Of course, paradise isn't cheap. "If you're doing business in Boulder, you've got to be willing and able to pay for it," says Pettigrew. Labor costs are no longer the bargain they were five years ago. The city's restrictions on land use and development, which have spared it from urban sprawl and enticed nature-loving newcomers, are driving up real estate costs. In the past two years Boulder's property prices have escalated faster than those of almost any city in the country. The median price of a home is now more than $230,000. "Employees cannot afford to live within city limits," reports Rochkind, who bemoans what he calls the "Aspenization of Boulder."
Balancing growth against the strong conservation ethic in Boulder is difficult. A proposed referendum restricting building expansion to 1% "could be the death knell," says Pettigrew.
"This community has been built on local enterprise," he avers. "If this were the headquarters of six Fortune 500 companies instead of six Inc. 500 companies, this town would be in the dumps right now. A community of entrepreneurs: that's what's making it work in Boulder."
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Expansion Strategies
On the walls of Drew Conway's office, in Newton, Mass., hangs a four-foot-by-three-foot map studded with navy blue flags and green pushpins. The flags mark territories already staked by 17 branch offices; the pushpins target 24 more markets yet to be conquered. Like a battered souvenir of the company's runaway ride to $61 million in sales last year, Conway's pocked map displays a classic expansion strategy at work: dominate a local market and then run like the devil to every other hot market you can find.
For growth companies, the search for the next market or the best new site is a never-ending quest. If they're not hastening to open international sales offices, or cross-country or even crosstown branches, they're desperately seeking a bigger warehouse, a better factory, more and ever more space. It is a rare company on this list that's doing business only in the humble place where it started.
Consider one 60-day period in the life of Conway's company, the Registry (#429). Last summer the Registry opened five new offices (in Denver; San Mateo, Calif.; Charlotte, N.C.; Greensboro, N.C.; and Manhattan) -- oh, and hatched plans for four more. Those were merely the latest assaults in Conway's Napoleonic campaign to become a national contender in the fragmented business of technical consulting.
"The opportunity is now," says Conway. "We're in a hot niche. We've hit a really good time in the market, so it's an ideal moment to expand."
Although the pace is furious, the Registry's expansion is not haphazard, says Conway. There's a regimen behind his urgent push: the company's five regions are governed by detailed expansion plans. And managers in each territory are judged by their ability to train the next generation. "They know they've got to produce a crop of people to open the next round of offices," he says. Few decisions are divorced from the company's ambitious expansion, reports Conway, who hires people willing to move, pursues customers with multiple locations, and electronically wires his organization so that staff around the country can communicate instantly.
"This is a portable organization," he says. "It's been built to move."
Tom Hoshko's Computer Professionals (#162), in Lake Wylie, S.C., operates out of eight offices, most of which are in the Southeast, yet he takes a more conservative (and less itinerant) approach to expansion than Conway, his sometime competitor. Rather than build a national company at breakneck speed (and lower margins), Hoshko opts to grow regionally. He's more discriminating in choosing sites, he says, even though he lets someone else do the picking. "We follow our customers," Hoshko states. When he insists that his company, a purveyor of technical services to the Fortune 500, is "customer driven," he means it quite literally: He has set up shop in Richmond, Va., in pursuit of Philip Morris; in Atlanta for the sake of Coca-Cola; and in Boca Raton, Fla., to cater to IBM. What's more, he recently crossed the Mississippi to serve American Express in Phoenix. "If we don't have a premium customer in town, we don't go," says Hoshko, who prefers to see a volume of business billed to the same address before he will commit to a new office. Expansion doesn't drain as much cash, Hoshko argues, when every office finances itself out of sales. "It's not what you make but what you keep," he says.
Marvin Kramer of Friendship Manor Homes, in Madison, Wis., is another incurable follower. But he doesn't trail his aging customers. They're everywhere, and increasing every year. He is guided, instead, by a different lodestar: "Wal-Mart," he says, quite reluctantly. "I hate to let the secret out, but we follow Wal-Mart around."
For the last four years Kramer has decided where to site most of his 52 homes for the elderly by shadowing the business-that-Sam-built. "It hasn't failed us yet," he claims. This year the company took number 65 on the Inc. 500 list, and it expects to top $10 million in revenues in 1994.
After 20 years as a commercial real estate broker and developer, Kramer knew firsthand how costly feasibility and site-selection studies could be. "I was going from place to place, doing it the hard way, and I kept bumping into the Wal-Mart team," recalls Kramer, who, like the place pickers from Bentonville, Ark., has an appetite for small semirural towns. "I thought, 'Why not take a shortcut? Let them pick the spots and we'd just meet them there later." It didn't matter how many old folks lived there, Kramer figured. If there were enough for Wal-Mart, then there'd be enough to fill a residential home with 15 beds.
