The 1988 Inc. 500

Company Profiles

#2: Orbital Sciences Corp. Fairfax, Va.

In early 1958, as Sputnik II circled the earth, David Thompson watched in wonder, dreaming of the rocket ship he'd build one day. Graduating first in his class from both MIT and Cal Tech, Thompson went straight to work at NASA. But the future he imagined -- outer-space manufacturing that would take advantage of zero gravity -- could not be done with vehicle-launching costs as high as NASA's. Two years at the space agency convinced him that only private industry could do the job.

Soon we'll begin to see if it has. Today, Thompson's company, Orbital Sciences Corp., has parlayed $75 million in private financing into rockets designed to launch military and commercial satellites. The first will debut next year.

#48: Russell Construction Co. Bettendorf, Iowa

Nine percent of this year's Inc. 500 companies are in the construction business, and James Russell's is among the smallest, with sales of $5.8 million. But its size belies its scope: unlike the majority of general contractors, Russell Construction is not a regional operation. The Iowa company travels nationally, following a few big clients from state to state to build retail outlets.

"We never pursued this niche," says the 27-year-old founder. "We never even advertised beyond a one-liner in the Yellow Pages. We just did one good job, then another, and got repeat business.'

With such clients as The Sock Market -- mall shops that sell socks -- and General Nutrition stores, a good job means keeping to schedule. Price is secondary, and Russell is confident he won't lose a customer to a lower bidder.

He's not so confident, though, about maintaining quality in the face of rapid expansion. "Quality control hasn't kept up with growth," Russell says frankly, "and I've got people in the field with less training than I'd like. But I have no choice.'

#78: Landmark Hotel Corp.Topeka, Kans.

Very few of the 1988 Inc. 500 companies grew through acquisition -- 84% made no acquisitions in the past five years, and only a handful made more than one or two. The major exception is Landmark Hotel Corp., which made 30 purchases, more than any other Inc. 500 company.

Simply put, president Gary Keller has "always wanted to build an empire," and he thinks acquisition is the easiest and cheapest way to do it. His strategy? Buy hotels that in their midsize markets -- Peoria, Sioux Falls -- are relatively up-scale, and renovate them to appeal to the convention trade. All the Landmark properties are franchises, and 22 of the 25 it still owns are Holiday Inns -- not surprising, given that 12 top Landmark managers are refugees from Brock Hotel Corp., once one of the country's biggest Holiday Inn franchisees. Keller headed up real-estate financing there, and has used his experience to work with banks, pension funds, and life-insurance companies to buy and renovate Landmark's hotels.

Acquisition has had a nasty side effect: red ink, despite gross operating profits of 38%. Keller says he's now "totally focused on consolidation" and confident that this year he'll show positive cash flow.

#108: American Nursing Resources Inc.

Overland Park, Kans.

Elizabeth Dayani grew up in Brazil, the daughter of missionary parents, and planned to learn nursing and establish a health clinic in the South American jungles. Instead, she ended up a nurse-practitioner in the plains of Kansas. Dayani also wrote a book called The Nurse Entrepreneur and with her husband, John, founded one of the country's fastest-growing temporary-help agencies for health-care workers.

The underlying motivation for Dayani's work is a conviction that nurses must take charge of their profession. "It's enormously frustrating to be trained to function at a high level and then have no control over your job," she says.

American Nursing Resources is the Dayanis' attempt to address such frustration. The company's 22 offices, from California to Connecticut, provide supplemental staffing to hospitals and nursing homes and coordinate short-term contracts for private care in homes. The offices are all managed by registered nurses who have profit sharing and stock options. The frontline providers set their own hours and choose their assignments. And they're working under other nurses -- the real key, Elizabeth Dayani believes, to empowering the profession. "My dream," she says, "is the day when all hospital nursing services are contracted from nurse-run agencies.'

Preferably hers.

#136: Peter Norton Computing Inc. Santa Monica, Calif.

Computer ate your file? No problem -- once upon a time it ate Peter Norton's file, too. Unlike the rest of us, however, Norton did something about it. He quickly recognized that the experience was probably as common as it was frustrating. Maybe even so common and frustrating that lots of people would happily pay money to keep it from happening again.

He was right. The introduction of his Norton Utilities software, which allows users to retrieve deleted files, created a new niche in the PC market: software that exists to make computing easier.

Like many good ideas, Norton's was an eminently copyable one, and products that were touted as cheaper, easier, or broader in scope soon appeared. Still, Norton, who has the distinction of being the first Dewar's Profilee on the Inc. 500, has retained his edge. Readers of the trade press consistently vote the updated Norton products their favorites, and the company has diversified into guides and text-editing software for programmers.