Young Millionaires
This story appears in the November 1998 issue of Business Start-Ups magazine. Subscribe »
In the sportswear industry, the rise and fall of companies often depends on seasonal trends. But Richard Allred is rejecting that notion by bringing the idea of timeless fashion into the equation. "It's really based on the classic surf clothing and lifestyle," says Allred of Toes on the Nose Corp., his Costa Mesa, California, company, which produces everything from board shorts and swimwear to bedding and towels. "We've got a look where a 5-year-old kid will wear the same print as his 80-year-old grandfather."
After graduating from the University of Southern California in Los Angeles, Allred found he was more inspired by his former classmates-who included Mossimo G. Giannulli of Mossimo Inc. and John Bernard of Spot Sport-than by his real-estate job. Gathering $110,000 from family and savings, he subleased space from Spot Sport and began to create the classic Hawaiian-print clothing he grew up with in San Diego. Today, his 7-year-old company is growing quickly-sales are expected to double from $5 million last year to $10 million this year.
Allred expects to slow down a bit in 2000 while he focuses on international markets and expanding throughout the United States. "The whole world's accessible to everyone now, and we're trying to take advantage of that," says Allred, who plans to expand into South America, as well as continue developing his markets in Australia, Canada, Great Britain and Japan. "Surfing in general is hot, and we've got a look the rest of the world really wants."
And though Toes is expanding into home linens and beginning to advertise in nonsurf magazines like Teen, don't expect Allred to lose sight of his original mission. "The way we've made ourselves different is by staying totally true to what we make. Our company doesn't look any different from when we started. We may have more items and offer more variety, but our look is exactly the same," says Allred. "It's like our image and game plan is to be like In 'N' Out Burger [a Southern California hamburger chain known for its simple but well-received menu]. You know exactly what you're going to get. If you want a hamburger, you go there. If people want a classic surf look, if they want the best Hawaiian prints, they come to Toes on the Nose."
Phil Shawe, 30, and Liz Elting, 33
Working out of a small, cramped dorm room may not be the most
comfortable way to start a business, but that didn't stop Phil
Shawe and Liz Elting. With a rented computer, homemade brochures
and a bevy of resources at their fingertips, the two then-NYU grad
students dreamed their 1992 start-up, TransPerfect Translations
Inc., would be among the largest service-oriented translations
firms in the industry.
The partners spent virtually every waking hour promoting and
marketing or calling and mass-mailing to long lists of businesses
and executives-efforts funded solely on their student budgets and
an eventual $5,000 credit-card advance. "There was no
difference between living expenses, food expenses and business
expenses," says Shawe. "We put as much as we could into
the business, then we paid the utilities, then the rent-only then
did we feed ourselves."
Within a few weeks, Shawe and Elting landed their first project and
eventually started seeing repeat clients. Using contacts from a
translation company that Elting previously worked for, they
acquired a vast network of subcontracted professional translators
and handled all their development, marketing and accounting
functions from a couch in their desk-void dorm room. Four months
into the business, the mother of all projects arrived: a 600-page
mining feasibility study requiring Russian translation within nine
days. Knowing the project had to be done in-house and right away,
Shawe and Elting somehow persuaded several Russian-speaking
geologists to fly to New York City and work right in their dorm
room. "I don't think either one of us slept for eight or
nine days," says Shawe. "Our room was like a casino full
of rousing Russian geologist translators. It was amazing!" The
translated study was on a plane half an hour before the client left
for Russia.
Their company has been thriving ever since. Long gone are the dorm
days: Today, this $15 million firm has 14 offices on three
continents, a network of 3,300 subcontractors, and big-name clients
like American Express and Coca-Cola. The Stern Business School
grads attribute their success to a blatant business philosophy:
hard work.
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"We went right into business after college, so we were used to
living like students," says Shawe. "It would have been
nice to have some money upfront, but I think learning to get by
without excess helped us later on."
Adds Elting, "If we could do it all over again, we would do it
the same way."
Alexis Abramson, 32
While employed as director of a senior center, Alexis Abramson
encountered many seniors struggling with daily activities like
holding their playing cards, reading their crossword puzzles, even
dialing their phones. Concluding that if the environment right
outside her office wasn't senior-friendly, then society must be
no different, Abramson, who has a master's degree in
gerontology, left her job and went on a quest to find products that
would facilitate seniors' everyday living. With $50,000 in
family contributions, she tracked down a multitude of distributors
scattered nationwide and launched www.maturemart.com in 1995, a gutsy
move to make in a time before "e-commerce" was even a
word and when Internet retail hadn't yet seen its
Amazon.coms.
