Tag Archives: companies

Editor’s Letter: Meet the Inc. 500 Class of 2010

Posted on November 14, 2011 by

There was a song we Girl Scouts used to sing as we swayed in sisterly harmony around the campfire. It went like this: “Make new friends, but keep the old/ One is silver and the other gold.” I know. Corny. But as I read through the names and company descriptions on this year’s Inc. 500, that sentimental lyric kept running through my head. Here’s why: I recognized a good number of companies from Inc. 500s past. Eighty-four companies returned for the second time, another 17 for the third. Growing at all during these past few years of recession, frozen credit, uncertain markets, and depressed business and consumer spending is noteworthy. Growing fast verges on incredible. It was good to see companies such as Monoprice , Morgan Borszcz Consulting , Skullcandy , Triplefin , Walz Group , and all the others continuing to do so well. Hats off to everyone at those companies. There were other companies that are first-timers on the list but not to Inc. or Inc.com . Like Pandora. When we first wrote about that company in an October 2007 cover story, founder Tim Westergren was trying to break out of perpetual start-up mode for his Internet radio site, which at the time had eight million listeners. This year, Pandora ranks at No. 253 with a three-year growth rate of 1,221.5 percent, more than $50 million in revenue, and 60 million true believers. If you come to this year’s Inc. 500|5000 conference, September 30 through October 2 in Washington, D.C., you can hear this clever and creative entrepreneur speak on the subject of “How I Got to Profitability.” Consider this a plug. I also came across the familiar names ModCloth (No. 2) and Thrillist (No. 93); their CEOs landed last year on our popular list of ” 30 Under 30 .” It was good, too, to see StumbleUpon , at No. 126, though not all that surprising, given that we’ve called upon CEO Garrett Camp for tips on how to be more productive. The rest of the ranking — the other four-fifths — comprises newcomers (the silvers, if I continue with the Girl Scout thing). Some have surprising histories, like the gunmaker Freedom Group (No. 217), which, 194 years after its founding, has 2,900 employees, $848.7 million in revenue, and a three-year growth rate of 1,360.8 percent. Then there’s The Elf on the Shelf (No. 222), a company that sprang from a family’s Christmas tradition. The Inc. 500 is all about fast growth. From 2006 to 2009, our No. 1 company, Ambit Energy , grew 20,369.4 percent. No. 500, three-time honoree AtTask , grew 603.6 percent. But numbers tell only part of the story. Behind the achievement of fast growth are CEOs whose success proves that no industry is too humble or too sophisticated for the truly ambitious. These are men and women who ferret out opportunities, unearth profitable niches, and then find confirmation of their ideas and strategies in the marketplace. Of course, they take pride in the achievement of fast growth. But if you read their stories in the pages that follow, you’ll find that their companies are much, much more than engines of growth. They are expressions of what’s important to them, of how they want to live their lives, engage their minds, treat other people, feed their families, and influence the world. So in the end, it’s not really about the numbers at all. But you knew that. janeb@inc.com Washington D.C. – Garrett Camp – AtTask – Girl Scout – Company Continue reading →

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What Kind of Entrepreneur Are You? Part 3

Posted on October 6, 2011 by Nitasha Tiku

Most growth-oriented entrepreneurs are wired for starting, not running, a business. I call these folks “on-base hitters” because, unlike baseball’s “sluggers,” they focus on earning lots of little wins in the form of starting many small businesses instead of seeking out rare but fantastic successes. (Read more about “on-base hitters” and “sluggers” in Part 1 of this series.) Yesterday, in Part 2 , I described the Kolbe personality test, which allows you to measure yourself on four personality attributes that are predictive of your success and happiness in running a business. People with a high Quick Start score on the Kolbe test thrive in the chaos of a start-up. One of the reasons Quick Starts rarely grow large businesses is because all of that creativity makes them bad managers. If you’ve ever watched a 230-pound slugger try to lumber his way to first base, you know it’s not a pretty sight. Neither is watching a Quick Start entrepreneur try to manage a large team of employees. When the boss is a Quick Start, employees get frustrated trying to keep up with all of the new ideas. Employees have trouble determining which brainchild was just a passing thought and which needs their most urgent attention. People with high Fact Finder scores often see their Quick Start boss as an impetuous, superficial risk taker. That’s why most growth-oriented entrepreneurs are happiest—and most successful—in the start-up phase. In a start-up, new ideas are valued at a premium, and there are only a few employees to manage. To follow our baseball analogy, these types are happiest with the quick, regular success of getting on base a lot rather than hitting a rare home run. Here’s an informal quiz to identify whether you’re best suited to be an on-base hitter or a home run slugger. Answer each question with a simple “agree” or “disagree.” I get bored easily.I feel overwhelmed by complexity.I have higher employee turnover than is normal for my industry.I like proposing new ideas that some people think are “off the wall.”I started lots of little businesses before getting into the one I’m running today.I’m a big-picture person.I started a little business when I was in high school or university.I burn out when my business gets too complex. If you answered “agree” to more than four of the questions above, you’re probably a person who thrives on the variety of the start-up and would flounder running a larger business. Focus on just getting on base by launching the business and creating revenue and a positive cash flow; then either sell it or install a manager. Clearly, you won’t earn as much from the sale of one small business than you would if you hung on and built it up further, but by getting out quickly, you’ll retain the energy and creativity to devote to a new business. Collectively, a portfolio of successful start-up businesses in a career could easily surpass the financial success of one home run, and you’ll be infinitely happier along the way. John Warrillow is the author of Built to Sell: Turn Your Business into One You Can Sell. He has started and exited four companies. Most recently John transformed Warrillow & Co. from a boutique consultancy into a recurring revenue model subscription business, which was acquired by The Corporate Executive Board. In 2008 he was recognized by BtoB Magazine’s “Who’s Who” list as one of America’s most influential business-to-business marketers. Business – Small business – Quick Start – United States – High school Continue reading →

