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HOW DIXIE CUPS BECAME THE BREAKOUT STARTUP OF THE 1918 PANDEMIC
TheLiquid says: "2020, Don't quit before the miracle happens" The following article is a reminder of just that!

Dixie cups were like the Zoom of the Spanish flu pandemic in 1918, which helped the product become a household name.

Photo: Boston Public Library Tichnor Brothers collection

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. 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.

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. 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.

BECOME A B2B OR B2BC BUSINESS

Educating a market takes time and money. 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 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.

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Kevin Leland is CEO of Halo, an open innovation network where companies connect with scientists and startups to solve important business challenges 2020

Word of the Week
And now, TheLiquid will keep you thinking, or are you laconic?

laconic [ləˈkänik] ADJECTIVE

(of a person, speech, or style of writing)

Using few words."his laconic reply suggested a lack of interest in the topic"

Synonyms

brief · concise · terse · succinct · short

economical · elliptical · crisp · pithy

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