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The Strangest Business Success Stories

It’s not easy to think about bizarre business success stories after Twitter. When a company built on the concept of public SMS messaging can pick up tens of millions of dollars in start-up funding and go on to become a phenomenon, anything is possible. But Jack Dorsey wasn’t the only one to come up with an odd idea that become a success (his new payment system looks a little more conventional.) There are plenty of other people who have thought of some weird concepts — and discovered that it’s just what the market needed.

A Novel About You

Part of the appeal of a good novel is the fantasy of being someone else. But when Katie Oliver was looking for a gift for her sister-in-law, a fan of romance novels, she stumbled on an idea for a very different kind of book gift. She set up UStarNovels.com, a business that puts the reader in the heart of the action. Buy one of the books available on the site and in addition to entering a dedication, you’ll be asked to substitute the name of the lead character with the name of the recipient — and to swap other characters for their friends and partner. The site offers a range of classic (for which read “out of copyright”) books but also a number of romance novels and, in response to demand, a range of erotic novels too. At about $40 a copy, they’re not cheap but they are selling. In one week alone, Katie Oliver told NPR that she’d processed more than 1,500 orders.

Forget e-books; maybe the real future of publishing is in designer books.

Personal Cakes

A good sign that a bizarre idea is a good ‘un is that the most common reaction to hearing it is: “Why did no one think of that before?” That has to be the most common reaction to the success of Crumbs Bakery, a chain that was launched in 2003 on the Upper West Side of Manhattan by Mia and Jason Bauer. The bakery sells the usual range of cakes and baked goodies but it’s really built its reputation on cupcakes — ornate, personal-sized cakes that are small enough to enjoy without having to feel you should be sharing them.

The product idea was smart enough but the concept came with an ambitious business plan too. That one bakery has now spread across America. It has branches in four states with more ready to open soon. Inc. Magazine has named Crumbs one of America’s fastest-growing companies, quoting its 273 percent revenue growth between start-up and 2008 when employees topped 200 and revenues reached $8 million.

That’s a lot of money from some very small cakes.

Money from Free Listings

The most bizarre aspect of Craiglist’s success is that it’s been successful at all. The list began way back in 1995 when Craig Newmark arrived in San Francisco and put together a listing of events that might interest other geeks. Initially, he distributed the list by email. It wasn’t intended to make money, and it wasn’t considered a business. But it became popular, grew, took on more cities, more countries, and more services. It also started to accept money: $25-$75 for job ads and $10 for some real estate listings.

The traffic the site has generated has turned those small payments into giant revenues. As a privately-owned business, Craigslist doesn’t report its earnings but estimates have put its annual revenues as high as $150 million.

And yet the site looks like it hasn’t changed since it moved from email to the Web. There are no graphics (the “Best of Craigslist” section is decorated with ASCII!). There are no social media widgets, no way to target listings except by category, no way to track results and no additional features at all. Most notably, there are no banner ads so no way to cash in on all of those users looking at the free listings.

It all comes down to the philosophy of Craig Newmark himself, who sees the site as primarily a service provider rather than a for-profit corporation. With an enormous readership and a price point that’s mostly zero, he’s created a very successful business though.

Selling Used Boxes

Marty Metro graduated cum laude from the University of Maryland. By the age of 23 he was completing his MBA, and before he had even graduated was recruited by Andersen Consulting (now Accenture), where he spent ten years as an enterprise technology consultant. In 2002, he turned his back on the giant tech companies that he’d been helping, and started selling cardboard boxes. Not just any cardboard boxes though: used cardboard boxes.

The idea was that people who had moved had boxes they wanted to get rid of, and people who were moving were willing to pay for those boxes. No less importantly, it was more environment-friendly to continue reusing the cardboard than to recycle it after one use.

Today, UsedCardboardBoxes.com buys stacks of boxes from large companies, paying more than they would receive from a recycler. It sorts them, pulps the ones it can’t use, refurbishes the ones it can and sells them on for less than the price of a retailer. It’s a system that’s simple, remunerative and planet-friendly enough to make the business a finalist for Green Business of the Year in 2009. Recyclers have long turned garbage into cash. But Marty Metro has managed to make cash by reusing garbage.

Bringing China to the World

If cupcakes and used boxes look so obvious that you would have thought that someone would have got there first, then at least when it comes to Alibaba.com, they did get there first. When Jack Ma, an English teacher from Hangzhou, created China Pages in 1995, it was the first Internet-based company in China. When he launched Alibaba.com in 1999 it went on to become one of the world’s biggest Internet companies.

The site acts as a giant wholesale market, offering products made in China to retailers around the world. Its Chinese site, www.1688.com (“yiliubaba” in Chinese), functions as a B2B site within China, and the company also has a Japanese version, and runs Aliexpress.com, a place for smaller retailers looking for fast shipments of smaller units. Together, those services are said to have over 50 million registered users. The company also owns China Yahoo!, AliPay, China’s most popular payment platform, and Taobao, an auction site that drove eBay out of the Chinese marketplace. When Alibaba had its IPO in Hong Kong in 1997, it raised $1.7 billion.

The ideas themselves weren’t odd, but doing it in China at that time was, and that first mover advantage turned the former teacher into a billionaire.

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