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10 Things to Do Before You Start Your Start-Up

Posted on September 27, 2011 by admin

Is your great idea good enough? Can it grow in this slow economy? Can it become profitable, and return on any investments it requires? Well, there’s no way to know until you try, right? Hardly. There are some ways to prepare yourself, test your idea, and improve it before you actually found a company around it. We’ve compiled the best examples from recent Inc. articles and Inc.com guides of tips for the very early steps of building a start-up. 1. Scope out your industry. Or, if you’re just starting to think about entrepreneurship in general, find the best industry to fit your style and talents. For example, this year’s burgeoning industries include interactive technology (from mobile app design to tech-savvy translation), wellness (healthy beverages), and little luxuries, such as baked goods. When you start honing in on a specialty area, seek out counselors and talk to industry veterans. You can go to SCORE, the SBA, the Women’s Economic Development Agency , or scores more. The Internet, your local library, the U.S. Census Bureau , business schools, industry associations, can be invaluable sources of information and contacts. For instance, you might approach business schools in your area to see if one of their marketing classes will take on your business as a test project. You could potentially get some valuable market research results at no cost. Read more . 2. Size-up the competition. Study your competition by visiting stores or locations where their products are offered. Say you want to open a new restaurant. For starters, create a list of restaurants in the area. Look at the menus, pricing, and additional features (e.g., valet parking or late night bar). Then check out the diners those restaurants appeal to. Are they young college students, neighborhood employees, or families? Then, become a customer of the competition. Go into stealth mode by visiting its website and putting yourself on its e-mail list. Read articles written on them. Sign up for e-mail alerts about search terms of your choice on Google News, which tracks hundreds of news sources. After you study it, deconstruct it using Fagan Finder , a bare-bones but very useful research site. Plug the address into the search box. You will be able to quickly learn, for example, the other sites that link to it, which can reveal alliances, networks, suppliers, and customers. Business data aggregators such as Dun & Bradstreet and InfoUSA provide detailed company information, including financials, although the services are not cheap. Your aim is to understand what your competition is doing so you can do it better. Read more . 3. Second-guess yourself. “The biggest mistake I see these days is thinking that a business idea will automatically turn into a viable business model,” says Terri Lonier , president and founder of Working Solo , a New Paltz , New York -based business strategy consultancy, and author of Working Solo: The Real Guide to Freedom and Financial Success with Your Own Business . Then again, what if the idea really is viable? “A lot of people start with a kitchen table idea,” says Marla Tabaka , a business coach who writes The Successful Soloist blog for Inc.com . “It’s a great idea you come up with your cousin at dinner. But then the business booms, and your growth gets out of control. You need a plan.” Another important consideration is your personal financial resources. Make sure you have a considerable amount of capital set aside, especially because in a sole proprietorship you assume personal liability for all activities of that business. If you borrow money and can’t repay it, your personal assets are at stake. Read more . 4. Think about funding. A lot. Can you bootstrap your company? Or are you going to need a small business loan? Might an entrepreneur in the family be able to invest, or should you look for venture capital or an angel investor? Money is a big topic for entrepreneurs, and you’ll want to know your options early on. In order to get investors to open up their checkbooks, you’ll need to convince them that your idea is worthy and also be willing to subject yourself to increased scrutiny and give up a percentage of your company. That’s why it’s a good idea to first ask yourself whether you really need a professional investor at all, says David Henkel-Wallace , a serial entrepreneur who has raised $60 million from VCs. “If you’re starting a web software or mobile software company, you might be able to bootstrap it, which has the advantage that you get to keep all the money you earn,” says Henkel-Wallace. “You could also look into borrowing from friends and family – or even take out a second mortgage – for the same reason.” If you decide your business can only get to the next level with the aid of a professional investor, then you need to figure out what a potential backer looks for in a budding company, says Martin Babinec , who raised six rounds of funding through the business process outsourcing firm he founded, TriNet, which now boasts annual revenues in excess of $200 million. Start doing your research now, and don’t talk to investors until you have a strategy that involves foreseeable future liquidity. Read more . 5. Refine your concept. Adrienne Simpson initially intended to run a traditional moving company out of her home in October 2002. The idea came to her after relocating her mother from Georgia to Michigan . “I thought I’d put everything in a box, put it on a truck and send her on her way. Oh, no! Mom started walking me through her home, pointing at things saying, ‘I’ll take that, let’s sell that, and I want to give that away,’” she recalls. By the second year of operation, Simpson shifted gears to make her Stone Mountain, Georgia -based company, Smooth Mooove, specialize in transporting seniors—and their beloved pets—and providing such value-add services as packaging, house cleaning, room reassembly, antique appraisals, estate sales, and charity donations. Her crew does everything: put clothes in the closets, hang drapes, make the bed, fill the refrigerator. But even still business was stalling. “I knew how to run an existing company, but I didn’t know how to run a start-up,” says Simpson, who worked 20 years for Blue Cross/Blue Shield and 10 years with Cigna Healthcare . Seeking money and marketing advice, Simpson went to the U.S. Small Business Administration (SBA) office in Atlanta and was connected to SCORE (Service Corps of Retired Executives) counselor Jeff Mesquita . “When you position your company you have to think outside of the box in terms of what makes you different from the competition,” says Mesquita. “Adrienne described that what she does is move seniors from A to Z, so, when they arrive to their new home it is like walking into a hotel room.” The only thing her clients have to bring is the clothes on their back (and maybe their pet under their arm). That’s when Mesquita suggested the business name change to Smooth Mooove Senior Relocation Services. That same night, Simpson went to a networking event. When people asked ‘what do you do?’ and her response was ‘I have a senior relocation service.’ Right away people said ‘Oh, you move seniors.” The business took off from there. Read more . 6. Seek advise from friends, mentors … or anyone, really. A mentor can be a boon to an entrepreneur in a broad range of scenarios, whether he or she provides pointers on business strategy, helps you bolster your networking efforts, or act as confidantes when your work-life balance gets out of whack. But the first thing you need to know when seeking out a mentor is what you’re looking for from the arrangement. What can your mentor do for you? Determining what type of resource you need is a crucial first step in the mentor hunt. Lois Zachary, the president of Leadership Development Services, a Phoenix, Arizona -based business coaching firm, and author of The Mentee’s Guide: Making Mentoring Work for You, recommends starting with a list. You may want someone who’s a good listener, someone well connected, someone with expertise in, say, marketing, someone accessible. Ideally you could find a mentor with all of these qualities, but the reality is you may have to make some compromises. After you enumerate the qualities you’re looking for in a mentor, divide that list into wants and needs. Who’s best as a mentor? Look within your family, friends, business community, academic community, and even at your competitors – well, not your direct competition, but you get the idea. Read more . 7. Pick a name. Naming your business can be a stressful process. You want to choose a name that will last and, if possible, will embody both your values and your company’s distinguishing characteristics. But screening long lists of names with a focus group composed of friends and family can return mixed results. Alternatively, a naming firm will ask questions to learn more about your culture and what’s unique about you – things you’ll want to communicate to consumers. One thing that Phillip Davis , the founder of Tungsten Branding, a Brevard, North Carolina -based naming firm, asks entrepreneurs is “do you want to fit in or stand out?” It seems straightforward. Who wouldn’t want to stand out? But Davis explains that some businesses are so concerned about gaining credibility in their field, often those in financial services or consulting, that they will sacrifice an edgy or attention-getting name. “However, in the majority of cases, clients want to stand out and that’s a better approach when looking at your long-term goals. Even the companies that say ‘I just want to get my foot in the door’ will usually begin wishing that they stood out more once they pass that first hurdle.” Read more . 8. Get a grasp on marketing strategies. You don’t need to be a marketing whiz, but if you’re trying to build an idea from the ground-up, you’ll likely need to build an accompanying marketing strategy from the ground up. In doing so, you need to be clear on who your customers are, because you don’t have any time to waste on marketing to those who aren’t. “That’s really the biggest challenge, determining who exactly your customers are,” Lonier says. “Many times [business owners] think they understand who they are, but you need to be willing to interview and test potential customers, particularly in the early days of a company, in order to be able to build those relationships.” One way to make marketing easier is through joint-venture marketing, Tabaka says. When she owned a coffeehouse in Naperville , Illinois, she realized that her company and a major drugstore in the same shopping center could work together and support each other’s marketing goals. Another important and relatively easy way to get your name out into the market is building your web presence through social media like Twitter and Facebook . Be sure you familiarize yourself with and utilize Search Engine Optimization (SEO) to make it easier for people to find your website. Read more . 9. Do a little test-run. “The best way to test your idea is if you’re employed full-time and can sell your product or service in the marketplace on weekends,” says Sapp. If the business is already your day job, then you have to move quickly to test, verify, and tweak your model,” he adds. Try surveys, polls, and focus groups to gain insight into attitudes about your business idea. Solicit feedback on the cheap by using online survey tools available through such services as Zoomerang.com , Surveymonkey.com , and Constantcontact.com . The goal is to get to know your customers intimately. What turns them on? What causes them to tune out? Are they impulse buyers or do they like to deliberate over their buying decisions? There are a lot of products that people like but don’t buy, says Sapp. The price might not be right, for example. “Use social media to hone in on certain groups that can become your focus group,” says Susan Friedmann , a nichepreneur coach , in Lake Placid , New York and author of Riches in Niches: How to Make it Big in a Small Market . “Check out chat rooms, communities on social networks like Ning or Facebook , industry groups within LinkedIn ,” she says. “What are people discussing? Letters to the editor or articles in trade publications are resources for finding out about challenges in that particular industry. What are people writing about? What do people want to know about?” Knowing the answers to these types of questions may help you refine your idea. Read more . 10. Start searching for future talent. This might sound premature, but don’t forget that your business is supposed to grow someday. Keep your eyes peeled all the time for people who might fit into your organization – even if you can’t afford to pay them yet. No matter how small the internet has made the world, experts still recommend in-person networking as the No. 1 way to recruit talent. “I’ve done a lot of placing people into positions, and I have never used a job board as a way to do that,” says Rich Sloan , co-founder of StartupNation. ‘Personal [interaction] is so much more powerful and important to me.” So, if you meet someone interesting or knowledgable at a networking event, or even if you get particularly impressive service somewhere, be it a museum gift shop or helpline, ask that person a bit about themselves, what kind of business they see themselves in in five years – and the best people around will stick in your mind for when you need them. Read more . Business – Small business – Google – Entrepreneur – Venture capital Continue reading →

