6 Founders Who Pivoted When the First Plan Failed

Kutol's plan had worked for decades until home heating changed. As households moved from coal to oil, gas and electricity, sooty buildup on wallpaper stopped being a problem. Manufacturing had already been scaled back, and Christopher Bensch, vice president of collections at The Strong National Museum of Play, later put the position bluntly: "Kutol was headed down the drain at that point."

• McVicker's sister-in-law, Kay Zufall, was a nursery school teacher looking for something easier for small hands than modeling clay. She had read an article about using wallpaper cleaner for holiday decorations, tested the non-toxic material with her pupils, and found that they loved shaping it. McVicker formed a subsidiary, Rainbow Crafts Company, and began marketing the old product under a new name suggested by Zufall and her husband, Robert.

• Woodward & Lothrop, a Washington, D.C. department store, was the first to carry Play-Doh, and other department stores soon followed.

• Sales soared in 1958 after televised advertising on children's programs; the host of Captain Kangaroo earned 2 percent of sales under an arrangement that never had a contract.

• The Fun Factory extruder, introduced in 1960, is still sold, and the brand has passed 3 billion cans.

The pivot kept the same formula and the same factory and only needed a new buyer for the compound.

The first plan tied demand to events that filled the hotels. Airbed & Breakfast officially launched during SXSW in March 2008 and received just two bookings. The website launched again in time for the Democratic National Convention in August 2008 and took 80. Between events there was little to sell. As the company neared the end of its first year it was not making money, not growing and not attracting venture capital, and the founders kept sliding further into debt.

The rescue was a stunt. In the fall of 2008 the founders produced presidential cereals, Obama O's and Cap'n McCain's, and sold the boxes at $40 each, earning $30,000 that helped pay down their credit card debt. The publicity faded, but the stunt persuaded an accelerator that had doubted the idea to take them in. Hosts on the platform, too, began offering whole homes and unusual lodgings as well as spare rooms. In March 2009 the company changed its name to Airbnb and expanded to apartments, whole homes and vacation rentals.

• An accelerator investment of $20,000 in January 2009 was followed within three months by a $615,000 seed round, and a year later by a $7 million Series A.

• Airbnb became a publicly traded company in December 2020.

• Hosts have earned more than $380 billion on the platform, according to the company's figures as of May 2026.

The product that worked was the one hosts had already started listing.

Fabulis kept adding features and nothing worked. "We built a beautiful product, but it was frustrating because no one was using it," Goldberg said. Shellhammer was at a breaking point after a year. The one feature that drew attention was a weekly deals offer he curated, covering everything from magazine subscriptions to furniture. About $2 million remained in the bank.

Over a dinner in Manhattan, Goldberg drew a circle with three slices on a napkin: what the pair were most passionate about, what they could be best in class at, and which market could still be disrupted. The answer was design. The deals that worked on Fabulis would be combined with Shellhammer's taste in handpicked, well-designed objects. Before launch, membership reached 175,000 in two months with no sales at all, and Fab opened on June 9, 2011.

• By November 2012 Fab was valued at around $600 million.

• It went from nothing to $250 million in sales in two years.

• It raised $150 million at a $1 billion valuation, taking its venture funding to $310 million.

The second plan reused the cash, the investors and the one feature that had traction.