You could write the book on business growth from the strategies of the companies that have made the INC. 500 five years running.
IN THIS FIFTH YEAR OF THE INC. 500, WE HONOR six privately owned companies that have earned a place on the list every year so far. These are astonishing companies, growing 60% or more every year for the last nine without stumbling even once. Although each started out modestly, they are all profitable and thriving today, run by the same people who set them on their present courses.
Taken together, the stories of these six companies represent something of a textbook on business growth. While one has leaped ahead by constantly expanding the range of services it offers, two others have grown on the strength of a basic product and a relentless quest for market share. Growth by acquisition has been the single-minded strategy of a miniconglomerate on our honor roll; growth by cloning was the trick of a temporary-help service specializing in computer work. There's even a company that's done well by doing good: a vocational school catering to welfare mothers, high-school dropouts, and the hard-core unemployed.
What is the secret of these six INC. 500 veterans?Perhaps only this: they started with a simple concept and never allowed themselves to lose sight of it.
5 YEARS ON THE INC. 500
HILL INTERNATIONAL INC. WILLINGBORO, N.J. CONSTRUCTION MANAGEMENT
Irvin Richter thinks there are three reasons why Hill International (#467) became the largest construction-claims consulting firm in the country, maybe even in the world: (1) he had a new idea; (2) the times were right; and (3) he never stopped selling.
Back in 1976, it was called claims management, risk protection for the construction industry. Whenever a delayed building project became mired in cost overruns, with charges and countercharges flying among owner, architect, contractor, and subcontractors, Hill put together a team of outside experts to visit the site and determine why the project had been derailed and who was to blame. They'd assess all the potential claims, estimate the legitimate damages, and even testify in court if their recommendation did not result in a settlement.
"The construction industry was going to hell in a handbasket at the time," Richter remembers. As the pace of construction slowed, contractors were forced to lower their bids and work on smaller margins, which quickly disappeared if a project began to go sour. "Suddenly, it was a service everybody needed."
Although initially Richter was the only full-time employee of his company, he took the title of vice-president. "That way," he says, "it would look like I was just one of a lot of vice-presidents." It was, to say the least, a modest beginning, working out of his son's bedroom with a $60,000 line of credit from a friend's consulting firm, a post-office box, and a subscription to The Wall Street Journal -- "so something would be in the mailbox for me every day."
Hill, you might say, is a business built on the foundations of hustle, momentum, and leverage. No sooner had Richter completed his first assignment, a claim against the city of Niagara Falls, N.Y., than he began selling his newfound reputation at a professional seminar he helped to organize, attracting 400 participants to a series of lectures on construction claims. Among those at the conference were the director of New Jersey's state construction office and the chairman of the Armed Services Board of Contract Appeals, as well as many of the country's top construction lawyers, architects, contractors, engineers, and insurance executives. The only consultant on the program, Richter spoke on "Preparing the Claim and Calculating the Damages" and signed up several clients on the spot.
Seminars led to journal articles, and journal articles to books (in fact, two books), and all of them to such clients as Bechtel Group Inc. and the U.S. General Services Administration -- whose names were immediately dropped in Richter's sales pitch and glossy brochures. He earned a law degree at night from Rutgers -- The State University of New Jersey. And within a decade, Hill International has become a leader in a brand-new industry. When there were problems at the Midland, Mich., nuclear-plant site, Consumers Power Co. called Hill. When the Tropicana Hotel and Casino, in Atlantic City, N.J., was in danger of losing its temporary license if it didn't complete construction according to schedule, Hill sorted out the claims and helped ensure that the project was completed precisely on time.
But Hill International didn't get to be a $42-million, 385-person operation simply by arbitrating construction claims. At first, Richter's idea was to get involved with bigger and more complex projects that afforded him higher fees, better margins, and higher visibility within the industry. But soon, he saw that there was still greater potential if he could sell his clients on using his services earlier and earlier in the construction cycle. In 1980, he began offering project management, "sitting with a job" from start to finish, which is now 25% of his business. And in 1984, after helping several hospitals with their construction, he bought the first of two hospital-management consulting firms to help them operate their new facilities once they were finished. These days, he's looking to get into commercial real estate development, in part as a way of offering his employees some form of equity participation without diluting control of Hill International itself. Just last summer, Hill was even named a finalist for the state contract to operate commuter rail service out of Boston.
