How three mighty mites have managed to carve out niches in the face of competition from brewers big and small, Amazon, and SAP's Ariba software unit.
Oskar Blues vs. MillerCoors
The challenge: Getting a toehold in a market with more than 2,000 U.S. craft brewers and a few dominant global titans.
What he did: Dale Katechis, 44, never expected to run a multimillion-dollar operation when he started Oskar Blues Restaurant in tiny Lyons, Colo., in 1997. “Banks wouldn’t lend me any money,” recalls Katechis, who used credit card cash advances for seed money. But when he started brewing beer in the basement and, later, canning customer favorites like Dale’s Pale Ale, the company took off. His beer operation soon spread to a nearby 100-year-old barn and eventually to a 43,000-square-foot brewery too. Now one of the fastest-growing U.S. craft brewers, Oskar Blues has annual sales of $31 million. It launched a production facility in Brevard, N.C., in December — as well as a mountain-bike startup called REEB Cycles. Yep, that’s “beer” spelled backward.
Harvard Book Store vs. Amazon
The challenge: Maintaining an old-fashioned bookstore against the onslaught of online sellers.
What he did: Former tech executive Jeff Mayersohn, 62, helped create technology to build the Internet, but he’s still a die-hard fan of printed books. In 2008 he bought the iconic Harvard Book Store in Cambridge, Mass., and resolved to beat the big online retailers at their own game. He bought a printing press about the size of a Smart Car that could produce any one of millions of titles within minutes — effectively expanding inventory without using precious shelf space. His theory: “Digitization, rather than being the death knell for the corner brick-and-mortar store, could be its salvation.” He also introduced local bicycle messengers who can deliver books faster than Amazon AMZN can ship them. Sales rose by more than 10% in the past year. Not bad for a dying industry.
Coupa vs. Ariba (SAP)
The challenge: Beating out an international powerhouse to sell spending software to big companies.
What they did: Gung ho about whipping their budgets into shape, many companies invest in complex software to track spending down to the last Bic pen. But their good intentions are often frustrated because employees find the programs daunting. The Oracle ORCL veterans who founded Coupa in 2006 created cloud-based “spend optimization” software designed to be as accessible as Facebook. “We’re by far the most usable tool out there,” says CEO Rob Bernshteyn, 39. With big clients like the Container Store — and more than 90% of customers renewing their annual contracts, according to the company — the Silicon Valley firm says it pulled in $15 million in 2011. VCs are flocking: Bernshteyn has raised $41.5 million since 2009.