What Successful Companies Started in a Basement?

The BASIC programming language has provided an invaluable foundation for today’s modern computing. It was a standard in early personal computers including Microsoft, Commodore, Apple, HP, IBM, and Atari. It all began in the basement of Dartmouth College back in 1964.

Computers were massive back then. While in the basement at 4:00 in the morning, Professor John Kemeny ran the first line of code. The invention of BASIC was the first time anyone was able to write their own computer programs.

Entrepreneur Sir Richard Branson started his first company when he was just 16. He was working on a student magazine out of his co-founder’s basement.

Neither he nor his cofounder had any capital. Then through a stroke of luck, his mother got nearly $125 through an unclaimed lost and found. Today that would be $1,005.84. They used the money to pay the electricity and postage bills. Virgin Group is currently valued at $4.7 billion.

In 1976, Martha Stewart made her start with a small catering company that she launched from her Connecticut basement.

A year into her home-based business, she was hired to cater a book release event during which she met people in the publishing industry. After pitching an idea of doing a cookbook of catering recipes, her first book was published in 1982.

In its heyday in 1999, Martha Stewart Living Omnimedia was valued at $2 billion. The company has had ups and downs since then, and Forbes reported that she was in federal prison when she became a billionaire the second time. Her personal fortune is estimated to be about $628 million, and the company recently traded in 2019 for $175 million.

Kevin O’Leary, a Shark Tank judge, started his billion-dollar business in a basement.

In 1986, O’Leary founded SoftKey International. His mother gave him $10,000, and he got to work publishing and distributing CD-Roms, an essential media form for several decades. In 1999, he sold the company to Mattel for $3.65 billion. That’s the equivalent of $5.7 billion today.

The toy company Melissa & Doug began as a pipedream in the couple’s Connecticut basement. Their “satellite office” was Doug’s parents’ garage.

When the company launched in 1988, it was selling short films and instructional videos. Their first successful product was a fuzzy puzzle. Now with an inventory of over 2,000 kinds of toys, the company is valued at $400 million.

In 1991, Tim Sweeney started designing video games in his parents’ basement.

At that time, he was a college student at the University of Maryland. On weekends, he’d drive 30 minutes from his dorm room to his parents’ house in Potomac, MD, where he had a personal computer.

As computer games started to be released in 1992, “It was clear that there was some real money to be made in that business,” he said. He came up with the business name Epic MegaGames to help him sound like a big deal. “Of course, it was just one guy working from his parents’ house,” said Sweeney.

The name was later shortened to Epic Games, and it wasn’t until 2017 that Fortnite was launched. Now, the company is valued at $15 billion.

Daymond John, of Shark Tank fame, launched the streetwear label, Fubu, from a basement.

Back in 1992, he started the company with just $40 in capital. He was working out of his mother’s basement in Queens. When he wasn’t using his mother’s sewing machine, he was working at Red Lobster during the day.

To get the word out, he would pitch hip hop artists to wear his clothes in music videos. This captured the young urban music scene and led to its eventual business success with a $6 billion company valuation.

Before Jeff Bezos launched his upstart e-commerce business, he was working out of a two-car garage in Bellevue, WA. However, after purchasing the first domain name in September 1994, he needed more physical space.

By 1995, Amazon was operating out of a 2,000-square-foot basement warehouse in Seattle. There was a handful of employees who were working in the basement in the evenings after their day jobs. Bezos once said, “We were packing on our hands and knees on a hard concrete floor.”

Now, that basement startup is valued at $1 trillion, and it’s one of the biggest companies in the world.

In 1996, 24-year-old Kevin Plank was working out of his grandmother’s basement in Washington, D.C., to design T-shirts made of moisture-wicking fabric.

The business idea hit him when he was playing fullback at the University of Maryland. He noticed that his cotton T-shirts were getting soaked with sweat while the synthetic fibers of his compression shorts stayed dry.

His teammates wore the prototypes, and when they went on to the NFL, he got his big break. When USA Today carried a front-page photo of Oakland Raiders quarterback Jeff George wearing an Under Armor shirt, the orders started to flow in. Now the business is valued at $3.5 billion.

In 2002, the $11.1 billion software company Qualtrics was started by two brothers, Ryan and Jared Smith, working in their parents’ basement in Utah.

The business was a family endeavor. Their father came up with the idea of software for academics who were conducting field research. Ryan convinced his brother Jared to quit his job at Google to write the code and manage the business’s technical side. Jared sold the software to customers, which eventually expanded to private sector companies.

In 2015, Voltage Security had $39 million in funding before being acquired by HP for an undisclosed amount. The company started 13 years earlier in the basement of Stanford University.

At Stanford, the three co-founders were working on a new type of network security for a computer science class research project. After incorporating in June 2002, they worked out of a basement office in Stanford’s Packard Engineering Building for about a year.

Their business plan then won the Stanford BASES Entrepreneurs Challenge, earning them $150,000 in capital. They moved from the basement to regular offices a few months later.

The cloud-based accounting software FreshBooks is now valued at $172 to $258 million. However, when it was founded in 2004, Mike McDerment was running the business out of his parents’ basement in Toronto.

He worked from the basement for three and a half years to keep his operations lean. He focused on the niche of invoicing, and for the first two years, he had 10 customers paying $9.99 per month.

Now, FreshBooks’ user count is more than five million, and the collective invoice amounts top $8 billion each year.

Another basement startup success story, Mashable is currently valued at $50 million.

When Pete Cashmore was 19, he started a blog from his parents’ basement in northern Scotland. It was 2005 and the early days of digital publishing.

He realized that to capture the attention of an American audience, he needed to be in their time zone. So in the darkened basement, he would sleep from about 6:00 or 7:00 a.m. until midday. For about 18 months he kept this blogging schedule, during which he earned two million monthly readers.

The first game of Cards Against Humanity was played in a basement.

In 2008, the company’s founders were hosting a New Year’s Eve “party for misfits” and needed a structured party game for about 30 to 40 people. The high school friends were back home in Chicago during the semester break.

They drafted up the first set of questions in a school notebook before typing them up in MS Word. The first game was played in Max Temkin’s parent’s basement. He recalled it was “enough fun that the next morning we wanted to work on it more.”

After their Kickstarter launch in 2010, Cards Against Humanity reached $12 million in revenue within two years.

In 2013, RXbar founders Peter Rahal and Jared Smith made the first bar. They were working in the kitchen and basement of the suburban Chicago home of Rahal’s parents.

Their business model was to sell directly to individual CrossFit franchises, which would keep their overhead low and give them virtually no competition. In the beginning, the inventory was in Tupperware containers and the bars had DIY labels that were made in PowerPoint.

Soon afterward, the business moved out of the basement and into a commercial kitchen. In 2017, the company was bought by Kellogg’s for $600 million.