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The conventional wisdom said they'd sell out, go public, or go under. The conventional wisdom was wrong
It looked like a graduation celebration: the 1983 Inc. 500, assembled in Houston on a hot May night, CEOs and their spouses dressed in unaccustomed formal wear for the gala dinner dance that ended the second annual Inc. 500 conference. For two days they'd sat through workshops and speeches, earnestly discussing the strategy and tactics of growth. Now they were ready to party.
They had reason to celebrate. The United States had recently come out of its worst recession in a decade, an economic slump marked by an unprecedented number of bankruptcies, the largest bond default in history, and the skyrocketing of the federal debt and the trade deficit. But the recession hadn't touched the companies represented in Houston. They were thriving, the hottest growth businesses in the country. While the Fortune 500 were losing market share and laying off employees by the thousands, the Inc. 500 could boast an average five-year sales increase of 770% and employee growth of 402%.
It was as if the economy had turned upside down. Most of the CEOs were in their late thirties and less than a decade away from start-up. Their companies were still relatively small (averaging $8.8 million in sales), anonymous, and often stretched near breaking by day-to-day demands. According to Inc., however, they were "the pacesetters of the recovery." Now they were being feted by the governor and the mayor, treated to dinner and dancing and a Rita Moreno stage show. Who needed champagne? The recognition was enough.
I'd never met a group like them. Strangers when the conference began, representing 35 states and the District of Columbia as well as a dizzying diversity of industries, they were like old comrades-in-arms by the night of the gala. Each one had a tale. Self-proclaimed novices at management, they seemed totally absorbed by the adventure of building a company.
No one knew, though, what making the Inc. 500 meant, beyond the five-year growth spurt that had put their companies on the list. Clearly these people had been in the right place at the right time, but you couldn't prove anything about national economic trends from the group or generalize about which regions or strategies were the most fertile.
No one knew how long their companies would last, either. Entrepreneurship had been out of favor for so long that it seemed like a new phenomenon in May 1984, when the conference was held. Inc. itself was an upstart in the publishing world, and David Birch's landmark study of growth-company job generation was still controversial. The conventional wisdom equated our national business health with the health of the Fortune 500 and Wall Street, dismissing most entrepreneurs as shooting stars and predicting astronomical failure rates for their companies. Just how significant were all those new jobs if they were going to disappear tomorrow?
The CEOs I met in Houston didn't buy the clichés. Yes, they were driven, but it wasn't money that drove them so much as control, the need to take charge of their own lives and futures. Their values came straight from Main Street: be your own boss, build something of your own for yourself and your family. They shared a common long-range goal, too: to keep the companies they'd founded independent and growing.
Privately, I didn't think many of them would make it. For all their determination, long-term growth would require deeper pockets and more structural sophistication than most of them could muster. The majority of their companies were newly profitable, without the resources to survive a market slump or an attack from a more established competitor. I expected that 25% of the businesses would fail outright sooner or later. Another 25%, technology companies for the most part, would go public, riding the then-booming IPO market. Most of the rest would wind up being sold. In fact, a group of mergers-and-acquisitions specialists from New York City had already called the magazine, trying unsuccessfully to buy the phone numbers of all the companies on the list. "They saw the 500 as a prospecting list," recalls editor-in-chief George Gendron, "a gold mine of hot companies that would have to be taken over to survive."
This past summer, six years after the Houston gala, I decided to track down the CEOs of the top 100 companies in that 1983 class, to see how accurate the predictions had been. I'd followed a few in Inc., such as Lane Nemeth, who built Discovery Toys (#17) to $70 million in sales, only to find herself embroiled in a bitter lawsuit with an early investor ("Greer vs. Nemeth," July, 07900761). But I'd lost track of most of the others. "Life After Growth" is what I planned to call the story. Where had their companies gone, and how did the CEOs look back at their Inc. 500 days, now that the dust had settled?
