A survey of some of America's most fascinating new companies. (1989)
A survey of some of America's most fascinating new companies
We begin with the story of William J. Texido, our nominee for Start-up Most Likely to Succeed: "If you're going to find yourself unemployed, 50 is not the right age. Starting up again was a very humbling experience. I went from a view of the Golden Gate Bridge to one little room with no windows, from having 1,500 employees to doing my own copying at CopyMate, from a company Learjet to the back of the bus on commercial flights. I was able to make those adjustments. I'm proud of that.
"Now," he adds, "I have a new company that's affected me in ways I never imagined would happen. A great many of the rewards I've gotten have been the emotional rewards from helping people. I never aimed for that, and I've been absolutely amazed at how good you feel about it. You go through your entire life totally committed to economic returns -- which I'm still committed to -- and all of a sudden a big part of your day is when someone tells you how much more enjoyable you're making their life. It's just amazing."
Texido's company, started last fall, is Providential Home Income Plan Inc., a provider of reverse mortgages for senior citizens (Insider, "On the House," March 1989, [Article link]). It's a good bet for at least two reasons. In finding a way to unlock the assets of brick-rich, cash-poor seniors, it represents a can't-lose demographic play. And in Texido, it has a passionate, proven entrepreneur -- until 1986 he ran BRAE Corp., a $500-million leasing company he founded and took to #1 on the 1983 Inc. 100.
There's another reason we like Texido -- the same reason we're thrilled by start-ups generally. We like his sense of discovery.
Of course, there are other things we like about start-ups, too: their shiny innocence, the feelings of unsullied hope and unchecked enthusiasm, and the way they embody business ideas -- raw thought and instinct -- in their purest, most fascinating form.
But it's still the personal test that's most exciting to see -- maybe because it's the most revealing. Things happen in new businesses, often bad things. Life gets tilted to extremes. What does one discover? Terror maybe, or unimagined strength, or simple grace under pressure. Anyway, this is certain: start a company, and you can't hide. As the founders of the companies that follow -- some of the hottest start-ups in America -- are finding out.
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BROMON AIRCRAFT
Keeping It Simple
It's no surprise that aircraft manufacturers don't start up every day. Barriers to entry are high. There's expense, for one thing; Las Vegas-based Bromon Aircraft Corp. is reportedly using some $100 million to get up and running. There's plenty of entrenched competition, for another.
So what leads former Hughes Aircraft Co. executives James Brown and Joseph Monaco to think they can survive the fray with Bromon? Three factors, mainly, all products of their decision to eschew the ever-more-sophisticated planes that most manufacturers are designing. Instead, they are making a simplified craft that is essentially a "flying box."
First, the plane's shape lets it carry A-series mail containers, used by overnight-freight companies, that others in its class can't. Second, the plane can transport military trucks that otherwise would need larger carriers. Third, it's cost competitive both in price -- helped in large part by low-cost labor at its Puerto Rican factory -- and in operation, thanks to the efficiency of the square shape and the easy maintenance that should result from its uncomplicated design and off-the-shelf parts.
The idea isn't new. The concept of a box-shaped plane was developed by another start-up in the 1970s, and that company went bankrupt -- Bromon later bought the assets and redesigned the plane. The reconceived aircraft has been in development at a converted air-force base in Puerto Rico, with 450 people working on it. At peak production the company expects to employ 1,000 workers and turn out five planes a month -- which translates into more than $300 million in annual sales.
Will it fly this time? Introduction of the finished BR2000 has been delayed once, to early next year, and the plane has yet to undergo Federal Aviation Administration certification tests.
Still, Monaco says the company has letters of intent for the purchase of about 50 planes from the Philippine govenment, Toyota Tsusho Corp. of Japan, and others -- enough to keep the plant busy for a couple of years.
Bye-Bye, Big Blue
"At IBM, the further you go up the organization, the less hands-on creative work you do. I went to meetings, and I said no to the creative people. It was like an issue of Time magazine: 90% of it ends up on the cutting-room floor, and I was the guy with the scissors. That's not nearly as much fun as creating is. There is, though, a -- I don't know what to call it -- entrepreneurial shock or big-company-to-small-company shock when suddenly you find that the massive resources and bank accounts aren't behind you anymore, and in order to do anything, you have to sell something, you have to finance something, you have to deliver something. And you have to do that every day in order to grow a business."
-- William Mount, former communications director for IBM's general systems division and now cofounder of Metaphor Advertising & Marketing Communications Inc., in Atlanta
HOT CONSUMER PRODUCT:MONTAGUE
Easy Rider
Folding bikes, David Montague concedes, have a nasty reputation. All those teeny wheels and little seats -- hardly the stuff for a comfortable spin around the park, let alone a high-performance tour in the mountains.
"Typically what people did," Montague says, "is they thought, OK, I want my end product to be the size of a briefcase, so how can I telescope this out and that out and unfold this and unfold that so I have something that vaguely resembles a bicycle and is somewhat ridable? That creates a folding bicycle, not a bicycle that folds."
The difference, he asserts, is more than semantic. The bikes made by Montague Corp., in Cambridge, Mass., are designed to be more comfortable than novel, structurally more like the typical, nonfolding all-terrain bike it competes with than the children's bike most other folding bikes resemle. True, the end product isn't as compact as a conventional folding bicycle, but it's small enough to fit in a car trunk or a closet. Which is, Montague posits, all an urban bike needs to be.
