From the November 2000 issue of Entrepreneur

We've combed through our many resources to compile our 12th annual list of young, successful entrepreneurs. What does it take to get on our list? Entrepreneurs have to be under 40, own a company that makes more than $1 million in sales and have a little something extra that catches our collective eye-maybe a groundbreaking idea, an inspiring story or simply the all-out determination to make it big. Whether they're selling sorbet or sportswear, creating cartoons or online classes, the following young millionaires have one thing in common: They all have exactly what it takes.

David Reinstein, 25, And Melody Kulp, 25

By Michelle Prather

Maybe you saw Jennifer Aniston sporting them as Rachel on Friends, or actress Sarah Michelle Gellar putting them in Jay Leno's hair on The Tonight Show. They're tiny crystals with Velcro backs that, when affixed to hair, make those wearing them look like they've just frolicked through a shower of jewels. Then again, you could've just seen one of the many Sparkles knockoffs that have plagued Mellies LLC, the El Segundo, California, hair accessories company founded two years ago by couple David Reinstein and Melody Kulp. Good thing this duo's savvy outweighed their lack of business experience.

While researching woman entrepreneurs for her former employer, The Learning Channel's Slice of Life show, Kulp began wondering why she wasn't making a name for herself. Then Kulp was amusing Reinstein's young cousins one day by placing yard-picked flowers in their hair and decided she wanted to craft something similar for the girls to maintain the look. Musician/composer Reinstein knew that if they found a way to do it, they'd have a destined hit so unique they could patent it-and they did, starting production with their own savings.

Mellies hit star status (boasting one account-the Fred Segal store in Santa Monica) when one hip Los Angeles twenty-something, after seeing Kulp sporting Sparkles, ran to the Fred Segal location in Los Angeles in a frantic quest for them-only to be disappointed and storm out. Reinstein and Kulp visited the second store that day and made their sale. Soon, fashion magazines featured Sparkles, celebrities wore them and stores worldwide were placing orders. This is Year One, mind you.

Unfortunately, demand caused many vendors to resort to buying faux Sparkles, which, despite the pending patent, were rampant. But instead of trying to beat the copycats, Reinstein and Kulp created their own Sparkles knock-off, Lulu's Twinkles. Now sold in supermarkets at a lower price point, Lulu's Twinkles helped sales climb to $9 million last year.

Reinstein and Kulp didn't forget the tough lesson when developing follow-up product HairLights: They didn't tell a soul until its patent was issued this year. They've also learned some creative marketing strategies along the way, like cold-calling department stores abroad, which landed them international accounts. Now, expecting Mellies to gross $40 million by year-end, they can finally stop to breathe. Says Kulp, "We've got the system set up where we can look ahead, rather than live day to day."

Dwayne Lewis, 30, And Michael Cherry, 31

By Talicia A. Flint

Thousands of American youths would be without their groove thang these days if it weren't for the entrepreneurial genius of Dwayne Lewis and Michael Cherry. As founders of New York City-based sportswear company Damani Dada, Lewis and Cherry have given a voice and an ultra-hip style to the urban fashion scene. Formed in May 1995 with one lone product and a mere $1,000 in pooled paychecks, Damani Dada has since made a name for itself, holding its own among runway greats like FUBU and Phat Farm. Sales for 1999 reached $40 million, and projections for 2000 are soaring to $70 million.

Do you have a clothes craze? Read "In The Jeans" to find out how to start your own clothing-design business

When Lewis decided to leave his administrative job with a law firm to pursue his dream of owning his own company, who better to choose for a business partner than his childhood friend, roommate and fellow entrepreneur-at-heart? "I felt we should go into something that we had some connection to," explains Lewis. "Coming from New York City and being sharp dressers ourselves, we thought we would know enough to put out a good product."

Easier said than done. Lewis and Cherry admit they faced their share of challenges as beginners in the fashion industry. "It was very tricky to try and learn the business without a mentor," remembers Lewis. "We always struggled with the task of maintaining a strong financial backing, and we had to learn a lot by making mistakes." Their persistence paid off, though, in 1996, when Lewis set off to Las Vegas for MAGIC (Men's Apparel Guild In California) International, the largest men's apparel trade show in the world. Touting Damani Dada's first product, the five-panel Polo Hat, Lewis left the show with more than $10,000 in orders.