To my surprise, relatively few of them have the time or the inclination to look back. Most of their companies are still here, just as the CEOs had hoped, and are still focused on the future, growing and creating new jobs.
The conventional wisdom about failure rates was wrong: only 16 of the top 100 are out of business today. The New York City M&A specialists were wrong, too: only 22 of the companies were sold. The Inc. 500 CEOs were right. Fifty-three of the 100 companies that topped the 1983 list are being run by the same men and women who led them to the Inc. 500. But they are hardly the small companies I remember from Houston: 19 of them have crossed the $50-million mark, and 10 of those have made it past $100 million, including the class's sales leader, Oracle (#82), which went from 15 products, 38 employees, and $5 million in sales in 1982 to 380 products, more than 7,000 employees, and $1 billion in sales today.
You still can't generalize about hot regions or sectors from the survey results. The 53 survivors include a vitamin supplier and a contract aviator, a manufacturer of disposable industrial clothing and a home-insulation merchant. Only 12 companies went public, and 2 later went private again. Surprisingly, the experience of going public doesn't appear to have set them apart. Eight of the 12 are still run by the same CEOs, and most are growing at rates not much different from those of the ones that stayed private.
Although the survivors' companies remain as niche oriented as ever, they are doing more things in more places these days. Some have expanded vertically and others horizontally, and almost all have reached out geographically as well. But no matter what growth path the companies have taken, success has forced them to wrestle with the dilemma of scale. In the early days, after all, they benefited from being small. Their size allowed them to be quick, flexible, focused, and responsive. Companies that keep growing, however, reach a point at which they begin to need the strengths of a large organization -- geographic reach, range of service, economies of scale. The question is, How do you acquire those strengths without sacrificing the small-company advantages that helped you grow in the first place? How do you avoid bureaucracy and keep your employees working as a team, especially when they begin to number in the hundreds and are spread all over the map?
That has been the fundamental challenge confronting the survivors. They've found ways to resolve the dilemma and keep their companies growing. In place of conventional hierarchies, the survivors have built systems of relationships inside and outside their companies that depend more on trust and mutual advantage than on authority and delegation. In the process, they have extended the definition of an entrepreneur and developed new models of management.
But it's not just the companies that have grown. So have the CEOs themselves. The survivors of 1983's top 100 are not nearly as obsessed with control as the people I met in Houston were. They can't be. Now they are hands-off by necessity, giving up day-to-day management to focus on strategic planning and building the team. They also spend more time thinking about their employees than they used to. These days they talk not only about identifying but about sharing the opportunities and responsibilities of growth.
They're getting older, too, moving through their forties and fifties. After all these years, they've had enough of the stress of 60-hour workweeks. Success has given them freedom, time to travel with their kids or coach Little League or just go fishing. Business is still an adventure, and they're still passionate about making their companies grow. But they're looking for something more.
You can track trends and events from the past seven years by studying the 16 companies that failed. But you can't prove much about entrepreneurship beyond the truism that some growth companies are better managed than others.
Times were hard in Houston, home to 7 of the top 100 companies on 1983's Inc. 500 list. Four of the companies went bust, and another is on the brink. But John McCormack's Visible Changes (#54) managed to thrive in Houston's collapsing market, reaching $22 million in sales in 1990. Outside the oil patch, consumer electronics experienced a shakeout, fad products came and went, and two stereo chains from the top 100 went under, along with a waterbed store, a comic-book publisher, and Gravity Guidance (#2), maker of the Gravity Boots that Richard Gere wore, hanging upside down, in the movie American Gigolo. But TSR (#51) had turned the 1980s' teenage mania for Dungeons & Dragons into a $27-million business by 1990, expanding into magazines, board games, and books.