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Study: Start-ups Create Lasting Job Growth

Posted on September 12, 2011 by Lauren Folino

Most of the jobs start-ups create remain as the fledgling companies age, creating a lasting effect on the economy, says a new study. The Ewing Marion Kauffman Foundation study – titled “After Inception: How Enduring is Job Creation by Start-ups?” – found that although only a fifth of start-ups make it to their 25th birthday, employment figures stayed at 68 percent of the initial number. It suggests the number of start-ups that flourish and create jobs balances the jobs lost by companies that close. The study is based on Business Dynamics Statistics, which is compiled by the U.S. Census Bureau and tracks the number of new businesses from 1977 to 2005. The organization defines start-ups as businesses that are less than one year old. Although start-ups’ employment after five years is 80 percent of what it was when the companies began, many of those jobs remain long term. The study found that in the year 2000, start-ups created almost 3.1 million jobs. Only half of those firms survived to 2005, but the surviving firms maintained 78 percent, or more than 2.4 million, of the jobs that existed in 2000. The study also analyzed entrepreneurship and employment during recessions. Companies starting up during recessions at first hired fewer employees than those started up at other times, but generally increased their hiring post-recession to catch up. But companies born during extended recessions – those lasting three years or more – created about 10 percent fewer jobs than companies that avoided a recession in their first five years. That’s about .2 percent of all jobs in the economy. (To hear the Kauffman Foundation’s take on why great companies tend to start during a recession, read this article .) “While a recession has a negative effect on a company’s employment in its first few years, a recession does not impose lasting consequences on startups,” said Robert Litan, the study co-author, an Inc. contributing editor, and the foundation’s vice president of research and policy, in a statement. Business – Ewing Marion Kauffman Foundation – Employment – United States – Small Business Continue reading →

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How to Open a Business in Brooklyn

