2nd Annual Hot List
We at Business Start-Ups often wonder what it's like to be millionaires. You could say we're a bit obsessed with the idea. And young millionaires? Oh, please. We can't get enough of them. Can you blame us? It'd be pretty awesome to wake up in the morning and know your business will have a good day--a very good day. But what does your millionaire dream look like? If it's anything like the ones of these entrepreneurs, all of whom have hit the million-dollar mark before hitting 30, you may just see your dreams reach fruition.
Stephanie Hirsch, 28
Company/description: INCA Girl Enterprises Inc. makes fashion editors fawn with its hip plastic bags, plastic bamboo beach mats and beaded bikinis.
Based: New York City
1999 sales: $1.4 million
2000 projections: $3 million-plus
Divine intervention: After college, Hirsch worked as a waitress and talent agent gopher in Los Angeles--even as a stylist-assistant after moving to the Big Apple. But Hirsch "never felt right in any job. It sucked the soul out of me." A 1996 trip to visit a pal in Peru and some pondering on the Inca Trail generated an epiphany: She would make the plastic market bags everyone was carrying the hottest new thing in the United States.
How much? "Days of harassing [Peruvians] and giving them money" led Hirsch to the bags' manufacturer. The nondesigner then returned to New York City and spent $500 in savings on samples and a spot in a fashion trade show that March. Press in Vogue and Marie Claire quickly followed.
Starry-eyed: Sure, Hirsch lost $150,000 trying to save her trademark from shady angel investors at one point. But now this once-homebased designer's got a shipping loft, four sales reps (in New York, California, Hawaii and Italy), and kudos from actress Courtney Cox and model/Nylon creative director Helena Christensen. Sports Illustrated even featured an INCA beaded swimsuit in last year's swimsuit issue.
Make like a Clydesdale: Hirsch didn't accidentally go from being "very unhappy" to having Saks Fifth Avenue, Bergdorf Goodman and Fred Segal in Los Angeles embrace her creations. "Just ignore negativity," she says. "Don't listen to people who go `Get a real job and make some money.' Just making a living is not enough for you."
Mike Fridgen, 24, and Ryan Smith, 26
Company/description: International Student Tours (IS Tours) is a brick-and-mortar establishment offering student tours and trips; also included is TripHub.com, a nationwide online student travel company.
Started: 1997; TripHub.com launched 1999
1999 sales: $2.5 million
2000 projections: $4 million
Ticket to ride: For 20 months, Fridgen and Smith's student travel business posted a Web site to assist in marketing their packaged travel tours for high school and college students. Learning that more than 50 percent of their hits came from states in which their products weren't available, the co-founders' focus shifted toward creating TripHub.com, the first nationwide student tour and travel aggregate.
All aboard: Working in the student travel industry while attending the University of Washington, Seattle, the two frat brothers joined their university's Program of Entrepreneurship Innovation in 1996. After a program-sponsored presentation, a Washington Mutual bank representative offered them a $120,000 credit line, and with a combined $50,000 in personal and family-loaned seed money, IS Tours was created.
Growth spurt: With their great ideas and a strong work ethic, Fridgen and Smith not only embraced the advantages of the youth-oriented industry, but also used their own youth as an advantage. "We were students selling student packages," explains Fridgen, "which gave us an edge." That edge made IS Tours' packages look a heck of a lot hipper to their target audience, high school and college jet-setters.
Lemons to lemonade: These traveling newburys didn't always have it so good. Faced with bitter competitors, IS Tours had to overcome hordes of threatening faxes sent to schools, families and establishments attacking them as callow upstarts. Today, IS Tours remains standing, yet the energy focuses on TripHub.com. Holding the largest inventory of Spring Break packages available, TripHub.com allows its members to book everything from a trip home for the holidays to study-abroad programs--all online. "With college students representing over 34 percent of the nation's online population," says Fridgen, "we're going to be the number-one online student travel source."
Marc Miller, 24
Company/description: InSite Advertising Inc. places ads in the bathrooms of crowd-attracting venues.
Based: New York City
Combined 1999 sales: $4 million
Combined 2000 projections: $8 million
The porcelain god: Inspired by the Dana Carvey flick Opportunity Knocks as well as his own fixation with sports pages posted above the urinals at bars and nightclubs he frequented, Marc Miller had an epiphany: Why not use public restrooms as an advertising medium? And not just any old commode--Miller specifically chose those within the hottest venues, where only the most happening 21-to-35-year-olds dispose of their martinis and microbrews. A medium where male relievers keep their attention focused on the wall in front of them and female relievers curiously examine any written text in their peripheral vision. "Every man knows that if you look left or right it turns into a liability," says Miller. So with that, as well as enthusiasm from family members, he launched InSite Advertising--a supplier of mini-billboards that allow advertisers to hawk their wares and venue proprietors to average 15 percent in revenue.
Head rush: Fresh out of college as well as a hedonistic month in the south of France, Miller and a former partner pounded the pavement to meet high-power ad agency execs by day and T-shirt-and-shorts-clad bar owners by night. With $5,000 in personal and familial contributions, Miller secured affordable office space through a generous building owner and, within three months, secured 75 interested venues. "From that point on, we were very successful in getting some big-name clients onto our billboards," says Miller. "So we decided to open up other markets. We thought if advertisers were interested in our concept in New York, they'd probably be interested in Philly, Chicago, DC, LA and Boston."