"I still see everything in terms of marketing," explains Richter, who didn't give up the title of vice-president until 1980. His five years on the INC. 500, he says, is a confirmation of the old wisdom that "the doing of business begins with the getting of business."
5 YEARS ON THE INC. 500
SAS INSTITUTE INC. CARY, N.C. COMPUTER SOFTWARE
The headquarters of the SAS Institute (#429) feel more like a well-funded academic-research foundation than a commercial software house. "The campus," everyone calls it: 10 glass-and-brick buildings, flower-lined walkways, a small lake, all set among 100 rolling green acres.
At noon on a sunny summer day, the place is a beehive of activity. Volleyball and basketball games have already started at the new gym, and the Nautilus room is filling up, but all six racquetball and tennis courts are free. Most of the 750 headquarters staff members are at the cafe for lunch, sitting at flower-topped tables, listening to the pianist, trying to decide between the trout Veracruz and the stir-fried chicken. A few children nibble happily alongside their parents, but most of the 121 children in the company's Montessori day-care program are napping up at the preschool.
This is a company with deep roots in academe. James Goodnight, along with three other cofounders, wrote the original version of the SAS System in the late 1960s, while he was studying for his Ph.D. in mathematics at North Carolina State University, in Raleigh. The program was designed to help graduate students track agricultural data, but by 1976, Goodnight found that he had more than 100 customers for his product outside of the university. When he finally had to move his fledgling business off campus, he decided to recreate an academic environment for it.
Not that there aren't good business reasons for the campus setting. In an industry in which products become obsolete within two years and success depends on the ability to attract and retain a group of professional in great demand, the campus is a powerful recruitment and compensation tool. During the past 10 years, annual turnover has averaged a remarkable 10%.
By any standard, the investment in its campus has paid off handsomely for the SAS Institute. It has become a money machine and the largest, most profitable company of the INC. 500 five-year veterans. With its program licensed at 9,179 sites, the institute claims 81% of the statistical-analysis market for IBM mainframe users. There are now 12 additional products along with the original, generating 1985 sales of $71 million on margins that have topped 15% for most of its 10-year history. That's the money that pays for the gym, the health center, and the pianist, as well as the profit sharing, which adds 15% to everyone's salary. In addition, there are annual performance bonuses.
Tom Lawton, editor-publisher of the trade journal Computer Services Report, explains the institute's unbroken record of success this way: "They've stuck to their knitting." Unlike many software houses that have pushed to create a wide range of products for a variety of users, the SAS Institute has concentrated on one basic product. Everyone at the campus works on -- or with -- the SAS software, from the cashier at the cafe up to chief executive officer Goodnight, who still spends half of each day at the terminal. The SAS Institute is also unusual because it puts research and development ahead of marketing on its priority list: 55% of the company budget and 60% of its staff are allocated to R&D. And unlike its competitors, the institute does not try to recoup its development costs with a large initial sales fee. Instead, the product is licensed to customers after a free 30-day trial. Users pay over time -- assuming, that is, that they decide to keep the SAS System on line year after year. And most do: the renewal rate is an impressive 95%.
A licensing arrangement for its product puts lots of pressure on the institute to keep the SAS software user friendly and to keep in close touch with customer needs and requests. Besides the training programs and user conferences, which are standard in the industry, the institute allows its customers to determine, in effect, the company's R&D priorities through a formal SASware Ballot sent around each year, which asks which program enhancements and additions customers want most. In the early '80s, for example, users asked for SAS software that didn't take a mainframe to run, so the company introduced a program for minis in 1984 and one for micros in 1985. Now, customers are asking about artificial intelligence, and company programmers are experimenting on a system that will respond directly to voice commands and will require little familiarity with computers.