Posted on August 13, 2011 by admin

For Alexis Miesen , Atlantic Avenue had all the makings of the quintessential Brooklyn thoroughfare that combines the charm of a small town with the pace of city life. With its colorful boutique storefronts, diverse dining options, smattering of coffee shops, and antique stores, she expected to see happy families strolling along the street sharing ice cream cones. There was one problem: There was no ice cream anywhere around. “It’s filled with all these fantastic bars and restaurants and shops and it just has this really great kind of energy. They have all these great amenities to the community but no great ice cream shop,” she said. “This is a gap in what other people are offering.” Less than three years later, Miesen and her partner Jennie Dundas had opened not only an ice cream shop on Atlantic Avenue, but also had rapidly expanded the franchise to two other Brooklyn locations, feeding summertime crowds that often form lines winding out the door. Blue Marble’s organic, grass-fed dairy-based ice cream has been praised on The Martha Stewart Show, CNN, and in a bevy of New York City publications. Brooklyn has become as much a brand these days as a location. Slap the word “Brooklyn” on a piece of clothing and it’s instantly edgy, and quite likely to sell. New York City’s most populous borough remains a popular place to start a business, and Miesen and Dundas are emblematic of the grassroots, DIY entrepreneurs across the borough who’ve found a niche, and a loyal fan base that helps spread their brand along the way. (Check out Inc.com’s slideshow on Brooklyn’s Best Entrepreneurs .) The surge of creative energy, young artists and recent graduates is putting Brooklyn on the map not just for its booming music scene but also as competition with San Francisco to see who will lead the next Internet revolution. Business owners say starting a venture in Brooklyn requires creativity, a careful study of neighborhoods, and a good deal of Web 2.0 savvy. We talked with several successful companies about why the county of Kings is a bubbling cauldron of entrepreneurship, and how to get in on the action. Opening a Business in Brooklyn: Why Brooklyn? While Brooklyn was once considered a sparse hinterland outside the bustling hub of Manhattan, now it’s seen as the roomier, cheaper, less chaotic alternative, with a more stable population, and a reputation for creativity that draws artists, developers, and investors from across the world. “It’s a community actually that appreciates a lot of handmade goods, ethnic foods,” said Catalina Castano, director of the Brooklyn Small Business Development Center. “It’s not only ethnically diverse but it’s also culturally diverse. People have really open minds.” For those looking to tap into the excitement of New York City without getting tapped dry on cash, Brooklyn can be the savior. The average rent for prime commercial corridors in Brooklyn such as Court Street, Fifth Avenue in Park Slope, and Bedford Avenue in Williamsburg is between $35 and $100 per square foot, according to a 2010 retail report produced by CPEX Real Estate. Compare that to $125 to $2,000 per square foot in most of Manhattan’s commercial areas. “It is a bit closer to the real world,” said Taylor Mork, owner of Crop To Cup, a family-farm centric coffee importer based near downtown Brooklyn. ”It’s not as fast-paced. I think people are willing to wait a little longer on their investment in you.” With 2.7 million residents, the demand for goods and services is multitudinous and diverse. The first step, experts say, is figuring out where you need to put your business to best serve your clientele. Dig Deeper: The View From Brooklyn Opening a Business in Brooklyn: Location, Location, Location Brooklyn’s neighborhoods all have unique flavors and demographics, so Castano and others said the initial question any new business should ask is: Who are my customers? If you’re a family retailer like the boutique Area Kids, the answer is Park Slope, and the busy pedestrian and commercial thoroughfares of 7th and 5th Avenues. “What I look for with kids stores is people pushing strollers,” said owner Loretta Gendville, who runs seven stores and spas in Brooklyn and two in Manhattan. “I want a high density with parents, moms. I like people that are at home, people that are with their kids during the day.” That means opening a space alongside kids hair salons, yoga studios and tea shops on those Park Slope streets. Trying for a bar? The influx of artists, a vibrant music scene and a surge in condo construction make Williamsburg a hot spot for bar hopping. If large-scale production is your game, the old manufacturing warehouse buildings on the north Brooklyn waterfront are considered prime real estate. When Rob Ferraroni was looking for a new location for his Ferra Designs metal fabrication shop 12 years ago, relocating to the Brooklyn Navy Yard seemed like a bold move. Now, people are clamoring to get into the property, and the ground-level, 10,000-sqare foot space in a former World War II building trades shop is coveted. A lot of his work is for clients in Manhattan, which is a quick hop across the bridge. “You need to be able to execute these ambitious projects, so you need room,” Ferraroni said. People also doubted Doug Steiner when he started building Steiner Studios on in the Navy Yard in 1999. But Steiner saw the potential for major growth, and the opportunity to fill a hole in the movie and television production market in New York City. Now Steiner Studios is the largest studio complex outside of Hollywood with aims of growing to a 50-acre campus, and New York City has helped roll out the welcome mat for the film industry in Brooklyn. “Everyone under 30 in the business now lives in Brooklyn. Manhattan’s gotten homogenized and nullified,” he said. “The light and the air and the view and the waterfront make this a really special place to come to.” In the tech community, the neighborhood of DUMBO (whose acronym stands for Down Under the Manhattan Bridge Overpass) is the hot trending ‘hood. For instance, drop.io, a private file-sharing service, moved to the area in 2008 to grow its business alongside a rising district of art galleries, performance spaces and a newly expanded Brooklyn Bridge Park. Another perk: an incredible view of the Manhattan skyline. “If you did it in Manhattan or Midtown or something, you’d basically have to get an office the size of a conference room,” said Steve Greenwood, drop.io’s head of applications. Instead, the company got a cheaper, spacious headquarters with exposed brick ceilings and enough space to use for both work and after-hours social and networking events. “The culture of DUMBO is very complimentary to starting up business,” he said. “This is a very creative, imaginative place.” Dig Deeper: How to Pick a Site for Your Business Opening a Business in Brooklyn: Finding and Understanding Your Customers If there’s one thing people say is almost unanimous across Brooklyn it’s that borough residents tend to be fiercely loyal and supportive of their local businesses. But how can you earn that loyalty? Business owners said Brooklyn is ripe with ways to discover and cultivate a customer base, even before you decide on a permanent location. Mork spent months pitching his Crop to Cup coffee all over Manhattan only to be met with blank stares. In 2008, he decided to set up a $100-a-day booth at the first outing of the Brooklyn Flea, now a wildly popular market-style showcase of local artisans and antique dealers held in the Fort Greene neighborhood. There, his company’s credo of farmer-centric coffee found an eager audience. Within a few years, his coffee was on the shelves at several nearby businesses, and he recently opened a Crop To Cup caf Continue reading →