Damani Dada has since expanded its line to include a full line of men's clothing as well as a women's line that was introduced this fall. With distribution deals in Canada, France, Germany and Great Britain, and plans for another one in Asia, this dynamic duo has proved they know a thing or two about success. "Business is war, and there's more competition here than in any other genre," advises Lewis. "You have to be mentally strong, willing to sacrifice and willing to accept delayed gratification." By the looks of it, we'd say Damani Dada's gratification has finally come.

Douglas Stewart, 32

By P. Kelly Smith

In the vanilla-and-chocolate-dominated ice cream world, it's nice to know one entrepreneur is having a little fun with the likes of mango, passion fruit and guava-strawberry. But it was more out of a sense of mission than fun that Douglas Stewart started Howler Products Inc. in 1994. The company, named after the Amazon's fruit-loving Howler monkeys, manufactures exotic sorbets and gourmet gelatos with ingredients and flavors taken from rare rain-forest fruits.

Is all this food talk making you hungry? Read "Upper Crust" to and find out how you can start your own sandwich shop franchise.

Stewart, president and CEO of the San Francisco-based company, began his journey in the Amazon jungle in 1989. Then a Stanford student, Stewart traveled to the Brazilian Amazon to research a thesis that ended up as a book on deforestation. He concluded that if farmers had a market for their rain-forest fruits, they might preserve the trees and plants that produced them. His convictions were so strong, he eventually left a job as a schoolteacher to start Howler Products. Six years later, with 100 flavors and sales between $1 million and $2 million, Stewart considers himself more of a "survivor" than a millionaire. "We've survived," he says, "and I think the formula for survival, whether you're 24 or 44, is you have to be persistent."

 

Jason Wall, 30

By P. Kelly Smith

As Jason Wall sees it, success is all about having a ball. Since 1998, Wall has been topping car antennas with happy faces, 8-balls and even cowgirls-complete with braids and hats. Wall is president and CEO of In-Concept Inc., the company behind Antennaballs.com, which manufactures more than 500,000 custom antenna balls per month.

Based in Glendale, California, Antennaballs.com owes its success to one "man": Jack. It all started when Wall saw a Jack In The Box fast-food commercial in mid-1997 that said the company had sold more than 3 million antenna balls. Sensing opportunity, Wall came up with a few designs he thought would penetrate the auto accessory and novelty industries. The designs stuck. After selling four million balls through local gas stations and convenience stores, Wall recently landed some major national accounts, including AutoZone, Circle K and Wal-Mart, and he's negotiating licensing deals with Universal Studios. With sales of $1.15 million for 1999, Wall attributes timeliness to his overnight success.

"It's very easy to think of a good idea," he says. "But I think [success] really comes down to execution and perseverance."

David Delgado, 31, and David Wirig, 31

By Talicia A. Flint

When David Delgado and David Wirig decided to leave their sales jobs in search of new challenges and start their own medical equipment company in February 1997, they expected an easy transition. But when their Minneapolis company, Medical Solutions Inc., suffered a loss of $12,000 the first year, it was time for a reality check.

"There was a lot of trial and error, and educating ourselves created a longer learning curve," explains Delgado, who admits he and Wirig knew nothing about medical equipment when they started.

Profit margins were slim due to market competition and the high cost of selling new equipment, and doubt was beginning to creep in when inspiration struck. One customer, after purchasing a new EKG machine, wanted to sell his old machine to Medical Solutions. Delgado and Wirig seized on the idea, cleaned and tested the used machine, and resold it for more than 10 times their initial investment.

After that, sales increased in 1999 to $1.1 million, and 2000 projections are at $1.9 million, with plans to expand into hospital, dental and veterinarian markets. And the best part about running their own business? Says Wirig, "We get to golf on Fridays."

 

 

Dale Bathum, 36

By Alex Purugganan

A large bottle of celebratory champagne chilled in Dale Bathum's refrigerator, waiting for the moment his Preston, Washington, company, Bite Golf, reached its initial revenue objective of $1 million. But the champagne remained on ice even days after the goal was accomplished. "We took a breather for an hour or so to enjoy it, then we went right back to business," Bathum says.