To CEO Goodnight, all this seems like just good common sense. Tall, bearded, with the slightly dreamy grin of a gentle man, he seems as much the self-effacing graduate student as he used to be, uncomfortable with questions about his management philosophy. "We just bumble along from year to year," he insists. "I'm just the type who likes to sit back and watch. I try to manage very little."
At the SAS Institute, a little management appears to go a long way.
5 YEARS ON THE INC. 500
E & A INDUSTRIES INC. INDIANAPOLIS CONGLOMERATE
Neither of the founders of E & A Industries (#139) quite fits the stereotype of the successful M.B.A. Rather than wearing three-piece suits, they sit in shirt-sleeves; there are holes in their shoes. Rather than carpeted corporate corridors, their funky offices feature a battered desk and overlook a parking lot at the edge of an urban ghetto.
In their day, they were among the golden boys of the Harvard Business School: Ed Klink, West Point graduate, Vietnam vet trained at both the Airborne and Ranger Schools, Baker scholar who graduated in the top 5% of his Harvard class; and Al Hubbard, who received his law degree cum laude and his business degree with distinction from Harvard on the same day. But even then, they were different from their classmates. Rather than trying to make a career in consulting, in the boardroom, or on The Street, "our only goal was to get into business for ourselves," Hubbard says.
Their strategy for E & A ran counter to the lessons of business school, too. Starting in 1977 with $40,000 in pooled capital, they went looking to buy a small company in a fragmented market and a static industry. Their plan was to develop a proprietary product and take it national. "We'd been taught at Harvard to get into a growing industry, then ride it to the top," Hubbard remembers. "But our hope was to pick an industry in which our management skills could pay off, an industry that didn't usually attract very dynamic people."
What they found was Marvel Product Co., an automotive-polish distributor -- and an entrepreneur's education. While Hubbard watched the shop, Klink loaded the product in the backseat of his station wagon and hit the road, looking for potential distributors. His target was the small "after market" -- distributors who sell to auto reconditioners and new- and used-car shops -- rather than the public. There was only one problem, Klink says: "We didn't have any products that worked." It made for a rather shaky launch.
Like good M.B.A.s, they started with a plan, this one projecting $500,000 in sales, or an 800% increase in the first year alone. It turned out to be a tad optimistic. Revenues that first year barely edged over $100,000, after thousands of dollars were returned to customers dissatisfied with the product.
It was two years before they turned a profit. Only after trying two different company chemists and five different polishes did they finally hit on Car Brite, today's national brand leader. Having a good product helped. Building a reputation for customer service has helped even more.
"I felt from the start that they were different," remembers Ed Friddle of Big E Enterprises, a distributor in Anderson, Ind. "They take a genuine interest in their customers." Delivery is on time, the price is right, and satisfaction is guaranteed, he says. "They've always stood behind their product. If there is a problem, they never hedge; they want it straightened out right away."
Hubbard and Klink, however, had bigger ambitions than running a small polish company. By 1982, they'd put a management team in place, with incentive bonus programs based on quality control, profits, and growth. Now, they were eager to test their counter-intuitive strategy again. In 1983, they bought Apex Corp., a local precision-machine shop supplying $2 million in aircraft-engine parts to large customers, such as General Motors and the U.S. Air Force.
"Apex had a good reputation as a supplier, but for 10 years, it had never gone after any new business," Klink explains. "So we started selling aggressively, going out and telling customers we could deliver quality products on time at a good price." Within a year, sales at Apex had more than doubled, outstripping production capacity, so the partners brought in a former TRW Inc. executive to oversee the expansion and manage the operation day-to-day. It was 1984 and time to go shopping again.
This time, it was Broulin & Co., a 50-year-old manufacturer of industrial chemicals and cleaners. Broulin was by far the duo's most ambitious acquisition. With its $24 million in sales, it was four times larger than its new parent. And while E & A had had 110 employees at two small operations, both in Indianapolis, Broulin added 275 employees spread among factories and warehouses at seven locations from New Jersey to Washington State.
