From the April 1999 issue of Startups

When you're hot, you're hot--and we think the young entrepreneurs spotlighted in our first annual Hot List are nothing short of sizzling. That's not to say they're all alike. Some are born entrepreneurs; others got into business almost by accident. Some carefully planned each step; others forged ahead on sheer chutzpah. What they all share (besides being under age 30) is the guts to go after their dreams. We hope their stories inspire you to do the same.

1-800 POSTCARDS

Entrepreneur: James Morel, 28
Company/Description: 1-800 POSTCARDS provides "any business, anywhere" with low-cost, high-quality postcard-printing services (even postcard-sized stickers).
Based: New York City
Started: 1995
1998 sales: $3.2 million
1999 projections: $4 million-plus

The evolution of James Morel: The wit-laden entrepreneurial spirit traces his knack for business back to college, when this self-described "freaky dork" partied in punk rock clubs by night and spouted Zig Ziglar motivational clichés by day.

The American dream: With degrees in advertising, marketing and psychology, Morel . . . waited tables. But the Italian restaurant gig led to his first business venture: making and wholesaling ravioli. After two years, he ditched pasta to provide advertising services for his downtown hipster/entrepreneur friends.

No thanks: The direct-mail packet Morel created wasn't taking off. But when he added a full-color postcard insert, clients asked, "Can we have the postcards . . . but not in your package?"

The exploding postcard inevitable: Business hit "for-real" status in 1995, the year Morel closed all deals in one week. Success left him wanting more. In 1998, he picked a new name: 1-800 POSTCARDS.

Next generation: Morel has lost customers due to his unconventional business "look" and ethic, but knows those remaining truly respect him and his 35-employee company. "The ultimate joy is to hear people say `Wow, there's another way to do this.' " His New York office makes Morel feel all the more legitimate, and opening an office in Los Angeles this spring and a new printing and shipping facility in New York this summer sure won't hurt.

Trash Bags

Entrepreneur: Anita Ko, 24
Company/Description: Trash Bags makes an affordably priced line of fabric handbags.
Based: Los Angeles
Started: 1997
1998 sales: $319,000
1999 projections: $1 million-plus

Cops and robbers: Three years ago, Ko's home fell victim to burglary. The now-well-accessorized thieves took the designer handbags Ko had gotten as gifts over the years, sending her on a mission to replace them. But her budget couldn't swing $1,000 bags.

Everything happens for a reason: Ko was tooling around a fabric store when she found great handbag material. She sketched two designs, had samples made and showed them to an L.A. Mart sales representative, who took Ko on and immediately started getting orders.

In the (hand)bag: With $20,000 in start-up funds from Ko's dad, Trash Bags commenced in October 1996, two weeks after those first samples were made. Ko worked out of Pop's paging service company warehouse for six months until she found her own office; she now has two employees.

Bag ladies: With the popularity of her $40 to $80 bags rising, Ko was ready to diversify. In November 1998, she began working on a more expensive, designer line; she also plans to do an around-$20 line for younger girls.

Purse philosophy: "Only 1 percent of the population can afford [high-priced bags]," says Ko. "The others can't, but put it on credit and hope they can pay it back. That's not how a woman should live." Select Nordstrom department stores, as well as Urban Outfitters, Fred Segal in Los Angeles and Anna Sui in New York City, are now helping women live fashionably well by stocking Trash Bags.

Spin Master Toys

Entrepreneurs: Ronnen Harary, 28; Ben Varadi, 29; Anton Rabie, 27
Company/Description: Spin Master Toys develops, manufactures, markets and distributes cutting-edge toys.
Based: Toronto
Started: 1994
1998 sales: $20 million
1999 projections: $40 million

Walking past the corporate ladder: In 1991, after Harary and Rabie created and sold a campus poster at the University of Western Ontario in London (where they met Varadi), they knew their only post-grad option was entrepreneurship.

Buddy system: After their 1994 graduation, Harary and Rabie used $10,000 from poster sales to create Earth Buddy--a gnome-like figure with grass for hair. Sales of $1 million a month and the addition of Varadi foreshadowed future victories.

