$5,000 to a $1 billion valuation without venture capital? That’s what Sara Blakely and her company, Spanx accomplished. It took over 20 years, but Sara Blakely built a unicorn without venture capital.
If you don’t know Spanx, Spanx is a clothing company focused on activewear and underwear for women.
Now, sure you might have seen that headline in the news and have heard some of the popular stories of Sara Blakely. These including how she got Spanx into Neiman Marcus, how she sold fax machines, and even wrote the majority of her own patent.
Those stories are all true and incredible. There are a bunch of other stories though that make me see Sara Blakely and Spanx in a whole new light. I have even more respect for what they have accomplished after digging into the story of Spanx.
Sara went through a lot to get where she is today and I can’t say myself or many others would have enough perseverance to get where she and Spanx are today. So, without further ado, let’s just jump into the very beginnings: Sara Blakley’s childhood.
The lead up to Spanx
Sara had a rollercoaster of a childhood. Sara was born in Clearwater, Florida where she was entrepreneurial with multiple different small ventures: a paid haunted house out of her home and babysitting while parents tanned at hotels. She did so well that she was eventually was “escorted out of the premises” of one of the hotels.
All of that sounds great, but Sara had a lot of tragedies and disappointments before even thinking of Spanx. In high school, Sara’s best friend was killed by a car, both of her prom dates passed away, and her parents separated.
She overcame all of that to eventually take the LSAT not once, but twice and test poorly each time.
Sara ended up taking a job at Disney buckling people into a ride at Epcot in Disney for 8 hours a day. This ended up only being a 3 month gig, especially after she “went on break and saw Snow White dragging on a cigarette”.
Eventually, Sara found her way joining the company, Danka, where she sold fax machines. I might be able to tell you how Airtable works in-depth, but couldn’t tell you how a fax machine works.
Her experience selling fax machines at Danka ended up being a significant part of Sara’s personal development. She would have to “drive around the block multiple times” just to be able to build up the confidence to go sell another fax machine.
The first 2 years of Spanx
The confidence in her skill in cold sales was a big reason why Spanx was able to get started. Before we get into how her skill in cold sales was key to the success of Spanx, let’s go right to the moment when the idea of Spanx popped into Sara’s head.
Sara was prepping for a party and realized she couldn’t create a smooth look under white pants. After the party, she started to see if she could find anything that would solve the problem. That led to her setting aside $5,000, paper clipping different pieces of elastic together, and making her way to a local Neiman Marcus store to talk to a sales associate about the idea.
All of that started the snowball of momentum for Sara and Spanx. Sara continued to sell fax machines during the day, but at night and on the weekends, Sara was busy working on Spanx.
Sara would go to the Georgia Tech Library most nights to learn how to write her own patent, ended up taking a week off just to show up at manufacturer’s doors, and even told manufacturers and other partners that she was funded by “Sara Blakely” when asked who she was backed by.
During this first year of Spanx, Sara made the decision to not tell many people about her idea. To paraphrase Sara, ideas are the most vulnerable in their infancy and Sara didn’t want family, friends, or others in general to criticize her for going after this idea. She wanted to have enough “sweat equity in the idea” so that when people did criticize her, she was invested enough personally to keep going.
That sweat equity was a big deal because Sara was critiqued in what seems like every conversation she ever had. Manufacturers wouldn’t take her seriously because she was pitching to mostly men who didn’t understand the problem and she couldn’t even find one single female patent attorney in Georgia at the time.
Eventually, Sara found a manufacturer that would produce her first item only because the decision maker, had three daughters who all thought it was a great idea.
Once Sara had manufacturing setup, it was time to get selling.
The growth of Spanx
At this point, it’s about 2 years of doing research and development for Spanx. No customers. No revenue…yet.
Sara bought the trademark for Spanx with $150 and used the Yellowpages (I might not know how to use a fax machine, but I do remember the physical Yellowpages) to eventually make the right phone call to a buyer in Neiman Marcus.
The buyer said, “If you’re willing to fly here, I’ll give you 10 minutes of my time”, so Sara was off to Dallas. All Sara physically had was her lucky red backpack with a prototype in a Ziploc bag.