Inside, the problems were even more daunting. Quality control and customer service were untested concepts. There were no set hours for management or office staff, and a 40-hour workweek was considered hard duty.A television had been set up in an employee lounge, and most of the production staff spent the afternoon watching soap operas.
The new partners went back to basics. They started the company's first performance reviews and tied all employees' pay to them. They took out the TV and put in a time clock -- at the request of employees. Sales and marketing efforts were expanded.
In this era of mergers and acquisitions, it is perhaps not surprising that a couple of fellows from Harvard Business School have made their way buying up companies, amassing a $35-million conglomerate for themselves.What distinguishes these two M.B.A.s is not simply their ability to spot a bargain, however, but the shirt-sleeve-and-shoe-leather know-how to turn these bargains into cash cows.
Is there any limit to where this strategy could take them? Apparently not. "We're certainly not satisfied with what we've done so far," Klink demurs, the INC. 500 plaques hanging on the walls around him. "And we don't have the time to sit back and look at what we've accomplished."
5 YEARS ON THE INC. 500
METRO INFORMATION SERVICES INC. VIRGINIA BEACH, VA. COMPUTER CONSULTANTS
Some companies grow by adding new layers to the organization. Others do it by acquisition. Still others, by franchising. But John Fain and Chris Crumley had a different idea for Metro Information Services (#261): cloning.
They started out as two partners working out of a spare room in Crumley's Virginia Beach house -- Fain the technical expert, Crumley the marketer. Their business was hiring out employees to do systems analysis and programming for large banks and manufacturing organizations. Their challenge was to develop loyalty from employees and customers in a business thought of by both as strictly short-term.
Fourteen years later, with $5 million in revenues and 125 employees in six cities, Fain and Crumley have it down to a formula. About 80% of their business at Metro Information Services comes from repeat customers. And in an industry known for turnover rates of 50%, theirs is 16%.
It starts the first day on the job, with a pep talk from the manager and a 12-minute videotape -- Metro is People! -- which is shown to every new employee. "It may be hokey," Crumley admits, "but we don't show it to cynics." And it continues with a constant barrage of employee-motivation techniques that stress values such as teamwork and customer service. Managers regularly take pains to explain to all employees some of the business details of the company, including revenues and expenses, and to outline its long-range plans. And the rewards for staying with the company and helping it grow are clearly spelled out: a profit-sharing plan that distributes two-thirds of the company's pretax income, an extensive education program for employees, even use of the company's mountain condo.
The visitor to Metro's headquarters finds an abundance of employee enthusiasm, which is not lost on customers like Tom Brochu, a systems project supervisor for Union Camp Corp., in Franklin, Va., who has turned to Metro several times during the last four years. "Uniformly, their attitude is, How much more can I do for you?" he says. "They have an uncanny devotion to their clients' needs. And it's not just something their managers preach about. They have an energy and enthusiasm through the company that is astonishing."
It's one thing to do that in a small company, where the owners are on hand to inspire and cajole. But what happens when growth means opening completely new operations in distant cities? Fain and Crumley had always had a 600-person company in mind, even from those first days in the spare room. But how could they get there without losing the original fervor of two entrepreneurs building a team, sharing risks and rewards?
That's where cloning comes in. Forget the idea of a branch office, the two founders said. Each new operation would be set up as a separate, decentralized profit center. At the top we two co-directors sharing responsibility for the start-up, just like Fain and Crumley did, one on the technical side, the other tending to marketing. And their charge would be to run the business as if they owned it -- hiring, marketing, planning, the works. Only the personnel and administrative policies would be controlled from the home office.
If the organization of the new offices was to be entrepreneurial, so, too, was the compensation. The directors don't really make any money until the division is making money; as in a real-life start-up, the first challenge is to get bread on the table. Between 40% and 50% of the directors' compensation depends on how good they are at generating revenues and cutting expenses. And to keep them hungry, that percentage increases along with sales and market share.
