Young Millionaires: Class of 2004

Modular Furniture, Ad Agency & Serial Entrepreneurship

LoveSac Corp.
Company description: Chain of stores (about half are franchised) specializing in modular furniture
Founder: Shawn Nelson, 28
Location: Salt Lake City
Projected 2004 sales: $30 million plus

A Bag Is Born: At age 18, Shawn Nelson was watching TV on the couch when he decided "a huge beanbag thing" might be more comfortable. He bought 14 yards of vinyl, cut it into a baseball shape, and spent three weeks filling it with anything soft he could find. The finished LoveSac was 7 feet wide, and everyone who saw it tried it out-and loved it.

Pocket Power: When neighbors started placing orders, Nelson decided to start his company almost as a joke. With free help from his friends, he made the LoveSacs in his parents' basement and sold them at trade shows, events and even the drive-in. Business was moderate at best, until he got a call on his cell phone that changed his life: a quarter-million-dollar order from Too Inc., which was looking for a back-to-school offering for its Limited Too stores. "I answered the phone and said, 'Twelve thousand LoveSacs? Sure, no problem. That's what we do; we're the best in the world at it,'" remembers Nelson.

Hard Road: Undaunted, Nelson amassed $50,000 in credit card debt building a factory. He worked 19-hour days and slept at the factory. "It nearly broke me emotionally, physically, mentally," Nelson says. "My hands were cracked and bleeding. We finished the order [for Too Inc.] but ate up all our profits." Just when things seemed darkest, a deceptively simple idea presented itself: Open a mall store. Not just any store, but one designed from the beginning to look like an upscale chain-even before it was a chain. It paid off: With some 55 stores, about half of them franchised, LoveSac is looking at sales topping $30 million this year.

Looking Forward: "We're headed toward owning [the market for] oversized living," says Nelson, who dispenses with all modesty where his business is concerned. "We're going to have a catalog that'll be three inches thick, selling everything that's over-the-top, bling-bling, LoveSac-get-out-of-our-freaking-way."

Unstoppable: No one fully expected LoveSac's success-not even Nelson himself. He says being committed to solving any problem is vital to his-and any entrepreneur's-success. "Decide that there is always a way," he says, "and you'll find that there is." -Jonathan Riggs

CCM Marketing Inc.
Company description: Media buying advertising agency specializing in the direct-response market
Founders: Suzy da Silva, 33, and Nicole Licata, 35
Location: San Luis Obisbo, California
Projected 2004 sales: $30 million

Directly Speaking: Suzy da Silva and Nicole Licata met in 1998 while working at a direct-response advertising agency, and the lack of ethics they sometimes witnessed inspired the pair to branch out on their own in 2001. "We wanted to do something that would treat the clients better," says Licata, "because direct response in general is a not-so-upfront industry. A lot of people take your money and don't tell you why they're taking it."

Timing Troubles: After the partners started their business in July 2001, the 9/11 terrorist attacks nearly put a quick stop to their venture because nobody was watching or buying from infomercials-it was all news all the time. To get through it, the pair went to TV stations directly to look for compromises and ad rate reduction deals that would help everybody-their clients, the stations and themselves-to survive. "Everyone had to be a team at that point," says da Silva.

Know Thyself: Says Licata, "We're both salespeople, so we have a lot of people watching over what is not our strong point-accounting. If you see a weakness in your business and you don't [understand] it, don't pretend you do. Hire somebody."

One Big Family: During the lean times after 9/11, da Silva and Licata vowed they wouldn't lay off a single employee. Though they had to forgo their own paychecks for a time, and each gained 25 pounds from the stress of it all, they kept their promise. Says da Silva, "We didn't want people out in that kind of environment. It's like a family here." The result: incredibly loyal employees and a knowledge that the duo can get through anything-including successfully losing their stress-related pounds. -N.L.T.

Company description: Clothing stores, a private nightclub and a real estate company, respectively, focusing on upscale, modern style
Founder: James P. Funderburk Jr., 39
Location: Charlotte, North Carolina
Projected 2004 sales: $3.3 million plus

Southern Revolution: Since 1994, James P. Funderburk Jr. has injected Charlotte, North Carolina-known as a conservative banker's town-with his vision of modern chic, starting with clothing store Urban Evolution and continuing most recently with J-Squared LLC, his newest foray into real estate development with architecturally modern housing. The common thread with these diverse businesses is offering "a unique product, service or hospitality the Charlotte region is missing but anticipating," says Funderburk. Doing so in exciting and innovative ways has drawn a loyal customer base that has allowed him to continue to expand his scope of style.

Worldly Charm: Funderburk competes with major metropolitan ventures by bringing the best concepts from his travels back to Charlotte. Private lounge Tonic melds Zen and modern elements, with many d├ęcor items designed and built by Funderburk, who has earned local and national recognition for his enterprises. "I've never let being undercapitalized stop me from doing something," he philosophizes. "I always thought 'Worst-case scenario, I can always use lines of credit.' And if something gets really bad, I can always get a job again."

Special Treatment: From including his retail managers on buying trips and paying for gym memberships to instilling a sense of ownership, Funderburk stresses appreciation for all his employees. "It's not easy to retain employees in retail, but I have very little turnover, and that's because I demonstrate to them [that] I always want them to be a bigger part of things," says Funderburk, who partnered with one employee to start Tonic and two others for his second Civilian store.

New Beginnings: Inspiration is key for Funderburk, who remodels his businesses every 18 months. "I look for something new; that's where the excitement comes from," he says. "It's easy to lose the excitement-that's why I like moving into other businesses as well." -April Y. Pennington

Like this article? Get this issue right now on iPad, Nook or Kindle Fire.

This article was originally published in the November 2004 print edition of Entrepreneur with the headline: Young Millionaires: Class of 2004.

Loading the player ...

This Billionaire's Definition of Success Will Surprise You

Ads by Google

Share Your Thoughts

Connect with Entrepreneur

Most Shared Stories