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Kelly Flatley, 28, and Brendan Synnott, 29
Bear Naked , Norwalk, Connecticut
Projected 2007 Sales: $50 million
Description: Manufacturer of all-natural granola products
It's All Natural: Childhood friends Kelly Flatley and Brendan Synnott were in between jobs in 2002 when Flatley, ever the health nut, began making all-natural granola in her kitchen and enlisted Synnott to help. "The whole food chain [has become] so processed and filled with artificial ingredients," says Synnott. "[To both of us], it just didn't make sense why you would want to put that in your body, if you are what you eat." Flatley and Synnott each invested $3,500 and moved back in with their parents as they began selling hand-wrapped bags of granola at street fairs.
Healthy Returns: Repeatedly pitching Bear Naked products to local grocer Stew Leonard's yielded no response. Finally, Flatley and Synnott upped the ante: At 7 o'clock one morning, they showed up in matching outfits, armed with granola, yogurt, milk and fruit "[to] bring the buyer breakfast in bed," explains Synnott, "which was so cheesy, but it worked." In fact, when their target buyer wasn't there, they spotted Stew Leonard Jr. walking by. "He [said,] 'Come on in.'" Today, Bear Naked is also sold at Costco, Kroger, Safeway, Target and Whole Foods, and four of its products are sold in Canada.
Food for Thought: Scaling their company upward was challenging. "It was often difficult to maintain the balance between the amount of product our sales team could sell and the amount of product our manufacturing team could produce," says Flatley.
Not wanting to give up their control to investors, they built from within. Says Synnott, "It forced us to ensure that every decision we made yielded value and success for us, even if it was the harder decision."
Follow Their Lead: Do something creative--but still in line with your product philosophy--to distinguish yourself to buyers. --Nichole L. Torres
Herman Flores, 34; Myles Kovacs, 33; and Haythem Haddad, 31
DUB Publishing Inc., City of Industry, California
Projected 2007 Sales: $50 million-plus
Description: Publisher of automotive magazine DUB
Bring on the Bling: In the custom auto industry, the word dub conjures up images of tricked-out cars, big wheels and celebrities. Stars like Shaquille O'Neal and their rides frequently grace DUB's pages, bringing the car culture into the limelight and popularizing the look. "If you had chrome wheels or large rims five to 10 years ago, [people] thought you were a thug or a drug dealer," says Myles Kovacs. These days, auto-makers offer oversize rims as an option for new cars, and the "bad boy" stigma has dissolved into the mainstream.
Driving Force: It was their lifelong obsession with cars and previous work with celebrities at an entertainment magazine that inspired the three friends to borrow $20,000 in 1999 to start the magazine out of their home offices. Since then, they've taken the DUB name and branched out beyond the print publication with custom car shows that have sponsors like Best Buy, Dodge and Pepsi and average 15,000 attendees; three lines of toys; two brands of wheels; a video game; and even a spot on the small screen. "We were fortunate to work with MTV back when we were the first of our kind," Herman Flores says of their experience co-producing a DUB edition of MTV Cribs.
Young and Restless: Success didn't come easy, but Haythem Haddad says that being young and confident took them a long way. "The celebrities, the kinds of cars we have--we all felt it was a strong concept," he says. "We were trailblazers--the first in our industry to profile the content that we have in our magazine." He says being naive and taking risks actually helped push the brand forward.
Follow Their Lead: Use your youth to your advantage by introducing something new into the market. --James Park
Fashion Statement: When Lance Lawson and Jim Wetzel realized that Chicago's fashion-conscious shoppers were looking outside the city for the latest trends, the pair decided to revolutionize the local fashion scene with their designer specialty store, Jake. Raising the sophistication level, they've introduced Chicago to collections from the likes of Doo.Ri and 3.1 Phillip Lim, as well as emerging designers whose fashions fit Jake's style. They also upped the level of customer service by offering complimentary alterations, deliveries and even champagne. In return, some customers spend $75,000 to $100,000 annually.
Perfect Fit : Taking out a home equity loan, Lawson and Wetzel pooled about $150,000 and opened the first location in 2004. And combining Wetzel's extensive experience at major fashion houses with Lawson's prior consumer marketing and sales work didn't hurt. They have since opened two more Chicago locations and plan to expand to other underserved markets across the U.S. "We have good buzz in Chicago, and we feel like this concept is really strong," says Wetzel. Already, their stores and website have received national acclaim.