It hasn't always worked. While Metro has promoted most of its technical co-directors from within, it has had to go outside the company for all but one of the marketing people -- and two of the five hires didn't work out. In both cases, the new co-directors wanted to see the rewards of profitability before the profits were posted.
"Now, we just pay even closer attention to the screening," Crumley says. "But we won't change the policy. Unless you pay them like businesspeople, they won't think like businesspeople. We don't let them smell the roses until they grow them."
5 YEARS ON THE INC. 500
PACIFIC ENVELOPE CO. ANAHEIM, CALIF. ENVELOPE MANUFACTURER
Bob Cashman should have been a happy man. Pacific Envelope (#380), the business he'd run since 1975, was thriving, with better than 80% penetration into his Orange County, Calif., market. Sales were more than $10 million, up 7,000% in just one decade, with steady profits. Walking through his plant each day, he was convinced he'd put together one of the best operations in the industry: efficient machines operated by loyal employees who had become his second family.
But Cashman was bored. He missed the risk, the old days when he'd had to push a broom to help keep Pacific Envelope alive, when cash flow was a daily worry and a new customer was cause for celebration. Sometimes it was hard, even for him, to connect the chief executive officer he was at 54, mild mannered and balding, with the energetic entrepreneur he had been back then. And his restlessness worried him. If he was losing the fire in the belly, he wondered, then what would keep the fire in the company alive?
Like thousands of Korean War veterans, Cashman had settled in southern California after his combat duty, finishing his education at the University of California at Los Angeles rather than back home in Iowa. After stints selling insurance by direct mail and writing reports on potential acquisitions at ITT Corp., he took over a small envelope-manufacturing company -- a former supplier from his direct-mail days that still owed him money on a $100,000 loan.
The company wasn't much. After he foreclosed on the assets and assumed the debts, Pacific Envelope started out at nearly $250,000 in the hole. But he loved the clatter of machines, the smell of the stock, the fun of actually making something with paper, not just shuffling it. Cashman set up his desk on a pallet on the shop floor and taught himself manufacturing, while his wife, Georgia, ran the office and directed sales. On weekends, he'd put on his overalls and come in to do maintenance on the machines.
There was just one problem: he couldn't make enough envelopes to make any money. He was even then the only manufacturer in the county, with a cost advantage over competitors who had to truck their envelopes down the freeway from Los Angeles. And as direct mail became a mainstream business tool, the demand for envelopes was booming. But he didn't have the machinery or the employees to capitalize on the situation. He could sell everything he could make, but his machines were too antiquated for him to increase his volume. A new, high-performance machine would cost $250,000, with a 40% deposit required. But he couldn't find anyone who would let him borrow against a machine that wasn't built yet -- "not the banks, not the high-security guys, not even the break-your-legs guys."
Then Dr. Cho La Siea appeared. As Cashman tells the story, Siea represented an outfit called The Great Eastern Trading Co., which then was helping to equip new envelope factories in the Philippines and on the Chinese mainland. Siea proposed to help Pacific Envelope get bank financing for its modernization by pledging to buy up all of its old machinery. In return, Siea would need Cashman's help in finding additional machines to purchase from other U.S. envelope manufacturers.
Cashman was eager to take Siea up on his offer, and over the next six months in 1979, they traveled around the United States, buying up 24 envelope machines. Cashman was fascinated by his elegant and somewhat mysterious traveling companion. A microbiologist by training, Siea apparently had given up his academic career for business shortly after President Richard Nixon reopened the China trade. His family ties were said to reach into the inner circles of Beijing, and perhaps because of that, he never failed to conduct his affairs with discretion and self-confidence. Even today, Cashman loves to tell of their visit to a factory in Philadelphia, where unionized movers balked at the prospect of moving four 2,000-pound pieces of machinery down from a second-floor factory. Unfazed, the doctor made a single phone call, and the next morning, a crew of Chinese laborers arrived, picked up the machine parts on poles, and silently carried them down the stairs.
