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Contents

“It’s like printing money, right?”

09.13

—JIM MITCHELL (left), CEO of Fuhu, the top company on the 2013 Inc. 500. At right is Robb Fujioka, a co-founder of the company.

PG.

138

PHOTOGRAPH BY MICHAEL LEWIS

SEP TEMBER 2013 - INC. - 5


70 Ŧ LEAD

The Price No one said entrepreneurship was easy. But it’s time to be honest about the real psychological cost. By Jessica Bruder

+ 90 Off Hours A photo portfolio of Inc. 500 CEOs wearing their nonwork hats

109 Ŧ INNOVATE

You’re Not That Innovative (And That’s OK) In fact, it might even be an advantage. What the latest research says about innovation— including when you shouldn’t be pursuing it. By Adam Bluestein

 OUTLOOK: SUNNY Paul Graham says the best ideas often seem bad at first.

Presenting the fastest-growing private companies in America

20 Mission Critical The impact of the Inc. 500 27 The Class of 2013 The full list, in a special foldout —

Sector by Sector: The Rankings by Industry 150 156 160 160 162 166 166 170 174 174 178

Advertising & Marketing Business Products & Services Computer Hardware Construction Consumer Products & Services Education Energy Financial Services Food & Beverage Government Services Health

184 188 192 194 196 196 198 202 202 210 210

Human Resources IT Services Logistics & Transportation Manufacturing Media Real Estate Retail Security Software Telecommunications Travel & Hospitality

Up close with the coolest products of the Inc. 500

38 Ŧ

LAUNCH: HOW I DID IT

The Eternal Optimist Is Paul Graham worried about a start-up bubble? Nah. Graham has good reason to be optimistic: His tech accelerator, Y Combinator, keeps developing winners. By Issie Lapowsky

+ 48 For Better and for Worse

A photo portfolio celebrating Inc. 500 partnerships JASON MADARA

19

The 32nd Annual Inc. 500

+118 They Made It

COVER ILLUSTRATION BY BEN VOLDMAN

6 - INC. - SEP TEMBER 2013

CONTENTS


Looking for more GROWTH AND INCOME? Here’s why dividends may be the answer. U.S. companies have $1.8 trillion in cash — the highest level in history.2

40% of total stock returns come from dividends.1

Many are using this extra cash to raise dividends — in fact, dividends have been rising faster than earnings.3

Payout ratios are still near 50-year lows, suggesting plenty of room to rise.

FEQIX FIDELITY® EQUITY-INCOME FUND

Consider these funds for your portfolio.

FGRIX FIDELITY® GROWTH & INCOME PORTFOLIO

At Fidelity, we use our global reach and research expertise to bring you smart investing ideas. Get our full perspective and fund details now.

FSDIX FIDELITY® STRATEGIC DIVIDEND & INCOME® FUND

Fidelity.com/dividend | 800.FIDELITY

Before investing in any mutual fund, consider the investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully. Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money. Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks, all of which are magnified in emerging markets. 1 Source: Morningstar® EnCorr ®; FMRCo, as of 12/31/2012. 2 Source: FMRCo; Haver Analytics, as of 12/31/2012. 3 FMRCo and FactSet. Fidelity Brokerage Services LLC, Member NYSE, SIPC. © 2013 FMR LLC. All rights reserved. 655470.1.0


96

116

Departments

104 78

33 Ŧ

LAUNCH

— 34 The First Year Inc. 500 CEOs on Year One in business. It wasn’t always pretty. 36 Matching Stars to Their Dream Cars Conor Delaney, Celebrity Auto Group 46 Making Buildings Greener Brian Fricano, Sustainable Supply 58 Goodbye, Photo Shoots. Hello, Shooting Range Joshua Waldron, Silencerco 60 Eric Paley Don’t let the quest for the perfect product stop you from building your business. 62 From Runaway Bride to Workout Mogul Ally and Jeff Davidson, Camp Gladiator

8 - INC. - SEP TEMBER 2013

65 Ŧ LEAD

— 66 Portrait of a Leader How Inc. 500 CEOs judge themselves as the boss 68 From C Suite to Cancer Ward Greg Roper, Integrity Funding 78 Owner’s Manual How not to sell a business 80 Chasing Bad Guys Online Josh McAfee, McAfee Institute 82 Meg Cadoux Hirshberg Thank you for your stories. 88 Giving Vets Respect Kevin Knight, Knight Solutions 98 An Equalizer on Madison Avenue Julie Bauer, Grok 100 Norm Brodsky Success is sweeter if you’ve known failure.

103 Ŧ

INNOVATE

— 104 Idea Factories Inc. 500 CEOs on innovation, including their best (and worst) eureka moments 106 Protecting Our (Shallowest) Borders Jonathan Hoflich, ReconCraft 116 Adding Delivery to the Menu Phil Dumontet, Dashed 128 Helping Surgeons See What They Are Doing Ricardo Alexander Gomez, New Wave Surgical 132 Jason Fried (Re)Birth of a Salesman 134 Bringing Flexibility to the Lives of Working Mothers Allison O’Kelly, Mom Corps

137 Ŧ THE 500

— 138 Kid You Not How Fuhu, the No. 1 company on the 2013 Inc. 500, grew 42,148 percent in three years 143 Raising the Bar A by-thenumbers look at the people and companies of the Inc. 500 150 The Rankings The fastestgrowing private companies in America, listed within their industries 236 Alphabetical Index

CONTENTS

CLOCKWISE FROM TOP LEFT: BENJAMIN LOWY; MARK PETERSON; IAN NOLAN/ALAMY; MIKE McGREGOR

16 Editor’s Letter Here’s to the honorees and the paths they traveled —


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TOP VIDEOS on Inc.com

I N C .C O M / L E A D

4 Steps to Achieving Great Things How do you move from delivering “good” to delivering “holy cow!” every time? Inc.com columnist Les McKeown shares four tips.

Inc.com

I N C .C O M / I N C - L I V E

Alexa von Tobel Founder of LearnVest.com ON HER COMPANY’S FINANCIAL STRATEGY

“To this day, I spend every single dollar like it is our last.”

1

2 —

3 —

4

PRIORITIZE

EXECUTE RELENTLESSLY

DON’T OBSESS OVER YOUR INBOX

GET OUT OF THE OFFICE

Once you start implementing, don’t stop until you’ve finished. Adapt on the fly, improvise as best you can, and—above all—keep going.

Here’s the thing: If you’re in thrall to your inbox, you’re working on other people’s agendas, not your own.

Your office is where you do 80 percent of merely good work. Find a space to work on your major achievements.

If you want to achieve something great, you first need to decide what it’s going to be. As my mother used to say, “If you aim at nuthin’, you’ll hit it.”

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Go Beyond the Page You’ll find the icon at the left on selected pages throughout the issue. That’s your signal to grab your smartphone or tablet and go deeper with the stories on the page. Here’s how:

I N C .C O M / I N C - L I V E

Nick Woodman Founder of GoPro ON OVERCOMING THE FEAR OF FAILURE

“Have confidence in yourself. You figure it out as you go. If I can do it, you can do it. I was an art major.”

1. Download the free Layar app from the Apple or Android store or at layar.com. 2. Launch the app and scan any page carrying the icon. 3. Enjoy bonus videos and other content designed to enrich the story.

12 - INC. - SEPTEMBER 2013

CONTENTS

PHILIP AND KAREN SMITH/GETTY


All Systems Grow

Create Promotions with Power

Everyone needs to sell, but no one wants to be sold to. How do you close that gap? You need to master the art of customer-focused promotion. Power Promotion, a new guide in the “All Systems Grow” series from The UPS Store® and Inc. magazine, gives you the tools and resources you need to do just that.

POWER PROMOTION FEATURES: • An array of best practices • Real-world case studies from: ✓ Big-box store challenger Toys With Love ✓ Rivard Art skateboard designs • A “Promotions Toolkit” loaded with information about how a suite of solutions, from The UPS Store, can help you build promotions that grow your business

To learn more about how you can build a brand that truly connects with your customers and prospects, download your free copy of Power Promotion at inc.com/theupsstore.

Visit The UPS Store Online: smallbiz.theupsstore.com


Our business is all fun and games, but The UPS Store takes us seriously.

SMALL BUSINESS: YOU’RE NOT ALONE OUT THERE. Stacey and Gail, co-owners of Toys with Love, Inc., share a passion for making kids happy. So when they need to spread the love, be it shipping a gift nationally or printing event mailers for the whole town, they turn to their neighbors at The UPS Store®. Because while play is their business, The UPS Store experts don’t play around when it comes to providing the right packing, shipping and printing solutions for their unique needs. At The UPS Store, we love small businesses. We love logistics. Check out Stacey and Gail’s video and learn how The UPS Store can help your business at smallbiz.theupsstore.com

POSTERS • FLYERS • BROCHURES • BUSINESS CARDS • CERTIFIED PACKING EXPERTS Copyright © 2013 The UPS Store, Inc.


YOU KNOW WHAT’S RIGHT FOR YOUR SMALL BUSINESS

WE SPECIALIZE IN TAILORED COVERAGE FOR ENTREPRENEURS GET THE RIGHT INSURANCE RIGHT NOW ®

WELCOME

500 SUCCESS STORIES (reality check included) RAD HOWARD’S Trend Nation is exactly the kind of company the Inc. 500 was designed to honor. The online retailer grew 1,126 percent since 2009 and lifted head count from three to 23. But here’s what’s not in the numbers: Two years ago, a patent lawsuit shut down the product that accounted for more than half of Trend Nation’s revenue. Howard had just moved to Nevada, where he knew no one and where his wife, a teacher, was not licensed to work. So there was no Plan B source of income and, soon enough, almost no working capital. “My back was against the wall,” Howard says. Trend Nation recovered—it clocked in at 396 on this year’s Inc. 500—but such a thing sticks with you. An anecdote about a near-disaster may be an odd way to introduce the 2013 Inc. 500 issue, which we at Inc. created as an unapologetic celebration of entrepreneurial success. And trust me, there is plenty to celebrate. This year’s 500 is the most exclusive ever: Simply to make the list, you had to increase revenue tenfold in a three-year period. To match the No. 1 company, kids’ tablet maker Fuhu, you had to grow a mind-boggling 42,000 percent. (Just in case you wanted to gear up for next year’s list.) But we believe that what makes entrepreneurs truly admirable isn’t their occasional big win. It’s what they go through to get it. Howard’s harrowing story was one of many that writer Jess Bruder and editor Bobbie Gossage uncovered for their feature “The Price” (page 70). Think of it as a kind of reality check on the all-too-common urge to glamorize entrepreneurship. Norm Brodsky’s column, on page 100, serves the same purpose. And Meg Cadoux Hirshberg’s valedictory column*, on page 82, is a beautiful tribute to the price that founders and their families pay to build enduring companies. It’s not easy, even if the companies of the 500 make it look that way. These days, it’s fashionable to pretend that failure is just a box entrepreneurs check off on the way to inevitable success. Brad Howard knows that isn’t how failure really feels. All the other leaders of Inc. 500 companies know it, too. I’m sure they also recognize themselves in Howard’s response to his experience. Even at the worst point, he says, “The thought of going to work for someone else never crossed my mind.” *Sadly, it’s true. This is Meg’s last column for Inc. magazine. But she’ll be back on Inc.com this fall.

Eric Schurenberg erics@inc.com

HISCOXUSA.COM/ENTREPRENEURS

EDITOR’S LETTER

CHRISTOPHER STURMAN

AS AN ENTREPRENEUR


AS A CONSULTANT YOU KNOW WHAT’S RIGHT FOR YOUR SMALL BUSINESS

WE SPECIALIZE IN TAILORED COVERAGE FOR CONSULTANTS SO YOU GET EVERYTHING YOU NEED AND NOTHING YOU DON’T

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hiscoxusa.com/consultants Underwritten by Hiscox Insurance Company Inc., 233 North Michigan Avenue, Suite 1840, Chicago, IL 60601, as administered by Hiscox Inc., a Delaware insurance producer that is licensed in all states and DC. In California, Hiscox Inc. does business as Hiscox Insurance Agency. Coverage is subject to underwriting and is not available in all states.


The companies and how they got here. The people and their stories. Presenting, for the 32nd year, the face of American entrepreneurship at its best

ILLUSTRATION BY BEN VOLDMAN

SEP TEMBER 2013 - INC. - 19


20 - INC. - SEP TEMBER 2013


MISSION CRITICAL Inc. 500 companies have one thing in common: performance. Their excellence makes other companies better, and that’s what makes the economy work By LEIGH BUCHANAN

 Illustration by LEO JUNG

E KNOW

companies that operate data centers are critical to the economy. If we thought about it, we would realize companies providing air conditioners to keep those data centers running are critical, too. But how critical are companies that maintain and service the air-conditioning systems that cool the data centers? Toby Thomas found out in 2007. At the time, he was working for a business that was hired by

INTRODUCTION




How much impact do these companies have? ADD IT UP

14.1 1,739 44,912

BILLION TOTAL 2012 REVENUE

MEDIAN THREE-YEAR GROWTH RATE

JOBS CREATED (2009-12)

ŦŦŦŦ Perot Systems to ensure its data center stayed cool while a new one was under construction. Perot Systems had many big financial clients, and “the day before we went in, we got a call from a top executive saying, ‘I want you to know, if this fails, what will happen,’ ” recalls Thomas. “ ‘It will be on CNN. The stock market could be affected. The value of the dollar could be affected.’ “I realized, Wow, we’re not just guys in hardhats doing a job,” says Thomas. Two years later, he founded EnSite Solutions, now based in Irving, Texas. “Data centers are more tied to our economy than oil is,” says Thomas. A company that services data-center cooling systems is mission critical to the mission critical to the mission critical.

T

HE FORTUNE 500

traffics in consumer products, oil, pharmaceuticals, cars, retail, and the kinds of telecom services and software most people use every day.

INTRODUCTION

The Inc. 500 is, by and large, a more esoteric crowd. Fewer than 30 percent of Inc. 500 companies sell directly to consumers. The rest supply businesses and government agencies with such products as network-on-chip design (Arteris), cloud-services brokering (Cloud Sherpas), and electronic payment technology optimized for the clinical-trial industry (Greenphire). The niches they ply can be inscrutably specific. Acquia provides products, services, and technical support for the Drupal social publishing system. Understanding Acquia requires a pit stop at drupal.org to learn about a fascinating corner of the global open-source movement. Management author Hermann Simon calls companies like these hidden champions, because they deliver outstanding performance while operating “in the ‘hinterland’ of the value chain, supplying machinery, components, or processes that are no longer discernible in the final product or service.” As such, they are the sinews of our economic physiology. Inc. likes to boast that most U.S. jobs are created by young growth companies. (And the class of 2013 is inarguably young: Roughly half these companies were founded in the past five years.) But jobs are also created by the thousands of organizations that constitute the Inc. 500’s customers. The ability of those organizations to hire is predicated, in part, on financial performance that the Inc. 500 helps make possible. The National Center for the Middle Market describes companies such as those on the Inc. 500 as “model links” in corporate supply chains. In a period of uncertainty and frequent shocks, their ability to deliver improves corporate customers’ resiliency. These businesses make and keep American companies competitive: Within their niches, they are as innovative and service oriented as the most beloved household

SEP TEMBER 2013 - INC. - 23


For the complete 2013 Inc. 500, P L E A S E T U R N T H E PA G E AND OPEN THE FOLDOUT

O

names. But rather than strategize to build brands, they earn reputations simply by virtue of how well they do what they do. They grow reference by reference until every customer in their markets knows whom to call. And corporate customers aren’t the only beneficiaries. This year’s No. 2 company, Emerge Managed Solutions, is part of a crowded cloud-computing and networkinfrastructure market. Emerge sometimes comes to the aid of other companies— including competitors— whose customers require expertise in, for example, a range of Cisco networking and VoIP products. “Many times, other suppliers will bring us in early in the sales process, where we act as a consultant to help position the correct technology and then execute it,” says Jesse Kegley, an Emerge managing partner. In those instances, Emerge is buried so far back in the value chain that its employees are sometimes asked to don shirts with their competitors’ logos. They gently say no. Kegley says helping other companies win more business is a great source of service rev-

ŦŦŦŦ



enue and sometimes creates opportunities for direct sales. In addition, by assigning employees to competitors’ jobs, Emerge exposes them to technologies they might not otherwise encounter, which makes Emerge more competitive. “Everybody wins,” says Kegley. The largest distinction between consumer-

Companies like these deliver outstanding performance while operating in the “hinterland” of the value chain. They are the sinews of our economic physiology. facing Inc. 500 companies and their businessto-business counterparts is that the former thrive by making customers happy. The latter thrive by making customers look great. Last year, a friend forwarded Toby Thomas an article in a business publication lauding one of EnSite’s New York City clients for quickly restoring generator service after Hurricane Sandy swept through. “No mention of EnSite,” Thomas’s correspondent noted curtly. “I wish they’d mentioned us,” says Thomas. “But it was still awesome.”

HOW THE 2013 INC. 500 CO M PA N I E S W E R E S E L E C T E D This year’s list measures revenue growth from 2009 through 2012. To qualify, companies must have been founded and generating revenue by March 31, 2009. Additionally, they had to be U.S.-based, privately held, for profit, and independent—not subsidiaries or divisions of other companies—as of December 31, 2012. (Since then, a number of companies on the list have gone public or been acquired.) The minimum revenue required for 2009 is $100,000; the minimum for 2012 is $2 million. Revenue figures given in the company profiles are for calendar year 2012. Employee counts are as of December 31, 2012. Full-time and part-time employees are included in the employee counts; independent contractors are not. As always, Inc. reserves the right to reject applicants for subjective reasons. The companies of the Inc. 500 represent the top tier of the Inc. 5000, which can be found in its entirety on Inc.com.

INTRODUCTION

SEPTEMBER 2013 - INC. - 25


#

27 - INC. - SEP TEMBER 2013

24,830.6%

21,337.4%

17,937.8%

16,433.2%

15,064.9%

The HCI Group

Bridger

DataXu

MileStone Community Builders

Value Payment Systems

Emerge Digital Group

Goal Zero

ƀYagoozon

ƀOBXtek

ƀAdRoll

uBreakiFix

5

6

7

8

9

10

11

12

13

14

14,102.1%

16,689.2%

16,980.5%

17,064.1%

17,404.1%

23,308.2%

24,544.8%

ƀFederalConference.com

3

4

42,148%

32,523.6%

Emerge Managed Solutions

Fuhu

Three-Year Growth

Five hundred reasons to be optimistic about leadership, innovation, and the health of the American dream

2

1

All Around Property Preservation

STAR Collaborative

138

139

Videology

ƀI.T. Source

Viderity

The Millennium Group International

137

136

135

134

Buy Happier

Netcom3 Global

132

133

ƀAdvice Interactive Group

ƀMaestro Technologies

131

130

Target Freight Management

GreenCupboards

128

129

Renegade Furniture Group

FuzeBox

127

126 2,933.1%

2,686.8%

2,695.5%

2,727.4%

2,737.8%

2,741.1%

2,757.9%

2,771.7%

2,772.9%

2,807.9%

2,831.6%

2,896.1%

2,897.8%

2,926.4%

251

BabyHaven.com

Gravity Media

SearchPros Solutions

ƀPlum Organics

Transcend Media

Macrospect

Technomax

264 ƀShayCore Enterprises

263

262 iDrive Logistics

261

260 Patient Engagement Advisors

259 3 Key Elements

258 FlexWage Solutions

257

256 ƀCrunchy Logistics

255

254 Benzara

253

252

1,639.9%

1,651.9%

1,653.5%

1,661.3%

1,663.8%

1,666.2%

1,670%

1,673.1%

1,686.9%

1,690.6%

1,701.5%

1,716%

1,723.5%

1,726.6%

375

Strongbridge

Martini Media

Action Lead Solutions

Govind Development

Evo Exhibits

ƀSchool Tech Supply

EHD Technologies

Rigil

388 Seven Swords Media

387

386 WebEyeCare

385 HPI

384 ƀDynamic Recycling

383

382 Integrated Prescription Management

381

380 The Force Realty

379

378

377

376

1,155.8%

1,156.5%

1,157.3%

1,161.4%

1,164.9%

1,165.5%

1,167.2%

1,169.3%

1,173%

1,174%

1,176.6%

1,180.8%

1,181.9%

1,184.4%

ŦŦŦŦ

THE CLASS OF 2013


9,245.5%

8,516.2%

8,442.7%

8,100.9%

7,786.3%

7,062.6%

6,763.9%

6,553.7%

6,526.8%

5,867.2%

5,524.9%

5,337.4%

5,328.3%

ƀIntegrity Funding

Vertex Body Sciences

BlueKai

Level 11

ƀPatient Conversation Media

Wingspan Portfolio Advisors

ƀVets First Choice

Timberhorn

BeenVerified

Trada

Kony

OneSource Virtual

Sailthru

Innovolt

Provider Power

Zurple

US Logistics

McAfee Institute

Now Communications

YellowHammer

ƀConductor

Intellect Resources

Phunware

NSR Solutions

Pangea Properties

Field Nation

ƀThe Joint

Silver Spring Networks

ThinkLite

ƀ29 Prime

ƀCinium Financial Services

ƀSolar Alliance of America

ƀSaratoga Roofing & Construction

Madwire Media

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

5,254.3%

5,364.8%

5,443.3%

5,961.6%

6,031.2%

6,218.5%

6,392.4%

6,701.6%

6,740%

7,087.2%

7,112.5%

7,224.4%

7,247.7%

7,322.2%

7,353.3%

8,585.3%

8,768.8%

8,782.4%

9,043.9%

10,462.1%

10,010.4%

Intelligent Audit

11,068%

10,573%

Amped Wireless

12,333.2%

12,862.5%

17

LivingSocial

18

Sparc

15

16

Clinovations

ƀRefinery29

175 176

CSI Powerline

Act-On Software

174

173

Extreme Reach

TracePoint Consulting

171 172

GSATi

HUMAN Healthy Vending

BayRu

Alternative Technology Solutions

170

169

168

167

EDJ Precision

ƀBrightSource Energy

165 166

SimplyGlobo

Summerset Professional Grills

164

163

projekt202

Medical Staffing Options

161 162

PropertyRate

Mobomo

SCM Data

Extrabux.com

1st American Systems and Services

160

159

158

157

156

Chicagoland Foreign Investment Group

Regal Wings

154 155

W4

GiftCardRescue.com

152 153

Rigid Industries

Hudl

Monster Flooring Sale

Business Finance Store

151

150

149

148

Dhaliwal Laboratories

Finch

146 147

RMGS

ƀApex Resources

144 145

Cloud Sherpas

StartFinder

142 143

ƀAstrum Solar

Populus

141

140

2,295.9%

2,301.4%

2,312.8%

2,330%

2,348.6%

2,355.1%

2,366.8%

2,377.8%

2,390%

2,407%

2,410.2%

2,415%

2,422.9%

2,429.2%

2,435.9%

2,444%

2,454.9%

2,484%

2,490.6%

2,491.6%

2,492.3%

2511.5%

2,513.1%

2,515%

2,517.6%

2,528%

2,535%

2,555.7%

2,586%

2,587.9%

2,593%

2,599.4%

2,624.7%

2,633%

2,659.2%

2,665.2%

2,684.7%

265 SAPremacy Consulting ƀVerdi Consulting

ƀJG Tax Group

iQuasar

Technical Solutions

Virtual Tech Gurus

ƀFull Circle Marketing

ƀMovement Mortgage

Space Saving Solutions

Genesis Consulting Partners

ƀVeterans Enterprise Technology Solutions

ƀMMC Systems

Patina Solutions

SET

ODW Logistics & Transportation Services

Column Five

ƀScanDigital

300 ƀDiscoverOrg

299 Kentech Consulting

298 Blue Star Tec

297

296 Knight Solutions

295 InfoFree.com

294 ActivityRez

293

292 Plug Smart

291

290 ƀThe FlexPro Group

289 Regal Assets

288 ƀLandmark Retail

287

286 ƀBottle Rocket Apps

285 ƀVintage IT Services

284 FreightPros

283 Acordis International

282 RosettaBooks

281

280 Oncology Analytics

279

278

277

276

275

274

273

272

271

270

269 NUE Agency

268 ƀHawaii Energy Connection

267

266 MSR Promo

1,639.6%

1,455.7%

1,461%

1,461.1%

1,461.5%

1,472.2%

1,473.2%

1,481%

1,503.5%

1,507.3%

1,507.6%

1,513.2%

1,514.5%

1,518.7%

1,528.4%

1,528.9%

1,531.3%

1,540.7%

1,542.3%

1,548.7%

1,554.7%

1,560.7%

1,561.2%

1,568.3%

1,584.9%

1,585.4%

1,586.9%

1,591.7%

1,594.6%

1,601.3%

1,601.6%

1,602.7%

1,604.3%

1,609.2%

1,626.2%

1,630.2%

389 ƀThe Premier Group Staffing

BNL

Channel Partners

Marketsmith

Summit 7 Systems

Trend Nation

Cornerstone Advisors Group

ERP International

4moms

CoesterVMS

ƀOtterBox

In-Flight Crew Connections

Merch Makers

Santa Rosa Consulting

Techsol4U

LinTech Global

ƀCarGurus

Paramount Business Jets

ƀESAC

Value Card Alliance

426 Kenry Home Improvement

425 Preferred Sands

424 ƀStonegate Mortgage

423 SSI

422 Five Stones Research

421

420 Grok

419

418

417

416

415

414

413

412

411

410

409 Caneel Group

408 R.J. Allen & Associates

407 ƀOld Town IT

406 ƀPalmerHouse Properties

405 Lumosity

404 Luna Data Solutions

403 GO Auto Recycling

402 ƀForward Health

401

400 ƀModus eDiscovery

399

398 Adscend Media

397

396

395

394 Colo5

393

392

391

390 Odyssey Telecommunications

1,071.7%

1,073.8%

1,074.4%

1,075.9%

1,076%

1,076.8%

1,077.3%

1,080.2%

1,080.8%

1,083.3%

1,084.9%

1,086.6%

1,089.5%

1,090.5%

1091.1%

1,093.4%

1,093.6%

1,097.1%

1,098.7%

1,101.3%

1,103.5%

1,104.1%

1,104.3%

1,106.1%

1,106.7%

1,112.4%

1,120.4%

1,120.6%

1,123.5%

1,125.2%

1,125.7%

1,130.2%

1,134.9%

1,136%

1,137.5%

1,137.7%

1,140%

1,151.6%


Rocket Fuel

iSend

BidPal

Equinox Business Solutions

Dito

Bio Soil Enhancers

Janes Capital Partners

RestoreHealth

ƀMatt Martin Real Estate Management

Celerity Ventures

73

74

75

76

77

78

79

80

81

82

WellDog

LiveIntent

72

89

33Across

71

SalesStaff

C-4 Analytics

70

88

ReTargeter

69

ƀC-DM Network

Crescendo Bioscience

ƀVital Farms

Celebrity Auto Group

67

68

87

ethosIQ

66

86

GSC Packaging

65

Next Step Living

HasOffers

64

85

Wilson Legal Solutions

63

Evolving Wisdom

4,200.4%

ƀMHD Enterprises

62

ƀASE Direct

4,235.3%

ƀRed Frog Events

61

83

4,744.8%

Doc Popcorn

60

84

4,768.4%

ƀeGumball

59

3,758.1%

3,833%

3,855%

3,877.6%

3,890.1%

3,923.6%

3,924.2%

3,960%

3,981.9%

4,039%

4,053.9%

4,086.9%

4,322.8%

4,441.3%

4,451.2%

4,485.1%

4,499%

4,645.8%

4,738.5%

4,739.8%

4,812.7%

4,836.8%

4,839.1%

4,942.1%

4,956.7%

5,010.6%

5,014.5%

5,015.8%

5,134%

5,151.5%

Lead5 Media

DSFederal

56

5,162%

5,208.2%

Pinnacle Strategies

ƀAltitude Digital

55

57

LabTech Software

54

5,220.8%

58

Eventus

53

2,044.7%

214

213

212

211

210

Arocon Roofing and Construction

NTE Solutions

TaskUs

ƀLandmark Network

TheraPearl

209 ƀGarbageMan, A Green Company

208 Solomon Consulting Group

1,982%

1,997.4%

1,998.9%

2,004.5%

2,017.2%

2,018.3%

2,027.2%

2,042.2%

206 ReconCraft TEEMA Consulting Group

2,053.4%

207

2,062.4%

205 AudioMicro

2,084%

204 CWU

203 Silencerco

2,091.1%

2,091.8%

202 Cell Phone Repair

ƀiSirona

201

2,112.2%

2,117.3%

2,117.3%

2,127.5%

2,131%

2,142.2%

2,155.8%

2,095.1%

Glass Mountain Capital

Evolution Capital Partners

Titan Protection and Consulting

Virtual Enterprise Architects

ƀTarget Logistics

S2verify

ƀWall Street Network Solutions

2,177.6%

2,177.7%

2,192%

2,194.8%

2,206.9%

2,217.5%

2,224.6%

2,224.6%

2,231.8%

2,236.3%

2,248%

2,249.3%

2,261%

2,267.1%

2,285.8%

2,287.8%

200 SiiBER

199

198

197

196

195

194

193

Greenphire

Advocate Merchant Solutions

191 192

ƀOmatic Software

ƀNextWorth Solutions

EnSite Solutions

Ad-Juster

IT Strategic Performance Firm

WordStream

First Flight Solutions

ƀStreamline Defense

190

189

188

187

186

185

184

183

TNH Pharmacy II

Sky Zone Indoor Trampoline Park

181 182

ƀRecondo Technology

Ticketracker

Hawkeye Management

Mixbook

180

179

178

177 Ultraflex Power Technologies

OrigAudio

SunSoft

Legacy Analytics

ƀNuCourse Distribution

Panjiva

ƀWireless Communications

Blueline Security Services

Tolteq Group

ƀACT Appraisal

Ivy Exec

ƀRescue One Financial

OneScreen

ISBX

ƀGreen Earth

Sunsight Instruments

MiLEND

Seamgen

InviCRO

ƀPivot Employment Platforms

ƀAbbyson Living

Vetora

338

337

336

335

Two95 International

enVision Business Consulting

FuelFX

Ramps International

334 Branding Brand

333

332

331

330 Gibbon Slacklines

329

328 ƀuTest

327

326

325

324 Barbaricum

323

322

321

320 SimpleRay

319

318

317

316

315

314

313

312

311

310

309 SHINE Systems & Technologies

308 Farm2Fleet Trucking

307

306 Reboot Marketing

305 Memphis Invest

304 Armstrong Steel Building Systems

303 Caduceus Healthcare

302 Clickin Moms

301

1,288.8%

1,290.7%

1,290.7%

1,298.8%

1,302.1%

1,305.5%

1,311.1%

1,311.2%

1,311.7%

1,312.4%

1,317.8%

1,320.5%

1,322.8%

1,328.2%

1,340.2%

1,343.9%

1,344.8%

1,350.4%

1,354.4%

1,360.8%

1,363.5%

1,373%

1,377.1%

1,377.6%

1,383.4%

1,384.6%

1,387.5%

1,401.4%

1,405.9%

1,409.8%

1,415%

1,423.3%

1,427.9%

1,428.9%

1,438.2%

1,442.6%

1,449.1%

1,454%

Alego Health

Onsite Health Diagnostics

SPICA Computers

Mo’mix Solutions

ƀJanrain

Bows-N-Ties.com

464 Add3

463 Medical Direct Club

462 ƀArteris

461

460 Worldwide Power Products

459 Encompass Digital Media

458 db5

457

456 Classy Llama

455 ƀBrafton

454 Frontline Source Group

453 PlayMaker CRM

452 Carrot Creative

451

450 Rooster Park

449 StandBy Talent Staffing Services

448 BH Cosmetics

447 Network Capital

446 AdColony

445 ClearAbility

444 FBS

443 Refresh Dental Management

442 ƀRepay

441

440 Kavaliro

439 ƀInfosemantics

438 It Works! Global

437

436 Planet Solar

435 GreenJobInterview

434 Yorktown Systems Group

433 ƀBoomTown

432 ƀVDart

431

430 ƀCareers in Transition

429 ƀTista Science and Technology

428 ƀSpecial Operations Solutions

427 305 Degrees

1,000.1%

1,000.2%

1,001.8%

1,003.3%

1,003.8%

1,005.1%

1,006.7%

1,008.2%

1,008.4%

1,014.2%

1,015.3%

1,017.6%

1,023.7%

1,025%

1,025.4%

1,025.8%

1,027.4%

1,027.5%

1,028.2%

1,028.6%

1,029.7%

1,031.3%

1,040%

1,040.6%

1,042.6%

1,046.1%

1,047.2%

1,049.7%

1,055%

1,055.8%

1,057.1%

1,058%

1,058.8%

1,061.8%

1,065.7%

1,065.8%

1,068.9%

1,071.5%


SEP TEMBER 2013 - INC. - 30

1,770.4%

Camp Gladiator

235

236

245 Infolob Solutions

246 VincentBenjamin

3,462.8%

3,131.4%

3,115.5%

2,984.2%

2,974.9%

ƀAlex and Ani

ƀOnsite OHS

CoverMyMeds

Discovery Services

ƀVRx

ƀMarketplace Homes

Centerplan Construction

BlueSquare Resolutions

The Logistics Store

CashStar

ƀWebiMax

Touchsuite

Akvarr

ƀAnalytic Strategies

Apartment List

ƀAcquia

ƀAxcient

ƀDatto

Command Post Technologies

Sustainable Supply

Oceanhouse Media

ƀRapier Solutions

Econohomes

ƀGreen Box Foods

BMA

Dashed

Puppet Labs

Orgain

US Perishables

ƀAsentra

ƀQuantum Networks

96

97

98

99

100

101

102

103

104

105

106

107

108

109

110

111

112

113

114

115

116

117

118

119

120

121

122

123

124

125

Ţ REPE AT HONOREE

1,778%

226 Titan Electric Company

Team Trident

225

3,473.2%

ƀBuild Group

95

2,943.9%

2,963.3%

2,965%

2,971.3%

2,997.8%

3,020%

3,041.4%

3,051.4%

3,055.4%

3,061.3%

3,095.1%

3,101.1%

3,191.4%

3,306.1%

3,310%

3,337.9%

3,367.3%

3,413.8%

3,449.9%

3,458.5%

3,478.7%

3,508%

3,567.1%

3,567.9%

3,569.1%

3,591.5% Sovereign Lending Group

BWBacon Group

Dane Street

Snap Advances

Novisync Solutions

ƀVictor Securities

WebPT

Adora

Vesa Health & Technology

Whitacre Logistics

Xtreme Solutions

ƀTubeMogul

1,751.2%

1,757.8%

1,765%

1,768.8%

1,788.5%

1,789.5%

1,796%

1,802.5%

1,808.2%

1,810%

1,810.3%

1,812.8%

1,820%

1,823.2%

1,827.4%

1,837.3%

1,854.9%

1,856.2%

1,892.4%

1,892.6%

1,903.7%

1,909.8%

1,915.6%

1,917.3%

1,920.7%

1,921.8%

1,924.5%

1,928.3%

1,936.9%

1,944.5%

1,948.9%

Bed Bug Supply

Nisga’a Data Systems

ReverbNation

Configero

ƀInnotion Enterprises

Taurean

Wellness Corporate Solutions

KT Tape

Fitness on Request

ƀSugarSync

ƀFCi Federal

ƀCentury Payments

Acceleration Partners

Reserveage Organics

Dynamix Mechanical

374

373

372

371

370

Securus Payments

24Hr HomeCare

re:think

Fathom

Netsertive

369 ƀMarketo

368 All Green Electronics Recycling

367

366 Clearleap

365

364 Platinum Advisor Strategies

363

362

361

360 Magnet 360

359

358 Profit Sense Innovations

357

356

355

354 Elorac

353

352

351

350 Echo Health

349 HireVue

348 ATDynamics

347

346 Grammarly

345 Ustream

344 ƀWilliams Strength

343 ƀComplete Merchant Solutions

342 CollabraLink Technologies

341

340 ƀCartagz

339

1,184.4%

1,185.4%

1,186%

1,187.8%

1,193.4%

1,204.5%

1,208.7%

1,211.9%

1,213.1%

1,213.3%

1,217.9%

1,218.2%

1,218.5%

1,226.8%

1,230.9%

1,234.1%

1,236.5%

1,236.8%

1,238.6%

1,243.4%

1,245.1%

1,245.3%

1,248.2%

1,249.2%

1,250.3%

1,251.3%

1,254.9%

1,256.8%

1,260.1%

1,265.3%

1,267.5%

1,271.3%

1,279.2%

1,281.3%

1,282.4%

1,285.3%

Workday

Qualityflooring4less

ƀJESS3

Hicks & Clark

ƀStrategic Communications

500 Big Street Construction

499 RCS Capital

498 PrepNet

497 Five Data

496 ƀVeteran Corps of America

495 Vivo Clothing

494 ƀC2S Technologies

493 Owens Harkey Advertising

492 MASS Communications

491

490 Gate 3 Design

489 KaloBios

488 Talent Curve

487 Personalized Prevention

486 Chief Executive Group

485 Cornerstone RPO

484 Hawaii Life

483 ƀFree for All

482 Fruition Partners

481

480 Tower Cloud

479 Ecogistics

478 Basho Technologies

477

476 Blue Acorn

475 Load Delivered Logistics

474 RevLocal

473

472 Mom Corps

471

470 ƀContent Marketing Institute

469 ƀAvondale

468 GameSim

467 Bustin Boards

466 Universal Industries

465 ƀGlobalMed

918.6%

918.8%

923.2%

926.7%

928.3%

929.3%

930.3%

930.9%

933%

933%

933.5%

935.3%

936.3%

936.6%

937%

939%

944.1%

949.7%

957.6%

960.5%

963.7%

967.4%

972.6%

972.7%

975.2%

978.8%

982.2%

982.9%

983.8%

984%

989.2%

990.2%

991.6%

992.1%

998.8%

999.8%

Note: The growth rates used to determine company rankings were calculated to three decimal places. There are no ties on this year’s Inc. 500.

250 ƀModern Everyday

249 TrendyMinds

248 Cardinal Point Captains

247 ƀCardCash.com

244 Vets Etc.

243 PanelClaw

242 iQuanti

241

240 North Florida Field Services

239

238 VinoPRO

237

234 Rethink Autism

233

232

231

230 ƀLINQ Services

229 Superfly Kids

228 ƀNew Wave Surgical

227

Quick Left

224 OpenX

223

222

221

220 Stemp Systems Group

219

218

1,974.6% 1,952.4%

94

3,601%

FreeAlliance.com

Elevate Technology Solutions

217

93

ƀThe Brixton Group

216

3,734%

3,715.7%

Sol Systems

1,975.4%

Spoken Communications

Sunset Healthcare Solutions

215

3,751.7%

91

SKM Media Group

92

90


Q&A: Paul Graham of Y Combinator PG.38

Inspiring Inc. 500 partnerships PG.48

Start-up Success.

LAUNCH “We had no idea we’d have such an amazing opportunity to live out our marriage mission statement.”

—ALLY DAVIDSON, co-founder of Camp Gladiator PG.

ŦŦŦŦ PHOTOGRAPH BY JEFF WILSON

62

SEP TEMBER 2013 - INC. - 33


FROM THE INC. 500 CEO SURVEY

THE FIRST YEAR THE AVERAGE THREE-YEAR GROWTH rate

of this year’s Inc. 500 companies is a whopping 2,926 percent. But, in many cases, Year One in business wasn’t pretty. We asked the entrepreneurs on the list to describe the highs and lows of those early months. We also probed a bit deeper into how and why they got started and what advice they wished they had received back then.

ŦŦŦŦ Why did you start your own business? ENTREPRENEURSHIP SUITED MY SKILLS AND ABILITIES 29%

I WANTED TO BE MY OWN BOSS 20%

Other motivations: “I became a dad and wanted to find a better way to feed my kids.” NEIL GRIMMER, PLUM ORGANICS NO. 255 ON THE INC. 500

“It seemed like it would be a waste to live in Silicon Valley and not try building a business.” ALAN KNITOWSKI PHUNWARE, NO. 41

I ADMIRED OTHER ENTREPRENEURS AND WANTED TO EMULATE THEM 9%

I WANTED FINANCIAL SUCCESS 11%

OTHER 13%

I HAD AN IDEA I JUST HAD TO TRY 18%

“I had a burning desire to tackle a global problem: climate change.” GEOFF CHAPIN NEXT STEP LIVING, NO. 85

How much money did you use to start your business? LESS THAN $10,000 61%

$10,000– $49,999 20%

$50,000– $100,000 7%

MORE THAN $100,000 11%

What were your sources of start-up capital?

71% Savings

21%

Loans from friends and family

13%

Personal bank loans

12%

Home equity loans or lines of credit

9% Angel funding

6% 3%

SBAguaranteed loans

0%

Crowdfunding

34 - INC. - SEP TEMBER 2013

ICONS: MATTHEW HOLLISTER; DOLLAR: STEVE STOCK/ALAMY

Venture capital


The ups of Year One ...



WE SNAGGED THE RIGHTS TO DR. SEUSS

“A former colleague helped me land a meeting with Audrey Geisel of Doctor Seuss Enterprises. I arrived with a fully functioning mobile version of How the Grinch Stole Christmas. When Geisel asked why a kid would like our app, I just slid my iPhone across the table. It was the pitch of my life.” MICHEL KRIPALANI OCEANHOUSE MEDIA, NO. 115

... and the downs

STRUGGLED TO GET EMPLOYEE VISAS WE

“We called Dick’s Sporting Goods almost every day for a year until we got a voice on the other line. They took a chance and hired us to do a $6,000 marketing campaign. It cost us $18,000, so we lost a bunch of money, but it was the start of a great relationship.”

“Because we were a new firm with a limited financial track record, we had a hard time getting H-1B visa approvals for some employees. The U.S. consulates overseas didn’t think our applications were genuine! Several of our software development projects were delayed as a result.”



CHRIS MASON, BRANDING BRAND, NO. 334

SURESH KUMAR, GREEN EARTH NO. 321

JEFF STEVENSON, VINOPRO NO. 238



OUR PERSISTENCE FINALLY PAID OFF

All work, no play

When did you start paying yourself?

15

IMMEDIATELY 27%

FROM LEFT: EVERETT COLLECTION; GEORGE CASWELL/GETTY; SIMON BELCHER/ALAMY; FLORIAN GROEHN/GALLERY STOCK

of Inc. 500 CEOs worked more than 100 hours a week in the first year. The good news? Just 3% work that much now.

How did you come up with your company name? Brainstorming 69%

Domain search

WITHIN SIX MONTHS 15%

WITHIN A YEAR 17%

WITHIN TWO YEARS 20%

Hours of research Doodling

WITHIN THREE YEARS 12%

5% Hiring a naming firm 1%

What was your company’s biggest mistake or challenge in the first year? BAD FIT WITH OTHER KEY EMPLOYEE 16%

SHORTAGE OF CAPITAL 45%

BAD FIT WITH INVESTOR 2%

SPENT TOO MUCH 11%

SPENT TOO MUCH TIME TRYING TO RAISE MONEY 3%

BAD FIT WITH PARTNER 10%

What advice do you wish you had received when you started your business? “Your first few hires establish your company culture.” ARMAN SADEGHI, ALL GREEN ELECTRONICS RECYCLING, NO. 368

11% 11%

“Our biggest competitor asserted that they had invented selling wine over the phone and sued our company and eight of our employees. After two years, we finally settled out of court for $115,000, which I’m still paying off two years later. I think of it as the cost of doing business.”

DIDN’T TEST PRODUCT ENOUGH 13%

Light-bulb moment 28%

WE GOT SUED!