Handled With Care: Lawson and Wetzel have created buzz thanks to active marketing efforts at the grass-roots level. They reward downtown concierges with lavish gifts in return for directing customers their way. They send gift boxes to their best customers every season, host a luncheon every spring with informal modeling of the newest trends, and put a face to fashion by regularly inviting top designers to their stores. Says Lawson, "To have a designer personally tell you in a fitting room what piece from their collection they think would be great for you is an amazing experience."
Follow Their Lead: Raise the standard and you'll find that you'll never go out of style. --Sara Wilson
Ready to Wear: A great business idea can come from life's basics--just ask Jacob DeHart and Jake Nickell. Every day, about 150 T-shirt designs from all corners of the world are submitted to their website. With designs ranging from political to comic to abstract, the artists behind them hope their creations will be selected as a favorite of the company's online community. Each day, members of the online community can cast their votes for the week's winning designs, which are put on T-shirts and made available for sale. Since the site launched six years ago, every design printed has sold out.
Village Voice: Understanding that uniting a community comes with responsibility, DeHart and Nickell regularly consult with their users for feedback and are careful to protect the integrity of the T-shirts. They've turned down offers from Target and Urban Outfitters, preferring to work with smaller vendors instead. Says Nickell, "We were just another product to put in their stores, and that's really not the way we view ourselves."
A Common Thread: With more than 500,000 registered users, Threadless.com is sizing up to be a powerful force. It just opened its first retail store in Chicago; launched Threadlesskids.com, a new children's clothing line; and has plans to expand distribution internationally and obtain partners in Europe. The site today is also just one of many communities under the partners' larger umbrella company, SkinnyCorp; other communities include Naked and Angry, which pursues the same idea on canvases like neckties and wallpaper, and 15 Megs of Fame, which puts the spotlight on undiscovered musicians.
Follow Their Lead: Give your customers a voice, and they just might use it to spread the word about your business. --Sara Wilson
Tim Vanderhook, 26; Chris Vanderhook, 28; and Russell Vanderhook, 30
Specific Media, Irvine, California
Projected 2007 Sales: $70 million-plus
Description: Online advertising company
Three's Company: Building a multimillion-dollar business wasn't really on Tim Vanderhook's mind at age 18. He was just tired of working odd jobs and saw potential in online advertising. So, in exchange for a share in the startup, he persuaded older brother Chris to let him charge $99 to his credit card for a domain name. For $33, Russell jumped onboard shortly thereafter. With no experience, "we taught ourselves everything," says Tim of their 1999 launch. "First we learned online advertising, then we taught ourselves advertising as a whole. This was a gun-slinging, wheeling-and-dealing-type atmosphere, because nobody had done it before."
Changing Times: With that self-schooling, they pioneered the use of the pop-up ad on mainstream websites. From 2000 to 2003, they were dominating the pre-Google online advertising market, and "making a million bucks a month," says Chris. "We were high-fiving in the office every day. But [then] the reawakening happened." While they were celebrating, the market picked up again after the dotcom crash, and Google came to take over online advertising, leaving Specific Media in its shadows. They were forced to get serious, so they shifted their focus to their current concept, which compiles internet user demographics to create target profiles for creating more relevant advertising. Today, clients include more than 200 companies from the Fortune 500.Lofty Goals: Though the guys are happy with how far they've come and the strong product offering they have today, they've set their sights on bigger things. "In reality, we're not where we want to be," says Russell, adding that international expansion is in the works.
Follow Their Lead: Stay focused and don't lose sight of why you're in business. --Lindsay Holloway
Megan Duckett, 35
Sew What? Inc., Rancho Dominguez, California
Projected 2007 Sales: $4.6 million
Description: Manufacturer of custom theatrical draperies and distributor of flame-retardant fabrics
Finding her way: After immigrating to the U.S. at age 19, this native Australian found work as a technician for a concert production company--and started sewing in her spare time. Her first gig was sewing fabric coffin linings for a Halloween show. "I rented a [sewing machine] and lined 10 coffins," recalls Megan Duckett. "[I discovered] that I had a talent and an ability to manipulate the fabric in a craftlike way, and I really enjoyed it." Duckett worked evenings and weekends on her craft business, and in 1997 she quit her full-time job, rented a warehouse and officially incorporated.
Building Buzz: Not one to wait for the phone to ring, Duckett used every inexpensive marketing tool she could, such as mailers, fliers and handmade business cards. She also chatted up her company's services every chance she got. "Everyone was a potential customer," she says. That grass-roots marketing led to her making draperies for theater, concerts and special events worldwide.
