Welcome Back, Dan Estes and Peggy Nordeen

Inc.500 CEOs seize opportunities. They're ambitious. And they can't imagine not being entrepreneurs

Playboy's onetime art director dan Estes and his wife, Peggy Nordeen, were fixtures on the Inc. 500 during the 1980s when their company, Starmark International, was tearing up the pea patch as an integrated marketer for multinational corporations. In 1987, Chicago-based Starmark joined the second class of Inc. 500 Hall of Famers: companies that have made the list five times. In 1994, the couple sold their then $50 million business and took early retirement in Margaritaville. "We moved to Florida and bought a three-story house on the water," says Estes. "I had a 50-foot boat tied up to the dock behind it. We were going to drink frosty drinks and watch the sunset.

"We were down there just a few months when I realized it was the wrong thing to do," says Estes. "I was bored silly." Estes and Nordeen knew just one sure cure for their malaise: start another company. So the minute their noncompete expired in 1998 they de-mothballed the name "Starmark International"--which they had hung on to after the sale--and launched version 2.0 in a tiny Fort Lauderdale storefront. This year marks the first that the new Starmark is eligible for the Inc. 500 and--big surprise--there it is, at No. 43 with $10.6 million in revenue and five-year growth of almost 2,929%.

This accomplishment is notable for two reasons. First, Starmark was absent from the list for 16 years--the longest lapse in Inc. 500 history--before making its triumphal return. (Strictly speaking, of course, it's a different company, but not in name, mission, strategy, principals, or spirit.) Second, Estes and Nordeen themselves are such archetypical Inc. 500'ers. They seize opportunities (already the couple has spun off a software company to leverage some fancy code developed in-house). They view improving employees' lives as a core part of their jobs (in addition to excellent salary and benefits, workers enjoy use of the company boat and meals prepared by the former chef of the Atlanta Olympics). They are ambitious (Estes is hungrily eyeing international clients expanding into American markets). And they can't imagine not being entrepreneurs. "After this company I think I'll do something in real estate," muses Estes, 57. "My philosophy now is never retiring."

There are numerous Inc. 500 honorees who share Estes's unalloyed joy in the act of company-building. They are the lucky ones. The sour economy of the last few years has eroded some traditional rewards of entrepreneurship, including the thrill of landing accounts (31% of respondents to our survey said winning new business has grown signiWcantly harder), enriching employees (22% reported layoffs and/or reductions in pay and benefits), and seizing opportunities (35% lamented that sluggish markets had prevented them from being all that they could be).

On the whole, though, the 500 have proved a notably hardy lot, with 38% observing no deceleration in growth whatsoever. What's more, 47% project substantial sales growth in 2003 while only 5% expect a modest dip. (There were only two takers for the "substantial decline" option.) And the next 12 months look rife with possibility: 32% are contemplating new markets, 29% imagine launching products and services, and 20% say they are at least thinking about going public.

The sustained vigor of the 500--many of which were born or came of age in the heavy-breathing '90s--may be the result of the textbook tactics with which they meet economic challenges. Many are redoubling their basic sales efforts--what Vance Patterson, president of Patterson Ventilation (page 101) in Blythewood, S.C., calls "putting feet on the street." Others have chosen to diversify--particularly into the government sector, especially military contracts. Still others, such as Intrasphere Technologies (page 81), an enterprise software company in New York, tweaked their offerings for a differently circumstanced client base. "Once we realized the economy was not going to grow as quickly as we'd like, we shifted from building systems oriented toward growth--sales, marketing--to systems that would better manage costs," says CEO Bill Karl.

Five years ago, conversations with 500 CEOs were brimming with tales of risk-taking and bravado. Today's honorees, by contrast, wear their conservatism as a badge of honor. Rarely have so many bragged so much about spending so little. Bill Oesterle, the CEO of Indianapolis-based Angie's List (page 135), which rates local service companies, waxes eloquent about his business's Salvation Army-chic furnishings and staff competitions to see who can Wnd the diviest dive for Friday lunch.

Even companies with significant funds in pocket don't feel a hole burning there. In the late '90s Unica (page 26), a maker of enterprise software in Waltham, Mass., raised $12 million in venture capital that CEO Yuchun Lee viewed as a war chest, in case his company needed it to seize opportunities. "I am happy to say all that money is still in the bank," says Lee. Meanwhile, outside investment--once a consummation devoutly to be wished--is now described by CEOs as a hazard that they mercifully avoided. These entrepreneurs say they survived where others perished because they were never lured into profligate ways by inflated bank accounts. HomeRoute CEO Steve Nickerson sounds like many of his peers when he recounts a brush with venture capital in the '90s: "I sat with VCs," he says. "I looked at term sheets. People wanted to give me seven figures. All I could see myself doing with that money was blowing it on marketing and technology that would be obsolete in a few years."

Leigh Buchanan

Leigh Buchanan is an editor at large for Inc. Magazine. A former editor at Harvard Business Review and founding editor of WebMaster magazine, she writes regular columns on leadership and workplace culture, and she contributes Inc.'s capsule book reviews, "A Skimmer's Guide to the Latest Business Books."