One company's crisis is another's opportunity. Prakash Melwani tried to expand mail-order clothier Royal Silk (#21) into retail stores and sank into Chapter 11. Yuppie-toy master Richard Thalheimer made the same move with The Sharper Image (#76), which grew to more than $200 million in sales. Two S&Ls slipped into the national morass, taken over by the feds. But Commonwealth Mortgage (#68) stayed healthy and pushed sales from $10 million to $50 million by sticking to loans for individual home buyers, rather than for development or construction.
The survivors' companies kept growing because they learned to reinvent themselves through seven years of crisis, choices, and change. Most followed textbook paths, broadening the markets they served and the ways they served them, capturing more customers and more revenues from each customer. Many expanded to other countries.
They have grown by fits and starts for the most part, and all of them have had to overcome external threats of one sort or another. But growth itself has usually been the biggest catalyst of change, as the survivors have struggled to make sure their companies retain the qualities that ignited their original expansion.
It was easy for Dennis Hayes to keep his hands on and the excitement high in the early days at Hayes Microcomputer Products (#4). To launch the company, he'd pulled together seven employees in classic garage-style fashion. There was no structure to speak of, no communication problems, no walls separating marketing and engineering and sales. Everyone worried about quality, cost, response time, and new-product introduction: with first-year sales of just $134,000, survival depended on doing those things right. Growth kept the pressure high, but the reward was high, too: a five-year 9,066% sales increase that put Hayes Microcomputer Products on the 1983 Inc. 500 list with $12.3 million in sales.
But it is no longer a small growth company. With sales exceeding $120 million, customers in 30 countries, and more than 600 employees in Atlanta, London, and Hong Kong, the challenges are different. Teamwork is still the order of the day, president Hayes says, but it has to be managed. While everyone is still expected to worry about quality and response time, he now has to make sure people have the tools and systems they need to get results. With that in mind, he has set up a quality-improvement process in the company, under which employees form into special QIP teams as they are required.
"It's not really a big change for us; it's more a formalization of the things we were already doing," Hayes says. There's a six-month training program, in which new employees learn a W. Edwards Deming inspired eight-step method of statistical process control and get a heavy dose of group dynamics. After that, they are expected to take responsibility for their own work and are rewarded accordingly.
Today the company moves faster than ever. Hayes has kept the organization flat, with only two levels of management between him and the line engineers. He's also created what he calls the OFI -- short for opportunity for improvement -- a suggestion program for employees, who are guaranteed a response within 24 hours. "We've worked hard to empower employees," he says. "We can't afford to lose it with the sluggishness and inattention that come from hierarchical management." The same goes for customer service. Though the stated goal is to have malfunctioning products repaired and out of the service department within 72 hours, 90% of all service requests are expedited in just one day. Hayes has worked hard to keep up the pace on the product-development side as well. In 1984, when the company first began exporting, it took a year to modify the domestic product for use abroad. Now it builds a basic, modular international model from the start. With this approach, the company was ready to ship the U.K. version of its most recent product 30 days after introducing it in the United States.
Hayes is typical of the successful survivors from 1983's top 100. They may call what they do empowerment or teamwork, partnership or sharing, but the goal is the same: to keep the virtues of smallness intact no matter how big the companies grow. Most survivors, like Hayes, have redefined their own roles in the process, focusing now on strategic planning, keeping the company flat and decentralized, and finding new markets and new people to take charge of them. The CEOs spread equity as they spread responsibility, giving employees control over their own jobs, along with a piece of the profits.
After finishing college, Rick Inatome started putting together computer kits with his dad. Today Inacomp Computer Centers (#38) is a $500-million, publicly owned operation with more than 1,400 employees. It has retail franchises serving corporate accounts, and computer rental and leasing operations. Inatome has had to change. "At $500 million the business can no longer be an extension of my personality," he says. "From a kid with passion and a dream, I've become a business manager, managing through organization."
