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Like the original, the future Microsoft is on this list: You know it, we know it. So will the next Bill Gates please stand up?
In 1984, with $50 million in revenues, 342 employees, and a CEO named Bill Gates, 10-year-old Microsoft Corp. made it onto the Inc. 500 list of America's fastest-growing private companies for the first time. Few applauded. Few hissed. Few noticed.
But today--13 years, 23,000 employees, and $11.4 billion in revenues later--Microsoft has become legend. Chief executives of growth companies aspire to be the next Microsoft. Analysts aspire to identify the next Microsoft. (And Microsoft aspires to buy or bury the next Microsoft before it indeed becomes the next Microsoft.)
And so we now bravely join the ranks of prognosticators. But rather than rely on a complex regression analysis based on a Fibonacci sequence and a vision of Nostradamus, we base our predictions on the hard facts. You want a surefire way to identify the next Microsoft? Then why not find the company that today most resembles Microsoft when it first made the list, in 1984?
Here's Microsoft's profile as it appeared in the company's first year on the Inc. 500 list:
In our quest to identify the next Microsoft, that's what a company would have to measure up to. At first blush, we thought there might be something magical about being #80 on the list, but that's not so. Other than Vermont Teddy Bear, which came in at the #80 slot in 1992, none of the companies holding the #80 spot since 1984--or before--are household names.
To ferret out the next Microsoft, we fed this year's 500 company profiles into our vast computer database to match them up against Microsoft's and waited eagerly for the results. The determination? Inconclusive.
The closest any company came to Microsoft's growth rate was within 10%. No match. The closest any company came to revenues five years prior to making the list was $10,000 over. No match. The closest any company came to list-year revenues was $128,000 off. No match. And no company had the same number of employees at list year; the closest was two above the mark. No match.
But then things started to cook. Six companies had 25 employees 5 years before they made the list. And 31 companies were 10 years old at the time they ranked. Only one company from the list--System One Technical (#496), a staffing firm--matched more than one set of criteria. It was 10 years old at the time it made this list and had 25 employees 5 years ago.
On being told that only System One passed muster on the Microsoft filter, CEO John West gushed, "As you can imagine, it's pretty exciting." It turns out, however, that West has long modeled his company on Microsoft but wasn't aware that anyone had noticed. "From the day we started, we've had aspirations to do the kind of thing Microsoft and Bill Gates have accomplished. I think he's the master."
West seems quite comfortable with the comparison: "I think one of the reasons your filters brought us up is that we're a highly focused business. Bill Gates has a combination of tremendous vision of where things are going and the ability to focus his company on execution of the mission."
Ah, humility. Wouldn't that be just like the next Bill Gates, blithely unaware of his own paranoid ruthlessness? But if history follows form, expect the next Microsoft to appear on this ranking once more before breaking the $1-billion barrier. By then West will be dreaming up creative ways to expand his empire. And we can all say we knew him when.