11 painful moments CEOs and founders thought their business was sunk — and how they turned it around

  • JetBlue, SparkNotes, Virgin Atlantic Airlines, and other successful businesses have had rough patches in the past.
  • There have been moments when their founders and CEOs didn’t know if the company would make it.
  • We take a look at 11 of those moments below, along with how the companies’ leadership managed to recover.

If you take a look at the history of many successful companies, you’ll inevitably find moments where the founder or CEO didn’t know if the organisation would make it.

Maybe they’d run out of money, or maybe they’d stumbled into a PR disaster. Either way, the future looked bleak.

Below, we’ve listed 11 such moments – and how the company leadership managed to forge ahead.


VIPKID CEO and founder Cindy Mi couldn’t handle unprecedented customer demand

Photo by Steve Jennings/Getty Images for TechCrunch

VIPKID is a Chinese education startup that connects native English-speaking teachers with young Chinese students for virtual English lessons.

As Business Insider’s Harrison Jacobs reported, while the company was in its pilot stage in 2014, Mi’s friend tried out the service and posted about it on Weibo (China’s version of Twitter).

Within a day, the company was receiving calls and messages from people who wanted to try the service for themselves. People started to get angry because the company wasn’t able to respond to all their requests.

Mi’s team ultimately resolved the problem by putting out a statement that read: “Give us a couple of months and, when we’re ready, we’ll come back to you.”

Mi told Jacobs that the message conveyed to customers that the company was professional instead of sleazy and wasn’t simply trying to get money out of them before the product was ready.


SparkNotes cofounder Sam Yagan wasn’t churning out content fast enough

Hollis Johnson/Business Insider

Yagan was a Harvard undergrad when he cofounded SparkNotes along with his roommate; the site went live the spring of their senior year.

As Yagan told Business Insider’s Richard Feloni on an episode of the podcast “This is Success,” the immediate response was that “people were pissed,” sending angry emails. Specifically, because the site didn’t have the book they needed yet.

“That’s the best kind of hate mail to get, is we need more product,” Yagan said. That summer, they hired some editors to put up more SparkNotes, “and the rest is history.”


GOAT cofounder Eddy Lu wasn’t prepared for the company to explode in popularity

Hollis Johnson/Business Insider

GOAT is now the world’s largest resale marketplace for high-end sneakers.

On Black Friday 2015, GOAT blew up and couldn’t keep up with customer demand; thousands of orders were left unfilled.

As Lu told Feloni on another episode of “This is Success,” “We responded to every single customer-service message. I think there were about 4,500 that day. But at that point it was better to be hated than unknown.”


Quicken Loans founder Dan Gilbert had a PR snafu while trying to rebuild downtown Detroit

Gilbert is the billionaire owner of the Cleveland Cavaliers and the founder of mortgage company Quicken Loans.

As Business Insider’s Feloni reported, since moving Quicken Loans to downtown Detroit in 2010, Gilbert has invested $US3.5 billion (with $US2.1 billion in development) into rebuilding the neighbourhood through his real estate firm Bedrock.

In July 2017, Bedrock posted an ad that read “See Detroit Like We Do,” which caused controversy because it featured primarily white people. (Feloni reported that Detroit is 80% black and largely working class.)

On an episode of “This is Success,” Gilbert told Feloni that the ad was just one in a series featuring a more diverse group of people, and that his company hadn’t put up the rest of the ads yet.

In a lengthy Facebook post, Gilbert wrote: “Although not intended to create the kind of feelings it did, the slogan/statement we used on these graphics was tone deaf, in poor taste and does not reflect a single value or philosophy that we stand for at Bedrock Development or in our entire Family of companies.”


The Corcoran Group founder Barbara Corcoran nearly watched her company go bankrupt

‘Shark Tank’/ABC

Corcoran was writing a speech to give to her employees, announcing that her real-estate company had gone bankrupt.

Then, as she told Business Insider editor-in-chief Alyson Shontell on an episode of “This is Success,” she remembered the 88 apartments owned by an insurance company that didn’t want an auction.

“It just popped in my head and I went back and I priced them all alike, got the same dollar but I priced one bedrooms, two bedroom, studios, all alike, I sold them for the same price,” Corcoran said.

Within a week, she went from owing $US348,000 to making $US1.2 million and commissions.

Corcoran said the will to survive is “probably the most important trait if you’re going to build a business. One thing for sure is you’ll have bad times; you can count on that one.”