"We didn't really have the resources to do any market
research," says Abramson. "So we just put [the products]
on the Internet."
It worked. Offering more than 250 products, the site received
40,000 hits in its first month. Today, Atlanta-based Mature Mart
Inc. distributes through a variety of channels, including drug
stores, catalogs and cable shopping networks, and expects 1999
sales of $5 million. "I always felt I had to be an advocate
for seniors," says Abramson. "Now I'm turning my
passion into a profit."
Andrea Keating, 38
"I need either a 48-hour day, or the ability to function on
one hour's sleep. I'm trying to figure out which would be
easier." For someone like Andrea Keating, who coordinates film
crews throughout the world 24/7, that age-old entrepreneurial
dilemma may yet see a solution.
Keating was working for a creative agency during the 1980s
recession when clients began requesting local crews to lower costs.
Her entrepreneurial light bulb went off. "What we [could do]
was eliminate the unknown, the fear of who was going to show up on
location," says Keating. Her Silver Spring, Maryland, company,
Crews Control Corp., now represents 2,000 film and video crews,
calling on them when clients need local crews for marketing,
training or sales programs. The two-person crews-which all have 10
years of experience and have been screened by Keating-pay a 15
percent fee to Crews Control, and clients like CNN, Microsoft and
Nissan save money by hiring locally. This strategy has led to a 97
percent client-retention rate, along with 1998 sales of $6 million
and an expected $10 million this year.
"We're available to our clients whenever they need
us," says Keating, who began her company in 1988 with a
$10,000 investment. "I think the only way you can earn client
loyalty is to give them everything-plus a little bit
more."
Brad Aronson, 28
Perhaps the best day for former em-ployees comes when they can
finally answer to the moniker "entrepreneur." But the
second-best has to be when they answer to "industry
expert."
Brad Aronson, founder of i-frontier Corp., heard those sweet words
early on when a client suggested he write an article for an
Internet-marketing newsletter. This led to an invitation to speak
at a conference, where Aronson signed his first two large clients.
Aronson, 28, now leads 30 employees in creating Internet
advertising for lucrative clients like The Discovery Channel,
1-800-FLOWERS and SmithKline Beecham, and has co-authored a book,
Advertising on the Internet (John Wiley & Sons).
"I learned it all myself. I bought every book [and] subscribed
to every magazine," says Aronson who started his company in
1996 with only a computer in his bedroom. "There weren't
[many] people doing Internet advertising [then]. By actually
getting my hands dirty and doing the work, we became the
experts."
In the brief off-time he has, Aronson volunteers with A Better
Chance, a group home where students from inner cities can live
while at-tending good public schools. "It's easy to spend
the time I'm not working thinking about the business,"
says Aronson, who, as a host parent with his wife, Mia, spends time
with students on an individual basis. "Volunteering reminds me
there are issues more important than the decisions that come with
owning a business."
I-frontier made $8 million last year, and Aronson, who expects to
top $20 million this year, has no plans of slowing down.
"We're considered one of the top Internet ad
agencies," he says, "and I want to make sure we stay on
top."
Walter Latham, 28
When Walter Latham says perseverance is his entrepreneurial ammo,
there's nothing cliché about it. At 28, he's an
entertainment mogul, heading the largest urban comedy promotion
company in the country. But have you heard of Latham
Enter-tainment, or its "Kings of Comedy" tour, which
grossed $20 million last year? Probably not, due to sparse media
coverage. Seasoned minority industry players say that's just
how it is. Latham retorts, "I only accept what I think I
deserve."
Don't assume Kings of Comedy has anything to do with Bob Hope.
It's the laugh-fest that last year featured three African
American stand-up comedians and ranked as the nation's
bestselling comedy tour, outdoing Jerry Seinfeld and Eddie Murphy.