Whirlwind success: "The first year and a half was just holding on, trying to keep up with demand that came overnight," says Rabie. The successful Earth Buddy was followed up by Devil Sticks (a juggling toy) and Grow Things (rubber shapes that grow in water).

Preparing for takeoff: The team's air-pressure-powered toy planes, Air Hogs, launched in May 1998 and won hurrahs everywhere from Popular Science to USA Today.

Keeping it real: Despite buyout offers, Spin Master's ownership will stay as is, and "out-of-the-box-thinking" will prevail. Does youth equal success? Says Rabie, "If what comes out of your mouth is astute and you're young, you've got a double-bingo."

Willowbee & Kent Travel Co.

Entrepreneurs: Julie Poteet, 28;Craig Poteet, 29
Company/Description: Willowbee & Kent Travel Co. is a combination travel agency and travel retail "superstore."
Based: Boston
Started: December 1997
1998 Sales: $1.2 million
1999 Projections: $3.3 million

Uncharted territory: "We're singular in the breadth of product we provide," says Craig of the couple's "value-added travel resource," which employs state-of-the-art technology and offers everything from ticketing and travel books to adventure wear and travel accessories under one roof.

Taking wing: After college, the Poteets spent five years researching their concept and attending travel conventions and luggage trade shows. Finally, Craig left his job as a manager at Boston's Logan International Airport, and he and Julie made the entrepreneurial leap, securing a site in Boston's upscale Back Bay.

Success by design: Says Craig, "Our goal was to make a store that was visually exciting and unique"--a task made much easier when they hired Retail Design Group (known for helping to design such retail stores as Eddie Bauer, Limited and Victoria's Secret). The firm, which rarely deals with one-store entities, was impressed by the Poteets' vision to bring an assortment of travel-related products together in one environment, and created the cutting-edge design that turned an aging building that formerly housed a bank into a one-of-a-kind travel-planning store.

Virtually unheard of: Willowbee & Kent clients enjoy the romance of travel before they've even finalized their plans, perusing one of hundreds of travel books over a cup of espresso or using the interactive kiosks to take a virtual trip to almost anywhere in the world. The Travel Gateway, a stunning two-story multimedia center with a circular screen, sets the mood. Clients can view real-time video of hotels and cruise ships while consulting with travel agents to create dream vacations.

Flight plan: Additional locations in the New England area and New York are in the works. The couple's next goal? Now that their business is flying high, they've committed to making time in their busy entrepreneurial schedules for celebrating their wedding anniversary in a different country every year.

Vervex Technologies

Entrepreneur: Price Givens, 27
Company /Description: Vervex Technologies develops database and corporate intranet applications that help project managers track off-site workers' projects.
Based: Irvine, California
Started: 1994
1998 sales: $1.2 million
1999 projections: $2.5 million

A giant among giants: Companies like Microsoft and Deloitte & Touche use Vervex's EnGage 2.0 to manage large projects that involve employees, subcontractors and consultants worldwide. The software allows team members to report on their progress via the corporate intranet, as well as generate invoices and timesheets that can be easily accessed by corporate headquarters.

Reach out: Givens and his team of software developers started by producing project management applications for accountants. But with Givens in Irvine and the company's software developers in Bellevue, Washington, geographic distance interfered with efficient collaboration. Givens knew an intranet could be the ultimate solution.

Power to the people: Although Vervex's newest timekeeping software program, FSBTime, was designed specifically for accountants, architects and others who bill clients for their time, Givens was surprised to find most visitors to Vervex's Web site were actually other software companies. "One of our biggest customers has all their developers in India and all their managers in [California]," he says. "Given the time difference, they had no way of communicating on a daily basis [until] we sold them FSBTime."

Chicago Map Corp.