WITHIN FOUR YEARS 9%

“You never win business in your own office.” RANDY WIMMER, ANALYTIC STRATEGIES, NO. 108

“Separate. When you’re at work, work hard. When you’re not, focus on the moment.” ROBERT NOVICK, ENVISION BUSINESS CONSULTING, NO. 337

INC.500 LAUNCH


 Sweet Ride Conor Delaney, in a limited-production 2013 Mercedes-Benz SLS AMG GT that he purchased for a client in the NBA

36 - INC. - SEP TEMBER 2013


PEOPLE OF THE 500

NO.67 C o n o r D e l a n e y  C e l e b r i t y A u t o G r o u p  T h r e e - y e a r g r o w t h 4,744.8%  2 0 1 2 R E V E N U E $ 1 6 . 2 M I L L I O N

I MATCH STARS TO THEIR DREAM CARS (JUST DON’T ASK WHO THEY ARE) While competing on the professional tennis circuit, Conor Delaney noticed that many athletes were buying several luxury cars every year. In 2006, two years after retiring from tennis, Delaney founded Celebrity Auto Group in Sarasota, Florida, to source and customize cars for them. Now, the British-born entrepreneur is a go-to dealer of exotic vehicles for A-list athletes and entertainers. One secret to his success? He never names names. I GREW UP IN LONDON and moved

to the U.S. when I was 18 to play professional tennis. I retired five years later, in 2004, because I wasn’t getting where I wanted to be. Along the way, I made a lot of contacts in the sports world. Many of the athletes I knew, especially the NBA players, were buying as many as 12 cars a year from different dealerships. I decided to start a one-stop consulting firm that sources cars for them. I used to watch music videos on MTV and see musicians driving cool cars. I thought it would be a great way to up my brand’s coolness factor. A friend introduced me to a music video director who

helped me create deals with producers: I lend them cars for video shoots in exchange for a three- to five-second close-up of my company logo in the license-plate frame. Because my goal is to create long-term relationships with clients, I sell cars for less than conventional dealers, taking less of a profit. I also customize cars. A client might ask me to move the driver’s seat back because he’s so tall, for instance, or add an entertainment center. I meet with clients in

person whenever possible. I’ll hop on a plane and go over contracts with them 10 times until they understand. When they get traded to a new team, I transport their vehicles. They call me at 3 a.m. to ask, “How do I turn on this DVD player in my Bentley?” The bulk of my business comes from 125 people, mostly NBA players, who buy two to 12 cars a year for an average of $150,000 each. Then, they do it again the next year. Three years ago, I realized my clients needed a way to

unload last year’s cars. So I created a website where the public can buy the cars, many of which have barely been driven. I don’t reveal which celebrities owned which cars, even though I could jack up the prices if I did. Privacy is huge for athletes. I never name clients, tweet about them, or post Instagram pictures of their cars. When they text me every few months to give me a new phone number, they know it’s safe. That’s the No. 1 reason we have the clients we have. My clients appreciate the fact that I don’t treat them like celebrities. Everybody else is wishing them luck on the game or asking for memorabilia. I just say what I have to say and get off the phone.

“Clients call me at 3 a.m. to ask, ‘How do I turn on this DVD player in my Bentley?’ ”

A s t o l d t o R E S H M A M E M O N YA Q U B  P h o t o g r a p h b y B O B C RO S L I N

INC.500 LAUNCH


THE ETERNAL

HOW I DID IT

 COOL CUSTOMER Paul Graham isn’t buying the hype about a start-up bubble.

38 - INC. - SEP TEMBER 2013


OPTIMIST

There’s a reason Paul Graham’s tech accelerator, Y Combinator, mints so many big successes. The reason is, well, Paul Graham. A conversation with the start-up guru Interview by ISSIE L APOWSKY  Photograph by JASON MADARA

P

AUL GRAHAM’S

appetite for small talk is waning. “Are we starting yet? Is this the interview?” he stops midsentence to ask on a hot summer afternoon in June. It’s hard to blame Graham, an angel investor known for being brusque, for placing a premium on his time. If there’s one thing he values, it’s speed. As co-founder of Y Combinator, the Silicon Valley tech accelerator, Graham has made a career of turning half-cooked business ideas into fast-growing companies in a matter of months. Twice a year, thousands of aspiring entrepreneurs vie for a coveted spot in one of Y Combinator’s cohorts. This summer, 53 were chosen, an honor that earned them up to $20,000 in seed capital, access to Graham and his partners, and a chance to pitch their ideas to a

INC.500 LAUNCH


roomful of venture capitalists on Demo Day. Among the 564 companies Y Combinator has funded over the past eight years are many runaway hits, including the cloud storage service Dropbox, the home-sharing start-up Airbnb, and the social-news site Reddit. It’s also had more than a few failures, including Perfect Third, whose sleep-tracking device WakeMate literally went up in flames before the company tanked. Despite those missteps, Y Combinator companies have collectively raised more than $1.7 billion in funding, at a total valuation of $11.7 billion, according to Graham. The accelerator’s modest headquarters in

Mountain View, California, is furnished with relics from Graham’s past, including a desk he bought back in the 1990s after co-founding Viaweb—a company that allowed anyone to build an online store—with Robert Morris and Trevor Blackwell. In 1998, Yahoo bought Viaweb for $49.6 million. Seven years later, Graham, Morris, and Blackwell launched Y Combinator with Jessica Livingston, who is now Graham’s wife. As a few entrepreneurs from the current Y Combinator class waited eagerly outside a conference room to meet with Graham, he spoke about the current start-up landscape and what it takes to build companies for fast growth.

— Why do some start-ups succeed and others flop?

The way the failures die is they run out of money. So what could cause them to run out of money? They can either not make something people want or they can be bad at selling it. Sometimes, they’re just bad at selling. But most of the time, start-ups fail for the same reasons restaurants do: Their food is bad. If a place has really good food, it can be in an obscure location, charge a lot, and have really bad service, and it will still be popular. If it has bad food, boy, it better do something really special to get anybody in there. Which is why we say, “Make something people want.” That’s the fundamental problem. If you die, it’s probably because you didn’t make something people wanted. Given the recent setbacks suffered by Groupon and Zynga, how do you know you’re making something people want for a long time and not just for now?

Those are edge cases, in which you have some superaggressive sales force that burns out their prospects. Usually, you’re lucky if you grow so fast that you run a

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risk of alienating users. You’re talking about the danger of overeating, while most startups die of starvation. You recently brought on Groupon founder Andrew Mason as a part-time partner. How come?

He is great, that’s why. He is brilliant and hilariously funny. One thing I know about start-ups is that, internally, they’re all train wrecks. You read about some train wrecks in the press and other train wrecks stay out of the press. I would certainly never hold it against Andrew that his particular train wrecks ended up being reported. Incubators have caught flak for underselling the challenges of entrepreneurship. Are Y Combinator founders prepared for how hard it is to start a company?

I’ve written a lot about what a bitch the start-up world is. So, maybe the other incubators are underselling, but we’re not. That being said, everyone is surprised by how difficult it turns out to be, because it’s not the kind of difficulty people have experienced before. That’s one reason you want to have something like Y Combinator, because not a lot of money or time is at risk.

So we’re totally OK with funding people who seem promising and earnest, and then, if it turns out to be too hard for them, that’s all right. Nobody knows what they’re capable of until they try it. Maybe half a percent of people have the brains and sheer determination to do this kind of thing. Start-ups are hard but doable, in the way that running a five-minute mile is hard but doable. Are there any bad habits that many Y Combinator founders share?

They don’t realize how independent they can be. When you’re a child, your parents tell you what you’re supposed to do. Then, you’re in school, and you’re part of this institution that tells you what to do. Then, you go work for some company, and the company tells you what to do. So people come in like baby birds in the nest and open their mouths, as if they’re expecting us to drop food in. We have to tell them, “We’re not your bosses. You’re in charge now.” Some of them are freaked out by that. Some people are meant to be employees. Other people discover they have wings and

start flapping them. There’s nothing like being thrown off a cliff to make you discover that you have wings. There’s been a lot of debate over whether Silicon Valley founders are solving “real problems.” Where do you stand?

I think people underestimate how small big ideas were when they first got started. Microsoft’s first product was an implementation of the BASIC programming language for a machine called Altair. There were probably a few thousand users, total. If those guys had presented that idea on Demo Day, investors would have laughed at them. But it turns out, everything has some adjacent territory, if you’re energetic enough. It’s OK to start out with a small idea. People are bad at looking at seeds and guessing what size tree will grow out of them. The way you’ll get big ideas in, say, health care is by starting out with small ideas. If you try to do some big thing, you don’t just need it to be big; you need it to be good. And it’s really hard to do big and good simultaneously. So, what that means is you can either do something small and

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Mostly, we look at the people. If they seem determined, flexible, and energetic, and their ideas are not just flamingly terrible, then we’ll fund them. We thought Airbnb was a bad idea. We funded it because we really liked the founders. They seemed so determined and so imaginative. Focusing on them saved us from our own stupidity. The very best ideas usually seem like bad ideas at first. Google seemed like a bad idea. There were already several other search engines, some of which were operated by public companies. Who needed another? And Facebook? When I first heard about Facebook, it was for college students, who don’t have any money. And what do they do there? Waste time looking at one another’s profiles. That seemed like the stupidest company ever. I’m glad no one gave me an opportunity to turn it down. How has your method of assessing Y Combinator applicants changed since it launched?

We learned a bunch of tells as time went on. We videotape all of our interviews, and before each round of interviews, we look at the game tapes from the last round. By then, we know something about how these

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Y COMBINATOR, BY THE NUMBERS The tech accelerator’s vital stats.

564 Total companies funded

11.7 $1.7 $billion billion

Total funds raised

Total valuation of companies

8 2.5 37

$4 billion

Number of start-ups in the class of 2005

Valuation of Dropbox, class of summer 2007

$

billion

Valuation of Airbnb, class of winter 2009

Number of start-ups valued at or sold for at least $40 million

84

Number of start-ups in summer of 2012 class, YC’s largest

ON THE FAST TRACK In addition to running Y Combinator, Graham is a prolific writer. Here, a sampling of start-up advice from his blog. — “HOW TO GET STARTUP IDEAS”

“The very best startup ideas tend to have three things in common: they’re something the founders themselves want, that they themselves can build, and that few others realize are worth doing.” “HOW NOT TO DIE”

“Startups almost never get it right the first time. Much more commonly you launch something, and no one cares. Don’t assume when this happens that you’ve failed…iterate.” “THE HARDEST LESSONS FOR STARTUPS TO LEARN”

 MASTER CLASS Graham holds office hours with Y Combinator founders.

“What you should fear, as a startup, is not the established players, but other startups you don’t know exist yet. They’re way more dangerous than Google because, like you, they’re cornered animals.”

“THE 18 MISTAKES THAT KILL STARTUPS”

“Most successful startups end up doing something different than they originally intended. You have to be prepared to see the better idea when it arrives.” “STARTUP = GROWTH”

“If you get growth, everything else tends to fall into place. Which means you can use growth like a compass to make almost every decision you face.” “STARTUPS IN 13 SENTENCES”

“Go out of your way to make people happy. They’ll be overwhelmed; you’ll see. In the earliest stages of a startup, it pays to offer customer service on a level that wouldn’t scale.”

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GARRY TAN/COURTESY Y COMBINATOR

How do you know when a small idea has big potential?

ŦŦŦŦ

good and then gradually make it bigger, or do something big and bad and gradually make it better. And you know what? Empirically, starting big just does not work. That’s the way the government does things. They do something really big that’s really bad, and they think, Well, we’ll make it better, and then it never gets better.


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start-ups turned out, either good or bad. Sometimes, you look at that video and say, “We would have been fooled by these guys again.” But sometimes, we can see: “Aha! They’re doing X.”

“People talk about young people being lazy. None of the young people here are lazy. They’re all working their asses off.”

Like what?

One quality that’s a really bad indication is a CEO with a strong foreign accent. I'm not sure why. It could be that there are a bunch of subtle things entrepreneurs have to communicate and can’t if you have a strong accent. Or, it could be that anyone with half a brain would realize you’re going to be more successful if you speak idiomatic English, so they must just be clueless if they haven’t gotten rid of their strong accent. I just know it’s a strong pattern we’ve seen. Another bad indication is when we feel sorry for people applying for the program. We used to fund people because they seemed so well meaning. We figured they would be so happy if we accepted them, and that they would get their asses kicked by the world if we didn’t. We eventually realized that we’re not doing those people a favor. They get their asses kicked by the world anyway. What do you make of all the $1 billion valuations these days? Are these companies worth it, or is this a sign of a bubble?

Instagram is probably a good deal, because Mark Zuckerberg is no fool. If he bought Instagram for $1 billion, that means he needed to. I suspect what that meant was, Instagram was a real danger to Facebook. That’s what valuation is, right? If you’re worth $1 billion to Mark Zuckerberg, then you’re worth $1 billion.

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But Instagram is an anomaly, not a sort of thing you can reproduce. One reason that you’re hearing people talk about high valuations is that companies are taking much longer to go public. Yes, prices are high. But there is a difference between high prices and a bubble. Valuations are high, which means they will probably go down, and then they will go back up again and then down. But a bubble is a different thing. A bubble is when people knowingly pay ridiculously high valuations hoping to sell their assets to a greater fool later. And that’s not going on now. No one is thinking that they’re going to fund this company and it’s going to go public and stupid retail investors are going to buy these overpriced stocks at an even higher price. I know these people. That’s not their motivation. You seem to be one of the most optimistic guys in Silicon Valley right now. Why is that?

What inspires my optimism is I get to work with the best 2 percent of thousands of people. For all I know, the world can be going to hell in a handbasket. But of the 53 start-ups in the current batch at Y Combinator, almost all of them are really good. People talk about young people being lazy. None of the young people around here are lazy. They're all working their

asses off. Maybe that’s why I’m optimistic. Part of it is that I’m probably naturally optimistic, though. If you were a naturally pessimistic person, you would not be very good at this. Is there anything Y Combinator start-ups have taught you that you wish you had known when you were running Viaweb?

We were the only start-up I knew, so I didn’t know what our strengths and weaknesses were, relative to other startups. Now I can say exactly what kind of start-up we were. We were the kind of start-up started by nerds who were really good at programing and really, really bad at sales and business. Now I would know exactly what to tell my previous self, which is that I should be spending all my time selling. Our first inclination back then was that the solution to any problem was to program our way out of it. In retrospect, our software was way more sophisticated than it needed to be. Do you ever miss the excitement of building a start-up yourself?

My God! I would never do that again. It’s much easier to be an investor than it is to start a company. I mean, I sort of have started a company, because Y Combinator has become so big, but at least we’re not serving data to paying customers or dealing with issues that blow up in the middle of the night.

Even though it’s more of a company now than I meant to start, it’s not as bad as running a start-up. What do you see in Y Combinator’s future?

There is a secular trend going on, in which launching a startup is a more common thing to do. It used to be there were two things you could do after college: go to grad school or get a job. Soon, I think there will be three things: go to grad school, get a job, or start your own company. I suspect this will be one of these economic transformations on the scale of the industrial revolution. When I was a kid, your prestige was the prestige of the company you worked for. Part of the problem with starting your own company was that you wouldn’t have any prestige. Now that people are starting more companies, I could easily imagine a world in which the number of successful start-ups is 10 times or, conceivably, 100 times what it is now. There are tons of Brian Cheskys (CEO of Airbnb) and Drew Houstons (CEO of Dropbox) going off to work for Microsoft or Google right now. They could start their own companies if they wanted to. We might have to figure out how to grow, too. Maybe there’s some crazy future in which Y Combinator is 10 times as big. This is a world where shit like that is always happening.

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 Greener Pastures Brian Fricano sells eco-friendly building supplies and related products on three websites.

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PEOPLE OF THE 500

NO.114 B r i a n F r i c a n o  S u s t a i n a b l e S u p p l y  T h r e e - y e a r g r o w t h 3,061.3%  2 0 1 2 R E V E N U E $ 3 . 2 M I L L I O N

MAKING COMMERCIAL BUILDINGS GREENER (AND FINALLY COMING CLEAN TO MY BOSS)

Brian Fricano always had an entrepreneurial bent, whether he was mowing lawns as a kid, selling Phish T-shirts during college, or starting a musicmanagement business after graduation. When he got married, he promised his wife he would settle down and get a “real job.” But it wasn’t long before he heard the siren song of entrepreneurship. FIVE YEARS into my job as a corporate sales manager with a manufacturer of commercial restroom products, I noticed a lack of online companies selling green products for commercial buildings. I realized I should create one, since I knew the market. In December 2008, I pitched the plan for Sustainable Supply to my recently retired parents and my reluctant wife, Teather. We had a 3-year-old son, Austin, and were expecting our second child in seven months. Teather agreed we could invest $2,100, even though that would pay for a lot of diapers. The baby’s delivery was scheduled for June 17, 2009.

Around midnight, six hours before we had to go to the hospital, I launched the company website, activated a company phone number, and launched a Google AdWords campaign, all without my wife knowing. If we didn’t launch prior to the baby’s birth, there was no guarantee it would happen. The next day, in the delivery room, I got a message from a prospective customer who needed help with an order. After Teather got her epidural at 5 p.m., I finally confessed. Our son, Eli, was

born at 8 p.m. and, two hours later, Teather sent me home to learn how to process a credit card order. I envisioned getting just enough orders for a multitasking stay-at-home mom to handle. But call volume grew daily. During the next 18 months, Teather and my parents ran the business during the day, and I worked on it at night. We kept the business a secret because I didn’t want to get fired from my “real job.” We also worried our friends would think we were nuts. We

had to do some sneaking around. When a new sale came in, my mom, Peggy, would email me at work, using our secret code. I waited anxiously all day for emails titled “Bingo” from “AdMom.” Once, we were all at a trade show—my family for our company and me for my employer. We texted all day to make sure we didn’t bump into each other. In 2010, we had $850,000 in sales. In 2011, I joined the business full time. (My former employer is one of our top suppliers.) We just moved the company from Milwaukee to Broomfield, Colorado. It’s like our third kid—the one who sleeps in our bed. But it’s all been worth it. It truly has been a family affair.

“When a new sale came in, my mom would email me at work, using our secret code.”

A s t o l d t o R E S H M A M E M O N YA Q U B  P h o t o g r a p h b y B E N J A M I N R A S M U S S E N

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FOR BETTER AND FOR WORSE

“If I had done it by myself, I know that Blueline wouldn’t be where it is today.” — S H AW N S C A R L ATA

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Entrepreneurs are often celebrated as rugged individualists. But nearly a third of the companies on the Inc. 500 were founded by teams. We tracked down some of the more unlikely groupings to see how they keep things harmonious P h o t o g r a p h s b y J A K E C H E S S U M  Te x t b y J E N N I F E R A L S E V E R



(FROM LEFT) S H AW N S C A R L ATA , F E L I P E O R D O N O ,

T I M C O R D E R O , A N D T R OY H A R D I N G Blueline Securit y Ser vices A security ser vices contractor in Landover, Mar yland NO. 314 — HOW THEY MET:

The foursome worked together as police officers in Prince George’s County, Maryland, for about 20 years. Scarlata, Cordero, and Ordono are still on the force. WHY THE PARTNERSHIP WORKS:

It helps to have eight hands on deck, the partners say. HOW THEY RESOLVE CONFLICT:

“Fighting it out,” Scarlata jokes. “Being police officers, we have strong personalities. When there is conflict, we just sit down and hash it out. Or yell it out. Whatever it takes.”

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 R O S E C O O K (LEFT) A N D LY N N FA U G H E Y The FlexPro Group A pharmaceutical consultanc y in Plymouth Meeting, Pennsylvania NO. 290 —

HOW THEY MET:

They’re identical twins born 47 years ago. They both studied engineering at Rutgers University and then pursued careers in the pharmaceutical industry. They started FlexPro in 2008. WHY THE PARTNERSHIP WORKS:

“Nothing between us is much of a surprise,” says Cook. “We can finish each other’s sentences. It’s an unfair advantage.” HOW THEY RESOLVE CONFLICT:

Cook owns 51 percent of the business. When they disagree, she makes the final call. “We collaborate on everything, but it’s also understood that I outrank her,” she says.

“Being twins breaks the ice and helps us stand out. Clients remember us.” —ROSE COOK

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Hello Tomorrow

Find your work-life groove From laid back to more upbeat, you'll find a range of inspirations in our Business Class. Savor gourmet cuisine, laugh through the latest comedies or tap your feet to your favorite tracks. Get in tune with the business of living.

emirates.com/usa “Airline of the Year� 2013 Skytrax World Airline Awards


(FROM LEFT) J U S T I N W E T H E R I L L ,

E D WA R D T R U J I L L O , A N D D AV I D R E I F F uBreakiFix A chain of electronics-repair stores based in Orlando NO. 14 —



HOW THEY MET:

Wetherill and Reiff have been close friends since their teen years and founded several companies together before launching uBreakiFix in 2009. Trujillo, a childhood friend of both, joined later. WHY THE PARTNERSHIP WORKS:

“All of us approach problems in different ways,” says Reiff. “That can cause some friction. But friction is beneficial.” HOW THEY RESOLVE CONFLICT:

When disagreements arise, the partners sit down and talk it out. If that does not work, Wetherill—who came up with the idea for the business and is CEO—makes the call.

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“We’re in this together. We share everything— except my toothbrush.” —RENEE ISRAEL

RENEE ISRAEL AND ROB ISRAEL Doc Popcorn A Boulder, Colorado–based franchiser of natural-popcorn stores NO. 60 —

 HOW THEY MET:

They met 10 years ago at a party. After a couple of months of dating, Renee began helping Rob on his idea for a natural-popcorn business. Two years later, they were married. WHY THE PARTNERSHIP WORKS:

No business talk is permitted from sundown Friday to sundown Saturday. And absolutely no talk of work in their bedroom. “We literally leave the room,” says Rob. HOW THEY RESOLVE CONFLICT:

Rob is CEO, but he’s willing to defer to Renee, the company’s marketing chief. When they have a problem they can’t fix alone, they get help from advisers and board members.

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STAY AHEAD OF THE BANDWIDTH CURVE. GET ETHERNET SPEEDS UP TO 10GBPS. +YP]PUNI\ZPULZZMVY^HYKKLTHUKZKH[H*VTJHZ[)\ZPULZZ,[OLYUL[ ZJHSLZMYVT4IWZ[V.IWZ[VRLLW\W^P[OIPNKH[HKLTHUKZ7S\Z *VTJHZ[)\ZPULZZPZ[OL^VYSK»ZÄYZ[JLY[PÄLK4,-,[OLYUL[WYV]PKLY 3LHYUTVYL[VKH`

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9LZ[YPJ[PVUZHWWS`5V[H]HPSHISLPUHSSHYLHZ(J[\HSZWLLKZ]HY`HUKHYLUV[N\HYHU[LLK*HSSMVYKL[HPSZ*VTJHZ[(SSYPNO[ZYLZLY]LK




(FROM LEFT) J O S H N E B L E T T, SARAH WOLLNICK, AND TOM SIMPSON GreenCupboards An online retailer of eco-friendly products in Spokane, Washington NO. 128 —

HOW THEY MET:

Neblett and Wollnick, a married couple, took Simpson’s entrepreneurship course at Gonzaga University. The professor had purchased the domain name GreenCupboards.com to use in the classroom. “I went up to him after class and said Sarah and I would like to run with that domain,” says Neblett. WHY THE PARTNERSHIP WORKS:

Simpson is chairman and stays out of day-to-day operations. Neblett handles culture and strategy, while Wollnick manages supplier relationships. HOW THEY RESOLVE CONFLICT:

“I am the boss at work, and she’s the boss at home,” says Neblett. Simpson plays the role of mentor, offering his advice gleaned from years of working with start-ups.

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In Vegas, It’s About Who You Meet “Our company was growing [the company employs 15 and had revenues of $7.5 million in 2012], and I decided that 2013 was the year to put a stake in the ground and show that we had arrived,� says Holland. “People notice who’s exhibiting and who’s not exhibiting.�

Joel Holland, founder/CEO, VideoBlocks.com

VideoBlocks.com is a subscriptionbased website, founded in 2010, in Reston, Virginia, that distributes royalty-free video and audio clips online to independent producers. Founder/CEO Joel Holland knew, KRZHYHUWKDWWKHRQO\ZD\KLVĂ HGJling company could sign marquee FOLHQWVZRXOGEHWRPHHWWKHPRIĂ LQH and in person. He also knew that could only happen in Las Vegas, at the annual meeting of the National Association of Broadcasters.

Las Vegas was so successful for us that we signed up on the spot. Holland soon learned that who else comes to Las Vegas matters a lot. “Our booth was next to a major global electronics supplier,� he says. “One of their reps came over and began discussing doing business together. That never would have happened at meetings held in other cities because that company doesn’t attend them.

They only go to Las Vegas. Similarly, another large exhibitor—a wellknown accounting software provider—came to our booth because they have used our products in the past. They asked if we would do a video interview for their website. That will get our company lots of free publicity. Had we not gone to Las Vegas, that never would have happened, either.� But there’s also something special about Las Vegas as a business destination, Holland adds. “People look forward to going to Las Vegas, and I believe that encourages them to open up their checkbook,� he says. “We paid for our entire exhibit cost through sales at the booth.� Based on this year’s success, Holland is eager to go back. “We already have our booth reserved for next year,� he says. “Las Vegas was so successful for us that we signed up on the spot.�

Vegas means business. Research shows, Las Vegas ranked No. 1 in “good value for the money.� With world-class meeting facilities, an extensive range of hotel rooms, and a city unrivaled in event and convention experience, here, business as usual is better than usual. Find out all the reasons why so many FORTUNE 500 Ž companies choose Las Vegas.

FORTUNE 500ÂŽ is a registered trademark of Time Inc. Used with permission.


PEOPLE OF THE 500

NO.203 J o s h u a Wa l d r o n  S i l e n c e r c o  T h r e e - y e a r g r o w t h 2,084%  2 0 1 2 R E V E N U E $ 6 . 3 M I L L I O N

GOODBYE, PHOTO SHOOTS. HELLO, SHOOTING RANGE Magazine photographer Joshua Waldron realized he would have to move from Utah to a big city to get serious about his career. Instead, he stayed put. Much to the surprise of his former clients, he went on to found Silencerco, which is now the country’s largest manufacturer of firearms silencers. I’D WORKED FOR many major publications—Newsweek, Fortune Small Business, Forbes—but I’d gotten pigeonholed as “the Utah photographer.” I didn’t want to move to New York, Los Angeles, or another big city, where you start getting bigger stories and more frequent jobs. I like Utah. I invested in a recording studio with a high school friend, Jonathon Shults. We worked very well together, but the music business wasn’t for me. Then I bought a company that fabricated and installed solid marble and granite countertops, but I hated it. Jonathon and I shot guns every chance we got. One thing I like about Utah is that I can go a few minutes from the city and there’s open range.

We’d set up a watermelon at 300 yards or shoot cans or prairie dogs. We started using silencers because we didn’t like to wear hearing protection. After a day of shooting, your head pounds from the earmuffs squeezing it. We started seeing flaws and problems with our silencers. We also noticed that silencer companies had horrible customer service and marketing, including 1990s-style websites. I thought, I could own this market. In 2008, Jonathon and I raised $65,000 from friends and family, got a lease on a garage in West Valley City, Utah, and made a down payment on manufacturing equipment. In 2009, we launched our first product, the Sparrow, a silencer for .22 caliber rifles.   I jumped on a plane and flew to all 39 states where silencers are legal to meet with dealers. We ended up taking so many preorders that we sold out our first batch of 200 silencers before they had even been made. The first year, we sold 750 Sparrows. Soon after, we devel-

“Silencer companies have horrible marketing. I thought, I could own this market.”

S C A N T H E PA G E T O S E E WA L D RO N ’ S S I L E N C E R S I N A C T I O N . ( I n s t r u c t i o n s , p a g e 1 2 )

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oped and released our next product, the Osprey, a silencer for handguns. Back then it was kind of taboo. For two years, I continued to get calls from magazine editors looking to hire me for photo shoots. Many of them were surprised—and even shocked—to hear that I was manufacturing silencers. Hollywood has created the idea that only bad guys use silencers. But they’re really hearing-protection devices. If you don’t know that, you think, Wow, those are illegal. One of the ways we’ve increased market share is by educating consumers about the legality of silencers. Going from photography to running Silencerco really isn’t as big of a divergence as you’d think. Part of the reason I was successful as a photographer was that I knew how to get jobs and keep people happy. I’m also focusing all of my creative skills on company direction, image, and marketing, which helps set us apart from our competitors. A successful business is a creative business.

A s t o l d t o B U RT H E L M  P h o t o g r a p h b y A L E X T E H R A N I


 Pulling the Trigger Joshua Waldron, shown here holding a custom Stiller rie, favors long-range and tactical-style shooting.

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T H E S TA R T I N G L I N E

Eric Paley ŦŦŦŦ The Myth of the Perfect Product Don’t wait until your product is perfect to build your business. You’ll be waiting forever

uct is viable, but it isn’t magically obvious that it is extraordinary. Many entrepreneurs seem to be waiting for their product to go viral before they actually build out their businesses. Although it’s fantastic to see companies grow without paid marketing, many outstanding companies have been built on products that have never gone viral. Some products just require a more meaningful marketing investment to educate and acquire customers before they achieve success. ’M A BIG BELIEVER in the key tenets of Steve Blank’s The Look to other metrics besides how fast your Four Steps to the Epiphany and Eric Ries’s The Lean company is acquiring users to determine whether Startup. Particularly, I like to see start-ups follow the you are ready to scale up. User engagement metauthors’ approach to finding what both call product/ rics like net promoter score are very powerful in market fit. One of the key concepts of product/market fit determining whether your product has satisfied is that you should not start to invest in building your users and you are ready to invest in growth. Even company until there is evidence that the product fits a those numbers will never be perfect, but they need in the market. Blank and Ries encourage start-ups to should give you confidence to take a leap and get their first product in front of customers quickly, get feedback, believe your product will work for a large enough then tweak their product accordingly. That’s great advice—scaling a group of users. sales force and infrastructure to sell a product that the market does Scale tends to breed scale. Start-ups often need not want can be catastrophic to a start-up. to get some type of critical mass of users before Unfortunately, the pendulum rarely swings halfway, and I’ve their products start to be fully appreciated and recently noticed a worrisome trend among many start-ups. Entreprebegin to spread more organically. Malcolm neurs are building good products, putting them in front of customGladwell explores this phenomenon in The Tipping ers, getting solid feedback, and then iterating into infinity in search Point. Without making some efforts toward scale, of something they will probably never find. In most cases, the prodyou typically won’t have the possibility of the market tipping in your direction. Furthermore, when you begin to intelligently scale up, you can then start to focus on the chalEric Paley is an entrepreneur lenges of marketing and selling the product. Those areas are also critical to long-term success and a managing partner of and will require just as much hypothesis testing and iteration. As the company gets good at Founder Collective, a seedstage venture capital fund. overcoming these challenges, you then have the opportunity to show some pretty impressive He is based in Cambridge, evidence of product success that might not have been possible with a smaller user base. Massachusetts. When scaling up, do it rationally and sustainably. When a seed-funded company goes to investors for the next round of funding, the first question typically is, how much traction with users does the company have? Some churn is to be expected, as are some product problems. Investors don’t expect a perfect product, but we do relish analyzing a business’s customer growth and engagement. If your company has a product that looks solid but hasn’t demonstrated the ability to scale up, you are going to find yourself meeting with lots of VCs and falling victim to the Series A crunch. Of course, you should continue to improve your product, but don’t wait for some magical moment to start building the rest of the business. Sometimes product is the reason a company isn’t ready to scale, but often the culprit is the insecurity of the entrepreneur.

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 Tycoon of Tough Ally Davidson leads a ďŹ tness boot camp in Austin. Camp Gladiator holds camps at 350 locations in eight states.

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PEOPLE OF THE 500

NO.236 Ally and Jeff Davidson  Camp Gladiator  Three-year growth 1,820%  2012 REVENUE $ 4.6 M I L L I O N

FROM RUNAWAY BRIDE TO WORKOUT MOGUL Before their 2008 wedding, Ally Kelly and Jeff Davidson’s pastor encouraged them to write a marriage mission statement. They agreed on a simple phrase: “To Live Adventurously.” The pledge wound up becoming a business plan of sorts, inspiring them to found the Austin-based fitness company Camp Gladiator. ALLY DAVIDSON: The night before our

wedding, my sister found out that the TV show American Gladiator was holding tryouts at a nearby gym the next day. That morning, we snuck out of the house without Jeff finding out. I was afraid he would think I was getting cold feet. When we arrived at the gym, there were about 2,000 people in line outside. I knew I couldn’t wait and make it to the church on time. So I threw on my veil and garter and ran up to the producer at the door. He loved that I was a real-life runaway bride and let me in. I did 14 pull-ups and ran a 40-yard dash, then raced to the church, drenched in sweat. I didn’t even have time to shower before the ceremony. Later, as we entered

our reception, I said to Jeff, “Hey, babe, guess what I did today?” After we got back from our honeymoon, I got a call saying that, of the 15,000 people who auditioned for the show, I was one of the 40 selected. A few days later, they asked Jeff to join me for a special newlywed episode. JEFF DAVIDSON: Ally had ridiculously

exaggerated my athletic abilities. I’m a finance guy. My goal was to not die in the arms of a 300-pound behemoth. Ally’s was to win the whole darn thing. We spent the next six weeks in Los Angeles, competing on the show. I made it to the semifinals, but Ally became the Grand Champion. After we returned to our day jobs, Ally was restless. She was in ad sales, but she dreamed of gladiators and adventure. In the two months before the show aired, she realized we could leverage the publicity and $100,000 prize money. We talked about it every night and prayed. We came up with the idea of

gladiator-themed outdoor fitness classes and launched Camp Gladiator in Dallas a month after the show’s finale. Within three months, 100 people had signed up. AD: I trained the campers, leading workouts in our church parking lot and a city park. I also handled day-to-day operations from our apartment. Jeff kept his day job and handled our company’s finances at night. JD: As Camp Gladiator grew, we added more trainers and locations. We’re now based in Austin and have 10,000 campers in eight states. We attract top trainers by giving them 80 percent of the profits from their locations. AD: When we created our marriage mission statement, we had no idea we’d have such an amazing opportunity to live it out. Not only are we blessed to live adventurously ourselves, but we’re also challenging our campers to do the same.

“I did 14 pull-ups and ran a 40-yard dash, then raced to the church, drenched in sweat.”

A s t o l d t o R E S H M A M E M O N YA Q U B  P h o t o g r a p h b y J E F F W I L S O N

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THE FLIP SIDE OF SUCCESS

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MEG CADOUX HIRSHBERG’S FOND FAREWELL

“At the ranch, there are no interruptions, which has taught me to hear other people—and to hear myself. It’s made me a better CEO.” —MARK B. PENTECOST, part-time rancher and CEO of It Works! Global

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ŦŦŦŦ PHOTOGRAPH BY BRYAN SCHUTMAAT

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FROM THE INC. 500 CEO SURVEY

PORTRAIT OF A LEADER

LEADING ANY ORGANIZATION is a challenge. But guiding a company that is expanding

as rapidly as those on the Inc. 500 requires a special kind of grit. We asked the founders of Inc. 500 companies how they pull it off. One interesting thing we learned: Vision and sincerity count for a lot; likability, not so much.

ŦŦŦŦ How would you characterize your leadership style? DEMOCRATIC 24%

VISIONARY 59%

Encourages widespread participation.

Sees the big picture and inspires others.

We asked the CEOs to rank 21 traits associated with outstanding leaders. The top three:

1 Trustworthiness 2 Sincerity 3 Capacity to inspire 19 Expertise 20 Work-life balance 21 Likability

SERVANT 14%

HANDS OFF 1%

Trusts others to make key decisions.

AUTOCRATIC 2%

Shuns hierarchy and is eager to jump into the fray.

Work-life balance is... A NICE FANTASY 29%

SOMETHING I WORK TO ACHIEVE 71%

Gives clear orders and maintains distance.

How do you think your employees view you? INSPIRING VISIONARY 50%

Which entrepreneur do you most admire? TOUGH TASKMASTER 19%

4 BILL GATES 1 RICHARD BRANSON SYMPATHETIC FRIEND 4%

BENEVOLENT PARENT 9%

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MOTIVATIONAL COACH 18%

2 ELON MUSK

3 JEFF BEZOS

5 MOM AND/OR DAD

CLOCKWISE FROM BOTTOM LEFT: ALL GETTY: DAVID PAUL MORRIS; BEN A. PRUCHNIE; JOE KLAMAR; STEFAN POSTLES; SUPERSTOCK

The bottom three:


What is one thing you wish you had never delegated? “Financial control.” VIN GUPTA, INFOFREE.COM NO. 295 ON THE INC. 500

What is one thing you wish you had delegated earlier? “Managing the sales staff.”

Here’s how CEOs encourage everyone to think like a leader: Devote significant resources to leadership development 64% Screen job candidates on basis of leadership ability

DOUG RECKER, COLO5, NO. 394

73%

“Daily correspondence with vendors.”

Evaluate staff on basis of leadership potential 89%

EVAN WEISS, 305 DEGREES, NO. 427

“Hiring an assistant.” JOHN NESS, ODW LOGISTICS & TRANSPORTATION SERVICES, NO. 291

“Employee screening.”

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RAJESH PERICHERLA, NOVISYNC SOLUTIONS, NO. 221

“Sales.” RYAN BORN AUDIOMICRO, NO. 205

“Communication with key clients.”

of respondents read books about leadership.

“My schedule.”

BRENDAN ANDERSON, EVOLUTION CAPITAL PARTNERS, NO. 198

JOE PULIZZI, CONTENT MARKETING INSTITUTE, NO. 470

What is the biggest challenge facing leaders today?

42%

Finding and keeping skilled workers

23% Staying focused

18% Innovating

ICONS: MATTHEW HOLLISTER; BOOK: iSTOCK

Managers vs. Leaders

93

believe leading and managing are two different things.

9%

Competing in a global market

What is the biggest mistake a leader can make?

8%

Coping with technological change

What is more important?

“Trying to lead without being on the frontlines setting an example.” ARMAN SADEGHI, ALL GREEN ELECTRONICS RECYCLING, NO. 368

“Lack of humility and failure to listen.” JENNIFER GUTHRIE, IN-FLIGHT CREW CONNECTIONS, NO. 417

THE RIGHT QUESTION 87% THE RIGHT ANSWER 13%

“Not caring about your employees and not sharing your company’s success.” BILL WHITFORD, S2VERIFY, NO. 194

“Believing your own bullshit.” ALAN KNITOWSKI PHUNWARE, NO. 41

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 Survivor’s Story Greg Roper spent six months recovering from cancer. His employees stepped up.

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PEOPLE OF THE 500

NO.19 G r e g Ro p e r  I n t e g r i t y F u n d i n g  T h r e e - y e a r g r o w t h 10,462.1%  2 0 1 2 R E V E N U E $ 1 1 . 1 M I L L I O N

FROM THE C SUITE TO THE CANCER WARD. AND BACK

Could your business survive in your absence? From the outset, Greg Roper worked to ensure that Integrity Funding, his Sarasota, Florida, specialty finance firm, could. Good thing, too. Because for much of 2012, Roper was out of the office—battling Stage 4 cancer. BACK IN THE 1980s, I was in the military, and I learned about small-unit tactics. The idea is that everyone is important, but nobody is irreplaceable. It’s the same for business: If your team can’t survive when the king is killed, your business fails. In 1986, at the age of 51, my father was found to have a brain tumor. His cancer was very serious, and after a few months, he passed away. I left the Army and came home to Charlotte, North Carolina, to help my mother take over his printing business. It was an abject failure and closed the following year. This cemented my philosophy of interchangeability. In 2012, I was shaving and found a lump in my

throat. I had not had a prescription for medication in my adult life, and I have never missed a day’s work. I found out I had Stage 4 oropharyngeal cancer. Like my father, I was 51. I immediately went back to work and called all of my people into our common area. I said, “Anybody who treats me any differently than you did yesterday has to go. We all have jobs to do, and I am just going to be a little less effective at mine over the next few months.” My surgery was in May. In June, I started chemo and

radiation. Picture me sitting there in chemo. Everyone else in the ward is covered up in a blanket. I am on my cell phone and laptop. I am doing my best to do whatever my job requires. Focusing on the business was therapy for me, but I don’t think I was that effective. The gift of cancer treatment is you have to learn to let go. My management team did the heavy lifting. Prior to my illness, we were very entrepreneurial, but everybody still kind of looked to me for validation. During my illness, they would bring me only what

they had to have my input on. We grew into a more mature group of people. A good example is our chief financial officer, Tracy Green. She has an amazing background, and anyone who interviews her would hire her. We’d persuaded her to come to Sarasota and work for our tiny company, and one month later the CEO says, “I have cancer.” Many people would have bolted. She jumped in—and has done as much to help our company as anyone. I am not the business— I work for the business. I remind myself and everyone else of this on a regular basis. This company will survive me. Hopefully, it will be viable well into the future.

“The gift of cancer treatment is you have to learn to let go.”

As told to JEREMY QUITTNER  Photograph by BOB CROSLIN

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THE PRICE

No one said building a company was easy. But it’s time to be honest about how psychologically brutal it really is—and about the price so many founders secretly pay

GUTTER CREDIT HERE

By JESSICA BRUDER

 I l l u s t r a t i o n b y R U T H G W I LY

Y ALL COUNTS and measures, Bradley Smith is an unequivocal business success. He’s CEO of Rescue One Financial, an Irvine, California–based financial services company that had sales of nearly $32 million last year. Smith’s company has grown some 1,400 percent in the last three years, landing it at No. 310 on this year’s Inc. 500. So you might never guess that just five years ago, Smith was on the brink of financial ruin—and mental collapse. Back in 2008, Smith was working long hours counseling nervous clients about getting out of debt. But his calm demeanor masked a secret: He shared their fears. Like them, Smith was sinking deeper and deeper into debt. He

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had driven himself far into the red starting—of all things—a debt-settlement company. “I was hearing how depressed and strung out my clients were, but in the back of my mind I was thinking to myself, I’ve got twice as much debt as you do,” Smith recalls. He had cashed in his 401(k) and maxed out a $60,000 line of credit. He had sold the Rolex he bought with his first-ever paycheck during an earlier career as a stockbroker. And he had humbled himself before his father—the man who raised him on maxims such as “money doesn’t grow on trees” and “never do business with family”—by asking for $10,000, which he received at 5 percent interest after signing a promissory note. Smith projected optimism to his co-founders and 10 employees, but his nerves were shot. “My wife and I would share a bottle of $5 wine for dinner and just kind of look at each other,” Smith says. “We knew we were close to the edge.” Then the pressure got worse: The couple learned they were expecting their first child. “There were sleepless nights, staring at the ceiling,” Smith recalls. “I’d wake up at 4 in the morning with my mind racing, thinking about this and that, not being able to shut it off, wondering, When is this thing going to turn?” After eight months of constant anxiety, Smith’s company finally began making money.