When Latham began planning it near the end of 1997 to follow up his
success with actor/comedian Chris Rock's "Bring The
Pain" tour, he hoped it would propel his then-5-year-old
business into greater fortune. When hope became reality, few
noticed. "We'd call People magazine [for
coverage]," says Latham, "and they'd say
'What's Kings of Comedy?'" Judging from the
numbers (expected company sales are $35 million this year, up from
$26 million last year) and the addition of ABC's The
Hughleys creator D.L. Hughley to 1999's Kings of Comedy
tour, the entertainment world cannot deny Latham the spotlight much
longer.
The former customer-service representative for American Express was
captivated by the successes of high school friends-turned-rap
artists. When his own rap demo remained a demo, he tried a
behind-the-scenes approach. "I don't think I knew the word
'promote,'" says Latham. "I probably just said
'I'll do rap shows.'"
Latham, who divides his time between his company's newest
office in Los Angeles and its first, in Greensboro, North Carolina,
has come a long way from scanning backs of CD cases for booking
contacts. With just $5,000 from his family to start, Latham has
transformed himself from a small-time promoter into a multimedia
player. Frankly, Latham has gone Hollywood: In the works is a TV
series animated by the creators of Rugrats. By reinvesting
in his product to keep his tours fresh, focusing on the urban
market and keeping his independent spirit intact, Latham is ready
to play David to Tinseltown's Goliaths. Says Latham,
"I've paid my dues with concerts, and I'm willing to
do it again. But I will not accept 'no' just because
it's the standard."
Tarina Tarantino, 30 and Alfonso Campos, 30
When the entrepreneurial bug bit Tarina Tarantino, she'd
already made quite a name for herself while working at a cosmetics
store in L.A.-and not just for her talents as a makeup artist. The
creator of Los Angeles-based Tarina Tarantino Designs used to wear
her bug-shaped jewelry and hair accessories to work-but she'd
come home bugless, having sold her bejeweled treasures to customers
eager to decorate their hands and heads with her creations.
Turns out, retail stores and Hollywood costume designers were just
as eager. "At the time, there were few hair accessories on the
market that were ornamental and pretty," says Tarantino, who
owns her company with her husband, Alfonso Campos. "There was
such a void in the marketplace that when we showed these pieces to
the stores, they jumped on them."
Even now, Tarantino doesn't fret about competition. "There
aren't many designers that make high-quality, funky, fun
costume jewelry," says Tarantino, who expects sales of $5
million this year, up from last year's $1 million-plus. "A
lot of them are trying to look real; we're not trying to do
that. Everything we make is whimsical and unusual."
That's not to say it's been a breeze for Tarantino and
Campos. After starting in 1992, orders flooded in-more than they
could handle-and banks all but scoffed at their loan requests.
"We had $50,000 worth of orders, and we thought 'Wow! This
is going to be it," says Campos. "They looked at us like
'$50,000 is nothing, kids. Do you have any
collateral?'"
But all they had was $400 in the bank; a car, which they sold; and
the will to make their bugs fly. So they set up shop in their
living room, worked around the clock to fill the orders, and set
about marketing themselves to Hollywood costume designers and
magazine editors.
For the editors, the fashion-conscious pair sent out silk pillows
bearing Tarantino's creations. And for the designers?
"I'd set up appointments for them to see the line,"
says Campos, who found designers by watching the credits of TV
sitcoms. "They're busy and they don't have time for
you, so I'd tell them all I needed was one minute of their
time, and it would be the best minute of their lives."
They'd all laugh, says Campos, but the laughter would quickly
die down when he'd open his jam-packed box of goodies and blind
them with all the colorful, Swarovski-crystal creations. "It
worked-they said this was the stuff they tried to get their
assistants to look for all the time," says Campos. "The
rest is history."
Per Welinder, 36 and Tony Hawk, 31
Here's something you may know about Tony Hawk: At this
year's X-Games, he executed the first-ever 900-degree trick to
be performed on a skateboard in com-petition. But here's
some-thing you probably don't know: At the same time, he was
promoting his Huntington Beach, California, company, Birdhouse
Projects Inc., one of the largest manufacturers of skateboards in
the world.
During the lull in skateboarding popularity in the early 1990s,
Hawk and fellow pro skater Per Welinder began Birdhouse with
$80,000 in combined savings. By growing their brand in specialty
sports shops and through advertising and promotions with the
Birdhouse skate team, Welinder and Hawk have built a skateboard,
clothing and accessories company well-respected by their discerning
customers.
"We really listen to our team because they're on the pulse
of what's happening," says Hawk, who expects Birdhouse to
bring in $12 million this year. "They're living it, and
they know what kids think is legitimate and what's not.
