(FORTUNE Magazine) – The betting odds stood as high as 25 to 1 against Evander Holyfield when he entered the ring last November to take on Mike Tyson. Detractors were saying the 215-pound Atlanta resident was too nice, too small, too old. But Holyfield battered Tyson to the canvas and won the heavyweight boxing championship, shocking just about everyone but himself. "I was confident going in," he told FORTUNE recently as he trained for his May 3 rematch with Tyson. "If you can see yourself winning, your chances are just as good as the other guy's."

Attitude is clearly key when it comes to vanquishing a seemingly unbeatable opponent, and perhaps Holyfield's grit can inspire all of us who dream of unlikely successes--and struggle against long odds. Scores of enterprises, from Southwest Airlines to Wal-Mart, have proved that planning, smarts, and Holyfield-style mental toughness can lead to grand victories against industry giants. And in the following pages, you'll meet four more companies that are waging a scrappy battle against formidable foes. A specialty brewer finds a way to market its premium brand that bedevils mighty Anheuser-Busch. A software developer outmaneuvers a gaggle of competitors by charging for superb service. A tiny airline finds space in a crowded sky by joining up with a jumbo carrier. A startup book retailer dukes it out with the megastores by learning all about its customers. Reading about these strivers may help you develop notions about how to take a punch and come back for more.

When you get down to it, that's what it's all about--not letting yourself settle for failure. Holyfield is, after all, three-time heavyweight champion. Viewed another way, that means he's twice come back from crushing defeats. He plans to win his May 3 rematch, of course, but he knows how to climb back up if he does lose. "There's no quit in me," he says.

Read on. Hopefully, that attitude is catching.

MAKING THEM PAY FOR PREMIUM

A day spent with brewer-evangelist-CEO Jim Koch generally begins at eight o'clock in the morning, belly-up to a bar made of old church pews in the Samuel Adams Brewery in the Jamaica Plain section of Boston. He draws a glass of lager, toasts the breakfast of champions, shuts his eyes, and takes a sip.

Koch claims to have tasted at least one Samuel Adams product each day since he introduced his flagship Boston Lager 12 years ago. But he's no bloated alcoholic. He just likes to lead by example in the quest that's behind his corporate strategy: to persuade beer drinkers everywhere that they should pay a premium for high-quality American beer. Like marketers of everything from Jaguars to Piagets, he's learned that you can carve out a place in even the toughest business by convincing people that you produce the best--and then charging them top dollar for it.

Koch founded his brewery in 1984, after quitting his job at Boston Consulting Group. The early days were grim, as Boston-area distributors doubted that consumers would pay $6 per six-pack for an American beer. Eventually he began selling the product directly to bars and retailers himself. Koch also entered his beer in the Great American Beer Festival and won the consumer preference poll--the industry's equivalent of the Oscars. He then built his advertising campaign around the award, saturating newspapers and radio waves with the tag line "The Best Beer in America." The ads stressed the idea that Samuel Adams beer was brewed in small batches by Yankee craftsmen. "I'd had no idea whether we'd find 100 customers or a million," he says. "I hoped to sell 5,000 barrels in five years, but we got to that goal in four months."

Once the company had posted those kinds of numbers, the big distributors quickly took an interest, and Samuel Adams beer became one of the first American specialty brews in decades to become a nationally distributed product. As annual sales at his Boston Beer Co. grew at a 57% clip in the early 1990s, Anheuser-Busch felt threatened. Koch recalls the moment he knew that for sure: "In 1994 I got a call from our lone hallertau hops farmer in Germany, who said that he had received an inquiry from Anheuser-Busch about buying all 400 acres of his annual crop. Given the amount of beer Busch brews each year, it wouldn't have made any difference in its product at all, but it would have put us out of business." Luckily Koch had had the foresight to lock the farm into a long-term contract. "That was the end of the beginning for Boston Beer," says Koch. "I felt like Luke Skywalker at the end of Star Wars, when there's about to be another saga called The Empire Strikes Back."

Indeed. Underdogs can never rest. Thirteen years after launching his successful beer company against all odds--in 1996 the company made $8.3 million on $214 million in sales--Koch is confronting yet another string of attacks from Anheuser-Busch. The giant brewer has begun a campaign to persuade wholesalers, who are often dependent on Budweiser sales, to stop selling specialty brews. The company also challenged Boston Beer's trademark for its Winter Lager just before the statute of limitations would have expired.

