This Woman Rescued Clorox From Bankruptcy When It Was A Failing Startup
By: John Greathouse
Tags: Startup, Founders, Entrepreneurship, Female Entrepreneurs, Entrepreneur

A version of this article previously appeared Forbes.

Courtesy: The Clorox Company

In 1913, five business people founded America’s first liquid bleach factory. The group raised $75,000 ($2 million, inflation adjusted), with the intent to mine the salt-water deposits that occur naturally in the brackish ponds around the San Francisco Bay Area. It was then processed into sodium hypochlorite, the main ingredient in household bleach.

Their intended market was large institutions, such as factories, food processors, laundries and municipal water companies. As such, they packaged their highly concentrated, 21% sodium hypochlorite product in 5-gallon containers.

The company floundered for two years, nearly going out of business before Annie Murray, wife of one of the company’s founders, stepped in. She modified the company’s product and packaging, while redefining its target market. Annie’s efforts helped create a company that is going strong over 100-years later. In 2018, Clorox employed over 8,000 people and generated over $6 billion in sales.

6 Lessons Today’s Entrepreneurs Can Learn From Annie Murray

In retrospect, it’s not surprising that Annie had such a significant impact on the formation of the Clorox company. When she launched the product, she was already a successful businesswoman, with a keen understanding of her retail consumers’ wants and needs.

1. Users Know Product / Market Fit, Non-Users Guess

Soon after the company was founded, Annie began using a diluted version of Clorox at home and at her prosperous mercantile store. Despite the skepticism of the original investors, she was convinced that Clorox could be re-packaged and sold directly to the emerging class of housewives, a new market segment which had modest discretionary income and were concerned about the cleanliness of their homes.

Annie had conviction in the company’s pivot, because she had used the revised product first-hand and she understood the target consumer, unlike the company’s founders.

2. Ride Cultural Waves

Obviously, entrepreneurs must be keenly aware of the macro trends impacting their efforts. Annie, and her business partners, had the good fortune of strong cultural and social changes that helped drive consumer demand for Clorox — a heightened awareness of cleanliness.

A number of factors influenced America’s changing view of personal hygiene at the turn of the last century. Principle among these factors was the discovery of viruses during the 1890s, solidifying the argument that microbes cause illnesses. By the early 20th century, Americans were waging a war against germs and they needed products to help them win this fight.

3. Freemium Works When Missionary Selling

At the turn of the last century, soaps and other cleaning agents were animal based. In rural areas, they were often made in the home. Such cleansers had limited abilities to kill microbes and germs.

However, even though Clorox had a technological advantage over traditional cleaners and America had become germ conscious, Annie faced tremendous competition. Not from other emerging chemical sanitizers, but from inertia.

To combat this reality, Annie gave away free 15-ounce bottles of Clorox, a marketing technique which remains to this day, a staple of consumer product marketing. Try to walk through Costco without being propositioned multiple times to partake in free samples.

Annie’s efforts initiated a word-of-mouth campaign which drove buyers to her store, specifically seeking Clorox. This creation of out-of-market demand eventually led to Annie establish a Clorox delivery service, via horse drawn carts, emblazoned with the Clorox logo.

4. Hummingbird Effects Look Like Luck, In Retrospect

None of Clorox’s founders could have foreseen the impact that another technology would have on their sales: radio. However, as this medium emerged, Annie and her compatriots were early advertisers. In fact, so many cleaning products were advertised during daytime radio that the associated melodramas which they sponsored came to be known as “soap operas.”

5. Leverage New Links In Supply Chain

Innovations come in many flavors, beyond product features. Annie and the early Clorox team took advantage of the newly completed Panama Canal and become one of the first West Coast companies to ship consumer goods to the Eastern US. Previously, most of consumer goods flowed East to West, via the railroad.

6. Innovations Evolve From Industrial To Consumer Use

Many inventions are initially too large, complex and expensive for consumer use. However, many technologies evolve into a form factor and price point that facilitate consumer usage.

Examples of this phenomenon include timepieces (huge clock towers to wristwatches), air conditioning (movie theaters to window units) and microwave ovens (commercial kitchens to homes). Clorox, in its diluted form, made a similar transition from commercial to household usage, thanks to a woman named Annie Murray.

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