The truth about companies that started in garages

The garage where Apple was founded in 1976.

Contemporary culture has an idealized picture of the American Dream where a company can be started from nothing by anyone in a garage. According to the the stories Amazon, Apple, Disney, Google, Harley Davidson, HP, Mattel, Microsoft, Dell and Nike among many other giants all started by previously unknown genius founders from incredibly humble beginnings of simple garage operations and became multi-national, billion dollar corporations. I would like to argue that the idea of starting these businesses from zero is largely misrepresented. The garage by itself is significantly more than meets the eye.

The obvious function of a garage is to protect whatever is inside from the environment. But the existence of the garage suggests that there is enough wealth available to support a fairly large non-essential space to experiment with ideas and even do small scale production. A garage also comes with a house that includes amenities that support the business. A typical garage we're talking about in itself is larger than what most families on Earth live in as their primary space. Having a garage is a huge luxury if we look at it from a global perspective.

We should not forget that the value of the garage also comes from the safe neighbourhood which allows business founders to work on their project without the danger of their inventions and small profits taken away by criminals or competitors. A neighbourhood where private property and inventions are respected is a huge invisible value and unfortuantely is not present in many parts of the World.

In an ever wider scope the garage business can only survive if the laws of the country support such initiatives in general. If you're not allowed to tinker and sell your stuff without going through complicated bureaucratic systems to set-up expensive companies and pay all kinds of hidden taxes you can say good-bye to any start-up. Strart-up experimentation requires freedom of business.

A garage business requires the founders to have enough free time to develop their idea. Most adults especially in families with small children work at least 12 hours a day, sometimes in several jobs, to earn a living. They have no or very little spare time to learn or create anything new.

We must also note that most garage start-up founders have access to high quality education and/or acquiring important skills at a premier company of some kind. They typically also have access to people in key positions or with specialized skills to work with.

When you are building a garage venture you must have enough savings to support not only your business expenses no matter how small they are, but also your own living expenses between the time you start working full time at your business and the time the operation starts making enough revenue to provide you with profits you can live off. This typically takes at least 1-3 years, but can last up to a decade.

Most importantly the right motivation is key. The founders must belong to the middle-class to begin with so they can have an incentive to become successful, celebrated and wealthy from their business.

If you take all this into account, the idea of staring a business in a garage becomes less readily available than one would first think. It's basically open for people who can afford a house in a fairly rich neighbourhood, have good education and work experience, have freely available funds and have much free time on their hands. Such conditions exist for a significant number of people in the developed world, but it's almost non-existent in poor nations. No wonder that most garage operations are from North America and to a smaller extent from Europe.

Startups are the most important economic engine in any country. They re-invent business and create new efficiencies in the economic system that everyone benefits from directly in form of jobs and contracts or indirectly by using cheaper and more valuable products and services. Start-ups are in many ways more important than the multi-nationals they eventually become. If there is one thing governments should focus on is creating the conditions described above to allow garage businesses disrupt stale economies and create more wellbeing for everyone.

If you're one of those motivated founders who strive to create the next Apple or Mattel you should focus on creating the above mentioned conditions in your life as much as possible. Move to the right location, take up the right job, find a nanny, etc. Half of success is creating the right environment where your talents can bloom. Good luck!

Steve Jobs posing in 1996 in front of his parent’s garage where he and Steve Wozniak founded Apple in 1976.
Steve Jobs and Steve Wozniak at the early days of Apple.
The garage of Walt Disney, his first "film studio" 1923.
Walt Disney garage interior.
The 1903 Harley-Davidson garage factory.
Bill Hewlett and Dave Packard at the HP garage at 367-369 Addison Avenue in Palo Alto.
The HP garage interior.
Ruth and Elliot Handler started Mattel in their garage in 1945.
Microsoft founders Paul Allen and Bill Gates in 1975.

Comment this post on: