[23] Struggle to Stay Afloat

...and How Companies Almost Went Bankrupt

“The wise man looks for what he can’t see, not what he can.”
— Charlie Munger

Turns out, even billion-dollar companies have been there. 😅
This week, we’re looking at businesses that almost went bust — and the bold moves that turned it all around.

Surviving Financial Drama - vocabulary

📉 to struggle to stay afloat

to manage to survive or keep operating, especially when facing financial difficulties.
It’s often used when a business or person is barely avoiding failure.

SYN. to keep one's head above water (very similar vibe, slightly more casual)

Picture this: You're clinging to a leaky lifeboat during a storm. That's exactly how a company feels when sales crash but expenses don’t.

• "In 2004, LEGO was struggling to stay afloat after losing $300 million in one year."

• "After losing 70% of its customers during the pandemic, the restaurant barely stayed afloat by switching to delivery services."

  

  cash flow crisis

  happens when a company (or person) runs out of available money to pay bills, salaries, suppliers, or loans — even if the business looks profitable on paper.
  It’s like having a fancy house but no cash in your wallet to buy groceries 🏠💸 which reminds me the plot of a latest Apple series:

  

  link

• "Tesla faced a major cash flow crisis in 2018, nearly shutting down its Model 3 production."

• "Despite strong demand for its app, the startup hit a cash flow crisis because it couldn’t collect payments fast enough."

• "Seasonal businesses often experience a cash flow crisis during off-peak months."

🛟 bailout

Scene: Uncle Sam shows up with a giant check and saves your company from total doom.

financial help given to a company (or even a country!) that’s about to collapse.
Usually, it comes from the government, banks, or investors who step in to "rescue" the situation — often because the company is considered too important to fail.

• "In 2009, the U.S. government gave General Motors a massive bailout to prevent the collapse of the auto industry."

• "Lufthansa received a €9 billion bailout during COVID-19 to survive the travel shutdown."

• "When my friend lost his job, his parents gave him a financial bailout to cover his rent."

🛠️ restructure /ˌriːˈstrʌk.tʃər/

Visualize: You take apart your IKEA shelf that's falling over and rebuild it properly. Now imagine doing that with an entire company.

• "After flirting with bankruptcy, LEGO restructured by ditching complex product lines and focusing on their core sets."

  

Wild Moves That Actually Worked

Tesla: "Let’s Build a Tent and Make Some Cars!"

Back in 2018, Tesla was this close to running out of cash.
Their shiny robot production line? Total disaster.
So Elon Musk said: “Forget it — let’s just build a tent outside and make the cars by hand.”

And guess what?
It worked. They hit their targets, people stopped freaking out, and Tesla lived to see another day.
👉 Sometimes simple beats fancy.

🎲 FedEx: “Let’s Bet It All on Blackjack” (1973)

Running on fumes, FedEx founder Fred Smith flew to Las Vegas with the company's last $5,000.
Crazy Idea: Bet it all on blackjack — and won $27,000!
Result: The winnings kept the planes flying for another week until he secured more funding.

🔥 Lesson: Desperate times call for literal rolling of the dice.

🏡 Airbnb: Selling Cereal to Keep Dream Alive (2008)

During the 2008 recession, Airbnb couldn’t get investors.
Crazy Idea: Co-founders sold limited-edition "Obama O's" and "Cap'n McCain" cereal during the U.S. election.
Result: Raised $30,000, stayed afloat, and eventually became a hospitality giant.

________

Hoping to drum up some attention, Airbnb set their sights on the 2008 Democratic National Convention in Denver — where Obama was about to speak in front of 80,000 people.

Traffic spiked during the event, sure... but after the crowds left, they realized the hard truth:

They still weren’t getting enough users to survive day-to-day.
The debt was piling up.

Profitability?

A distant dream.

Something had to change.

As Brian Chesky put it,

"We’re Air Bed & Breakfast. The air beds aren’t working out — maybe we should just sell breakfast."
(Desperate times, creative ideas.)

So they pivoted.
Armed with some design skills and a sense of humor, they whipped up custom cereal boxes:

• Obama O’s: The Breakfast of Change

• Cap’n McCains: A Maverick in Every Bite

They found a printing connection through the Rhode Island School of Design, bought the cheapest cereal they could find, and filled shopping carts full of it.
Back at their apartment, they hand-folded hundreds of boxes, sealing them shut with hot glue guns like a couple of startup Santa Clauses.

But here’s the kicker:
They sold the cereal as limited-edition collector’s items for $40 a box — and people actually bought them.

In the end, they raked in $30,000 from cereal alone — just enough to keep Airbnb alive.

Their new, slightly cheeky motto?
“Be a Cereal Entrepreneur.” 🥣🚀

Lesson: Sometimes survival looks weird. And sometimes, weird works.

☕ Starbucks: Shutting Down 7,100 Stores for Training (2008)

Quality was dropping. Customers were unhappy.
Crazy Idea: Howard Schultz closed all U.S. stores for one afternoon to retrain baristas.
Result: Public trust was restored, and Starbucks stayed dominant.

🔥 Lesson: Sometimes, you need to pause everything to rebuild excellence.