Sign of the times, high tech: small computer companies such as Thinking Machines Inc., in Cambridge, Mass., and MasPar Computer Corp., in Sunnyvale, Calif., are outpacing their giant competitors in the development of so-called massively parallel computing, which is thought by many to be the field's next great advance. Sign of the times, low tech: small railroads are operating more and more of the nation's tracks (24%, up from 6% a couple of decades ago).
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"Growth sucks up cash like crazy. You're always scrambling to get enough inventory to meet the demands, to get enough financing to pay for the inventory and finance the receivables. In our first year of growth we increased our line of credit three or four times. Every time, I had to go in and rejustify what was going on and hold their hands." -- Tim Leister,
Tl Care Inc.
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Most promising variation. Companies that grow not simply by hiring labor but by creating owners. All five finalists in this year's Entrepreneur of the Year contest encourage employee stock ownership. A young Minneapolis-based life-insurance company called LifeUSA has leapt to $114 million in sales in only four years -- thanks in part, says chief operating officer Maggie Hughes, to its system of widespread ownership. LifeUSA employees and sales agents take part of their compensation in stock. An "owners' council" representing both groups makes sure they are heard in the corridors of power. The system breeds high performance. "We process with 274 people what others process with thousands," brags Hughes.
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Type Three: The Soloists
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Who they are. Sole practitioners. On their own. You know them as consultants, free-lance professionals, independent brokers, and manufacturer's reps. What they sell are their own (usually) high-priced services, meaning their knowledge and contacts and experience. How many are there? According to the Labor Department, the number of self-employed rose 23% during the '80s, to nearly 9 million (excluding farmers). The fastest-growing occupational group: managers and professionals, which now account for more than one-third of the self-employed.
Feeding that boom is the information revolution. No longer are vendors of knowledge limited by their own experience and the local library; any self-respecting free lance can tap into a dozen databases to boost his or her stock-in-trade. Nor are they limited by local marketplaces. Armed with a fax and a modem, a manufacturing consultant in Cleveland can evaluate drawings for a company in Dallas. IKR Corp.'s Richard and Inga-Marit Koehler offer marketing help in countries from Saudi Arabia to Singapore and accept clients from all over the United States. Most of their projects begin with extensive computerized research. "There are things on CD-ROM that are incredible in terms of producing information," says Richard.
What you'd better be good at. Need it be said? What you do. There's nothing else, after all -- no partners to fall back on, no brand loyalty, no reason at all for anyone to do business with you if you screw up. On the other hand, that's a pretty powerful selling tool. "Somebody asks me, Why should I go through you, why shouldn't I go direct to Humongous Printing Company?" says Bill Farquharson, who operates a solo print-and-forms brokerage out of his suburban Boston basement. "I tell them, It's my money. If I screw up, I have to go upstairs and tell my wife, Honey, I just lost $5,000. Sure, people can go out and get a cheaper price. But if they're out of forms on Friday and they need 'em on Monday, a low price doesn't do them much good."
Then too, if you are good at what you do, you won't need to worry about much else. Money will pour in, and the only hired hand you'll have to pay is your accountant. Clients will materialize, fed by personal recommendations. "I haven't made a cold call in five years," says Farquharson. "I increase my business through word of mouth or through somebody I've worked with moving to another company."
Prognosis. Excellent. Commentators from Paul Hawken (in The Next Economy) to the Japanese essayist Taichi Sakaiya (in The Knowledge-Value Revolution) have observed that information is the coin of today's realm; those who gather and broker it will find they command ever-higher value in the marketplace. That holds true not just for highly technical skills such as computer programming or investment counseling but for seemingly mundane abilities such as Farquharson's. Few organizations today can keep on their payroll all the experts they're likely to need, whether the experts are employee-benefits specialists or print buyers or telecommunications consultants. But businesses can't afford to do without the experts' services, either.
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"I take monday mornings off. This morning my little daughter and I went skating. I don't have somebody else's problems; I don't have another salesman out there I have to worry about motivating.
"The drawback? Motivating myself. I loved the camaraderie in the office. When you make a big sale, you come home and there's nobody to tell. And as soon as the phone stops ringing, your mind plays tricks on you. I think to myself, the party's over. I'm going to have to get a real job. It scares the hell out of you."
-- Bill Farquharson,
Advanced Form Systems
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Most promising variation. Call it the soloist as people broker: he or she channels other experts to clients with multiple needs. An example is Stefania Aulicino, sole proprietor of Chicago-based Capital Link Inc. Working with entrepreneurs seeking to raise money, Aulicino noticed inevitable lacunae in her client companies, such as an absence of marketing or financial expertise. She also noticed that scores of experienced businesspeople were contacting her in hopes of finding a growing company to involve themselves with.
