Young Millionaires

This story appears in the November 1998 issue of Entrepreneur. 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