Bathum adopted that worker-bee mentality while working as a production manager for Nike in South Korea and China. He has since incorporated the attitude into his golf-footwear company. "Bite Golf's framework parallels Nike's entirely, from the defining of team roles to the breeding of a winning atmosphere," explains Bathum, who launched his business in August 1996.

And the similarities don't end there. Bathum has revolutionized the golf-shoe industry by introducing an athletic design for golf sandals and boots, focusing on comfort and style-and very much unlike the wingtip standard. Bite Golf expects to bring in more than $5 million in sales this year. Staying true to form, Bathum has reset his company's original objectives. "Earning $1 million was our first goal," he says. "Earning $1 million a month is our next."

Scott Mitic, 29, And Peter Mellen, 32

By Amanda C. Kooser

One day in 1998, Scott Mitic met fellow business student and friend Peter Mellen for lunch. "We talked and decided we shouldn't wait to become entrepreneurs," says Mellen. "We agreed to burn our resumes instead of interviewing for corporate jobs with the rest of our classmates." San Francisco-based Headlight.com, was founded less than one year later.

Offering more than 3,000 online courses, Headlight.com is leading the charge for e-learning. The company already has more than 30 major partners and expects 2000 sales to be more than $2 million. "I've looked up to entrepreneurs as heroes," Mellen says. "I enjoy thinking outside of the box to see opportunities others don't, then seeing that vision become a reality."

Julie Aigner-Clark, 34

By Nichole L. Torres

Most great ideas are born from a need. The Baby Einstein Company LLC based in Littleton, Colorado, came from Julie Aigner-Clark's need for a learning tool for her infant daughter. In 1995, this former teacher and new mom read the latest research regarding babies' capacity to learn. Finding nothing in stores that used the research and that was developmentally appropriate, educational and fun, Aigner-Clark (pictured with daughters Sierra, 3, and Aspen, 6) decided to create something herself. Her first video, Baby Einstein, featured intriguing pictures and mothers speaking different languages. Says Aigner-Clark, "I wanted something that was not only entertaining but stimulating and engaging that would give [my daughter] exposure to things that were lovely."

Give them some TLC-check out "Oh, Baby!" for more ideas on what's big in the baby business.

As a mom, she knew her product was good, but "nobody was returning my calls," she says. "I knew if I could get it into the hands of a mom or an executive who had a baby, [that] would sell it."

Two years later, with no responses to her many queries, Aigner-Clark finally hit pay dirt: She went to the American International Toy Fair in New York City determined to get her product into the hands of a buyer from The Right Start, a high-end baby retailer. She searched the huge show for two days without luck. When she finally found the buyers, she says, "I ran up to them [and said,] 'You're going to love this video! You have to watch it! It's perfect for your store!' " Aigner-Clark's instincts were right on: Baby Einstein soon became the store's fastest-moving product.

She's followed up with more books and videos-Baby Bach, Baby Mozart, Baby Shakespeare and Baby Van Gogh. She's also developing Baby Santa's Music Box, a CD set due out at Christmas, as well as licensing agreements with toy-makers to create educational toys to expose babies to the arts.

Still, even with 1999 sales of more than $4 million and a projected $10 million in 2000, Aigner-Clark's best rewards are being able to organize her schedule around her daughters and reading the stirring letters she gets from Baby Einstein viewers. How does she define success? "That I've made these kids-who are so special-happy . . . that I've made them smile."

Ken Seiff, 36

By Michelle Prather

The last person you'd expect to build a discount brand-name fashion e-tailer into a thriving Web hub of style boasting 100,000 customers and half a million registered users is some guy who used to manufacture golf gear. To that, Bluefly.com founder Ken Seiff says, "I wasn't a golfer when I got into the golf business, and I wasn't particularly well-dressed when I got into the clothing business." But what the now better-clad (minus the tie-Net life demands too many hours for such constriction) entrepreneur has, and has always had, is an eye for the next big thing.

While working for a management consulting firm right out of the college gates, Seiff learned to spot industry trends that hadn't publicly manifested themselves. From then on, he says, his "desire to be at the front of the business curve" took him to where the profits were.