Paul Woodruff's consulting firm in Exton, Pa., had 8 employees and $318,000 in sales in 1978, its first year in business. Environmental Resources Management (#88) now has 1,350 employees and $131 million in sales, with offices in Toronto, Vancouver, London, Brussels, Milan, and Hong Kong -- a group of 32 companies altogether, offering everything from construction services to computer software. "We've gone through a continual metamorphosis of structure, but we've always stayed decentralized," Woodruff says. "When we start a business, we do it by hiring people who are knowledgeable in their field. The mind-set is an old-fashioned one of partnership. Whatever your share may be, this is your business and you can make a difference, both in the company's destiny and in your own."
"This is an ongoing process -- it lasts forever," Hayes agrees. "Usually you mess it up for a while. Then you fix it. But the important thing is human excitement. You have to empower employees, create an environment where they want to come to work."
No other CEO from the '83 group has changed company structure more dramatically than Lawrence Ellison of Oracle, the $1-billion database-management software company, now publicly owned. When sales hit $500 million two years ago, he began a radical process of decentralization. "We wanted to cut the bureaucracy and response time," Ellison explains, "and we thought we could grow 10 $50-million companies better than one $500-million company."
First, the central product division was carved into 15 business units, each serving a different hardware system or producing a different product. The corporate offices handled packaging and distribution, provided legal help and human resources personnel, and offered marketing consultation free of charge. But each production unit was responsible for developing and marketing its own product and had authority over budgets, hiring, and accounting. Individual bonuses were based on the unit's bottom line.
Last June, though, Ellison established Oracle USA, which took over the marketing budgets of the 15 domestic small business units (SBUs). Each SBU is responsible for producing its products and for helping the marketing units in countries outside the United States. Inside the country, however, success depends on teamwork: although each unit has an individual revenue quota, the quotas for the sales reps of Oracle USA are not product based, forcing each SBU to work with the salespeople to develop products that both sales and production believe they can sell.
The result has been a growth explosion: Oracle has doubled in size in the past two years, reaching $1 billion in sales. Rather than a pyramid, with the CEO on top, the company has become a wheel, with the CEO at the center of the spokes.
Andrew Stewart has followed a similar path at Computer Methods (#43) -- "carving the world into tiny niches," he calls it. With $18 million in sales, his company is working on a far smaller scale than Oracle is, but the logic and method are much the same.
By 1983 Stewart had built Computer Methods into a $2.4-million company supplying temporary software personnel primarily to Detroit's automotive giants. Then H. Ross Perot sold Electronic Data Systems to General Motors, causing 90 of Stewart's 150 programmers to be thrown out of work. Although Stewart remembers the experience as "brutal," it turned out to be a blessing, forcing Computer Methods to look for new markets.
The company started by moving into health-care billing, bundling a newly developed proprietary software package with contract data services for local hospitals, on the theory that -- as the automakers continued to slump -- laid-off workers would push to have their medical work done before their benefits expired. Today health-care products and services account for one-third of the company's sales. Stewart's next move was back to the automakers, providing software and consulting services for the Big Three's engineering departments, creating software products for service-bay diagnostics, say, or for monitoring performance on a factory floor.
Computer Methods is now stronger than ever, with 20 divisions, but Stewart insists it is not really his company anymore. His 275 employees own 40% of the equity and have taken home about $3 million in bonuses over the past six years.
To keep the company's division managers entrepreneurial, Stewart treats them all like entrepreneurs -- literally. He helps them define the market and the service, and he provides them with support, but it's up to them to make their businesses grow, and they get to reap the rewards. He even lets the divisions keep their own profits. Each division is run "like a franchise," he says. It is financially autonomous, paying headquarters a profit percentage as well as a fixed fee for administrative services.
"It's simple," he says. "I just go get the best people and pay them more than anyone else." He then focuses on clearing obstacles out of their path. "I looked at what would have kept me from starting my own company. My first three or four years here I spent with insurance people, bankers, and the IRS, and I wasn't very good at it. So I take care of all that for the divisions and let them concentrate on what they're good at."
