Joe Palko, 33, & Scott Sanfilippo, 34
Neeps Inc. & Solid Cactus
Projected 2005 Sales: $7 million
Description: Pet supply websites, including AnimalCages.com and TheFerretStore.com; website development and internet marketing group
Pet Sanctuary: Scott Sanfilippo and Joe Palko became ferret owners in 1994--and soon discovered few pet stores carry ferret food or toys. While ferret supply manufacturers exist, retail stores are reluctant to devote any shelf space to such a small niche market. From their home, the friends decided to start a website, TheFerretStore.com, to serve ferret owners like themselves. Sanfilippo, an ISP sales engineer at the time, and Palko, a UPS manager, spent nights working on their venture until devoting themselves solely to their business in 1999. Today, they offer over 1,500 unique ferret products. Recently, Sanfilippo was thrilled to see another order from their first customer ever: "I found that to be a testament to our company."
Under Development: In 1999, when the partners were ready to expand their company, Neeps, beyond ferrets, Yahoo! Merchant Solutions enabled them to create ActiveK9.com, AnimalCages.com, CritterStore.com, PetCareCentral.com, RabbitCentral.com and TheKittyStore.com. It also led them to a group of Kyrgyzstan-based recent college graduates who had responded to TheFerretStore.com's website redesign bid. Though he and Sanfilippo opted to use another developer, Palko developed a strong friendship with the young men. When the partners spun off their website development and internet marketing group to create Solid Cactus in 2000, Palko successfully immigrated two of the Kyrgyzstanis to the U.S. to work for them. Palko and Sanfilippo have since brought over two more Kyrgyzstanis and one Indian, and Solid Cactus has already created 1,700 websites for clients such as the Kennedy Space Center and the National Wildlife Association.
Single-Minded Approach: Today, Neeps continues to develop the specialty market with more supplies sold online for small and popular pets (three of the online stores also have print catalogs), while Solid Cactus creates and maintains websites for clients. Solid Cactus and Neeps are separate companies that share one philosophy. Says Palko, "It's about servicing our existing customers and making sure we did everything we possibly could." --April Y. Pennington
Chris Griffiths, 32
St. John's, Newfoundland
Projected 2005 Sales: Over $7 million
Description: Manufacturer of acoustic guitars using a patented bracing system
Brace Yourself: A Garrison acoustic guitar looks like a regular guitar on the outside, but the inside is a modern marvel. Instead of wood braces, a one-piece injection-molded fiberglass structure called the Active Bracing System is encased in the guitar body. It's a high-tech leap for an instrument that's been around for hundreds of years. Garrison is on track to build 25,000 guitars this year, selling to more than 450 dealers in North America and to distributors in 35 other countries.
The Long and Winding Road: Griffiths likes to mention that it took six minutes to come up with the bracing concept--and six years to build it. He was no stranger to running a business, having started Griffiths Guitar Works, a small custom guitar-building shop and later a retail store, in 1993, when he was only 19. "All the lessons and all the troubles and all the issues were extremely similar between both companies, just on a different scale," he says. With no factory and only five prototypes in hand, Griffiths went to the National Association of Music Merchants trade show--the industry's largest--in 2000 and came away with prospective orders for over 46,000 guitars per year. By February 2001, Griffiths had secured $4 million in funding. "We had no employees, no sandpaper, no wood, and we started to build a company," he says. By September 2001, Garrison was shipping its first batch of guitars.
Canada Calling: From one of North America's oldest cities come the newest innovations in acoustic guitars. As Griffiths says, St. John's is "way out there. It's a big deal to have a guitar factory in this town. We've shown that you can be innovative in Newfoundland and still be a global company." The 37 employees at the 20,000-square-foot factory are all locals. "Without good people, it's just a building, a bunch of machines and a pile of wood," says Griffiths. That focus on the community has paid dividends in terms of loyalty and low employee turnover.
Making Beautiful Music: "I've transitioned from being a fan of the guitar and a guitar builder to being a guitar CEO," Griffiths says. But he still finds time to play the instrument he's loved since he was 12 years old. With Garrison Guitars looking to double in size over the next year and a half, Griffiths has definitely found his groove. --Amanda C. Kooser
Vinay Bhagat, 36, & David Crooke, 34
Projected 2005 Sales: $20 million
Description: Provider of online constituent relationship management software and services for nonprofit organizations
The Sound of Business: Austin, Texas, is known for its music scene, but it has also built a reputation for innovative technology. While so many tech startups were sprouting in Silicon Valley, Convio decided to launch in the Lone Star State. "We could build a business more economically here than we could on the West Coast," explains chief strategy officer Vinay Bhagat. What he and David Crooke, Convio's CTO, built is a for-profit company that uses the internet to improve the way nonprofits communicate and work with their constituents.
Money Matters: Bhagat and Crooke met while attending school at the University of Cambridge in England--a long way from Austin. "We had dreamed and talked about one day starting a company together," says Bhagat. Years later, after reuniting at Trilogy Software in Austin, they got their chance. The Convio concept was born when Bhagat volunteered for a public TV pledge drive and was amazed at how antiquated the fundraising system was. He was confident that his idea to build an internet system for nonprofits would fly. Says Bhagat, "What attracted me to this idea was that it could be a neat way to combine building a business with having a real impact on the world."
Without a Net: When most entrepreneurs start a company, they risk losing capital if the venture fails. While Bhagat left his high-paying job to self-finance six months of research into Convio's business concept, Crooke risked being deported if the business didn't get off the ground--he was a British citizen who left his job to found Convio, despite the fact that he didn't have a green card. A $4.6 million round of venture capital from Austin Ventures in 1999 allowed the founders to breathe a sigh of relief.
Role Models: Crooke's role as the technical force behind Convio hasn't changed, but Bhagat made a big move in 2003 to bring in an experienced CEO while he switched over to the chief strategy officer role. "I put my ego aside," says Bhagat. With the founders' focus, drive and passion, Convio has helped nonprofits raise over $175 million and put e-philanthropy on the map. --Amanda C. Kooser