How Self-Made Titans Got Started
Learn how they went from humble origins to massive moguls.
June 9, 2008— -- Capital is a constraint for many would-be entrepreneurs -- or is it?
Scan the Forbes list of the world's richest people and you'll come across moguls from startlingly humble origins. How did they get their impressive empires off the ground? Sweat, savings, schmoozing, creativity and a dab or two of good fortune.
To be fair, the lucky few "born on third base" probably have a better shot at stardom than those without a safety net. According to a 2002 U.S. Census Bureau survey representing some 16 million business owners, a whopping 55 percent were initially funded by personal and family capital. Just 11.4 percent snagged bank loans and 8.8 percent got going on personal and business credit cards; much of the remainder lived on government loans and outside investors.
Some world-beating entrepreneurs -- like John Catsimatidis, owner of the Red Apple Group and aspiring mayor of New York City -- scared up capital by getting to know the right people.
The son of a busboy, Catsimatidis entered the grocery industry in the summer of 1966, just after graduating from high school. Befriending the owner of a Manhattan superette, he started taking on more responsibilities. Four years later, the owner offered him a 50 percent stake in one of his stores, to be acquired over 10 months at a rate of $1,000 per month.
Within a few months, the store's sales doubled, and Catsimatidis was earning a profit of $500 per week (not bad for a 20-year-old back then). After dropping out of New York University just eight credits shy of a degree, he launched his own grocery chain, the Red Apple Group. Lacking working capital for inventory, Catsimatidis charmed vendors to let him buy on credit, something he says "would never happen today." By the age of 25, he owned 10 stores--debt-free--netting a combined $1 million on $25 million in sales. Today the Red Apple empire includes Gristede's, Sloan's and Red Apple.
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