Seiff had pondered the Internet's possibilities since the early '90s when he was busy restructuring golf apparel company Pivot Rules, which he'd founded in 1991. (He was even featured in our magazine back in October 1993 as a young millionaire for his efforts.) In 1998, however, facing an industry in decline, he concluded salvation wasn't likely. He sold Pivot Rules and used the capital to start Bluefly.com in New York City.

Seiff admits his greatest asset in getting Bluefly.com off the ground was his hand-picked team (he conducts final interviews with applicants), including reputable buyers from Saks Fifth Avenue and Bergdorf Goodman who've helped open many a door. His number of suppliers has grown from 30 to more than 400.

Bluefly.com's customer-centric approach is helping the company buzz its way to analyst-projected heights of $20 million this year. As a wholesaler in the golf industry, he only got to hear retailers ("a particularly unhappy lot," he says) voice their problems and how he wasn't solving them. He was surprised by how vocal consumers are when they get what they want.

Customers' criticism, however, is never swept under the rug. "We spend our lives trying to be customers of the site," says Seiff, "but there are customers out there plenty smarter than we are. They give us terrific ideas [such as automated order tracking and designer profiles], and we try to be responsive."

While the financial community is busy separating the winners from the losers in e-commerce, Seiff has surprised everyone by becoming part of the Net elite who have survived and prospered. "We're not 'there' yet," he says, "but we're making very significant progress."

Jean-Philippe Iberti, 33, And Todd Carmichael, 37

By Kimiko L. Martinez

It's rumored the Republicans took their convention to Philadelphia for the coffee. After dining at Le Bec Fin, one of the city's most popular restaurants, one delegate said, "That's the best coffee I've ever had." Le Bec Fin's chef, Georges Perrier, must agree-he's been serving La Colombe Torrefaction's coffee since master roaster Jean-Philippe Iberti brewed him his first cup.

Want to hear what the king of coffee has to say? Check out "Grounds For Success" for an interview with Starbucks CEO Howard Shultz.<

Iberti and partner Todd Carmichael reacted quite differently to local brews when they arrived in 1993 while scouting locations to incubate their business. "We thought restaurants in Philadelphia were great, but the quality of the coffee was [terrible]," Carmichael says. Despite the cold weather, an airport renovation and striking garbage collectors, they fell in love with the city's European feel and walkability.

Since those early days, the company has gone from producing 27 pounds of coffee per month to more than 60,000 pounds per month for their world-renowned chef clientele and two successful Philadelphia cafes. The company expects to top $7 million this year with its acquisition and restructuring of a local competitor.

"It pleases me to think that, at least in the Northeast, all the restaurants come to Philly to get their coffee," Carmichael says. "And that's a great beginning. I want that to mature and mature."

There may have been some truth to that rumor after all.

Richard Johnson, 39

By Gisela M. Pedroza

The willingness to take calculated risks defines a young entrepreneur, and you've got to believe in what you're doing. It's more than just being successful; it's about loving what you do." So says Richard Johnson, an entrepreneur since the fifth grade. In those early days, Johnson used his allowance to buy toothpicks, which he then dipped in cinnamon oil and sold to his classmates for 5 cents apiece. This taught the young Johnson the value of working hard to get a return on his investments.

Are you a cheapskate? Then read "No Money Down" to find out how to start a Web site for cheap.

Those early lessons have come in handy in his latest venture, HotJobs.com, an online job-listing site that he founded in 1996 in New York City after spending three years as a headhunter. To get the word out about his business, Johnson invested $1.6 million of his own money in a Super Bowl ad in 1999. The move immediately thrust the company into the media spotlight, attracting not only a flurry of traffic to its site but also the attention of venture capitalists, who invested a total of $165 million. Johnson took the company public six months later. He now oversees a company with 14 offices and 500 employees and expects sales for this year to top $40 million.

Sheila McCann, 37

By Devlin Smith

As her chosen career as a public defender started to wear Sheila McCann down, she craved something healthy and positive to do with her life. From vivid early childhood memories of baking with her grandmother, the answer came: bread. Soon after, McCann started House of Bread, a San Luis Obispo, California, bread bakery in November 1996.