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How Incubators Speed the Start-up Process

Posted on August 9, 2011 by

Most start-ups don’t need much money to get going. But that doesn’t mean they don’t need help. That’s where so-called seed accelerators come in — outfits like Y Combinator in Silicon Valley; the aforementioned TechStars in Boulder, Boston, and soon Seattle; and the Capital Factory in Austin. A mashup of angel investing, speed dating, and geek camp, most seed accelerators adhere to the same basic model: A group of seasoned entrepreneurs and investors selects a few founders with sound business ideas; hands over a little cash and a place to work for a couple of months; and provides lots of hands-on coaching, strategizing, and butt kicking in exchange for a modest equity share in the company. David Cohen, who launched TechStars in 2006 after founding three technology companies, says he was always frustrated with the relationships he had had with angel investors. “Most angel investors have a couple of coffee-shop meetings, write a check, and then cross their fingers,” he says. “At TechStars, investors and mentors actually work with the companies for three months. At the end of that time, you’ve become part of the team — and you know whether or not you want to invest more.” About 70 percent of TechStars’s alumni have gone on to raise angel or venture funding or reach profitability without outside investors. Of the 150 or so start-ups launched from Y Combinator since 2005, about a dozen have been acquired in multimillion-dollar deals, including Reddit (acquired by Cond Continue reading →

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Vying for the No. 1 Spot

Posted on May 24, 2011 by Inc. Staff

As applications for this year’s Inc. 500|5000 arrive, we thought it would be worthwhile to shine a spotlight on some of the companies that are vying to appear on our ranking of the fastest-growing private companies in the U.S. Robert Moog is credited with inventing the Moog synthesizer, a sophisticated, versatile instrument that has revolutionized how music has been played and recorded in the last 50 years. When it debuted at the Audio Engineering Society Convention in 1964, he took orders on the spot. “Bob used to say that he got into business by slipping backwards on a banana peel,” says Mike Adams, who joined the company in 2002 and now serves as the company’s CEO. In 2005, at the age of 71, Robert Moog died from cancer. Now, with 45 employees and distribution in nearly 50 countries worldwide, Moog Music is on the rise. Last year, the company made over $7 million in revenue, and Adams anticipates growth of up to 40 percent for this year. Denise Wilson is an anomaly in the flying community. She is one of the nearly 38,000 active female pilots in the United States, just six percent of all active pilots in the country. What makes her even more rare is that she’s also the founder and president of an aviation company, Desert Jet, which she launched in 2007. The company acts as brokers for corporations who own their own planes, thereby affording those corporations the opportunity to offset their expenses by chartering out their planes when they are not in use. This arrangement allows Desert Jet to have full operation of the aircraft without the debt and liabilities associated with actual ownership. Today, the company has annual revenues of $2.1 million, representing 1,300 percent growth over the past three years. Rick and Jeff Platt, a father and son entrepreneurial duo from Los Angeles, were really excited about the idea of creating a new professional sport that would use trampoline courts as its playing field. But after receiving $2.5 million in investments, building the court (called Sky Zone), and training athletes, the Platt’s could not get the new sport to catch on. One thing that did catch on was the neighborhood kids begging to play on the trampolines. So in June of 2004, Sky Zone, the sport, morphed into Sky Zone Indoor Trampoline Park. In 2010, the company reported $3 million in revenue, up from $500,000 in 2007, amounting to 500 percent growth over that period. Jeff projects total revenue for 2011 will reach nearly $12 million. If you’ve taken your pet to the vet recently, you know how expensive your little pup’s pills can be. But what if there was a generic alternative? That’s where Putney comes in, a pharmaceutical company specializing in the development of high quality drugs for pets. Part businesswoman, part animal lover, Putney’s CEO Jean Hoffman founded Putney in 2006. One afternoon, while taking her adopted cat Dude to the vet, Hoffman had a couple of realizations. First, pet medications were prohibitively high for many people. And second, this created a niche market for a business that sold generic pet medications. The company, which launched its first product in 2007, has enjoyed a 58 percent compound annual growth rate over the last year, with $9.5 million in revenue in 2010. Imagine if a pilot knew how to fly a plane before ever stepping into a cockpit, if a doctor knew how to perform a complicated surgery before ever cutting a patient, or if a soldier knew how to use his equipment before ever holding it in his hands. What might sound like science fiction is now a reality, thanks to Heartwood Studios. Heartwood’s custom-designed 3D virtual training applications provides customers like Raytheon, Honeywell, and the U.S. Army with a modern alternative to a PowerPoint presentation or training manuals. After earning $2 million in revenue in 2010, the company expects 100 percent growth for the next two years. Last year, Military Training Technology magazine named Heartwood as one of the year’s Top Simulation and Training Companies. Kim Overton’s “aha” moment led to a multi-million dollar business that makes small personal item (SPI) belts for working out and travel. Overton can be classified as a serial entrepreneur. In the mid-90s she co-founded a tech company with her friend. After that she helped The Lord Group advertising agency develop its interactive division. And most recently, she invented the SPIbelt in 2006. “I was out on a run and I had my key tucked into my bra top and I thought ‘man, this is uncomfortable. I just need a simple belt.’ After that run I went and bought the stuff to make the very first belt,” Overton says. Soon she quit her job so she could devote all of her attention to her new company. Since its launch, SPIbelt has added 10 employees and revenue has grown from $150,000 in 2007 to $7 million in 2010. After graduating from Columbia University, brothers Courtney and Carter Reum took jobs at Goldman Sachs. But in 2007, right before the financial crisis upended Wall Street, they’d had enough. The money was good—but they craved something more exciting. “I always wanted to be an entrepreneur,” says Courtney. He adds, “It just kind of struck me that the main categories of spirits out there—vodka, gin, rum—have been around for centuries. There’s been very little innovation in the true sense of the word.” So the brothers quit their jobs to launch VeeV, a spirit containing the antioxidant-rich a Continue reading →

