Noel Biderman is CEO of Avid Life Media, the parent company of Established Men, which connects older, affluent males with younger females seeking "sugar daddy" arrangements. If you don't know what that is, well… just think about it for a minute. Once you figure it out, you'll see why controversy has helped the brand get its name out there.
"There have been journalists and commentators who have lumped us in with other services that they have positioned as a veiled form of prostitution," he said. But despite the moral indignation, a stubborn fact remains—the service has no shortage of clients. In fact, he said, it attracts about 12 women for every man who signs up.
Businesses that find success through controversy occupy a wide spectrum. And while some people may scorn them in public, the businesses attract enough consumers to suggest that the scorn has provided a form of free advertising. CNBC.com spoke with people in a variety of businesses and professions about the controversy that they've faced, and whether or not that's actually helped them succeed.
Read ahead to see 10 controversial businesses that have plenty of people patronizing them.
—By CNBC's Daniel Bukszpan
Posted 18 March 2014
Watch "The Profit," a reality series with multimillionaire Marcus Lemonis turning around struggling companies, Tuesdays at 10 p.m ET/PT.
Patrick Donovan is a criminal defense attorney from Quincy, Mass. who handles drunken-driving cases. While every criminal has the constitutional right to a lawyer, he sometimes encounters people who see it differently, and say so. But people keep driving drunk, so he keeps making a good living.
"I had a person insult me on my honeymoon," he said. "Her husband was a cop. And one time a person sitting next to me on a plane abruptly stopped talking to me once he learned I represented drunk drivers. I didn't care, because I was heading to a conference of drunk-driving attorneys in Las Vegas."
According to director of marketing A.J. Perkins, Arrangement Finders is a place for the college student who needs help paying tuition, or the single mom struggling to make ends meet. He also said it's a place for "successful men looking for these incredible women to spoil. It's an honest trade-off."
The very nature of this business makes controversy inevitable, but it earned bonus indignation with its 2013 billboard campaign. One featured former adult film star Bree Olson and explained what the best kind of "job" is. Another, which went up in Philadelphia, said "Thou Shalt Not Commit Adultery," with the word "not" crossed out.
"It was near a Catholic school that felt this billboard did not bode well for the community," Perkins said. "Conversely, we had a dramatic increase in membership the moment this board went up."
Tim Sykes made his first splash in the financial world before he was old enough to drink. Thanks to the miracle of day trading, he turned his $12,000 bar mitzvah haul into $1.65 million.
"I got thousands of emails from people wanting to know how I was so successful at such a young age," he said. "Half of them thought I was a fraud." He decided to focus on teaching his methods to others, and his students have gone on to be profitable. But despite apparently being vindicated, the doubters have not yet gone away.
David Sapper is the owner of Auto Mart, a Las Vegas used car dealership for consumers with bad credit. These customers can't get traditional bank loans, so Auto Mart does it for them. But despite this altruistic undertaking, he said, the company has been on the receiving end of hostility from all quarters. "We are very, very successful, but are constantly fighting the stigma of the slimy used car dealer," he said.
Sometimes, the hostility comes from the company's own customers, such as the man who couldn't get the loan that Auto Mart was orchestrating because he had lied on his application. "He immediately started screaming and throwing chairs," Sapper said. "He pulls out a gun and points it at one of our salesman and threatens to kill him if we don't sell him the car. He then storms outside and leaves."
Houston real estate broker Sissy Lappin says she has sold over half a billion dollars' worth of property. Despite her success—or perhaps because of it, she said, she has had to fight the preconceived notions that many people harbor about her profession.
"I was at a conference last month and a man asked me what I did," she said. "I told him I was a real estate broker and he remarked, 'Oh, a bloodsucking vampire.' I hear negative comments about being a real estate agent all the time, about how over 70 percent of people don't trust us, and we are ranked above politicians but below bankers in ethics. I have developed a thick skin through the years."
Alan "Action" Schneider is founder of a business that holds events where rich older men can meet younger women who are decidedly less rich. It guarantees only networking and dancing, and does not promise sex in any way, shape or form, but with a name like SugarDaddyForMe.com, it's hard to fight the perception that he's in the arm candy business. But public perception aside, he said the company has great value for both the men and the women who use it.
"A lot of these women have said, 'We need this lifestyle, we need it to survive and we can get along by having a man in our lives who can enrich us,'" he said. "A lot of men are starving for affection. Fifty percent of the men at the parties are single, but 30 percent are in sad relationships. They're begging for attention, love, respect. … They're so miserable, they're begging for this."
Cali Estes deals with drug addicts, but treats them in a nontraditional way. Rather than the usual 12-step process, she specializes in "harm reduction," which allows the addict to taper off a substance rather than quit cold turkey or transition to a legal but still addictive substitute, such as methadone. She said that others in the recovery industry don't appreciate her unorthodox approach.
"People in this industry are very pro-12-step and very cliquey," she said. "If you don't agree with them, they like to argue and tell you why they are so much better than you at helping someone get sober. They also expect you to work for free. I don't find value in free." She wouldn't disclose any numbers, but when asked if her business is profitable, she answered simply. "Yes, very."
Robert Smith & Associates is a digital marketing and public relations firm that was started by its namesake in 2000. Smith characterized the business as one where you can make a lot of money, provided you don't have a big office with dozens of redundant employees.
He said that many members of the media regard public relations representatives as paid pitchmen who don't believe in what they sell. But his company is doing just fine anyway, thank you very much. "I am between $500,000 and $1 million, with a few deals in place to hit $2 million in 2014," he said.
Biderman is not just the owner of the Established Men site. He is also the owner of Ashley Madison, which targets people already in committed relationships. If that isn't immediately apparent, the company clears up whatever confusion there might be with its slogan – "Life is short. Have an affair." Biderman said that within six months of its launch, Ashley Madison became profitable and has "returned close to $100 million to our institutional and private investors." But the success has been tempered by some unpleasantness.
"That unfortunately has ranged from the extreme death threats necessitating my international travel with armed guards, to banning my travel to a certain country in Europe directly by a sitting monarch, and most recently Singapore's government blocking access to our Ashleymadison.com URL," he said. However, it's all in a day's work.
"We acknowledge Ashley Madison being a controversial business, but truly controversy is just another way of stating a societal change," he said. "We originated the notion of married dating, and ultimately Ashley Madison allows women to pursue anonymous affairs, en masse, for the first time in that gender's history."
Appconomy is a mobile app for consumers and retailers. If you buy coffee from a particular retail chain in a particular neighborhood every day, the app learns that by tracking you. Should you leave your usual stomping grounds, the app tells you where the nearest franchise is. While this offers great convenience, company founder Steve Papermaster said that privacy concerns have been a major issue.
"We encountered serious privacy concerns with location tracking," he said. "We've worked hard over the years to build a product in which the user has control and transparency with shared data. We've found within our initial market in China, consumers enjoy full use of the Appconomy features to trigger even better, more personal suggestions."
When Marcus Lemonis isn't running his multibillion dollar company, Camping World, he goes on the hunt for struggling businesses that are desperate for cash and ripe for a deal. In the past 10 years, he has successfully turned around over 100 companies. Now he's bringing those skills to CNBC Prime and doing something no one has ever done on TV before … he's putting over $2 million of his own money on the line. In each episode, Lemonis makes an offer that's impossible to refuse—his cash for a piece of the business and a percentage of the profits. And once inside these companies, he'll do almost anything to save the business and make himself a profit, even if it means firing the president, promoting the secretary or doing the work himself.