Seven Mega-Companies That Started in Garages (and Other Interesting Places)

The University of Texas at Austin campus is known for stimulating the minds of its undergraduates -- the grassy fields, the sprawling trees and the traditional architecture of the revered halls are all filled with inspiration. But Michael Dell didn't have his revelation in the class room. He found it in his dorm room.

It was in room 2713 that he ran his informal business, building and selling custom-ordered personal computers under the name PCs Limited. By selling directly to the customer, Dell cut out the middleman and kept prices lower than his competition. That bright idea set the young entrepreneur apart, and by 1985, the 19-year-old dropped out of school and moved his business to an office center in North Austin that he purchased with his profits.

Dell is now one of the largest tech companies in the world.

Photo Courtesy of Flickr User Craig A Rodway

Before it became the world's leading supplier of athletic gear, Nike wasn't Nike -- it was "Blue Ribbon Sports." And for the first two years, you couldn't find it at any retailer. Blue Ribbon Sports operated exclusively out of the trunk of Phil Knight's green Plymouth Valiant. That's right, Nike started in the trunk of a car.

Blue Ribbon Sports was founded in January 1964 by two University of Oregon men -- track athlete Knight and his coach, Bill Bowerman. The company originally operated as a distributor for Japanese shoemaker Onitsuka Tiger. While Knight sold shoes at track meets, Bowerman, always on the search for the competitive edge, was ripping them apart to see how he could make them lighter and better. He recruited his runners to test his designs.

In 1966, the two opened the company's first retail store in Santa Monica, CA, and business grew quickly. Blue Ribbon Sports split from Onitsuka Tiger and launched its own line of footwear, bearing a newly designed "swoosh." In 1978, BRS, Inc. officially renamed itself Nike, Inc.

Flickr Courtesy of Flickr User Photon

Just as Nike was getting its official start, Dyson was coming into being across the pond. In a dirty living room.

In 1978, James Dyson was growing more and more frustrated with his Hoover vacuum cleaner.  As he tried to clean his living room, dust clogged the fine mesh pores of the bag and blocked airflow, causing the machine to quickly lose suction power. Even emptying the bag had no effect. Tired and frustrated, he set to work on developing a more efficient vacuum cleaner.

While visiting a local sawmill, Dyson noticed that large industrial cyclones were removing sawdust from the air. Inspired, he dismantled his Hoover machine and fitted it with a cardboard recreation of the sawmill cyclones. During his initial tests, Dyson found his cardboard prototype picked up more dust than his bag model!

For five years, Dyson faced rejection from every major vacuum manufacturer. He and his wife were seriously in debt, and they even began growing their own vegetables and sewing their own clothes to support the ongoing project. A determined Dyson persevered, and he went on to manufacture, market and sell his design. Today, Dyson is one of the most widely-recognized appliance manufacturers, constantly wowing consumers with innovative and stylish solutions to everyday problems.

On April 1, 1976, three young men established a startup inside a garage in Cupertino, CA. Their vision was to set off a personal computer revolution. The result was the hand-built Apple I personal computer kit. Their names: Steve Jobs, Steve Wozniak and Ronald Wayne (who left the company in 1977, selling his shares for a mere $800).

The Apple I was first sold in 1976 as a motherboard with CPU, RAM and basic textual-video chips -- much less than what is now featured in a personal computer.  The Apple II came out shortly thereafter with color graphics and an open architecture, helping distinguish Apple's products from its competitors. But it wasn't until Apple launched the Macintosh line -- with its famous "1984" commercial -- that the company experienced a watershed moment for its eventual success.

Over the decades, Apple has established a unique reputation not only in personal computers, but throughout the consumer electronics industry by expanding its product offerings with the iPod, iPhone and iPad.

In 1939, two electrical engineering graduates from Stanford, Bill Hewlett and Dave Packard, established an electronics manufacturing company in a one-car garage in Palo Alto, CA. The two partners used a coin flip to decide whether the company was going to be named Packard-Hewlett or Hewlett-Packard. Packard won and, with an initial investment of $538, the two launched the "Hewlett-Packard Company."

Widely recognized as the symbolic founder of Silicon Valley, Hewlett-Packard was incorporated on August 18, 1947, and went public on November 6, 1957. They experienced financial success early on with customers like the Walt Disney Company, but were originally a bit unfocused with product offerings that crossed over into the agriculture sector. Fortunately, they eventually decided to focus on high-quality electronics.

To this day, Hewlett Packard is known not only for its high-quality electronics and unique company culture -- “The HP Way” -- but also for its corporate social responsibility in recycling billions of pounds of electronics, toner and ink cartridges.

Courtesy of Flickr User Robert Scoble

Shortly after the end of World War II, Ruth and Elliot Handler started a company named Mattel in their Southern California garage. Although we all know Mattel as the mega-toy company, their first products were actually picture frames. 

As a side business, Elliot began making dollhouse furniture out of wood scraps from the frames. Encouraged by the success from the dollhouse furniture, Mattel decided to turn their attention to toys, instead.

In 1955, Mattel began to introduce its toys through advertising on “The Mickey Mouse Club” television show. Soon after, in 1959, Ruth Handler established the Barbie product line that would turn the company into a household name.  Mattel would go on to create additional product lines, including: Fisher Price, Hot Wheels, Matchbox cars, Masters of the Universe, American Girl dolls and an extensive line of board games – e.g., Scrabble, Uno and Scene It.