How Failure Molded Spanx's Founder

As a kid, Sara Blakely was advised to fail. The founder of Spanx, a $150 million hosiery company, says it was the best advice she ever received

By Stacy Perman

Spanx founder Sara Blakely on CNBC's "The Big Idea with Donny Deutsch"

Sara Blakely had been selling fax machines and office copiers door-to-door for seven years when she had an idea for a clothing line that would transform her from an employee into a successful entrepreneur. In a moment of inspiration, Blakely, frustrated with her "unsightly panty lines," cut the feet off a pair of panty hose that she could wear under her white pants with a pair of open-toed sandals—and voilà, a primitive version of Spanx was born.

Blakely, who had originally hoped to be a trial attorney before failing the LSAT, knew she was onto something. After that, Blakely says, her biggest decision was to simply follow her gut instincts. During the next two years she plowed $5,000 of her own money into getting a prototype made. In 2000 she began selling Spanx in major department stores such as Neiman Marcus and Saks Fifth Avenue. Not long after, she got the call of a lifetime— Oprah Winfrey (BusinessWeek.com, 8/24/06) had fallen for the body slimming, toeless panty hose and wanted to feature Spanx on her annual favorite things show.

Today, Spanx, based in Atlanta, Ga., is a $150 million company with 55 employees and 100 different styles. In January, Blakely will unveil a new product line: the Bra-llelujah, billed as a comfortable all-hosiery bra.

Blakely spoke recently with BusinessWeek.com's Stacy Perman about confronting failure and starting a company from scratch. Edited excerpts of their conversation follow:

How did you originally come up with the idea for Spanx?

I did not like the way I looked in a pair of white pants. I was 27 at time and spent a lot of money on them but you could see panty lines, you could see the thong. Nothing worked. I shopped for body shapers for the first time in my life and I was horrified. They were thick—it was like wearing workout clothes and they all had a leg band on one side that showed through the pants. So I cut the feet off of a pair of panty hose and it allowed me to wear a pair of great strappy sandals. I didn't see lines but the hose rolled up at my feet—and that's how Spanx born.

I spent the next two years working nights and weekends out of my apartment to get a prototype made, design packaging, and name the product. Once I did that, I knew that other people were going to want it, and I set out to sell it. The company was built around the reaction to the demand for the product.

Originally, you were a salesperson, how did that play into being an entrepreneur?

It was a huge part of it. Everything about my journey to get Spanx off the ground entailed me having to be a salesperson—from going to the hosiery mills to get a prototype made to calling Saks Fifth Avenue and Neiman Marcus. I had to position myself to get five minutes in the door with buyers. My first account was Neiman Marcus. I cold-called them just like I had cold-called businesses when I was selling fax machines for seven years.

When did you know that you could really make a go of this?

I knew right away when I wore the prototype and I saw the difference it made in my wardrobe. I knew right away that this was going to be big. But the real blessing was twofold. Neiman Marcus said they would try it and put it in their stores right away. About four weeks later I got a call from the Oprah Winfrey Show. Oprah had chosen Spanx as one of her favorite products in 2000. I had boxes of product in my apartment and I had two weeks notice that she was going to say she loved it on TV and I had no shipping department. It was pretty intense and a fabulous call to get as an entrepreneur and it got the ball in motion quickly.