UCCESSFUL ENTREPRENEURS ACHIEVE

hero status in our culture. We idolize the Mark Zuckerbergs and the Elon Musks. And we celebrate the blazingly fast growth of the Inc. 500 companies. But many of those entrepreneurs, like Smith, harbor secret demons: Before they made it big, they struggled through moments of near-debilitating anxiety and despair—times when it seemed everything might crumble. Until recently, admitting such sentiments was taboo. Rather than showing vulnerability, business leaders have practiced what social psychiatrists call impression management—also known as “fake it till you make it.” Toby Thomas, CEO of EnSite Solutions (No. 188 on the Inc. 500), explains the phenomenon with his favorite analogy: a man riding a lion. “People look at him and think, This guy’s really got it together! He’s brave!” says Thomas. “And the man riding the lion is thinking, How the hell did I get on a lion, and how do I keep from getting eaten?” Not everyone who walks through darkness makes it out. In January, well-known founder Jody Sherman, 47, of the e-commerce site Ecomom took his own life. His death shook the start-up community. It also reignited a discussion about entrepreneurship and mental health that began two years earlier after the suicide of Ilya Zhitomirskiy, the 22-year-old co-founder of Diaspora, a social networking site. Lately, more entrepreneurs have begun speaking out about their internal struggles in an attempt to combat the stigma on depression and anxiety that makes it hard for sufferers to seek

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“It’s like a man riding a lion. People think, ‘This guy’s brave.’ And he’s thinking, ‘How the hell did I get on a lion, and how do I keep from getting eaten?’ ” help. In a deeply personal post called “When Death Feels Like a Good Option,” Ben Huh, the CEO of the Cheezburger Network humor websites, wrote about his suicidal thoughts following a failed start-up in 2001. Sean Percival, a former MySpace vice president and co-founder of the children’s clothing start-up Wittlebee, penned a piece called “When It’s Not All Good, Ask for Help” on his website. “I was to the edge and back a few times this past year with my business and own depression,” he wrote. “If you’re about to lose it, please contact me.” Brad Feld, a managing director of the Foundry Group, started blogging in October about his latest episode of depression. The problem wasn’t new—the prominent venture capitalist had struggled with mood disorders throughout his adult life—and he didn’t expect much of a response. But then came the emails. Hundreds of them. Many were from entrepreneurs who had also wrestled with anxiety and despair. (For more of Feld’s thoughts on depression, see his column, “Surviving the Dark Nights of the Soul,” in Inc.’s July/August issue.) “If you saw the list of names, it would surprise you a great deal,” says Feld. “They are very successful people, very visible, very charismatic—yet they’ve struggled with this silently. There’s a sense that they can’t talk about it, that it’s a weakness or a shame or something. They feel like they’re Illustration by RUSSELL CHRISTIAN


Inc. 500 CEOs share some of their most emotionally trying moments—and their advice for getting through tough times. — CINDY TYSINGER G SAT i ( N o . 1 70 o n t h e I n c . 5 0 0) When cash got tight, Tysinger’s son invested $250,000 in her company. “That was the hardest thing ever, going to my son to borrow money,” she says. “Humbling yourself to that point is difficult. I just want to take care of everybody, you know?” Around that time, anxiety made it hard to sleep and blunted her appetite. She lost 30 pounds. Her family tried to make her take breaks by unplugging the home Internet connection. What she’s learned: Get outside. “I love to walk,” she says. “Even if I was thinking about things I needed to do, I was in fresh air, nature.”

— TOBY THOMAS E n S i t e S o l u t i o n s ( N o . 1 8 8) Thomas started his company with two partners who, he claims, did not do their share of the workload. Six months later, he bought them out. “That was a very scary point,” he recalls. “When you go into a business with partners, you’re spreading the risk out. But when you suddenly don’t have that support system, it’s like you’re in a black hole.” What he’s learned: Find a CEO support group. Thomas is a member of Entrepreneurs’ Organization, a global nonprofit founders’ network. “It’s very Skull and Bones,” he says. “People completely open up. You have to sign a constitution that says you can’t even tell your wife about what you talk about.”

— GRIER ALLEN B o o m To w n ( N o . 4 33 ) A publicly traded company bought Allen’s main competitor and rebranded its entire business around that company’s technology. Allen tried to stay calm and focus on the market segment where BoomTown was strongest, a strategy that later paid off. But the stress was getting to him and shortening his temper. What he’s learned: Jog it off. “Running releases a lot of stress,” he says. “It clears my mind and lets me detach from the digital world for a little while. If I don’t get out and run at least twice or three times a week, I just start feeling crazy.”

— YISROEL BRUCE KRINSKY Re n e g a d e Fu r n i t u r e G r o u p ( N o . 1 2 7 ) Krinsky’s first venture, at 21, was importing dried-fruit energy bars from South Africa. He got the product into 200 stores, but there were no repeat orders, and the company flopped. “It was heartbreaking,” he says. “Every time I went to check on the product with a big smile on my face, it was all still sitting on the shelf. I was really upset, and I felt kind of like a loser.” What he’s learned: Play the long game. “If you can think of any problem you have today, picture your reaction in seven years,” he suggests. “Will it be affecting you then?”

— ANDREW LAFFOON M i x b o o k ( N o . 1 7 7 ) Mixbook nearly ran out of cash three times before getting venture capital funding. “We were pitching VCs day in and day out,” Laffoon recalls. “We got a lot of soft nos. I was sick to my stomach for weeks.” What he’s learned: Remember that you’re not the business. “If your identity is all wrapped up in this company you’ve built,” says Laffoon, “when someone rejects it, they’re rejecting you.”

ŦŦŦŦ

OUT OF THE DARKNESS

hiding, which makes the whole thing worse.” If you run a business, that probably all sounds familiar. It’s a stressful job that can create emotional turbulence. For starters, there’s the high risk of failure. Three out of four venturebacked start-ups fail, according to research by Shikhar Ghosh, a Harvard Business School lecturer. Ghosh also found that more than 95 percent of start-ups fall short of their initial projections. Entrepreneurs often juggle many roles and face countless setbacks—lost customers, disputes with partners, increased competition, staffing problems—all while struggling to make payroll. “There are traumatic events all the way along the line,” says psychiatrist and former entrepreneur Michael A. Freeman, who is researching mental health and entrepreneurship. Complicating matters, new entrepreneurs often make themselves less resilient by neglecting their health. They eat too much or too little. They don’t get enough sleep. They fail to exercise. “You can get into a start-up mode, where you push yourself and abuse your body,” Freeman says. “That can trigger mood vulnerability.” So it should come as little surprise that entrepreneurs experience more anxiety than employees. In the latest GallupHealthways Well-Being Index, 34 percent of entrepreneurs— 4 percentage points more than other workers—reported they were worried. And 45 percent of entrepreneurs said they were stressed, 3 percentage points more than other workers. But it may be more than a stressful job that pushes some founders over the edge. According to researchers, many entrepreneurs share innate character traits that make them more vulnerable to mood swings. “People who are on the energetic, motivated, and creative side are both more likely to be entrepreneurial and more likely to have strong emotional states,” says Freeman. Those states may include depression, despair, hopelessness, worthlessness, loss of motivation, and suicidal thinking. Call it the downside of being up. The same passionate dispositions that drive founders heedlessly toward success can sometimes consume them. Business owners are “vulnerable to the dark side of obsession,” suggest researchers from the Swinburne University of Technology in Melbourne, Australia. They conducted interviews with founders for a study about entrepreneurial passion. The researchers found that many subjects displayed signs of clinical obsession, including strong feelings of distress and anxiety, which have “the potential to lead to impaired functioning,” they wrote in a paper published in the Entrepreneurship Research Journal in April. Reinforcing that message is John Gartner, a practicing psychologist who teaches at Johns Hopkins University Medical School. In his book The Hypomanic Edge: The Link Between (a Little) Craziness and (a Lot of ) Success in America, Gartner argues that an often-overlooked temperament—hypomania—may be responsible for some entrepreneurs’ strengths as well as their flaws. A milder version of mania, hypomania often occurs in the relatives of manic-depressives and affects an estimated 5 percent to 10 percent of Americans. “If you’re manic, you think you’re Jesus,” says Gartner. “If you’re hypomanic, you think you’re God’s gift to technology

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investing. We’re talking about different levels of grandiosity but the same symptoms.” Gartner theorizes that there are so many hypomanics—and so many entrepreneurs—in the U.S. because our country’s national character rose on waves of immigration. “We’re a self-selected population,” he says. “Immigrants have unusual ambition, energy, drive, and risk tolerance, which lets them take a chance on moving for a better opportunity. These are biologically based temperament traits. If you seed an entire continent with them, you’re going to get a nation of entrepreneurs.” Though driven and innovative, hypomanics are at much higher risk for depression than the general population, notes Gartner. Failure can spark these depressive episodes, of course, but so can anything that slows a hypomanic’s momentum. “They’re like border collies—they have to run,” says Gartner. “If you keep them inside, they chew up the furniture. They go crazy; they just pace around. That’s what hypomanics do. They need to be busy, active, overworking.”

O MATTER WHAT your psy-

chological makeup, big setbacks in your business can knock you flat. Even experienced entrepreneurs have had the rug pulled out from under them. Mark Woeppel launched Pinnacle Strategies, a management consulting firm, in 1992. In 2009, his phone stopped ringing. Caught in the global financial crisis, his customers were suddenly more concerned with survival than with boosting their output. Sales plummeted 75 percent. Woeppel laid off his half-dozen employees. Before long, he had exhausted his assets: cars, jewelry, anything that could go. His supply of confidence was dwindling, too. “As CEO, you have this selfimage—you’re the master of the universe,” he says. “Then all of a sudden, you are not.” Woeppel stopped leaving his house. Anxious and low on self-esteem, he started eating too much—and put on 50 pounds. Sometimes he sought temporary relief in an old addiction: playing the guitar. Locked in a room, he practiced solos by Stevie Ray Vaughan and Chet Atkins. “It was something I could do just for the love of doing it,” he recalls. “Then there was nothing but me, the guitar, and the peace.” Through it all, he kept working to develop new services. He just hoped his company would hang on long enough to sell them. In 2010, customers started to return. Pinnacle scored its biggest-ever contract, with an aerospace manufacturer, on the I l l u s t r a t i o n b y J A M E S S T E I N B E RG

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“Entrepreneurs have struggled silently. There’s a sense that they can’t talk about it, that it’s a weakness.” basis of a white paper Woeppel had written during the downturn. Last year, Pinnacle’s revenue hit $7 million. Sales are up more than 5,000 percent since 2009, earning the company a spot at No. 57 on this year’s Inc. 500. Woeppel says he’s more resilient now, tempered by tough times. “I used to be like, ‘My work is me,’” he says. “Then you fail. And you find out that your kids still love you. Your wife still loves you. Your dog still loves you.” BUT FOR MANY ENTREPRENEURS, the battle wounds never fully heal. That was the case for John Pope, CEO of WellDog, a Laramie, Wyoming–based energy technology firm. On Dec. 11, 2002, Pope had exactly $8.42 in the bank. He was 90 days late on his car payment. He was 75 days behind on the mortgage. The IRS had filed a lien against him. His home phone, cell phone, and cable TV had all been turned off. In less than a week, the natural-gas company was scheduled to suspend service to the house he shared with his wife and daughters. Then there would be no heat. His company was expecting a

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wire transfer from the oil company Shell, a strategic investor, after months of negotiations had ended with a signed 380-page contract. So Pope waited. The wire arrived the next day. Pope—along with his company—was saved. Afterward, he made a list of all the ways in which he had financially overreached. “I’m going to remember this,” he recalls thinking. “It’s the farthest I’m willing to go.” Since then, WellDog has taken off: In the past three years, sales grew more than 3,700 percent, to $8 million, making the company No. 89 on the Inc. 500. But emotional residue from the years of tumult still lingers. “There’s always that feeling of being overextended, of never being able to relax,” says Pope. “You end up with a serious confidence problem. You feel like every time you build up security, something happens to take it away.” Pope sometimes catches himself emotionally overreacting to small things. It’s a behavior pattern that reminds him of posttraumatic stress disorder. “Something happens, and you freak out about it,” he says. “But the scale of the problem is a lot less than the scale of your emotional reaction. That just comes with the scar tissue of going through these things.”

HOUGH LAUNCHING A company will always be a

wild ride, full of ups and downs, there are things entrepreneurs can do to help keep their lives from spiraling out of control, say experts. Most important, make time for your loved ones, suggests Freeman. “Don’t let your business squeeze out your connections with human beings,” he says. When it comes to fighting off depression, relationships with friends and family can be powerful weapons. And don’t be afraid to ask for help—see a mental health professional if you are experiencing symptoms of significant anxiety, posttraumatic stress disorder, or depression. Freeman also advises that entrepreneurs limit their financial exposure. When it comes to assessing risk, entrepreneurs’ blind spots are often big enough to drive a Mack truck through, he says. The consequences can rock not only your bank account but also your stress levels. So set a limit for how much of your own money you’re prepared to invest. And don’t let friends and family kick in more than they can afford to lose. Cardiovascular exercise, a healthful diet, and adequate sleep all help, too. So does cultivating an identity apart from your company. “Build a life centered on the belief that self-worth is not the same as net worth,” says Freeman. “Other dimensions of your life should be part of your identity.” Whether you’re raising a family, sitting on the board of a local charity, building model rockets in the backyard, or going swing dancing on weekends, it’s important to feel successful in areas unrelated to work. The ability to reframe failure and loss can also help leaders

“If you’re manic, you think you’re Jesus. If you’re hypomanic, you think you’re God’s gift to technology investing.” maintain good mental health. “Instead of telling yourself, ‘I failed, the business failed, I’m a loser,’” says Freeman, “look at the data from a different perspective: Nothing ventured, nothing gained. Life is a constant process of trial and error. Don’t exaggerate the experience.” Last, be open about your feelings—don’t mask your emotions, even at the office, suggests Brad Feld. When you are willing to be emotionally honest, he says, you can connect more deeply with the people around you. “When you deny yourself and you deny what you’re about, people can see through that,” says Feld. “Willingness to be vulnerable is very powerful for a leader.” JESSICA BRUDER, a former editor at Fortune Small Business, wrote

Illustration by VIVIENNE FLESHER

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the “Tough Love” feature in the July/August issue of Inc.

SEP TEMBER 2013 - INC. - 7 7


O W N E R ’ S M A N UA L

THE BEST EXIT? THE ONE YOU DO ON YOUR OWN TERMS Shazi Visram, founder and CEO of organic food brand Happy Family (a two-time Inc. 500 honoree), has always wanted to go big or go home. In May, she went big and agreed to sell to Danone, the only acquirer she had ever been willing to consider. Visram told Inc.’s Jeff Haden about her very specific exit strategy—and why she thinks taking private equity is a cop-out. Photograph by MIKE McGREGOR

Danone acquired a 92 percent stake

in your company; I’m sure that feels awesome but also bittersweet.

It’s not bittersweet at all. I haven’t lost anything. I’m still in control; I don’t feel like I’ve given away my baby. I’ve gained great advice and support from a great partner. Ten years ago, when you wrote your business plan, you said a company like Danone would make an ideal partner.

I didn’t say like Danone, I said Danone. They were the only people I thought we would talk to. And then they called. They’re an amazing organization; they’re socially respon-

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experience from a true strategic partner. Going public could have been a great way to monetize, but in my mind it would still have meant we were on our own.

Why sell now?

So private equity was out as an

We wanted to create a purely organic play that removes pesticides and toxins from children’s lives. When your mission is that big and you truly care about what you’re doing, you want your company to be as big as possible.

option, too?

Even so, I’m sure handing over such a large stake wasn't easy.

The first time I had to raise $8 million, it felt like a lot. But I had seen my parents’ entrepreneurial journey [her parents were motel owners], and that gave me a humble understanding of what it means to be in control—and not to give it up lightly. Did you consider going public?

We were looking for a shepherd and the support and

I saw private equity as the ultimate cop-out in our space. I care about my business. I care about the culture. I would hate to see all that jeopardized by someone with a totally different agenda. That happened to one of our competitors. Once private equity took over, the brand was always on sale. Eventually, the company was shopped around because it was time to cash in on the investment. I can’t imagine a sadder story: to be forced into a relationship with a company I may not admire, that may not offer the right strategic guidance and help. It would have meant I spent the last 10 years making someone else money.

ŦŦŦŦ

Q

sible in everything they do; their mission is to change the world through nutrition; they’re entrepreneurial—so they get it. It’s truly a match made in heaven.

Visram’s tips to avoid selling your soul to private equity: 1. FIND WORLD-CLASS ADVISERS WHO HAVE DONE WHAT YOU WANT TO DO. Learn from great examples of how you can do what you want to do your way. 2. BE READY TO DO MORE WORK. It’s harder and takes more work to raise money from individuals. But it can be done—many people seek the emotional reward of supporting something socially responsible. So pitch and pitch and pitch. When you get investments, it will be from people who believe in you and your vision and want to be a part of it. 3. CREATE A PHENOMENAL TEAM YOU TRUST. Constantly think about whether your staff can do what you need today and also tomorrow. Match your vision of the future with that of the people on your team. When you have great advisers, great investors, and a great team, you don’t need private equity: You have everything.

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You don’t get to be the leader in voluntary benefits by just winging it. Rate stability, fast claims processing and high claims satisfaction.1 Those are just some of the things that have made us the leader2 in voluntary benefits—Aflac’s sole focus since 1955.

Learn more at aflac.com/business

1

Competitor Loyalty Study, June 2012, Prince Market Research. 2 U.S. Worksite Sales Report Carrier Results for 2009, Eastbridge Consulting Group, Inc., Avon, Connecticut, April 2010. Aflac’s family of insurers includes American Family Life Assurance Company of Columbus, American Family Life Assurance Company of New York, and Continental American Insurance Company. Z130070


 On the Case Josh McAfee’s work on cybercrime led to an unexpected place: the dark world of human trafficking.

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PEOPLE OF THE 500

NO.36 J o s h M c Af e e  M c Af e e I n s t i t u t e  T h r e e - y e a r g r o w t h 7,062.6%  2 0 1 2 R E V E N U E $ 1 5 M I L L I O N

CHASING BAD GUYS (REALLY, REALLY BAD GUYS) ONLINE Entrepreneurs are often described in heroic terms. But few wear the white hat as well as Josh McAfee. A former law enforcement officer and loss-prevention executive, McAfee is CEO of McAfee Institute, a Peoria, Illinois–based business that trains corporations and law enforcement agencies to battle cybercrime and fraud. He’s also tackling something far more ominous. WHEN WE STARTED, we were focused mostly on fraud detection and loss prevention in the e-commerce world. But in 2010, when we launched our social-media investigation course, we had our first human-trafficking case. In that class, we teach people from law enforcement agencies and the fraud- and loss-prevention units of businesses how to find bad guys on Facebook and Twitter, and then use the information they find to lead to prosecution. We never intended to go after human trafficking, but we started seeing more and more cases coming through. One story that will always stick with me was this young lady in Florida. During a class, a police officer asked for advice on identifying prostitution online, so the group started looking on Craigslist. They found this girl and solicited her using an undercover identity. When they arrested her, they found out she was being coerced the whole time by her father. It turns out he was a sex offender, and she’d been chained up and forced to prostitute herself to men starting when she was 13. When they found out, investigators tracked down the father and arrested him.

Human trafficking takes all forms. It’s not just prostitution. There have been many cases we’ve closed where people were bought and sold from overseas to do housework. Globally, it’s estimated that there are 27 million individuals who are trafficked every year. But we don’t know how much is really out there. Human-trafficking detection is a very small piece of what we do, compared with the work we do on online fraud, but it brings me a lot of gratification. Since 2011, our company has helped bring back about 1,900 human-trafficking victims, 1,000 of them kids. And the best part about it is we’re not doing it all ourselves. We now teach a course on human trafficking, to an average of 150 to 200 people a month. We’re developing leaders in the classroom, so they can go out and utilize our techniques within their organizations. It multiplies our success and enables us to make a huge impact. Growing up, I always had a passion for law enforcement. I wanted to get out there and fight crime, get the bad guys—you know, help people. That’s why I became a law enforcement officer right out of college. To be able to do this kind of work in my business is everything to me. It’s what I was born to do.

“Since 2011, our company has helped bring back about 1,900 human-trafficking victims, 1,000 of them kids.”

As told to ISSIE L APOWSKY  Photograph by PETER HOFFMAN

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BALANCING ACTS

Meg Cadoux Hirshberg ŦŦŦŦ Goodbye, and Thanks for All Your Stories It’s been five years—five years of thinking and writing about the tense, chaotic, fearful, endlessly compromising, occasionally over-the-top-joyful family lives of entrepreneurs

story. Or it was my story only in the details. For although the specifics may change from family to family, the joys and burdens of entrepreneurship remain essentially the same. Every business launch marks the beginning of a new family saga. The pioneer-entrepreneur may stride solo through unconquered territory, but a covered wagon full of kin bumps along precariously in his wake. For the past five years, I have chronicled those family stories from the perspectives of both passenger and pilot. In the process, I have spoken to or corresponded with hundreds of entrepreneurs, their spouses, romantic partners, children, parents, and siblings. I have heard from men and women; twentysomethings and eightysomethings; people living in the ELLING YOUR OWN STORY is cathartic. United States, England, India, Australia, New In 2008, when I first wrote about the Zealand, Bolivia, Poland, France, Brazil, Cameearly years of my marriage to a cockroon, and Bangladesh. Such a large, sprawling eyed-optimist entrepreneur, his community. And yet so many people wrote to me company, Stonyfield Farm, had at about loneliness. As one woman in Boston put it, long last become successful and our being married to an entrepreneur “feels like being financial future secure. But as I part of a weird, underground cult.” wrangled my memories into a feature My readers already knew that everyone finds article—“Hitched to Someone Else’s the business part of entrepreneurship hard. They Dream” was the title—the old anxiewere relieved to discover they weren’t the only ties, the exhaustion, the material ones struggling with the domestic side as well. privation, the tension of being at once crazy in love and crazy In the column, I have tried to look at all the afraid, surged back. I had never repressed my feelings about the ways entrepreneurship affects families, including business (as my husband, Gary, will attest). Still, laying it all out on how it can unite them around a shared purpose the page felt strangely liberating. and identity. But as longtime readers know, I write This is my last column for the print version of Inc. And I am more often about pain. So, not surprisingly, the so glad and grateful that what began as a catharsis for me has proved stories I’ve heard from others have been more dark cathartic to so many others. Because my story was never just my underbelly than sunny side of the street. My correspondents talked about infidelity, illness, and insolvency, about anger and estrangement. Mostly they talked about fear. But as one spouse put it, no matter what the issue, the column “gave us permission to talk about difficult topics because someone else wrote them down.” Meg Cadoux My readers also asked me questions that I couldn’t begin to answer. Where does loyalty end Hirshberg is the and sanity begin? Can you love someone and not be on his side? How much sacrifice can you author of For Better or for Work: A Survival demand of your children? Is this too much? Is it time to quit? Guide for Entrepreneurs Others wanted reassurance I couldn’t give: and Their Families. She is married to Gary Hirshberg, co-founder of Stonyfield Farm.

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“I’m writing because I need to know that there is light at the end of this bleak tunnel. That all

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ANDREW MACLEAN

T


Account Control Technology (ACT) performs a business balancing act with the aplomb that might make a tightrope walker envious. It is dedicated to helping its clients recover funds which they can reinvest in their own organizations while at the same time helping consumers achieve financial stability and better debt management. In fact, ACT is so good at what it does that it boosted revenues by almost 90 percent and added 160 new jobs between 2008 and 2011. Driving that success, says CEO Nabil Kabbani, are a passionate workforce, strategic technology investments, and a philosophy that emphasizes consultative service and respect. And on the financial side, ACT counts on Bank of America Merrill Lynch to help it keep moving forward. Much of ACT’s operation relies on treasury functions that have to operate in a timely and flawless manner. “Our accounts receivable payment cycle does not synchronize well with our expenditures, and we need to ensure a consistent cash flow to pay for growth investments,” Kabbani explains. “Bank of America Merrill Lynch’s operational discipline and line of credit are essential to managing short-term cash flow while allowing us to make investments as they are needed.” As the organization grew, ensuring it had sufficient staff to maintain the high level of customer service that has become the company’s hallmark while also staying on top of infrastructure and business expenses was a challenge, says Lynn Heineman, Senior Vice President, Sales & Marketing, at ACT, and Bank of America Merrill Lynch helped ACT meet it. Major investments in both human resources and infrastructure in recent years “all may have seemed risky, but those investments are paying dividends in terms of process improvements and higher performance,” she reports.

Aiding a smooth transition ACT uses many Bank of America Merrill Lynch services, including savings and checking accounts, credit cards, lines of credit, and the new CashPro® portal, which ACT Controller James Gates says “provides unprecedented use adaptability” for managing cash. “Eric Chen, Vice President, Client Manager, has been great to work with during our transition into a larger organization, always looking for new ways to help us grow our business,” he adds. Looking ahead, Kabbani sees more of the same for ACT as it continues to diversify its business, expanding services in its current market and branching out into new ones. “We recently acquired one company and are looking at further acquisitions and partnerships,” he says. “Bank of America Merrill Lynch’s services are sure to come into play as we maintain financial stability while investing in our growth.”

“Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., all of which are registered broker-dealers and members of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured * May Lose Value * Are Not Bank Guaranteed.


our years of misery will work out. That the sleepless nights will subside. That someday we won’t need support. That we’ll be able to stand strong on our own someday and live peacefully…I need to know that it’s going to be OK…I’m exhausted and overworked but can’t afford help at work or at home. I need to know this is all worth it.” Yet there have also been extraordinary professions of gratitude and faith. My first column, following that autobiographical feature, described entrepreneurship as a never-ending test of spousal allegiance. I wrote about my agonizing doubts of Gary’s ability to turn Stonyfield into a viable business and my decision to stay the course anyway because I loved and believed in the man who seemed to be condemning me to penury. A reader sent me this: “Your article had me in tears. My wife has been my biggest cheerleader for eight-plus years now (yes, I’m eight years closer to being an overnight success). I sometimes fear failure but I cannot ever accept the idea that I would fail her. She believes in me and my abilities sometimes so much more so than I believe in myself. Mortgaging the house, maxing the credit cards, the highest highs, lowest lows, biggest promises, greatest disappointments....she keeps shouting (and often whispering), “keep going, you can do it, I know you can.” I’m glad I received that particular letter early on. It reminded me that drama isn’t tragedy so long as hope and love are present. AS A COLUMNIST, I’ve become a collector of stories, and I am deeply grateful to those who’ve shared them with me. Maybe I’m biased, but I think companybuilding lives are more dramatic than the lives of the more conventionally employed. There is no end of people hanging from cliffs by their fingernails or going out for that Hail Mary pass. There are a lot of great characters, too. Entrepreneurs live life large, and their family battles—like their business ones—

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Such a large, sprawling community. And yet so many people wrote to me about loneliness. As one woman in Boston put it, being married to an entrepreneur “feels like being part of a weird, underground cult.”

tend toward the titanic. I was horrified by the saga of an entrepreneur who sold 20 percent of her business to her parents, who then threatened to sell those shares to a competitor unless she sold the company. I felt for the woman who co-owns a business with her bipolar husband; she described in painful detail how she covers for him with employees when he doesn’t show at the office or behaves strangely. I couldn’t help chuckling when one entrepreneur told me that his former spouse so resented his business that every time he bought a new piece of machinery, she went out and purchased expensive jewelry. If you distilled all the relationships I’ve written about (including mine and

Gary’s) into the story of a single entrepreneurial marriage, it might sound a bit like the one described in this letter: “I run my own business and my husband works full time. I have been struggling with my business for the past two years as I made some bad decisions. It had a huge impact on our marriage—I lost a lot of money and we are fighting to survive. Couple months ago my husband said he’s out and he doesn’t want to hear about my company. He says I work a lot and we’re still in the same place. He doesn’t understand that it takes time to make everything right. He doesn’t support my dream. He thinks I can change everything—go get a nice job with a good salary but I don’t want to. I am an entrepreneur and I don’t want to work anywhere else. Besides, I love what I do and I really believe it will succeed. I cut all the expenses in my company and I’m fighting for more sales. I strongly believe I should keep it going—I’m getting a lot of new opportunities, new contacts, my company is becoming a brand. Yes, I work a lot but I always have time for my husband and I put him first. But I think it’s unfair of him to ask me to shut down my business and I’m in a lot of pain knowing he doesn’t support my dream. We are starting to fall apart. I can’t concentrate on my business when we fight all the time. I don’t know what to do. I love him so much and I kind of understand him—we’re in debt, we can’t go on vacation, we can’t dream of our own house. But I can’t make the decision to close my company because he wants to. I’m afraid that I won’t be happy if I do it. What should I fight for? My marriage or my dream?” It’s all there: the crippling financial stress; the anxious, neglected spouse; the incompatible dreams; the entrepreneur’s ( justifiable? baseless? who knows?) optimism; the back-burner-ing of domestic milestones; the anger; the despair; all coming down to the selfimposed ultimatum. By the entrepreneur’s account, the couple sounds irreconcilable. Yet I can’t help wonder-

INC.500 LEAD


WHAT’S IN A

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ing whether her tenacity and optimism and big dreams aren’t part of what brought those two together in the first place. WHAT I THINK—OR HOPE—the column

achieved is captured in its title: Balancing Acts. That’s meant to be aspirational, not prescriptive. Because entrepreneurs owe the best of themselves to both their companies and their families, work-life balance is impossible. But that’s no excuse for not trying. Imagine your life like one of those old-fashioned balance-beam scales, where you are constantly inching the weight back and forth, a notch at a time, gradually edging up on equilibrium. A silenced cell phone. A few hours of sacrosanct family time on the weekends. College funds squirreled away in an inviolate account. The bar will continue to sway—sometimes work will win, and sometimes the family. But it can sway a little less, or a little less wildly. It’s a truism that no success in business can compensate for a personal life in tatters. As one of my readers put it, if you build a business but lose your family in the process, you’ve had your eye on the wrong ball. So my core message has always been pretty simple: Communicate, and be conscious. Try to see things from the other person’s perspective, and do what you can to make life better for those you love. And the column has had some impact in that respect. Among the most gratifying stories I’ve heard are these: Two readers wrote to tell me they had decided to start families after a column convinced them to stop endlessly postponing life’s major milestones for the sake of the business. It makes me smile to think there might be a child or two toddling around right now because of “Balancing Acts.” I received a postcard from Lake Tahoe written by a reader on his first vacation in years. (Regular readers will know I’m as boosterish on the subject of vacations as the Travelocity gnome.) A young entrepreneur I talked to about the stress of asking friends and

As one of my readers put it, if you build a business but lose your family in the process, you’ve had your eye on the wrong ball. So my core message has always been pretty simple: Communicate, and be conscious.

family for money decided, as a result of that interview, to finally talk to his grandfather about the older man’s investment in his company—money the young man would probably never be able to pay back. To his surprise, the grandfather neither judged nor blamed him. In 2011, I wrote a column about how serious illness—of either an entrepreneur or a family member—affects a business. I interviewed both Jerry Gonzalez, founder of the food company Maria Elena’s Authentic Latino, and his wife, Karen, about Jerry’s Stage 4 colon cancer, then in remission. Karen told me all she wanted from life was to lower the family’s stress level and spend more time with her husband. When Jerry read that (I had interviewed them separately), he was so moved that he decided to sell his business and take a regular job. Soon after Jerry did that, his cancer returned. But because he now had medical benefits, his treatments were covered. Jerry passed away a few months ago. He was a passionate entrepreneur who, in the end, tipped the scales toward his wife and family.

learned from my years of writing “Balancing Acts,” and he said this:

I STARTED THIS COLUMN writing about Gary, so it makes sense to conclude with him as well. I asked Gary what he had

You can continue to reach me at mhirshberg@ inc.com and @meghirshberg on Twitter. In the fall, I will begin blogging on Inc.com.

“There are threads that connect. The specific topic almost doesn’t matter. First, most couples undercommunicate. Second, entrepreneurs are routinely unrealistic about time—they think they’re going to make it in much less time than it will actually take, if in fact they do succeed at all. Third, entrepreneurs have a different risk profile with money. They see an investment as a sure bet where their mate sees only calamity. And finally, entrepreneurs need to realize that there isn’t enough time to go around. They have to make choices and set rules based on joint priorities. The couple needs a plan.” GARY AND I HAVE A PLAN. He will continue

to throw himself like a man possessed into new ventures—his own and other people’s. I will continue to challenge him with questions and advocate for stability and admire the hell out of him. It keeps life interesting.

SCAN THE PAGE TO SEE MEG AND GARY HIRSHBERG TALK ABOUT BALANCING FAMILY AND BUSINESS. (Instructions, page 12)

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INC.500 LEAD


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*Research Brief: Accelerating Leadership Development, Aberdeen Group, March 2013.


 Brother’s Keeper Kevin Knight, at Winchester National Cemetery in Virginia—one of the military burial sites that Knight Solutions keeps shipshape

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PEOPLE OF THE 500

NO.296 Ke v i n K n i g h t  K n i g h t S o l u t i o n s  T h r e e - y e a r g r o w t h 1,472.2%  2 0 1 2 R E V E N U E $ 1 6 . 3 M I L L I O N

GIVING VETS—BOTH LIVING AND FALLEN—THE RESPECT THEY DESERVE Kevin Knight imagined a future in the U.S. Army. But when he injured both eyes in a training accident, he chased a different dream—his own business, Knight Solutions—and wound up serving his nation in a different way. I REMEMBER sitting in a chair in the doctor’s office crying. He told me I was blind in my right eye and that I would be of no use to the Army. It was devastating. Eventually, I graduated from Norfolk State University and then the University of Cincinnati, where I received my master’s. I then worked for a number of big companies, like General Motors, that taught me what I needed to know to launch my own business. I came to see the poor conditions of our military cemeteries when I went to the funeral of my brother-in-law, who was a Vietnam vet. It became my calling to turn those resting places around so that families can have a pleasant

experience visiting their loved ones. I started making connections through the Department of Veterans Affairs. I explained that I wanted to take veterans who have seen action and hire them, give them a place where they would be able to say, “I did not leave my brother behind; I am taking care of him now.” I launched Knight Solutions with the help of a mentor who enlightened me on the programs available to service-disabled-veteranowned businesses. When it comes to military cemeteries, all people think about is Arlington National. But there are more than 100 national cemeteries, some of which aren’t kept to the standard they should be. We’re based in Leesburg, Virginia, but we provide cemetery restoration, construction, and grounds maintenance nationwide. Each job lasts about 12 to

18 months. We raise and realign each headstone and replace the sod. There is a standard for working on national cemeteries called the shrine standards, which requires that every headstone stand up straight, like a soldier. Anytime we start a new job, I remind our employees that there is zero tolerance for delivering anything less than that. When we get a new contract, I call the VA hospital near the cemetery and talk to the veterans’ rep to let them know I will be hiring a pool of veterans for the job. We set up a trailer as a base to get started and then move on to the next one. It’s like having a mobile command center. I get veterans who tell me their lives have been forever changed. Not only do they have stable employment with benefits, but they also have a sense of purpose in taking care of the resting place for their fallen brothers and sisters.

“I did not leave my brother behind; I am taking care of him now.”

S C A N T H E PA G E T O T O U R A C E M E T E RY W I T H K N I G H T. ( I n s t r u c t i o n s , p a g e 1 2 )

As told to DARREN DAHL  Photograph by MELISSA GOLDEN

INC.500 LEAD


MARK B. PENTECOST —

IT WORKS! G LO B A L

— NO. 438 — Three-year growth 1,047.2%

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OFF HOURS

Taking the Bull by the Horns Two years ago, Mark Pentecost decided to scratch his cowboy itch. Pentecost, CEO of It Works! Global, a direct-sales company in Bradenton, Florida, bought a working 340-acre ranch, complete with 50 Texas Longhorns, wild hogs, and coyotes, in nearby Myakka City. “It’s like a John Wayne movie out here,” says Pentecost, who spends several days a month at the ranch plowing fields, feeding cattle, and rounding up his herd on a horse. One thing he can’t do is connect with the outside world: There’s no cell signal, landline, or Internet connection. “There are no interruptions, which has taught me to hear other people—and myself,” he says. “It's made me a better CEO and a better person.” — R E S H M A M E M O N YA Q U B Photograph by B RYA N S C H U T M A AT

At one time or another, most CEOs have claimed to be swimming with sharks, shoveling manure, or recovering from a nosedive. But when these CEOs say it, they really mean it. Meet four Inc. 500 entrepreneurs who have used success in business as a chance to pursue passions outside the office

S C A N T H I S PA G E T O WAT C H P E N T E CO S T I N A C T I O N ON HIS RANCH. (Instructions, page 12)

INC.500 LEAD


MATTHEW BORJES —

S PAC E S AV I N G S O LU T I O N S — NO. 273 — Three-year growth 1,594.6%

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Into the Deep Scuba diving has been a humbling experience for Matthew Borjes. “I’m just a speck of sand, compared to what’s down there,” says Borjes, CEO of Space Saving Solutions, a company in Lexington, South Carolina, that designs and installs mobile shelving and other storage equipment. Several times a year, he pilots a rented plane to Florida or the Caribbean and squeezes dozens of dives—ranging in length from five to 40 minutes each—into a four-day trip. Borjes, shown here exploring a sunken ship off the coast of West Palm Beach, Florida, has had some unforgettable underwater encounters. Recently, he came across a dozen goliath groupers. (“They could literally have inhaled me,” he says.) Another time, he was surrounded by several 8- to 10-foot sharks. (He stayed very still, with his arms crossed, until they swam away.) It's been good training for running a business, he says: “I’m a little fish who has had to get good at risk management. I've learned to push myself out of my comfort zone and not panic when I get there.” —R.M.Y.

P h o t o g r a p h b y L A Z A RO R U D A

S C A N T H I S PA G E T O S E E B O R J E S O N A D I V E . ( I n s t r u c t i o n s , p a g e 1 2 )

INC.500 LEAD


LAKESHIA GRANT —

V I RT UA L ENTERPRISE A RC H I T E C T S — NO. 196 — Three-year growth 2,127.5%

On the Agenda: Giving Back In July 2012, Lakeshia Grant’s father told her about a local food bank where he was doing carpentry work. Grant, the founder and CEO of Virtual Enterprise Architects, a business and IT consulting firm in Washington, D.C., decided to check it out. Since then, she and several employees have spent the third Thursday and Friday of each month at the bank, the Family and Youth Outreach Center, where they package food and distribute it to 80 local families. Charitable giving has been a core principle at Virtual Enterprise Architects since Grant founded the business in 2007. Each year, the company matches up to $3,000 in charitable contributions for each employee and gives an award to the staff member who racks up the most volunteer hours. “It’s not so much about the financial giving,” Grant says. “To me, the time we put in is more valuable than the money.” —ABIGAIL TRACY Photograph by DUSTIN AKSL AND

SCAN THIS PAGE TO SEE GRANT TALK ABOUT THE REWARDS OF HELPING OTHERS. (Instructions, page 12)

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INC.500 LEAD


FRANK DOMBROSKI —

F L E X WAG E S O LU T I O N S

— NO. 258 — Three-year growth 1,670%

Top of the World After taking his first plane trip in high school, Frank Dombroski fell in love with flying and saved up for lessons. In the 25 years since then, the CEO of FlexWage Solutions, a financial services and payroll processing company in Mountainside, New Jersey, has logged 2,000 flight hours. He has also owned a dozen two- or four-seat planes, three of which he assembled himself. Dombroski, shown here piloting his Vans RV-7A kit plane over Manhattan, often flies to business meetings and enjoys the occasional aerobatic stunt. He has had some close calls: In February, his plane crashed into treetops on a hillside in Lake Placid, New York, as he was diverting from an unlit runway. The plane was destroyed, but he was unhurt. A week later, he was back in the cockpit. “I have a speed affliction,” he says. —R.M.Y. Photograph by BENJAMIN LOW Y

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S C A N T H I S PA G E T O S E E D O M B RO S K I ’ S P L A N E U P C L O S E . ( I n s t r u c t i o n s , p a g e 1 2 )

INC.500 LEAD


 Giant Killer Julie Bauer knows—make that “groks”—how small businesses can take on big ones.

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PEOPLE OF THE 500

NO.420 J u l i e B a u e r  G r o k  T h r e e - y e a r g r o w t h 1,077.3%  2 0 1 2 R E V E N U E $ 9. 4 M I L L I O N

THE EQUALIZER FOR SMALL BRANDS ON MADISON AVENUE Julie Bauer spent two decades working at some of the world’s largest advertising agencies, serving some of the world’s biggest brands. Now, as a founding partner (along with Tod Seisser and Steve Landsberg) of the New York City-based ad firm Grok, Bauer is facing off against those same big names. And winning. MY PARTNERS AND I all came

out of 20-plus years working for big agencies. A lot of people take clients with them when they leave an agency, but we didn’t. We thought there was an opportunity to go to smaller, challenger brands and say, “You’re going to get the same type of talent that Procter & Gamble gets when it walks through the doors of a Saatchi or a BBDO.” Because we know how the big guys operate, we can zig when they zag. For example, we are the agency for i-Health, which makes a probiotic supplement called Culturelle. In mid-2009, Procter & Gamble entered

the probiotics market with a product called Align. We knew P&G would come in with a hardcore scientific story and base all of their marketing around that claim. And sure enough, they did. They ran ads stating that Align was the No. 1 recommended probiotic by gastroenterologists. And they offered heavy promotion pricing—they were basically giving their products away to build market share. We were outspent 3 to 1. We didn’t want to back

away from the science—the bacterial strain in Culturelle is clinically proven—but we also felt there was a beauty and softness to the Culturelle brand. So we built our marketing around talking to women about digestive issues and making them feel good about Culturelle’s ability to relieve them. We toned down the website’s color scheme and focused on making it soothing, comforting. We ran commercials on TV, and we launched an educational website. Though Culturelle

lost its No. 1 place in the market for a year, we stuck to our guns. I’m proud to say that Culturelle has regained its position as the No. 1 brand in probiotics. One of our clients once told me that the reason she likes working with Grok is that we’re simpatico—we’re doing the same things she is. Just like we have to compete with the big agencies to get business, our clients come to us for the marketing muscle to compete with large businesses. If you look at the definition of grok, that’s what it is: It’s a sci-fi term that means “to understand something or someone profoundly and intuitively.” And that’s what we do.

“Because we know how the big guys operate, we can zig when they zag.”

A s t o l d t o A P R I L J OY N E R  P h o t o g r a p h b y B R I A N F I N K E

INC.500 LEAD


STREET SMARTS

Norm Brodsky ŦŦŦŦ Success Is Even Sweeter When You’ve Been Down and Out Sooner or later, everybody fails. And that’s not necessarily a bad thing

though doing so was part of their agreement. Keith could see that the business was going to fail. Unfortunately, that was the one possibility for which he was totally unprepared. What scared him most was the shame he knew he would feel. He’d made a big deal about the studio’s recent opening. What would he tell people now? What would his friends think? And VERY YEAR AT this time, we celebrate entreprewhat should he do? neurial success, and I’m all for it. Making the I understood what he was going through. I’d Inc. 500 isn’t easy, and those who do it dehad similar feelings when I put my first company, serve our admiration and praise. But I also Perfect Courier, into Chapter 11. My identity was think that you can’t really appreciate success totally wrapped up in the business. People respectunless you’ve known failure. ed me, I thought, because of its success. So when Let me tell you about someone who came to the company failed, it was my failure. I didn’t me for advice about six months ago. I’ll call know how people would react, but I was deeply him Keith. At the time, he was about to open a embarrassed. So I hid out for a while. A couple of yoga studio and was brimming with enthusimonths went by before I would even go to a resasm. But when we met five months later, he was clearly depressed. taurant with anybody other than my wife. It took a Everything had gone wrong, he told me. His partner had lied to lot longer for me to recapture the pride I’d felt him: She’d said the money they’d invested would carry them for six when I was riding high with Perfect Courier. months, but it was gone after four. The yoga instructors he’d signed Looking back, I realize that this painful expeup hadn’t been able to bring in as many students as they’d estimatrience ultimately led to the good things I’ve been ed. The publicist they’d hired wasn’t working out, but his partner able to do since. But I couldn’t see that at the refused to fire her. Meanwhile, he was putting in 12-hour days, time. You never can. seven days a week, and the partner seldom came in to help, even I figured that, like me, Keith was paralyzed by the unknown. So I drew him a decision tree. The first decision: Stay or leave? I said, “If you leave, Norm Brodsky is a veteran there are no other decisions to make about this business. What happens if you stay? You entrepreneur. His co-author is might succeed or you might fail, right?” He nodded. “What happens if you succeed? I can see editor-at-large Bo Burlingham. They also are co-authors of Street that you’re very unhappy. Can you get along with your partner for the next five, 10, 20 years?” Smarts: An All-Purpose Tool Kit “No, I can’t,” he said. “So you’re telling me that, even if you stay and succeed, you’ll be unfor Entrepreneurs. Follow them on Twitter at @normbrodsky happy.” He suddenly brightened. “I didn’t think of that, but you’re right,” he said. “I’m going and @boburlingham. to be unhappy even if we succeed.” I emphasized that I wasn’t telling him what to do. It had to be his decision. But I said he should bear in mind the valuable lessons he’d already learned. The first was, you need to know someone really well before deciding to launch a business with him or her. Second, it’s your responsibility to figure out how much money you need to start a business; you can’t rely on what someone else tells you. Third, most entrepreneurs tend to be overly optimistic in their sales forecasts while underestimating their expenses. Keith was no different. There are undoubtedly other lessons, I said. They’ll come in handy the next time he starts a business. SCAN THE PAGE TO SEE NORM ANSWER ANOTHER QUESTION FROM AN ENTREPRENEUR. (Instructions, page 12)

Do you have a question for Norm? Write to him at AskNorm@inc.com.

