Burn, Baby, Burn
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In our 21st century economy, speed is the new prerequisite. Entrepreneurs who don't hit the ground running are often left choking on a cloud of dust. Meanwhile, much of the glory today goes to those who accelerate from $0 to millions faster than you can say IPO.
You could say Entrepreneur was quick to pick up on this trend. five years ago, on the cusp of America's obsession with all things fast, we set out to find the nation's fastest-growing new businesses. With the help of Dun & Bradstreet (D&B), the world's top research-based business information provider, we combed massive databases to find 100 entrepreneurial ventures of all shapes, forms, industries and corners of the country. The common bond: warp speed growth.
Meanwhile, Dun & Bradstreet and Entrepreneur's Hot 100 list has itself seen some changes. In six short years, we've felt the effects of the technological boom and the subsequent superstar status of dotcoms. While our ranking still represents diversity-from toys to construction-you'll notice the increasing presence of tech ventures. What better trend to propel us into 2000?
Of course, these entrepreneurs aren't consumed with just speed. Besides making millions, these men and women introduced innovations, contributed to their communities, improved our lives and had fun in the process. Here's the inside story of a few Hot 100 entrepreneurs, plus a complete ranking of our Sixth Annual Hot 100. We consider this not only a look at today's fastest-growing businesses, but at tomorrow's household names.
Computer and Software Systems Integration Business
By Alex Purugganan
Ever imagined yourself partnering up with a long-standing business rival? That's exactly what Michelle Clery and Bruce Keenan did, putting down the sparring gloves and working together to create a computer and software systems integration business. The partnership has certainly paid off: Their company, Prosys Information Systems, hit this year's No. 1 spot in our Hot 100.
Prior to forming the Norcross, Georgia, tech firm, Clery, 37, and Keenan, 47, both excelled as sales representatives at competing firms in Miami. For years, the two battled each other in pursuit of the same clients. "Michelle would win some. I would win some," Keenan says. "Out of everybody I competed with, she was the person I always had the most respect for."
Tired of making money for huge corporations, the two ended their rivalry to form Prosys, launching in 1997 with personal investments totaling $200,000. But with only four employees-and Clery and Keenan serving as president and corporate secretary/treasurer, respectively-the fledgling business faced problems. "Establishing a name and reputation for the company [was difficult]," explains Keenan. "We were competing with large, national resellers like CompuCom and Intex."
Clery says that first year was "all hours and no paycheck." But they remained confident, and in the following year, sales skyrocketed to $32.9 million. Those figures rose again last year (when they finished at No. 5 on our list) to $49 million. By year-end 2000, with added help from more than 80 employees-sales should hit nearly $100 million.
In addition to handling large projects for several Fortune 500 clients, Clery and Keenan also help small businesses and educational institutions. Treating customer service as No. 1, they make sure they have personnel available 24 hours per day and stock products locally for immediate delivery. "Make the customer happy," Clery says. "And then beg for forgiveness."
Success hasn't spoiled the two, either. If anything, it has let them concentrate on the world beyond business. For the past year, Prosys has worked with the Nepalese Children's Organization to raise funds for mentally handicapped children. "We're just lending a hand where there's an enormous need for help," Keenan says. When you consider how much these former competitors have already achieved, the obvious question is: Why didn't they partner up sooner?
Plastic Toys Business
By Devlin Smith
Thousands of years ago, children gathered in the streets and in front of houses to play a game called Tabas, which involved throwing and bouncing bones. Today, kids are getting together in schools, churches and after-school clubs to play games with Crazy Bones, the small, plastic figurines inspired by classic games like Tabas, jacks and marbles, and developed by Toy Craze Inc. (No. 15) in Cleveland.
Kids can use Crazy Bones, which come in a variety of shapes and colors, to play almost any game, from counting games to bowling. They can also get stickers, magazines and handbooks based on the different characters and games.
CEO and co-founder Scott Harris, 37, was inspired to launch Crazy Bones after seeing the success of GoGo's, which was introduced in 1996 to Europe and South America, selling more than 350 million packs by 1997. To bring Crazy Bones to the United States, Harris formed Toy Craze in December 1997 with partners Bill Flaherty, 43, and Peter Gantner, 34. Gartner is no longer with the company.
Prior to the product's U.S. release, the founders asked their families to evaluate the toys-and were encouraged by what they found. "My 91-year-old grandmother was visiting, and there really isn't too much she can do with my kids except read to them and hang out," says Harris, father of 6- and 8-year-old daughters. "We were sitting there with the Crazy Bones, and she got some and started showing them games that she remembered playing when she was a little girl 80 years ago. When I saw my grandmother playing with a toy with my kids, I knew we had a winner."
