Concept: Plastic recycling and eventually refining collected plastic for use in own manufacturing
Founders: Doug Wadsworth and Dave McGraw, both 26; after meeting in college, both worked as engineers at Fortune 500 companies
Financing: $50,000 from savings and home-equity loans
Source of Idea: An article in a trade magazine called Modern Plastics
Critical Hurdle: Eluding competition long enough to establish itself in what could fast become a market crowded with much bigger companies
Projections: At least $50 million in revenues by 1994
ANSWER COMPUTER
A Good Ear for Solutions
Here's a market you can bet won't shrink: customer-service departments that need help answering the questions of technology-illiterate users. Answer Computer Inc., of Sunnyvale, Calif., has developed a $15,000 software package that walks service reps through likely solutions to the typical and the not-so-typical problems of harried callers.
Market size right now? There's about $500 million worth of business in high-tech customer support alone, figures Louise Kirkbride, one of three Answer cofounders -- and Answer plans to capture 10% of it within the next five years.
Not by peddling its package to service departments, however. That would pit Answer against the internal software developers at its large corporate clients. It might also miff customer-service managers, who'd interpret Answer's proposed alternative as an implication they aren't doing the job. So Answer's opening pitch usually goes to a company's vice-president of sales.
"We call it our 'Tom Peters Sell,' " Kirkbride says. "We help companies get the competitive edge with better customer service. Selling to a happy old customer is five times easier than finding a new one."
Another reason Answer targets the sales VP: the higher up the management chain you can reach, the more likely you are to find someone who has the ear of the CEO.
HOT ENTREPRENEUR:DOUBLE SHARP GARMENTS
Marlowe's Ghosts
It seems simple enough: Joanne Marlowe makes weighted beach towels. Before that, though, she founded separate companies that made custom dresses, retailed clothes, and produced and telemarketed garments. In 10 years of self-employment, she has survived embezzlement, near bankruptcy, and life as a Chicago carriage driver. Now, she is on pace to do $4.5 million in towel sales by March 1990. She is 23 years old.
"It was a Sunday morning at the end of June 1988, and I was -- how should I say this? I'm basically a great person for having rabbits up my sleeve, and I didn't have any more rabbits. The theft in the fall had cost us about $450,000 in lost sales, this only six months into the company [Double Sharp Garments, first incarnation]. I closed down my plant June 6, after struggling to get it back on its feet. I was seriously considering bankruptcy. I'd gone from a sizable small company to back where I'd started eight years before.
"I was pretty depressed, and one of my friends pointed out that I lived across the street from a beach but had never gone. Never had time. So we got a cooler, a bottle of wine, decided to relax.
"It was a beautiful Lake Michigan day -- puffy white clouds, light breeze, not too hot. I laid out my towel. To pamper myself, I spent a lot of time putting suntan oil on. Just as I stretched out, a gust of wind picked up the towel and covered me in sand. I hit the roof.
"My friend said, 'Joanne, instead of getting angry, why don't you figure out a fix? I bet that pisses other people off, too.' This particular person had come up with a lot of really impractical ideas over the years, but this one seemed feasible. A weighted beach towel would be a low-cost product to introduce, for instance, and it could be telemarketed. So instead of relaxing at the beach, I spent the day coming up with prototypes in my mind and had the product developed within five weeks and had it to market within eight weeks.
"Developing the towel was extraordinarily easy for me, because I started out in fashion, and fashion is cutthroat. I had learned how the larger retailers function, how the markets function, how the seasons sell, all with a much more difficult product. Clothing was five different colors, 10 different styles, and three different lines -- twice a year. I went from managing that to managing five different weighted towels, two sizes, one color. And when you make product introductions to domestics buyers, they actually like to talk to you, as opposed to clothing buyers, who never return a phone call.
"I took an odd job to pay the bills, driving a carriage for three months in downtown Chicago. It was the kind of thing where I'd get up at 5:30 a.m., do all my office work, work with the couple of employees I kept on staff from 9:00 until about 3:00, then run downtown, clean my horse, clean my tack, get on the street by 6:00, and be out until 2:00 in the morning. I was sleeping about three hours a day from July until October. I wasn't very healthy, but it worked.
"I've kept it very small this time. I have only two assistants and me. I work with five manufacturers, and all the towels are drop-shipped by the printer I'm working with domestically. It's allowed me to move fairly freely without the overhead, which has been the key for getting this thing back together.
"I like the idea of doing a lot of this out of house, because it's easier to define costs. My history has been to do distribution and production and sales all in house, and it's very hard to formulate exactly how much a garment costs based on those three segments of overhead. I kind of like being sent bills; you go, 'Oh, this cost that much, huh? We'll put that in the file.' It makes bookkeeping just an absolute dream.
"By March 1990 I'm expecting we'll have sold $4.5 million of the towels [at $25 to $37 each]. My goal is for us to be doing $7 million to $8 million in sales by the end of 1990 with fewer than 10 people on staff. I think I'll be able to do it the way I've laid the groundwork.
"If there's an obstacle in the way, I'd have to say it's my own emotional readiness, because after being down on the canvas, you become extremely cautious. I don't want to be unprepared for the success because I got hit so hard before."