Stewart is as far from being a hands-on manager as a CEO can get. The only controls on his divisions are his employees' ambition and talent and the response of the marketplace. "This is the real world. People either have it or they don't. If the division can't pay me my franchise fee, they're out of a job. They can move to other groups in the company, but that's it.
"I used to try to manage, to listen to everybody's problems, but it bored me," he says. "And I was bad at it -- my employees told me." So he just stopped doing it six years ago. Now he concentrates on strategic planning and allocating the R&D budget, working a five-and-a-half-hour day. "Management is too expensive anyway. I'd rather give that money back to the employees." October he spends fly-fishing in Montana. In November he's in Florida, fishing with clients. "I've got it pretty good for myself," he admits. "I love working, though. I'll never stop."
Three growth companies, all wrestling with a problem of size: how could they acquire the advantages of scale before they actually got big?
* For John A. Varacchi, the issue was service range. Furniture Consultants (#36) was a $19.7-million dealer selling furniture to Manhattan architects and designers, but the company had to attract large corporate clients to grow. To do that, it had to provide turnkey solutions, supplying everything from the wiring at a Darien, Conn., headquarters to facilities management of a data-processing department in White Plains, N.Y.
* For Michael Dunham, the issue was geographic reach. Effective Management Systems (#28) was selling $3.1 million worth of business software and software systems for manufacturers, distributors, and food-service operators to hundreds of small companies near its Milwaukee headquarters. But how could the company sell to similar customers in other cities, given Dunham's commitment to service?
* For Al Toth, the issue was buying power. His Independence, Ohio, distributorship, PBM Office Products (#63), had grown to $6.8 million in sales by 1982, but it sold a commodity and was therefore forced to compete on price. That proved a major disadvantage when office-products superstores such as Staples and Office Depot arrived on the scene, with buying power PBM Office Products couldn't match.
Varacchi, Dunham, and Toth all chose the same solution. Instead of creating a structure of relationships inside the company, they looked for relationships on the outside, putting together a patchwork of networks and alliances with other entrepreneurs who shared their ambitions. On the surface, their solution seems the opposite of the decentralized corporate structures developed by Oracle and Computer Methods, but the goal -- building a team to grow with -- is exactly the same. The management demands are the same, too: an alliance's success depends on finding the right people and motivating them, creating a compelling mutual advantage rather than exercising control in the traditional sense.
At Furniture Consultants half the revenues still come from sales of furniture, but it also sells project-management services, organizing what Varacchi calls one-stop shopping for such giant clients as Shearson/American Express. Need service in the Hudson Valley or along the Greenwich/Darien axis? The company owns Furniture Consultants of Connecticut/New York, with outlets in Greenwich and Poughkeepsie. Need a specialist to do the computer or telephone cable layout for a 30-story office tower, to lay the cable, or to manage the facility when it's built? The company has an alliance with an organization that can do all of that.
"The downside is it's harder to run a business like this than to just sell furniture," Varacchi admits. To keep his new customers satisfied, he has to make sure the separate companies work as one. For him, as for Ellison and Stewart, the challenge is to find men and women who share his customer service orientation, then to provide the direction and support needed to keep all parts of the network growing together. But the upside is burgeoning sales, from $19.6 million in 1982 to $65 million today.
Dunham and his partners at Effective Management Systems (EMS) have created a similar structure -- and the company's sales have risen from $3 million in '82 to $30 million today. Their strategy was to establish alliances in other cities with entrepreneurs who shared EMS's service-driven attitude. There are now 13 such alliances selling EMS applications software and providing service support in their own local markets. EMS owns 3 of the allied companies, holds an interest in 2 of them, and has exclusive contracts with the other 8.
Dunham and Varacchi both share equity and responsibility with an internal senior management team as well. Dunham just added five new partners to the four principals who own and run the Milwaukee parent company -- "to show people there's room to grow here." Varacchi is one of five partners who own Furniture Consultants; all have their own divisions and customers. The partners meet every Thursday afternoon from 3:00 to 7:00. With so many people involved, it may take longer to reach decisions than if the company were a one-man show, but it takes less time to execute the decisions, and the process ensures that responsibility is shared and that strategic planning uses the strengths of the team.
