The word “startup” conjures images of brash young founders, state-of-the-art technology, and creating “the future of” something. Let’s look back a century or two and review the “startups” of that time. Can you guess the company?
Startup #1: deliveries and communications are slow because workers want to spend time with their families. That’s why we only hire orphans — no family, more days on the road.
Startup #2: working-class citizens shouldn’t store money at home where it can catch on fire, they should give it to us. We promise to give the money back if asked. And we’re open to help fulfill all of our community’s Buy Now, Pay Later dreams.
Startup #3: we’re pivoting from our original nutrition delivery model by using our proprietary copper-rivet design to manufacture pants. Tough pants. Very tough pants. And overalls, can’t forget the overalls. Our clothes are designed for tough outdoor work, but our TAM is much broader because every self-respecting White man needs pants.
Have your guesses in? Here are the answers:
Startup #1: Pony Express
It’s debated whether or not the Pony Express actually focused on hiring orphans (an alleged 1860 advertisement that floats around the internet appears to be a hoax from 1902), but the conditions were certainly rough in exchange for the ample pay. Messages would swap multiple people and horses to go from Missouri to California is around 10 days, but cost an exorbitant amount to do so ($5 per 1/2 ounce at the start, or $1 towards the end of its run, vs. $0.02 for normal USPS mail).
In classic startup fashion, Pony Express was highly subsidized, short-lived after losing almost all market share to a new competitor, and subsequently romanticized in the American mythos. It’s big competitor? The telegraph, which entered into use roughly 1 year after Pony Express launched.
Startup #2: Bank of Italy (now Bank of America)
Yes, this is technically a “20th century startup”, but just barely; A.P. Giannini incorporated his “Bank of Italy” in 1904, a couple years before the great 1906 earthquake (and fire) in San Francisco. Just as modern startups are often forged in the fires of tough times, Bank of Italy was bolstered thanks to the founder’s quick thinking amidst a literal fire — he loaded up bank assets in the back of a horse cart and rode down to his home in San Mateo (~20 miles away). This meant that Giannini was one of the first people able to offer loans to help repair and rebuild San Francisco (and what are loans if not the original “buy now, pay later”?). Many of the Bank of Italy’s customers were in the North Beach neighborhood (San Francisco’s “Little Italy”), an important community hub to Giannini.
A few decades and mergers later, Bank of Italy became Bank of America. The small bank once able to fit everything in a horse-drawn carriage rapidly expanded into a massive conglomerate, holding close to 11% of all American deposits by 2021.
Startup #3: Levi Strauss
Levi Strauss & co was founded in the 1850s as a dry-goods store; it focused on the clothing market decades later. Like modern startups, they didn’t invent something major (denim pants already existed), but added an innovation (the copper rivet patent created by Jacob Davis and financed by Strauss) that improved quality. The market for Levi Strauss grew far beyond the founders’ dreams (and the days of “White labor [only] labels”). Nowadays, jeans are common clothing, and wearing a pair of Levis to work has become acceptable in blue-collar and white-collar worlds alike.
Startups often romanticize their backstories or try to tie themselves to a greater story, so it’s worth calling out that Levi Strauss didn’t actually sell jeans to the 49ers gold miners. The images of peak Gold Rush-era men wearing jeans was in fact a marketing campaign decades later — after all, their “riveted denim pants” didn’t exist until the 1870s at the earliest.
The descendants of Levi Strauss (the Haas family) are still majority shareholders, and the Levi Strauss company achieved unicorn status back in the 1980s thanks to a leveraged buyout from the family to take back control (they IPOd again in 2019, and Levi Strauss is now worth ~$6 Billion). It may have taken a little longer to hit a billion-dollar valuation compared to the VC-backed startups of the 21st century, but when you’re bootstrapping and profitable, you have the luxury of time.