100 - INC. - SEPTEMBER 2013

INC.500 LEAD

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The myths of innovation PG.109

Cool products of the Inc. 500 PG.118

INNOVATE Ideas. Breakthroughs. Disruption.

“We spent four months prototyping ideas. This couldn’t be solved with a computer program.” —JONATHAN HOFLICH, left, who co-founded ReconCraft and designed this boat with brother Jay (right)

PG.

ŦŦŦŦ PHOTOGRAPH BY JESSE BURKE

106 SEP TEMBER 2013 - INC. - 103


FROM THE INC. 500 CEO SURVEY

IDEA FACTORIES

INC. 500 COMPANIES ARE BURSTING with ideas. And most CEOs say they are getting

new products and services to market in a matter of months, weeks—even days. Here’s a look at where the ideas come from and some of the best (and worst) eureka moments of Inc. 500 CEOs and their employees.

ŦŦŦŦ Chief Idea Officers

What was your best idea?

93 Which factors contribute to your company’s ability to innovate?

of Inc. 500 CEOs say they are the company visionaries. Where do you get the best ideas for new products and services? CUSTOMERS 38%

ME 24%

Retaining great talent 77%

Developing new business processes to streamline work 72%

Recruiting great talent 72%

Creating an environment in which it’s OK to fail 61%

Collaborating with the right business partners 58%

Investing in research 31%

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BUSINESS PARTNER A DEDICATED TEAM 15% 3%

EMPLOYEES 20%

Though customers provide most ideas, just

37

of companies have a formal method for collecting customer ideas.

“Hiring smarter people than me from Day One.” ERIC BOWMAN, SPARC NO. 15 ON THE INC. 500

“Outsourcing everything that is not core to the business.” DERRICK HARRIS STANDBY TALENT STAFFING SERVICES, NO. 449

“Insourcing jobs to my hometown in Maine. It was cheaper than offshore, and it felt so much better than anything else I had done.” ERIK RICHARD, LANDMARK NETWORK, NO. 211

“To marry my wife and make her my business partner.” JEFF STEVENSON, VINOPRO, NO. 238

“ I had it last week. I can’t tell you.” JACK HOPPIN, INVICRO, NO. 329


86

of CEOs say innovation works better when there is collaboration.

Where do you like to brainstorm?

17%

JUSTIN DRAPLIN SUPERFLY KIDS, NO. 229

MORE THAN A YEAR 5%

Best employee suggestion? “Learn how to delegate.” PHIL DUMONTET, DASHED, NO. 120

13% Shower

“Implement weekly team meetings to increase company communication.” GREG ROPER, INTEGRITY FUNDING, NO. 19

“Beer Fridays.”

12% Company off-site

CARY DANIEL PIVOT EMPLOYMENT PLATFORMS, NO. 333

Worst suggestion? “Let people vote for company policy decisions.” CHRIS MASON, BRANDING BRAND, NO. 334

7%

Exercising

“Standup desks for employees. Great concept, but not accepted by all.” CHARLES JENKINS CWU, NO. 204

GEOFFREY STENRICK, SIMPLERAY, NO. 320

“Thinking I could do it all on my own.”

SIX TO 12 MONTHS 22%

Vacation

KRISH V. PATEL WIRELESS COMMUNICATIONS NO. 315

“Hiring a bookkeeping service that I didn’t vet. My Spidey senses were tingling, but I just let them keep up the work. Undoing bad bookkeeping is an impossible nightmare.”

LESS THAN A MONTH 27%

Group meetings

STEVEN GALLEGOS, VESA HEALTH & TECHNOLOGY, NO. 231

“Recruiting all my friends to work for me.”

ONE TO FIVE MONTHS 46%

26%

Your worst?

“Starting two companies at once.”

How long does it take you to go from idea to market?

1%

Golf course

“Put an Xbox in the conference room.” FRANK WATSON NISGA’A DATA SYSTEMS, NO. 341

ICONS: MATTHEW HOLLISTER; BULB: IAN NOLAN/ALAMY; BEER: BURAZIN/GETTY; XBOX: A. ROBERT TURNER/ALAMY

Putting their heads together

INC.500 INNOVATE


 Puddle Jumper Brothers Jay (left) and Jonathan Hoich pilot their prototype over the sandbars and shallow waters of Hingham Bay in Massachusetts. Several federal agencies use their boats.

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PEOPLE OF THE 500

NO.206 J o n a t h a n H o f l i c h  R e c o n C r a f t  T h r e e - y e a r g r o w t h 2,044.7%  2 0 1 2 R E V E N U E $ 2 . 2 M I L L I O N

PROTECTING OUR (SHALLOWEST) BORDERS After leaving the U.S. Coast Guard in 2008, Jonathan Hoflich teamed with his brother Jay and friend Joe Silkowski to design the kind of boat he had always wanted on patrol: a jet boat that could glide stealthily in just a few inches of water and run roughshod over rocks and logs. Today, their Newton, Massachusetts–based company, ReconCraft, makes vessels for the Department of Homeland Security and the Department of Defense. But, in the early days, a design flaw almost sunk everything. WE WERE HALFWAY through

our first-ever trade show in 2009 when U.S. Customs and Border Protection invited us to demo our vessel in Del Rio, Texas. The shallow-water craft they were using were these noisy airboats. Our boats are quiet. So, we left the show early. I was really confident. Maybe overconfident. In Del Rio, they took us through a huge border gate and down a dirt road to a little clearing maybe 10 feet wide, where the river separates the U.S. and Mexico. I thought, This is a really small river. I could grab a rock and throw it across to Mexico. My partner Joe took our

boat out with a couple of their guys while I stood on the bank with a senior official from the CBP. After a while, an airboat came around the corner— and there was a tow rope behind it. No, I thought. This can’t be! Our boat was being towed by the airboat we were hoping to replace. The jet intakes had gotten clogged with hydrilla, a long, stringy weed that grows in shallow water. Joe and I jumped into the water and started pulling the weeds out by hand, begging

for another chance. They agreed. Luckily, I was able to show that the boat could run in 3 inches of water and go over rocks. Then, we turned the corner and saw a small Mexican guy trying to cross the river. Normally, migrants hear the airboats and hide in the bushes until they go by. But he didn’t hear us coming. The guy looked at us, frozen, like, “Whoa!” We couldn’t have paid to be in a better spot. It highlighted our boat’s potential. If we could just figure out how to operate it in weeds and

debris, we would have an edge. We had to solve this. We spent four months prototyping ideas. This couldn’t be solved with a computer program. We had to do it the old-fashioned way, through trial and error. Eventually, we came up with a device, which we patented, called a weed-and-debris gate. It acts like scissors— when you move a lever, it chops up all the weeds. Then, they float right out the back. When the CBP eventually solicited bids, we went head to head with several boat companies. But this time, we were ready. Now, we’re filling an 80-boat contract. Had we not failed so miserably in that first meeting, we probably wouldn’t have been so intent on coming up with a solution.

“We spent four months prototyping ideas. This couldn’t be solved with a computer program.”

S C A N T H E PA G E T O S E E T H E J E T B O AT I N A C T I O N . ( I n s t r u c t i o n s , p a g e 1 2 )

A s t o l d t o B U RT H E L M  P h o t o g r a p h b y J E S S E B U R K E

INC.500 INNOVATE


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YOU’RE NOT THAT INNOVATIVE (AND THAT’S OK) B y A D A M B LU E S T E I N

 I l l u s t r a t i o n s b y PA U L B L O W

ŦŦŦŦ

In fact, it could be an advantage. Here’s what the latest research says about innovating— including when not to do it

N

EARLY everywhere you turn these days, you are exhorted to innovate, disrupt, or otherwise prove yourself a game changer. It’s enough to make you feel that if you haven’t put a couple of Fortune 500 incumbents out of business this week, you’ve taken your eye off the ball. There’s nothing wrong—and plenty that is right—with trying to innovate. But what if innovation is not the panacea it’s said to be? Can’t you simply work hard, heed your customers, and manage your business very, very well? To answer that question, we pored over academic studies, talked to innovation experts and entrepreneurs, and turned to some unlikely sources (including racecar teams) to get beyond the rhetoric and find the reality behind six of the most common myths about innovation. The conclusion: You probably need less of it than you think.

INC.500 INNOVATE

SEP TEMBER 2013 - INC. - 109


MYTH: INNOVATION IS DISRUPTION FACT: SMALL STEPS ARE MORE LIKELY TO SPUR SUCCESS

I

N THE WAKE OF CLAYTON Chris-

tensen’s influential book The Innovator’s Dilemma, many people have come to equate the idea of innovation with disruptive innovation. But the fact is that for most businesses, placing big bets on high-risk ideas is not only unfeasible, it’s unwise. “The real question is, How much disruptive innovation do you really need to advance your business goals?” says Robert Sher, founding principal of the Bay Area consulting firm CEO to CEO. Not that much, suggests a 2012 report by innovation consultants Bansi Nagji and Geoff Tuff. In a survey of publicly traded companies across the industrial, technology, and consumergoods sectors, they found that the most successful businesses allocated resources across three distinct categories of innovation in a particular ratio. On average, the most successful companies devoted about 70 percent of their innovation assets (time and money) to “safe” core initiatives; 20 percent to slightly more risky adjacent ones; and just 10 percent to transformational, or disruptive, ones. Such companies outperformed their peers in terms of share price, with price-to-earnings premiums of 10 percent to 20 percent. Core innovation involves making incremental changes to improve existing products for existing customers— think selling laundry detergent in capsule form. Adjacent innovations draw on a company’s existing capabilities and put them to new uses—see Procter & Gamble’s Swiffer, a reenvisioning of the old-fashioned mop to attract a new set of customers. Transformation-

110 - INC. - SEP TEMBER 2013

al (a.k.a. disruptive) innovations involve inventing things for markets that don’t exist yet—say, iTunes or Starbucks. The 70:20:10 ratio isn’t set in stone. Depending on your industry, your competitive position in it, and your stage of growth, you may need to make adjustments. Tech companies, for example, tend to spend less time and money improving core products because their market craves novelty, and so they may put more effort into risky ideas. VCbacked start-ups have to go all in with a disruptive strategy. Consumer-products companies with established product lines tend to focus mostly on incremental innovations. Of course, when a disruptive innovation succeeds, the returns can be enormous. Nagji and Tuff also found that when it came to return on investment of innovation, the success ratio was flipped, with 70 percent of total returns coming from breakthrough initiatives, 20 percent from adjacent ones, and 10 percent from core improvements. Bottom line: Every business needs some practice coming up with ideas that will change everything, but it is unwise to let the pursuit of the breakthrough over-

shadow the many smaller initiatives that sustain a business over the long run.

MYTH: YOU CAN’T HAVE TOO MANY IDEAS FACT: SURE YOU CAN, IF YOU DON’T KNOW WHAT TO DO WITH THEM

C

OMING UP WITH

ideas isn’t nearly as hard as determining which ones are any good and figuring out what to do with them. Small companies can be crushed under the weight of too many ideas. A big part of your job as CEO is to kill the weak ones. But most companies lack processes to decide which ideas to pursue, much less ways to measure their success. Picking the right ideas starts with being clear about your company’s mission. A cool idea that excites your engineers should never become a working project until someone can articulate how it actually solves a pressing problem that your customers have. The business case for pursuing an innovation should include an indication of how to measure its impact, says Sher. “The goal could be increasing brand awareness, customer satisfaction, customer retention," Sher says. “Make sure you measure something crucial to your outcome.” Just as you can’t drink from a fire hose, a company can’t “do something” with every idea your people come up with, not even every good idea. “You never have enough resources and time to attack all your opportunities,” says

INC.500 INNOVATE


offering superior service or an alternate format, or simply outmarketing them.

MYTH: INNOVATION IS ABOUT STUFF FACT: TRY A BUSINESS-MODEL REVAMP INSTEAD

M

Sher. “You want to focus on the best ones, so you can finish them first. Two nonessential ones get done, the important ones don’t, and there’s no value created.”

MYTH: IT PAYS TO BE FIRST FACT: BETTER TO BE A SMART FOLLOWER

I

NNOVATION IS OFTEN associ-

ated with the visionary, who invents something new and is first to market. And that's a great strategy— if you’re patenting a blockbuster drug. But if your aim is to sell morequotidian goods and services, research tells us that there are advantages to arriving late to the party. This is especially true in emerging industries or sectors, where you don’t have to look far for cases of second and third movers that let pioneers beat a path, only to come in and blow them away: Nintendo vs. Atari, Amazon vs. Book.com, Google vs. Yahoo. In a 2010 study, University of Chicago researchers Stanislav Dobrev and Aleksios Gotso-

112 - INC. - SEP TEMBER 2013

poulos found that companies that enter new industries at an early stage actually have a first-mover disadvantage, failing at a much higher rate than those that wait. It turns out that first-to-market pioneers suffer from higher costs that eventually overwhelm their profit advantage. As a result, over the long term they are less profitable than second- or third-generation followers. What’s more, first-mover advantages are on the decline. Why? For one thing, the pace of follow-on innovation has increased dramatically. In “The Myth of First Mover Advantage,” a study published last year by consulting group IHS, business analysts Erik Darner and Justin Pettit found that in the past century, the average span between introduction of an innovation and follow-on competition has fallen from 33 years to just 3.4 years. What’s more, Darner and Pettit’s research found that unless first movers enjoy one of three conditions—a significant learning curve for followers; the ability to preempt competitors for scarce resources, whether raw materials or a specific talent; or high customer-switching costs— there is no advantage to going first. By contrast, followers have a multitude of ways to topple pioneers, including improving or simplifying a product,

OST companies focus most of their innovation efforts on new products and product extensions, according to research by the consultancy Doblin. But these kinds of innovations, it turns out, are the least likely to return their cost of investment, with a success rate of only 4.5 percent. Instead, Doblin found, companies get the highest return on investment when they focus on things such as improving business models, internal processes, and customer experience. “The most valuable innovations are platform-level innovations,” says Larry Keeley, a director at Deloitte and the author of Ten Types of Innovation. Though Apple is rightly famous for well-designed devices, he says, “Apple’s most valuable innovation is the iTunes store.” Almost as integral to Apple’s success have been the company’s aggressive tax-avoidance strategies—such as creating offices and subsidiaries in low-tax locales such as Nevada, Ireland, and the British Virgin Islands. “It’s created a very advantaged business model,” says Keeley. Similarly, Amazon makes little money on Kindle sales. The device’s real value comes from the way Amazon has linked it to its massive inventory of e-books. Other examples of nonproduct innovation include the collaborativeconsumption models of Zipcar or Airbnb, Zappos’s positioning of itself as “a service company that just happens to sell shoes,” and the values-driven strategies of Patagonia and Whole Foods. Rather than obsessing over your next new product or service, it might be smarter to work on a new profit model or a better customer experience. Opportunities abound for CEOs who recognize that

INC.500 INNOVATE


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MYTH: YOU MUST INNOVATE CONSTANTLY FACT: INNOVATION IS CYCLICAL

I

N CERTAIN INDUSTRIES—entertainment, advertising, and fashion, for example—customers expect new things all the time, and the businesses that can deliver novelty on a regular basis are the ones that win. But for most businesses, it’s important to time innovation efforts more carefully. “When your last innovation is proven and you’ve started to scale, you want to focus most of your people and energy on grabbing that opportunity,” says CEO to CEO’s Robert Sher. “If you’re doubling every year, you want to devote 90 percent of your efforts to reaping that opportunity. When you’re a couple of years into rocket-ship growth, but competitors have shown up...that’s when you want to add to your innovation percentage.” Broader industry trends and developments—new regulations, say, or the emergence of new technologies—also need to be taken into account when determining whether it’s time to innovate. That’s the finding of a study of Formula One auto-racing teams by Paolo Aversa of the Cass Business School in London. Formula One races are essentially competitions between prototypes, each aiming to be the cutting edge of automotive technology. But teams also must follow a strict set of rules handed down by the sport’s governing body, FIA, designed to increase safety, spur creativity (such as asking for more-efficient engines), and reshuffle the competition so the same teams don’t always win. Aversa found that in years when the FIA mandated major technical changes instead of the usual minor tweaks, the teams that followed an adaptive strategy—simply making their car fit the regulation perfectly, without introducing any additional optional innovations— consistently beat historically strong competitors that overinnovated. Aversa believes his findings apply beyond the

114 - INC. - SEP TEMBER 2013

racetrack. After all, rules, standards, and technologies change all the time in the business world. When they do, even the smartest companies can get overextended when they try to do too much.

MYTH: INNOVATION IS COSTLY FACT: SPENDING HAS LITTLE TO DO WITH RESULTS

I

N ITS ANNUAL GLOBAL Inno-

vation 1000 study, the consulting group Booz & Company has consistently found no correlation between a company’s research and development spending and how innovative it is ranked by peers. What’s more, it has found no relationship between R&D dollars and financial performance. In Booz’s most recent survey, from 2012, the top 10 R&D spenders actually underperformed their industry peers in terms of both market capitalization and revenue growth. Apple, ranked as the most innovative company for the past three years, spends just 2.2 percent of its sales on R&D efforts. That’s well below the industry average of 6.5 percent for computing and electronics and far less than rivals such as Google, Samsung, and Microsoft. In fact, Apple ranks 53rd among the 1,000 top R&D spenders in all industries. “There’s a logic fallacy that if you spend more, you get more innovation,” says Michael Schrage, a research fellow at MIT and an adviser on innovation to companies such as Procter & Gamble and Herman Miller. Measuring innovation properly, Schrage says, means getting away from looking at inputs—that is, your R&D dollars—and focusing on the outputs that your efforts are generating with customers. “Unless you can show that customers and clients are getting more value from your new offerings,” Schrage says, “it’s less likely to be innovation and more likely to be waste.” ADAM BLUESTEIN is a Burlington, Vermont–

based freelance writer and a frequent contributor to Inc.

ŦŦŦŦ

the next big idea just might come from the CFO rather than an engineer.

DO THIS INSTEAD These tried-and-true strategies might have a better payoff than attempts at innovation. —

Invest in employees How important are happy employees? More than you might imagine. David Sirota, coauthor of The Enthusiastic Employee, found that businesses with high morale outperformed industry counterparts by 20 percent; those with moderate or low morale underperformed peers by about 5 percent.

Encourage efficiencies Don’t underestimate the cumulative impact on your bottom line of encouraging employees to make improvements in areas they understand.

Crush customer service Studies show a positive correlation between customer satisfaction (using the American Customer Satisfaction Index) and share price. In a 2008 study by Vanderbilt University, a portfolio composed of companies with high ACSI scores outperformed the market, gaining 212 percent compared with an increase of 105 percent for the S&P.

Promote yourself Dixon Ticonderoga hasn’t changed its iconic pencils since World War II. Yet the 218-yearold business boosted sales more than 18 percent in 2012—largely thanks to a public relations effort that resulted in high-impact media impressions, including an Oprah magazine cover.

De-innovate At some point, consumers get exhausted by complexity, giving the upper hand to businesses that can simplify an existing model. See Mint.com in the personal accounting space or the Wii controller in gaming. —A.B.

INC.500 INNOVATE


NOW ON VIEW

MAGRITTE The Mystery of the Ordinary, 1926–1938

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Bank of America is the National Sponsor of Magritte: The Mystery of the Ordinary, 1926–1938. Major support for the MoMA presentation is provided by the American Friends of Magritte, Inc., and by The International Council of The Museum of Modern Art. Additional funding is provided by the MoMA Annual Exhibition Fund. This exhibition is supported by an indemnity from the Federal Council on the Arts and the Humanities. Support for the accompanying publication is provided by Charly Herscovici. René Magritte. The False Mirror (detail). Paris, 1929. Oil on canvas. Purchase. © 2013 C. Herscovici, Brussels/Artists Rights Society (ARS), New York


 Meals on Wheels Phil Dumontet leads a few of his employees through the streets of Boston, where his company delivers orders for hundreds of local restaurants.

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PEOPLE OF THE 500

NO.120 P h i l D u m o n t e t  D a s h e d  T h r e e - y e a r g r o w t h 2,984.2%  2 0 1 2 R E V E N U E $ 4 . 6 M I L L I O N

ADDING DELIVERY TO THE MENUS OF HUNDREDS OF RESTAURANTS Phil Dumontet started Dashed, a Boston-based food-delivery service, with nothing more than two wheels and a plastic food container. Today, the 26-year-old CEO has rolled out his service to five cities and more than 500 restaurants, including chains such as P.F. Chang’s and Pinkberry. Making that many deliveries—all in about 45 minutes each—requires smart logistics and a whole lot of pedaling. I STARTED THE DELIVERY service on my Trek mountain bike in 2009. I outfitted it with an insulated Rubbermaid container and started making deliveries for an Italian place called Maurizio’s. I had just graduated from Boston College, with a marketing and philosophy degree, and I was in the best shape of my life. There were already a couple of delivery services in Boston. But the largest one, which employed about 60 drivers, had just folded. I thought there was such an opportunity. The demand was there, but the company had gotten a lot of complaints about bad service and deliveries taking 90 minutes or more. I thought,

It’s not rocket science. You want to get the food there as quickly as possible. Before graduation, I’d signed a contract to work for AT&T in sales. I broke the contract. The recruiter wasn’t happy. She said, “You want to start your own business, when AT&T has been around for over 100 years?” And I’m like, Absolutely! I called it Dashed because we focus on speed. Delivery times are all I think about. We average 45 minutes. When you place a food order online or over the

phone, it gets sent to our dispatch routing system in Boston. Then, one of our dispatchers arranges the pickup. Restaurants pay us a portion of orders we deliver, typically about 30 percent. Over time, I expanded to Providence; Philadelphia; Hoboken, New Jersey; and Baltimore. In New York City, every place has its own delivery staff. But that’s not the case in those cities. Most restaurants don’t want the headache. I approach these guys and say, “Look, just think of us as your best take-

out customer.” Some restaurants have seen a 10 to 16 percent increase in sales. This year, I’m expanding to Connecticut. There’s strong demand from colleges, and a lot of restaurants don’t deliver. Setting up in a new city is straightforward: I pay salespeople to go in and sign up restaurants, and once we get to about 50 of them, we flip the switch. Today, about 25 percent of my delivery guys are on bikes and scooters—the rest are in cars. Nobody else is investing in bikes and scooters the way we are. They are faster and more nimble, and you can park them anywhere. That’s a big advantage when you’re trying to get the food there as fast as you can.

“I called it Dashed because we focus on speed. Delivery times are all I think about.”

A s t o l d t o B U RT H E L M  P h o t o g r a p h b y M A R K P E T E R S O N

INC.500 INNOVATE


THEY MADE IT With robot baby strollers, foldable speakers, and high-tech sand, Inc. 500 manufacturers make the ordinary extraordinary P h o t o g r a p h s b y J A M I E C H U N G  Te x t b y S H I VA N I V O R A

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NO.425

P r e f e r r e d S a n d s  Ra d n o r, Pe n n s y l v a n i a This is no ordinary sand. The red resin-coated grains are specially treated for hydraulic fracturing, or fracking. The fracking process typically involves blasting a high-pressure mix of water, sand, and chemicals into shale deep below the earth’s surface. (The sand props open tiny cracks in the shale, releasing gas and oil.) Preferred Sands, one of the country’s largest fracking sand suppliers, developed the resin-coated sand in response to growing demand for greener materials, says founder Michael O’Neill. The coating allows sand to penetrate low-temperature and low-pressure wells without the use of phenol, a strong chemical.

INC.500 INNOVATE


NO.467

B u s t i n B o a r d s  B r o o k l y n , N e w Yo r k Need a ride to work? This Sportster 36 skateboard is built for commuting. The $247 longboard, made of nine-ply Canadian maple, sports a drop-through design, meaning it’s low to the ground for added stability. Notches carved in the middle give the board exibility for a more comfortable ride. Ryan Daughtridge started the company after designing his own skateboard to commute two miles to his Wall Street job in New York City. Bustin Boards, which specializes in longboards for racing and commuting, manufactures the boards in its North Carolina factory before screen-printing custom designs onto them in New York.

S C A N T H I S PA G E T O S E E T H E B O A R D I N A C T I O N O N T H E S T R E E T S O F N Y C . ( I n s t r u c t i o n s , p a g e 1 2 )

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NO.307

O r i g A u d i o  Co s t a M e s a , Ca l i fo r n i a Turns out that almost anything can become a speaker, even a cardboard box. That’s the idea behind these 3-inch-tall Fold N’Play speakers, made from recycled materials. The speakers, which fold flat, weigh just 4 ounces each and are powered via the headphone jack of a mobile phone or MP3 player. Friends Jason Lucash and Mike Szymczak came up with the idea for the portable speakers, inspired by a Chinese takeout container. Now, their company, OrigAudio, sells a variety of audio electronics, including a gadget that turns household objects—empty tissue boxes and Styrofoam coolers—into speakers. But these Fold N’Play speakers, which come in six designs and sell for $16 a pair, are still the company’s bestseller.

INC.500 INNOVATE


NO.356

K T Ta p e  L i n d o n , U t a h When beach volleyball player Kerri Walsh won the gold medal in the 2008 Olympics, the black web on her right shoulder got nearly as much attention as her game. The mysterious material turned out to be kinesiology tape, which was stabilizing a rotator-cuff injury. One curious viewer, John MacKay, sensed a business opportunity after he discovered that the tape was being marketed only to physicians. His KT Tape, which comes in 10 colors, is sold over the counter to consumers who, say, pull a muscle or suffer from tendinitis. When placed strategically, the elastic adhesive strips, which sell for $13 to $20 a roll, can either activate or inhibit a targeted muscle. MacKay’s company sold more than two million rolls of the stuff last year through some 22,000 drugstores and other retailers.

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INC.500 INNOVATE


NO.401

4 m o m s  P i t t s b u rg h This Origami baby stroller is actually part robot. Press a button on the handle, and it automatically folds down flat, ready to stow in a car trunk. The cool factor doesn’t stop there: The stroller, which sells for $849, includes headlights and an LCD screen that displays information from the built-in thermometer, pedometer, and speedometer. And, of course, there’s a mobile-phone charger, powered by generators in the rear wheels that harness energy as you push the baby. 4moms co-founder Robert Daley says his inspiration was watching a mother struggle to fold her stroller with one hand while holding her baby in the other. He partnered with roboticist Henry Thorne to create the Origami and the company’s other high-tech baby products.

124 - INC. - SEP TEMBER 2013

INC.500 INNOVATE


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Rigid Industries  Gilbert, Arizona No streetlights? No problem. Designed for off-road vehicles, these bright—and nearly unbreakable—LEDs from Rigid Industries light up dark spaces for a variety of industries, including farming, emergency services, automotive racing, and mining. The company’s patented reflector systems help project the beams long distances. The 40-bulb E-Series light bar (pictured far left) can cast light over a distance of more than 3,000 feet. The light bars, which sell for about $700 each, can be found mounted on a variety of off-road vehicles, including desert racers and airplane inspection vehicles. CEO Jason Christiansen, a former major league pitcher, focused the business on lighting after buying an aftermarket automotive accessories company in 2004. S C A N T H I S PA G E T O S E E H O W T H E L I G H T S FA R E A G A I N S T A C I RC U L A R S AW. ( I n s t r u c t i o n s , p a g e 1 2 )

126 - INC. - SEP TEMBER 2013

INC.500 INNOVATE

PROP STYLING: BRIAN BYRNE; KT TAPE STYLING: RAWLE SCOPE

NO.151


 Streamlining Operations Ricardo Alexander Gomez developed a small device (on the far-right edge of the table) to replace the buckets of hot water traditionally used to defog scopes during laparoscopic surgery.

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PEOPLE OF THE 500

NO.228 Ricardo Alexander Gomez  New Wave Surgical  Three-year growth 1,903.7 %  2012 REVENUE $12.4 MILLION

MY PRODUCT HELPS SURGEONS SEE WHAT THEY ARE DOING Med school is tough enough without starting a company in your dorm. But after working in the operating room, Ricardo Alexander Gomez saw the need for better tools. So he threw himself into launching New Wave Surgical, his Pompano Beach, Florida–based company. Even though it meant abandoning his other dream. MY GRANDFATHER GOT me interested in

medicine. He was a doctor for nearly 30 years, serving the underprivileged in Cuba and Puerto Rico. When he died, hundreds came to the funeral. He had made a difference in so many lives. From then on, I wanted to become a doctor. To save for medical school, I worked as a surgical technologist, who passes instruments to the surgeon. That’s when I encountered a strange technique: using a bucket of hot water during laparoscopic surgery. The operating room is chilly. When you put a cold laparoscopic camera lens into a warm body, it fogs up. Surgeons go in and out, dipping the scope in the bucket to defog it. Our

hospital was small and dated, so I assumed we were using an archaic method. Then, during medical school, I moonlighted as a surgical tech at New York– Presbyterian Hospital, a state-of-the-art facility. The surgeons were doing things laparoscopically that no one else dared. Yet, there I was again with that bucket. That’s when I started developing the D-HELP, a fist-size device. You insert the scope, and a solution inside cleans and warms the lens. It’s disposable and battery operated, and, unlike the bucket, it can sit right on the operating table. As a med student, I had little money for development. I asked a surgeon to co-sign a loan with me. He agreed, but because I had no credit or income, the bank refused. So he loaned me $90,000 himself. If there’s a true definition of an angel investor, it’s Daniel McBride, M.D. I began creating working models of the device. I’d go down to the lobby of my dorm, and the doorman would won-

der why I was getting weird components and boxes from China. I tried many cleansing solutions, but I couldn’t find one gentle or safe enough. One night, at 3 a.m., I was studying for a test and read about a solution used to clean burns. It’s what we still use today. When I needed more funding, my mother refinanced her house. I struggled with that, but I felt deep in my heart that I would not let her down. Eventually, I had to decide whether to enter residency or continue with the business full time. In my fourth year, I left medical school. I had more than $200,000 in educational debts, but I knew that for the company to succeed, I had to give it everything I had. Today, nearly 1,000 hospitals use D-HELP. I may not be a doctor like my grandfather, but success is not about letters at the end of my name. It’s about making a contribution to people’s care. And I feel blessed to have done that.

“Eventually, I had to decide whether to enter residency or continue with the business.”

A s t o l d t o R E S H M A M E M O N YA Q U B  P h o t o g r a p h b y J E F F E RY S A LT E R

INC.500 INNOVATE


GET REAL

Jason Fried ŦŦŦŦ

(Re)Birth of a Salesman Hey, CEOs: Get out of the office and start pitching clients face to face. You’ll be surprised at the things you’ll learn

el, the top line more or less takes care of itself. Pretty enviable, right? That’s what I always thought. But there is a cost to all this automation. We see the numbers and analyze the data. But we don’t get to hear the stories behind the sales. And I miss that. I began to wonder: What would it be like to hit the streets again and actually sell something, person to person? Which brings me to 37signals’s new product. IKE MANY ENTREPRENEURS, I started out in sales. It’s called Know Your Company, and it’s an appliI began at 14, when I got a job selling shoes and cation designed to help the owners of small, growtennis rackets at a pro shop, and I’ve been ing businesses become smarter managers. selling one thing or another ever since. We launched Know Your Company in June, and Being a salesperson prepares you for just we’re selling it differently from our other products. about everything in business: how to listen, Instead of self-service, it’s full service. You can’t empathize, and persuade; when to back off and even buy it unless you’re willing to sit through a when to step in; and, of course, how to close. 30-minute pitch and product demo. (People in But at 37signals, neither I nor anyone else Chicago come to our office; otherwise, we chat via spends much time in sales mode. Our sales WebEx or Skype.) process is self-service and entirely automated. If you want to buy The other thing that’s different: I (along with a Basecamp, Highrise, or Campfire, you simply go to our website, click colleague) am doing the selling. a couple of buttons, and it’s yours. No human interaction is required. Aren’t there more important things for a CEO As a result, we’re free to spend our time on more creative purto be doing than making sales calls? suits, such as improving our products, providing better customer A few months ago, I would have said, “Absoservice, writing books and articles, hosting conferences, exploring lutely.” But after spending a couple of months ideas for new products, and the like. Thanks to the self-service modselling Know Your Company, I am convinced that there’s nothing more valuable for me to be doing right now. When you spend time with potential customJason Fried is co-founder of ers, you get to hear about their struggles firsthand. You see their eyes light up with 37signals, a Chicago-based excitement or darken with confusion. You learn things you would never find in a software company. survey, database, or questionnaire. You learn why people buy. The stories I hear are packed with insights we can use to improve not just Know Your Company but all of 37signals’s products. Just as important, Know Your Company customers all are fellow entrepreneurs. We inevitably wind up talking shop about other things. Maybe someone has an issue I can help with. Or maybe someone has just solved a problem that has me stumped. Such conversations may have little if anything to do with Know Your Company, but they, too, yield useful insights. So far, we’ve given about 100 demos, nearly half of which have led to sales. Could we have made 500 sales if Know Your Company was self-service? Maybe. But I would know a whole lot less about our customers.

132 - INC. - SEP TEMBER 2013

INC.500 INNOVATE

JEFF SCIORTINO

L


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Stay-at-Home CEO Running her staffing company from her home in Pennsylvania affords Allison O’Kelly more time with Ethan (right) and her other two sons. Most of her employees have similar arrangements.

134 - INC. - SEP TEMBER 2013


PEOPLE OF THE 500

NO.472 A l l i s o n O ’ Ke l l y  M o m C o r p s  T h r e e - y e a r g r o w t h 983.8%  2 0 1 2 R E V E N U E $ 1 6 . 2 M I L L I O N

BRINGING FLEXIBILITY TO THE LIVES OF THOUSANDS OF WORKING MOTHERS Allison O’Kelly was on the corporate fast track: She had an M.B.A. from Harvard, had worked as a CPA at KPMG, and was climbing the executive ladder at Toys “R” Us. But everything changed when she had kids. Now, O’Kelly’s Atlanta-based staffing company, Mom Corps, is helping her—and other working moms—spend more time at home. I WAS ALWAYS passionate about

retail, which is why I pursued a job at Toys “R” Us. After several years, I was up for a big promotion to become the only female district manager in the Southeast. Then I had my first child. My boss was amazing. He told me I could work three days a week until I was ready to get back on track. But I found I needed more flexibility. The idea that I had to be anywhere at a specific time was challenging for me. When I resigned, my boss was like, “I don’t get it. What more could we have done?” I felt bad because there was nothing. Eventually, I realized that there were many talented

people like me who wanted to work but on their terms. At the same time, I saw that companies were short on top talent. I figured there was a market if you could match those two things up. That’s how Mom Corps was born. Now, I have three boys, ages 2, 8, and 10. When I tell my story about how hard it is to be a working mom, everyone nods her head. We have all been there. It’s a huge struggle to have both a career and a family. Our candidates trust that we will listen and place them according to their

needs. Whatever their limitations are, we won’t look at them like they’re crazy. People often think that flexible work means part time. That’s only part of it. We talk about flexibility in terms of time, duration, or place. Time could be part time or flexible hours. Duration could be a fixed-month contract or seasonal work. And place could be closer to home or telecommuting. We get told by employers that the moms we place are very productive. They say, “Gosh, your people get more

done than some of my fulltime people.” That’s because moms have other priorities and they are focused on what they need to get done. Not all of my employees are moms, but most are. We all work from home and rely on conference calls, instant messaging, and email. I work full time on a 24hour clock. I might do something with the kids during the day, but I’ll make it up at 5 a.m. or after they go to bed. I have complete flexibility. I can see my kids when they get home from school, I can run downstairs to steal a kiss from the baby during my lunch break, I can go to parties at school. It’s a constant juggling act, but I feel I have the best of both worlds.

“I can run downstairs to steal a kiss from the baby during my lunch break.”

As told to DARREN DAHL  Photograph by BETH PERKINS

INC.500 INNOVATE


The honorees, all 500 of them, ranked within their industries PG.150

THE500 2013’s Growth Leaders, by the Numbers

PG.

138

“At the end of the year, I’m going to have four million screens out there. That’s like a whole TV network.” —JIM MITCHELL, CEO of Fuhu, the No. 1 company on the Inc. 500, with three-year growth of 42,148 percent. Pictured is the Nabi 2, Fuhu’s signature product.

ŦŦŦŦ PHOTOGRAPH BY JAMIE CHUNG

SEP TEMBER 2013 - INC. - 137


PEOPLE OF THE 500

NO.1 J i m M i t c h e l l a n d Ro b b F u j i o k a  F u h u  T h r e e - y e a r g r o w t h 42,148%  2 0 1 2 R E V E N U E $ 1 1 7. 9 M I L L I O N

KID YOU NOT The fastest-growing company in

America makes a soft-sided tablet that entertains and educates kids. It’s cute. That’s where the cute ends at Fuhu, one very intense business By

B U RT H E L M

 Photograph by MICHAEL LEWIS

ROBB FUJIOKA IS TOO BUSY, working too fast, to be watched. Underlings are lined up. One wants sign-off on a package design. Another needs guidance before a supplier negotiation. But a reporter (me) has asked to observe a meeting or something, his marketing person reminds him—to get the flavor of the company. So he has her use the walkie-talkie she and other managers carry to call 24 of them in for an impromptu meeting. Within minutes, they file in like obedient children. He gives me a look. There, happy? This is the El Segundo, California, headquarters of Fuhu, maker of the Nabi. It’s the first Android tablet for children, and it sold 1.2 million units last year, generating $118 million in revenue—explosive sales that led to 42,148 percent growth in three years. The Nabi is adorable. It’s possible the men who run Fuhu were adorable once. Now they are very, very grown up: This is company No. 7 for Fujioka, Fuhu’s president. Jim Mitchell, the CEO, is a 19-year veteran of the consulting giant

138 - INC. - SEP TEMBER 2013


FOCUSED GROUP Jim Mitchell (left) and Robb Fujioka with some Nabi fans

THE 500


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For a deep dive into the Inc. 500 companies and their leaders, P L E A S E T U R N T H E PA G E A N D OPEN THE FOLDOUT

ŦŦŦŦ Accenture. The two other co-founders, John Hui and Steve Hui, have worked in the computer hardware industry almost as long as there has been a computer hardware industry. (John Hui was co-founder of eMachines, bought by Gateway for a reported $290 million.) Their industry connections run deep: This scrappy little start-up happens to have weekly conference calls with the world’s largest manufacturer, Foxconn, a behemoth with 1.4 million employees. The Hui brothers and Fujioka co-founded Fuhu (it’s a combination of the first two letters of their last names) in 2008 with $1.5 million in seed funding from the Huis’ hardware friends. Their original idea was straightforward, if eventually unsuccessful: They would develop apps, features, and other software that hardware companies could bundle with their products to justify higher prices and escape commoditization. They recruited Mitchell to be Fuhu’s CEO. The Huis took on advisory roles. John Hui had just one rule for Mitchell and Fujioka: Don’t touch the hardware itself. Develop any software you want, but license the technology and leave the anorexic margins and all other headaches to the big guys. Over the next two years, Fuhu would develop virtual trading cards called urFooz, a widget platform called Spinlets, a kid-friendly user interface called Fooz Kids, and software called urDrive that could run applications from a USB jump drive. Mitchell and Fujioka sold equity stakes to the hardware companies they worked with, including Acer, Kingston Technology, and Foxconn. But Fujioka grew increasingly frustrated with the massive hardware companies. “Every time you had a simple idea, you had to go and convince all these guys to do it,” he says. “You’d almost have to say, ‘I’m going to turn your devices into gold’ to get all these self-motivated fiefdoms involved.” Worse, the big guys could be bullies. After Fujioka spent six months selling Acer on an app store, he says, the giant went ahead and made its own version, the Acer Alive app store, which launched in November 2010. (Acer did not comment on the claim.) That year, however, Apple introduced the iPad, leading competitors to rush out mass-market tablets for Google’s Android operating system. Fujioka and Mitchell believed they spotted an unaddressed market: women. Without telling the Huis, they decided to design a niche tablet them-

selves. They would touch the hardware. In the spring of 2011, Fuhu produced a prototype of a sleek tablet geared toward women, called Pinq (pronounced pink). Retailers weren’t interested, and it seemed as if the company might have a year with no new products. But that summer, Foxconn came to Fuhu with an opportunity. It was trying to get rid of these remaindered low-end tablets it couldn’t sell. Did Fuhu have any ideas? “It was a shit tablet,” says Mitchell, but Fujioka had an idea. Fuhu had already developed Fooz Kids. “Robb thought, Why not put it on this tablet, redo ’em, and sell ’em for 99 bucks?” says Mitchell. The device crashed too much to bring to market. Still,

Because Fuhu makes only $5 or $10 profit on the Nabi devices, the money is in accessories.

THE 500

Fujioka believed they were onto something. “When it was working,” he says, “we were like, ‘Wow, that’s really cool.’” With time before Christmas shopping season ticking down, they loaded the software onto a generic Android tablet they bought from a manufacturer in Shenzhen. Then they added a bright-red silicone bumper case with a distinctive curvy shape. It evoked the shape of wings, and they called it the Nabi, the Korean word for butterfly. That fall, Mitchell managed to negotiate an exclusive deal with Toys “R” Us for 10,000 units. He and Fujioka still hadn’t told John Hui, the company’s chairman, about their gambit. “We’d physically hide the prototypes when he came to town,” says Fujioka. Racing to get the tablets on Toys “R” Us shelves, Fuhu shipped them by jet from China. The Nabi was on sale a week before Christmas. The entire order, all 10,000 units, sold out in two weeks. But then came the bad news. Instead of a big, fat follow-up order, Toys “R” Us said it wanted only 15,000 more Nabis. “I looked at Jim and I said, ‘You go back on the phone to them and you tell them, ‘Are you guys crazy?’” says Fujioka. “‘At 15,000 units, you will bury us!’” A small order

SEP TEMBER 2013 - INC. - 141


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INC. 500 CEO SURVEY

Entrepr is in the

RAISING THE BAR 43 INDIVIDUALLY, THE COMPANIES on

the Inc. 500 are impressive. Viewed collectively, these 500 fast-growing businesses constitute a jobcreating, revenue-generating powerhouse. Here’s a statistical overview of the Inc. 500 CEOs and the industries in which they are having the most success. It’s a record-breaking group—at 918.6 percent, this year’s baseline growth rate is the highest in Inc. 500 history.

had a par was an e

But the their wa

What wa you ever

ŦŦŦŦ The Boys’ Club The profile of an Inc. 500 CEO: White, male, married, and over 35 GENDER MALE 90%

FEMALE 10%

AGE 35-44 37%

45-55 27%

25-34 26%

OVER 55 9% UNDER 25 1%

STATUS MARRIED 81%

SINGLE 13%

DIVORCED 6%

ETHNICITY CAUCASIAN 77%

SOUTH ASIAN 9% AFRICAN AMERICAN 4% OTHER 4% EAST ASIAN 3% HISPANIC 3%

2

The me which t their fir

Top metro areas

1 SAN ANTONIO

2 BOULDER, CO

3 PROVO-OREM, UT

4 AUSTIN

(Based on the number of Inc. 500 companies per capita, among metro areas with a minimum of three Inc. 500 companies)

143 - INC. - SEPTEMBER 2013

5 HUNTSVILLE, AL

6 WASHINGTON, D.C.

7


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|||

||

|| |||

||

= 2012 total revenue | = Number of companies in sector

41 com pan ies

reneurship eir genes:

MILLION

$518.8 MILLION

12%

Manual labor (construction, farm work, etc.)

7%

|

| ||||||

nies pa

|| |||

$1.2 BILLION

2013 Inc. 500 at a glance ||

||

|

|||

||||

|||

|||

||

||

|| |||

|||| 36 companies

|||||

BILLION TOTAL 2012 REVENUE

Worked in the family business

7 SAN FRANCISCO

|

|||

||||

The advertising and marketing industry is the best represented on the list, with 58 companies. But the energy industry had the biggest financial impact. The 22 companies in the energy industry raked in $3.3 billion in combined revenue in 2012.

