A couple months ago I wrote a post titled, “How Nike Found Greatness,” focusing on how Nike started and became a successful international company. The company name Nike has been around since 1971 but the idea of it started in the 1950’s. It is now internationally the biggest athletic clothing company and has earned $24 billion in revenue during 2012.
In comparison, Under Armour ended the year with around $1.8 billion in revenue during 2012. Now you could say that Under Armour isn’t as successful a company until you realize that it’s only been around since 1996 and didn’t target a market outside the United States until 2012. It’s really incredible how it all got started and how far it has come in eighteen years.
How it all got started
Under Armour was founded by Kevin Plank. In 1995, one year before its launch, Plank played football for University of Maryland. During a two-a-day practice he would have to bring a couple under shirts because his cotton t-shirts would get soaked in sweat, make him more hot, and heavy. This is where his “ah ha!” moment began.
After his graduation, he began exploring synthetic material that was lightweight, could breathe, and wouldn’t hold in sweat. He worked out of his grandmothers home making and field testing his product with former teammates until he the right material. He then began giving t-shirts away to not only college athletes but professional as well.
Take advantage of alternative financing.
Finding a business loan can be hard. Statistically speaking, nine out of ten business owners are turned down at the bank for one or more of several reasons. There are so many alternatives to getting the financing you need to start, sustain, or expand your small business.
Plank invested $20,000 of his own money and an extra $40,000 on his credit cards to get Under Armour started. His first year he only gained $17,000 back from sales. Broke and in debt, he admitted, “I was totally broke–so broke I needed to go to my mom’s house to ask if she minded cooking dinner for me. I needed for her to feed me.” It wasn’t until a year later that sales really took off and the company started to become profitable.
Give your customers what they want.
You may think your perspective is all that matters when it comes to your products and services. That’s where you’d be wrong. You are the one selling the product/service—not buying it. Listening to what you customer(s) want is key to the evolution of any successful business.
Under Armour’s first product was a short sleeve t-shirt designed for warm weather. After trying out this product, college and professional teams began asking for other products. “Do you make the shirts in long sleeve?” or “Do you guys make anything for cold weather?” were two of the products they asked about. Plank would answer, “Of course we do!”
In reality, Under Armour didn’t make those products—yet. Now I’m not saying you should promise undeveloped products or services to your customers but, you should definitely listen to the demand. Plank was lucky enough to have a simple product and contractor who could quickly provide new products for their customers.
Build a resonator.
The idea of a “resonator” was introduced to me in Craig Stull’s book Tuned In: Uncover the Extraordinary Opportunities That Lead to Business Breakthroughs. Stull breaks down the anatomy of the resonator into four parts.
- The perfect solution to a specific problem
- A product or service people want to buy without being coerced
- An offering that establishes a real and direct connection to what your market values most.
- An idea that people immediately understand what has value to them, even if they have never heard of your company or products or services.
Under Armour’s original HeatGear and ColdGear are resonators. The biggest reason why it’s a resonator is because most of their original sales and contracts came as a result of word-of-mouth. Players loved the products so much they would tell those around them who would also benefit by wearing Under Armour. Your customers become your biggest advocate for success because they love your product.
You have to give it to Kevin Plank for making a small t-shirt business grow into a billion dollar company in less than two decades. It just goes to show that any small business can grow tremendously with the right financial backing, listening to your customers and delivering a product that resonates with them.