Don't just hire some marketing agency that says they can do it,
because I've seen that fail over and over again. They put some
extreme slogan somewhere, and it just looks ridiculous. Kids are
the first ones to know it's contrived."
Dennis D'Alessio, 34
You have to start-up something after you graduate from the
University of Southern California in Los Angeles' entrepreneur
program, right? But Dennis D'Alessio went for uncharted
territory, pursuing his idea for the Online Yellow Pages at a time
when only techies touched the Internet and venture capitalists
weren't yet scouring the Silicon Valley.
"Nobody wanted to give us money," says D'Alessio. So
instead he worked for a traditional Yellow Pages company to learn
the mechanics and later acquired its marine division, which
publishes the United Yellow Pages Boating Directory, founding what
is now known as Superior Business Network Inc. in 1994. Three years
later, D'Alessio's brain-child became a reality when the
Online Yellow Pages (www.sbn.com)
went live.
The mammoth growth D'Alessio's Newport Beach, California,
company is enjoying is the risk-taker's reward. With 50 million
businesses listed on sbn.com, 1,500 affiliates-from Amazon.com to
virtual unknowns-paying linkage commissions, and about 500 ISPs
utilizing the site's user-friendly Yellow Pages,
D'Alessio's $50,000 start-up is now seeing sales climb well
into the millions.
Rosemary Jordano, 36
When Rosemary Jordano set about opening Boston-based ChildrenFirst
Inc. seven years ago, she knew she wasn't just trying to find
clients; she was trying to sell a vision. She had no proof her
concept was viable-or even desirable.
Jordano's idea was to provide backup child care for children
when a parent's regular child-care arrangements fell through so
parents wouldn't be forced to take time off work. She hooked up
with companies that would offer the service to their employees; the
employees could then call on ChildrenFirst during, say, school
holidays or when they needed to work on an irregular day.
"Up until that point, companies thought they could only
provide full-time child care [for their employees]," says
Jordano, who started ChildrenFirst as a management company that
oversaw backup care centers before building her own. "But that
is so fraught with shortcomings and limited in the number of
families it can serve. You end up with waiting lists and more
people unserved than served."
The idea caught on. Companies started calling Jordano and getting
creative with how they offered the service to employees, using it
for mothers returning from maternity leave, or for traveling or
relocating employees. ChildrenFirst, which grossed approximately
$10 million last year, now works with almost 200 corporations and
19,000 children and has a 99 percent client-retention rate.
To ensure quality service, Jordano maintains a challenging
curriculum and hires only professionals with bachelor's or
master's degrees in early childhood or elementary education.
That will help give her an edge as competitors surface in the
future. "[Back-up child care] is the fastest-growing segment
of the child-care market, rapidly outpacing full-time child
care," says Jordano. "More and more companies are using
backup instead of full-time care. We're the pioneers in this
market segment and we're the only ones doing it nationally and
exclusively."
More important, though, are the children and the company
philosophy: that each child is unique, precious and unrepeat-able.
"The focus should always be on what puts the child
first," says Jordano, who plans to add four more centers to
her current tally of 20 in the coming months. "The people who
[work] in our centers are totally committed to [doing
that]."
Mike Manclark, 35
It's pretty lucky when someone can turn a hobby they love into
a thriving business. And Mike Man-clark couldn't agree more.
Manclark, who can tell you exactly what type of airplane is flying
overhead without even looking, built Leading Edge Aviation Services
Inc. into an aircraft maintenance company that made $26 million in
sales last year out of his simple love of airplanes.
After studying to be an airline pilot for two years, Manclark added
business school to his agenda in case his real goal didn't pan
out. But while he fueled and moved jets at Orange County,
California's John Wayne Airport to earn a living, he realized
he could go into business before graduation. Car detailing was at
its peak, so Manclark, then 19, thought, 'Why not detail
corporate jets?' In 1984, he quit everything, borrowed $3,000
from his dad and started Leading Edge, providing maintenance,
interior recon-figu-rations, corrosion inspection, work on fuel
cells and full repainting for aircrafts.
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Manclark, who sometimes spends Saturdays at his Santa Ana,
California, office for pure enjoyment, hopes to grow Leading
Edge's worth to $100 million within the next four years by
reinvesting into the company. "I don't do this for the
money," he says. "I do it for the love of
airplanes."
