As Frank Sinatra famously crooned in “That’s Life” a half-century ago, life is filled with ups and downs: “You’re riding high in April / Shot down in May.” The same is true of the business world, where it’s all too common for ‘hot’ startups to quickly lose their luster. Yet it’s shortsighted to think that all companies—and, indeed, all people—that fall on hard times are down and out. Again, we invoke the wisdom of Ol’ Blue Eyes: “But I know I’m gonna change that tune / When I’m back on top, back on top in June.”
Sinatra was definitely on to something. If there’s one thing Americans love, it’s a comeback story. Sure, the fall from grace can be interesting, but there’s nothing better than a story about overcoming the odds. Our collective love for the redemption narrative is evident throughout popular culture, whether it’s movies—“Rocky,” “Rudy”—books—“Unbroken,” “Life of Pi”—or television shows like Netflix’s “Unbreakable Kimmy Schmidt” and HBO’s appropriately titled “The Comeback.”
So, it shouldn’t come as a surprise that a number of the most riveting stories in the business world revolve around entrepreneurs who persevered against all odds, staging remarkable and unprecedented comebacks.
From an entrepreneur who reclaimed control of a business he had lost to a co-founder who triumphantly returned to his company after an unceremonious termination, here are six of the greatest company comebacks in the history of corporate America.
There’s no way we could create a list of the greatest corporate comebacks without including Apple at the top of it. Now the world’s biggest technology company, Apple had fallen on hard times in the years after Steve Jobs and Steve Wozniak co-founded the company out of a garage in Silicon Valley.
Dissatisfied with Jobs’ performance at its helm, Apple’s board of directors voted in the mid-1980s to terminate Jobs from the company he started. The move did little to reverse Apple’s fortunes, however, with the company cycling through a series of ineffective chief executive officers. Jobs, meanwhile, flourished while away from Apple, transforming Pixar into an innovative movie studio known for groundbreaking films like “Toy Story” and its superior digital technology.
Following a series of calculated moves, Jobs eventually returned to Apple in 1997. Over the next 15 years, he was the driving force behind some of the biggest technological breakthroughs of this century, presiding over an unprecedented period of growth that saw the release of the iTunes Music Store, the iPod, the iPhone, and the iPad, among other groundbreaking consumer products. Nearly four years after his 2011 death from pancreatic cancer, Jobs’ legacy persists at Apple, which has continued to expand at a torrid pace: Its market cap has skyrocketed from roughly $5 billion in 2000 to more than $740 billion today, and it easily ranks atop the Forbes list of the most valuable brands in the world.
Whitepages was born in a Stanford University dorm room that, at the time, belonged to Alex Algard. Nearly 20 years later, Algard is still the chief executive officer of the company, which is now experiencing a period of unparalleled growth.
Unlike Jobs, Algard was never forced out of the company he founded. Yet he did lose some of his overall control in 2005, when two private equity firms paid $45 million for a minority stake in Whitepages. The relationship lasted until 2013, when Algard led an effort that bought back all outstanding shares of the still-private company. As Algard told Free Enterprise, that decision paved the way for the kind of success that Whitepages is now seeing.
“As opposed to running the company on a quarter-to-quarter basis, I was eager to invest more for longer-term growth,” Algard said. “Conventional wisdom says that optimizing for near-term profits is the profit-maximizing way to run a company. But it actually turned out that, after we had put a lot of money back into investing in the company and our employees, we were actually able to almost double our profit rate within just 18 months.”
Continental Airlines, which eventually merged with United, has long been recognized as one of the greatest comeback stories in aviation history. Its former chief executive officer, Gordon Bethune, is largely credited with reversing the formerly flagging airline’s fortunes.
When Bethune took over in 1994, Continental was on a downward trajectory: It routinely ranked last among all major airlines in customer satisfaction, and it was hemorrhaging money, losing hundreds of millions of dollars each year. Yet under Bethune, Continental enjoyed a rebirth, quickly winning over customers and earning a place atop the JD Power Awards. As Bethune told Free Enterprise earlier this year, he simply placed an emphasis on improving management and respecting and cultivating the workforce he had—a move that paid off in dividends.
“How did we do it? We became America’s most on-time airline. How did we do that? We focused on that every day, and the record still stands,” he said. “We lost something like $600 million in 1994. In 1995, we made $225 million—with the same people and the same airplanes. So, it wasn’t anything wrong with the employees. It was the management—and it always is.”
You can check out our full piece on Bethune and Continental Airlines here: “Management Advice From the CEO Who Saved Continental Airlines”
As comeback stories go, it doesn’t get more American than General Motors. After nearly folding during the depths of the recession, the Detroit-based automaker has roared back to life.
Since 2008, when the U.S. government bailed out the carmaker, GM has overhauled its supply chain and manufacturing divisions, streamlining processes while cutting costs. It has unveiled a number of new and popular car models, and it has refocused its research and development arm. That has led to a steady stream of earnings and sales growth for GM, which sold slightly fewer than 10 million cars in 2014 to rank as the world’s third-largest automaker, according to Bloomberg.
That kind of performance has benefited the company’s bottom line: In 2014, GM’s net income clocked in at nearly $3 billion—up markedly from 2008, when the automaker posted a nearly $31 billion full-year loss.
We’re not the gambling types here at Free Enterprise, but if we were to bet on someone, it’d probably be Elon Musk. The serial entrepreneur has long defied his (many) critics, helping lead major turnarounds at his two current projects, SpaceX and Tesla Motors.
Even for someone as storied as Musk, Tesla is a stunning example of a business that fought back from the brink. The electric carmaker almost went out of business during the recession, when financing dried up for all kinds of companies. Yet Musk never lost faith in the company, leading a restructuring effort that has helped Tesla thrive over the past few years.
The California-based company now employs more than 6,000 people and is logging impressive sales growth figures, as buyers around the world become more comfortable with the idea of owning electric vehicles. Investors are impressed by the automaker’s recent performance: Tesla, whose stock is trading at just under $250 a share, currently boasts a market capitalization of $31.3 billion.
With its fashionable clothes and pleasing price point, Gap was the definitive brand of the 1990s. That it was so successful is particularly impressive, considering that the company was on the verge of falling apart 20 years prior.
Gap’s comeback can largely be attributed to Mickey Drexler, who took over the retailer in 1983 and remained at its helm for the next 19 years. While at Gap, Drexler focused on honing the company’s style and aesthetic, and he oversaw a major rebranding campaign that drastically changed Gap’s perception, transforming it from a stodgy company into a must-have brand.
While Drexler led Gap, the company’s sales increased from roughly $400 million to $14 billion; its store count similarly shot up, jumping from 450 to more than 2,000, according to the Wall Street Journal. Though he was eventually let go from the company after its stock took a nosedive, Drexler would go on to resurrect another previously fading clothing brand: J.Crew.