Halo Top founder Justin Woolverton received a cease-and-desist letter from a competitor

Halo Top

In 2013, ice-cream brand Halo Top was about to melt.

Woolverton owed $US100,000 in cash and about $US150,000 in credit card debt, Stephen J. Bronner at Entrepreneur reported.

“We had a come-to-Jesus moment, because there was no guarantee we were going to be able to stay alive,” Woolverton told Entrepreneur. “It was very do or die.” Woolverton and his team raised about $US1 million and gave friends and family promissory notes that would repay their loans at a rate of 150%.

Two years later, Halo Top ran into another roadblock when it received a cease-and-desist letter from another company that said Halo Top’s packaging looked too similar to theirs. Halo Top underwent a redesign – and in 2016, the company said it grew 2,500%. In 2017, Entrepreneur reported, Halo Top was the top-selling new food brand.


Outreach cofounder and CEO Manny Medina didn’t know how to rescue his company from the brink of bankruptcy

Manny Medina

In 2014, Outreach was called GroupTalent and it sold recruiting software, Business Insider’s Julie Bort reported. The company was on the brink of bankruptcy, with just two months’ cash left.

The subsequent turnaround happened by accident.

The company cofounders had created a work-flow app to automate cold-calling, which automatically provided follow-up emails. As it turns out, people were less interested in the recruiting tool than they were in the emails.

“People were like, I don’t want to buy your recruiting product. I want to buy your sales tool. And that was the birth of Outreach,” Medina told Bort.

The product launched in 2015, and Outreach achieved annual recurring revenue of $US10 million by the end of 2016, Bort reported.


Evernote’s cofounder and former CEO Phil Libin was about to shut down the company and fire all his employees

All Turtles

During the 2008 financial crisis, an investor in note-taking company Evernote backed out at the last minute and Libin had already given up his right to work with other investors. The company had just three weeks of cash left, TechCrunch reported.

So Libin decided to shutter the company and fire all his staff.

Then, TechCrunch reported, an investor from Sweden got in touch, saying the product had changed his life. About a week later, he wired Evernote $US500,000.

While Evernote has had some rough patches since then, current CEO Chris O’Neill told Business Insider’s Shona Ghosh in 2017 that the company was cash-flow positive and had more paying users than Slack.


Twitter cofounder Evan Williams saw his early startup Blogger crash when the dotcom bubble burst

Way before Twitter, there was Blogger. Williams launched one of the original self-publishing sites in 1999 and it was popular for a while, Forbes reported. But in 2000, Blogger crashed and Williams had to lay off all his employees.

Williams told Reid Hoffman on the “Masters of Scale” podcast:

“I sat the team down and said, ‘Look, in two weeks, we’re not gonna be able to pay you.” So, essentially, this is the last paycheck we can pay.’ We had already like skipped one. I told them, ‘You’re welcome to come back tomorrow. I’m gonna come back.” But none of them came back. That was hard.”

Alone, Williams kept working on the startup until, in 2003, it was bought by Google. Williams went to work for the tech giant.

Though Blogger doesn’t exist anymore, Williams himself has been more than a little successful since then: He cofounded Twitter and has served as its CEO.


JetBlue’s former CEO David Neeleman saw customers enraged after flight delays

On Valentine’s Day 2007, an ice storm hit the northeast. Chaos ensued. Over the next few days, thousands of passengers had their JetBlue flights canceled and were stranded. Some were trapped on the runway at John F. Kennedy airport.

Then-CEO Neeleman called it “the worst operational week in JetBlue’s seven-year history,” according to Harvard Business School Working Knowledge.

To help restore the company’s positive image, Neeleman apologised publicly to the affected customers and offered compensation. He doubled down on employee cross-training, so that corporate employees could help in the case of a future crisis. JetBlue also introduced a Customer Bill of Rights.


Virgin Atlantic founder Richard Branson had to dip into the company’s cash reserves to buy a new test plane after a bird flew into the engine

Justin Sullivan/Getty Images

“The launch of Virgin Atlantic put financial pressure on the other businesses in the Virgin Group,” Branson wrote in the Independent. This was back in the 1980s.

Branson leased the first plane for a year, keeping the business separate from the rest of the Virgin Group.

Then, disaster struck. “We were sailing close to the wind and were almost sunk before our first trip when a bird flew into the engine during a test flight,” Branson wrote. “We had to use our cash reserves to buy a new one.”

Today, Virgin Atlantic is one of the biggest airlines in the UK. A company spokesperson told CNBC that sales from Virgin-branded businesses around the world are $US23 billion annually.

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