Where the Growth Is:America's Fastest-Growing Private Companies
If there had been an Inc. 500 back in 1810 -- maybe in those simpler days it would have been an Inc. 50 -- Eli Terry's company would surely have made the list. The Connecticut clock maker had started his business only a few years earlier, but by 1810 he was cranking out an unheard-of 3,000 clocks a year.
Worth an article, no doubt. Sent to investigate this fast-growth company, an Inc. reporter of the day would have come back astonished. This guy Terry doesn't build clocks to order, like everyone else; he makes them first, then he sells them. His 12 workmen use high-tech, water-powered machinery to turn out big batches of parts. And -- get this -- his clocks are sold to customers by a huge network of Yankee peddlers, as far south as Richmond and as far west as Buffalo. Some of the peddlers don't even ask for money until their next visit.
In 1989 we tend to be jaded about such things. But in 1810 factory-style production and nationwide, buy-now-pay-later marketing were harbingers of a business revolution. From such seeds came the mass-production economy of the late nineteenth century.
Which makes you wonder: who are the Eli Terrys of today? Where are they located, and what businesses are they in? What can the companies they run tell us about tomorrow's business landscape?
Welcome to this year's list of the 500 fastest-growing privately held companies in America. It has become a truism to say that the business marketplace is undergoing convulsive change. Yet here are 500 enterprises that -- far from being swamped by economic upheavals -- have somehow managed to take advantage of them, to get out in front, to grow at stunning speed despite ever-more-intense competition. Just perusing the list, as we'll see below, tells us much about how the U.S. economy is evolving. And as for running a company -- well, like Terry, the chief executives of the Inc. 500 have learned to manage for the marketplace of the future rather than that of the past. We'd be poor students if we couldn't take home a few pointers from their experience.
So choose your curriculum. The profiles ["Growth Strategies," [Article link]] showcase the strategies that got some of this year's winners where they are today. The story of this year's #1 company -- Cogentrix Inc. -- is told in "Full Steam Ahead" [ [Article link]]. The list itself appears in "The 500" [ [Article link]], and an index ["The 500 Index," [Article link]] also is available.
First, though, consider everything these 500 companies tell us about our new economy -- and about where Eli Terrylike growth is taking place in modern America.
Where the Growth Is: By Region
Point one: this is a big country, with booming growth appearing all over the map. Divide the United States into its four main sections -- Northeast, Midwest, South, and West -- and you'll find something approximating one-quarter of the list in each one. The South is the regional winner, with 145 companies. It's followed by the Northeast (124), the West (120), and the Midwest (111).
Over the past five years, however, both the South and the West have lost ground relative to the other two regions -- which leads to some surprising conclusions about the geography of growth.
* The hot coast these days is the Atlantic, not the Pacific. California is -- as always -- the single-state leader, with 83 companies, down 3 since our 1984 list. But New England, the Middle Atlantic states, and the South Atlantic states rack up 217, a gain of 12 over five years ago. New England alone gained 13 winners since 1984, while Pacific Coast states as a group lost 13. After California, the two leading states are New York, with 34 companies, and Massachusetts, with 29.
* Adjusting for population, the tilt toward the East becomes even more pronounced. Seven of the top 10 states are on the East Coast, while California drops to #9. Staid New England has half again as many winners per million residents as the Pacific Coast states. Going back to those four main regions, the Northeast is now the hands-down winner, with the South bringing up the rear.
* Something remarkable is happening in what used to be called the Rust Belt. Ohio, Indiana, Illinois, Michigan, and Wisconsin have 89 companies among them, up from 75 in 1984. Michigan alone added 18 listees in five years, including 6 since last year. "We're seeing a lot of spin-off activity from large corporations, both in manufacturing and services," says John E. Jackson, a professor at the University of Michigan who's an expert on the state's economy. "And the state government has been instrumental in supporting that kind of entrepreneurship."
Only a few states -- Alaska, Mississippi, Montana, and Nevada -- didn't make the list at all. Sparsely populated Wyoming made it for the first time in a few years, thanks to Moose's Welding & Construction (#368). Gardener's Supply (#310) and New England Builder (#463) put tiny Vermont on the list, also for the first time in a while. Maine has three Inc. 500 companies this year; from 1983 through 1987 it had none at all.
