Young Millionaires From bootstrap to big time, our 2008 picks share their secrets to multimillion-dollar success.
With annual sales ranging from $5.4 million to $50 million, these 14 young millionaires have one thing in common: They've turned their passions into profits, and they've done so before the age of 40. From fruit delivery services to community software, discover the ideas and inspiration that have spurred this forward-thinking group of entrepreneurs to succeed against all odds.
By Amanda C. Kooser, Lindsay Holloway, Nichole L. Torres and Sara Wilson Research by Kristen Henning, Celeste Hoang, Jake Kilroy, Kevin Manahan, James Park and Trevor Owens
Marco Giannini, 32
Dogswell, Los Angeles
Projected 2008 sales: $21 million
Description: Manufacturer of natural pet treats that have functional properties Natural order: Fresh out of business school and with a brief stint producing functional beverages under his belt, Marco Giannini came up with the idea of creating dog treats infused with nutrients to help pets maintain healthy bodies. Giannini invested $30,000 of his own money to manufacture and package his first truckload of the product. "I went around to about 100 [independent] pet stores in Northern California and 100 in Southern California," he says. "I got about $35,000 in revenue in our first month."
Growing strong: Customers loved the idea of functional pet snacks, and Dogswell has seen more than 100 percent growth each year since its launch in 2004. Thanks to earning sales of $500,000 his first full year in business, Giannini never had to seek venture funding. "That was a big key to me--managing my own destiny," he says.
People mover: Building a staff that can handle quick growth was a priority for Giannini, who now has 25 employees. From closing the office early on Fridays during the summer to planning trips to Cancun when the company meets its goals, Giannini is determined to create a healthy, happy working environment.
Future focus: Giving out more than 160,000 full-size samples to pet stores each month helps get the Dogswell--and now Catswell--line of treats noticed by pet lovers. In the works: a plan to launch a line of organic pet food.
Follow his lead: Widen your reach and customer base by letting people try your product for free.
Anne Pawsat-Dressler, 28
Hawaii Hideaways, Kula, Hawaii
Projected 2008 sales: $5.4 million
Description: High-end villa rental agency specializing in upscale concierge services Aloha spirit: All it took was one vacation in Hawaii for Anne Pawsat-Dressler to know she wanted to move there for good. Initially, though, she had a hard time getting used to the laid-back Hawaiian lifestyle. "Everywhere you turn, it's 'Oh, sorry, that's Hawaii style,'" she says. "I could see there was a real lack of high-end services in Hawaii," especially in travel. Pawsat-Dressler sought to change that by launching Hawaii Hideaways in 2004.
Gold standard: Although Pawsat-Dressler already had a handful of clients through previous travel consulting work, she also faced skeptical homeowners who were hesitant to hand their multimillion-dollar estates over to a 24-year-old. "It was [like], 'Here's the challenge: They already think I don't have what it takes, so I've only got one hour to win them over.'" Before long she built up her inventory of rentals and grew her brand as a leading provider of luxury vacations in Hawaii.
Five stars: With five full-time employees, Hawaii Hideaways provides rental properties and 24-hour concierge services, from massages and personalized birthday cakes to luaus and yacht charters. Pawsat-Dressler says her most bizarre request came from a guest from Hong Kong who wanted to bring his own bed. It's this kind of unparalleled customer service that helped her earn Conde Nast's Villa Rental Specialist award in 2006 and 2007. With word-of-mouth as Hawaii Hideaways' main marketing method, the award is helping boost the company's reputation, which is Pawsat-Dressler's core focus right now.
Follow her lead: Pursue your passion and you can achieve your dreams.
Greg Selkoe, 33
Projected 2008 sales: $40 million
Description: Streetwear retailer and online community
Wear it's at: With brand names like Artful Dodger, Married to the Mob and Naughty Monkey on its roster, Karmaloop is a far cry from your local mall's cookie-cutter clothing stores. "One of the things that makes Karmaloop unique is that we're much more than an e-commerce site," says founder Greg Selkoe. "We're a community of style." With his recent video venture KarmaloopTV (karmalooptv.com) and upcoming social network Junglelife.com, Selkoe has come a long way since bootstrapping the clothing retailer from his parents' basement in 1999. "We had to learn on a very tight budget and be very careful about every penny we spent."
Fashion forward: Karmaloop (karmaloop.com) now has a passionate global customer base of more than 2.5 million unique web visitors per month. "We've framed it as a movement to help save people from the evil forces of McFashion," says Selkoe, whose Street Team consists of customers who go out and promote the store. The Kazbah section of the site features a handpicked set of up-and-coming underground designers who help keep Karmaloop on the cutting edge of urban fashion.
