5 Incredibly Ballsy Moves that Worked

When Groupon’s Eric Lefkofsky turned down $6 billion from Google, he was both praised for his chutzpah and questioned for his judgment. Turns out Eric was right. Groupon’s IPO was recently priced at $20 a share, at a valuation of about $13 billion. When I spoke to Lefkofsky for my book, How They Did It: Billion Dollar Insights from the Heart of America, he admitted that to be in today’s business environment, “you sign up for some level of insanity.”

Whether you believe such ballsy business moves are smart, or crazy, the fact is that successful company founders often identify those moments as important turning points that helped determine their ultimate success.

Based on interviews with 45 company founders, each of whom started, grew, and sold the company for approximately $100 million or more, or took it public for $300 million or more, here are five gutsy business decisions that each became the pivotal moment in an entrepreneur’s success story.

Have a Titanium Story

Dane Miller, founder of Biomet, believed that titanium was the safest metal on the planet for knee and hip replacement parts, far better than the industry standard—stainless steel. To prove his point, he asked a surgeon friend to insert a small piece of titanium into his own arm. Miller’s implant proved to be a powerful promotional tool and a testament to his passion. These days, everyone uses titanium. When he took Biomet private a couple years ago, after having been a public company for 20 years, it had a $12 billion valuation.

Stand Next to the Big Boys

Viresh Bhatia’s InstallShield software had a hundred competitors, most with similar software technology. Unlike most techies, however, Bhatia envisioned using advertising to stand out from the crowd. His chutzpah moment? Though he and his partner were working out of a 10’-x-10’ room, they sank their money into a colorful full-page ad they insisted had to run adjacent to Microsoft or IBM in PC Magazine. Customers assumed InstallShield was in the big leagues, catapulting it to become the standard install software on millions of PCs. Eventual sale price for InstallShield: $78 million.

Skip the Contracts—Just Perform Better

Mark Tebbe launched Answers.com after trying to help his son perform a search on Google for a school assignment and coming up with lousy results. He thought there had to be a better way to get an answer, so he created a website that presented everything you wanted to know about a topic on one page. A friend from Google quickly took note and featured Answers.com in the upper-right-hand corner of Google’s page. Traffic skyrocketed, with more than 80 percent of site visits coming from Google. Four years later, when Google decided to take the link down, it was responsible for less than 3.5 percent of Answers.com traffic. Could Mark have insisted on a contract with Google? Maybe. But instead he realized that he had to keep improving functionality and broaden Answers.com’s appeal. He did not want to rely on the 800 lb. gorilla of search. The end result was a public company listing and eventual sale for $127 million.

Reverse Engineer Your Own Product

Jim Dolan bought a 107-year-old legal newspaper publisher. It had a 94 percent renewal rate, and Jim wanted to know why. He set a task for his new employees to interview every single one of their thousands of subscribers to listen and learn from them. From that process, he found that subscribers were most interested in reading the fine print notices of bankruptcy—not the headlines. So he focused all his energy on creating a real-time database of bankruptcy filings and ended up selling the database service for over $100 million.

Leave, and Start Again

David Becker saw his employer’s credit union clients lacking the software they needed following the 1979 deregulation of the financial industry. After six months of research, he found a software product he loved, and presented his plan to the league of credit unions’ board of directors. In the midst of discussions bogged down by indecisiveness, Becker stood up, whistled to get everyone’s attention, and announced, “Ladies and gentlemen, let me solve this dilemma for you. I’m going to quit and do this myself.” He thanked them for their time, invited them to be his customers someday, and walked out. Eventually, more than half of those board members became his customers. After selling that first company for $24 million, then selling a second company for $52 million, Becker went on to launch First Internet Bank, now at $500 million in assets, and is recognized as a founding father of internet banking.

I think I got their point. In business, chutzpah pays off. I know, just for starters, that these entrepreneurs energized me to finish the four-year process of interviewing and editing How They Did It. If you’re passionate about your business idea, don’t let obstacles of any size prevent you from taking a stand, pursuing your goal, and sticking to your vision.