Saturday Stories: 5 Companies That Came Back From the Dead

Happy Halloween, crowd! 🎃

Tonight, the zombies come out. So for this Saturday Stories, we dug up five companies that were declared dead, or close to it, and came roaring back. One sold cereal to survive. One was saved at a blackjack table. One was born from a video game nobody played.

In this week's Saturday Stories:

• 🍎 Apple, 90 days from bankruptcy

• 🥣 Airbnb, kept alive by cereal boxes

• 🎮 Slack, built from a dead video game

• 🦸 Marvel, from bankruptcy to $4B

• 🃏 FedEx, saved at a blackjack table

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🧟 BACK FROM THE DEAD

ZOMBIE #1 · 1997

🍎 Apple Was 90 Days From Bankruptcy

The near-death: In 1997, Apple lost more than $1 billion. Steve Jobs later said the company was within about 90 days of going bankrupt. Asked what he would do with Apple, Dell founder Michael Dell famously said he would "shut it down and give the money back to the shareholders."

The resurrection:

• Jobs returned in 1997 and cut Apple's product line down to a handful

• Rival Microsoft invested $150M to help keep it alive

• The colorful iMac arrived in 1998, then the iPod in 2001 and the iPhone in 2007

• In 2018, Apple became the first US company worth $1 trillion

The lesson: The most valuable company of its era was once a turnaround story nobody wanted to bet on. Focus beat breadth.

ZOMBIE #2 · 2008

🥣 Airbnb Survived by Selling Cereal

The near-death: In 2008, Airbnb's founders were broke, with maxed-out credit cards and almost no users. So during the presidential election, they designed and sold novelty cereal boxes, "Obama O's" and "Cap'n McCain's," for $40 each.

The resurrection:

• The cereal stunt raised about $30,000, enough to keep going

• It helped them get into Y Combinator in early 2009

• Airbnb went public in December 2020, and its stock more than doubled on day one

The lesson: Investors often back founders over ideas. Paul Graham of Y Combinator said that if they could convince people to pay $40 for cereal, they could probably convince people to sleep in strangers' homes.

ZOMBIE #3 · 2012

🎮 Slack Was Born From a Dead Video Game

The near-death: Stewart Butterfield's startup built an online game called Glitch. Not enough people played it, and it shut down in late 2012.

The resurrection:

• The team kept one thing: the internal chat tool they had built to talk to each other

• They turned it into Slack, which launched in 2014 and became one of the fastest-growing business apps ever

• Salesforce bought Slack for $27.7B, closing in 2021

• Bonus: Butterfield did it twice. Flickr also came out of a failed game

The lesson: Sometimes the side project is the real company. Great investors watch what a team builds for itself.

ZOMBIE #4 · 1996

🦸 Marvel Went Bankrupt, Then Sold for $4B

The near-death: The comic book crash of the 1990s pushed Marvel into bankruptcy in 1996. To survive, it licensed out film rights to some of its most famous heroes to other studios.

The resurrection:

• In 2005, Marvel borrowed to make its own movies, using film rights to its characters as collateral

• Its first self-financed film, Iron Man, came out in 2008 and was a hit

• Disney bought Marvel for about $4B in 2009, and the Marvel films went on to earn tens of billions

The lesson: An asset can be undervalued for years until someone finds the right business model for it.

ZOMBIE #5 · 1973

🃏 FedEx Was Saved at a Blackjack Table

The near-death: In FedEx's early days, the company was burning cash fast. As founder Fred Smith later told the story, it was down to about $5,000, not enough to cover the next week's fuel bill.

The resurrection:

• Smith flew to Las Vegas and played blackjack

• He won about $27,000, enough to keep the planes flying

• FedEx went on to become one of the largest delivery companies in the world

The lesson: Please don't try this with your startup. But it shows how thin the line between failure and a giant company can be in the early days.

🧠 HALLOWEEN POP QUIZ

One more company that started as something completely different. 👻

THE TAKEAWAY

🕯️ What the Graveyard Teaches Investors

• Early death is common. Most great companies looked dead at least once. A bad year is not always the end.

• Teams matter more than first ideas. Slack, YouTube and Instagram all became something different from what they started as.

• Survival is a skill. The founders who find a way to stay alive long enough often get the second chance that matters.

Every week we feature private companies you can actually invest in. Some will become comeback stories. Many will not. Only invest money you can afford to lose.

QUICK HITS

🦇 More companies that started as something else

• YouTube began in 2005 as a video dating site. Google bought it for $1.65B a year later. Read more

• Nintendo was founded in 1889 to make playing cards. Read more

• Twitter grew out of Odeo, a podcasting startup that Apple's iTunes made irrelevant. Read more

• Instagram started as Burbn, a check-in app, before its founders cut it down to just photos. Read more

🎓 Catch up on Founderscrowds

• Thursday: Google's cloud doubled and its stock fell 8%

• Tuesday: Anthropic files to list as ANT, Meta wants $95B

• The Private Company Index: what the 100 biggest private companies are worth

Quick answers

How close was Apple to bankruptcy in 1997?

Apple lost more than $1 billion in fiscal 1997, and Steve Jobs later said the company was within about 90 days of going bankrupt. Microsoft invested $150 million that year, and Apple went on to become the first US company worth $1 trillion in 2018.

How did Airbnb survive in 2008?

Airbnb's founders designed and sold novelty election-themed cereal boxes, Obama O's and Cap'n McCain's, for $40 each, raising about $30,000. The stunt helped them get into Y Combinator in early 2009.

How much did Disney pay for Marvel?

Disney acquired Marvel Entertainment for about $4 billion in 2009, about 13 years after Marvel filed for bankruptcy in 1996.

That's a wrap. Hit reply and tell us: what's your favorite comeback story? We read every one.

From all of us: Happy Halloween! Stay spooky, and may all your investments come back from the dead. 🎃

Jose, Alberto & the Founderscrowds Team

Disclaimer: Founderscrowds is a media company. We are not a broker-dealer, funding portal, investment adviser or financial planner, and we do not collect or hold investor funds. Nothing in this email is investment, legal or tax advice, or an offer to buy or sell any security. Views on any company or deal are the writers' opinions and are not tailored to you. Some content may be sponsored or affiliate-linked, and writers may hold positions in companies we cover. Data comes from third-party sources and is not guaranteed. Private market investments are speculative, illiquid and can lose their entire value, and many offerings are limited to accredited investors.

Sources

• Wikipedia: History of Apple Inc.

• Wikipedia: Airbnb

• Wikipedia: Slack Technologies

• Wikipedia: Glitch (video game)

• Wikipedia: Marvel Entertainment

• Wikipedia: FedEx

• Wikipedia: YouTube

All story images are AI-generated illustrations.