Bowled over: Today, with 22 strategic markets in place, InSite has plunged into the lavatories of alternate venues nationwide, such as health clubs, shopping malls and concert arenas. With sales climbing from $300,000 in 1998 to an astounding projected $8 million this year, there's no way this business is going down the toilet.
Manoj "Marty" Puranik, 26, and Jose Sanchez, 25
Company/description: Atlantic.Net Inc. is an ISP.
Based: Gainesville, Florida
1999 sales: About $6 million
2000 projections: About $12 million
Gotta start somewhere: First computers for these technically inclined entrepreneurs? Puranik: "A Texas Instruments TI-94a given to me by my uncle in 1984." Sanchez: "An Atari 400, a long time ago."
Computer connection: Puranik and Sanchez hit it off immediately when they met while attending the University of Florida in Gainesville. "We just happened to sit next to each other and started talking about computers. After a while, we decided to start an ISP," Sanchez recalls. It was UF's lack of Internet access for students that helped the partners along.
Mony, mony: A couple of college students with no business experience couldn't just wave their hands and make an ISP appear. They actually started out in 1994 with a computer store. "We had the idea; we just didn't have the money to do what we wanted," says Sanchez. "We started selling computers to generate cash flow to fund the Internet portion of the company." Puranik and Sanchez didn't pay themselves until the ISP went online a year later.
Across state lines: Atlantic.Net may not be the biggest fish in the ISP ocean, but they are one of the most successful. They just completed their (count 'em!) 10th ISP acquisition and have expanded out of Florida across the southeastern United States. Plus, "we're looking internationally," adds Puranik. In 1998 and 1999, UF recognized Atlantic.Net as one of Florida's 100 fastest-growing private companies. "In some ways, we didn't really think we were going to pull it off. In your head, you always kind of dream the world, right?"
Matt Britton, 25, and Michael Cohen, 23
Company/description: The Magma Group Inc. is a marketing firm focusing on e-mail marketing to college students.
1999 sales: $1 million-plus
2000 projections: $2.5 million-plus
Go team, go: Magma's Team Magma program employs more than 6,000 student organizations at 400 campuses nationwide to sign up students to receive e-mail marketing messages from Magma's clients. Student organizations receive cash for each sign-up. Magma also uses event marketing at spring break party spots to provide information and give away goodies for clients.
Heads of the class: Britton and Cohen began their entrepreneurial careers by promoting concerts and festivals, but they found their niche when large companies asked to sponsor the student events. "The fact that companies were coming to us when they had all these traditional media outlets showed us those outlets weren't working," says Britton. "We saw there was a huge opportunity to serve Internet companies because it leveled the playing field with our competitors who hadn't tapped into that marketplace yet in terms of pitching Internet companies. But we knew that since the college market is so Internet-savvy, it's definitely a market that Internet companies would want to reach."
Prodigious advantage: Starting the company while Cohen was still attending Boston University and Britton having recently graduated had its advantages and disadvantages. While Cohen juggled studies and CEO duties, both partners juggled the difficulties of being young while competing with established companies. "We were lucky because it was easy for us to portray ourselves as close to the market we were reaching," says Britton.
Econ 101: Britton and Cohen started Magma sans funds by working out of Cohen's bedroom and funneling all profits back into the company--a practice they still abide by. "We take barely enough money to live on," says Britton. "Every dollar in terms of income that comes into the company goes right back into building it." Still, Britton says, one of their biggest challenges is "growing faster than the dollar and cents allow you to." To make up for the gap between big plans and small working capital, the partners are looking into several options, including venture capital investments and acquisition or private investment from industry majors.
Di-Ann Eisnor, 27
Company/description: Eisnor Interactive (EI) Inc. is an offline promotion agency that creates real-world advertising experiences (using things like mobile billboards and "street teams") to promote digital brands.
Based: New York City
1999 sales: $12 million
2000 projections: $32 million
Full circle: Schooled in painting and business, Eisnor longed to fuse both fortes. Employment at a "super-conservative" Japanese ad agency and at renowned interactive agency Site Specific bolstered her business acumen yet hardly subdued her creative side. She even started an artist's residency program.
Ch-ch-changes: After Site Specific's 1997 sale, Eisnor left the company with a new agenda: to pioneer media offline. A personal investment of $20,000 opened EI's doors--but the offline promotion category was almost nonexistent.
Try me: "[For six months, Internet companies] were like `I think this is the future, but we're not going to pay for it,' " recalls Eisnor. But Site Specific clients Prodigy and Music Boulevard soon signed on. Nickelodeon.com, TheStreet.com, Compaq and Staples.com have since become believers. Now EI is in negotiations with Halfway, Oregon, to become the first dot.com town ever by possibly changing its name to Half.com. The payback: EI has promised to wire all schools and homes and reinvigorate its economy with interactive industry.
Best regards: Eisnor attributes her success to her staff ("You'll get valuable ideas from our receptionist to our CFO") and her seasoned management team. With a board of great mentors, you can't go wrong.
Atlantic.Net Inc., (800) 422-2936
Eisnor Interactive Inc., (212) 414-4924, http://www.eisnor.com
INCA Girl Enterprises Inc., http://www.incabag.com
InSite Advertising Inc., (212) 391-9048, http://www.insiteadvertising.com
The Magma Group Inc., (617) 783-9700, http://www.magmagroup.com