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The Inc. 500: Inc.'s 15th Annual List

A senior Inc. editor offers an overview and some thoughts on the 1996 Inc. 500.
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The founders of America's fastest-growing companies have plenty of smart ideas about taking your company to the next level. What really sets them apart, though, is more than that

Here you are, on the verge of meeting the nation's most accomplished company builders, and all you can think to ask is "What makes them so special?"

Sure, you've got a right to ask. And nobody's suggesting that this year's group--our 15th annual ranking of America's 500 fastest-growing private com-panies--is an unusually tight-lipped lot. Study their stories in the pages ahead, and you'll find answers to the kinds of questions every aspiring Inc. 500 founder asks: How do I know whether I have the resources to finance more growth? (Answer: If your kid's piggy bank still jingles, you're fine.) How do I know whether I have the right business idea? (Answer: Consult your current bosses; if they hate it, you're onto something.) Who can help me cope with the stress? (Answer: Unless you've got multiple spouses, meet regularly with other entrepreneurs.)

Those specific ideas are valuable, but it's only a matter of time before the patchwork you've stitched together from them begins to show holes. What shines through? The distance between your company and theirs. It's not enough simply to get smarter about marketing or operations or sales. What's still missing, as it turns out, is what you most wanted to know about Inc. 500 companies: What makes them so special?

The garrulous architects of these exemplary businesses couldn't tell you--and not because they're offended by the implicit suggestion that they have to justify their appearance among the entrepreneurial elite. They think they're answering you when they talk about what's worked for them. But look inside just about any Inc. 500 company, and you'll find much more than the sum of its smart practices. What makes these companies so special?

The founders of Inc. 500 companies may delight customers, energize employees, and outpace competitors, but they can't satisfy your basic craving for an answer. The reason is simple: they honestly don't know.

Soon, though, you're never going to have to ask that question again.

This special issue aims to ex-plore what really makes these fast growers different. Gathered here are 500 companies that together show what it takes to build a business that breaks through to the next level and beyond. Each of these breakthrough businesses points to some special attribute to explain its achievement: a distri-bution channel its competitors ignored, an uncommon closeness with its customers, a marked fierceness in its founder's need to prevail.

Learning about these businesses, you'll be tempted to think that all you have to do to take your company to the next level is implement the right breakthrough strategy. And that's not a bad idea. It's just backwards.

Why? Because the breakthroughs made by these 500 founders rarely came from some moment of crushing insight. What pushed these businesses through barriers that most companies never break wasn't a single strategy or tactic. It was something at once more vague and more powerful: their leaders' cast of mind. When entrepreneurs direct their disciplined intellectual energies toward figuring out how to grow, they end up reinventing products, or rethinking so many assumptions that they mold new industries. What they think up comes second. It's how they think that matters most.

Breakthrough thinking.

It's what these founders do so naturally that they can't explain it. But place their stories in close proximity, and certain patterns leap out:

* They understand what their businesses need. When Kenny Troutt started Excel Communications (#80), he had no experience in the long-distance business. But instead of hiring someone who could compensate for that, he brought on Steve Smith, an expert in network marketing. Troutt just knew what would set Excel apart: its distribution channel. For more on fast-growing network marketers, see Susan Greco's "The Buddy System," on page 52.

* They're at ease making assumptions about the future. Wally Tsuha prepared auto supplier Saturn Electronics & Engineering (#392) to thrive amid the harshest shakeout in any industry. In doing so, he made Saturn "This Year's Model" for anybody feeling the vibrations of oncoming consolidators. The story, by Edward O. Welles, begins on page 28.

* They focus on grand ambitions, not big risks. Inc. 500 founders work relentlessly to keep their businesses moving in a direction that isn't always easy for onlookers to identify: ahead. Mike Mahmoodi needed to prove himself, so he started and built NIE International (#423). Mahmoodi's drive was so powerful that it enabled him to survive the enormous hardships he recounts in David Whitford's "Un-sentimental Journey," which starts on page 72.

* They're shrewd about using re-sources--including themselves. As future oriented as they are, Inc. 500 founders understand that their companies are measured by how well they execute in the present. Those who continue growing their businesses long past their arrival on the Inc. 500 have worked hard to figure out how they can best contribute on a day-to-day basis. Donna Fenn talks about just that in "Higher Ground," which begins on page 92. (One of their common strengths: a childlike curiosity that actually dates back to childhood. For proof, see "Are You Raising an Inc. 500 CEO?" by Alessandra Bianchi and Christopher Caggiano, page 152.)

Of course, you don't have to be an Inc. 500 founder to recognize elements of your own thinking in the pages ahead. You may be closer than you think to the breakthrough you want for your business, the one that will finally propel it onto the Inc. 500. So it may not be long before someone approaches you needing to know What makes you so special? That's your chance to offer that person the answer you really wanted yourself. -- Joshua Hyatt




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