An even more problematic assault came last summer, when Anheuser-Busch filed a complaint with the government arguing that Samuel Adams's labels were misleading. Boston Beer is a contract brewer, which means it hires bigger companies to help make its beer, but its labels note only that the beer is BREWED BY BOSTON BEER COMPANY, BOSTON, MA AND UNDER SPECIAL AGREEMENT PITTSBURGH, PA. (The second city is the location of the contract brewer.) Koch defends his policy of not mentioning the contract brewer by name, insisting that to do so would give consumers the impression that Samuel Adams beer made at a Stroh brewery is a Stroh's product. Francine Katz, an Anheuser-Busch vice president, says she doesn't get it: "How can you logically argue against a labeling standard that simply requires honesty?"

Most consumers probably don't care about the labeling flap, but the controversy has cost Koch's company nevertheless. After an NBC News show broadcast a segment last October criticizing Boston Beer's labeling, the company's stock price fell 20%, and it has gone down further since. None of this seems to bother Jim Koch, who has about 95% of his net worth wrapped up in the stock. "You don't create a whole new national market in the beer business by being frightened," he says. Yes, Boston Beer's growth has slowed recently as hundreds of new breweries have appeared. But Koch, with an open bottle of the company's new Hardcore Cider sitting in front of him, says he still likes his chances: "Anheuser-Busch's campaign just makes us the underdog again."

TOP SERVICE--WITH A PRICETAG

In the spring of 1983, 27-year-old Doug Burgum left the Fargo, North Dakota, headquarters of Great Plains Software and made his first trip to Comdex, a computer industry megashowcase. In an attempt to capitalize on the stares that a software entrepreneur from North Dakota was likely to draw, Burgum brought along a rancher to teach lasso skills at his booth. The ploy worked magnificently, drawing thousands of curious onlookers. All was well until Burgum checked the program to see which of the other five companies that produced accounting software for small businesses had shown up. "There were 63 companies listed," he says, still shaking his head in disbelief 14 years later.

So how do you beat 63 competitors when you're operating from America's flatlands? Burgum didn't want to kill his retailers' margins by driving prices down, and he didn't want to run in the never-ending race to have the sexiest bells and whistles in his programs. So instead he zeroed in on the biggest problem with accounting software at the time. "Nobody was answering the phone," Burgum says. Like other smart operators looking for a way to stand out from the crowd, he decided to focus on becoming the best, most responsive service provider in the field.

But there was a problem. If Great Plains gave every call the attention it deserved, it would go out of business paying overtime to its support reps. This quagmire gave birth to a simple yet elegant solution--one that shook up the software business quite a bit. Burgum simply began to charge for customer service. This idea was not exactly new; after all, the cost of support does get bundled into software's purchase price. But no developer had ever dared to force customers to pay even more for the right to call the company for help. "Accountants charge their customers for their time," argues Jodi Uecker-Rust, a group vice president at Great Plains. "Sure, theirs is a professional service, but so is ours. We're not telling people how to plug in their keyboard. We're helping them set up general ledgers and their chart of accounts."

Having convinced itself that customers wouldn't defect in droves, Great Plains introduced service plans that allowed each customer to pay a fixed amount for an unlimited number of support calls. Customers could also pay on a per-call basis, but nothing would be free.

Emboldened by the lack of angry phone calls in response to its new policy, Great Plains executives began asking more questions: Can we guarantee that the more customers pay, the quicker an expert on their problem will call them back? And what if customers could talk to the same reps every time they called, so that they could develop relationships with people who know their needs? Today customers who lay out the cash get calls back within half an hour. Companies babble a lot these days about turning customer service into a profit center, but at Great Plains, sales of both software and service contributed to the $3.1 million the company earned on sales of $49.7 million in the most recent four quarters. The company recently announced its intention to go public.

Since service is such a big part of Great Plains' bottom line, the company does its best to reward people who deliver it well. When a customer sends a letter commending a support rep, the rep gets a bonus. Customers sometimes do more than just write in too. One appreciative accountant sent a rep and his wife plane tickets to Chicago and took them to a Bears game.

With this sort of inspiration, Great Plains employees tend to honor the time guarantees. Their record is 249,020 straight calls returned without missing a deadline. To make sure customers can always find the support rep they talked to last, new employees take an alias if they share a first name with someone who already works there.