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How One Site Gained 4 Million Subscribers

Posted on May 16, 2011 by

For working women on the go, MyDailyMoment is a one-stop shop for everything fitness, beauty, recipes, and more. As we process applications for the 2011 Inc. 500 | 5000, we thought it would be worthwhile to shine a spotlight on some of the companies that are vying to appear on our ranking of the fastest-growing private companies in the U.S. One that caught our eye was MyDailyMoment.com , a women’s entertainment and lifestyle website that delivers a daily dose of information to consumers via e-mail. “Our focus is providing useful, inspiring, insightful small pieces of content to women who are busy on a daily basis,” says Sujay Jhaveri, CEO and co-founder of the New York-based site. With 15 employees, Jhaveri’s site covers content such as fitness and parenting tips, style and beauty, horoscopes, as well as celebrity gossip. So far the most popular content verticals are ‘food and recipes’, with two million subscriptions, with ‘horoscope’ and ‘diet & fitness’ coming in second with roughly 700,000 to 800,000 subscribers. After being in business for only three years, MyDailyMoment has already managed to accumulate almost four million subscribers. How? First, Jhaveri and co-founder and president, Ray Costa have experience in the industry. They both worked at iVillage and Beliefnet, whose demographics happened to be predominately women. “We had a lot of experience in terms of women’s media and understood what type of content and what kind of interests there was among that demographic,” he notes. With previous knowledge of the market, Jhaveri says they understood exactly what type of women they’d be targeting and how best to reach them. “[These] women were very busy and they didn’t have time to spend half an hour perusing long forms of content everywhere,” he says. “Part of the differentiation for us is that we really look to e-mail to be a way to deliver this content to users. It is a small bite-size piece of content that provides something interesting and insightful.” For a company that was created with no investor capital it was still able to bring in $3.7 million in revenue last year, and continues to show promise even despite the challenges that came from the recession. “Ray and I come from a background where we’re very prudent and understand that the way to manage a business through difficult economic times is really focusing in the cost side and keeping costs low.” Even in the midst of a gradual recovery, Jhaveri learned the importance of being selective. “There are so many opportunities available to you and you can waste a lot of time and money chasing all of them down. Focus on one or two of them and do them well.” “For us it’s really about delivering on this concept of the daily moment on a much deeper level than we’re doing right now,” he says. “The website is still young. We think there’s still a massive opportunity ahead of us.” Continue reading →

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Launching a Company That Will Last

Posted on May 12, 2011 by

I recently attended a speech by Gary Hoover , founder of BOOKSTOP and Hoovers, Inc. The speech was titled, “Why Mexico Will Change Your Life” . According to Hoover, most Americans are not aware of the impact that the future of Mexico will have on the future of the United States. Among other ideas, Hoover laid out eight key steps to creating and building lasting enterprises. These were: 1) Be curious 2) Study history 3) Study geography 4) Be clear 5) Be consistent 6) Serve others 7) Be unique 8) Be passionate. Smart guy, Mr. Hoover. I highly recommend you listen to him speak if you ever have the opportunity. Gary’s speech got me to thinking about what steps entrepreneurs should take to create and build a lasting enterprise. I don’t think it’s a “one size fits all” blueprint that everyone can follow. Rather, to borrow another clich Continue reading →

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You Say You Want a Revolution?