Entrepreneur: Steve Peskaitis, 24
Company /Description: Chicago Map Corp. produces custom-designed mapping software.
Based: Lemont, Illinois
Started: 1990
1998 sales: $1 million-plus
1999 projections: approaching $5 million

Head of the class: In high school, Peskaitis sold shareware CD-ROMs at computer shows and designed one of the first mapping software programs for DOS that allowed users to search for and print out maps of various geographical areas. "I had little or no experience when I first started," says Peskaitis, "but I saw a demand for mapping products, and there was really only one competitor at the time."

Shifting gears: Chicago Map's first product, Precision Mapping 1.0, was well-received by consumers. But when big companies like Microsoft and RandMcNally started dominating the consumer mapping software market, Peskaitis changed his focus. Now he provides mapping software for other companies' products, from digital campground directories and handheld global positioning system (GPS) units to vehicle locator/dispatch systems for utility businesses and police departments.

Global expansion: Chicago Map has just finished the first complete software road atlas for Canada and South Africa, and is working on a product that will map all the world's road systems.

Jeremy's MicroBatch Ice Creams

Entrepreneurs: Samuel Cohen, 21; Jeremy Kraus, 23; Thomas Shelton, 22
Company/Description: Jeremy's MicroBatch Ice Creams makes superpremium ice cream.
Based: Philadelphia
Year Started: 1997
1998 Sales: $1 million
1999 Projections: $5 million

Purely Gen-X: "[Launching Jeremy's] was based on a deep-seated aversion to getting a real job. I just couldn't do it. So I said `I'll do anything--even make ice cream,' " explains Krause, the University of Pennsylvania graduate who started Jeremy's in his dorm room during his junior year. Not long after, college buddies Samuel Cohen and Thomas Shelton joined in.

Cashing in: Jeremy's attracted venture capital early on. "[But to start with,] I sold most of my securities and invested in myself," says Kraus, who had parlayed money he earned selling water purifiers door-to-door in junior high into more than $60,000 in investments.

The distinction: "There hasn't been a significant innovation in the superpremium ice cream category in more than 20 years," Kraus says. Until his long-held affection for beer maker Samuel Adams inspired Kraus to use the customized techniques of microbrewing, that is. "We contracted with a local dairy to make ice cream to our specifications." The result? "We view ourselves as an innovative flavor house rather than the producer of any one variety of ice cream in perpetuity," says Kraus of his company's aggressive rotation schedule, which features such flavors as Cinnamon Bun and Chocolate Overload.

Marketing 101: "The term `microbatch' conveys a powerful message to our target market very quickly," Kraus says. Look for the MicroBatch Mobile ("basically just a whacked-out, painted RV with the couches ripped out and ice cream freezers instead") at a campus or mall event near you. Jeremy's is currently sold in more than 3,000 outlets.

The cold, hard facts: Boasting "full-fat," Kraus says, "We have absolutely no plans for any low-fat or sorbet products. We're witnessing a throwback to indulgence, but people haven't been given a new reason to indulge in ice cream. That's where we come in."

Manastash Inc.

Entrepreneur: Robert Jungmann, 29
Company/Description: Manastash Inc. makes hemp clothing and accessories for outdoor enthusiasts, from rock climbers and kayakers to surfers and snowboarders.
Based: Seattle
Started: 1994
1998 Sales: $1 million
1999 Sales: $3 million

Search party: Jungmann, some friends and fellow hardcore rock climbers from Central Washington University were seeking clothing durable enough to withstand their weekend exploits. "Nothing could keep up with us in the mountains. We were wearing out our clothing fast," Jungmann says.

Mrs. McKinney's attic: Enter Lana McKinney, the mother of one of Jungmann's buddies, who used her attic sewing room--and her personal interest in hemp as a functional fiber--to help Jungmann develop his initial products.

Road warriors: Armed with an environmentally friendly fabric so tough it almost sold itself, after graduation, Jungman and his hemp posse hit the road, attending trade shows, rock-climbing events, mountain bike races and Grateful Dead concerts, where their fledging product line, led by the "Chenga wallet on a rope," hit it big.

