If you dream big and go far as an entrepreneur sometimes the best way is to think small. That's what brothers Shaun Knudsen did when he founded Plugfones, a Utah company that makes earbud headphones with a special focus on safety. But the founder's success didn't come quickly or easily but only after setbacks, challenges, and plenty of sacrifice.

From Candy to Real Estate

Shaun was born with free enterprise in his blood. As a kid he used to buy NERDS candy at the grocery store for 40 cents a box and sell them at school for a dollar. But for him it wasn't making a profit that was the best part, but the process. In college, he spent more time designing and selling website businesses than he did doing homework until he dropped out during his 3rd year to pursue entrepreneurship full time.

In 2004 Shaun started a real estate company buying rental homes and put everything he owned into the business, reinvesting profits to acquire more properties. Everything went well-for about four years until the 2008 housing crash.

Saying "No" to Bankruptcy

When the bottom of the market fell out Shaun lost everything-the business, his own home, the rental properties, his cars, everything. With a wife and 6 kids to support he found himself not just at ground zero, but worse than that with large business debts and no immediate way to pay them off. While many of his colleagues filed bankruptcy, he felt an obligation to pay off his debts. But how? Working a normal job wouldn't cut it. Shaun decided starting a new business was his only way out. But he still needed immediate cash to stay afloat.

Inspired by Manual Labor

Shaun found himself at a job he had previously scoffed at, working in a glass factory making windows for skyscrapers. He had gone from being a successful business owner to 12-hour days loading a 2,000 degree furnace with plate glass and earning a laborer's paycheck. He was grateful to have the job, but he struggled with the work that was mostly physical and didn't engage his mind. His thoughts would wander, seeking something to engage. Little did he know that working this blue collar job would lead to his biggest business success.

It was while working at this factory that Shaun started wishing he could listen to business audiobooks to help pass the time, but it was so loud in the factory that he and his co-workers had to wear ear plugs, the kind made of rubbery foam that you squish before putting in your ear and then which expand to perfectly seal your ear to outside noise. That's when Shaun had his big idea-what if these foamy little earplugs played music?

After work that day Shaun hurried home to the 1,000 square foot apartment that housed his family of 8 and looked up his idea online to see if he could buy a pair of earplugs that played music. He found lots of people on web forums looking for the same thing, but nobody seemed to make them. Shaun realized there might be a golden opportunity, and went to work designing a prototype.

Hunger and Motivation

Shaun had no capital to spend on his idea, so he went without eating every other day to save the money to buy the components he needed to build a working prototype. Shaun tested the prototype at work, going through multiple iterations until he had a working model consisting of a pair of foam earplugs that each encased a tiny headphone speaker. The foam earplug would expand in the ear to provide hearing protection while the music was delivered through a small column within the earplug, direct to his ear.

Shaun then built a simple website in less than a day and began posting links on the web forums where he had done his research, telling everyone he had "found" a solution. Within the first 24 hours Shaun sold five pairs of headphones. He took the money from the first sales to buy parts and built the first 10 pairs of "Plugfones." He shipped 5 pairs to those who had ordered, and the rest to his co-workers. Then he got to work building his business in his "spare" time.

For months Shaun worked 12 hours per day at the factory and 8 hours each night on Plugfones, leaving 4 hours for sleep. He put the profits back into the business to buy components in bulk in order to improve his margins. Within a year the business was bringing in three times what he was earning at the factory. At that point he quit the factory job.

Scaling and Innovating

In 2012 Shaun hired his cousin, Tyler Knudsen, to focus on sales and marketing. Tyler began selling through eBay and Amazon which immediately tripled business sales. Since then the business has grown from $650,000 in sales in 2013 to $1.5M in 2015 with over 70,000 pairs sold during that year. The company has innovated to produce different kinds of headphones focused not just on workplace safety but other markets like sports where customers value an earbud that doesn't easily fall out. Plugfones recently launched a Kickstarter campaign to fund their latest model, a Bluetooth enabled pair of earbuds. The campaign passed its $35,000 funding goal within the first week after launch.

Shaun's story of riches to rags to riches is a warning against ever thinking you're safe when it comes to entrepreneurship, but also shows how one can triumph over adversity and create a successful business with just a few hundred dollars and a lot of hard work and sacrifice.