14.1 2,926 26 44,912

edian age at hey started rst business

|||||||||||||||||||||

ADVERTISING & MARKETING

|||||||||

A real dynamo

Mowing lawns and/or shoveling snow

7%

||

|||

||||

AVERAGE GROWTH RATE

CONSUMER PRODUCTS & SERVICES

$1.9 BILLION

JOBS CREATED (2009-12)

States with the most Inc. 500 CALIFORNIA 88

8 SALT LAKE CITY

9 CHARLESTON, S.C.

10 STAMFORD, CT

ICONS: MATTHEW HOLLISTER; iSTOCK (5)

Delivered newspapers

MILLION

|| |||

ies

12%

$76.2

n ompa 58 c

Food service (busboy, grill cook, etc.)

|

nies pa

18%

TELECOMMUNICATIONS

8 co m

as the first job had?

$42

MILLION

5 co m

ey worked ay up.

||||

|

SECURITY


6c om

|||||

||||

|||

|||

FOOD & BEVERAGE

$743.8 MILLION

$184.4 MILLION

$371.6 MILLION

14

||||||||||

|||

|

40 companies

MILLION

s nie pa

|||

pa com 33

n ie s

||||||||||||

ies an mp co

|||||||||||||

|||

15 com pan i es

| ||| |||

SOFTWARE

|||||

$396.7

anies

MANUFACTURING |

|||||||||||||||

||||

||

28 compan ies

RETAIL

22 comp

||

|| |||

|||||

|

nies

|||||||||||||

pa om 9c

||

||||

|||

|

| |||

|

||||

|||

|||

MILLION

| |||

21 comp ani es

||

||| | 16 comp ani es

|| ||

|||

$345.3 MILLION

|||

A tale of two industries ||

||| ||||

|||

||

|| |||

||||| ||||||

$606.6 MILLION

|||

BUSINESS PRODUCTS & SERVICES

Government services, long one of the biggest in seen a steady decline over the past three years. contractors on the list has fallen 40 percent sin of the companies in the sector has fallen 72 per is on the upswing, with total revenue in 2012 up

IT SERVICES

$1.2 BILLION

2009 TOTAL REVENUE GOVERNMENT SERVICES HEALTH

FLORIDA 34

NEW YORK 30

$502 million

companies TEXAS 49

2010

ILLINOIS 27

NO. OF COMPANIES MEDIAN GROWTH

$571 million

|||

$1.9 billion

|||||||||||||||||||||

$1.3 billion

||

||||

|||

||

|||

|| |||

||| ||||||||

nies

nies

||||||||

REAL ESTATE

BILLION

54 compa

pa com

$

$333.4 ||

BILLION

36

CON

LOGISTICS & TRANSPORTATION

$1.2

$3.3

|

M

FINANCIAL SERVICES

ENERGY

|||

59 32 62 31 1,347% 1,183%

1,204% 1,604%


MILLION

||||

|||||||

ies an

MILLION

$294.1

$15.8 billion

4 com p

NSTRUCTION

EDUCATION

||||||

MILLION

$48.7

s nie

MILLION

|| ||

||||

|||||||||||

6 com pa

|

HUMAN RESOURCES MILLION

With a combined 2012 revenue higher than the GDP of some island nations, the companies on the Inc. 5000 complete the portrait of America’s fastest-growing private businesses. Head to Inc.com for the complete Inc. 5000, including expanded coverage and profiles of all 5,000 companies. Here’s a quick snapshot of the list’s size and scope.

MALE 88%

FEMALE 12%

242 468 BILLION TOTAL 2012 REVENUE

ndustries on the Inc. 500, has . The number of government ce 2010, and total revenue rcent. Health care, meanwhile, p 62 percent over 2011.

2011

INC. 5000 THE BIG PICTURE

GENDER

$10.5 billion

$291.7

$11.2 billion

s|

$36.7

$14.1 billion

2 co

TRAVEL & HOSPITALITY

Inc. 500 historic total revenue

ŦŦŦŦ

$31.3

$18.4 billion

anies mp

||

COMPUTER HARDWARE

2012

AVERAGE GROWTH RATE

518,811

1,456% 1,434%

1,602% 1,312%

2009 2010

2011

2012

52,061

46,609

TOTAL EMPLOYMENT

35,823

38 35 37 41

57,310

$721 million

$519 million

$444 million

2008

45,324

$1.2 billion

JOBS CREATED (2009-12) COMPANY WITH THE HIGHEST REVENUE:

CDW NO.4,788 10.1 BILLION 2012 REVENUE

THE 500


Congratulations to everyone on the 2013 Inc 500 list. Check out the CEO survey inside. Visit Dell.com/entrepreneurs


ŦŦŦŦ

left Fuhu vulnerable. Until more parents bought Nabis, a copycat could swoop in and swipe the market. (In fact, Mitchell says, Toys “R” Us attempted to do just that, releasing its own Android kids’ tablet, the Tabeo, the following September. Fuhu is now suing Toys “R” Us for stealing trade secrets. Toys “R” Us declined to comment for this story.) Fuhu decided to circumvent the exclusivity agreement that January. It shut down production of the Nabi. To finance operations, the company took out $10 million in debt. Fuhu raced to design the Nabi 2 for the 2012 holiday season.

WHY PARENTS LOVE THE NABI

Any tablet can run educational apps, games, and e-books—but want your kids to do their chores? Study? Go to bed? Here’s what makes the Nabi different.

COURTESY COMPANY

N A RECENT AFTERNOON, in a showroom in

Fuhu’s 100-employee office in El Segundo, Mitchell triumphantly showed me the result. Three prominent display consoles replicate how the Nabi 2 retails today in Walmart, Target, and Best Buy stores. Fuhu sold more than a million units last year at a list price of $199. Next to the Nabi 2s on those displays are two other tablets: the 5-inch Nabi Jr. ($100) and the 10-inch Nabi XD ($249). But Mitchell really lights up when he picks up a Nabi 2 and flips it over. On the back, little silicone squares spell “JIMS NABI” in alphabet-soup letters. Parents who want to spell their child’s name on the back can buy a 26-letter pack of these little squares, called Kinabis, for $24.99. (Or, if the kid’s name has one letter twice, make that $49.98. Sorry, Sara.) On the opposing wall hang more of these high-margin accessories: cases, backpacks, screen protectors, specialized stretchy car chargers that reach to the back seat, $99 noise-limiting headphones, and GoPro-like mountable cameras ($170), all designed by Fuhu especially for its new devices. Because the company makes only $5 or $10 profit on the Nabi devices themselves, this is where the money is. Later, Mitchell shows me removable stickers, called Nabi Frames, that retail for $5.99. “These are awesome,” he says, his eyes gleaming like Christmas morning. “It’s like printing money, right?” September will be a big month for Fuhu, if everything goes as planned. The company will release an audio dock attachment that converts the Nabi into a karaoke machine. There will be a special-edition Disney Nabi, preloaded with Disney videos, that will sell exclusively at Best Buy, and a special-edition Nickelodeon Nabi that will sell exclusively at Walmart. There will be a Dream Tablet, designed especially for DreamWorks. DreamWorks Animation, which committed $5 million to Fuhu’s latest $65 million round of funding (putting the company’s value at $280 million), now has an executive on Fuhu’s board. Mitchell and Fujioka believe this is just the beginning. Mitchell sees the Nabi as a distribution channel for children’s content of all kinds. “At the end of the year, I’m going to have four million screens out there,” says Mitchell. “That’s like a whole TV network.” Fuhu has a partnership with Japanese mobile provider KDDI to produce a Japanese version of Fooz Kids, and later this year Fuhu will launch in China—looking to

THE 500

— BEDTIME ENFORCEMENT Starting this fall, parents will be able to program time limits and curfews. At the appointed hour, the Nabi will sing a bedtime song and shut itself off.

— A NOT-SO-WIDE WORLD WEB The Nabi’s browser accesses only preapproved websites.

Parents can program a Chore List. When kids complete tasks, parents sign off, and the device awards kids coins (which parents buy from Fuhu) they can use to buy apps, games, wallpapers, and more.

VIRTUAL CURRENCY, REAL BED MAKING

— GAMES THAT TEACH—AND LEARN Nabi devices are loaded with Wings, a game that figures out a child’s math, reading, and writing skills—and adjusts its difficulty level accordingly. Parents can see how well their kids are doing via an online report card. —B.H.

use the Huis and their Foxconn connections to help the company sell not just to affluent Chinese consumers but to the whole education system. Fuhu is also taking another crack at Pinq, this time with a line of home audio products. The sense of urgency is unrelenting. The day after Mitchell takes me around the showroom, I meet with a team of four exhausted-looking men from the Taiwanese audio manufacturer Primax. They show me prototypes for the speakers that will go with the Nabi karaoke machine. “What’s the deadline?” I ask. Fujioka happens to hear me as he walks by. “Yesterday!” he hisses at them, grinning, barely breaking stride. “Yesterday!” The four men seem to feel a shiver up their spines. By early September, the sleepy men assure me, the speakers should be on jets, bound for big-box stores around the U.S. BURT HELM is Inc.’s senior writer.

SEP TEMBER 2013 - INC. - 149


5 COMP THE ŦŦŦŦ

ADVERTISING + MARKETING

150 - INC. - SEP TEMBER 2013

58 COMPANIES

$1.2 BILLION TOTAL REVENUE

From traditional advertising agencies and public relations firms to SEO specialists, data analysis experts, and developers of online marketing platforms

THE 2013 RANKINGS

Herewith, the entrepreneurial economy at full throttle. On the following 30 pages, we’ve ranked the companies of the Inc. 500 within 22 industries. To quickly locate a company on these pages, use the alphabetical index on page 236. To see the complete list in numerical order, turn back to page 27. To see the entire Inc. 5000, go to Inc.com.

Get to know the fastest-growing

Ţ

$9.2 MILLION MEDIAN REVENUE 1,799.3% MEDIAN GROWTH RATE 4,215 TOTAL EMPLOYMENT

RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

DATAXU BOSTON CEO: Mike Baker, dataxu.com Develops a software platform that allows marketers to harness big data and use real-time multivariate decision technology for digital campaigns.

6

21,337.4%

$87 MILLION

220

2009

EMERGE DIGITAL GROUP SAN FRANCISCO CO-FOUNDERS: Chase Norlin and Alex Rowland, emergedigital.com Provides marketing services to Web and mobile publishers.

9

17,064.1%

$23.9 MILLION

75

2009

ADROLL SAN FRANCISCO CEO: Aaron Bell, adroll.com Operates a Web-based platform that lets clients place ads on the basis of consumers’ past online behavior.

13

15,064.9%

$34.1 MILLION

165

2007

BLUEKAI CUPERTINO, CALIF. CEO: Omar Tawakol, bluekai.com Operates a data-management platform, a data exchange, and an analytics system for marketers and publishers.

21

9,245.5%

$26.8 MILLION

107

2008

TRADA BOULDER, COLO. CEO: Niel Robertson, trada.com Provides a Web-based platform on which search experts work in teams to build and optimize ad campaigns.

28

8,100.9%

$12.6 MILLION

75

2008

SAILTHRU NEW YORK CITY CEO: Neil Capel, sailthru.com Operates a platform on which marketers create websites and mass emails customized for individual recipients.

31

7,322.2%

$8.1 MILLION

79

2008

YELLOWHAMMER NEW YORK CITY COO: Hagan Major, yhmg.com Operates an online platform that allows advertisers to run campaigns across exchanges and publishers.

38

6,740%

$18 MILLION

27

2009


00 ANIES privately held companies in America.

Ţ

Ţ

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

CONDUCTOR NEW YORK CITY CEO: Seth Besmertnik, conductor.com Operates an online search-engine-marketing platform.

39

6,701.6%

$7.1 MILLION

89

2006

29 PRIME IRVINE, CALIF. CEO: Russell Wallace, 29prime.com Provides Internet marketing services, with a specialty in search-engine optimization.

48

5,443.3%

$13.8 MILLION

152

2008

MADWIRE MEDIA LOVELAND, COLO. CEO: JB Kellogg, madwiremedia.com Provides Internet marketing and design services.

52

5,254.3%

$6.9 MILLION

94

2009

ALTITUDE DIGITAL DENVER CEO: Jeremy Ostermiller, altitudedigital.com Places ads online.

55

5,162%

$11.4 MILLION

21

2008

LEAD5 MEDIA NEWARK, CALIF. CEO: Steve Lombardi, lead5media.com Provides marketing services to the education, health and fitness, home services, auto, and insurance industries.

58

5,015.8%

$35.6 MILLION

33

2009

59

5,014.5%

$9.6 MILLION

125

1996

HASOFFERS SEATTLE CEO: Peter Hamilton, hasoffers.com Develops software that tracks the performance of advertisements on websites and mobile apps.

64

4,836.8%

$7.3 MILLION

57

2009

RETARGETER SAN FRANCISCO CEO: Arjun Dev Arora, retargeter.com Operates a Web-based platform that targets ads on the basis of consumers’ past online behavior.

69

4,738.5%

$6.5 MILLION

35

2009

C-4 ANALYTICS SAUGUS, MASS. CEO: Justin Cook, c-4analytics.com Provides online marketing services, with a specialty in strategy and analytics.

70

4,645.8%

$4.9 MILLION

32

2009

IRVINE, CALIF. Ţ Ţ EGUMBALL John Bauer, egumball.com CEO:

COURTESY COMPANY

Provides local Internet marketing services and search-engine optimization.

ŦŦŦŦ

Ţ

RANK THREE-YEAR GROWTH

NO. 1 ADVERTISING + MARKETING

“Our clients don’t have data scientists from MIT analyzing their marketing investments, so we do it for them.” MIKE BAKER CEO of DataXu

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree THE 500


WHAT ADVICE DO YOU WISH YOU HAD RECEIVED WHEN YOU STARTED YOUR COMPANY?

RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

33ACROSS NEW YORK CITY CEO: Eric Wheeler, 33across.com Operates a social-media-management platform used by marketers and publishers.

71

4,499%

$27.9 MILLION

75

2008

LIVEINTENT NEW YORK CITY CEO: Matt Keiser, liveintent.com Provides email advertising services to marketers and publishers.

72

4,485.1%

$6.9 MILLION

42

2009

ROCKET FUEL REDWOOD CITY, CALIF. CEO: George John, rocketfuel.com Operates a media-buying platform that screens advertising opportunities and selects the best ones for customers.

73

4,451.2%

$106.6 MILLION

289

2008

SKM MEDIA GROUP BOCA RATON, FLA. CEO: Steve Moreno, skmmediagroup.com Provides direct mail, email marketing, and data analysis services.

90

3,751.7%

$12 MILLION

20

2008

WEBIMAX MOUNT LAUREL, N.J. CEO: Kenneth Wisnefski, webimax.com Provides Internet marketing services, including search-engine optimization and Web design.

105

3,367.3%

$8.4 MILLION

125

2008

TRUMBULL, CONN. ŢŢ ASENTRA Dave Grubler, asentra.com

124

2,963.3%

$12.1 MILLION

24

2001

Ţ

ADVICE INTERACTIVE GROUP McKINNEY, TEXAS CEO: Bernadette Coleman, adviceinteractivegroup.com Provides Internet marketing, Web design, search-engine optimization, and reputation-management services.

131

2,807.9%

$3.2 MILLION

31

2008

VIDEOLOGY BALTIMORE CEO: Scott Ferber, videologygroup.com Operates an online platform on which users plan, serve, manage, and monitor video ad campaigns.

137

2,727.4%

$137.5 MILLION

321

2007

W4 SANTA MONICA, CALIF. CEO: Jason Durant Walker, w4.com Distributes online ad campaigns, charging advertisers for specific actions associated with ads.

153

2,515%

$59.8 MILLION

40

2009

EXTREME REACH NEEDHAM, MASS. CEO: John Roland, extremereach.com Operates a cloud-based platform that helps marketers execute and manage video campaigns.

172

2,348.6%

$41.5 MILLION

203

2008

WORDSTREAM BOSTON CEO: Ralph Folz, wordstream.com Operates a search-engine-marketing platform used by small and midsize businesses.

185

2,224.6%

$3.4 MILLION

56

2007

OPENX PASADENA, CALIF. CEO: Tim Cadogan, openx.com Operates an online platform for serving and managing digital ads.

224

1,920.7%

$154 MILLION

264

2007

TUBEMOGUL EMERYVILLE, CALIF. CEO: Brett Wilson, tubemogul.com Operates a media-buying platform for video advertising.

241

1,802.5%

$53.4 MILLION

125

2006

IQUANTI HOBOKEN, N.J. CEO: Viswanatha Rachakonda, iquanti.com Provides software and consulting services focused on monitoring and analyzing Web content and online ad campaigns.

242

1,796%

$2.5 MILLION

50

2008

TRENDYMINDS INDIANAPOLIS Yager, trendyminds.com Provides Web design and development, public relations, and advertising services.

249

1,757.8%

$3.7 MILLION

29

1995

GRAVITY MEDIA NEW YORK CITY Boykiv, mediagravity.com Provides a full range of marketing services, with a specialty in international campaigns.

252

1,723.5%

$12.4 MILLION

15

2009

TRANSCEND MEDIA BOSTON CEO: Jason Nauman, transcendmedia.com Provides online marketing services.

257

1,673.1%

$6.7 MILLION

107

2009

FULL CIRCLE MARKETING FORT LAUDERDALE, FLA. CEO: Adam Stephens, realtyfire.com Provides online marketing services to real estate agents and brokerages.

275

1,586.9%

$3.4 MILLION

14

2008

SET PORTLAND, ORE. CEO: Sabina Teshler, setcreative.com Provides experiential marketing services, including events and in-store displays, to retailers.

287

1,528.4%

$23.7 MILLION

46

2009

ADVERTISING + MARKETING (CONT.)

ŦŦŦŦ

THE INC. 500 C E O S U RV EY

“You cannot always be everyone’s friend.” DOUG RECKER, COLO5

“To truly understand a business, you have to wear all the hats before you can take some of them off.”

Ţ

CEO:

Provides marketing services to insurance and telecommunications companies.

JIM McNELIS, DITO

You aren’t “Y going to care about anything else; friends and family will be less important.” MIKE GERMANO CARROT CREATIVE

“Your business is separate from you. Build a machine, not a job.” MARK WOEPPEL PINNACLE STRATEGIES

Ţ

CEO: Trevor

CEO: Yuriy

Ţ

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 152 - INC. - SEP TEMBER 2013

THE 500


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Highest Revenue: Bridger

RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

REBOOT MARKETING NASHVILLE CEO: Allen Baler, rebootmarketing.com Sells how-to guides on various subjects and generates sales and leads from the Internet and direct mail.

306

1,427.9%

$11.8 MILLION

7

2008

FUELFX BELLAIRE, TEXAS CEO: Oliver Diaz, fuelfx.com Provides digital marketing and communications services, with a specialty in creating 3-D graphics.

336

1,290.7%

$2.2 MILLION

31

2007

MAGNET 360 MINNEAPOLIS MANAGING PARTNER: Scott Litman, magnet360.com Provides marketing and technology services.

360

1,230.9%

$17.1 MILLION

71

2001

ACCELERATION PARTNERS NEEDHAM, MASS. Glazer, acceleration-partners.com Provides digital strategy and marketing services.

361

1,226.8%

$3.3 MILLION

15

2007

NETSERTIVE MORRISVILLE, N.C. CEO: Brendan Morrissey, netsertive.com Provides online marketing services, with a specialty in targeting local markets.

370

1,193.4%

$9 MILLION

73

2009

RE:THINK RAMSEY, N.J. CEO: Thomas McVey, chooserethink.com Provides website design and search-engine-optimization services to small businesses.

372

1,186%

$2.9 MILLION

22

2001

EVO EXHIBITS WEST CHICAGO, ILL. PRINCIPAL: Kevin Fett, evoexhibits.com Designs trade-show exhibits and provides related services, including logistics.

375

1,184.4%

$4.5 MILLION

22

2009

ACTION LEAD SOLUTIONS CHICAGO Connolly, actionleadsolutions.com Provides lead-generation and marketing services.

377

1,180.8%

$7.9 MILLION

12

2009

MARTINI MEDIA SAN FRANCISCO CEO: Skip Brand, martinimedianetwork.com Operates an online marketing platform.

378

1,176.6%

$17.2 MILLION

50

2008

SEVEN SWORDS MEDIA CRANSTON, R.I. CEO: Giovanni Feroce, sevenswords.com Provides brand and marketing strategy services.

388

1,155.8%

$8.8 MILLION

29

2009

MARKETSMITH PARSIPPANY, N.J. CEO: Monica C. Smith, marketsmithinc.com Creates and manages direct response television advertising campaigns and events.

391

1,137.7%

$28.1 MILLION

23

1999

ADSCEND MEDIA AUSTIN CEO: Fehzan Ali, adscendmedia.com Creates online tools for advertisers and publishers.

398

1,123.5%

$10.9 MILLION

8

2009

GROK NEW YORK CITY CEO: Julie Bauer, groknyc.com Provides a full range of advertising services.

420

1,077.3%

$9.4 MILLION

19

2008

ADCOLONY LOS ANGELES CEO: Will Kassoy, adcolony.com Operates a high-definition video advertising platform for mobile devices.

446

1,028.2%

$11.3 MILLION

53

2008

CARROT CREATIVE BROOKLYN, N.Y. CEO: Mike Germano, carrot.is Provides digital marketing services, with a specialty in social media.

452

1,023.7%

$7.2 MILLION

45

2005

BRAFTON BOSTON CEO: Tom Agnew, brafton.com Creates custom content for marketing purposes, including blogs and videos, and provides related services.

455

1,014.2%

$16.7 MILLION

263

2007

CLASSY LLAMA SPRINGFIELD, MO. CEO: Kurt Theobald, classyllama.com Provides marketing and e-commerce services to online merchants.

456

1,008.4%

$2.4 MILLION

26

2007

DB5 LOS ANGELES CEO: Chris Hubble, dogsbollocks5.com Provides media, branding, marketing, strategy, and communications services.

458

1,006.7%

$5.8 MILLION

27

2008

ADD3 SEATTLE CEO: Paul Uhlir, add3.com Provides marketing services, with a specialty in search-engine optimization and online display advertising.

464

1,000.1%

$5.9 MILLION

18

2007

REVLOCAL MOUNT VERNON, OHIO CEO: Marc Hawk, revlocal.com Provides Internet marketing services, with a specialty in local search.

474

982.2%

$2.5 MILLION

83

1997

ADVERTISING + MARKETING (CONT.)

ŦŦŦŦ

I N C . 5 0 0 S TAT S

(No. 5)

1.9

BILLION

MANAGING DIRECTOR: Robert

Highest Revenue per Employee: Emerge Managed Solutions (No. 2)

85.1

MILLION

CEO: Sean

Most Employees: LivingSocial (No. 16)

4,100

Ţ

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 154 - INC. - SEP TEMBER 2013

THE 500


2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

Ţ

JESS3 LOS ANGELES CEO: Jesse Thomas, jess3.com Creates infographics and other data visualizations.

477

972.7%

$5.6 MILLION

27

2008

OWENS HARKEY ADVERTISING PHOENIX CEO: Scott Harkey, owensharkey.com Provides marketing services.

493

930.9%

$3.3 MILLION

22

1960

NO. 1 BUSINESS PRODUCTS + S E RV I C E S

FIVE DATA ELMHURST, ILL. CEO: Michael Medema, fivedata.com Provides email advertising services.

497

926.7%

$3.5 MILLION

7

2009

BUSINESS PRODUCTS + SERVICES A broad spectrum of companies that help other businesses to operate smoothly and efficiently, including companies that consult in a range of industries

Ţ “Our team is obsessed with the pet owner experience.” B E N J A M I N S H AW CEO of Vets First Choice

Ţ

36 COMPANIES $606.6 MILLION TOTAL REVENUE $7.1 MILLION MEDIAN REVENUE 1,851.4% MEDIAN GROWTH RATE 2,755 TOTAL EMPLOYMENT

VETS FIRST CHOICE PORTLAND, MAINE CEO: Benjamin Shaw, vetsfirstchoice.com Sets up and operates online pharmacies for veterinary practices.

25

8,585.3%

$14.6 MILLION

74

2008

INNOVOLT ATLANTA CEO: Jim Mitropoulos, innovolt.com Provides software and services that protect technology systems from power disturbances.

32

7,247.7%

$8 MILLION

30

2006

FIELD NATION MINNEAPOLIS CEO: Mynul Khan, fieldnation.com Operates an online platform that allows employers to find, manage, and pay contract workers.

44

6,031.2%

$27.7 MILLION

15

2008

EVENTUS ENGLEWOOD, COLO. CEO: Milos Djokovic, eventusg.com Provides strategic consulting and cloud-computing services related to customer interactions.

53

5,220.8%

$6.4 MILLION

22

2009

PINNACLE STRATEGIES PLANO, TEXAS CEO: Mark Woeppel, pinnacle-strategies.com Provides management consulting services.

57

5,134%

$7 MILLION

17

1992

MHD ENTERPRISES AUSTIN CEO: Michael Dadashi, mhdenterprises.com Refurbishes and resells used electronics to businesses.

62

4,942.1%

$7.2 MILLION

27

2007

ETHOSIQ HOUSTON CEO: Scott Walker, ethosiq.com Provides call-center software and services.

66

4,768.4%

$6.9 MILLION

118

2009

BIDPAL INDIANAPOLIS CEO: Scott Webber, bidpalnetwork.com Develops technology used by nonprofits to run auctions and other charitable events.

75

4,322.8%

$10.2 MILLION

88

2008

EQUINOX BUSINESS SOLUTIONS SALT LAKE CITY PRESIDENT: Spencer Angerbauer, equinoxbusiness.com Provides business services, including bookkeeping and tax preparation, to companies in the transportation industry.

76

4,235.3%

$82.6 MILLION

140

1998

SALESSTAFF STAFFORD, TEXAS Balzen, prosalesstaff.com Researches sales leads for clients and sets up meetings with executives.

88

3,833%

$4.1 MILLION

60

2009

DISCOVERY SERVICES CHICAGO CEO: Ashish Prasad, discoveryservicesllc.com Provides legal staffing, litigation consulting, and electronic discovery services to law firms, corporations, and government agencies.

98

3,508%

$16.6 MILLION

6

2008

DASHED BOSTON CEO: Phil Dumontet, dashed.com Delivers takeout meals for more than 500 restaurants.

120

2,984.2%

$4.6 MILLION

92

2009

FUZEBOX SAN FRANCISCO CEO: Jeff Cavins, fuzebox.com Develops products used by companies to collaborate and hold videoconferences.

126

2,933.1%

$8.8 MILLION

132

2009

136

2,737.8%

$84.5 MILLION

34

2002

CEO: David

ANGELES Ţ I.T. SOURCEKim,LOSitsourcecorp.net Ţ Ţ OwnsAndy and operates several companies in the credit card CEO:

processing, telecom, and IT industries.

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 156 - INC. - SEP TEMBER 2013

THE 500

COURTESY COMPANY

ŦŦŦŦ

RANK THREE-YEAR GROWTH

ADVERTISING + MARKETING (CONT.)


WHAT KEEPS YOU UP AT NIGHT?

“Am I doing everything I can?

Ţ

JEFFREY ROCHA THE MILLENNIUM GROUP INTERNATIONAL

“How to outthink competitors and stay in front.”

Ţ

JORDAN COUSINO CARDINAL POINT CAPTAINS

“Obamacare.” CARY DANIEL PIVOT EMPLOYMENT PLATFORMS

“My employees. Especially in today’s tough job market, I feel responsible for their well-being.”

RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

ENSITE SOLUTIONS IRVING, TEXAS CEO: Toby Thomas, ensitesolutions.com Maintains and repairs air-conditioning, power-supply, generator, and fire-suppression systems of critical facilities.

188

2,206.9%

$10.6 MILLION

14

2009

TARGET LOGISTICS BOSTON CEO: Brian Lash, targetlogistics.net Provides temporary housing and related services to workers in remote, austere, or hostile environments.

195

2,131%

$121.9 MILLION

450

1978

TASKUS SANTA MONICA, CALIF. CEO: Bryce Maddock, taskus.com Provides outsourced services to fast-growing Internet companies.

212

1,998.9%

$3.9 MILLION

424

2008

LINQ SERVICES ELKRIDGE, MD. CEO: Kevin Lowe, linqservices.com Manages cellular accounts for businesses and sells cell phones wholesale.

230

1,892.4%

$57.5 MILLION

25

2006

VINOPRO SANTA ROSA, CALIF. CEO: Jeff Stevenson, vinopro.com Provides telemarketing services to wineries.

238

1,810.3%

$2.4 MILLION

40

2007

MSR PROMO NEW YORK CITY CEO: Hanwey Shieh, silkletter.com Sells promotional products, including custom-printed apparel and electronics.

266

1,630.2%

$2.4 MILLION

4

2007

SPACE SAVING SOLUTIONS LEXINGTON, S.C. CEO: Matthew Borjes, spacesavingsolutions.com Designs and installs mobile shelving and other equipment used by health care, government, and university clients.

273

1,594.6%

$5.8 MILLION

10

2005

INFOFREE.COM SAN MATEO, CALIF. CEO: Vin Gupta, infofree.com Sells sales leads and mailing lists to small businesses.

295

1,473.2%

$2.4 MILLION

145

2009

300

1,455.7%

$13.7 MILLION

87

2007

PANJIVA NEW YORK CITY CEO: Josh Green, panjiva.com Operates an online platform that connects business-tobusiness buyers and suppliers.

316

1,377.1%

$4 MILLION

48

2006

LEGACY ANALYTICS ROLLING MEADOWS, ILL. CEO: Daniel Hostetler, legacyanalytics.com Provides business consulting services to entrepreneurs.

318

1,363.5%

$3.5 MILLION

81

2009

GREEN EARTH ISELIN, N.J. FOUNDER: Suresh Kumar, greenearthaction.com Provides sustainability consulting services to organizations, municipalities, and individuals.

321

1,350.4%

$7.7 MILLION

53

2006

ENVISION BUSINESS CONSULTING DENVER CEO: Robert Novick, envision-bc.com Provides business consulting services to clients in the commercial, government, and nonprofit sectors.

337

1,290.7%

$10.4 MILLION

20

2008

PROFIT SENSE INNOVATIONS JERSEY CITY, N.J. CEO: Jerry Khemraj, profitsi.com Provides consulting services, including market research and website development, to small businesses.

358

1,236.5%

$5 MILLION

38

2009

PLATINUM ADVISOR STRATEGIES THE VILLAGES, FLA. CO-FOUNDERS: Robert Sofia, Thomas Fross, and Robert Fross platinumstrategies.com Develops marketing and branding strategies for financial advisers.

364

1,217.9%

$2.3 MILLION

15

2009

ALL GREEN ELECTRONICS RECYCLING TUSTIN, CALIF. CEO: Arman Sadeghi, allgreenrecycling.com Removes, refurbishes, resells, and recycles IT equipment for corporate clients.

368

1,208.7%

$4.6 MILLION

88

2009

EHD TECHNOLOGIES BRENTWOOD, TENN. CEO: Michael Claudio, ehdtech.com Provides staffing, inspections, training, and other services to automotive companies and other manufacturers.

383

1,165.5%

$20.5 MILLION

106

2002

DYNAMIC RECYCLING LA CROSSE, WIS. CEO: Miles Harter, dynamicrecycling.com Recycles electronics, buys scrap, and disposes of unwanted IT equipment for businesses and municipalities.

384

1,164.9%

$13.5 MILLION

42

2007

MODUS EDISCOVERY WASHINGTON, D.C. CEO: Abtin Buergari, discovermodus.com Provides e-discovery consulting services to corporations and law firms.

400

1,120.4%

$18 MILLION

175

2008

BUSINESS PRODUCTS + SERVICES (CONT.)

ŦŦŦŦ

THE INC. 500 C E O S U RV EY

VANCOUVER, WASH. ŢŢ DISCOVERORG Henry Schuck, discoverorg.com CEO:

Sells sales leads to tech companies targeting the IT departments of corporations, schools, and governments.

ROSE COOK THE FLEXPRO GROUP

Ţ

Ţ Ţ

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 158 - INC. - SEP TEMBER 2013

THE 500


Guitars h , Fo u n d e r, P R S Pa u l R e e d S m i t

. E R E H E D A M E R A S G N GREAT THI . D R A E H E V ’ U O Y E B Y MA Wo r l d - t o u r i n g P R S G u i t a rs a re m a d e o n M a r y l a n d ’s s c e n i c E a s t e r n S h o re. P R S a n d M a r y l a n d g l o b a l l e a d e rs l i k e U n d e r A r m o u r, M c C o r m i c k a n d L o c k h e e d M a r t i n e n j oy ove r n i g h t a c c e s s t o o n e - t h i rd o f t h e n a t i o n , a t o p - ra n k e d wo rk f o rc e a n d a r i c h q u a l i t y o f l i f e. G row yo u r b u s i n e s s a n d l e a r n m o re a t C h o o s e M a r y l a n d . o rg.

Mar tin O’Malley, Governor Depar tment of Business and Economic Development


RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

VALUE CARD ALLIANCE PHOENIX CEO: Christie Acevedo, valuecardalliance.com Operates a business-to-business bartering network and a flexible-spending health care program based on bartering.

421

1,076.8%

$2.2 MILLION

8

2004

FBS PLANO, TEXAS CEO: Nicholas McCoy, fbsprint.com Provides commercial printing services.

444

1,029.7%

$2.4 MILLION

18

2004

GATE 3 DESIGN BEVERLY, MASS. CEO: Ryan Shefferman, gate3design.com Provides interior-design services for restaurants, airports, and the DIY network television show Man Caves.

490

933.5%

$2.4 MILLION

9

2007

“The tech industry in general outsources customer service, but we keep everything in-house.”

COMPUTER HARDWARE

2 COMPANIES $31.3 MILLION TOTAL REVENUE

Companies that make, distribute, or sell computer components, microchips, semiconductors, or related technology hardware. Customers include consumers and technology businesses

JASON OWEN CEO of Amped Wireless

Ţ NO. 1 CONSTRUCTION

“When the downturn hit, our part of the country didn’t see the contraction that the coasts did, so we were able to hire high-level people and put together a great team.”

Ţ

11,068%

$14.3 MILLION

26

2007

ARTERIS SUNNYVALE, CALIF. CEO: K. Charles Janac, arteris.com Develops intellectual property used to design chips for mobile phones, consumer electronics, and other devices.

462

1,001.8%

$17 MILLION

64

2003

15 COMPANIES $294.1 MILLION TOTAL REVENUE $8.8 MILLION MEDIAN REVENUE 933 TOTAL EMPLOYMENT

SARATOGA ROOFING & CONSTRUCTION OKLAHOMA CITY PRESIDENT: Denver Green, saratogaroofing.com Provides commercial and residential roofing services.

51

5,328.3%

$29.3 MILLION

240

1999

C-DM NETWORK ADDISON, TEXAS CEO: Matthew Gallagher, g9construction.com Provides construction and disaster-management services.

87

3,855%

$5.5 MILLION

19

2008

BUILD GROUP SAN FRANCISCO CEO: Ross Edwards, buildgc.com Manages the construction of residential, commercial, retail, and hotel developments.

94

3,591.5%

$101.5 MILLION

158

2007

CENTERPLAN CONSTRUCTION MIDDLETOWN, CONN. CEO: Robert Landino, centerplanconstruction.com Provides construction management and general contracting services.

101

3,462.8%

$56.4 MILLION

43

2008

ALL AROUND PROPERTY PRESERVATION

139

2,686.8%

$10.8 MILLION

15

2008

AROCON ROOFING AND CONSTRUCTION WESTMINSTER, MD. PARTNERS: Eric Consuegra, David Silverstein, and Chris Toleman, aroconllc.com Provides home-improvement construction services.

214

1,982%

$8.8 MILLION

50

2008

TITAN ELECTRIC COMPANY CHARLOTTE, N.C. CEO: Josiah Boling, titanelectric.com Provides electrical contracting services.

226

1,915.6%

$6.8 MILLION

50

2009

NORTH FLORIDA FIELD SERVICES JACKSONVILLE, FLA. CO-CEOs: Jerry Macnamara and Marti McCoy, nffsinc.com Provides repairs, inspections, and maintenance on homes that remain unsold after foreclosure auctions.

240

1,808.2%

$13.1 MILLION

46

2007

SHAYCORE ENTERPRISES JACKSONVILLE, FLA. CEO: Bill Kilgannon, shaycore.com Provides general contracting and construction services to residential, commercial, and industrial clients.

264

1,639.9%

$6.9 MILLION

18

2008

CEO: Charles

Thayer, goallaround.com Provides roofing, renovation, and property preservation in the Midwest.

Ţ

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 160 - INC. - SEP TEMBER 2013

1,808.2% MEDIAN GROWTH RATE

GOLDEN VALLEY, MINN.

DENVER GREEN President and co-founder of Saratoga Roofing & Construction

90 TOTAL EMPLOYMENT

17

Businesses involved in construction projects, including building homes, offices, and hotels. Also, businesses that supply construction companies

Ţ

6,034.9% MEDIAN GROWTH RATE

AMPED WIRELESS CHINO, CALIF. CEO: Jason Owen, ampedwireless.com Provides routers and other devices that increase the range of Wi-Fi networks in homes and offices.

CONSTRUCTION Ţ

$15.7 MILLION MEDIAN REVENUE

THE 500

COURTESY COMPANY (2)

BUSINESS PRODUCTS + SERVICES (CONT.)

ŦŦŦŦ

NO. 1 C O M P U T E R H A R D WA R E


2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

288

1,518.7%

$6.1 MILLION

15

2007

ARMSTRONG STEEL BUILDING SYSTEMS DENVER CEO: Ethan Chumley, armstrongsteel.com Designs and constructs steel buildings.

304

1,438.2%

$8 MILLION

50

2006

GOVIND DEVELOPMENT CORPUS CHRISTI, TEXAS CEO: Govind Nadkarni, govinddevelopment.com Provides engineering and design services to industrial and government clients.

376

1,181.9%

$14 MILLION

145

2007

R.J. ALLEN & ASSOCIATES OXFORD, MISS. CEO: David Blackburn, rjaa.com Assists with land acquisition and development, and manages all construction-related activities.

408

1,098.7%

$14.7 MILLION

22

1984

PLANET SOLAR SANTA BARBARA, CALIF. CEO: Ben Siebert, planetsolar.com Installs solar-energy systems.

436

1,055%

$7.6 MILLION

35

2008

BIG STREET CONSTRUCTION NORTH POLE, ALASKA CO-FOUNDERS: Patty Flemming and Brian Flemming bigstreetconstruction.com Provides construction and damage-restoration services.

500

918.6%

$4.7 MILLION

27

2005

RETAIL LITTLE FALLS, N.J. ŢŢ LANDMARK Tony Pizza, lrcus.com CEO:

Provides construction and facility-management services to retailers nationwide.

NO. 1 CONSUMER PRODUCTS + S E RV I C E S

CONSUMER PRODUCTS + SERVICES Companies whose products and services are sold directly to consumers. Some of these businesses have a retail component, but that is not their primary means of reaching buyers

“I knew we had it right when my daughters weren’t fighting over who got the iPad.” JIM MITCHELL CEO of Fuhu, maker of the children’s Nabi tablet and this year’s No. 1 company. For more on Fuhu, see page 138.

Ţ

$8.4 MILLION MEDIAN REVENUE 1,581.5% MEDIAN GROWTH RATE 6,175 TOTAL EMPLOYMENT

1

42,148%

$117.9 MILLION

104

2008

GOAL ZERO BLUFFDALE, UTAH CEO: Joe Atkin, goalzero.com Makes solar-power recharging kits.

10

16,980.5%

$33.1 MILLION

97

2009

LIVINGSOCIAL WASHINGTON, D.C. CEO: Tim O’Shaughnessy, livingsocial.com Operates an online marketplace that offers goods and services from local businesses.

16

12,333.2%

$536 MILLION

4,100

2007

BEENVERIFIED NEW YORK CITY CEO: Joshua Levy, beenverified.com Provides consumers with background checks and access to public records.

27

8,442.7%

$13.7 MILLION

17

2008

NOW COMMUNICATIONS TEMPE, ARIZ. CEO: Chris Pearce, workwithnow.com Sells television, Internet, and phone products and services nationwide.

37

6,763.9%

$7 MILLION

110

2009

RED FROG EVENTS CHICAGO CO-CEOs: Joe Reynolds and Ryan Kunkel, redfrogevents.com Produces large-scale group events, including music, running, and beer festivals.

61

4,956.7%

$49.5 MILLION

83

2007

CELEBRITY AUTO GROUP SARASOTA, FLA. Delaney, celebrityautogroup.com Sources exotic automobiles for celebrity athletes and entertainers.

67

4,744.8%

$16.2 MILLION

6

2006

GIFTCARDRESCUE.COM ELLICOTT CITY, MD. CEO: Kwame Kuadey, giftcardrescue.com Buys unused gift cards from consumers, then resells them online for less than face value.

152

2,517.6%

$6.6 MILLION

8

2008

EXTRABUX.COM SAN DIEGO CO-FOUNDERS: Jeff Nobbs and Noah Auerhahn, extrabux.com Operates a members-only shopping site that gives consumers coupons and price comparisons.

157

2,491.6%

$4.6 MILLION

15

2006

SUMMERSET PROFESSIONAL GRILLS COSTA MESA, CALIF. CEO: Jeff Straubel, summersetgrills.com Manufactures stainless-steel barbecues and outdoor kitchen accessories.

163

2,429.2%

$6.1 MILLION

6

2003

NEXTWORTH SOLUTIONS BILLERICA, MASS. CEO: David Chen, nextworth.com Collects, resells, and recycles consumer electronics.

189

2,194.8%

$31.1 MILLION

20

2005

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 162 - INC. - SEP TEMBER 2013

$1.9 BILLION TOTAL REVENUE

FUHU EL SEGUNDO, CALIF. CEO: Jim Mitchell, nabitablet.com Creates an Android tablet and software for kids.

CEO: Conor

Ţ

36 COMPANIES

THE 500

COURTESY COMPANY

ŦŦŦŦ

RANK THREE-YEAR GROWTH

CONSTRUCTION (CONT.)


For more than 200 years, though fire, weather and the unexpected, The Hartford has been helping

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WHICH OF THE FOLLOWING SOCIAL-MEDIA APPLICATIONS DOES YOUR COMPANY USE?

90 84 72 22 6

Ţ

LinkedIn

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

SILENCERCO WEST VALLEY CITY, UTAH CEO: Joshua Waldron, silencerco.com Designs and manufactures firearms silencers.

203

2,084%

$6.3 MILLION

51

2008

GARBAGEMAN, A GREEN COMPANY PLYMOUTH, MINN. CEO: Andrew Sorensen, garbagemanusa.com Sells environmentally conscious garbage-collection and -disposal franchises.

209

2,018.3%

$8.9 MILLION

49

2007

THERAPEARL JESSUP, MD. PRESIDENT: Daniel Baumwald, therapearl.com Makes a hot/cold pack to treat pain and inflammation.

210

2,017.2%

$5 MILLION

16

2008

SUPERFLY KIDS LIVONIA, MICH. Draplin and Holly Bartman, superflykids.com Makes and sells custom superhero capes and costumes.

229

1,892.6%

$2.4 MILLION

17

2008

CAMP GLADIATOR AUSTIN CO-FOUNDERS: Ally Davidson and Jeff Davidson campgladiator.com Offers outdoor group fitness boot camps.

236

1,820%

$4.6 MILLION

22

2008

CARDCASH.COM EAST WINDSOR, N.J. CO-FOUNDERS: Elliot Bohm and Marc Ackerman, cardcash.com Buys and resells consumers’ unwanted gift cards.

247

1,768.8%

$16.1 MILLION

42

2008

BENZARA NAPERVILLE, ILL. CEO: Arvind Singh, woodlandimport.com Wholesales decorative accessories, home furnishings, and giftware.