Creative Coverings: Manufacturing the custom draperies for Rod Stewart's latest concert tour was a highlight for Duckett. "We made about 1,500 yards of the Stewart family tartan," she says. "We made it into this enormous design that would register onstage with the audience--it was totally unique." The work of Sew What? has also graced the tours of such legends as Gwen Stefani, Prince and Fleetwood Mac, to name a few. But despite a packed schedule, she still makes time to help the community: Duckett founded From Stages to Students, a program that provides free or low-cost draperies to school theater programs and community rehabilitation centers that teach sewing.
Follow Her Lead: Chat up your new business every chance you get, as you never know where leads will come from. --Nichole L. Torres
Brad Sugars, 36
ActionCoach, Las Vegas
Projected 2007 Sales: $220 million
Description: Executive business coaching
Driven to Succeed: When other 15-year-old boys were obsessing about video games and girls, Australia-born Brad Sugars was dreaming up business ideas. By the time he was 22, he'd owned more businesses than most 50-year-olds and was educating business owners about how to run their companies.
Street Smarts: Although the path to success was fairly short for the trained accountant, Sugars absorbed a wealth of business know-how. At 22, he founded ActionCoach, his business coaching franchise company, but Sugars didn't settle for just one entrepreneurial venture. "Over the years [since I started ActionCoach], I've owned and operated pretty much everything, from magazine publishing to insurance to dog-food businesses," says Sugars. "And now it's good because I coach in what I do, not what I theoretically believe." As it turns out, business coaching is the perfect endeavor for Sugars: It combines his love of deal making with his adventurous entrepreneurial spirit.
Staff Smarts: Quality employees with a range of expertise are his company's most valuable assets. Says Sugars, "You have to make sure you have not just good people around you, but great people." It was Sugars' aptitude for finding skilled employees that helped him franchise his business. After being trained by ActionCoach, his employees had the skills and knowledge to take on clients of their own, so Sugars decided that if he wanted to keep his brand strong and meet his goals for expansion, franchising was the way to go.
Global Expansion: In the 14 years since Sugars started ActionCoach (formerly known as Action International), the company has expanded to 24 countries and more than 1,500 coaches. Essential to its success is ActionCoach's mission of helping other businesses. Sugars--who is also one of Entrepreneur.com's experts--says, "I love a business where you can make a profit and help people at the same time."
Follow His Lead: Knowledgeable team members can help you grow your business to new heights. --Kim Orr
John Vechey, 28; Brian Fiete, 29; and Jason Kapalka, 37
PopCap Games, Seattle
Projected 2007 Sales: More than $20 million
Description: Creator and provider of downloadable games
Level One: When game designer Jason Kapalka first met John Vechey and Brian Fiete in 1997, the two 19-year-olds had just been wooed from Indiana to work at Kapalka's former employer, a gaming company. "We hit it off really well," says Kapalka, who was impressed by an online game the two teens had created. "We kept in touch, and around 2000, we were all a little unhappy with our jobs. We thought, 'Hey, we could start our own company.'"
Beyond the Bust: As it turned out, the years 2000 and 2001 weren't kind to internet companies. "We didn't have the best timing, but we survived because we didn't have many expenses," says Kapalka. The business's first low-overhead stomping grounds were in the co-founders' respective apartments. PopCap adapted to uncertain times by experimenting with direct game downloads from its website. The gamble paid off, and within a couple of years, the company moved to a real office in Seattle. It has since added offices in Chicago; San Francisco; Vancouver, British Columbia; and Dublin, Ireland.
High Score: "We're just trying to keep a very simple business model: Make games. If people like them, they'll buy them," says Kapalka, adding that top sellers include Bejeweled, Bookworm, Chuzzle and Peggle--all games that are easy to learn but hard to master. People certainly love PopCap's games: Their content generated around $75 million in sales of their content across all platforms and partners in 2006. A lot of that is because the games have more in common with Pac-Man and Tetris than with World of Warcraft. PopCap is helping to engineer a shift from complicated, hard-core gaming to casual gaming for general audiences. Says Kapalka, "We're moving toward the democratization of video games." And that's a winning formula.
