The Dynamic Duo
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The founders of Hoover's have launched five businesses together.
Gary Hoover and Patrick Spain have collaborated on no fewer than five businesses, and with each new venture they've found a fresh way to complement each other's skills. Their last three enterprises have jumped right onto the fast track, including Hoover's Inc. (#311), in Austin, Tex.--but that gets ahead of the story. The two met in the fall of 1970 at the University of Chicago. Hoover, who had been subscribing to Fortune since the age of 12, leased a bus to carry a group of chums to Long Island for Thanksgiving. Since there were more seats than there were bodies to fill them, he grasped that he had inventory to sell just as surely as did Marshall Field's & Co., his favorite store. Charging $30 per seat, he and Spain started TW Bus, which soon began carrying students to East Coast destinations during holidays.
That first business established a general division of duties that would remain more or less intact for the next three decades. Hoover was the idea person and the idealist, while Spain was the operations manager and the practical businessman. When one bus trip sold only a few seats, Hoover wanted to run the bus anyway, since a bus seat was what the company had promised. Spain, concerned with the company's bottom line, disagreed. "I said, 'Let's give each of them an airplane ticket instead,' because it was less expensive," Spain says. The next venture, a bookselling operation on campus, involved an equal split of duties. The two bought cartons of lost books at auctions held by the U.S. Postal Service in Chicago and then sold them on campus.
The pair split after graduation; Spain became a corporate lawyer, Hoover a retailing executive at the May Department Stores chain. In 1981, however, when Hoover started Bookstop, the nation's first chain of superstores for discount books, he renewed his partnership with Spain, who invested some of the initial capital. Hoover grew Bookstop to 22 stores and approximately $65 million in sales, making it the fourth-largest book chain in the country. When the company's board asked him to step down, in 1989, Hoover turned to his old buddy in yet another role--this time, as adviser. The two talked constantly for several weeks as Hoover dealt with his disappointment. "Patrick knew the legal issues, and he was a close personal friend," Hoover says. Later that year, Hoover and the venture capitalists sold Bookstop to Barnes & Noble.
A year later, Hoover started Hoover's Inc., then known as Reference Press, to publish business reference books. While he was running the bookstore chain, Hoover had noted that although his customers could get reference books on diet, cooking, and exercise, there were few available on business. "I wanted to form a company that would be the Webster's of business guides," says Hoover. Within weeks Spain had quit his job and joined his friend.
Along with a handful of employees and dozens of freelance writers, Hoover and Spain wrote their first guide, a profile of 546 large corporations. But Spain made his most lasting contribution by setting the company's strategic direction, persuading Hoover to make the business reference information available on-line. Today half the company's $4 million in sales comes from electronic publishing through the company's own Web site. Hoover left the company early in 1992, eager to return to his first love, retailing. The next year he started yet another company, TravelFest Superstores, the first superstore in the travel business and a place where customers can buy tickets, luggage, maps, books, and a variety of travel accessories. While Spain stayed behind to run Hoover's, he once again provided some of TravelFest's start-up capital and has advised Hoover on strategies to move some of the travel business on-line. "We now have a Web site where people can book tickets," says Hoover, who opened his third store in August.
Given Hoover and Spain's obvious appreciation for each other's skills, there's no indication that their partnership won't take on yet another form, enabling them to launch a sixth business. "I like creating businesses," says Hoover. "I'm not a backseat driver." Spain thinks the key to their relationship is trust. "Trust is not just integrity but also faith in the other person's judgment," he says.