254

1,701.5%

$2 MILLION

5

2009

SCANDIGITAL TORRANCE, CALIF. CEO: Anderson Schoenrock, scandigital.com Digitizes photos, slides, negatives, videos, and film.

297

1,461.5%

$7.6 MILLION

48

2007

ORIGAUDIO COSTA MESA, CALIF. CEO: Jason Lucash, origaudio.com Makes and sells portable, eco-friendly speakers and headphones.

307

1,423.3%

$3.6 MILLION

13

2009

NUCOURSE DISTRIBUTION GARDEN GROVE, CALIF. CEO: Nick Seedorf, nucourse.com Distributes accessories for wireless devices.

317

1,373%

$97.5 MILLION

74

2008

GIBBON SLACKLINES BOULDER, COLO. CEO: Ricardo Bottome, gibbonslacklines.com Imports and sells slacklines and hosts slackline competitions and events.

330

1,311.7%

$3.8 MILLION

12

2008

ABBYSON LIVING CALABASAS, CALIF. CEO: Yavar Rafieha, abbysonliving.com Designs and manufactures home furnishings.

332

1,311.1%

$29.8 MILLION

62

2008

BED BUG SUPPLY CORAL SPRINGS, FLA. Sanders and Michelle Sanders bedbugsupply.com Sells products to eliminate bedbugs.

339

1,285.3%

$6.9 MILLION

9

2007

CARTAGZ ELK GROVE, CALIF. CEO: Greg Sanders, cartagz.com Provides online DMV services to California vehicle owners.

340

1,282.4%

$20.9 MILLION

8

2008

344

1,267.5%

$3.5 MILLION

32

1998

USTREAM SAN FRANCISCO CEO: Brad Hunstable, ustream.tv Creates technology for live video streaming.

345

1,265.3%

$17.4 MILLION

254

2007

GRAMMARLY SAN FRANCISCO CEO: Brad Hoover, grammarly.com Makes and sells software that proofreads and corrects grammatical and spelling errors.

346

1,260.1%

$8 MILLION

50

2008

4MOMS PITTSBURGH CEO: Robert Daley, 4moms.com Designs and manufactures products for babies and toddlers.

401

1,112.4%

$16 MILLION

62

2005

LUMOSITY SAN FRANCISCO CEO: Kunal Sarkar, lumosity.com Develops online and mobile “brain training” games.

405

1,104.1%

$23.7 MILLION

69

2005

412

1,091.1%

$17.4 MILLION

22

2006

CO-CEOs: Justin

Facebook

Twitter

RANK THREE-YEAR GROWTH

CONSUMER PRODUCTS + SERVICES (CONT.)

ŦŦŦŦ

THE INC. 500 C E O S U RV EY

Ţ

Pinterest

Ţ

My company doesn’t use social media.

Ţ

Ţ

CO-FOUNDERS: Mark

Ţ WHO CONTRIBUTES THE TWEETS, FACEBOOK UPDATES, ETC. TO YOUR COMPANY’S SOCIAL MEDIA? A dedicated social-media expert

56% I do

39% Everyone on staff

39% An intern

7%

STRENGTH WEST COLUMBIA, S.C. ŢŢ WILLIAMS Scott C. Williams, williamsstrength.com CEO:

Makes and sells weightlifting and athletic equipment.

CAMBRIDGE, MASS. ŢŢ CARGURUS Langley Steinert, cargurus.com CEO:

Operates a website that enables users to search and compare local autos-for-sale listings.

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 164 - INC. - SEP TEMBER 2013

THE 500


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ŦŦŦŦ

NO. 1 E D U C AT I O N

RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

416

1,084.9%

$2.1 MILLION

1

2008

418

1,080.8%

$573.9 MILLION

600

1998

IT WORKS! GLOBAL BRADENTON, FLA. CEO: Mark B. Pentecost, itworksglobal.com Operates a network of distributors of beauty, wellness, and weight-loss products.

438

1,047.2%

$200 MILLION

58

2001

UNIVERSAL INDUSTRIES LAS VEGAS CEO: David Ordonez, universalinds.com Distributes bed frames, dining room and living room sets, and home furnishings.

466

998.8%

$3.1 MILLION

8

2008

BUSTIN BOARDS BROOKLYN, N.Y. CEO: Ryan Daughtridge, bustinboards.com Designs and produces skateboards (longboards), which it sells online and through retail stores and partners.

467

992.1%

$4 MILLION

25

2004

CONSUMER PRODUCTS + SERVICES (CONT.) MERCH MAKERS AMES, IOWA CEO: Dale Lenz, merch-makers.com Manufactures and sells licensed apparel and novelty items from TV shows, movies, and musicians. FORT COLLINS, COLO. Ţ OTTERBOX Ţ Brian Thomas, otterbox.com Ţ Designs and makes rugged and semirugged cases CEO:

for mobile devices and other valuables.

EDUCATION

6 COMPANIES $48.7 MILLION TOTAL REVENUE $7 MILLION MEDIAN REVENUE

Includes companies that provide instruction or coaching or sell educational materials, or whose primary market is schools and universities

JOSH McAFEE CEO of McAfee Institute

NO. 1 ENERGY

Ţ

1,746.8% MEDIAN GROWTH RATE 186 TOTAL EMPLOYMENT

McAFEE INSTITUTE PEORIA, ILL. CEO: Josh McAfee, mcafeeinstitute.com Trains and certifies antifraud professionals in government, law enforcement, business, and academia.

36

7,062.6%

$15 MILLION

15

2007

EVOLVING WISDOM SAN RAFAEL, CALIF. CEO: Craig Hamilton, evolvingwisdom.com Creates online workshops and seminars in the areas of spirituality and personal growth.

84

3,923.6%

$6.7 MILLION

29

2009

RETHINK AUTISM NEW YORK CITY CEO: Daniel Etra, rethinkfirst.com Develops software for parents, educators, and others who care for children with developmental disabilities.

234

1,827.4%

$4.1 MILLION

22

2007

3 KEY ELEMENTS WEST JORDAN, UTAH CEO: Kirk Duncan, 3keyelements.com Provides classes and training aimed at helping students succeed socially and professionally.

259

1,666.2%

$2.1 MILLION

12

2009

SCHOOL TECH SUPPLY WESTLAKE VILLAGE, CALIF. CEO: Marc Netka, schooltechsupply.com Sells refurbished computer hardware and provides technology fundraising services to school districts nationwide.

381

1,169.3%

$13.3 MILLION

31

2001

PREPNET GRAND RAPIDS, MICH. CEO: Jason Pater, prepnetschools.com Manages four college-preparatory high schools in Michigan.

498

923.2%

$7.3 MILLION

77

2008

ENERGY “We move America’s oil.” JULIO E. RIOS II CEO of Bridger

$3.3 BILLION TOTAL REVENUE $29 MILLION MEDIAN REVENUE

Companies involved with the production, distribution, or conservation of energy, as well as businesses that provide specialized services to the energy industry

2,363.9% MEDIAN GROWTH RATE 2,950 TOTAL EMPLOYMENT

BRIDGER ADDISON, TEXAS CEO: Julio E. Rios II, bridgergroup.com Provides marketing, transportation, and logistics services to crude oil producers and distributors.

5

23,308.2%

$1.9 BILLION

50

2008

PROVIDER POWER AUBURN, MAINE CO-FOUNDERS: Kevin Dean and Emile Clavet, providerpower.com Provides electricity to businesses and consumers in New England.

33

7,224.4%

$56.8 MILLION

50

2009

SILVER SPRING NETWORKS REDWOOD CITY, CALIF. Lang, silverspringnetworks.com Provides networking software and services to electricalpower providers. The company went public in March.

46

5,867.2%

$196.7 MILLION

566

2002

CEO: Scott

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 166 - INC. - SEP TEMBER 2013

22 COMPANIES

THE 500

FROM TOP: PETER HOFFMAN; COURTESY COMPANY

“There’s this notion out there that law enforcement is watching everything. But there’s a lot they don’t see. We can teach them how to find it.”


OVERCOMING THE SMALL BUSINESS I.T. BARRIER. Growing your small business can be challenging. You’re figuring out how to get over the barrier to bigger revenues, on top of your day-today duties. A solid IT foundation to build on can be a springboard over the barrier, and we can help.

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1

U.S. Dept. of Labor, Bureau of Labor Statistics, Business Employment Dynamics 2BizTech, “The Elements of a Small Business” July, 2012 3Spiceworks State of Small Business IT Report, 2012 BizTech, “The 2012 Small Business Confidence Index” August, 2012 ©2013 CDW LLC. CDW® , CDWtG ® and PEOPLE WHO GET IT™ are trademarks of CDW LLC.

3


WHO ARE YOUR PRIMARY CUSTOMERS?

50 44 30 21 8

ENERGY (CONT.)

ŦŦŦŦ

THE INC. 500 C E O S U RV EY

Ţ

Large companies

Small to midsize companies

Consumers

Government clients

Other

Ţ Ţ

NUMBER OF EMPLOYEES

YEAR FOUNDED

47

5,524.9%

$8.5 MILLION

14

2009

SOLAR ALLIANCE OF AMERICA SAN DIEGO CEO: Artie Rose, solarallianceofamerica.com Installs and provides financing for solar-energy systems.

50

5,337.4%

$17.3 MILLION

4

2009

NEXT STEP LIVING BOSTON CEO: Geoff Chapin, nextstepliving.com Provides energy audits and other services to make homes more energy efficient.

85

3,890.1%

$29.4 MILLION

460

2008

WELLDOG LARAMIE, WYO. CEO: John Pope, welldog.com Advises natural-gas, oil, and mining companies looking to reduce their environmental impact.

89

3,758.1%

$8 MILLION

42

2007

SOL SYSTEMS WASHINGTON, D.C. CEO: Yuri Horwitz, solsystemscompany.com Advises investors interested in renewable energy and provides financing to alternative-power producers.

92

3,715.7%

$9.1 MILLION

16

2008

POPULUS BOULDER, COLO. CEO: Laura A. Hutchings, populusllc.com Provides energy-efficiency programs to utilities and homeowners.

140

2,684.7%

$3 MILLION

30

2006

ASTRUM SOLAR ANNAPOLIS JUNCTION, MD. CEO: Vadim Polikov, astrumsolar.com Markets and installs solar-energy systems for homeowners and small businesses.

141

2,665.2%

$41 MILLION

200

2007

BRIGHTSOURCE ENERGY OAKLAND, CALIF. EXECUTIVE CHAIRMAN: David Ramm, brightsourceenergy.com Designs and develops solar-power systems for utility and industrial customers.

165

2,415%

$291.1 MILLION

481

2006

CSI POWERLINE CHANDLER, ARIZ. CEO: Phil Panek, csipowerline.com Provides staffing and consulting services to construction and utility companies.

174

2,312.8%

$16 MILLION

140

2004

NTE SOLUTIONS ST. AUGUSTINE, FLA. CEO: Seth Shortlidge, ntesolutions.com Builds and maintains large infrastructure projects for water, natural-gas, and power suppliers.

213

1,997.4%

$4.4 MILLION

16

2009

TEAM TRIDENT HOUSTON PRESIDENT: Rod Long, teamtrident.com Provides full- and part-time technical workers to oil and gas companies.

235

1,823.2%

$6.7 MILLION

6

2006

PANELCLAW NORTH ANDOVER, MASS. Ringler, panelclaw.com Makes mounting and balancing structures that boost the safety and reliability of solar-energy systems.

243

1,789.5%

$35.2 MILLION

46

2008

HAWAII ENERGY CONNECTION AIEA, HAWAII CO-FOUNDERS: Chris DeBone and Steve Godmere hawaiienergyconnection.com Markets alternative-energy systems in Hawaii.

268

1,609.2%

$45.1 MILLION

80

2007

PLUG SMART COLUMBUS, OHIO CEO: Rich Housh, plugsmart.com Advises organizations on increasing their energy efficiency.

292

1,507.3%

$6.4 MILLION

18

2008

TOLTEQ GROUP CEDAR PARK, TEXAS CEO: Paul Deere, tolteq.com Manufactures tools used by drilling operators to monitor and collect data about their operations.

313

1,384.6%

$28.5 MILLION

45

2003

SIMPLERAY ST. PAUL CEO: Geoffrey Stenrick, simpleray.com Sells solar panels and related components to homeowners and businesses.

320

1,354.4%

$2.2 MILLION

2

2007

HPI HOUSTON CEO: Hal Pontez, hpi-llc.com Provides hardware, software, and services to the marine and energy industries.

385

1,161.4%

$204.7 MILLION

153

2002

PREFERRED SANDS RADNOR, PA. CEO: Mike O’Neill, preferred.com Produces materials used in hydraulic fracturing, or fracking.

425

1,073.8%

$351.5 MILLION

501

2007

WORLDWIDE POWER PRODUCTS HOUSTON CEO: Will Perry, wpowerproducts.com Distributes power-generation equipment to clients in the nautical, industrial, and petroleum industries.

460

1,003.8%

$31.1 MILLION

30

2008

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 168 - INC. - SEP TEMBER 2013

2012 REVENUE

THINKLITE NATICK, MASS. CEO: Dinesh Wadhwani, thinklite.com Designs and manufactures energy-efficient lighting for businesses and government agencies.

CEO: Thomas

Ţ

RANK THREE-YEAR GROWTH

THE 500


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Ţ “We don’t see a need to take on big investors. We have good, controlled growth, and we want to maintain our equity in the company.” JEFF GARDNER CEO and co-founder of Value Payment Systems

1,670% MEDIAN GROWTH RATE 4,521 TOTAL EMPLOYMENT

RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

VALUE PAYMENT SYSTEMS NASHVILLE CEO: Jeff Gardner, valuepaymentsystems.com Provides electronic payment services to municipalities and businesses.

8

17,404.1%

$25.5 MILLION

27

2007

INTEGRITY FUNDING SARASOTA, FLA. CEO: Greg Roper, integrityfunding.com Provides financial services to institutions and individuals.

19

10,462.1%

$11.1 MILLION

11

2007

WINGSPAN PORTFOLIO ADVISORS DALLAS CEO: Steven Horne, www.wingspanportfolioadvisors.com Provides mortgage services to investors, banks, and insurers.

24

8,768.8%

$77 MILLION

1,016

2008

CINIUM FINANCIAL SERVICES ROCK HILL, N.Y. CEO: Robert Berman, cinium.com Operates a holding company with subsidiaries including an insurance company, a risk-management group, and a company that provides financing to small businesses.

49

5,364.8%

$5.9 MILLION

32

2006

ISEND MIDDLEBURY, CONN. CEO: Steve LaBella, isendonline.com Provides electronic payment services to people who support family members abroad.

74

4,441.3%

$105.8 MILLION

15

2007

JANES CAPITAL PARTNERS IRVINE, CALIF. MANAGING PARTNERS: David Janes, Stephen Perry, and Richard Phillips, janescapital.com Provides investment banking services, with a specialty in deals in the aerospace and defense industries.

79

4,053.9%

$7.5 MILLION

10

1997

BLUESQUARE RESOLUTIONS SCOTTSDALE, ARIZ. CO-FOUNDERS: Sabin Burrell and Nick Glimcher bluesquareresolutions.com Provides secure payment processing to merchants.

102

3,458.5%

$14.3 MILLION

14

2009

BUSINESS FINANCE STORE SANTA ANA, CALIF. CEO: Tim McCormack, businessfinancestore.com Provides financing to start-ups and small businesses.

148

2,586%

$4 MILLION

35

2000

CHICAGOLAND FOREIGN INVESTMENT GROUP CHICAGO CEO: Taher Kameli, chicagoeb5.com Assists foreign investors in becoming permanent U.S. residents through investing in domestic companies.

155

2,511.5%

$3.9 MILLION

9

2008

HAWKEYE MANAGEMENT BLACKWOOD, N.J. CEO: Thomas Gazaway, hawkeyemgmt.com Provides loans, lines of credit, and consulting services to small businesses.

178

2,285.8%

$3 MILLION

32

2001

ADVOCATE MERCHANT SOLUTIONS FISHERS, IND. CEO: William Wise, advopayment.com Provides merchant processing services to businesses nationwide through independent sales agents.

191

2,177.7%

$3.7 MILLION

75

2009

EVOLUTION CAPITAL PARTNERS CLEVELAND CO-FOUNDERS: Brendan Anderson and Jeffrey Kadlic evolutioncp.com Invests in and provides management for second-stage or midsize companies.

198

2,117.3%

$2.7 MILLION

5

2005

GLASS MOUNTAIN CAPITAL SCHAUMBURG, ILL. CEO: Anthony Nuzzo, glassmountaincapital.com Collects delinquent debt for financial institutions, debt buyers, and credit grantors.

199

2,112.2%

$6.9 MILLION

140

2005

SOVEREIGN LENDING GROUP IRVINE, CALIF. CEO: Joseph Pirro, slgmortgage.com Provides mortgage refinancing, home equity loans, and debt consolidation for homebuyers.

219

1,944.5%

$6.2 MILLION

49

2005

SNAP ADVANCES SALT LAKE CITY PARTNERS: Matt Hawkins, Bart Longson, and Mike Landau snapadvances.com Makes cash-advance loans to small and midsize businesses.

222

1,924.5%

$21.9 MILLION

40

2009

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 170 - INC. - SEP TEMBER 2013

$1.2 BILLION TOTAL REVENUE $7.5 MILLION MEDIAN REVENUE

Includes lenders, mortgage brokers, financial advisers, and businesses whose products and services facilitate financial transactions

NO. 1 F I NA N C I A L S E RV I C E S

33 COMPANIES

THE 500

COURTESY COMPANY

ŦŦŦŦ

FINANCIAL SERVICES


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WHAT WAS YOUR BEST IDEA?

“Taking the business global when it was one year old.” DINESH WADHWANI THINKLITE

ŦŦŦŦ

THE INC. 500 C E O S U RV EY

RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

VICTOR SECURITIES ENGLEWOOD, N.J. CEO: Kevin Bakhler, victorsecurities.com Provides brokerage services to professional investors, such as hedge funds and proprietary trading groups.

227

1,909.8%

$5.1 MILLION

14

2007

FLEXWAGE SOLUTIONS MOUNTAINSIDE, N.J. CEO: Frank Dombroski, flexwage.com Provides financial services and payroll processing to consumers without bank accounts.

258

1,670%

$2.1 MILLION

8

2009

MOVEMENT MORTGAGE CHARLOTTE, N.C. CEO: Casey Crawford, movementmortgage.com Provides and services mortgages.

274

1,591.7%

$92 MILLION

1,165

2008

JG TAX GROUP DEERFIELD BEACH, FLA. CEO: David Connell, jgtaxgroup.com Advises individuals, attorneys, and businesses with complex tax problems.

279

1,561.2%

$4.6 MILLION

55

2008

REGAL ASSETS BURBANK, CALIF. CEO: Tyler Gallagher, regalassets.com Sells gold and other precious metals.

289

1,514.5%

$24.5 MILLION

33

2003

RESCUE ONE FINANCIAL IRVINE, CALIF. CEO: Bradley W. Smith, rescueonefinancial.com Provides debt-reduction plans and loan assistance to consumers overburdened with debt.

310

1,405.9%

$31.6 MILLION

53

2007

MILEND ATLANTA CEO: Mark Granigan, milend.com Provides residential mortgages.

326

1,322.8%

$14.2 MILLION

86

1994

COMPLETE MERCHANT SOLUTIONS OREM, UTAH CEO: Jack Wilson, cmsonline.com Provides electronic payment-processing services to retail and e-commerce businesses.

343

1,271.3%

$31.1 MILLION

32

2008

362

1,218.5%

$206.4 MILLION

465

2006

SECURUS PAYMENTS PORTLAND, ORE. CO-FOUNDERS: Steven Lemma and Mychol Robirds securuspayments.com Provides credit and debit card processing, e-commerce software, and other services to merchants.

374

1,184.4%

$6.6 MILLION

150

2009

CHANNEL PARTNERS MAPLE GROVE, MINN. CEO: Brad Peterson, channelpartnersllc.com Makes short-term loans and cash advances to small businesses.

392

1,137.5%

$2.2 MILLION

12

2009

CANEEL GROUP GIBBSBORO, N.J. CEO: Jason Osborne, caneelgroup.com Manages nonperforming assets for investment banks and hedge funds.

409

1,097.1%

$7 MILLION

20

2008

MORTGAGE INDIANAPOLIS ŢŢ STONEGATE Jim Cutillo, stonegatemtg.com

424

1,074.4%

$95.5 MILLION

444

2005

Ţ

REPAY ATLANTA CEO: John Morris, repayonline.com Provides electronic payment processing and other services for merchants.

442

1,040%

$12.8 MILLION

13

2006

NETWORK CAPITAL IRVINE, CALIF. CEO: Tri Nguyen, networkcapital.net Provides mortgages, home equity loans, and FHA and VA loans to homeowners and homebuyers.

447

1,027.5%

$43.8 MILLION

220

2002

469

990.2%

$7.2 MILLION

29

2005

HICKS & CLARK SANDY SPRINGS, GA. CEO: Jerry Hicks, hicksclark.com Provides accounting, payroll, and tax consulting services.

481

960.5%

$2.3 MILLION

14

2009

RCS CAPITAL NEW YORK CITY CEO: William Kahane, rcscapital.com Provides investment banking and transaction-management services. The company went public in June.

499

918.8%

$287.5 MILLION

198

2007

FINANCIAL SERVICES (CONT.)

Ţ

Ţ Ţ

“Standardizing and structuring all of our processes.” DAVID ALLERBY 24HR HOMECARE

“Forming partnerships with complementary companies.” MARC ALRINGER SEAMGEN

Ţ

Ţ

PAYMENTS FRISCO, TEXAS Ţ CENTURY Ţ Robert Wechsler, centurypayments.com Ţ Provides electronic payment-processing services. CEO:

“Paying a premium for a material that no one in the market has.” JAMES YU SIMPLYGLOBO

CEO:

Provides mortgage loans and services.

CHICAGO ŢŢ AVONDALE Karl Stark, avondalestrategicpartners.com CEO:

Provides advisory services to the managers of and investors in growing companies.

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 17 2 - INC. - SEP TEMBER 2013

THE 500


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$371.6 MILLION TOTAL REVENUE $10.7 MILLION MEDIAN REVENUE

Companies that manufacture, sell, or distribute food and beverages, including restaurant chains, restaurant franchisers, and vending machine companies

NO. 1 FOOD + BEVERAGE

Ţ Ţ “We make our products nutritional, but also something our customers will eat.” TODD WILLIAMS CEO of Vertex Body Sciences

6 COMPANIES

2,995.6% MEDIAN GROWTH RATE 400 TOTAL EMPLOYMENT

RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

VERTEX BODY SCIENCES COLUMBUS, OHIO CEO: Todd Williams, vertexbsi.com Makes energy drinks and meal replacement bars, which are sold online and in stores and health clubs.

20

10,010.4%

$11.8 MILLION

51

2006

VITAL FARMS AUSTIN CEO: Matt O’Hayer, vitalfarms.com Produces organic, pasture-raised poultry and eggs, which are sold primarily in Whole Foods grocery stores.

86

3,877.6%

$9.7 MILLION

30

2007

GREEN BOX FOODS NORCROSS, GA. CEO: Keith Kantor, greenboxfoods.com Sells and delivers food to consumers’ homes and to businesses, and operates corporate wellness programs.

118

3,020%

$251.1 MILLION

221

1981

ORGAIN TUSTIN, CALIF. CEO: Andrew Abraham, orgain.com Makes organic nutritional shakes sold in 20,000 grocery stores and pharmacies.

122

2,971.3%

$9 MILLION

6

2008

HUMAN HEALTHY VENDING CULVER CITY, CALIF. CEO: Sean Kelly, healthyvending.com Franchises vending machines with healthful snacks, such as fresh fruit, protein bars, and juice.

169

2,377.8%

$9.2 MILLION

30

2008

255

1,690.6%

$80.8 MILLION

62

2007

EMERYVILLE, CALIF. ŢŢ PLUMNeilORGANICS Grimmer, plumorganics.com CEO:

Makes organic meals and snacks for babies and toddlers.

GOVERNMENT SERVICES

37 COMPANIES $518.8 MILLION TOTAL REVENUE $9.2 MILLION MEDIAN REVENUE

A diverse range of companies that provide consulting, training, software, equipment, and other products and services primarily to government entities NO. 1 G OV E R N M E N T S E RV I C E S

Ţ

PA U L T R A P P CEO of FederalConference. com

3

24,830.6%

$49.6 MILLION

51

2006

OBXTEK TYSONS CORNER, VA. CEO: Ed Jesson, obxtek.com Provides IT services to federal government agencies.

12

16,433.2%

$29.6 MILLION

149

2008

NSR SOLUTIONS ROCKVILLE, MD. CEO: Nayereh Rassoulpour, nsrsolutions.com Provides IT services, staffing, translation, and other services to federal agencies and businesses.

42

6,392.4%

$10.1 MILLION

252

1990

DSFEDERAL GAITHERSBURG, MD. CEO: Sophia Parker, dsfederal.com Offers consulting, research, event planning, software development, and other services to federal clients such as the Food and Drug Administration.

56

5,151.5%

$9.4 MILLION

70

2007

BRENTWOOD, TENN. ŢŢ ASEBoDIRECT D. Clift, asedirect.com

83

3,924.2%

$26.2 MILLION

17

2005

Ţ

ANALYTIC STRATEGIES VIENNA, VA. CEO: Randy Wimmer, analyticstrategies.com Provides analytical tools and services to the Department of Defense and other federal government clients.

108

3,306.1%

$5.4 MILLION

33

2006

COMMAND POST TECHNOLOGIES SUFFOLK, VA. PRESIDENT: Scott Bisciotti, commandposttech.com Provides training to U.S. Army Special Operation Forces and law enforcement.

113

3,095.1%

$7.2 MILLION

31

2008

BMA LEAVENWORTH, KAN. McNully, bma-1.com Provides training and analytical services for the U.S. military and military contractors.

119

2,997.8%

$9 MILLION

75

2009

CEO:

Sells office supplies, IT hardware, and medical equipment and supplies to federal agencies and large businesses.

GENERAL MANAGER: Sam

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 174 - INC. - SEP TEMBER 2013

4,510 TOTAL EMPLOYMENT

FEDERALCONFERENCE.COM DUMFRIES, VA. CEO: Paul Trapp, federalconference.com Organizes and stages conferences and events for the federal government.

Ţ

“We’re not just event planners. We’re experts in federal regulations.”

1,601.6% MEDIAN GROWTH RATE

THE 500

FROM TOP: COURTESY COMPANY; MARK REGAN

ŦŦŦŦ

FOOD + BEVERAGE


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WHAT WAS YOUR WORST IDEA?

“Listening to investors about who to hire.”

Ţ

CINDY TYSINGER GSATI

“Mixing business and family.” CHARLES THAYER ALL AROUND PROPERTY PRESERVATION

“Instituting unstructured 20 percent time to work on a side project without any rules or guidelines. It turned into beer time.” INGRID ALONGI QUICK LEFT

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

THE MILLENNIUM GROUP INTERNATIONAL STERLING, VA. CEO: Jeffrey Rocha, tmgi.net Provides consulting, training, and leadership development services to government agencies and other organizations.

134

2,757.9%

$4.5 MILLION

25

1998

VIDERITY WASHINGTON, D.C. Everett, viderity.com Provides IT consulting and services to government agencies.

135

2,741.1%

$10.7 MILLION

28

2007

RMGS VIRGINIA BEACH, VA. CEO: Rich Hansen, rmgsinc.com Provides training and consulting to the U.S. Special Operations Command, the Department of Homeland Security, and other government entities.

145

2,599.4%

$3.9 MILLION

23

2008

1ST AMERICAN SYSTEMS AND SERVICES FALLS CHURCH, VA. CEO: Alpa Shah, 1asas.com Provides IT services, training, staffing, records management, and other services to federal and state government clients.

156

2,492.3%

$2.6 MILLION

34

2007

STREAMLINE DEFENSE TAMPA CEO: Terrell A. Martin, streamlinedefense.com Provides intelligence and IT services to U.S. military special forces.

183

2,236.3%

$6.3 MILLION

60

2007

CWU CLEARWATER, FLA. CEO: Charles Jenkins, cwuinc.us Provides counterterrorism training and other services to the departments of Defense and Homeland Security.

204

2,062.4%

$10.2 MILLION

474

2004

FREEALLIANCE.COM WASHINGTON, D.C. CEO: Anil Sharma, freealliance.com Provides IT staffing, consulting, and services to state and federal clients, including the Department of the Treasury and the Department of the Interior.

217

1,952.4%

$2.6 MILLION

7

2001

VESA HEALTH & TECHNOLOGY SAN ANTONIO CEO: Steven Gallegos, vesahealth.com Provides medical staffing, IT services, consulting, and other services to the military and other government clients.

231

1,856.2%

$15.5 MILLION

149

2007

CARDINAL POINT CAPTAINS CARLSBAD, CALIF. PRESIDENT: Jordan Cousino, cpcperforms.com Provides ship crews and maritime services to the Navy, the Coast Guard, and other organizations.

248

1,765%

$2 MILLION

30

2008

267

1,626.2%

$5.8 MILLION

45

2002

271

1,601.6%

$79.3 MILLION

467

2005

KNIGHT SOLUTIONS LEESBURG, VA. CEO: Kevin Knight, knightsolutionsfirst.com Provides landscaping and renovation services at cemeteries for military veterans.

296

1,472.2%

$16.3 MILLION

150

2005

CADUCEUS HEALTHCARE ATLANTA CEO: Carlos M. Lopez, caduceusstaffing.com Provides medical and IT staffing to federal clients, including the Department of Veterans Affairs.

303

1,442.6%

$4.1 MILLION

18

2008

SHINE SYSTEMS & TECHNOLOGIES CHARLOTTESVILLE, VA. CEO: Jeff A. Thomas, shinesystech.com Provides biometric and forensic tools, military intelligence, IT services, and consulting to government clients.

309

1,409.8%

$5.9 MILLION

73

2007

BARBARICUM WASHINGTON, D.C. CEO: Brandon Bloodworth, barbaricum.com Provides strategic communications and energy consulting services to the U.S. Army and other clients.

324

1,340.2%

$6.1 MILLION

47

2008

NISGA’A DATA SYSTEMS HERNDON, VA. CEO: Frank Watson, ndsystems.com Provides IT services and consulting to the military, other federal agencies, and businesses.

341

1,281.3%

$9.5 MILLION

62

2007

TAUREAN SAN ANTONIO CEO: Jeffrey Jaime, taurean.net Provides cybersecurity software and services to the Department of Defense and intelligence agencies.

351

1,249.2%

$5.9 MILLION

35

2008

FCI FEDERAL LEESBURG, VA. CEO: Sharon Virts Mozer, fcifederal.com Provides business process outsourcing for federal agencies and departments, including the Department of State.

363

1,218.2%

$70.9 MILLION

1,352

1991

CEO: Rachel

GIOVANNI FEROCE ALEX AND ANI AND SEVEN SWORDS MEDIA

“Holding on to toxic clients in order to grow our business.”

RANK THREE-YEAR GROWTH

GOVERNMENT SERVICES (CONT.)

ŦŦŦŦ

THE INC. 500 C E O S U RV EY

CONSULTING McLEAN, VA. ŢŢ VERDI Mariama Levy, verdiconsulting.net CEO:

Provides accounting, auditing, and IT services to federal agencies.

TECHNOLOGY Ţ VETERANS ENTERPRISE Ţ CLARKSVILLE, VA. Ţ SOLUTIONS James Moody, vets-inc.com CEO:

Provides administrative, intelligence, and IT services to federal departments and agencies.

Ţ

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 176 - INC. - SEP TEMBER 2013

THE 500


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ŦŦŦŦ

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

DYNAMIX MECHANICAL TAMPA CEO: Christopher Leiser, dynamixmechanical.com Builds, retrofits, and maintains commercial and industrial HVAC systems for federal customers.

367

1,211.9%

$13.3 MILLION

90

2007

STRONGBRIDGE STERLING, VA. CEO: Janaki Deshmukh, strongbridgecorp.com Provides marketing and IT services to federal agencies and departments.

379

1,174%

$10.1 MILLION

78

2004

BNL LOVETTSVILLE, VA. CEO: Larry MIller, bnlinc.com Provides HR and IT services and consulting to federal agencies.

393

1,136%

$6 MILLION

29

2001

LINTECH GLOBAL FARMINGTON HILLS, MICH. CEO: Michael Lin, lintechglobal.com Provides IT services, including software development and system integration, to local, state, and federal agencies.

413

1,090.5%

$2.8 MILLION

14

2007

FIVE STONES RESEARCH BROWNSBORO, ALA. CEO: Joni Green, 5sr-hsv.com Provides engineering and logistics to the Department of Defense and federal agencies.

422

1,076%

$5.1 MILLION

51

2006

SSI GERMANTOWN, MD. CEO: Linda Dennis, groupssi.com Provides translation services as well as cultural and foreign-language instruction to the U.S. military.

423

1,075.9%

$9.2 MILLION

143

2002

Ţ

SPECIAL OPERATIONS SOLUTIONS SILVER SPRING, MD. PRESIDENT: Manan Patel, specopsolutions.com Provides intelligence personnel on contract to the Department of Defense.

428

1,068.9%

$11.4 MILLION

33

2008

429

1,065.8%

$16 MILLION

150

2005

YORKTOWN SYSTEMS GROUP HUNTSVILLE, ALA. Dyer, ysginc.com Provides IT services, financial services, and training to the military.

434

1,057.1%

$10.7 MILLION

122

2008

CLEARABILITY WOODBINE, MD. CEO: David Hall, clearability.com Provides IT staffing and services to the Department of Defense and other federal clients.

445

1,028.6%

$2.5 MILLION

14

2007

496

928.3%

$23.3 MILLION

29

2005

AND TECHNOLOGY ROCKVILLE, MD. ŢŢ TISTA SCIENCE Ahmed Ali, tistatech.com PRESIDENT:

Provides IT services, including staffing, to state and federal government clients.

PRESIDENT: Bryan

“Rising costs are challenging health systems nationwide. We see smarter IT as part of the solution.”

CORPS OF AMERICA O’FALLON, ILL. Ţ VETERAN Ţ Bill Wheeler, veterancorps.com Ţ Provides simulation-based training, IT services, CEO:

and logistics to the military.

HEALTH

RICHARD CAPLIN CEO of The HCI Group

$721.2 MILLION TOTAL REVENUE $9.3 MILLION MEDIAN REVENUE

Companies that provide health care in all its forms. Also includes companies whose products or services are designed specifically for the health care system

Ţ

Ţ

1,312.4% MEDIAN GROWTH RATE 4,209 TOTAL EMPLOYMENT

THE HCI GROUP JACKSONVILLE, FLA. CEO: Richard Caplin, thehcigroup.com Provides electronic medical record consulting to hospitals.

4

24,544.8%

$25.5 MILLION

132

2009

PATIENT CONVERSATION MEDIA AUSTIN CEO: Donald W. Hackett, patientconversation.com Publishes several websites, including dailyRx and 1-800-Therapist, which provide health-related content.

23

8,782.4%

$9.8 MILLION

41

2008

INTELLECT RESOURCES GREENSBORO, N.C. CEO: Tiffany Crenshaw, intellectresources.com Provides health care IT recruiting and consulting to hospitals.

40

6,553.7%

$30 MILLION

675

1999

THE JOINT SCOTTSDALE, ARIZ. CEO: John Leonesio, thejoint.com Franchises chiropractic clinics, with nearly 400 locations.

45

5,961.6%

$7.4 MILLION

14

1999

CRESCENDO BIOSCIENCE SOUTH SAN FRANCISCO, CALIF. CEO: William A. Hagstrom, crescendobio.com Develops blood tests used by rheumatologists.

68

4,739.8%

$5.5 MILLION

103

2003

RESTOREHEALTH MADISON, WIS. CEO: Matt Wanderer, restorehc.com Operates a pharmacy that specializes in compounded medications.

80

4,039%

$4.9 MILLION

45

2009

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 178 - INC. - SEP TEMBER 2013

41 COMPANIES

THE 500

PALOMBO-ELLIOTT

NO. 1 H E A LT H

RANK THREE-YEAR GROWTH

GOVERNMENT SERVICES (CONT.)


ARE YOU THE FOUNDER OR CO-FOUNDER OF YOUR CURRENT COMPANY?

95 5

ŦŦŦŦ

THE INC. 500 C E O S U RV EY

RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

ONSITE OHS PRINCETON, IND. CEO: Kyle G. Johnson, onsiteohs.com Provides on-site medical services to construction sites.

96

3,567.9%

$33.2 MILLION

228

2008

COVERMYMEDS TWINSBURG, OHIO CEO: D. Alan Scantland, covermymeds.com Develops an electronic management system used by pharmacies and pharmacy benefit managers.

97

3,567.1%

$5.3 MILLION

35

2008

VRX SALT LAKE CITY CEO: Douglas S. Burgoyne, myvrx.com Provides pharmacy-benefit-management services to large employers and health plans.

99

3,478.7%

$72.4 MILLION

67

2006

MEDICAL STAFFING OPTIONS WESTERVILLE, OHIO CEO: Robert Gammill, medicalstaffingoptions.com Provides medical staffing to hospitals.

161

2,444%

$4.6 MILLION

200

2003

CLINOVATIONS WASHINGTON, D.C. CEO: Trenor Williams, clinovations.com Consults on strategic and clinical IT issues for health care organizations.

176

2,295.9%

$12.8 MILLION

40

2008

RECONDO TECHNOLOGY GREENWOOD VILLAGE, COLO. CEO: Rick Adam, recondotech.com Designs software and provides services to hospitals for managing insurance claims and collections.

180

2,261%

$30.4 MILLION

251

2006

TNH PHARMACY II VAN NUYS, CALIF. CEO: Avetis Minasyan, tnhpharmacy.com Operates a pharmacy specializing in treatments for cancer, HIV, multiple sclerosis, and chronic conditions.

182

2,248%

$37.7 MILLION

20

2008

ISIRONA PANAMA CITY, FLA. CEO: Dave Dyell, isirona.com Develops software that integrates medical device data into electronic medical records.

201

2,091.8%

$17.2 MILLION

106

2008

SUNSET HEALTHCARE SOLUTIONS CHICAGO CEO: Christopher Slosar, sunsethcs.com Manufactures and distributes medical devices for the treatment of sleep apnea.

215

1,975.4%

$6.7 MILLION

35

2004

DANE STREET BOSTON CEO: Will Fulton, danestreet.com Provides medical peer-review services to insurance companies and other organizations.

223

1,921.8%

$9.4 MILLION

81

2008

NEW WAVE SURGICAL POMPANO BEACH, FLA. PRESIDENT: Ricardo Alexander Gomez, newwavesurgical.com Designs and markets devices for laparoscopic surgery.

228

1,903.7%

$12.4 MILLION

98

2006

PATIENT ENGAGEMENT ADVISORS BIRMINGHAM, ALA. CEO: Jeff Moreland, patientengagementadvisors.com Provides consulting services to hospitals.

260

1,663.8%

$2.3 MILLION

30

2008

ONCOLOGY ANALYTICS PLANTATION, FLA. CEO: Marc Fishman, oncologyanalytics.com Provides oncology-benefit-management services for health insurance companies.

280

1,560.7%

$2.6 MILLION

20

2009

THE FLEXPRO GROUP PLYMOUTH MEETING, PA. PRESIDENT: Rose Cook, theflexprogroup.com Provides consulting services to the pharmaceutical industry.

290

1,513.2%

$6.6 MILLION

32

2008

INVICRO BOSTON

329

1,312.4%

$5.7 MILLION

18

2008

ECHO HEALTH WESTLAKE, OHIO H. Davis, www.echohealthinc.com Provides payment-processing services for third-party administrators of health insurance plans.

350

1,250.3%

$25 MILLION

15

1997

ELORAC VERNON HILLS, ILL. CEO: Jeff Bernstein, eloracpharma.com Develops and markets prescription treatments for skin diseases and disorders.

354

1,245.1%

$6.1 MILLION

14

2008

FITNESS ON REQUEST MAPLE GROVE, MINN. INTERIM CEO: Dave Kraai, fitnessonrequest.com Provides systems that broadcast prerecorded fitness classes to about 1,000 gyms.

355

1,243.4%

$3.9 MILLION

29

2008

KT TAPE LINDON, UTAH CEO: John MacKay, kttape.com Manufactures athletic tape for sports injuries.

356

1,238.6%

$9.1 MILLION

19

2009

WELLNESS CORPORATE SOLUTIONS BETHESDA, MD. PRESIDENT: Fiona Gathright, wellnesscorporatesolutions.com Provides wellness programs to midsize and large businesses.

357

1,236.8%

$9.3 MILLION

51

2004

HEALTH (CONT.)

Ţ

Ţ

Yes

No

Ţ

Ţ

Ţ

Ţ

MANAGING PARTNER: Jack

Hoppin, invicro.com Provides biomedical imaging services and software used to develop new drugs.

CEO: William

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 180 - INC. - SEP TEMBER 2013

THE 500


GREATER NEW YORK

— PHILADELPHIA

— SAN FRANCISCO/SILICON VALLEY

Congratulates our Council Members whose businesses made 2013’s Inc. 5000 list of fast-growing private companies

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www.inc.com/iboc/killer-sales-force


Congratulations to this yearâ&#x20AC;&#x2122;s Inc. 500/5000 winners.


UnitedHealthcare applauds you for your determination and success. You’ve worked hard to make your dream come true and build a successful business. Congratulations on a job well done and for earning a spot on the Inc. 500/5000 list. You are part of an elite group of business owners who are helping the economy grow. At UnitedHealthcare, we also strive for success, and we know that our success depends on the success of your business. That’s why we focus on providing a wide range of health care coverage solutions, so you can focus on running your business. We want you to know that we are here to help your company continue its upward growth. When you’re ready to find the right health care coverage to fit your employees’ unique needs, count on us to help support you.

©2013 United HealthCare Services, Inc. Insurance coverage provided by or through UnitedHealthcare Insurance Company or its affiliates. Administrative services provided by United HealthCare Services, Inc. or their affiliates. Health plan coverage provided by or through a UnitedHealthcare company. UHCEW646285-000


RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

RESERVEAGE ORGANICS GAINESVILLE, FLA. CEO: Naomi Whittel, reserveage.com Develops and sells vitamins, dietary supplements, tonics, and beauty products used for antiaging effects.

365

1,213.3%

$63.3 MILLION

72

2009

24HR HOMECARE EL SEGUNDO, CALIF. CO-FOUNDERS: David Allerby, Tyner Brenneman-Slay, and Ryan Iwamoto, 24hrcares.com Provides in-home care services to the elderly.

373

1,185.4%

$18.4 MILLION

49

2008

INTEGRATED PRESCRIPTION MANAGEMENT FRESNO, CALIF. CEO: Walter Troy Collins, rxipm.com Provides pharmacy-benefit-management services.

382

1,167.2%

$53.1 MILLION

15

2009

CORNERSTONE ADVISORS GROUP GEORGETOWN, CONN. MANAGING PRINCIPAL: Keith Ryan, cornerstone-advisors.com Provides health care IT consulting to hospitals.

395

1,130.2%

$6.1 MILLION

26

2008

FORWARD HEALTH NEW YORK CITY CEO: Arthur Meyerovich, forwardhealth.com Operates several websites, including Men’s Health Base and Pregnancy Girl, that provide health-related content.

402

1,106.7%

$10.5 MILLION

6

2003

ESAC ROCKVILLE, MD. PRESIDENT: Shine Jacob, esacinc.com Provides data-management and -analysis tools to scientists and medical researchers.

410

1,093.6%

$7.3 MILLION

26

2000

SANTA ROSA CONSULTING FRANKLIN, TENN. Helppie, santarosaconsulting.com Provides management consulting and IT services to the health care industry.

415

1,086.6%

$54.1 MILLION

200

2008

ALEGO HEALTH WESTLAKE, OHIO PRESIDENT: Jacqueline Forestall, alegohealth.com Provides IT services and electronic medical record consulting to hospitals.

431

1,061.8%

$8.6 MILLION

660

2004

ONSITE HEALTH DIAGNOSTICS IRVING, TEXAS CEO: Steven Staneff, onsitehd.com Provides employee health screenings and analytics to companies.