Of course, none of this works if the wrong sort of people are setting the tone. How does Great Plains attract top talent to the wilds of North Dakota? Of course, the company is stacked with North Dakota natives, many of whom graduated from the well-respected computer science program at North Dakota State. But Burgum, it seems, will stop at nothing to get the people he wants. Vice president Scott Lozuaway-McComsey took a rather odd road to his post. A New Jersey native and a graduate of Amherst College, he knew Burgum from their bachelor days in Chicago. When Lozuaway-McComsey quit his job to ride a motorcycle cross-country for a few months, he stopped in Fargo for lunch one day. "Doug asked if I wanted to see Great Plains," he recalls. "So I arrive in my leather, and he has job interviews set up for me." A year later he returned in a moving truck.

With the perennial shortage of software experts in warmer climates, why would people like Lozuaway-McComsey come to the Silicon Prairie? "A lot of our managers could be running bigger departments elsewhere," says Uecker-Rust. "But we're open to allowing people to create new opportunities for themselves. We'd rather have people take action than sit at the bar and bitch about those who did."

BOND WITH BIG BOYS

As long as there are airplanes, there will always be some crazy entrepreneur trying to get you from here to there for less than United and Delta. That doesn't mean that any of the upstarts will last very long, though. Since the industry was deregulated in 1978, more than 200 carriers have filed for permission to fly. Only a handful of them have reached their fifth birthday.

Barring any unforeseen disasters, Reno Air will join that exclusive club this summer. And its survival strategy is one that any small company fighting for space in a land of giants might emulate. Instead of a suicidal frontal assault, going head-to-head with the big airlines, Reno Air founder Joe Lorenzo began by essentially begging gargantuan American to let him be its junior partner.

Reno's strategy was a simple matter of opportunism, though it took the airline a while to fall into it. Like most airline entrepreneurs, Lorenzo first went hunting for a market where jet service had deteriorated, but where there was still latent demand for it. Reno was a gem: poor jet service, outrageous prices, and plenty of casinos and Lake Tahoe resorts to assist the airline's marketing department.

So the airline leased a few jets and offered meals so that it wouldn't seem like one of those cut-rate competitors. Inexplicably, one of the first markets Reno chose to serve was Minneapolis, home of a Northwest Airlines hub that the carrier vigorously defends. Reno threw 20% of its seats at the market anyway, and Northwest responded by announcing its intention to open a minihub in Reno (imagine that) and charge prices that seemed far below its breakeven point. Though the government intervened, Reno was still left reeling.

That might have been the end of things, but then came an opportunity to link up with American. The carrier had maintained a hub in San Jose for years, but high costs and the need to match Southwest Airlines' low fares there had made the operation a loser. American wanted out of the market, but it was bound by intractable leases on its airport gates. Moreover, the carrier had little desire to cede all its West Coast frequent fliers to United.

For a time American executives were in quiet negotiations with America West for the then-bankrupt carrier to take over its San Jose gates and routes. But American CEO Robert Crandall, pressured by his pilots' union, eventually put a stop to the fledgling alliance.

Lorenzo heard about the situation and caught the next flight to American's headquarters. "Lorenzo walked in here within 24 hours of when I first heard that the America West alliance was dead," says J.T. Fisher, who worked for American at the time but is now Reno's chief financial officer. "He said that Reno was a clone of American's operation, that it had first-class seating and links to the travel agents." Lorenzo persuaded American to let Reno take over the entire San Jose operation.

It was still a long shot. "By odds alone, Reno wasn't going to last," says Fisher, explaining American's logic. "But we figured that it would be better to write off the hub in a year or so when Reno died than to do it right then and there." To help the upstart along, American allowed it to siphon off American's cheap jet fuel and gave American frequent-flier miles to Reno passengers. For Reno the alliance was a terrific strategic move, for an airline cannot grow and thrive merely by funneling leisure traffic through Reno. The San Jose hub would allow it to serve West Coast business travelers too, since many Silicon Valley executives prefer the airport in San Jose to San Francisco International.

Eventually the airline settled on a proper mix of routes, and it was profitable in 1995. There was some financial turbulence last year after the ValuJet crash in May took the luster off all upstart airlines. While Reno's bookings remained stable, its stock plummeted from $14 to $10.50. Meanwhile, fuel prices rose by about 35% last year. Finally, Southwest, which competes with Reno on about 60% of Reno's routes, announced a $29 fare sale that lasted five months. Reno was forced to match the fares.

