What Have You Become?

Success And Moderate Growth

Some entrepreneurs, particularly younger ones, grow companies only to a level that ensures a freewheeling mentality will hold sway. These business owners view traditional corporate tenets with skepticism and see no reason to ride herd over the gray-flannel-suit-oriented culture that sucked the life out of their baby boomer parents. "The longer I do this, the more I think I don't want to have a $100 million company," says Steve Lake, the 31-year-old co-founder (along with Dave Klimkiewicz, 29, and Dennis Telfer, 30) of Sector 9 Inc., a skateboard maker in San Diego.

Lake and his buddies started the company in 1993 after tinkering with their own custom-made skateboards. After some initial problems, business took off. "The boards caught fire from Day One," says Lake. "People would stop us on the streets and ask us to make them a skateboard. So we started making 4-foot-long skateboards for $25 apiece on Dennis' pool table." Sector 9 snowballed: By the end of 1998, the company had earned $4 million, boasted a staff of 40 employees and saw a flurry of competitors enter the market.

But even as Sector 9 takes off in a big way (its products are distributed in 1,800 stores and 40 countries), Lake says he's still wrestling with what he calls the corporate "growth problem." "I think we'd like to level off and maintain the flexibility we have now," he explains. "We did grow another 25 percent this year, and there's always a need to add staff and invest more money into the company. But is that the wise thing to do? You know, we're still wearing shorts to work, still riding our skateboards to work. I'd hate to lose that flexible feeling. And if we grow that much faster, we could."

Having It Both Ways

Unlike the guys at Sector 9, sacrificing dollars for flexible office culture is something most won't do. But, a growing number of entrepreneurs insist they can have it both ways-big profits and a loosey-goosey workplace. "At some point, you have to let go of your baby if you're going to get your company to where you want it to go," says Christian Larsen, one of two founding partners of Pacific Web Works, an Internet software services firm in Salt Lake City.

"If you have a need for a computer programmer skilled at writing great code, you get that programmer at all costs," Larsen adds. "But you also need to get someone to manage all your programmers, and that's where the corporate-think enters the picture." Larsen says his company has recruited top managers to help his company grow even further. "Our CEO came out of a $1 billion firm, our call center manager came out of AOL, and our chief financial officer came from PricewaterhouseCoopers. That's the price you have to pay to become a successful corporation."

That said, Larsen defends his company's entrepreneurial spirit. "I really don't think that's changed," he says. "Just because we bring professional managers in doesn't mean we're becoming a staid, stuffy organization. On the contrary, people want to come here because we still offer a start-up mentality."

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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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