When Dixie cups originally failed to resonate with consumers, Luellen refocused his 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, Dixie could depend on revenue from the repurchase of cups. It 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 new business is the ability to adapt. As we’ve seen in the most extreme case with COVID-19, factors completely out of a company’s control can reverse its fortunes, for better or for worse.
Suddenly, drinking out of a disposable cup became a matter of life and death. In response, Luellen launched an advertising campaign to drive the point home and rebranded from the Health Kup to the more memorable Dixie cup in 1919.
EVOLVE YOUR MESSAGE
A lingering question for those startups that were made essential during the pandemic: Will they keep growing once the pandemic passes? If remote work becomes as widespread as some people think, those startups will see increased competition and pressure to differentiate beyond what set them apart originally.
That’s what happened to Dixie cups. As the popularity of disposable cups grew, copycats entered the market, leading Dixie cups to find novel applications, such as “Ice Cream Dixies” a frozen treat that soda fountains used to offer. The company also began touting other benefits beyond disease prevention, such as convenience.
FEEDING THE INNOVATION LOOP
With the success of Dixie cups came other disposable products, such as Kleenex in 1924 and paper towels in 1931.
As the history of Dixie cups shows, a product that solves one problem can create new ones. Some of the problematic ones will present opportunities for intrepid new startups.
Kevin Leland is CEO of Halo, an open innovation network where companies connect with scientists and startups to solve important business challenges 2020