How Dixie cups became the breakout startup of the 1918 pandemic

In 1907, Boston attorney Lawrence Luellen created a cup. It wasn’t made of glass or metal—the norm at the time. Instead, it was made of paper so it could be thrown away after use. While not earth-shattering in our current context, in the early 1900s there were no disposable paper tissues or paper towels. A cup made of paper was a novel idea, one with a noble goal: Luellen hoped his paper cups could help stop the spread of disease. What makes this century-old startup story especially poignant today is that Dixie cups, as they came to be known, achieved only moderate growth for 10 years until the Spanish flu of 1918 made disposable cups a necessity and helped the Dixie cup become a household name. In 2012, Smithsonian Magazine even called the Dixie cup a “life-saving technology” that helped stop the spread of disease. Before the Spanish flu hit, the company behind Dixie cups was a scrappy startup. But just as we’ve seen with the teleconferencing phenom Zoom in the COVID-19 era, Dixie cups shot to popularity with the arrival of a major health crisis. That’s why the Dixie cup’s story is instructive for startups struggling to make ends meet during the COVID-19 pandemic. Embedded in the history of Dixie cups are important lessons for how startups can scale when times are good—and survive when times are hard. WHEN TIMING ISN’T RIGHT, SURVIVE UNTIL IT IS As any VC will tell you, timing is one of the crucial stars that must align for a startup to succeed. But what if timing isn’t right for a startup? Chances are, timing won’t be exactly right. To succeed, you must survive until it is. When Luellen invented the paper cup, which he originally named the “Health Kup,” the timing wasn’t great either. Communal metal drinking cups known as “tin dippers” were commonplace. A single “tin dipper” could be shared by hundreds of different people. If that sounds gross, it was. But scientists were only just beginning to understand how contagion was spread. As a result, when Luellen and his cofounder Hugh Moore went to market with their paper cups, the product didn’t fly off the shelves. It’s hard to sell a solution to a problem people don’t know they have. BECOME A B2B OR B2BC BUSINESS Educating a market takes time and money, two especially scarce resources for a startup. When awareness is the problem, targeting business customers can make the educational process less daunting. While sales cycles might be longer, order sizes are significantly larger and more predictable. When Dixie cups originally failed to resonate with consumers, Luellen and Moore refocused their efforts on businesses. They developed a free-standing dispenser that was sold to businesses, which could sell a Dixie cup of water for a penny. Once a business bought a dispenser, Luellen and Moore could depend on revenue from the repurchase of cups. This helped the company survive during what was a slow period of adoption. It also introduced Dixie cups to thousands of workers who would soon begin buying them in stores for home use. MEET THE MOMENT One of the most important skills for any startup is the ability to adapt. As we’ve seen in the most extreme case with COVID-19, factors completely out of a startup’s control can reverse its fortunes, for better or for worse....[   ] The post How Dixie cups became the breakout startup of the 1918 pandemic appeared first on NewsCetera.
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