This year Granite Systems has attracted nearly $23 million in a second round of financing and has 96 employees, up from 25 in 1998. And despite the pride Borden feels about his company's self-sufficient early years, he is more confident now. "I don't lose as much sleep at night over meeting payroll," he says.
Regret 3: Not trying to go public sooner
Company: TelStrat International (#232), in Plano, Texas
Business: Adding remote capabilities to telecommunications systems
CEO: Bob Carroll
Bob Carroll is an entrepreneur who values his independence. The CEO of TelStrat, who had years of experience in engineering and management and another start-up under his belt, was determined to keep the business in the family. In 1993 he'd "started it as a private company," he says, "and I wanted to keep it that way. I wanted the autonomy."
He brought his two adult children into the business two years later and, he says, "the plan was to have them take over." But within the past six months, all that has changed. "With all the dot-com competition, it's hard to motivate and retain good talent," says the 56-year-old Carroll. "They've got stars in their eyes about stock options." So he now has to switch directions and head for the public markets. "If I had decided to do this from the start, it would have been easier," he says.
Carroll has been working almost exclusively with one customer, telecommunications giant Nortel, in designing, manufacturing, and private-labeling added capabilities for the company's systems, but he now feels he must expand his customer base. That will cost him in terms of profitability because of the investment he must now make in marketing, and in research and development for individual customers.
Mostly, though, he feels he may have missed the best initial-public-offering market for a long time to come. "Had I positioned myself to go public, I could've gone public one or one and a half years ago. I missed a great window," says Carroll. "We had a 200% growth rate, and we had a lot of cash. All I really needed to do was to have a good story. It would've been an easy sell." Instead, he now plans to go public in two or three years, depending on what the market looks like when he's ready.
So why didn't Carroll go public when he could have? "I had been part of public companies before and knew the pains you have to go through. I wasn't willing to make the trade-offs," he says. In 1987 he had started another business, Digital Techniques Inc., which became part of a public company. "I had the experience of dealing with shareholders, with a board. I had enough of that. Now I'm chairman of TelStrat. For a while I was the only officer. Then I added my kids and my president. And that's it. There's a minimum amount of interference," he says wistfully.
Regret 4: Not going to college
Company: Ecocrete (#154), in Chula Vista, Calif.
Business: Manufacturing modular schools and classrooms
CEO: Keith Christian
"I didn't pay much attention in high school," Keith Christian says ruefully. "My pager kept going off." That's because he had started his first company, a janitorial-services business, when he was 15. He managed to graduate, albeit with poor grades, but his business was doing so well that he never bothered with college. And now, years later, despite having started three successful companies, "I think I would be a better CEO if I had more education," he says. He feels that lack of education most acutely in the areas of finance and accounting, where he has to rely on his employees to monitor the bottom line.
In his 41 years, Christian has never worked for anyone. Now that Ecocrete -- which owns a patented formula for reinforced concrete that it uses in construction -- is seven years old and has some 300 employees, he wishes he had had a role model earlier in his life. "I wish I had worked for a more mature company that had a backlog and inventory. I wish I had worked for a company that got it right," he says. "I could have learned how to manage a business. In a start-up, you're always in crisis mode."
If only I'd gotten a college education.
As part of the consolidation in his industry, Christian is acquiring a dealership that has been the intermediary between Ecocrete and its customers, the school districts. With expansion on his mind and recognizing his own limitations, he has decided to make the head of the dealership, Richard Koch, his new CEO. The strikingly modest Christian believes that Koch -- who has 15 years' experience in the business and a degree in accounting from the University of California, Berkeley -- "will make a better CEO."
Despite his regrets, Christian, who will remain chairman, says he has no plans to go back to school anytime soon. But he is strongly encouraging his two kids to stick it out. And it's perhaps only fitting that he is finally hitting his stride in a business devoted to building space for students.
Regret 5: Hiring the wrong executive
Company: Alogent Corp. (#281), in Norcross, Ga.
Business: Designing and installing payment-processing software
CEO: Brian Geisel
"It was a desperation move," says Brian Geisel, referring to his decision to hire a key manager. The fact that the man he chose was a bad fit was one thing, but what Geisel regrets most is that he'd allowed himself to get backed into a corner in the first place. "My biggest mistake was to let myself get into a situation where you need to solve issues immediately, in desperation," says Geisel, who founded his software company in 1995. "I didn't have the resources to let me do due diligence. I didn't have a board. I didn't have a human-resources department. I didn't have the depth of management to use the managers as a sounding board."