Harvard man: Streetwear may seem like an unusual market for someone with an urban planning background and a public policy degree from Harvard, but it's all led to a deeper cultural understanding that's helped Selkoe develop his business the same way a city grows from a small town. "Karmaloop is a lifestyle. It's not just selling clothes," he says. "Clothing and music and culture are completely linked. It's all symbiotic."
Follow his lead: Recruit passionate customers who can help you generate ideas and market your business.
David Kim, 29
C2 Education, Duluth, Georgia
Projected 2008 sales: $48 million
Description: Tutoring company
Live and learn: When he was a college student in 1997, David Kim developed a passion for tutoring kids. "[I saw] how they improved," he says. "Being able to motivate them and relate to them, since I wasn't that much older, I saw there was a niche for that type of mentoring and tutoring." A Harvard student at the time, he launched a business and started hiring tutors.
Strategic growth: Response to his tutoring service was so strong that in 2001, C2 Education started offering franchise opportunities to those who truly understand the company's mission; to date, 40 of the company's 112 locations are franchises. "We are dealing with the futures and the lives of the students--it's not just a matter of being able to sell the program," says Kim. "It's important to be able to provide that follow-up service and really deliver on [our] promises."
Test run: Before Kim can demand excellence from students, he demands excellence from his tutors, who must pass rigorous academic, personality and teaching assessments. The intensive screening approach has yielded a range of individuals with impressive credentials, from Ph.D.s and graduates of top schools to retired scientists who worked on the Hubble Space Telescope.
Smart idea: Good news travels fast when elated parents brag about their kids' higher test scores, allowing C2 Education to grow largely via word-of-mouth. When students write thank-you notes or share stories of 600-point jumps on the SATs, the news is proudly posted on the website. Says Kim, "A lot of our growth [is] organic."
Follow his lead: Consider franchising your business for quick expansion nationwide.
Marx Acosta-Rubio, 38
Onestop, Canoga Park, California
Projected 2008 sales: $22 million
Description: Office consumables distributor for small businesses
Against all odds: The saying "been there, done that" rings true for Marx Acosta-Rubio. That's not to say he doesn't have room to grow. But over the years, he's encountered almost every roadblock possible. The day in 1998 that Acosta-Rubio was fired from his job was the day before he launched Onestop and set in motion a series of obstacles, including a hysterical relative trying to renege on a loan, failure to collect a year of receivables, a lawsuit and a negligent CFO. But Acosta-Rubio says, "It's those lessons that make us who we are today."
Competitive edge: From the beginning, Acosta-Rubio has kept up with the big names by using a "customer intimacy model," he says. "Our competitors focus on price and availability, but we discovered a market that craves service." His employees contact clients before they need toner cartridges or other office supplies, and they do it over the phone, which is a rarity in this automated, web-based industry. Acosta-Rubio's former employer, who is one of his major competitors today, "did $27 million last year with 112 salespeople; we did $16 million with 14," he says. "Whose model is better? We need to focus on the human aspect of employees and customers."
In retrospect: Like many entrepreneurs, Acosta-Rubio never imagined he'd be where he is today--owner of a multimillion-dollar, 30-employee company. Even so, would he have done anything differently? "Absolutely, 100 percent!" he says. "I would have tried harder, taken bigger risks and made even more mistakes."
Follow his lead: Don't let the fear of failure hold you back from making mistakes--and learning from them.
Chris Lighty, 39
Violator/Brand Asset Group, New York City
2007 sales: $11 million (Violator); $2 million (Brand Asset Group)
Description: Artist management, record company and marketing group
From vinyl to vitamin water: Chris Lighty's first music industry job involved carrying crates of records for DJ Red Alert. "I figured out that I didn't want to be on the front line; I wanted to be on the back line," he says. Since starting Violator in 1990, Lighty has spearheaded a host of innovative marketing moves that have connected musicians with brands, including rapper 50 Cent's major endorsement deal with Vitamin Water. Violator is also home to big-name artists like Diddy, LL Cool J and Macy Gray.
Management training: Lighty honed his management skills from an early age--he was in charge of getting his siblings to school from their home in the Bronx projects. "I have to thank my mother for being able to deal with different attitudes and the timing issues--and for making sure I got to school," he says. The Bronx turned out to be a good location for Lighty as hip-hop and rap took wing all around him in the early '80s. "Our culture isn't just about living in the projects; there's so much more."
Branding iron: As Lighty continues to make creative management and branding moves with Violator, he's also building up strategic marketing and management company Brand Asset Group, a joint venture launched with Warner Music Group last year. "The way that I'm looking at the music business now is that it's an overall business of entertainment," he says. Lighty maintains his entertainment industry shooting star status by matching artists with unexpected brands and extending his influence into TV and film deals. Lighty even has a film company with 50 Cent. Other plans in the works include a hip-hop reality show.
