world's blossom buyers. The difference, Stemberg speculated, might be in the marketing: European flower markets were generally larger and more inviting than their U.S. counterparts, and their prices were 35% lower. Would it be possible, he asked Hartstein, a former Staples executive and Israeli diplomat, to reinvent the U.S. floral industry along the European model?
WHAT'S TO LOVE: KaBloom applies a biggish-box strategy to a brand-new category. Outlets stock more than 200 varieties of fresh-cut posies, compared with an average of 40 at the largest supermarkets and 20 at most florists, says Hartstein. KaBloom keeps its prices low--about half the industry norm--by buying directly from growers and distributors, as opposed to wholesalers. On-line, the company charges less than half as much as 1-800-Flowers. KaBlooms are also twice as large as and better lit than many mom-and-pop shops. "A walk in our store is like a walk in a garden," says Hartstein.