To create her dream business, McCann spent nine months researching the bakery industry, writing business plans and meeting with bankers and landlords. During that time, McCann had to prove to all the naysayers her idea would work, something she says her law background helped her with. "It really gave me the confidence, the credibility and the skills to negotiate my leases and [deal] with suppliers and financial institutions," she explains.

McCann now has three corporate and four franchise locations, and is expanding beyond Northern California. All this makes for a business that should see its sales rise to about $5 million in 2001.

Mike McLane, 35; Ray Nelson Jr., 35; And Ranjy Thomas, 31

By Nichole L. Torres

Sure, learning can be fun. But convincing parents and teachers that flashy animation is educational can be tough. Just ask Mike McLane, Ray Nelson Jr. and Ranjy Thomas, the leaders of Portland, Oregon-based Flying Rhinoceros Inc. and creators of the CBS cartoon Flying Rhino Jr. High (which even had a Baskin-Robbins flavor, Rhinorageous, named after it).

Founded in 1993, Flying Rhinoceros started creating learning materials-following strict educational standards-after Nelson noticed the boring textbooks children had to use. Applying entertainment to education isn't new (think Schoolhouse Rock), but the Flying Rhino trio proved the market's far from dead: 2000 sales are estimated to reach $12 million.

Now the trio plans to conquer the Web at www.fraboom.com, where people can access online lessons and learning materials. Says McLane, "At the end of the day, we're loved by kids, trusted by parents and needed by teachers."

Sarah Gerdes, 32

By Gisela M. Pedroza

While working two separate stints as a marketing executive at high-tech firms, Sarah Gerdes noticed the lack of alliance management service providers in the technology sector. Using her industry contacts, Gerdes broke out on her own in 1996 to start Business Marketing Group Inc. Today BMG brokers partnership agreements between high-tech entrepreneurs and technology fat cats like Microsoft, Intel and Tivoli.

Gerdes faced her greatest challenge when she decided to move company headquarters from San Francisco to Kirkland, Washington, in 1998 to be nearer to her husband. Leaving most of her staff behind, it took her nine months to hire and train a partnership development staff. Nevertheless, earnings still tripled in 1998 and again in 1999.

BMG expects $12 million in sales this year. Gerdes' formula for success? "Being able to have an absolute belief that what you're doing is vital to another company's business."

Victor Mitchell, 35

By Amanda C. Kooser

Victor Mitchell never could seem to hold down a job. The self-described "unemployable man" has instead preferred to hold together his own businesses-all the way back to when he was still a junior at San Diego State University. "I had to make it on my own, or I'd probably be pushing a shopping cart," he says.

Mitchell's path to success has been littered with ownership stints, running a limo service, a cell phone retail store and other ventures. Then, in 1996, he hit on the idea that would stick: He opened Advantage Wireless in Denver.

Mitchell has turned one store in Denver into a major wireless distributor with 60 Advantage Wireless licensee retail stores and more than 600 independent sub-dealer retail locations in 26 states. He describes most of the locations as mom-and-pop independent dealers offering a variety of phones and carriers in a "consultant-style, consumer-friendly environment." The company will be in 30 states by the end of this year and plans to be nationwide before long.

But Mitchell's company isn't just growing across the United States-it's also branching out into cyberspace with eAdvantageWireless.com. "[I want to] put together a click-and-mortar e-commerce solution [that provides] a comparison shopping service for people via our Web site to demystify the whole buying experience." Mitchell's Web site allows customers to buy cell phones and calling plans online or visit stores in their geographical areas.

Setting such high goals is a big part of what has powered Advantage Wireless. With a multimillion-dollar national advertising campaign underway and company sales for 1999 skyrocketing past $30 million, is Mitchell content? "I don't really consider us successful," he says. "I see companies with $10 billion, $100 billion capitalization. We've got goals to eventually go public if the stars align, but we're not even a $100-million-a-year company yet, so I don't really consider us successful in the scope of a large company."

Though Mitchell no longer has to take care of the company's day-to-day operations, he still puts in solid 50-to-60-hour workweeks and spends his time focusing on the strategic aspects of the business. But his ultimate goal has little to do with phones or calling plans. "I want to be out of the business within four years," he says. "My long-term goal: Within six years, I want to run for governor of Colorado. I look at this as a means to an end. Politics is what I love."


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