Follow his lead: Creative thinking can help you make successful business connections that others overlook.
Maria Peevey, 39
Simplyshe Inc., San Francisco
Projected 2008 sales: $50 million
Description: Manufacturer of fashion products, especially pet fashions Puppy love: It started when Maria Peevey's golden retriever inspired her to write SimplyDog, a book full of humorous life lessons. "I quickly realized that there were no fashion-based products for pets," says Peevey. "A light went off in my head." SimplyShe had designed products for women since 1999, but in 2004 the SimplyDog line of pet fashions and accessories was born.
Learning curve: Peevey had great success selling SimplyShe products to high-end boutiques, but she knew the burgeoning pet products industry had mass-market appeal. "We got our chops wet in servicing the boutique market," she says. "I had a great foundation in terms of creating and launching products."
Big dogs: In a bold move, Peevey pitched her SimplyDog line to a vice president of merchandising at Petco in 2005 and gained the retailer as her first big account. Armed with that success, she pitched and won a contract with retail giant Wal-Mart in 2006. "There was such a huge opportunity," says Peevey, whose pet products run the gamut from dresses, jackets and necklaces to beds, carriers and toys. "[With] pet fashions, nobody had really implemented a multiproduct fashion-based offering in the mass market. And that's what we did."
World domination: Today the company has a national presence, with brands that include SimplyDog, SimplyCat, SimplyShe and SimplyWee, a line of infant and toddler apparel and accessories, as well as plans to expand internationally.
Follow her lead: Don't let uncertainty hold you back from approaching large retail chains.
Jera, 34, & Brad Deal, 39
Sticks And Stones, Peoria, Illinois
Projected 2008 sales: $10.5 million
Description: Custom keepsakes made using framed photos
Picture perfect: When Jera Deal took her oldest daughter "letter hunting," it was merely a way for the 15-month-old to learn the alphabet by finding letters in nature and architecture. Four years and two kids later, however, that game had evolved into a full-time business. When they needed a unique and memorable gift for a wedding, Jera and husband Brad framed photos of the letters that spelled the newlyweds' last name. The keepsake was a hit, and the Deals quickly realized they were on to something. Show biz: Following the 2005 launch of their website he Deals got into their first catalog and set out to get their product into as many hands as possible. There was one person, however, who they especially Wanted to reach: Oprah Winfrey. After a couple of trips to her show and "a little bit of luck and persistence," says Brad, they finally managed to reach the icon. "I stood up in front of 300 audience members and [gave] her a keepsake," he explains. "She opened it and loved it"--so much so that she commissioned one on the spot for Tom Cruise and Katie Holmes. Says Brad, "We were already self-sustaining at that point, but having [Oprah's approval] helped a lot."
Word bank: Today, Jera and Brad continue to build their letter inventory, brand, reach and sales. They're inking deals with a third catalog and are working on relationships with Disney and Hallmark. But staying true to their original vision remains a priority. "We don't ever want to come across as commercialized," says Jera. "This is a family business [that started] as a hobby with our daughters. We want to maintain that integrity."
Follow their lead: Even a successful business can benefit from a high-profile endorsement.
Darren T. Kimura, 33
Energy Industries, Honolulu
Projected 2008 sales: $16 million
Description: Energy project developer focused on efficiency and renewable solutions
Living large: Darren T. Kimura hasn't wasted a single day of his life. Only 33, he's the founder of a 14-year-old company that has earned millions by helping commercial and industrial clients drastically reduce their energy consumption. With clients through-out the Northwest and plans to expand quickly in the U.S., Asia and Europe, Kimura simply doesn't have time to waste. "This is a global business that we're growing, and there are global opportunities," he says. "Energy conservation is one of the very few things that you can do in every part of this world."
Before his time: Now hailed as a visionary, Kimura remembers all too well when others simply deemed him crazy. Green is the buzzword today, but getting others to see the light more than a decade ago was a battle he initially fought solo by running the business out of the back of his car and selling women's shoes to supplement his income. Now, with traditional energy sources dwindling and demand for alternatives growing, Kimura's team of one has grown to 90 dedicated employees.
Go for the green: Before he could grow his business, Kimura had to grow up. To do so, he bid adieu to his earrings and surfboard and started speaking more professionally. When he was unable to get financial backing for the first seven years, Ki-mura financed his company completely on credit cards: "Having to live that every single day and constantly struggle with it really teaches you a lot about budgets and growing companies."
Follow his lead: Got an idea that others call crazy? Stick to it, and people might just call you a genius one day.