437

1,049.7%

$6.7 MILLION

45

2000

REFRESH DENTAL MANAGEMENT NEW CASTLE, PA. CEO: Kenneth L. Cooper, gorefreshdental.com Operates more than 35 dental offices in Ohio and Pennsylvania.

443

1,031.3%

$31.1 MILLION

454

2008

MEDICAL DIRECT CLUB NASHVILLE CEO: Bradford C. Gulmi, medicaldirectclub.com Sells mail-order urological supplies.

463

1,000.2%

$20.1 MILLION

75

2009

SCOTTSDALE, ARIZ. ŢŢ GLOBALMED Joel E. Barthelemy, globalmed.com

465

999.8%

$32.2 MILLION

101

2002

FOR ALL MOUNT LAUREL, N.J. ŢŢ FREEGerard J. Ferro, rxcut.com

483

949.7%

$4.5 MILLION

24

2008

PERSONALIZED PREVENTION SAN ANTONIO CEO: Lisa Van Ackeren, personalizedprevention.com Provides corporate wellness services to employers.

487

936.6%

$3.2 MILLION

37

2006

KALOBIOS SOUTH SAN FRANCISCO, CALIF. CEO: David W. Pritchard, kalobios.com Develops treatments for respiratory diseases and cancer. KaloBios went public in January.

489

935.3%

$6.1 MILLION

20

2000

Ţ Ţ

CEO: Rich

NO. 1 HUMAN RESOURCES

FOUNDER:

Provides cameras, software, and other tools that allow doctors to examine patients remotely. CEO:

Offers discount prescription plans to consumers.

“We can find an expert, ninja, or purple squirrel in any field.” ED LEFKOW President of STAR Collaborative

HUMAN RESOURCES

$291.7 MILLION TOTAL REVENUE $8.2 MILLION MEDIAN REVENUE

Staffing, recruiting, and executive-search firms, as well as companies that provide outsourced payroll services and employee-training services

1,288.8% MEDIAN GROWTH RATE 2,041 TOTAL EMPLOYMENT

STAR COLLABORATIVE MINNEAPOLIS PRESIDENT: Ed Lefkow, starcollaborative.com Provides staffing and consulting, with a specialty in IT employees.

138

2,695.5%

$14 MILLION

5

2009

STARTFINDER ROCKVILLE, MD. CO-FOUNDERS: Barry Smith and Alan Strauss, startfinder.com Provides IT staffing, recruiting, and consulting services.

142

2,659.2%

$2.8 MILLION

29

2009

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 184 - INC. - SEP TEMBER 2013

21 COMPANIES

THE 500

COURTESY COMPANY

ŦŦŦŦ

HEALTH (CONT.)


WHAT IS THE MOST REVEALING QUESTION YOU CAN ASK A JOB CANDIDATE?

“ ‘What makes you weird?’ You’d be amazed at the answers we get!” ERIC BOWMAN, SPARC

“If I put you in my place for one month, what would you do?” ANIL SHARNA FREEALLIANCE.COM

RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

S2VERIFY ROSWELL, GA. CEO: Bill Whitford, s2verify.com Performs background checks and employmentscreening services.

194

2,142.2%

$4.4 MILLION

15

2009

TEEMA CONSULTING GROUP IRVINE, CALIF. CEO: Brian Antenbring, teemagroup.com Provides staffing and technology services.

207

2,042.2%

$30 MILLION

90

2008

BWBACON GROUP DENVER CEO: Dave Bacon, bwbacon.com Provides consulting and staffing services to technology companies.

218

1,948.9%

$3.6 MILLION

6

2001

VINCENTBENJAMIN PHOENIX CO-CEOs: Ben Howard and Vincent Dorazio, vincentbenjamin.com Recruits employees for accounting, finance, and IT positions.

246

1,770.4%

$8.2 MILLION

34

2009

SEARCHPROS SOLUTIONS SACRAMENTO CEO: Myla Ramos, searchprosmsp.com Recruits IT, engineering, HR, finance, and administrative employees.

251

1,726.6%

$27.6 MILLION

713

2005

PATINA SOLUTIONS MILWAUKEE CEO: Mike Harris, patinasolutions.com Provides staffing services, specializing in executives and professionals for temporary positions.

281

1,554.7%

$9.9 MILLION

99

2009

IVY EXEC NEW YORK CITY CEO: Elena Bajic, ivyexec.com Provides online recruiting services for executive positions.

311

1,401.4%

$2.2 MILLION

30

2006

333

1,305.5%

$100.2 MILLION

13

2002

TWO95 INTERNATIONAL CHERRY HILL, N.J. CEO: Shanker Koladi, two95intl.com Provides staffing and HR services to IT companies, as well as consulting on the establishment of offices in India.

338

1,288.8%

$4.6 MILLION

85

2009

HIREVUE SALT LAKE CITY CEO: Mark Newman, hirevue.com Makes an online platform for conducting video job interviews.

349

1,251.3%

$5.8 MILLION

83

2004

THE PREMIER GROUP STAFFING DENVER CO-OWNERS: Rich Johnson and Dara Johnson thepremiergroupus.com Recruits workers for the construction, finance, and IT industries.

389

1,151.6%

$11.4 MILLION

26

2008

CAREERS IN TRANSITION TUCKER, GA. CEO: Indigo Triplett, career-transition.com Provides employee-management services to businesses, universities, and federal agencies.

430

1,065.7%

$5.3 MILLION

36

1995

GREENJOBINTERVIEW COSTA MESA, CALIF. CO-FOUNDERS: Greg Rokos and Theo Rokos, greenjobinterview.com Provides a cloud-based virtual interviewing platform for employers.

435

1,055.8%

$2.6 MILLION

20

2007

KAVALIRO ORLANDO CEO: Diane Mahony, kavaliro.com Provides staffing services in the areas of IT, engineering, finance, and administration.

440

1,042.6%

$16.8 MILLION

231

2003

STANDBY TALENT STAFFING SERVICES ATLANTA CEO: Derrick Harris, standbytalent.com Recruits IT, finance, HR, and administrative workers.

449

1,025.8%

$2.3 MILLION

25

2004

FRONTLINE SOURCE GROUP DALLAS CEO: Bill Kasko, frontlinesourcegroup.com Provides staffing and recruiting services to oil and gas companies, hospitals, and other businesses.

454

1,015.3%

$8.6 MILLION

205

2004

MOM CORPS ATLANTA CEO: Allison O’Kelly, momcorps.com Places mothers and other workers who need flexible hours in part-time and temporary positions.

472

983.8%

$16.2 MILLION

141

2005

CORNERSTONE RPO RICHMOND, VA. MANAGING PRINCIPAL: Rodney Ashby, cornerstonerpo.com Provides recruiting services to the financial services, manufacturing, tech, and retail industries.

485

939%

$6.3 MILLION

80

2005

TALENT CURVE PITTSBORO, N.C. Brister, talentcurve.com Creates interactive career websites for companies and provides career counselors to employees on-site or over the phone.

488

936.3%

$8.9 MILLION

75

2007

HUMAN RESOURCES (CONT.)

ŦŦŦŦ

THE INC. 500 C E O S U RV EY

EMPLOYMENT PLATFORMS OVERLAND PARK, KAN. Ţ PIVOT Ţ Cary Daniel, pivotcompanies.com Ţ Provides back-office systems and services to the CEO:

“What do people assume about you that would be wrong?”

staffing industry. It also franchises staffing services.

DAVID ALLERBY 24HR HOMECARE

“ ‘What are your salary requirements?’ I prefer candidates who respond with something like, ‘Is there a limit?’ ” PAUL TRAPP FEDERALCONFERENCE.COM

Ţ Ţ

CEO: Anne

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 186 - INC. - SEP TEMBER 2013

THE 500


JESSE KEGLEY Managing partner of Emerge Managed Solutions

Ţ

$6.8 MILLION MEDIAN REVENUE 1,621.1% MEDIAN GROWTH RATE 3,732 TOTAL EMPLOYMENT

RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

EMERGE MANAGED SOLUTIONS ERLANGER, KY. MANAGING PARTNER: Jesse Kegley, emergeits.com Provides cloud-computing, network, and messagingcollaboration services to small and midsize businesses.

2

32,523.6%

$681.1 MILLION

8

2006

LEVEL 11 SEATTLE CEO: Mark Hadland, level11.com Consults for large companies on data analytics and other technology concerns.

22

9,043.9%

$9.6 MILLION

30

2009

TIMBERHORN FRISCO, TEXAS CEO: Rex Kurzius, timberhorn.com Consults in IT services, staffing, and deployment.

26

8,516.2%

$13.8 MILLION

150

2009

ONESOURCE VIRTUAL IRVING, TEXAS CEO: Brian Williams, onesourcevirtual.com Deploys Workday software for client companies.

30

7,353.3%

$23.5 MILLION

260

2008

WILSON LEGAL SOLUTIONS NEWTOWN SQUARE, PA. CEO: Bruce Wilson, wilsonlegalsol.com Deploys practice-management software for law firms.

63

4,839.1%

$5.5 MILLION

30

2009

DITO MANASSAS, VA. CEO: Jim McNelis, ditoweb.com Deploys Google enterprise applications and provides training and management services for companies using those apps.

77

4,200.4%

$4.5 MILLION

30

2007

ELEVATE TECHNOLOGY SOLUTIONS ROCKLAND, MASS. CEO: Michael McCabe, elevatets.com Provides IT consulting and staffing services.

93

3,601%

$16.9 MILLION

120

2009

AKVARR FAIRFAX, VA. CEO: Vijai Rangarajan, akvarr.com Designs and maintains corporate networks, provides IT personnel, and develops custom apps.

107

3,310%

$5.1 MILLION

65

2007

RAPIER SOLUTIONS MATTHEWS, N.C. PRESIDENT: William Bailey, rapiersolutions.com Provides systems operation and maintenance, disaster recovery, and logistics services.

116

3,051.4%

$6.2 MILLION

51

2002

130

2,831.6%

$5.2 MILLION

66

1993

CLOUD SHERPAS ATLANTA CEO: David Northington, cloudsherpas.com Brokers cloud-computing services and helps businesses adopt and manage cloud technologies.

143

2,633%

$75.3 MILLION

532

2007

SCM DATA JERSEY CITY, N.J. CEO: Sowrabh Sharma, scmdata.com Consults on IT infrastructure and develops software.

158

2,490.6%

$10.3 MILLION

150

2009

GSATI DENTON, TEXAS CEO: Cindy Tysinger, gsati.com Designs and manages IT systems, develops apps, and designs websites for small businesses.

170

2,366.8%

$2.5 MILLION

23

2008

TRACEPOINT CONSULTING ATLANTA CEO: Randy Geoghagan, tracepointconsulting.com Consults for clients that are embarking on large-scale IT initiatives.

171

2,355.1%

$4.9 MILLION

18

2009

IT STRATEGIC PERFORMANCE FIRM SAN ANTONIO CEO: Maria White, itspfm.com Provides consulting and support services to government entities and commercial health care companies.

186

2,224.6%

$3.5 MILLION

38

2008

VIRTUAL ENTERPRISE ARCHITECTS WASHINGTON, D.C. CEO: Lakeshia Grant, virtual-ea.com Consults on enterprise architecture and other IT concerns.

196

2,127.5%

$3.8 MILLION

23

2007

SOLOMON CONSULTING GROUP OVERLAND PARK, KAN. CEO: Grant Gordon, solomonbi.com Consults with clients in the public and private sectors on data management and other strategy concerns.

208

2,027.2%

$2.2 MILLION

20

2008

THE BRIXTON GROUP WAXHAW, N.C. CEO: Andrew Sobel, brixton.net Provides IT consulting and recruiting services.

216

1,974.6%

$20.9 MILLION

11

1998

TECHNOLOGIES EDISON, N.J. ŢŢ MAESTRO Susheel Bathla, maestro.com CEO:

Consults on IT infrastructure and develops software.

Ţ

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 188 - INC. - SEP TEMBER 2013

$1.2 BILLION TOTAL REVENUE

Companies that provide information technology support and consulting, as well as Web hosting companies, software resellers, Web design firms, and Internet service providers

NO. 1 I T S E RV I C E S

“A lot of executives say, ‘I won’t talk to my competitors,’ and people ask me why I would take that chance. There is more opportunity partnering with our competitors than there is going head to head with them.”

54 COMPANIES

THE 500

COURTESY COMPANY

ŦŦŦŦ

IT SERVICES


WHAT’S THE BEST SUGGESTION YOU’VE GOTTEN FROM AN EMPLOYEE?

“That we document some of the company antics. We’ve gotten hundreds of thousands of media impressions from YouTube because of it.”

Ţ

THOMAS McVEY RE:THINK

“My office manager suggested four years ago that we start using ‘lean’ in our processes. Changed everything.”

RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

STEMP SYSTEMS GROUP LONG ISLAND CITY, N.Y. CEO: Morris Stemp, stempsystems.com Designs and manages IT infrastructure.

220

1,936.9%

$6.8 MILLION

39

1986

NOVISYNC SOLUTIONS FISHKILL, N.Y. CEO: Rajesh Pericherla, novisync.com Provides IT and data-center services and support.

221

1,928.3%

$7.5 MILLION

119

2007

XTREME SOLUTIONS ATLANTA CEO: Phyllis Newhouse, xtremesolutions-inc.com Provides IT services for businesses and government entities.

239

1,810%

$8.6 MILLION

157

2002

VETS ETC. SEASIDE, CALIF. CEO: John Nash, vetsetc.com Provides IT implementation, support, and services.

244

1,788.5%

$3.8 MILLION

15

2009

INFOLOB SOLUTIONS IRVING, TEXAS CEO: Vijay Cherukuri, infolob.com Designs, implements, and maintains IT systems, with a specialty in Oracle products.

245

1,778%

$12.2 MILLION

120

2009

CRUNCHY LOGISTICS ORLANDO CEO: Neil Dufva, crunchy.co Develops audio-visual systems, user-interface technologies, and mobile apps for businesses.

256

1,686.9%

$2.2 MILLION

14

2008

MACROSPECT IRVING, TEXAS CEO: Randy Marvel, macrospect.net Consults in enterprise performance management, with a specialty in SAP products.

261

1,661.3%

$4.6 MILLION

32

2005

TECHNOMAX WEST WINDSOR, N.J. CEO: Sai Varanasi, technomaxllc.com Provides IT consulting, staff augmentation, and implementation services.

263

1,651.9%

$2.4 MILLION

9

2006

SAPREMACY CONSULTING WARRENVILLE, ILL. CEO: Mike Merri, sapremacy.com Provides consulting and software support services.

265

1,639.6%

$6.1 MILLION

2

2007

MMC SYSTEMS HERNDON, VA. CEO: Sowrabh Sharma, mmcsystems.com Provides consulting and software support services.

270

1,602.7%

$8.9 MILLION

100

2004

GENESIS CONSULTING PARTNERS GLEN ALLEN, VA. CEO: Jason Fair, genesisconsulting.com Provides IT consulting services for businesses.

272

1,601.3%

$12.2 MILLION

50

2008

VIRTUAL TECH GURUS IRVING, TEXAS CEO: Guru Moorthi, virtualtechgurus.com Provides IT services in infrastructure, cloud services, networking, backup, and VMware.

276

1,585.4%

$10.4 MILLION

23

2008

IQUASAR STERLING, VA. CEO: Tahir Qazi, iquasar.com Consults to businesses in the U.S. and abroad.

278

1,568.3%

$3.3 MILLION

11

2004

ACORDIS INTERNATIONAL PEMBROKE PINES, FLA. CEO: Rehan Khan, acordiscorp.com Provides products and services, including data management, to companies, government agencies, and schools.

283

1,542.3%

$2.2 MILLION

12

2007

VINTAGE IT SERVICES AUSTIN CEO: Sheryl Hanes, vintageits.com Provides IT consulting and management services.

285

1,531.3%

$28.9 MILLION

18

2001

BLUE STAR TEC BLOOMINGDALE, ILL. CEO: David Litt, bluestartec.com Provides IT consulting and management.

298

1,461.1%

$2.8 MILLION

25

2009

SUNSOFT SCOTTSDALE, ARIZ. PRESIDENT: Poornima Hiremath, sunsoftonline.com Provides IT consulting and staffing, as well as software and app development.

319

1,360.8%

$2.5 MILLION

85

2006

UTEST FRAMINGHAM, MASS. CEO: Doron Reuveni, utest.com Provides testing of Web, desktop, and mobile applications in development.

328

1,317.8%

$17 MILLION

102

2007

RAMPS INTERNATIONAL EDISON, N.J. Nunugonda, rampscorp.com Provides IT consulting and staffing, as well as software development and customization.

335

1,298.8%

$7.4 MILLION

90

2007

COLLABRALINK TECHNOLOGIES HINSDALE, ILL. CEO: Yash Pandhi, collabralink.com Consults on IT process analysis and implementation.

342

1,279.2%

$6.9 MILLION

35

2003

CONFIGERO DULUTH, GA. CEO: Jody Hamlett, configero.com Provides consulting services, with a specialty in Salesforce.

353

1,245.3%

$2.2 MILLION

21

2009

IT SERVICES (CONT.)

ŦŦŦŦ

THE INC. 500 C E O S U RV EY

Ţ

BRENDAN ANDERSON EVOLUTION CAPITAL PARTNERS

“To talk less and listen more.” MICHAEL BAKER DATAXU

Ţ

Ţ

PRESIDENT: Ram

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 190 - INC. - SEP TEMBER 2013

THE 500


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Ţ Ţ

“At some point I realized in order to get out of the small-business mode, I had to start hiring young, fresh people and reinvest all the dividends back in to the company.” YOSIE LEBOVICH CEO of Intelligent Audit

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

RIGIL WASHINGTON, D.C. CEO: Rakhi Sharma, rigil.com Provides consulting, support, and app development.

387

1,156.5%

$8.2 MILLION

38

2005

COLO5 JACKSONVILLE, FLA. CEO: Doug Recker, colo5.com Provides data-center and disaster-recovery services.

394

1,134.9%

$7.1 MILLION

11

2008

SUMMIT 7 SYSTEMS HUNTSVILLE, ALA. PRESIDENT: Scott Edwards, summit7systems.com Designs and deploys IT systems for businesses, with a specialty in Microsoft products.

397

1,125.2%

$3.2 MILLION

24

2008

ERP INTERNATIONAL LAUREL, MD. CEO: Melvin Petty, erpinternational.com Provides IT consulting and support services, with a specialty in health care companies.

399

1,120.6%

$22.3 MILLION

170

2006

LUNA DATA SOLUTIONS AUSTIN CEO: Dana R. Jones, lunadatasolutions.com Recruits and places technical and management IT professionals.

404

1,104.3%

$37.3 MILLION

21

2000

OLD TOWN IT ALEXANDRIA, VA. CEO: Timothy Ward, oldtownit.com Consults on IT design and deployment and develops software for professional associations.

407

1,101.3%

$4.1 MILLION

25

2007

TECHSOL4U TRACY, CALIF. COO: Suneel Ravi, techsol4u.com Consults on the development and deployment of IT systems.

414

1,089.5%

$2.2 MILLION

18

2007

VDART ALPHARETTA, GA. CEO: Syed Ahmed, vdartinc.com Provides IT staffing and consulting.

432

1,058.8%

$20.7 MILLION

348

2007

INFOSEMANTICS FLOWER MOUND, TEXAS CEO: Naren Thota, infosemantics.com Consults on systems and strategy; also provides IT staffing and tech support.

439

1,046.1%

$7.1 MILLION

50

2001

SPICA COMPUTERS JERSEY CITY, N.J. CEO: Zafar Shaikh, spicacomputers.com Provides a variety of IT services, including website and software development.

441

1,040.6%

$2 MILLION

30

2006

MO’MIX SOLUTIONS DRIPPING SPRINGS, TEXAS CEO: Erin Latham, momixsolutions.com Provides data warehousing and reporting services.

451

1,025%

$4.3 MILLION

15

2008

BLUE ACORN CHARLESTON, S.C. CEO: Kevin Eichelberger, blueacorn.com Builds, markets, and optimizes e-commerce sites.

476

975.2%

$2.6 MILLION

33

2008

FRUITION PARTNERS CHICAGO CEO: Marc Talluto, fruitionpartners.com Provides IT consulting with an emphasis on cloud-based service management.

482

957.6%

$24.1 MILLION

132

2003

Ţ

STRATEGIC COMMUNICATIONS LOUISVILLE PRESIDENT: Kathy Mills, yourstrategic.com Engineers and installs voice, data, video, security, and wireless networks.

491

933%

$41.7 MILLION

30

1994

Ţ

C2S TECHNOLOGIES BELLEVUE, WASH. CEO: Navya Chitiprolu, c2stechs.com Provides IT consulting and staffing, as well as software development.

494

930.3%

$8.6 MILLION

83

2005

LOGISTICS + TRANSPORTATION

14 COMPANIES $333.4 MILLION TOTAL REVENUE

Freight shippers, truckers, and other companies that move products and people; as well as brokers of those companies’ services, logistics companies, and providers of services to the industry

1,733.2% MEDIAN GROWTH RATE 400 TOTAL EMPLOYMENT

INTELLIGENT AUDIT ROCHELLE PARK, N.J. CEO: Yosie Lebovich, intelligentaudit.com Performs audits and analysis and negotiates on behalf of high-volume shippers worldwide.

18

10,573%

$145 MILLION

15

1997

US LOGISTICS CINCINNATI Hiatt, uslfreight.com Provides back-office support and compliance for freight-brokering agents.

35

7,087.2%

$48.3 MILLION

10

2007

CEO: Jeff

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 192 - INC. - SEP TEMBER 2013

$9.7 MILLION MEDIAN REVENUE

THE 500

COURTESY COMPANY

ŦŦŦŦ Ţ

NO. 1 LOGISTICS + T R A N S P O R TAT I O N

RANK THREE-YEAR GROWTH

IT SERVICES (CONT.)


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RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

THE LOGISTICS STORE LIBERTY, MO. CEO: Marti Gooch, thelogisticsstore.com Consults on freight management, operational efficiencies, and technology.

103

3,449.9%

$7.1 MILLION

11

2009

US PERISHABLES OAKLAND, CALIF. CEO: David Evans, usperishables.com Manages third-party logistics and transportation for manufacturers of perishable foods.

123

2,965%

$4 MILLION

10

2008

TARGET FREIGHT MANAGEMENT PITTSBURGH CEO: Michael Wagner, targetfmi.com Brokers of LTL (less-than-truckload) freight loads.

129

2,896.1%

$23.9 MILLION

24

2008

FIRST FLIGHT SOLUTIONS EMERALD ISLE, N.C. CEO: Travis Burt, firstflightsolutions.com Consults and negotiates for high-volume shippers.

184

2,231.8%

$2.7 MILLION

1

2008

WHITACRE LOGISTICS PORTAGE, OHIO CEO: Gary Whitacre, whitacrelogistics.com Transports shipping containers by truck across the Midwest and operates a third-party logistics business.

237

1,812.8%

$19.9 MILLION

135

2008

IDRIVE LOGISTICS AMERICAN FORK, UTAH CEO: Shaun Rothwell, idrivelogistics.com Manages and audits costs for high-volume shippers.

262

1,653.5%

$11.3 MILLION

7

2007

FREIGHTPROS AUSTIN CEO: Chris Clever, freightpros.com Brokers truckload and less-than-truckload services.

284

1,540.7%

$7.1 MILLION

25

2009

ODW LOGISTICS & TRANSPORTATION SERVICES HAMILTON, OHIO CEO: John Ness, odwlogistics.com Provides freight-brokerage and supply-chainmanagement services.

291

1,507.6%

$14.8 MILLION

20

2009

FARM2FLEET TRUCKING CHATTANOOGA, TENN. CEO: William Hood, farm2fleet.com Partners with and trains owner-operators of freight trucks.

308

1,415%

$2.4 MILLION

17

2008

ATDYNAMICS HAYWARD, CALIF. CEO: Andrew Smith, atdynamics.com Develops products that improve the fuel efficiency of tractortrailers, most notably the TrailerTail aerodynamics system.

348

1,254.9%

$8.2 MILLION

50

2006

LOAD DELIVERED LOGISTICS CHICAGO Nathan, loaddelivered.com Provides third-party logistics services for shippers.

475

978.8%

$35.2 MILLION

64

2008

ECOGISTICS ROCK ISLAND, ILL. CEO: Kevin Nolan, ecogistics.org Provides brokerage, rate negotiation, and logistics services, with an emphasis on environmental responsibility.

479

967.4%

$3.4 MILLION

11

2009

NO. 1 M A N U FA C T U R I N G

CEO: Robert

MANUFACTURING “I really like watching the machines work. That’s my whole thing. I’m like a kid.”

$184.4 MILLION TOTAL REVENUE $4.9 MILLION MEDIAN REVENUE

Companies that make things for other businesses, primarily components for those businesses’ finished goods. Includes suppliers of raw materials.

ROBERT SHAPIRO CEO of GSC Packaging

Ţ

2,528% MEDIAN GROWTH RATE 542 TOTAL EMPLOYMENT

GSC PACKAGING ATLANTA CEO: Robert Shapiro, gscpackaging.com Packages powdered food, drink mixes, and diet products.

65

4,812.7%

$112.6 MILLION

300

2001

BIO SOIL ENHANCERS HATTIESBURG, MISS. CO-FOUNDERS: Louis Elwell III and Wayne Wade, sumagrow.com Manufactures organic soil additives.

78

4,086.9%

$4.9 MILLION

19

2007

APEX RESOURCES DALLAS CO-FOUNDERS: Vinita Gupta and Vineet Gupta, apexr.com Makes polymer-based products used in agricultural, mining, firefighting, and oil drilling.

144

2,624.7%

$22.8 MILLION

3

1996

DHALIWAL LABORATORIES DALLAS CEO: Tehsel Dhaliwal, dhaliwal-labs.com Manufactures private-label personal-care products, over-the-counter drug preparations, and cosmetics.

147

2,587.9%

$8.3 MILLION

49

2008

RIGID INDUSTRIES GILBERT, ARIZ. CEO: Jason Christiansen, rigidindustries.com Designs and manufactures LED lighting and accessories for use in heavy-duty vehicles.

151

2,528%

$24.1 MILLION

121

2004

EDJ PRECISION HOUSTON CEO: Michael Henn, edj-precision.com Operates a machine shop and job shop.

166

2,410.2%

$4 MILLION

11

2008

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 194 - INC. - SEP TEMBER 2013

9 COMPANIES

THE 500

COURTESY COMPANY

ŦŦŦŦ

LOGISTICS + TRANSPORTATION (CONT.)


BUILT TO SUCCEED: STUDIO VELO

High-end clients bring high-net results

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YEAR FOUNDED

RECONCRAFT NEWTON, MASS. CEO: Jay Hoflich, reconcraft.com Designs and manufactures shallow-draft work boats.

206

2,044.7%

$2.2 MILLION

12

2008

ULTRAFLEX POWER TECHNOLOGIES RONKONKOMA, N.Y. CEO: Mario Metodiev, ultraflexpower.com Designs and manufactures induction-heating power supplies.

301

1,454%

$2.2 MILLION

12

2007

FATHOM OAKLAND, CALIF. CEO: Michelle Mihevc, studiofathom.com Provides 3-D design, prototyping, printing, and manufacturing services.

371

1,187.8%

$3.4 MILLION

15

2008

Ţ

$252.3 MILLION TOTAL REVENUE $4.1 MILLION MEDIAN REVENUE 1,503.5% MEDIAN GROWTH RATE 1,320 TOTAL EMPLOYMENT

REFINERY29 NEW YORK CITY CO-CEOs: Philippe von Borries and Justin Stefano refinery29.com Operates a fashion, beauty, and entertainment website that offers news, trends, and shopping deals.

175

2,301.4%

$16.6 MILLION

99

2005

AUDIOMICRO SHERMAN OAKS, CALIF. Born, audiomicroinc.com Licenses royalty-free music, sound effects, and photos, and manages music copyrights on eight million YouTube videos.

205

2,053.4%

$2.2 MILLION

5

2007

NUE AGENCY NEW YORK CITY CEO: Jesse Kirshbaum, nueagency.com Represents music artists on concert tours and in endorsement deals.

269

1,604.3%

$4.5 MILLION

4

2008

ROSETTABOOKS NEW YORK CITY CEO: Arthur Klebanoff, rosettabooks.com Acquires licenses to backlist books, which it converts into e-books and sells through Web retailers.

282

1,548.7%

$3.2 MILLION

7

2000

COLUMN FIVE NEWPORT BEACH, CALIF. CEO: Jason Lankow, columnfivemedia.com Creates infographics, illustrations, and digital PR strategies.

293

1,503.5%

$5.3 MILLION

42

2009

CLICKIN MOMS GENEVA, ILL. CEO: Sarah Wilkerson, clickinmoms.com Hosts an online community for professional and hobbyist photographers.

302

1,449.1%

$2.8 MILLION

10

2008

ENCOMPASS DIGITAL MEDIA STAMFORD, CONN. CEO: Bill Tillson, encompass.tv Distributes video and digital content for media companies from its broadcast facilities throughout the U.S., Latin America, the U.K., and Asia.

459

1,005.1%

$210.4 MILLION

1,131

2008

CONTENT MARKETING INSTITUTE CLEVELAND CEO: Joe Pulizzi, contentmarketinginstitute.com Runs the Content Marketing World conference and publishes the trade magazine Chief Content Officer.

470

989.2%

$3.1 MILLION

2

2007

CHIEF EXECUTIVE GROUP GREENWICH, CONN. CEO: Marshall Cooper, chiefexecutive.net Publishes Chief Executive magazine and the website ChiefExecutive.net, and hosts networking events for CEOs.

486

937%

$4.1 MILLION

20

2009

CEO: Ryan

Ţ

REAL ESTATE

16 COMPANIES $345.3 MILLION TOTAL REVENUE $15.6 MILLION MEDIAN REVENUE

Includes residential and commercial developers and investment firms, real estate brokers, and companies that provide services to brokers, buyers, and sellers

2,229.7% MEDIAN GROWTH RATE 2,156 TOTAL EMPLOYMENT

MILESTONE COMMUNITY BUILDERS AUSTIN CEO: Garrett Martin, mymilestone.com Sells homes in several planned communities in the Austin area.

7

17,937.8%

$45.7 MILLION

63

2009

PANGEA PROPERTIES CHICAGO CEO: Albert Goldstein, pangeare.com Buys, restores, rents, and manages distressed buildings in troubled communities.

43

6,218.5%

$28.3 MILLION

264

2008

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 196 - INC. - SEP TEMBER 2013

9 COMPANIES

Includes companies whose primary business is creating or distributing content in any kind of media to consumers and other businesses

NO. 1 R E A L E S TAT E

GARRETT MARTIN CEO of Milestone Community Builders

NUMBER OF EMPLOYEES

MEDIA

J U S T I N S T E FA N O Co-CEO and co-founder of Refinery29

“Call it a blessing or divine intervention, but we were in the right place at the right time to acquire some great land to develop.”

2012 REVENUE

THE 500

FROM TOP: WINNIE AU; SANG McDONNELL

“We saw slow sales in the beginning, but we kept with e-commerce, because we knew it was the fundamental direction in which things were going.”

RANK THREE-YEAR GROWTH

MANUFACTURING (CONT.)

ŦŦŦŦ

NO. 1 MEDIA


Signup to Win a Free Ipad: www.janusnetworks.com/ipad


2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

MATT MARTIN REAL ESTATE MANAGEMENT FRISCO, TEXAS CEO: Matt Martin, mmrem.com Provides asset-management and real estate services to private-sector and government clients.

81

3,981.9%

$31.7 MILLION

114

2004

CELERITY VENTURES ALEXANDRIA, VA. CEO: Christopher McCarrick, celerity-ventures.com Purchases and renovates residential properties.

82

3,960%

$15.8 MILLION

7

2008

MARKETPLACE HOMES LIVONIA, MICH. CEO: Mike Kalis, marketplacehomes.com Finds buyers or tenants for the current homes of people looking to buy new homes.

100

3,473.2%

$19.4 MILLION

73

2002

APARTMENT LIST SAN FRANCISCO CEO: John Kobs, apartmentlist.com Operates an apartment search engine for renters nationwide.

109

3,191.4%

$10.3 MILLION

32

2008

ECONOHOMES AUSTIN CEO: Jeffrey Ball, econohomes.com Buys distressed homes priced at less than $100,000 and resells them online to investors.

117

3,041.4%

$42.7 MILLION

73

2006

PROPERTYRATE ORANGE, CALIF. CEO: Dexter Go, propertyrate.com Provides appraisal-management services for lenders.

160

2,454.9%

$4.2 MILLION

7

2004

Ţ

LANDMARK NETWORK SHERMAN OAKS, CALIF. CEO: Erik Richard, landmarknetwork.com Provides appraisal-management services for lenders.

211

2,004.5%

$7.5 MILLION

57

2007

MEMPHIS INVEST CORDOVA, TENN. CEO: Kent Clothier, memphisinvest.com Finds, renovates, and manages residential properties for investors.

305

1,428.9%

$40 MILLION

41

2004

Ţ

ACT APPRAISAL EAST DUNDEE, ILL. CEO: Bryan Franks, actappraisal.com Provides appraisal-management services for lenders.

312

1,387.5%

$15.3 MILLION

46

1998

352

1,248.2%

$41.5 MILLION

40

1997

380

1,173%

$6.5 MILLION

360

2004

406

1,103.5%

$7.2 MILLION

783

2006

COESTERVMS ROCKVILLE, MD. CEO: Brian Coester, coestervms.com Provides appraisal services and technology for residential and commercial properties.

419

1,080.2%

$14.2 MILLION

56

2005

HAWAII LIFE HONOLULU CEO: Matt Beall, hawaiilife.com Sells and rents residential properties across Hawaii.

484

944.1%

$15.2 MILLION

140

2008

ENTERPRISES VIENNA, VA. ŢŢ INNOTION Al Espinoza, innotion.com CEO:

Provides property-management and -marketing services, with a focus on bank-owned homes.

THE FORCE REALTY BELLEVUE, WASH. CEO: Amir Feinsilber, theforcerealty.com Brokers residential real estate deals. PROPERTIES ATLANTA ŢŢ PALMERHOUSE Kevin Palmer, palmerhouseproperties.com CEO:

Brokers residential and commercial real estate deals.

“If I believe in a product and think there is a demand for it, I will buy it all and keep it on my books a little longer just so I am the only one selling it.”

RETAIL

$396.7 MILLION TOTAL REVENUE $7.6 MILLION MEDIAN REVENUE

Companies that sell products or services directly to consumers, either through online storefronts or at brick-and-mortar locations

JUSTIN LIGERI CEO of Yagoozon

Ţ

2,093.1% MEDIAN GROWTH RATE 3,958 TOTAL EMPLOYMENT

YAGOOZON WARWICK, R.I. CEO: Justin Ligeri, yagoozon.com Sells discount costumes, party accessories, and toys through online retailers.

11

16,689.2%

$18.6 MILLION

15

2007

UBREAKIFIX ORLANDO CEO: Justin Wetherill, ubreakifix.com Repairs smartphones, tablets, computers, and other devices in its 45 stores nationwide.

14

14,102.1%

$17 MILLION

250

2009

DOC POPCORN BOULDER, COLO. CEO: Rob Israel, docpopcorn.com Franchises stores that sell flavored popcorn; has 80 locations.

60

5,010.6%

$7.2 MILLION

18

2003

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 198 - INC. - SEP TEMBER 2013

28 COMPANIES

THE 500

COURTESY COMPANY

ŦŦŦŦ

Ţ

Ţ

NO. 1 R E TA I L

RANK THREE-YEAR GROWTH

REAL ESTATE (CONT.)


WHAT’S THE WORST SUGGESTION YOU’VE GOTTEN FROM AN EMPLOYEE?

ŦŦŦŦ

THE INC. 500 C E O S U RV EY

RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

95

3,569.1%

$79.8 MILLION

613

2004

SUSTAINABLE SUPPLY BROOMFIELD, COLO. CEO: Brian Fricano, sustainablesupply.com Sells green building and home supplies through three websites.

114

3,061.3%

$3.2 MILLION

7

2009

RENEGADE FURNITURE GROUP HEWLETT, N.Y. CEO: Yisroel Bruce Krinsky, colemanfurniture.com Sells furniture, including its own line, through three websites.

127

2,926.4%

$9.8 MILLION

17

2009

GREENCUPBOARDS SPOKANE, WASH. CEO: Josh Neblett, greencupboards.com Sells more than 25,000 eco-friendly products ranging from toys to furniture.

128

2,897.8%

$13.1 MILLION

56

2008

BUY HAPPIER MORTON GROVE, ILL. CEO: Aaron Miller, buyhappier.com Operates online shopping channels for vacuum cleaners, kitchenware, and other home goods.

133

2,771.7%

$20.6 MILLION

32

2009

MONSTER FLOORING SALE CARROLLTON, TEXAS CEO: Donovan Royal, monsterflooringsale.com Sells floor coverings and offers custom installation from eight retail locations.

149

2,555.7%

$3.8 MILLION

31

2009

SIMPLYGLOBO VILLA PARK, ILL. CEO: James Yu, simplyglobo.com Manufactures and distributes office equipment, air mattresses, and speakers.

164

2,422.9%

$2.6 MILLION

11

2009

BAYRU MORTON GROVE, ILL. CEO: Aaron Block, bay.ru Sells goods from the U.S. to consumers in Russia through partners such as eBay and Amazon.

168

2,390%

$19.5 MILLION

120

2007

MIXBOOK PALO ALTO, CALIF. CEO: Andrew Laffoon, mixbook.com Sells online tools for designing photo books, cards, and calendars.

177

2,287.8%

$25.1 MILLION

60

2006

SKY ZONE INDOOR TRAMPOLINE PARK LOS ANGELES CEO: Jeff Platt, skyzone.com Franchises trampoline facilities that host parties, corporate events, and other activities.

181

2,249.3%

$50.6 MILLION

2,000

2004

SIIBER FORT WAYNE, IND. CEO: Peter Roesner, siiber.com Operates multiple consumer and B2B e-commerce sites.

200

2,095.1%

$2.5 MILLION

7

2009

CELL PHONE REPAIR ORLANDO CEO: Jeremy Kwaterski, cellphonerepair.com Franchises stores that repair cell phones and other electronics.

202

2,091.1%

$7.5 MILLION

45

2008

ADORA GREENSBORO, N.C. CEO: Genea Dudley Gidey, balancedayspa.com Operates four day spas that offer massages, facials, nail services, and waxing.

232

1,854.9%

$2.6 MILLION

84

2003

MODERN EVERYDAY SOUTH EL MONTE, CALIF. CEO: Byron Hsu, moderneveryday.com Sells home products, toys, and sporting goods online.

250

1,751.2%

$6.1 MILLION

24

2008

BABYHAVEN.COM SANTA FE SPRINGS, CALIF. CO-FOUNDERS: Jason Becker and Jennifer Becker, babyhaven.com Sells baby and parenting products online.

253

1,716%

$11.4 MILLION

94

2009

WIRELESS COMMUNICATIONS GREENVILLE, S.C. CEO: Krish V. Patel, thewcinc.com Owns and operates 32 Verizon Wireless Premium Retail shops.

315

1,377.6%

$43.1 MILLION

297

2008

VETORA OREM, UTAH CEO: Rich Jackson, ecoswift.com Sells packaging and shipping supplies, as well as electronics accessories.

331

1,311.2%

$4.2 MILLION

21

2005

WEBEYECARE LANGHORNE, PA. CEO: Peter Batushansky, webeyecare.com Sells contact lenses to consumers online.

386

1,157.3%

$4.7 MILLION

8

2009

TREND NATION LAS VEGAS CEO: Bradley Howard, trendnation.com Operates seven niche fashion, accessory, and solar-products websites.

396

1,125.7%

$7.7 MILLION

23

2008

RETAIL (CONT.) AND ANI CRANSTON, R.I. ŢŢ ALEXGiovanni Feroce, alexandani.com CEO:

Sells its own collections of jewelry, as well as licensed products with major league sports team logos.

“Lower our prices and sell lowerquality items.” KEITH KANTOR GREEN BOX FOODS

“Keeping a person around because he was ‘smart.’ ” MARK WOEPPEL PINNACLE STRATEGIES

“Let’s borrow money!” MICHAEL FRITZLO WALL STREET NETWORK SOLUTIONS

Ţ

Ţ

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 200 - INC. - SEP TEMBER 2013

THE 500


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RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

GO AUTO RECYCLING JACKSONVILLE, FLA. CO-CEOs: Brian Shell and Jason Finley, goautorecycling.com Recycles and sells late-model autos and parts.

403

1,106.1%

$5.7 MILLION

30

2008

KENRY HOME IMPROVEMENT AUSTIN CEO: Ashraf Hossain, mainfaucet.com Sells faucets and lighting fixtures through MainFaucet.com and LightingCity.com.

426

1,071.7%

$3.3 MILLION

12

1999

BH COSMETICS BURBANK, CALIF. CEO: Fred Sadovskiy, bhcosmetics.com Sells makeup and accessories online, with distribution centers in the U.S. and Europe.

448

1,027.4%

$7.8 MILLION

27

2009

BOWS-N-TIES.COM SAN FRANCISCO CEO: Hendrik Pohl, bows-n-ties.com Sells men’s neckties, bow ties, and other accessories online.

461

1,003.3%

$2 MILLION

4

2008

QUALITYFLOORING4LESS SAN FRANCISCO CEO: Aaron David, qualityflooring4less.com Sells flooring products online.

473

982.9%

$14.6 MILLION

16

2008

VIVO CLOTHING COEUR D’ALENE, IDAHO CEO: Dale Rainey, vivoclothing.com Operates a mall-based juniors’ clothing-store chain in the Pacific Northwest.

495

929.3%

$2.6 MILLION

36

2009

“Our competition backs up data, but we mirror your entire business in the cloud.” JUSTIN MOORE CEO of Axcient

SECURITY

5 COMPANIES $42 MILLION TOTAL REVENUE $2.4 MILLION MEDIAN REVENUE

Companies that provide background checks, security training, physical security—such as guards and surveillance systems—and data security

Ţ Ţ NO. 1 S O F T WA R E

“Early on, we made a decision to choose to work with people we like to work with. The cultural fit was more important than aptitude and their resumé.” ERIC BOWMAN CEO of Sparc

607 TOTAL EMPLOYMENT

AXCIENT MOUNTAIN VIEW, CALIF. CEO: Justin Moore, axcient.com Provides a cloud-based platform for storage, backup, and disaster recovery.

111

3,115.5%

$9.7 MILLION

96

2006

DATTO NORWALK, CONN. CEO: Austin McChord, dattobackup.com Provides hardware-based on-site and off-site backup, disaster recovery, and business continuity services.

112

3,101.1%

$25.2 MILLION

125

2007

TITAN PROTECTION AND CONSULTING OVERLAND PARK, KAN. CEO: Ryan Smith, tpcsecurity.com Provides security guards, patrol services, and remote video monitoring to businesses.

197

2,117.3%

$2.4 MILLION

158

2008

KENTECH CONSULTING CHICAGO CEO: Kenneth Coats, ekentech.com Provides customized, online background checks of job candidates and prospective tenants.

299

1,461%

$2.4 MILLION

80

2006

BLUELINE SECURITY SERVICES LANDOVER, MD. CEO: Shawn Scarlata, bluelinesecurityservices.com Provides security guards, security training, event security, and employee theft and fraud protection services.

314

1,383.4%

$2.2 MILLION

148

2008

SOFTWARE

40 COMPANIES $743.8 MILLION TOTAL REVENUE $8.2 MILLION MEDIAN REVENUE

Companies that create software, applications, or Web platforms, as well as companies that provide custom software development for businesses or individuals

2,184.8% MEDIAN GROWTH RATE 5,586 TOTAL EMPLOYMENT

SPARC CHARLESTON, S.C. CEO: Eric Bowman, sparcedge.com Provides software development and services for the executive leadership, human resources, green energy, analytics, and mobile markets.