David Watkins, 31
Ask Webster's what "urban" means, and
it'll tell you something like "of, or relating to, a
city." Ask David Watkins, and you'll get a much different
answer.
What makes Watkins different is his unrivaled perspective on the
urban customer, the focus of his New York City advertising,
marketing and event-production firm, Icon Lifestyle Marketing
(ILM). As Watkins sees it, to be an urban customer is to be much
more than just a part of the cit-it's to be young, hip, diverse
and part of a cultural phenomenon-one that's propelled ILM well
beyond the million-dollar mark.
"We think of urban customers in a much more sophisticated
fashion than most: We give them more credit for being able to
com-prehend things than the average advertising agency does,"
says Watkins, who started ILM in 1995 after a three-year stint at
The Source magazine-a stint that gave him some insight on
the world of advertising and marketing: "I realized there was
no one who was addressing the urban consumer effectively,"
says Watkins. "The things that were out there for young
African American consumers, in particular, were really tired and
boring."
So Watkins gave the industry a wake-up call, hiring a staff of
young employees who are always ready to get in the mainstream
trenches. "To understand the market, you've got to have
people in your office who live and breathe that market every
day," says Watkins. "Twenty or 30 years from now,
we'll still have 19- and 20-year-olds on the staff."
That might explain why ILM hit $4.4 million in 1998 and is expected
to gross $10 million by year-end-not too shabby for a company
launched from Watkins' basement. "I started this company
with $2 in my pocket and an idea," Watkins recalls.
"I'm glad we took that route, but it's been very
complicated."
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Complications aside, Watkins doesn't need much more than his
concept to make ILM work. Clients can virtually taste his
enthusiasm-and the profits just seem to follow. "It's
important to have a passion for what you're doing,"
Watkins advises. "Clients see it in your eye; they hear it in
your voice. If you don't have that passion, you'll never be
successful. How are you going to sell it to anyone else if you
can't even sell it to yourself?"
John Jerit, 37
For John Jerit, success took a name change and some backbone. While
working for a fireworks company, Jerit and his partner bought and
sold 3-D glasses called Laser Viewers. But he soon found they cost
too much and that "fireworks people" didn't like the
name Laser Viewers. So, in 1990, with $85,000 in savings, he
acquired his part-ner's half of the glasses business and
started his Bartlett, Tennessee company, American Paper Optics,
renaming his novelty items 3-D Fireworks Glasses.
Hawking his products carnie-style at fireworks shows, or having
chapters of organizations like Kiwanis International and the Boys
Club of America do -it for a cut, required backbone. Upon deciding
to expand his 3-D glasses business beyond the 3-D fireworks model,
however, everything changed. Within a year, Jerit's $400,000
sales goal was surpassed, and this year he's expecting $6
million.
Each pair sells for pennies, but -when companies all over the world
purchase from the 12-type assortment en masse (we're talking 20
million units) for promotion and retailing, 3-D glasses seem a lot
less kitschy.
Aside from meeting impossible deadlines on unbelievably large
orders from accounts like a KISS concert tour and National
Geographic, success has come through marketing-at trade shows,
through direct mail, on the Internet, you name it. "It's
about staying in the public eye so when a big project is out there,
you're considered for it," Jerit says. "If you
don't know about it, it means you haven't done your
homework."
Contact Sources
American Paper Optics Inc., (800) 767-8427, http://www.3dglassesonline.com
Birdhouse Projects Inc., http://www.b-house.com
ChildrenFirst Inc., http://www.childrenfirst.com
Crews Control Corp., (800) 545-CREW, http://www.crews-control.com
Icon Lifestyle Marketing, 37 W. 17th St., #7W, New York, NY
10011, (212) 929-3800
i-frontier Corp., (215) 755-2250, brad@i-frontier.com
Latham Entertainment, (310) 385-0300
Leading Edge Aviation Services Inc., fax: (714) 556-4023,
mikem@leascorp.com
Mature Mart Inc., (404) 881-9816, alexis@maturemart.com
Tarina Tarantino Designs, (213) 694-1998, http://www.fashiondish.com
Toes on the Nose Corp., (714) 513-1500, http://www.toesonthenose.com
TransPerfect Translations Inc., (212) 689-5555, http://www.transperfect.com