Al Toth didn't set out to form an external alliance. He first tried to grow PBM Office Products by launching a retail division, but he had to ax the expansion after opening seven stores when he came up against the buying power of the new superstores. Since the retail end of the business made up only 10% of sales, he decided to concentrate on corporate accounts instead, joining a coast-to-coast network of 30 independent companies called American Office Product Distributors. With combined annual sales of $2 billion today, American Office Product can act like a giant. The network's strength is its ability to market with shared advertising and promotions to midsize and large corporations across the country, coordinating the members' efforts through a huge computer network. "It's great for customers," Toth says. "They get national purchasing power with local service." It's been great for PBM Office Products, too: sales have grown to $17 million, up 150% since 1982.
And it's been great for Toth himself. "I'm much less intense and stressed," he says. Inside PBM he's expanded the senior management team to four people, and he's cut his own workweek from 70 hours to 40, spending the newfound free time with his two young children. He's a year-round coach, in baseball and basketball, and an elected member of the local school board.
"After a while what's interesting and important changes for you," Toth says. "The company is still important to me financially, but now I'm more concerned with making sure the employees benefit from success."
It's interesting, seven years later, to talk with the 53 surviving CEOs from 1983's top 100. The more they've given up control, the faster their companies have grown. But the more successful they've become, the less driven they sound today. There are still crises to face, of course, but they've spread the responsibilities and shed the day-to-day worries.
And though growth has made them rich, they insist the money hasn't changed their values. They remain as Main Street as they were at the Inc. 500 conference six years ago, focused on their companies and their families. "I would hope I'm the same person I've always been," Carl DeSantis insists, speaking for many in the group. "There are only so many steaks you can eat and cars you can drive."
Life is sweet for DeSantis, the founder of Sundown Vitamins (#48), which had sales of $10.1 million in 1982. Today sales of the company and its affiliates are up to about $100 million. He has seen his two sons grow up in the business, too. Both are now vice-presidents. Although DeSantis is still the CEO, he's stepping back, coming in at 10:30 or 11:00 in the morning and working until 6:00 or so at night, taking time off for boating or scuba diving, his newest hobby. If he had to start again, his sons would be his first two hires, he says. But he doesn't necessarily expect them to take over when he retires. "That's up to the board of directors," he says.
DeSantis is typical of the successful survivors. They're not ready to retire. Still focused on the long term, just as they were in '83, they remain committed to the future growth of their companies. But now they're relying on the teams they've built, in which they profess unbounded confidence. For the CEOs themselves, success means freedom, a shorter workweek, and more time off, an opportunity to savor the rewards.
For John Nady, who built Nady Systems (#23) from sales of $3.3 million in 1982 to nearly $15 million in 1990, success means a chance to go back to his rock-and-roll roots. If you'd been in Oakland, Calif., in the late 1970s, you might have seen him, a trained engineer billed as Captain Nasty, lead guitarist with Titanic, for which he'd developed a new microphone, the Nasty Cordless. When the microphone took off and the band didn't, Nady decided he had to put his guitar aside to focus on growing his new company.
He's made all the right moves since then. Nady Systems has enjoyed a compound annual growth rate of more than 60% since 1978, expanding into higher-margin consumer electronics products such as professional audio equipment, motorcycle communications gear, and telephone headsets, and exporting to Europe, the Far East, Australia, and South America. And now he's gone back to the music, buying two rock-and-roll clubs, both run by his wife, Toby Garten, and practicing in his studio at night after work with his latest band, Nady Alliance.
Nady knows it's only rock and roll. But he likes it.
WHAT EVER HAPPENED TO . . .
