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Young Millionaires

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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."

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