Follow Their Lead: No matter how fast your company grows, stay focused on keeping your product quality standards high. --Amanda C. Kooser
Nathan Jones, 37
Xlear Inc., Orem, Utah
Projected 2007 Sales: $13 million to $14 million
Description: Manufacturer of xylitol products
Born From Necessity: Nathan Jones was deeply involved in underwater welding when a breathtaking opportunity brought him quickly back to the surface. Jones' father, a family physician, had invented a xylitol-enhanced nasal wash in a desperate attempt to cure his patients' recurring ear infections. A naturally occurring sweetener, xylitol had primarily been known in Finland for its effectiveness in preventing tooth decay. The nasal wash brought relief to his father's patients--and inspired a new direction in Nathan's own life. In 2000, armed with $40,000 startup capital from a friend, Jones purchased the rights from his father, founded Xlear Inc. and started manufacturing a line of xylitol products that now includes dental products, candy and even a recently launched xylitol gel-filled pacifier.
Leader of the Pack: Being an early xylitol player required educating the public about its benefits. "Four years ago when I started going to dental conventions, they didn't even know what [xylitol] was," says Jones. But regularly attending trade shows and dental conventions paid off, helping Xlear secure shelf space at more than 6,000 retailers nationwide and in parts of Europe, with even broader distribution expected by next year. The early start also enabled Jones to build up the company's purchasing power in order to snatch up a significant portion of the world's limited supply.
Shape-Shifter: Specializing in such a niche and hard-to-obtain product naturally reduces the number of competitors, but to better position the company even further, Jones applied for a trademark on diamond-shaped gum, which he plans to license to other companies. The shape will indicate to consumers when a gum is 100 percent xylitol-sweetened, preventing competitors from stealing the market with anything less.
Follow His Lead: Don't let a good thing pass you by. Seize the right opportunity, and you just might become the market leader. --Sara Wilson
Devon Rifkin, 33
The Great American Hanger Company/ Hangers.com , Miami
Projected 2007 Sales: $10 million-plus
Description: Manufacturer, wholesaler and retailer of clothes hangers
Frame of Reference: The fact that Devon Rifkin never attended college is just a tiny footnote in his success story. The fact that he has made millions selling hangers is slightly more unique. But for Rifkin, defying the standards means nothing if his business isn't successful--or if his team isn't sharing in the success. Says Rifkin, "To me, people have made the biggest difference because they're the face of the business."
Hire Education: After high school, as his friends went off to attend Ivy Leagues, Rifkin moved to New York City and talked his way into a job as a stockbroker. Three years later, his entrepreneurial ambitions got the best of him, and he moved back to his hometown of Miami to work at his dad's store-fixture company. The nuts and bolts of store fixtures didn't fascinate him, but customers' interest in clothes hangers--not only for retail but also for personal use--sparked his curiosity. In 1999, Rifkin had found his new business idea.
All Hung Up: Rifkin's early forays into market research were conducted with a phone and the White Pages. "I actually called [consumers] and asked them where they bought their hangers," he says. "I learned that everybody begged for hangers when they bought [clothes] in the stores, or they took hangers from hotels. That's how I got the idea to start the business." A business devoted to hangers was an unexplored venture, and Rifkin quickly became its Magellan, garnering attention from eager retailers, consumers and celebrities alike.
Fast Forward: The company, which sells more than 400 kinds of hangers--from fabric to cedar to custom designs--on its website, has just launched the first-ever mail-order catalog for hangers. And even with celebrity customers like Jerry Seinfeld and Jennifer Lopez, Rifkin hasn't let it go to his head: "Too many people get caught up in the business of the day, and they don't pick their heads up and say, 'This is what I want to build.'"
Follow His Lead: Just because you haven't taken the cookie-cutter path to entrepreneurship doesn't mean you can't make your business a success. --Kim Orr
Ryan Black, 32; Ed Nichols, 32; and Jeremy Black, 34
Sambazon , San Clemente, California
Projected 2007 Sales: $15 million to $20 million
Description: Manufacturer of Brazilian açaí berry products
Jungle Fever: When Ed Nichols and Ryan Black took a surf trip to Brazil, they never expected to end up far from the water's edge and deep in the Amazon. Through the country's surf culture, the friends discovered açaí (pronounced "ah-sigh-ee"), a Brazilian berry popular for its unique flavor and nutritional properties. "We fell in love with it," says Nichols. "We didn't want to leave Brazil without it." So they teamed up with Ryan's brother, Jeremy, to become the United States' first supplier of .
Through extensive research, they learned about the berry's other benefits. "The native people make more money selling açaí than they do selling nonrenewable resources," explains Nichols. "We [realized we] could drive preservation by employing the people to harvest the fruit instead of wood."