Posted on May 4, 2011 by

How is starting a business like sparking an uprising? Plus, the perils of unlimited vacation time, and the rest of the day’s news for entrepreneurs. Each day, Inc.’s reporters scour the Web for the most important and interesting news to entrepreneurs. Here’s what we found today. The start-ups’ guide to revolutions. Perhaps inspiring an uprising isn’t so different from starting a business. Come up with an idea (or a product) that inspires change or improves lives, and you’re on your way—to either, really. However, sustaining said revolution or business can be trickier. Inspired by the sweep of revolutions in the Middle East, Mashable provided a guide yesterday on how to sustain your revolution after its initial swell. Yes, the piece is focused on social movements, but it’s not much of a stretch to reapply tips such as building on success, adapting your vision, or redefining leadership to your business. The endless summer. What would happen if you let your employees take unlimited vacation? Katie Morrell, over at OPEN Forum, makes a solid case for employers granting their workers carte blanch with their time. Ben Kirshner, founder of Elite SEM and purveyor of unlimited vacation time, tells OPEN “I understand that things come up in the middle of the day that are outside of your work duties. If you need to get a haircut or your suit dry-cleaned or watch your child’s soccer game, you should do it. Life is too short.” But Kirshner has one rule: abuse it and lose it. Check out this terrific infographic that shows mandatory paid time off around the world and find out why the United States didn’t even make the cut. Outlook: optimistic. A new survey from Citibank shows that small businesses are coming out of the economic slump with a big sense of optimism. Seventy-eight percent said they will expand this year, and more than half of surveyed business owners say business conditions this year are “steady as a rock.” What’s more, 76 percent of business owners say they’d do it all again—start their business, even knowing all the challenges they would face. Six fundraising tips. So you have an amazing idea, a solid business plan and a co-founder, or two. Check! Now you need the funds to actually get your business off the ground. This could be the tricky part. Tom Szaky, wrote a piece in The New York Times highlighting the challenges his company, TerraCycle, faced when looking for outside investors. “Institutional investors tend to be more demanding and less flexible,” he notes. “They have their own investors to satisfy, are impatient for results, and have low tolerance for any deviation from the original plan.” Through trial and error he pinpoints six lessons he’s learned through the process. One of he’s most important tips is to “build your terms assuming the worst will happen—in the time it takes you to establish your company, it just might.” How to master “the pivot.” No company is perfect when it launches; new challenges and feedback help push the company forward. But sometimes, progress requires a relatively dramatic and intentional shift in direction—a “pivot,” if you will. However, recognizing it’s time for a reassessment or new direction can be difficult, especially for young entrepreneurs. In a column for The Huffington Post, entrepreneur Cathy Belk shares why, how, and when a company needs to pivot and refocus its energies. “The ability to make well-informed pivots is necessary to discover where your technology offers the most value,” says Rick Arlow, chief science officer at LifeServe Innovations, a medical device start-up based in Ohio. Trying to make sense of the daily deal craze? While the number of daily deal sites has proliferated, this grid by Online MBA pits the four biggies—LivingSocial, Groupon, Facebook, Google—along such key metrics as membership base, retailer’s cut and mobile apps available. Managing over iPhone. A startup called Gigwalk launches today with the aim of creating a mobile community of workers willing to do basic tasks ranging in pay from $3 and $90. Here’s the deal: Companies post the job they want done, directions, and how much they will pay. Using the location data from iPhones, Gigwalk (and the job poster) manages the job and confirm that the “Gigwalkers” completed the task. Examples of jobs include verifying street names or reporting red light cameras. The service is available in Los Angeles, San Francisco, New York, and other major U.S. Cities, with plans to expand beyond. The company, which is based in Mountain View, California, reportedly received $1.7 million in seed funding. When’s best to start-up? If you get to pick the time of year for launching your company, why not go with the established market conditions to decide when to press “go.” YC Reject compiled a small set of data —just the dates a dozen successful tech companies launched—to look for a trend. Voila: one emerged. Four of the companies were founded in September. They include eBay, Google, Mint, and YouTube. Another tip: stay away from both winter and summer holidays for start-up dates. More from Inc. magazine: Get this delivered to your inbox. Follow us on Twitter. Follow us on Tumblr . Like us on Facebook. Continue reading →

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