The pitch famously didn’t start out well, so Sara made a pivot shortly into the meeting. She invited the buyer into the bathroom for a show and tell. Sara went to the bathroom with the buyer and showed how her prototype worked on herself. The buyer obviously saw the value then and agreed to try Spanx in 7 regional Neiman Marcus stores across the US.
She immediately called her manufacturer to tell him the news and his response was, “Don’t take this the wrong way, but I thought you were going to give these away for Christmas gifts for the next 5 years”.
After Neiman Marcus started selling Spanx in stores, Sara said that’s when the work began. She would call friends in the 7 cities to go buy the items off the shelves and send them a check to reimburse them. She would stand in the store from 9am-6pm to show people how the product worked. She analyzed where the product was being sold and even just placed it next to the cash registers without it being formally approved.
It was 2 years of idea to finally hitting stores and Sara was really just getting started with the work as she put it.
As Spanx was starting to sell in Neiman Marcus, Sara was selling Spanx online and was shipping items all over the world from her apartment.
She even shipped one to Oprah with a note.
Oprah’s hair dresser put it in her dressing room and Oprah ended up naming it her favorite product of the year.
Spanx was going crazy with Oprah and went even crazier after Sara, who was told not to do this by many, went onto QVC. She was told it would kill the Spanx brand, but as you can tell, that surely didn’t happen. Sara sold 8,000 pairs of Spanx in 5 minutes on QVC and for comparison’s sake, was selling 35-70 pairs/day in Neiman Marcus at the time.
Fast forward to October 2021, and Sara ended up selling the majority of Spanx to Blackstone. She was obviously rewarded financially for this, but made sure to reward her own team. After this sale, each team member at Spanx was given 2 plane tickets to anywhere in the world and $10,000 to spend on whatever they wanted on that trip.
There’s a lot of different takeaways, especially if you’re a female founder, from the story of Spanx. Here are a few key takeaways that I came away with:
Perseverance matters more than we give it credit sometimes
Before doing this research, I knew the common stories of Spanx. The sale to Neiman Marcus. The lucky red backpack. The sale to Blackstone. What I didn’t know was how much Sara had to go through before she graduated from high school and college.
To lose people in the way she did, have her parents split up, and then work her tail off in college to ultimately not get to her childhood dream of being a lawyer is soul crushing in so many ways.
To make it through all of that alone is a tip of the cap moment.
It makes pushing through all of the critiques she was given by manufacturers, lawyers, and potential customers more understandable.
Sara’s will to persevere through the early challenges to Spanx feels like a muscle she knew she had and used it in these early challenges. For me, it’s a reminder that sometimes the challenges were given today are building blocks for later on.
If you’re counting too, Spanx had to persevere for 20 years before getting the billion dollar exit. There’s something about just sticking around long enough.
Build for care, not for the money
One of the interesting parts in researching Sara was that she never thought Spanx was going to fail. She said that along with, “I do care the most”.
When you care enough about something along with the will to persevere for something like I just talked about, money and the rest of it just seem to come together. Spanx is another example of that.
Sara cared about her customers more than any other competitor and it’s not a competitive moat you can pitch about, but it does seem valid.
The world is smaller than you think
Sara didn’t know anyone at Neiman Marcus. She didn’t know any manufacturers. She certainly didn’t know Oprah before starting Spanx.
Yet, within 2 years of starting Spanx, she had relationships of some sort with all of those people. She picked up the phone, sent mail, and even just showed up at the door of these people.
Today, those actions can still work. As I like to call it, you have to give yourself enough swings at “intentional serendipity”. Every successful business needs some lucky moments, so how can you give yourself enough chances to have luck happen to your business? What rooms can you try and get into? Who do you need to talk to to get in front of someone that would change your business forever?
The chances are that someone that can change your business forever isn’t that far away. For Sara, it was people in North Carolina. It was people in Dallas, Texas.
What’s your version of “driving around the block multiple times” to have the confidence to give yourself the chance of those lucky breaks?