6 Case Study: The Youngest Billionaire

Picture this. The billionaire owner and founder stands in the conference room trying on bras while the CEO stands behind her, adjusting the straps. The floor is littered with underwear. The owner takes off one bra and puts on another. Five executives in the conference room barely blink.

Welcome to Sara Blakely's company, Spanx. In just a few years, Spanx has become to slimming underwear what Jello is to gelatine and Kleenex is to facial tissue: so dominant is the brand that its name is synonymous with the category.

At 42, Blakely isn't the youngest billionaire in the world. However, she is the youngest female self-made billionaire. Like many stories of entrepreneurial success, hers is part gritty determination, part inspiration and part circumstance. The grit was easy to see early on. As a child growing up in Clearwater Beach, Florida, she lured friends into doing her chores by setting up a competition. At 16, Blakely was so intent on success that she listened to self-help guru Wayne Dyer's recordings incessantly. Friends refused to ride in her car. 'No! She's going to make us listen to that motivational crap!' Blakely recalls they said.

After twice failing to get into law school, Blakely started her first business in 1990, running a kids' club at the Clearwater Beach Hilton. It worked until the Hilton's general manager found out. Later, while working full-time in sales, Blakely began learning how to start a business. Her inspiration for Spanx came while she was cold calling customers as a sales manager for an office supply company. She hated pantyhose. 'It's Florida, it's hot, I'm carrying copy machines,' she noted.

At a local library, Blakely researched every pantyhose patent ever filed. She wrote her patent application by following a textbook she read in Barnes & Noble. Then she worked on marketing, manufacturing and financing, treating each as its own project. After numerous rejections, she finally found mill owners in North Carolina willing to finance the manufacturing. 'At the end of the day, the guy ended up just wanting to help me,' Blakely said. 'He didn't even believe in the idea.'

For a time, Blakely relied on stores such as Neiman Marcus, who allowed her to sell her products from a table in their foyer, and on word-of-mouth to get the news out to the public. Her big break came when she sent samples to Oprah Winfrey's stylist. Harpo Productions called to say that Winfrey would name Spanx her favourite product of the year and warned Blakely to get her website ready. She didn't have a website.

Billions of dollars in sales later, Blakely has no plans to slow down. Spanx is sold in 54 countries, and Blakely wants to double international sales in three years. She says: 'The biggest risk in life is not risking. Every risk you take in life is in direct proportion to the reward. If I'm afraid of something, it's the next thing I have to go do. That's just the way I've been.'

THINGS TO CONSIDER:

1.What is attribution theory?

2.What is meant by external and internal attribution?

3.How much of Blakely's success is due to her personality (internal attribution) and effort and how much to external attribution/serendipity (being in the right place at the right time)?

4.What advice would you have given to Blakey before she became successful?

?SUGGESTED READINGS:

Amankwah-Amoah, J 2015, 'Where will the axe fall?: An integrative framework for understanding attributions after a business failure', European Business Review, vol. 27, no. 4, pp. 409-429. viewed 29 December 2017, ProQuest database.

Reinhard, M, Stahlberg, D & Messner, M 2008, 'Failure as an asset for high-status persons - Relative group performance and attributed occupational success', Journal of Experimental Social Psychology, vol. 44, no. 3, pp.501-518, viewed 29 December 2017, ProQuest database.

Rogoff, EG, Lee, M, & Suh, D 2004.,'"Who done it?" attributions by entrepreneurs and experts of the factors that cause and impede small business success', Journal of Small Business Management, vol. 42, no. 4, pp. 364-376, viewed 29 December 2017, ProQuest database.

Attribution Theory Use text-book, suggested readings and your own research to identify. Attribution Theory Case Analysis Worksheet Case Study Description What evidence do you see within the case study? Using the readings, what can you infer Item the case study? Case Study Analysis Using both the case study and the readings, explain Blakely's success? Case Study Recommendations What advice would you have given to Blakey before she became successful? Denition - Fundamental attribution error - Self-sewing bias Advantages - Internal Attribution Long-term - External Attribution Disadvantages Long-term - Internal Attribution - External Attribution