When Robb McMahan’s wife complained that standing on the kitchen’s tile floors hurt her feet and back, he suggested floor mats. After they went through three sets of commercial mats in six months without relieving her discomfort, he decided to invent his own. That was six years ago and today McMahan is founder and CEO of Let’s Gel, Inc., a 97-employee maker of gel floor mats used by celebrity chefs like Rachael Ray and Emeril Lagasse and sold in retailers across the country.
McMahan, who recently sold his one-millionth GelPro mat, says that basing his company on a product he developed to fix a problem in his own home helped him understand customers. “If it's something you’re actually using in your everyday life, it’s easy to form opinions about what you like and don't like,” he says. And with GelPro mats typically retailing for about $100, it’s easy to see why McMahan places a pretty high value on his opinion.
It may seem unlikely that a multi-million-dollar company could result from an everyday frustration around the house. But it’s not unusual. Andy Dunn’s housemate in Palo Alto, California, got frustrated with the way his slacks fit, so he sewed up a pair that had a unique, curved waistband that better mimicked the shape of the natural male physique.
In 2007, Dunn, who was studying at Stanford University’s business school, teamed up with the housemate, Brian Spaly. The pair formed Bonobos, an online retailer of tailored men’s pants that has won rave reviews from customers. Dunn won’t reveal sales for the privately held firm, but it’s a matter of record that Bonobos investors have pumped in $26.5 million to fund a startup that today sells pants, shirts and other apparel both online and at retail.
These home-inspired successes shouldn’t surprise anyone, says Paula Englis, a management professor and head of the entrepreneur program at Berry College in Mount Berry, Georgia. “They get the value proposition,” she says of homespun business creators. “And they get it in the way that a customer would, because they are that person.” Some homespun businesses hit the really big time, Englis says, pointing to Baby Einstein, a children’s products company founded by a mother in 1996 and sold to Disney Corp. in 2001. “I really like this idea of consumers as entrepreneurs,” Englis says, “because of them being so close to what they’re doing.”
Dunn also lauds the way entrepreneurs with home-generated ideas can relate to customers. But, before you decide to mortgage the house to create a sandwich empire out of your personal quadruple-decker sub recipe, consider that this kind of home-based entrepreneur also faces special barriers. The biggest, perhaps, is credibility.
Dunn recounts a meeting with a potential retail distributor at the New York City apartment they called headquarters in the early days. “I could see by the look in his eyes that he thought, ‘This guy is out of his mind,’” Dunn recalls.
McMahan recalls the hoops landlords put him through when the time came to move Let’s Gel out of his home and he tried to sub-lease an office on a floor mostly occupied by a semiconductor design firm. “They considered me more of a credit risk than this semiconductor company which I can understand,” he says, adding, “The semiconductor company went out of business and we now have the whole top floor.”
While that sort of redemption is sweet, it doesn’t come cheaply. McMahan plowed in his life savings, mortgaged his home and tapped loans from friends and relatives when banks wouldn’t provide financing. The result barely got through some scary places. “There were times when it wasn't clear it was going to pan out,” he says.
Skepticism can come from all over. When Jill Morgan decided to start a publishing company to re-issue children’s books she’d loved as a kid but could no longer find, the authors were the ones who wouldn’t give her a chance. “We had nothing to show them for a while,” says the founder of Purple House Press in Cynthiana, Kentucky. “It was a leap of faith to give us the rights to their books.”
But after convincing the first one, Mr. Pine's Purple House author Leonard Kessler, things started lining up. She got her first national distribution deal when a buyer had an emotional reaction to finding her own favorite kid’s book re-issued in a new edition. Now she and her husband, who is Purple House’s sole other employee, have dozens formerly out-of-print favorites like Stan the Hot Dog Man, another Kessler title, and Morgan has 11 years worth of publishing successes to show other authors.
If you see a problem and are up for the challenge of solving it, Dunn says you should still ask yourself whether you’re the right one to solve it. “I like when entrepreneurs solve problems that they themselves have,” he says. “I like it even better when they have problems that they are uniquely positioned to solve. There are a lot of things that bother me, but they aren’t things I’m uniquely positioned to solve. With Bonobos, I understood e-commerce and I understood fashion because I’d worked in both those fields.”
While Dunn had previous stints in apparel and e-commerce on his resume, McMahan had worked with gel cushioning when designing disk-drive enclosures for a computer company and, later, seat pads for a wheelchair maker. Morgan, however, was a software engineer whose primary assets were determination, resourcefulness—and the salary she earned at her regular job.
“I made lots of mistakes in the beginning, but we corrected them all,” she says. “Now it’s all come together and it’s much easier.” Today, she advises would-be entrepreneurs that an idea that comes from home can be a springboard to entrepreneurial success. “If you can convince people your product is good, it probably is and will stand a shot out there in the market,” she says. “I’d tell them to keep their day job but definitely give it a try.”