Always the Optimist

Lessons in perseverance from Darlene Ryan, owner of the drugmaker PharmaFab.

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Darlene Ryan says she never really wanted to be the boss. She never dreamed the entrepreneurial dream. She was a lifer at Arthur Andersen, a pioneer female tax partner who found herself increasingly dispirited by the shenanigans she saw in the world of corporate accounting. Then there was her young son Kevin. Darlene, who ran major Asian accounts from San Diego, spent half her time winging across the Pacific and rarely saw him. So when her father, Ken, and her brother Bruce invited her to join the small pharmaceutical business they were starting in Texas, she decided to take the plunge. Darlene knew zero about manufacturing drugs, but a start-up sounded like fun, a lark. Plus it was family, which to Darlene meant treating people right. She imagined the cozy venture as a "little company for the three of us."

"It was never money in our family," she explains. "My dad wanted to start this company as his legacy to my brother and me. What he had to give us was his knowledge."

Ten years later, on the day I fly to Texas, the Fort Worth City Council is celebrating Darlene Ryan Day. The council chamber is packed. The mayor, Mike Moncrief, a Dabney Coleman look-alike, reads from the plaque: "Whereas PharmaFab was the fastest growing private company in the Dallas-Fort Worth area between 2001 and 2003...Whereas the 286% sales growth...Whereas..." He concludes the proclamation by asserting, "Darlene Ryan, you're a shining star in our crown!"

The metaphor is apt, perhaps more than the mayor knows. While from a distance, a star inspires a sense of celestial peace, we all know that, up close, the process that makes it shine is brutally dynamic. The last decade has been like that for Darlene Ryan. Over the same period of time that she built PharmaFab into a business with an estimated $40 million in annual sales (without a single salesperson, I might add), she has endured the most trying moments of her life.

Over the years, there were times when she thought that her smartest move would be to walk away from the business, that that might be better for her family. But the company, which started as an escape -- and then seemed like an obligation or a burden -- has, in time, become for her a source of strength. So often we think of entrepreneurs as successful professionals who let their work overwhelm their personal lives. People who build companies never spend enough time with their kids, it is said, and many of them end up divorced. That may be. But it's also true that a company can ground people and provide them with a means of coping. Sure, Darlene works long hours. But she remains a devoted daughter, wife, and mother. And through the tough times, her company has helped to keep her sane.

As the name PharmaFab suggests, the company manufactures pharmaceuticals. Tablets, capsules, and liquids each account for a third of the business. About 50% are branded drugs and 50% generic. A lot are cold and cough remedies; a few, pain relievers. The company gets most customers in one of two ways: 1) A big manufacturer is over capacity in its facility and outsources the product, usually an older drug; 2) A top executive, an expert in sales or marketing, strikes out on his own and needs a company to make the new product.

This particular niche of the market, contract or boutique manufacturing, is relatively new and small, maybe a half-dozen companies. What's kept competition down are the barriers to entry, the heavy regulation, and extensive scrutiny by government agencies. PharmaFab got a running start because Darlene's dad was a well-known chemist with vendor and customer contacts. It was his reputation that gave Darlene the confidence, back in 1993, to chuck her half-million-dollar salary from Andersen, with an office that overlooked the Pacific, and sell her big, beautiful house. Her husband, Dick, was less sanguine. A city planner who'd designed the quaint downtowns of Vail and Boulder, Colo., he struck a deal with Darlene: She had two years to get the business up and running. After that, the family would move back to the country he loved: the Rockies. "My Andersen partners thought I was crazy," says Darlene, who is now 50. "How could I leave the job certainty and partnership income to work for this little company my dad had started? Well, I did."

Anyone who has ever worked at a start-up can guess what happened next: Almost immediately, the plan unraveled. Darlene's father, Ken Montgomery, had another partner, who owned the majority share. The two had an ugly falling-out, and lawsuits were filed. That might have been the end of the matter, except Darlene is nothing if not resolute. It was, she decided, no time to back out. She went to Barnes & Noble and bought a book, How to Incorporate. She picked the logo, a red capsule shape around the name PharmaFab because it was available on her Microsoft Paint program. She bought a color printer and ran off the business plan.

At the same time, she made plans to move back to Colorado, where she intended to headquarter the relaunched firm. Not only did the decision assuage her husband, but it also made sense from a financial perspective. Darlene had secured a million dollars in capital from a company in Colorado that had considered backing her father and his initial partner. "I just said fine," Darlene recalls, "let's start over. We're going to do a company right."

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