Reno still managed to eke out slightly higher profits of $2 million for 1996, on revenue growth of about 36%, but its cash position has dwindled from a relatively healthy $35 million at the beginning of 1996 to about $28 million at present. That gives the company enough money to stay in business for about four months without any revenues. With this in mind, Robert Reding, now the airline's CEO, has essentially called a halt to the carrier's growth for 1997 and plans to focus instead on improving profit margins. "The No. 1 reason new airlines die is because of overexpansion," he says, pointing to ValuJet's troubles last year. "By not investing $2 million in each new market, we can take that money to the bottom line or invest in our infrastructure."

As for Southwest, Reding can't see how the competition could get any more vicious. "There's not that much more they can throw at us. What are they going to do--pay people to get on their airplanes?" he asks.

CUSTOMERS RULE

Minneapolis is home to the nation's largest mall and some of the first big Barnes & Noble and Borders bookstores. So you'd have to be nuts to open a small, neighborhood book shop in that sort of retail environment, right? Well, maybe not--if you work hard at finding a market niche and learning all there is to know about your particular brand of customers. That's how husband-and-wife team Tom Braun and Collette Morgan, proprietors of a children's bookstore called Wild Rumpus, have managed to thrive in the land of giant retailers.

When the couple opened the store in 1992, Morgan had just finished a two-year stint at Odegard Books, an independent bookstore that had closed. She and Braun knew that they too would fail unless they understood their market better than anyone else. "Most children's bookstores are completely sterile," Morgan says. "There are walls painted in primary colors, but rarely does anyone stop and think about what actually excites children."

After two years of minding the children's books at Odegard's, Morgan knew what appealed to kids. Two of the couple's favorite books, The Salamander Room and Where the Wild Things Are, are both about children living among animals. Thus the name "Wild Rumpus," which calls to mind the dance that the protagonist Max does with the beasts in Where the Wild Things Are.

Depending on your size, you can enter Wild Rumpus through a standard-size front door or the purple four-foot children's aperture that's built into it. Immediately you encounter a kind of unruly menagerie. Two cats roam free, as does Flicka the rooster. There are songbirds, lizards, and a tarantula in cages. The scary-books section has a floor that's made partially of glass, so kids can see the family of rats that lives in a cage underneath.

Just for fun, try calling the store sometime to experience the cacophony of cackling roosters, shrieking children, and zydeco music. You could make a fortune selling Advil at this place. But kids aren't the only customers. One crucial part of running a children's bookstore is establishing strong links with educators, who can use the store to run school book fairs and bring classes in for field trips. Before Wild Rumpus even opened, Morgan and Braun invited teachers to visit, and they eventually returned with students in tow. "Very quickly we began to see weekend traffic," says Braun. "Kids who had been here with school groups were coming back with their parents to show them the store."

Early on, the staff also began scheduling regular Saturday events. "We wanted parents to bring their kids each week, knowing that we would have something creative planned," Morgan says. The staff has brought in a rock band that uses power tools for instruments and an archaeology professor who taught the assembled mass of little girls how to mummify their Barbies. One Mother's Day the staff even had llamas out back for a mama vs. llama spitting contest. While these events don't have much to do with books, their sheer uniqueness draws tons of traffic.

While Wild Rumpus is not yet wildly profitable, it posts some respectable numbers. Sales have increased by double digits each year, and it's been in the black since year two. Word of the store's success has spread, and the occasional suit shows up to scribble furtive notes for an unnamed corporate copycat. But for the moment, Wild Rumpus has no peer. Though books for children sold better than any other literary category last year, the children's departments at the nearest Barnes & Noble and Borders were still deserted on a recent sunny weekday afternoon. Meanwhile, Wild Rumpus was hosting school field trips--and making contact with a new bunch of potential customers.

Mall of America management has begged the staff of Wild Rumpus to open a store there, offering to build a space to its specifications. Braun and Morgan thought hard about the offer, but they finally realized that their staff's creative energy was best directed toward a single operation. No point in taking on a competitive battle too hard to win. Like other plucky entrepreneurs who continue to defy the odds and survive, this couple knows when to wade in with both fists and when to use a little footwork. Evander would be proud.

REPORTER ASSOCIATE Sheree R. Curry