Harris isn't the only one who thinks so. After more than a year of aggressively marketing its product to McDonald's, Toy Craze got the news every toy company wants to hear-in the fourth quarter of 2000, its product will be packaged inside Happy Meals, and about 840 different Crazy Bones toys will be offered through McDonald's.
"In the toy business, this is one of the biggest things that can happen to you," says Harris, who points out that McDonald's usually teams up with large corporations and movie studios for Happy Meal promotions. "For them to do something with a small entrepreneurial company is a very significant event."
This year, the company expects to nearly double sales to $30 million. With the McDonald's deal and fans joining Crazy Bones clubs and visiting the company's Web site (www.crazybones.com) to share new game and character ideas with each other and the company, it seems this craze is just getting started.
"There's nothing complicated about [Crazy Bones]," Harris explains, "and you don't need to spend a lot of money-you can buy a pack of Crazy Bones for $2 and you're in the game."
Fixing Aircraft Parts
By P. Kelly Smith
Seth Hall is grinning from ear to ear-or, in his case, nose to tail. In three short years, the 28-year-old president has made his Houston company, Source One Spares Inc. (No. 7 in our list), a global phenomenon. Source One Spares, distributing overhauled aircraft components, grossed $37.7 million in 1999 alone. With a 100,000-square-foot facility located at Houston's George Bush Intercontinental Airport and offices in Dallas; Hong Kong; London; Los Angeles; and Tulsa, Oklahoma; the company shows no sign of slowing.
While in college, Hall worked for a small company that repaired airplane parts. Right away he noticed it took anywhere from 30 to 90 days to repair a part. "If you're an airplane operator, you can't wait that long for your part-you have to have a spare," he says. So, while in graduate school at Southern Methodist University in Dallas, Hall devised a plan that proposed putting overhauled parts on a shelf and then exchanging them when another part comes in.
In other words, "If American Airlines needs a part right away, we send our overhauled component to them and they send us their damaged component, which we [fix]. We end up with an overhauled part back in our inventory, and they pay us an exchange fee, plus the price for fixing the part," Hall says. This way, Hall constantly turns over inventory and turns profits.
Thanks to the successful business plan, Source One Spares now has the world's largest exchange pool of overhauled flight controls and airframe components. And because Source One services all Boeing and Douglas aircraft models, all the major airlines benefit from the service.
Hall attributes his international success to a top-notch marketing campaign and his 65 employees. "It's neat to see them out in the warehouse...or staying late to make that call," he says. "They just chip right in and do whatever it takes to get things done."
When asked if he's amazed by his success and growing reputation, Hall says, "Yeah, and we're not even a computer company."
Making the Cut
This is how it all begins: Culling from its massive database, Dun & Bradstreet provides Entrepreneur with an initial list of fast-growing companies. Entrepreneur mails each company a form, which the entrepreneurs must complete and submit along with current financial statements. We then measure the company's sales growth from the date of inception, listing the businesses in growth order.
In order for a business to be considered, it must meet the following criteria:
- Founder is actively involved in daily operations and controls at least 51 percent of the business.
- Business was founded no earlier than 1997.
- Annual sales exceeded $1 million in 1999.
- Company meets the SBA's definition of a small business, based on the number of employees and sales figures. These numbers vary according to industry.
To be considered for our Hot 100 list in 2000, your company must be registered with D&B with current information on file. To register, call D&B at (800) 333-0505.
Dun & Bradstreet research by Iris Geisler & Steve Hess; Entrepreneur research by Lee Houston and Bowen Park
About Dun & Bradstreet
Dun & Bradstreet (D&B), with the world's largest business information database, tracks 57 million companies worldwide, 11 million in the United States alone. Businesses use D&B's services to find new customers and evaluate their creditworthiness, identify potential suppliers, and collect overdue receivables.
Through face-to-face and telephone interviews and public-records searches, more than 200 million financial transactions are added annually to D&B's files in the United States alone. D&B updates its information base continually-an average of 950,000 times each business day.
When businesses are entered in the D&B database, they are issued D-U-N-S numbers (similar to Social Security numbers for companies). The U.S. federal government requires companies to have this number to bid for government contracts. Also used by the United Nations and the European Union, the D&B D-U-N-S number is quickly becoming the universal standard for identifying businesses on the Web as well.
For more information about D&B, call (800) 234-3867 or visit the D&B Web site at www.dnb.com. To register for a D-U-N-S number, call (800) 333-0505.