You hear these examples a lot. But I think if you look closer you see that these are examples stories being more complicated than their stripped down versions, not counterexamples. The stripped down version still holds to the pattern.

The "real" beginning of Starbucks was an entrepreneur buying Starbucks and merging it with another couple of coffee shops then expanding immediately at serious pace. It went public 5 years after the purchase.

Mcdonalds is a similar story. Bought and expanded.

It's hard to measure the exact beginning of these businesses, they weren't founded with the intention of raising capital and going big. They did however join that trajectory at some point. The interesting thing is that they joined it very close to the launch point - these weren't small companies that slowly became medium then big, these were tiny companies that stayed small for decades, then they became giants very quickly, almost instantly.

edit: BTW, it is definitely possible of finding companies that grew slowly over decades. But in those cases you probably won't find that they were small businesses for a long time. They spent roughly equal amounts of time as 5 person companies, 10, 100, 1,000 - so you don't here so much about their heritage as a small business. They might have only spent a few years that way.

Good points.

Something I noticed after I read your comment: The funny thing about both Starbucks and McDonalds is that, in both cases, it took an outsider who became an employee, _not a founder_, to grow the company. Two companies don't a pattern make, but it does make you wonder...

I think the right way of reading it is to put consider the outsider the founder and otherwise consider their takeover as the founding. It would be like Bill Gates buying a 4 person company that made Basic interpreters instead of starting one, it's not fundamental to the story.

If you looked at a graph of Starbucks and another startup going public at the same time the would look like this

  . . . . . . . . . . . . . . . . . . . . IPO
  . . . . . . . . . . . . . . . . . . . . /
  . . . . . . . . . . . . . . . . . . . ./
  . . . . . . . . . . . . . . . . . . . /
  . . . . . . . . . . . . . . . . .  ../
  . . . . . . . . . . . . . . .founding

  . . . . . . . . . . . . . . . . . . . . IPO
  . . . . . . . . . . . . . . . . . . . . /
  . . . . . . . . . . . . . . . . . . . ./
  . . . . . . . . . . . . . . . . . . . /
  . . . . . . . . . . . . . . . . .  ../
  . . . . . . . . . . . . . . . . .  ./
  founding----------------acquisition/

What happened between founding and acquisition in company #2 isn't really part of the story. The day after aquisition though is pretty much the same after the day of founding company #1.

I think timescale plays a part here. It's all well and good to open up a restaurant, then another, then two more the next year, then 5, then 20, then 50, then 200...Problem is, you're looking at at least a decade before you're large-scale. McDonalds is a 75 year-old company. Starbucks is 45 years old. OTI, the pace of growth (and failure) is much higher. Facebook is ~6 years old. Who knows if it will be here in another 10?

That kind of growth takes money. It's nearly impossible to scale from 3-4 people to 3000 in a couple years if you're self-funded. Now, the article was arguing that that kind of growth is unnecessary; that it's perfectly acceptable to have a business making 100-200k/year. That't true, but it in no way negates the need for VCs and angels.