As for Cashman, he never did buy that new machine, instead picking up a used model with nearly similar capacity for only 60% of the cost. Almost immediately, business jumped 40%. Within six months, he bought a second used machine. Two years later, he added a third, and so on, until he had 11 high-efficiency machines in his factory.
The years that followed should have been the best of times for Cashman. Sales were virtually doubling every year as the market boomed. And Cashman felt he'd found a way to grow without risk. Every three years, he bought a new $100,000 machine, borrowing $80,000 and putting down the rest in cash. Within the first year, the tax code took care of his down payment: after taking his investment tax credit of $8,000 and his $14,000 in depreciation, he found himself about even. As for the borrowed $80,000 proceeds from the sale of paper scraps generated by the new machine matched exactly the monthly payment to the bank. Meanwhile, the machine was churning out $50,000 worth of envelopes each month at gross margins of 34%. Even the float was working in his favor: most of his customers paid within 30 days, while his paper supplier waited 15 days from the end of each month.
It was an unbeatable formula: little competition, a growing market, and capital investment that almost immediately paid for itself. There wasn't much for Cashman to do but sit back and watch it happen. In 1983, he'd bought a printing company that was being foreclosed, but Georgia was running that. For a while, volunteer work for the 1984 Olympics kept him busy. He finally built that backyard pool he had been promising his wife for years, and they took their first real vacation.
As 1986 drew around, Cashman found himself on the horns of a dilemma. With sales topping $10 million, he figured that Pacific Envelope had grown about as big as it could without getting bogged down in systems. Now the challenge was to preserve what he'd built. Where was the fun for him in that?
Cashman's solution was to start another company. But this one wouldn't be only Bob Cashman's baby; he wanted everyone at Pacific Envelope to be able to share the excitement of the start-up. He'd encourage them all to participate -- even, if necessary, lending them the money so they all could invest.
The obvious first question was what kind of company it would be. He wanted something that would be interesting enough to attract top-flight managers and eventually big enough to absorb both Pacific Envelope and Hallmark Litho Inc., his wife's printing house. He also wanted something that could be taken public in a way that would encourage key employees to stay, while allowing him to cash out easily. Another envelope company, the underwriters told him, would never fly in the market. A manufacturer of trash dumpsters didn't seem to have the necessary synergy.
Suddenly, the mysterious Siea reappeared with a solution: computers. And not just any computers -- IBM Personal Computer clones manufactured offshore. Pacific Envelope would enter into a joint venture with a Hong Kong manufacturer, to whom Cashman was introduced by Siea. They called it Crown Technology Inc. Cashman put up the first $50,000, and 20 employees invested an average of $1,000 each. Others are expected to sign up before the first computer is shipped early next year.
"We can sell them exactly the way we sell envelopes," Cashman insists. "We'll start here in California -- this is one of the two hottest markets for computers in the country. If we get just 1% of the market, that's 1,000 computers a month and $10 million in yearly sales."
It's all made Bob Cashman young again, setting up an office, hiring the new employees, scheming with his partners and dreaming of growth. "You'll never see Crown on the INC. 500," he promises. "If it takes off like we think it will, we'll take it public within the next two years."
5 YEARS ON THE INC. 500
VOCATIONAL TRAINING CENTER INC. ST. LOUIS VOCATIONAL SCHOOLS
There is no other business on the INC. 500 quite like Marshall Laskey's Vocational Training Center (#287). VTC's eight locations range from a converted parochial school in the boarded-up heart of the St. Louis ghetto to a renovated church annex, which the center rents for just $1 a year. Its customers are the underclass -- high-school dropouts and the long-term unemployed. And at the top of this business organization is a 58-year-old chief executive officer and family patriarch who still sounds more like a social worker than the founder of one of the fastest-growing companies in the United States.
"It doesn't take much to get me up on my soapbox," Lasky admits, grinning sheepishly. "My son says I'm a crusader, and I guess I am."
