What Have You Become?

Thinking Corporate

If today's entrepreneurs could write an epitaph to sum up their attitudes toward their burgeoning businesses, "It's not just about me anymore" may be it.

The exhilarating days of living on Pop Tarts and Top Ramen, sleeping on the office sofa and filling orders with the help of old college buddies are long gone for many entrepreneurs. With a roaring economy, consumers eager for new products and services, and new opportunities in e-commerce, a growing number of entrepreneurs are waking up to the realization that they now run fairly large businesses with successful pedigrees. But that success comes with all the requisite duties and responsibilities bigger businesses bring to the table.

"It's a very passive thing," says Ethan Winning, author of Labor Pains: Employer and Employee Rights and Obligations (TFM Publications). "Small-business owners don't even think about change, or about becoming a full-fledged corporation, until after the second or third wave of employees comes on. Let's face it: The 'one big happy family' mentality would be pretty dysfunctional if it covered 300 employees."

That's the case with Minneapolis-based Crazy Carrot Juice Bars, which started with just two full-time employees in 1998: co-founders Eric Strauss, 30, and Tony Barranco, 25. Demand was strong right off the bat, as the company's first store was a huge success-so strong that Barranco and Strauss soon found themselves ordering more than 3,000 pounds of oranges per week, up to 1,500 pounds of jumbo carrots and hundreds of pounds of bananas, strawberries, raspberries and other assorted fruits and vegetables. The Crazy Carrot's ingredients were carefully picked by members of "Team Carrot"-a group of people strategically assembled with the goal of taking the company to the next level. The Crazy Carrot concept-which consists of everything from a distinctive logo and one-of-a-kind smoothies to the company's focus on environmental awareness-was more than 18 months in the making.

By September 1998, a second Crazy Carrot Juice Bar opened in Minneapolis' Uptown neighborhood, an area positively dripping with cachet. A third store opened near the University of Minnesota campus in Minneapolis. By spring 1999, two more locations had opened. The founders' passion for juice drinks and flair for marketing paid off: Sales for 1999 soared past the $1 million mark, and payroll grew to 95 employees.

But their company grew too fast. The headaches of scouting out new locations; fending off larger, copycat competitors and grabbing additional funding wore Strauss and Barranco out. Last November, the company merged with Heartland Juice Companies, a regional developer of Jamba Juice. The deal's fallout was nightmarish for Strauss, who was forced out by Heartland. Barranco stayed on as director of operations in Minnesota and Wisconsin in what to him was a more regimented, traditional corporation.

"It's a good-news, bad-news thing," says Barranco. "As entrepreneurs, we lost focus and soon found ourselves in danger of being swept away. My personal feeling is that when you start out scrubbing floors together and making your first drink together, you're living the entrepreneur's dream. But when you change speeds and grow as a company, you take a closer look at whether that entrepreneurial spirit withers or not. In my case, [the growth of the company] made it a lot easier to walk away. I know our company is in reliable hands, with lots of money and resources, and that means a lot to me."

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This article was originally published in the May 2000 print edition of Entrepreneur with the headline: What Have You Become?.

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