The entrepreneur of the year grossed less than $100,000 in 1986, has no full-time employees, and plans to expand her business from Cleveland to Washington, D.C., because that's where she wants to live.
The hottest entrepreneur is Betsy Tabac.
It might have been Mike Lieberman, who competes in the personal-computer market against IBM from a leased storefront in Riverton, Wyo., where he assembles computers by hand.
Or Florence Sender, 44, and mother of 14-month-old Boaz.
Or any one of thousands of seemingly unlikely choices -- people who don't remind you of entrepreneurs in the familiar sense of the word at all.
Welcome to the Post-Industrial World, the Age of . . . well, what do we call these people?
They are your customers, suppliers, competitors, and friends; male and female; experienced managers with M.B.A.s; polisci majors out of left-leaning nonprofits; exmoms; naive and slick; 30 or 45-plus; hard, in other words, to characterize -- except for this one overarching distinction: they've all started companies because it was the best way, sometimes the only way, they could get the work they wanted, where they wanted, and on the terms that they wanted.
WHAT EMPLOYER, FOR INSTANCE, was going to hire Barbara Patton as anything but a pleasant, if inexperienced, receptionist?
Not that Patton, 45 now, was looking for a job, although, as she points out, "When I was growing up, people went to work for big organizations."
She's right. For her parents' generation, and their parents', the respectable way to earn a living in twentieth-century America was to get a job. We Americans may celebrate personal independence and fancy ourselves a nation of rugged individualists, but the reality is that for the past 100 years or so we have preferred to depend on someone else for our employment. Self-employment has been on a downhill slide in the lot like Toffler's Third Wave -- the second was industrialism -- has arrived. Consequently, no one should be surprised that these new companies reflect the economic, technological, and cultural changes that are washing over the country.
Economic change, to begin with, has revolutionized the structure, even the concept, of manufacturing. New manufacturing businesses -- Nibbles International Inc. and T.L. Computing Corp. are good examples -- need not be delimited by factory walls. One makes cheese spread, the other computers; one is run by a man, the other by a woman; one is near Route 128 in Massachusetts, the other in remote central Wyoming; one serves a national market, the other a regional; one expects to go public, the other doesn't. (Suggested exercise: match the characteristics just listed to one of the companies, cheese or computer. Then read on to find out how you scored.)
Mike Lieberman, 36, a political science graduate and, for most of his professional life, a social worker, runs 16-month-old T.L. Computing in a Riverton, Wyo., Main Street storefront. He started the company with Randy Tucker, an elementary school history teacher and basketball coach who earlier aspired to be an environmental lawyer. T.L. Computing manufactures and markets IBM-compatible personal computers primarily, but not exclusively, to school districts and local governments in Wyoming and most contiguous states. After 16 months, the company's installed base is approximately 75 machines, about what IBM sells every five minutes.
Florence Sender, a former school volunteer, cofounded and runs Nibbles, also from a storefront, this one in Newton, Mass. "I'm the victim of a liberal education -- well schooled and totally unemployable," she says. Since no company was likely to hire Sender to develop a multimillion-dollar product line for them, she created her own. Nibbles expects gross revenues of $5 million during the current fiscal year from the sale of the all-natural cheese spreads and snacks it sells nationally through supermarket delicatessen and dairy departments. Last year's sales were $2.2 million.
While both companies sell products of their own design, neither, in the conventional sense, actually makes anything. Nibbles's cheese spreads are manufactured and distributed by Beatrice Cheese Inc., in Iowa. T.L. Computing's computers consist of components from Japan, Taiwan, and the United States. In the storefront's back room, Lieberman and two part-time technicians stuff the printed circuit boards and assemble, test, and pack the machines for shipment. The heart of the machine, the programmable chip that gives it its operating characteristics, is Lieberman's copyrighted creation.
T.L. Computing is riding a firmly established trend toward industrial disaggregation -- the turning over by large companies of specific manufacturing and support tasks to independent specialists. One consequence of disaggregation is that small startups, like T.L. Computing, can tap the same component suppliers as IBM. As a result, neither IBM nor T.L. Computing enjoys a decisive advantage in actually building the machine. They compete in how they add value to it. IBM's value added is its brand name, reputation, mass distribution, and service network. But mass distribution and service don't work in such places as Wyoming, where the population is sparse and urban centers, such as they are, are widely scattered. (You can't fly from one Wyoming city to another without leaving the state.) So T.L. Computing's value added is the customer hand-holding and service support a mass marketer can't provide. By selling its machines through direct mail and telemarketing, T.L. Computing saves the retailer's markup, which gives Lieberman enough margin to afford delivery, setup, consulting, and warranty repair, if required.
Another consequence of disaggregation is that assembling large amounts of financial capital is no longer a prerequisite to many business start-ups. Lieberman and Tucker split the $900 cost of building their first computer in the fall of 1985. When they sold it, they used the revenue to finance construction of the second machine. Then their banker gave them a $10,000 line of credit, secured by their personal vehicles. When T.L. Computing received a purchase order for one or more machines, it borrowed from its credit line against that purchase order for the components it needed. When those machines were sold, the partners paid the line down until the next order came in. They retained all earnings for working capital.