1983 -- CEO of Frontier Cooperative Herbs (#78), a bulk herb-and-spice distributor with '82 sales of $2 million
1990 -- Earned enough credits to get his bachelor's degree in business administration and accounting from Coe College in Cedar Rapids, Iowa
Stewart started college in September 1982, just before Frontier Herbs was named to the Inc. 500. Growth had made running the company so complicated, he says, "I had to learn the science of business just to stay even." For the next eight years he studied nights and weekends -- and did much better than just staying even, pushing the company's sales up to $9 million in 1990.
But Stewart's education hasn't stopped: he plans to start working toward an M.B.A. Sometime soon Frontier Herbs will hit another growth spurt, he predicts, "and I'm gonna be prepared for it."
1983 -- CEO of Sun-Flex (#26), a manufacturer of antiglare personal-computer-monitor filters with '82 sales of $6.1 million
1990 -- An investor in Classico San Francisco, a publisher of
Thomsen sold Sun-Flex to Xidex in 1984 and stayed on board for 10 months before leaving in a dispute with the new management over what Thomsen considered "an impersonal and insensitive big-company attitude." In 1985 he started LaserLink Systems, a manufacturer of computer add-ons, which he's winding down because "there's no future in hardware for American companies." Instead, he's concentrating on his new postcard company, specializing in the movie, music, and comic-book market, with licenses from Walt Disney, Norman Rockwell, and Lucasfilm.
With 15 employees and its own press, Classico is booming, Thomsen says. But he won't reveal the numbers -- he plans to keep this business for himself.
1983 -- CEO of Excalibur Products (#85), a small appliance manufacturer with '82 sales of $4 million
1990 -- Home owner
After his company made the Inc. 500, Orton decided he'd have to delegate to keep it growing. So he hired a "heavy hitter" as his vice-president of marketing; the new VP persuaded him to shift markets and sell his fruit dehydrators through mass retailers rather than through the small independent stores responsible for Excalibur's original growth. It turned the company around: from a $500,000 profit in 1983 to a $500,000 loss and Chapter 11 in 1985.
"I was devastated," Orton recalls. He'd supported seven kids with the company. After it began dissolving around him, he had to struggle to hold on to the house. But hold on he did, for five long years, finally throwing a family party last summer to celebrate making the last mortgage payment.
Excalibur is no more, liquidated this year. But Orton has started another company, Killer Baits, which manufactures fishing lures and, coincidentally, sells fruit dehydrators. And what about delegation? "I might be a little gun-shy," he admits, "but my mistake was picking the wrong people, not delegating too much."
1983 -- CEO of Burdick's Computer Stores (#14), consisting of six ComputerLand franchises, with '82 sales of $9.6 million
1990 -- Co-owner of Bryce's Sport Saloon & Grill
Burdick sold his Inc. 500 company in 1987. "I got tired of doing the same thing," he says. "Then I tried to retire, but after I alphabetized the spice rack, my wife told me to get out of the house and do something, so I opened a sports bar with my son Bryce.
"Keeping it going was the hardest work I've ever done," he says, "but I do best under pressure. So I'm starting another company, buying and selling mistakes, like TV dinners with corn in both corners. The manufacturer couldn't sell them in stores, but I bought them and sold them to a prison."
JOHN KANE AND GEORGE WILSON
1983 -- Cofounders of Equitrac (#50), a computerized billing service with '82 sales of $3 million
1990 -- Still partners, with sales at Equitrac up to $15.3 million
It's hard enough to share a business with a partner, but Kane and Wilson have gone one step further, sharing an office for the 13 years since they started in business together. "It's good for communication," Kane explains. "We both hear every phone conversation and know everything that's going on. And in all those years we've never had a disagreement."
The partners' casual style hasn't changed, Kane says. "We still sit around in our jeans, and no one calls anyone 'Mr." But there has been one change: Kane had the president's title when the company started, and now Wilson has it. But not for long, the partners agree. "We want to challenge our people with opportunities, so we already have other people jockeying for that spot," says Kane.