15

12,862.5%

$21.1 MILLION

160

2009

KONY ORLANDO CEO: Raj Koneru, kony.com Provides a codebase for developing mobile and multichannel applications, allowing its customers to create custom apps.

29

7,786.3%

$51.1 MILLION

1,100

2007

ZURPLE CARLSBAD, CALIF. CEO: Robert Schulte, zurple.com Makes an SaaS platform for online marketing used by residential real estate professionals.

34

7,112.5%

$7.7 MILLION

32

2009

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 202 - INC. - SEP TEMBER 2013

2,117.3% MEDIAN GROWTH RATE

THE 500

COURTESY COMPANY (2)

RETAIL (CONT.)

ŦŦŦŦ

NO. 1 SECURITY


WHAT WAS YOUR COMPANY’S BIGGEST MILESTONE IN THE FIRST YEAR?

“Winning Duke University as a first client.” TIFFANY CRENSHAW INTELLECT RESOURCES

“Raising $1.5 million of Series A start-up capital.”

RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

PHUNWARE AUSTIN CEO: Alan Knitowski, phunware.com Develops applications for engaging, managing, and monetizing activities of mobile device users.

41

6,526.8%

$8.2 MILLION

92

2009

LABTECH SOFTWARE TAMPA CEO: Matt Nachtrab, labtechsoftware.com Provides a platform for the remote monitoring and management of IT systems.

54

5,208.2%

$23.1 MILLION

152

2004

CASHSTAR PORTLAND, MAINE CEO: Steven Boal, cashstar.com Hosts and maintains a transaction platform for retailer-branded digital gift card programs.

104

3,413.8%

$9.7 MILLION

96

2008

TOUCHSUITE BOCA RATON, FLA. CEO: Sam Zietz, touchsuite.com Develops software used to manage hair salons, restaurants, and other retailers.

106

3,337.9%

$13.4 MILLION

43

2007

ACQUIA BURLINGTON, MASS. CEO: Thomas Erickson, acquia.com Provides products, services, and technical support for the Drupal social publishing system.

110

3,131.4%

$45.4 MILLION

263

2007

OCEANHOUSE MEDIA ENCINITAS, CALIF. CEO: Michel Kripalani, oceanhousemedia.com Publishes mobile and desktop apps for games, books, music, photography, and health and fitness.

115

3,055.4%

$3.9 MILLION

10

2009

PUPPET LABS PORTLAND, ORE. CEO: Luke Kanies, puppetlabs.com Develops IT automation software used by system administrators.

121

2,974.9%

$8.8 MILLION

107

2005

NETCOM3 GLOBAL LAGUNA NIGUEL, CALIF. CEO: Cashier Myricks, netcom3global.com Develops, markets, licenses, and supports Internet security and PC optimization software.

132

2,772.9%

$23.7 MILLION

12

2001

FINCH LEHI, UTAH CEO: Bjorn Espenes, finch.com Operates a cloud-based service used to optimize Google AdWords.

146

2,593%

$2.9 MILLION

6

2009

HUDL LINCOLN, NEB. CEO: David Graff, hudl.com Develops software for sports teams that allows them to analyze videos of plays from any computer or mobile device.

150

2,535%

$14.1 MILLION

73

2006

MOBOMO WASHINGTON, D.C. CEO: Barg Upender, mobomo.com Provides mobile app strategy, design, and development for businesses, organizations, and the federal government.

159

2,484%

$2.8 MILLION

13

2009

PROJEKT202 ADDISON, TEXAS CEO: David Lancashire, projekt202.com Designs and develops Internet, desktop, and mobile applications.

162

2,435.9%

$12.5 MILLION

73

2003

ALTERNATIVE TECHNOLOGY SOLUTIONS ALISO VIEJO, CALIF. CEO: Vivian Keena, alttechsolutions.com Provides software and consulting services to manufacturing and distribution companies.

167

2,407%

$8.8 MILLION

52

2009

ACT-ON SOFTWARE BEAVERTON, ORE. CEO: Raghu Raghavan, act-on.com Develops marketing automation software that allows companies to manage all their online marketing efforts from a single dashboard.

173

2,330%

$9.2 MILLION

140

2008

TICKETRACKER ANDERSON, IND. CEO: Chad Wolfe, ticketracker.com Provides online ticketing and other services for middle school and high school sporting events.

179

2,267.1%

$2.5 MILLION

11

2005

AD-JUSTER POWAY, CALIF. PRESIDENT: Mike Lewis, ad-juster.com Develops ad campaign tracking software for large online publishers.

187

2,217.5%

$2.8 MILLION

18

2007

OMATIC SOFTWARE NORTH CHARLESTON, S.C. CEO: Jeffrey Montgomery, omaticsoftware.com Develops software to eliminate manual processes and improve operational efficiency for nonprofit organizations.

190

2,192%

$5 MILLION

22

2002

GREENPHIRE KING OF PRUSSIA, PA. CEO: Samuel Whitaker, greenphire.com Provides technology and services to streamline reporting and payments during clinical trials.

192

2,177.6%

$5.4 MILLION

42

2008

SOFTWARE (CONT.)

ŦŦŦŦ

THE INC. 500 C E O S U RV EY

Ţ

JOHN ROLAND EXTREME REACH

“Closing our first major Fortune 500 customer.” ALAN KNITOWSKI PHUNWARE

“Hiring my first full-time employee, who became the key person who made our business a success.” ANDREW TOSH GAMESIM

“Paying me!” MICHAEL FRITZLO WALL STREET NETWORK SOLUTIONS

Ţ

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 206 - INC. - SEP TEMBER 2013

THE 500


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HOW MANY VACATION DAYS HAVE YOU TAKEN IN THE PAST YEAR?

7 30 22 20 12 9

Ţ

None

1-5 days

6-10 days

11-15 days

16-20 days

More than 20 days

RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

QUICK LEFT BOULDER, COLO. CEO: Ingrid Alongi, quickleft.com Designs and develops custom mobile applications for businesses.

225

1,917.3%

$2.8 MILLION

20

2009

WEBPT PHOENIX CEO: Paul Winandy, webpt.com Develops a cloud-based electronic medical records system for physical therapy clinics.

233

1,837.3%

$8.9 MILLION

140

2006

BOTTLE ROCKET APPS DALLAS PRESIDENT: Calvin Carter, bottlerocketapps.com Builds mobile applications for businesses.

286

1,528.9%

$10.8 MILLION

107

2008

ACTIVITYREZ HONOLULU CEO: Lubuw Falanruw, activityrez.com Develops an activity booking engine connecting agents and suppliers with inventory, rate management, and point-of-sale systems.

294

1,481%

$5.1 MILLION

9

2009

ISBX LOS ANGELES CEO: Eric Wise, isbx.com Develops mobile apps.

322

1,344.8%

$5.2 MILLION

41

2009

ONESCREEN IRVINE, CALIF. CEO: Atul Patel, onescreen.com Provides a platform companies use to manage their video content.

323

1,343.9%

$15.8 MILLION

55

2006

SEAMGEN SAN DIEGO CEO: Marc Alringer, seamgen.com Provides custom software development for mobile applications, user experience design, quality assurance, rich applications, and Salesforce.com solutions.

325

1,328.2%

$3.7 MILLION

20

2008

BRANDING BRAND PITTSBURGH CEO: Chris Mason, brandingbrand.com Operates a platform that powers mobile commerce sites and apps for major retailers, including Costco and Kate Spade.

334

1,302.1%

$8 MILLION

117

2008

REVERBNATION DURHAM, N.C. CEO: Michael Doernberg, reverbnation.com Develops technology used by the music industry for promotion, content management, distribution, social media, and cross-media licensing opportunities.

347

1,256.8%

$13.9 MILLION

61

2006

SUGARSYNC SAN MATEO, CALIF. CEO: Mike Grossman, sugarsync.com Provides mobile cloud-based services enabling users to access, back up, and share their data from any device.

359

1,234.1%

$17.3 MILLION

70

2008

CLEARLEAP DULUTH, GA. CEO: Braxton Jarratt, clearleap.com Develops a cloud-based IP video platform that simplifies the delivery of video content.

366

1,213.1%

$5.5 MILLION

35

2007

MARKETO SAN MATEO, CALIF. CEO: Phil Fernandez, marketo.com Develops marketing automation and sales effectiveness software. The company went public in May.

369

1,204.5%

$58.4 MILLION

339

2007

433

1,058%

$8.1 MILLION

65

2006

ROOSTER PARK SEATTLE CEO: Scott Ruthfield, roosterpark.com Develops and supports software for businesses and recruits software engineers for client companies.

450

1,025.4%

$8.2 MILLION

53

2009

PLAYMAKER CRM FRANKLIN, TENN. CEO: Judy Bishop, playmakercrm.com Provides a Web-based CRM tool for hospice and home care companies.

453

1,017.6%

$2.2 MILLION

20

2008

JANRAIN PORTLAND, ORE. CEO: Larry Drebes, janrain.com Develops a platform that allows businesses to target customers using information available on the social Web.

457

1,008.2%

$5.9 MILLION

167

2005

GAMESIM ORLANDO CEO: Andrew Tosh, gamesim.com Provides software and services to the entertainment, simulation, and geographic information systems industries.

468

991.6%

$2.7 MILLION

25

2008

SOFTWARE (CONT.)

ŦŦŦŦ

THE INC. 500 C E O S U RV EY

Ţ

Ţ

CHARLESTON, S.C. ŢŢ BOOMTOWN Grier Allen, boomtownroi.com CEO:

Provides a Web-based marketing system for real estate professionals.

Ţ

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 208 - INC. - SEP TEMBER 2013

THE 500


RANK THREE-YEAR GROWTH

2012 REVENUE

NUMBER OF EMPLOYEES

YEAR FOUNDED

WORKDAY PLEASANTON, CALIF. CO-CEOs: David Duffield and Aneel Bhusri, workday.com Provides human resources, analytics, payroll, and financial-management software to enterprise companies. The company went public last October.

471

984%

$273.7 MILLION

1,620

2005

BASHO TECHNOLOGIES CAMBRIDGE, MASS. CEO: Greg Collins, basho.com Develops Riak, an open-source database.

478

972.6%

$5.5 MILLION

105

2008

TELECOMMUNICATIONS “Our industry is no longer about making sure that when a customer calls, someone answers. That’s just plumbing.” H O WA R D L E E CEO of Spoken Communications

NO. 1 T R AV E L + H O S P I TA L I T Y

Ţ

1,452.7% MEDIAN GROWTH RATE 389 TOTAL EMPLOYMENT

SPOKEN COMMUNICATIONS BELLEVUE, WASH. CEO: Howard Lee, spoken.com Provides and maintains technology for large call centers.

91

3,734%

$10.2 MILLION

37

2005

QUANTUM NETWORKS NEW YORK CITY CEO: Ari Zoldan, quantum-co.com Provides and maintains technology for call centers.

125

2,943.9%

$11.5 MILLION

28

2008

WALL STREET NETWORK SOLUTIONS PARSIPPANY, N.J. CEO: Michael Fritzlo, wsnsllc.com Provides and supports networks for financial services companies.

193

2,155.8%

$7.7 MILLION

12

2008

TECHNICAL SOLUTIONS WALDEN, N.Y. CEO: Daniel Ralph, tsllc.net Deploys capital improvement, repair, and troubleshooting services to the telecommunications industry.

277

1,584.9%

$16.3 MILLION

213

2003

SUNSIGHT INSTRUMENTS MAITLAND, FLA. CEO: James Wattwood, sunsight.com Develops and manufactures antenna alignment tools used by wireless carriers and oil and gas developers.

327

1,320.5%

$2.2 MILLION

15

2006

ODYSSEY TELECOMMUNICATIONS COLDEN, N.Y. CO-FOUNDERS: Robert J. Blizniak and Justin A. Wekenmann otelinc.com Provides VoIP phone systems for individuals and small businesses.

390

1,140%

$3.3 MILLION

6

2008

TOWER CLOUD ST. PETERSBURG, FLA. CEO: Ronald Mudry, towercloud.com Provides backhaul network services for mobile carriers and wholesale capacity transport.

480

963.7%

$15.4 MILLION

53

2006

MASS COMMUNICATIONS NEW YORK CITY CEO: Darren Mass, masscommgroup.com Provides telecommunications-management consulting and IT for businesses.

492

933%

$9.8 MILLION

25

2008

TRAVEL + HOSPITALITY “When you book us for a graduation or a funeral, our agents will ask how it went. Can a website do that? No, it can’t.” ELI OSTREICHER CEO of Regal Wings

4 COMPANIES $36.7 MILLION TOTAL REVENUE $8.5 MILLION MEDIAN REVENUE

Travel agencies, tour operators, hotel companies, concierge services, jet brokers, and other businesses that facilitate travel

1,088.3% MEDIAN GROWTH RATE 386 TOTAL EMPLOYMENT

REGAL WINGS BROOKLYN, N.Y. CEO: Eli Ostreicher, regalwings.com Provides luxury and corporate travel services.

154

2,513.1%

$15.4 MILLION

42

2006

PARAMOUNT BUSINESS JETS LEESBURG, VA. CEO: Richard Zaher, paramountbusinessjets.com Provides charter-jet brokerage services.

411

1,093.4%

$4.3 MILLION

9

2005

IN-FLIGHT CREW CONNECTIONS CHARLOTTE, N.C. CEO: Jennifer Guthrie, inflightcrewconnections.com Places aviation personnel with clients, mainly corporations and individuals with private jets, and provides related services.

417

1,083.3%

$6.9 MILLION

332

2002

305 DEGREES MIAMI BEACH, FLA. CO-CEOs: Joey Firestone and Evan Weiss, 305degrees.com Provides luxury concierge services.

427

1,071.5%

$10.1 MILLION

3

2007

ŢPast honoree ŢŢTwo-time past honoree ŢŢŢThree-time past honoree 210 - INC. - SEP TEMBER 2013

$76.2 MILLION TOTAL REVENUE $10 MILLION MEDIAN REVENUE

Companies that transmit voice, video, or data, or that provide equipment or services for the telecommunications industry

Ţ

8 COMPANIES

THE 500

COURTESY COMPANY (2)

SOFTWARE (CONT.)

ŦŦŦŦ

NO. 1 T E L E C O M M U N I C AT I O N S


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Expanding Horizons by Mark Henricks

“The foundation of our unique model is in our dual management approach with both an owner and educational director on site at every school,” Padulo says. “While on-site owners are available to the children, their families, and The Goddard School faculty every day, the educational director is responsible for the curriculum, programming, and teacher “Desire!” says Hayes, a franchising consultant and current development.” head of the department of business administration at Gulf University for Science and Technology in Kuwait. “If people There are 400 franchised Goddard School locations in 35 are persuaded to believe a franchise is hot, they buy it,” states, including suburban, urban, and metro markets. The Hayes says. “Suddenly we have dozens and hundreds of company continues to grow successfully, opening 15 new units -- and we have a dozen different competitive franchised schools since January 2012 and projecting to franchisors.” Still, some franchise concepts have found open 18 more in 2013. ways to develop sizable systems largely on the basis of Goddard Systems is currently franchising within the genuinely unique propositions. continental United States, with particular focus on northern The Goddard School has developed an opportunity for California, Illinois, Oregon, Pennsylvania, Texas, and franchisees to integrate their work and personal lives. As Washington. Longer-term urban and downtown areas, such owners of businesses providing play-based education for as Boston, Chicago, Minneapolis and Philadelphia, are on children 6 weeks to 6 years old, Goddard School franchisees their list. “We expect to finish 2013 with approximately 413 use the most current, proven methods to ensure that children schools, with openings in California, Georgia, Pennsylvania, have fun while learning the skills they need for long-term Texas, and Washington, among others,” Padulo says. success in school and in life, says Anthony Padulo, vice president of franchise development for King of Prussia, Liberty Tax has found a special niche providing franchisees with an opportunity to run a seasonal business in a recessionPennsylvania-based Goddard Systems. While franchisers, franchisees, and other industry experts puzzle over demographic trends, financing availability, and other data to try to identify growing niches and companies in franchising, John Hayes says it comes down to one simple factor.

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With 35 locations open primarily in the Northeast and Southeast but also including Utah, Colorado, and, soon, California, 101 Mobility is moving rapidly into the central part of the country including Texas, Louisiana, Tennessee, Arkansas, and Ohio. “We’re targeting the entire U.S. with big opportunities in Florida, Massachusetts, California, and Arizona,” Brenner adds. “Within the next 12 months we anticipate having 55 or more locations operating in The seasonality allows franchisees to keep their regular full- close to 200 territories.” time jobs while still owning and operating Liberty Tax offices. About two-thirds of new franchisees keep their jobs, Hewitt Bricks4Kidz targets parents whose kids love LEGO bricks. says. That makes opening a Liberty Tax business less risky. “The business revolves around LEGO and most of our owners have children who are passionate about LEGO,” says Brian Despite the presence of some well-known brands, most Pappas, managing director of the St. Augustine, Floridareturn preparations are still done by mom-and-pop based franchiser. “Some are LEGO fanatics themselves.” buisneses, Hewitt says. “This industry is ripe for Bricks4Kidz is a franchise for people who love kids as well consolidation,” he says. as LEGO, Pappas adds. In addition to low start-up costs -Liberty Tax has opened over 4,500 offices worldwide and franchisees operate as mobile businesses -- the concept in recent years has averaged adding 350 net new locations displayed its recession resistance when the founder started a year. Going forward, Hewitt says, they are primarily it during the worst of the last downturn. focused on territories in the US, Canada, Australia and There are more than 340 Bricks4Kidz franchises and the Puerto Rico. company is selling 15 to 20 new franchises per month, 101 Mobility’s focus is on bringing the strength of a national Pappas says. Over the last year, over 150 units have brand to the fragmented field of mobility and accessibility been put into operation. The next year should see no equipment. The Wilmington, North Carolina-based franchiser slackening of that pace in adding locations. “We’re also benefits from serving a booming demand, notes Joel projecting around 500 by the end of 2014 based upon Brenner, marketing director. “Our core customer base, the our current growth,” Pappas says. “And we’re targeting aging baby boomer generation, is the fastest growing everywhere.” And Bricks4Kidz is, indeed, expanding all demographic in the country with 80 million Americans over. The company has locations in the U.S. and 15 other countries. turning 65 over the next 20 years,” Brenner says. resistant industry that remains highly fragmented. The Virginia Beach, Virginia-based franchiser of tax preparation businesses is clearly resistant to economic fluctuations. “In a recession, you don’t have to buy a new house or car,” notes John Hewitt, founder and CEO. “But you do have to file your taxes.” This helped Liberty Tax add 800 new offices during the recession years of 2008 and 2009.

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Seniors Helping Seniors is all about expanding opportunities for people who need a little help to get it, and people who want to provide it to make a living doing so. Franchisees of the Reading, Pennsylvania-based franchise community match less active seniors with more active seniors who provide in-home non-medical services to enable them to live independently in their own homes.

“Love and caring are always in demand and the Seniors Helping Seniors franchise is a way for people with hearts who enjoy helping others and giving back to their communities to do good and make money by providing a very valuable and rapidly growing service,” says CEO and co-founder Philip Yocom. More than 200 Seniors Helping Seniors franchises operate in 40 states. The company recently began expanding internationally with a first move into the United Kingdom. Yocom anticipates adding up to 100 new territories in the year, with much of the growth coming from the larger U.S. metropolitan areas as well as the international efforts beginning with the U.K. Prospects for growth in the Fantastic Sams chain of hair salons are driven by an expanding population -- everyone needs haircuts -- and boosted by recent consumer trends favoring more costly coifs involving coloring and other advanced hair treatments. The Beverly, Massachusettsbased franchiser is also seeing a long-term trend toward more men frequenting salons rather than barbershops.

Camille Albane for the first time. Camille Albane is a premium French hair salon with 264 locations in 11 countries, including its first American location in Boston. John Leonesio puts a premium on franchise concepts that are simple to operate and face little established competition. “I don’t necessarily like to compete. It’s a lot of work,” explains the CEO of The Joint, a chain of Scottsdale, Arizona-based businesses that is bringing the benefits of a national franchise system to chiropractic care. The Joint represents a departure from conventional health care delivery. The Joint’s doctors don’t take insurance; appointments aren’t needed. All care is paid for when received or through pre-paid membership plans. The clinics offer high-quality care and make it more convenient with extended night and weekend hours. While consumers enjoy the convenience, franchisees enjoy an easy-to-learn business model with low investment and rapid breakeven relative to many businesses. “I like fairly quick cash flow,” Leonesio says. “Under a year is good. And fairly quick return on investment, too.” The Joint has expanded by more than 90 new locations in the last year, for a total of 140 locations. Existing stores are widely dispersed and the expansion won’t follow any geographic pattern either, Leonesio says. By the end of another 12 months, he expects to have close to 250 open locations.

In addition to those favorable elements, Fantastic Sams offers customers discount pricing and a full suite of services. “We have an incredible legacy of consistency and full service -- we cut, color and perm for the whole family,” says CEO Allyson King. “You can bring your whole family and get an incredible haircut and a really smart value.” Fantastic Sams has approximately 1,190 open locations, with Minnesota, California, and Florida as its top states. The company expects to add another 50 locations in the coming year, with Chicago, Atlanta, and Houston highlighted as top markets for expansion. In addition to the Fantastic Sams salons, the company’s Paris-based parent has begun selling U.S. licenses for

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Kiddie Academy is a franchise opportunity for people who want a business that complements their lives, and vice versa. “We offer the ability for individuals and couples to create a sustainable venture in a growing market segment, while maintaining work-life balance,” says Sue Hilger, vice president of franchise development for the Abingdon, Maryland-based company.


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Kiddie Academy provides high-quality, education-based childcare to address a steadily increasing demand. Employing the company’s Life Essentials philosophy, which includes a proprietary curriculum and technology for health, fitness, and character education, franchisees prepare kids for success later on in school and in life. “Life Essentials is the framework that drives us to positively shape the lives of children, families, and communities everywhere,” Hilger says. The company has 113 franchised academies in 22 states and officials anticipate continuing its recent record rate of expansion. “This year we are on track to open 16 new locations,” Hilger says. Kiddie Academy locations are concentrated are along the coasts, as well as Texas, Illinois, and Indiana. The company has recently established franchises in new markets in Seattle and Boston. “While we continue to expand in the markets where we have a presence, we are making a focused effort in NJ and Texas,” Hilger says. “In 12 months, we expect to have 135 to 140 locations open and operating.” TapSnap founder and CEO Scott McInnes expects within the next 12 months the Vancouver-based franchiser will add another 80 to 100 market areas across North America to add to the 50 U.S. and Canada-based locations already served by franchisees of its digital photo booth business opportunity.

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“The demand for TapSnap from people planning events has been even stronger than we anticipated,” McInnes says. “We have done events ranging from weddings and bar/bat mitzvahs to street festivals, corporate functions, and client appreciation events.” TapSnap franchisees employ a portable digital photo system that lets users take high-quality photos, and manipulate and customize them digitally using an over-sized touch screen. They can then easily share photos via their favorite social networks. Owning a TapSnap franchise is enjoyable, and the concept is well-suited for franchisees who want to have fun through business ownership, McInnes says. “Our franchisees consider themselves to be in the ‘Phototainment’ business,” he says. “Wherever our franchisees go, they will be a part of their customers’ special moments.” The concept is designed for work-from-home franchisees. And the business model is simple enough to work for franchisees with a variety of different skills, backgrounds, and interests, McInnes says. Country Inns & Suites By Carlson is an upper-midscale hotel brand designed to attract business travelers, millennials, and baby boomers with contemporary architecture and interiors evoking the comfort and consistency of home. The flexible concepts suits both urban and suburban markets, and franchisees are supported by an established company, strong product, experienced resources, tools, and training.


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Country Inns & Suites By Carlson recently went through a branding and property redesign. “The new design allows us to expand to a broader range of geographical areas -- urban markets for example -- and reach a new demographic – the millennial business traveler -- while retaining our current base of loyal customers,” says Scott Meyer, senior vice president, Midscale Brands, Americas for Carlson Rezidor Hotel Group, based in Minnetonka, Minnesota. Other strengths include a reliable and cost-effective supplier network and a cutting-edge revenue optimization program. Country Inns & Suites By Carlson also benefits from partnership with sister company Carlson Wagonlit Travel and the Club Carlson loyalty program. There are more than 470 Country Inns & Suites By Carlson open around the world. Within a year, that number should reach 500, Meyer says. Target markets for growth are urban and suburban markets including the top 25 cities.

Franchisees of Proforma can target their printing and promotional item offerings to almost any other company, and that is part of what drives their prospects for rapid expansion, according to founder Greg Muzzillo. “Every business in North America buys printing and promotional items,” he explains. “And every business runs out and needs to order more. ” The resulting repeat orders help drive the Cleveland, Ohiobased franchiser. That growth has been substantial. About 750 Proforma locations serve a wide variety of markets. The company anticipates adding about 100 franchises this year and is expanding internationally into Ireland and England, “It’s exciting times for Proforma,” Muzzillo says. Much more lies ahead, according to Muzzillo. “Businesses in North America spend about $200 billion a year on what we sell,” he says. “Since we’re at only half a billion dollars in sales, there’s a lot of room for us to grow.” In addition to a large market and growing market and a diverse set of customers and prospects, the franchisees enjoy low overhead, since printing is outsourced and the model requires no expense for overhead, and high margins. “It makes for a wonderful combination,” Muzzillo says. The combination of growing demand and little competition makes for good prospects for new franchiser Daycare

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Cleaning Services. Rob Nestore, president of the Cherry Hill, New Jersey-based company, says the daycare centers that make up their primary market are going through a demand boom. “In today’s economy with both parents having to work, it’s not like one can stay home,” Nestore says. “There’s a need for childcare. And as the childcare industry continues to grow, there’s a need for our industry.” Since starting the company in 2001, Daycare Cleaning Services addresses the special cleaning needs of educational markets with a system developed by Nestore. Today the company has contracts with top childcare chains as well as local charter and public schools. As Daycare Cleaning Services begins to set up its franchising network, Nestore continues to grow the customer base served by the initial location in the Pennsylvania, New Jersey, Delaware, and New York markets. Meanwhile, he reports significant interest from potential franchisees. “We recently attended the International Franchising Exposition and we’ve had a tremendous response from people all over the country,” he says. “Currently we are in negotiations with several future area developers from both the East and West coasts as well as Florida and Texas.” The response to the fare and feel of McAlister’s Deli has helped the Atlanta-based restaurant franchiser expand to 317 locations in 23 mostly Southeastern, Southwestern, and Midwestern states. “We’re adding about 12 to 15 a year at this point, and it looks like it’s going to be more next year,” says CEO Frank Paci. Paci says one strong positive is that the chain has shown sustained revenue increases coming out of the last downturn. “We’ve run 12 quarters in a row of positive same-store sales growth,” he says. “That’s giving the franchisees the confidence to build additional stores.” In addition to building out existing areas, appealing opportunities exist in markets including Pennsylvania, Iowa, and Wisconsin, as well as Illinois where there are some open stores, but Paci thinks more locations would be successful. Wherever they open, the chain’s basic appeal to consumers is its particular service model. McAlister’s Deli diners order at a counter and then sit at tables where servers deliver their drinks and meals when ready. To franchisees, a big part of the appeal is the simple operation, which doesn’t include complex cooking apparatus like fryers, and limited hours.


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The franchisees of Aaron’s make the Atlanta-based chain of lease-to-own businesses very different, and possibly unique. According to National DirectorFranchising Greg Tanner, none of the 2,200 corporate and franchise locations is owned by a single-unit franchisee. “All our franchisees are multi-unit owners,” Tanner says. “And over 65 percent of our franchisees don’t live in the same state as their stores.” These differences hint at the difference between owning an Aaron’s franchise and most other businesses, franchise or not. Rather than the corporate refugees, part-time entrepreneurs, and others who flock to many franchise opportunities, Aaron’s appeals to sophisticated investors who appreciate things like the way depreciating an inventory of lease-to-own products can enhance cash flow and the importance of effective collections. “It’s not how much money you make,” as Tanner puts it. “It’s how much money you have left at the end of the day.” Aaron’s looks for investors with strong net worth and the ability to manage people and cash flow, then trains them in its system. The company adds about 150 to 160 units annually and anticipates that continuing. Aarons operates coast to coast, with the largest numbers of stores in the South, Southwest, Northeast, and Mid-Atlantic states. “Our growth opportunities are out on the West Coast, but there are a lot of available markets around the United States,” Tanner says. For Complete Nutrition, growing a franchise system of nutrition businesses is more than a matter of selling supplements. “Our concept is appealing to franchisees because we take a solution-based approach to nutrition,” says Ryan Zink, president of the Omaha, Nebraskabased franchiser. Rather than making a sale and letting the customer walk out and never hear from Complete Nutrition again, Zink’s franchisees help them build diet and exercise plans complete with followup sessions. “It’s really a partnership and it’s focused on a solution versus a magic pill,” Zink says. As befits the name, Complete Nutrition offers a comprehensive approach to nutrition and fitness. “It’s a one-stop shop,” Zink says. Customers can get products as well as diet and exercise and assistance from consultants who work with them during their journey. “I believe our approach gets our customers better results,” he adds. Over the last year, Complete Nutrition has added more than 30 stores to reach its current total of 178 in 35 states. In

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12 months, Zink envisions 30 to 35 additional stores. Most existing operations are in the Midwest and South, and Zink plans to continue to grow there while also opening new territories, in the Southeast and Northeast. Ultimately, what feeds Complete Nutrition’s ambitions is the realization that is serves a dynamic and expanding need. “People have a passion for health and fitness,” Zink says. “It’s a continually growing industry.” As these franchisers’ stories suggest, few if any concepts are intended to serve declining or stagnant markets. But having good prospects is more than a matter of finding a demand that is increasing and finding a way to satisfy it. In franchising, in particular, expansion depends on properly pairing the opportunity with the candidate, having good systems for support, and good relationships between franchiser and franchisee. It’s a formula worth taking the time to perfect, Hayes says. “There is great interest in finding a good franchise today,” he says. “And rightly so, because when the franchiser is savvy and honest, and the franchisee is trainable, magic happens.”


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8 Proforma Franchise Owners made the 2012 Inc. 5000 list

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Proforma can help you get there. Proforma is the leading B2B franchise distributor in the $200 billion dollar print and promotional products industry and the only franchisor with eight franchisees on the 2012 Inc. 5000 list.

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A Abbyson Living 164 Acceleration Partners 154 Acordis International 190 Acquia 23, 206 ACT Appraisal 198 Action Lead Solutions 154 ActivityRez 208 Act-On Software 206 AdColony 154 Add3 154 Ad-Juster 206 Adora 200 AdRoll 150 Adscend Media 154 Advice Interactive Group 152 Advocate Merchant Solutions 170 Akvarr 188 Alego Health 184 Alex and Ani 200 All Around Property Preservation 160 All Green Electronics Recycling 158 Alternative Technology Solutions 206 Altitude Digital 151 Amped Wireless 160 Analytic Strategies 174 Apartment List 198 Apex Resources 194 Armstrong Steel Building Systems 162 Arocon Roofing and Construction 160 Arteris 23, 160 ASE Direct 174 Asentra 152 Astrum Solar 168 ATDynamics 194 AudioMicro 196 Avondale 172 Axcient 202

B BabyHaven.com 200 Barbaricum 176 Basho Technologies 210 BayRu 200 Bed Bug Supply 164 BeenVerified 162 Benzara 164 BH Cosmetics 202 BidPal 156 Big Street Construction 162 Bio Soil Enhancers 194 Blue Acorn 192 BlueKai 150 Blueline Security Services 48, 202

BlueSquare Resolutions 170 Blue Star Tec 190 BMA 174 BNL 178 BoomTown 73, 208 Bottle Rocket Apps 208 Bows-N-Ties.com 202 Brafton 154 Branding Brand 208 Bridger 166 BrightSource Energy 168 Brixton Group, The 188 Build Group 160 Business Finance Store 170 Bustin Boards 120, 166 Buy Happier 200 BWBacon Group 186

C Caduceus Healthcare 176 Camp Gladiator 62, 164 Caneel Group 172 CardCash.com 164 Cardinal Point Captains 176 Careers in Transition 186 CarGurus 164 Carrot Creative 154 Cartagz 164 CashStar 206 C-DM Network 160 Celebrity Auto Group 36, 162 Celerity Ventures 198 Cell Phone Repair 200 Centerplan Construction 160 Century Payments 172 C-4 Analytics 151 Channel Partners 172

Chicagoland Foreign Investment Group 170 Chief Executive Group 196 Cinium Financial Services 170 Classy Llama 154 ClearAbility 178 Clearleap 208 Clickin Moms 196 Clinovations 180 Cloud Sherpas 23, 188 CoesterVMS 198 CollabraLink Technologies 190 Colo5 192 Column Five 196 Command Post Technologies 174 Complete Merchant Solutions 172 Conductor 151 Configero 190 Content Marketing Institute 196 Cornerstone Advisors Group 184 Cornerstone RPO 186 CoverMyMeds 180 Crescendo Bioscience 178 Crunchy Logistics 190 CSI Powerline 168 C2S Technologies 192 CWU 176

D Dane Street 180 Dashed 116, 156 DataXu 150 Datto 202 db5 154 Dhaliwal Laboratories 194 DiscoverOrg 158 Discovery Services 156 Dito 188 Doc Popcorn 54, 198 DSFederal 174 Dynamic Recycling 158 Dynamix Mechanical 178

E Echo Health 180 Ecogistics 194 Econohomes 198 EDJ Precision 194 eGumball 151 EHD Technologies 158 Elevate Technology Solutions 188 Elorac 180 Emerge Digital Group 150 Emerge Managed Solutions 25, 188

Encompass Digital Media 196 EnSite Solutions 23, 72, 158 enVision Business Consulting 158 Equinox Business Solutions 156 ERP International 192 ESAC 184 ethosIQ 156 Eventus 156 Evo Exhibits 154 Evolution Capital Partners 170 Evolving Wisdom 166 Extrabux.com 162 Extreme Reach 152

F Farm2Fleet Trucking 194 Fathom 196 FBS 160 FCi Federal 176 FederalConference.com 174 Field Nation 156 Finch 206 1st American Systems and Services 176 First Flight Solutions 194 Fitness on Request 180 Five Data 156 Five Stones Research 178 FlexPro Group, The 50, 180 FlexWage Solutions 96, 172 Force Realty, The 198 Forward Health 184 4moms 124, 164 FreeAlliance.com 176 Free for All 184 FreightPros 194 Frontline Source Group 186 Fruition Partners 192 FuelFX 154 Fuhu 16, 138, 162

Full Circle Marketing 152 FuzeBox 156

G GameSim 208 GarbageMan, A Green Company 164 Gate 3 Design 160 Genesis Consulting Partners 190 Gibbon Slacklines 164 GiftCardRescue.com 162 Glass Mountain Capital 170 GlobalMed 184 Goal Zero 162 GO Auto Recycling 202 Govind Development 162 Grammarly 164 Gravity Media 152 Green Box Foods 174 GreenCupboards 56, 200 Green Earth 158 GreenJobInterview 186 Greenphire 23, 206 Grok 98, 154 GSATi 73, 188 GSC Packaging 194

H HasOffers 151 Hawaii Energy Connection 168 Hawaii Life 198 Hawkeye Management 170 HCI Group, The 178 Hicks & Clark 172 HireVue 186 HPI 168 Hudl 206 HUMAN Healthy Vending 174

I iDrive Logistics 194 In-Flight Crew Connections 210 InfoFree.com 158 Infolob Solutions 190 Infosemantics 192 Innotion Enterprises 198 Innovolt 156 Integrated Prescription Management 184 Integrity Funding 68, 170 Intellect Resources 178 Intelligent Audit 192 InviCRO 180 iQuanti 152 iQuasar 190 ISBX 208 iSend 170 iSirona 180 I.T. Source 156 IT Strategic Performance Firm 188 It Works! Global 90, 166 Ivy Exec 186

J Janes Capital Partners 170 Janrain 208 JESS3 156 JG Tax Group 172 Joint, The 178

K KaloBios 184 Kavaliro 186 Kenry Home Improvement 202 Kentech Consulting 202 Knight Solutions 88, 176 Kony 202 KT Tape 122, 180

L LabTech Software 206 Landmark Network 198 Landmark Retail 162 Lead5 Media 151 Legacy Analytics 158 Level 11 188 LINQ Services 158 LinTech Global 178 LiveIntent 152 LivingSocial 162 Load Delivered Logistics 194 Logistics Store, The 194 Lumosity 164 Luna Data Solutions 192

M Macrospect 190 Madwire Media 151

Maestro Technologies 188 Magnet 360 154 Marketo 208 Marketplace Homes 198 Marketsmith 154 Martini Media 154 MASS Communications 210 Matt Martin Real Estate Management 198 McAfee Institute 80, 166 Medical Direct Club 184 Medical Staffing Options 180 Memphis Invest 198 Merch Makers 166 MHD Enterprises 156 MiLEND 172 MileStone Community Builders 196 Millennium Group International, The 176 Mixbook 73, 200 MMC Systems 190 Mobomo 206 Modern Everyday 200 Modus eDiscovery 158 Mom Corps 134, 186 Mo’mix Solutions 192 Monster Flooring Sale 200 Movement Mortgage 172 MSR Promo 158

N Netcom3 Global 206 Netsertive 154 Network Capital 172 New Wave Surgical 128, 180 Next Step Living 168 NextWorth Solutions 162 Nisga’a Data Systems 176 North Florida Field Services 160 Novisync Solutions 190 Now Communications 162 NSR Solutions 174 NTE Solutions 168 NuCourse Distribution 164 NUE Agency 196

O OBXtek 174 Oceanhouse Media 206 ODW Logistics & Transportation Services 194 Odyssey Telecommunications 210 Old Town IT 192 Omatic Software 206 Oncology Analytics 180 OneScreen 208 OneSource Virtual 188 Onsite Health Diagnostics 184 Onsite OHS 180 OpenX 152 Orgain 174 OrigAudio 121, 164 OtterBox 166 Owens Harkey Advertising 156

P PalmerHouse Properties 198 PanelClaw 168 Pangea Properties 196 Panjiva 158 Paramount Business Jets 210 Patient Conversation Media 178 Patient Engagement Advisors 180 Patina Solutions 186 Personalized Prevention 184 Phunware 206 Pinnacle Strategies 74, 156 Pivot Employment Platforms 186 Planet Solar 162 Platinum Advisor Strategies 158 PlayMaker CRM 208 Plug Smart 168 Plum Organics 174 Populus 168 Preferred Sands 118, 168 Premier Group Staffing, The 186 PrepNet 166 Profit Sense Innovations 158 projekt202 206 PropertyRate 198 Provider Power 166 Puppet Labs 206

Q Qualityflooring4less 202

Quantum Networks 210 Quick Left 208

TaskUs 158 Taurean 176 Team Trident 168 Technical Solutions 210 Technomax 190 Techsol4U 192 TEEMA Consulting Group 186 TheraPearl 164 ThinkLite 168 33Across 152 305 Degrees 210 3 Key Elements 166 Ticketracker 206 Timberhorn 188 Tista Science and Technology 178 Titan Electric Company 160 Titan Protection and Consulting 202 TNH Pharmacy II 180 Tolteq Group 168 Touchsuite 206 Tower Cloud 210 TracePoint Consulting 188 Trada 150 Transcend Media 152 Trend Nation 16, 200 TrendyMinds 152 TubeMogul 152 24Hr HomeCare 184 29 Prime 151 Two95 International 186

R Ramps International 190 Rapier Solutions 188 RCS Capital 172 Reboot Marketing 154 ReconCraft 106, 196 Recondo Technology 180 Red Frog Events 162 Refinery29 196 Refresh Dental Management 184 Regal Assets 172 Regal Wings 210 Renegade Furniture Group 73, 200

Repay 172 Rescue One Financial 71, 172 Reserveage Organics 184 RestoreHealth 178 ReTargeter 151 re:think 154 Rethink Autism 166 ReverbNation 208 RevLocal 154 Rigid Industries 126, 194 Rigil 192 R.J. Allen & Associates 162 RMGS 176 Rocket Fuel 152 Rooster Park 208 RosettaBooks 196

U

S Sailthru 150 SalesStaff 156 Santa Rosa Consulting 184 SAPremacy Consulting 190 Saratoga Roofing & Construction 160 ScanDigital 164 School Tech Supply 166 SCM Data 188 Seamgen 208 SearchPros Solutions 186 Securus Payments 172 SET 152 Seven Swords Media 154 ShayCore Enterprises 160 SHINE Systems & Technologies 176 SiiBER 200 Silencerco 58, 164 Silver Spring Networks 166 SimpleRay 168 SimplyGlobo 200 SKM Media Group 152 Sky Zone Indoor Trampoline Park 200 Snap Advances 170 Solar Alliance of America 168 Solomon Consulting Group 188 Sol Systems 168 Sovereign Lending Group 170 Space Saving Solutions 92, 158 Sparc 202 Special Operations Solutions 178 SPICA Computers 192 Spoken Communications 210 SSI 178 StandBy Talent Staffing Services 186 STAR Collaborative 184 StartFinder 184 Stemp Systems Group 190 Stonegate Mortgage 172 Strategic Communications 192 Streamline Defense 176 Strongbridge 178 S2verify 186 SugarSync 208 Summerset Professional Grills 162 Summit 7 Systems 192 Sunset Healthcare Solutions 180 Sunsight Instruments 210 SunSoft 190 Superfly Kids 164 Sustainable Supply 46, 200

T Talent Curve 186 Target Freight Management 194 Target Logistics 158

uBreakiFix 52, 198 Ultraflex Power Technologies 196 Universal Industries 166 US Logistics 192 US Perishables 194 Ustream 164 uTest 190

V Value Card Alliance 160 Value Payment Systems 170 VDart 192 Verdi Consulting 176 Vertex Body Sciences 174 Vesa Health & Technology 176 Veteran Corps of America 178 Veterans Enterprise Technology Solutions 176 Vetora 200 Vets Etc. 190 Vets First Choice 156 Victor Securities 172 Videology 152 Viderity 176 VincentBenjamin 186 VinoPRO 158 Vintage IT Services 190 Virtual Enterprise Architects 94, 188

Virtual Tech Gurus 190 Vital Farms 174 Vivo Clothing 202 VRx 180

W Wall Street Network Solutions 210 WebEyeCare 200 WebiMax 152 WebPT 208 WellDog 74, 168 Wellness Corporate Solutions 180 W4 152 Whitacre Logistics 194 Williams Strength 164 Wilson Legal Solutions 188 Wingspan Portfolio Advisors 170 Wireless Communications 200 WordStream 152 Workday 210 Worldwide Power Products 168

X Xtreme Solutions 190

Y Yagoozon 198 YellowHammer 150 Yorktown Systems Group 178

Z Zurple 202

PRINTED IN THE USA. COPYRIGHT ©2013 BY MANSUETO VENTURES LLC. All rights reserved. INC. (ISSN 0162-8968) is published monthly, except for combined July/August and December/January issues, by Mansueto Ventures LLC, 7 World Trade Center, New York, NY 10007-2195. Subscription rate for U.S. and Possessions, $19 per year. Address all subscription correspondence to Inc. magazine, P.O. Box 3136, Harlan, IA 51593-0202; 800-234-0999; icmcustserv@cdsfulfillment. com (U.S., Canada, International). Please allow at least six weeks for change of address. Include your old address as well as new, and enclose if possible an address label from a recent issue. Single-copy requests: 800-234-0999. Periodical postage paid at New York, NY, and additional mailing offices. Canadian GST registration number is R123245250. Canada Post P.O. Box 867, Markham Station Main, Markham, Ontario L3P 8K8. POSTMASTER: Send address changes to Inc. magazine, P.O. Box 3136, Harlan, IA 51593-0202. Material in this publication must not be stored or reproduced in any form without permission. Requests for permission should be directed to permissions@inc.com. Reprint requests should be directed to The YGS Group at 800-290-5460, ext. 128. Inc. is a registered trademark of Mansueto Ventures LLC. SEPTEMBER 2013 VOL. 35 NO. 7

236 - INC. - SEP TEMBER 2013

INC. 500 INDEX


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