Pay dirt: At a huge, outdoor retailer trade show in Reno in 1995, they met representatives of a Japanese company that later placed Manastash's first big order. As sales in Japan mushroomed, Jungmann looked for a way to make his products more affordable in the United States, where high hemp importing and manufacturing costs relegated Manastash to only the most exclusive sportswear shops. Last October, Manastash moved his manufacturing site from Seattle to China, enabling the business to lower U.S. prices by almost 35 percent.

Rock on: Now sold across the United States, Manatash products--from Tough Guy Pants to Boulder Paks--are worn as much for comfort and style as for functionality. "Many of our [customers] buy Manastash because it looks and feels good," Jungmann says. "Then they get home and find out it's hemp. That's our dream: to get hemp [clothing] to the masses."

H3O Inc.

Entrepreneur: Jamison Humphrey, 26
Company/Description: H3O Inc. markets bottled water to Generation X.
Based: Beckley, West Virginia
Started: 1994
1998 sales: $2 million
1999 projections: $7 million

Fountain of youth: "What makes H3O different is who it's targeting: Generation X," says Humphrey. "When you look at our competitors' [packaging], it's the same old mountain, same old stream. We're not just another `me, too' item."

Bottle this: Humphrey differentiates his "Extreme Water" with a purple, blue and yellow label, a narrow 20-ounce size that fits in bike bottle holders, and a sports cap. Advertisements tout H3O as "barely legal."

Water works: A manufacturing facility is in the works (the company currently outsources manufacturing), as are more drinks to round out the line. "We're developing new products to diversify into more of a total beverage company," Humphrey says. Watch for a meal-replacement beverage geared toward busy Gen Xers.

Under pressure: "My personal philosophy is, if you hit a wall, get back up and hit it again until you break through," says Humphrey. The next walls he plans on breaking through? The 17 states left untouched by H3O, international markets, and an IPO in three to five years.

Palmentere Brothers Distributing

Entrepreneurs: Kevin Pereira, 29; Tom Riccardi, 26; Mark Pereira, 28
Company/Description: Palmentere Brothers Distributing distributes beverages.
Based: Kansas City, Missouri
Started: 1993
1998 Sales: $5 million
1999 Projections: $6 million-plus

Firm foundation: After college, Kevin (l.) and Mark (r.) Pereira, and childhood friend Tom Riccardi, purchased Palmentere Brothers, retaining the well-established company's name. Once a highly profitable venture, the company had hit a slump. To rev up profits, the trio set out to take the business back to its roots as a local distributor only.

With two broken-down trucks that had seen better days, a handful of employees and lots of trial and error, the partners launched with a conservative fiscal approach: "We don't overextend ourselves," says Mark. "We don't need the plush [offices] and toys. Those all come in time. You've got to crawl before you can walk."

The big score: In 1995, when another local distributor went out of business, Palmentere Brothers acquired the company's vendors. Later that year, the trio expanded their clientele beyond restaurants and convenience stores to add grocery chains to their conquests. Another competitor closed in 1997, clearing the way for Palmentere Brothers to dominate Kansas City's nonalcoholic distributorship scene.

Service calls: "The biggest thing we have [going for us] in competing against the big boys like Coke and Pepsi is service," says Mark. Instead of the soft drink giants' minimum-order rules, Palmentere Brothers will deliver orders of just two cases.

Cheers: Today, "We've got vendors knocking on our doors and asking us to be their distributor, where in the past we were begging them," says Mark. "I can't picture myself in any other business [because] I enjoy this one so much."

Contact Sources

1-800 POSTCARDS, (212) 271-5505, ext. 600, http://www.1800postcards.com

Chicago Map Corp., (630) 257-7616, fax: (630) 257-9678

Jeremy's MicroBatch Ice Creams, (215) 823-6885, http://www.microbatch.com

Manastash Inc., (800) 328-5166, manastash@earthlink.net

Palmentere Brothers Distributing, (816) 421-4486

Spin Master Toys, toys@spinmaster.com, http://www.spinmaster.com

Trash Bags, (213) 622-0718

Vervex Technologies, (800) 841-6621, larryr@vervex.com

Willowbee & Kent Travel Co., (617) 437-6700, http://www.willowbeekent.com