Chris Mittelstaedt, 39
The Fruitguys, South San Francisco, California
Projected 2008 sales: $10 million
Description: Fresh fruit delivery service for workplaces
Staying the course: Chris Mittelstaedt was just a child at the controls of a Cessna aircraft when he got his first lesson in business. An entrepreneur and a pilot, Mittelstaedt's father taught him the importance of keeping an eye out for early indications of trouble. Later on, when the dotcom bust severely damaged his regional fruit delivery business, leaving The FruitGuys with about $50,000 of bad debt after customers went belly up--and Mittelstaedt with $100,000 of personal debt--that lesson took on special meaning. "We were growing so fast at the time, and I wasn't paying attention to my dashboard or thinking macroeconomically," admits Mittelstaedt. He recovered by restructuring his business to include a tighter credit policy, more variable costs and national expansion.
Labor of love: The dotcom crash wasn't Mittelstaedt's first brush with adversity. Since the beginning, necessity has forced him to turn up the juice. In 1998, Mittelstaedt was earning $9.50 an hour at a temp job when he learned his wife was pregnant. With no time to waste, he launched his business. By starting his 18-hour days at midnight, lugging heavy crates of produce and making the deliveries personally, his business slowly came to fruition.
Inner core: A decade later, The FruitGuys has grown into a full-scale operation that delivers fresh, high-quality produce to more than 3,000 businesses nationwide. But at the pit of the company is a proactive effort to promote wellness in the community--whether it's by helping clients establish athletic clubs at the office, reaching out to low-income communities or working with farmers to maintain sustainable businesses.
Follow his lead: Weather upcoming storms by keeping your eye on the horizon.
Matt Tucker, 29, & Bill Lynch, 30
Jive Software, Portland, Oregon
Projected 2008 sales: $20 million-plus
Description: Enterprise collaboration and community software
Up for debate: Jive Software co-founders Matt Tucker and Bill Lynch go way back. A trophy from their days as high school debate partners still graces their Portland office. Jive's origins can be traced to the University of Iowa, when Tucker and Lynch first pooled $70 to buy business cards. "We had a dorm room that looked like an office," says Tucker. "I can proudly say that after that initial investment, we've been profitable ever since."
Jive talking: Jive was ahead of its time when it launched in 2001. Now it's ahead of the pack. "When we starting doing collaboration and community software seven years ago, it wasn't the cool thing to do," says Tucker. "That was before Web 2.0. The market evolved at the same time we were evolving our products." The latest version of Jive's flagship enterprise social software platform, Clearspace, has kept the company positioned in front of its competition.
Portland calling: After stints in Iowa and New York, the founders relocated to Oregon in 2004. It was a smart move: In 2007, they received their first round of venture capital from Sequoia Capital and nearly tripled their staff over the course of the year. Says Tucker, "We loved being a bootstrapped company, but we always knew at some point it would be time to hit the gas."
Best of both worlds: Tucker takes pride in Jive's company culture. With a keg in the break room, infamous happy hours on tap and an open office environment, they combine the work ethic of a Silicon Valley startup with the good-natured approach of the Portland lifestyle.
Follow their lead: Make maintaining your unique business culture a priority, even in times of rapid growth.
Gary Goldberg, 38
Cleanbrands Llc, East Providence, Rhode Island
Projected 2008 sales: $20 million
Description: Designer and manufacturer of allergy barrier bedding products
Night light: Many go in search of the next big idea. For Gary Gold-berg, the idea gripped him night after night until it couldn't be ignored. After numerous late-night trips to the emergency room, his 4-year-old son was diagnosed with allergies related to dust mites. Goldberg did some research and discovered that dust mite waste occurs in bedding naturally, and that 70 percent of the allergies Americans suffer from are related to this waste. That was when his idea to create allergy barrier bedding products fully took hold. "I didn't have a choice about whether I was going to do this or not because I think about this all the time," says Goldberg, who invested several million dollars into the business. "I am obsessed with it."
Put to rest: Though not the first to come up with the idea, Gold-berg aimed to do it better. The products available were either made of uncomfortable materials that couldn't be laundered or of cotton with pore sizes too big to be effective. Born to a family of textile scientists, Goldberg drew on his background in that industry and, after a year of experimentation, created a waterproof, breathable fabric that did it all. In 2006, CleanBrands, featuring MicronOne Technology, was born.
Dream come true: Since July, CleanBrands has reached new heights by selling pillow and blanket sets to JetBlue, which uses them for its 550 flights per day, garnering massive in-flight exposure for CleanBrands. By developing different brands at different price points, Goldberg has also been able to secure shelf space at Bed Bath & Beyond and Wal-Mart.
Follow his lead: Secure your niche by raising the bar.