Lasky has never thought of VTC primarily as a business, regardless of the $9 million in 1985 revenues, up from $3 million the year before. Nor does he talk about profit margins, even though profits are up 15%, too. He prefers to talk about his duty, his mission, and the talk pours out in a torrent of infectious enthusiasm. What he's selling, he says, is the future.
There are 1,400 students in VTC classrooms today, training for such entry-level jobs as nurse's assistants and hotel cashiers, data-entry operators and day-care supervisors. Most are black, many are welfare mothers, and almost 90% receive some form of government assistance. For six months, they're taught work and life skills, how to write a resume and why to get to work on time. Then VTC's placement staff of seven will help them get a start in the work world, "getting them off welfare and making them taxpayers," Lasky says.
It's easy to be skeptical about vocational schools. Many are marginal operations, in business only a few years; the worst are get-rich scams preying on the vulnerable. But after 25 years as the director, head teacher, and inspiration behind VTC, Lasky has built impressive credentials and a dramatic record of achievement. Accredited at both the state and federal levels, VTC today boasts a staff of close to 300, with a teacher-training program designed by the director of the education department at St. Louis University. While only 28% of vocational students nationwide ever reach graduation, between 60% and 70% of VTC's students complete their training course. Last year, more than 1,000 of them went from VTC to the payrolls of such local employers as Century 21 Real Estate, Eastman Kodak, Holiday Inns, and K mart. They claim a placement rate of 70% to 75 within six months.
"VTC students are well qualified and well trained," says Mary Fitzgerald, director of operations of Med-Staff Inc., a new medical placement agency in St. Louis. In four months, Med-Staff was able to place 60 VTC students, "and we hear excellent reports on all of them."
Marshall Lasky knows what it's like to be poor. Growing up the son of a newspaper deliveryman, he wanted to be a major-league baseball player or, if not, a social worker who might touch the lives of others as the director of the local community center had touched his. After graduating from college, he opened his own TV-repair shop and began helping three other men learn the trade at night in the back room. Within a year, he founded VTC and was teaching TV-repair classes mornings, afternoons, and evenings. In five years, he was even making money at it.
From the start, VTC was a family operation, Marshall and his wife, Jeanette, working full-time, sons Steven and Edward when they could. But it wasn't until 1980, when Steven, then 23, gave up a high-school coaching job to become VTC's director of education that the company began its dramatic growth, increasing revenues 1,500% over six years.
When Steven arrived, VTC was still a TV- and appliance-repair school, with 250 students a year and a staff of 12, including both his parents. At $237,000 a year, sales were dropping, as Vietnam-era GI benefits expired and the school's traditional customer base -- unemployed blue-collar workers from the St. Louis auto plants -- were called back to work or moved away.
So Steven changed markets, targeting the high-risk customers of St. Louis's ghettos. Instead of repair classes, he reoriented the training to the city's current job opportunities -- teaching child-care workers to meet the growing demand for day care, for example, or training workers for the new hotels being built downtown. Rather than asking potential customers to come to VTC's one central location, he started opening schools right in the inner-city neighborhoods he hoped to serve. An aggressive marketing program blanketed each new neighborhood in posters and fliers, while telemarketers contacted students directly. "The smile of success looks great on everyone," proclaimed his newspaper ads.
Most of VTC's programs require no high-school diploma. What is required is hard work. Each of the eight schools runs two four-hour shifts a day, with each six-month course split between lectures and hands-on practice. The professional staff is also split: half are trained teachers and guidance counselors, the other half instructors who have a minimum of 4,000 hours experience in the field they teach. Tutoring is provided free.
A walk through one of the facilities reveals a mood that is relentlessly upbeat. Unlike at most public high schools, the students at VTC seem eager to be there, and their classrooms are a buzz of questions and discussions. Posters with school mottoes cover the walls: "Be all you can be" and "I am in charge of my life."
"Everybody has written these people off, and they need us!" Lasky says. "We have to help them break the cycle of poverty. It's our obligation to make sure they get a chance in life."