Organically Grown: The guys founded Sambazon in 2000 and then hit the streets. Getting people to try the exotic berry was a challenge, but once they did, they loved it. Business really picked up after Dr. Nicholas Perricone named açaí the No. 1 "superfood" in his 2004 book, The Perricone Promise. "All of a sudden, the floodgates opened," says Jeremy. "It really helped accelerate the knowledge of what açaí is."
Fruitful Business: From there, Sambazon expanded its products and distribution and opened the first açaí processing facility in the Amazon. Last year, they won the U.S. Secretary of State Award for Corporate Excellence. "We were recognized not so much for our profits, but for the intangible things we're doing," says Ryan. "It was really cool for the State Department to recognize something that's not just on our balance sheet."
Adds Jeremy, "We've been given this incredible opportunity to make a lot of positive change with this berry"--change they hope includes getting açaí in every supermarket nationwide and expanding internationally.
Follow Their Lead: Let your passion be the driving force in your business. --Lindsay Holloway
Amy Smilovic, 39
Tibi, New York City
Projected 2007 Sales: $21 million
Description: Designer of an upscale boutique clothing line
Hustle and Bustle: Even as a child, Amy Smilovic was a budding entrepreneur, forming everything from mini baby-sitting networks to lemonade stand chains. Her business sense eventually landed her a successful marketing career, but the self-starting side of Smilovic dreamed of bigger things. When her husband was relocated to Hong Kong in 1997, Smilovic joined him--and stumbled upon the idea for Tibi. As she walked the streets of her new hometown, she noticed that no one made clothing to fit a modern Western woman's lifestyle in Asia.
Spreading the Word: Just one month after the move, Smilovic designed and manufactured a line of dresses that meshed American sportswear with hints of international influence. After showcasing the line to a group of women she'd met in Hong Kong, the collection became an overwhelming success. When summer arrived, many of the women returned home overseas, bringing the Tibi brand with them and establishing Tibi's worldwide fame.
In 2000, Smilovic headed back to the States to open a 3,000-square-foot loft in New York City's SoHo. Her designs now hang in department stores such as Neiman Marcus, Nordstrom and Saks Fifth Avenue, and they can be spotted in Istanbul, Turkey; London; Moscow; and Hong Kong. The brand has come a long way, with a second store in St. Simons Island, Georgia, and even a shoe collection making its debut next month.
Styles, Not Trends: "If you just design for yourself, someone will identify with it," Smilovic says. "The world is big enough, and you'll find a group of people who want to dress like you." As a woman who has seen much of the world, Smilovic certainly is a testament to this.
Follow Her Lead: When you fill a hole in the market with a quality product, customers will take notice. --Jessica Chen
Bob Shallenberger, 37, and John Cavanagh, 38
Highland Homes, St. Louis
Projected 2007 Sales: $22 million-plus
Description: Green residential builder
Open House: Bob Shallenberger and John Cavanagh enjoy having company over. Both live in homes built by their company, Highland Homes, and both use them as models to show potential customers what they can do. The two fraternity brothers from St. Louis University used "creative financing" and credit cards to launch their vision in 2003. "We did everything except rob banks," says Shallenberger.
It's a Green Thing: Highland Homes isn't your typical builder. Each new home comes with a plasma TV and the option of special packages like "Elvis Live," which includes a stereo, karaoke machine, CD player and iPod Nano. Those are fun extras, but the real difference comes down to Highland's environmentally friendly building methods: sustainably grown wood, rooftop decks, underground parking, lots of parklike green space and high-efficiency heating and cooling systems. Says Cavanagh about green building, "It's difficult and it's expensive to learn. It's challenging, and there's some risk in it. We see it as a big growth segment of the market." Their next move? "Being recognized as the top green residential builder in the country is the goal for us," he says.
Hip Homes: There's a definite spark to Shallenberger and Cavanagh when they discuss Highland Homes and the future of the business. "When we design a building, we live and breathe it," says Shallenberger. They have no shortage of projects lined up and no shortage of future homeowners looking to buy into their affordable and hip green urban developments. "We've got a bunch of cool people working for us," Shallenberger continues. "The people that we sell to are all really cool, too."
Follow Their Lead: Surround yourself with entrepreneurial-minded employees and you'll gain a creative, dedicated work force and a constant infusion of innovative ideas. --Amanda C. Kooser