Size Counts

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"Would I do it differently? I don't think so. It was our main chance. The only way that we would ever achieve a national presence was partnering up with someone like that. As soon as we became aware that Garden.com was no longer going to be around, we started approaching other potential distributors and people that would not have even answered the phone for us four years ago -- I'm talking Amazon, Martha Stewart, all the biggies -- yeah, they're interested. I actually have six new contracts already. We have a reputation now, a track record; we have shipped thousands of orders a day -- all those things that I could not have said three or four years ago.

"The optimal size for my business? I personally don't want to be in a situation where I'm in a suit and a tie without any contact with the nitty-gritty of running a business. Couple of million bucks a year, so we're building equity in the business to pass along to our kids and have a comfortable middle-class existence."

J'Amy Owens, 40
President: The Retail Group Inc., Seattle
Status: Retail consultant

"Montgomery Ward is gone. J.C. Penney Co. announced the closing of at least 47 stores in January. The department stores are really under siege. Maybe it's that Americans are sick of slogging through those big neutral places that just have redundancy and soft goods that all look alike and ready-to-wear that's dull. Maybe it's that size is boring in many instances, and too much of nothing is bad.

Passion counts. Passion counts more than size.

"Conversely, you have Target, which is very big and very good, because it represents time savings, it represents the sure thing -- 'I know I'm going to get my needs met when I go there, I understand what they sell, and I can anticipate its being in stock.' That model, that construct, is big and efficient and simple to understand and also hip. Nothing is more hip than Target, and if Target can be hip, there's hope for all of us.

"Big can be both bad and good. It's not ever only about size. How a smaller retailer can compete is really the $64,000 question. The answer is by picking a niche, because niche rhymes with rich. There are contenders that can ride the edges or the fringe of generational desires, and they offer a fashion direction and a position that Target never could. There is still plenty of room for specialty stores to provide fashion direction and leadership and to take risks and to be innovators, and there is a huge market for that. Because they're more nimble and they don't source themselves, meaning they don't try to be the manufacturer as well. They can move faster. Passion counts. Passion counts more than size."

Rick Andron, 55
President, U.S. Pool Corp., Boca Raton, Fla.
Revenues: $6.5 million
Status: Start-up that is pursuing a roll-up strategy in the pool-service industry in south Florida, a fragmented market that has traditionally been dominated by small companies

"About two years ago we identified a niche that consisted of hundreds of mom-and-pop operators. The largest had roughly 1,000 pools in a geographic area that contained 175,000 pools. So there was really nobody that was over a fraction of 1%.

"We began the acquisition of small companies in our service area, and selectively chose a number of operators who had strengths in different fields. That gave us collective expertise in each of the main areas that constitute a comprehensive pool-service-and-repair company.

"Right now we have 4,000 pools, so we're about four times larger than our nearest competitor in south Florida. The advantages are that we have the expertise, we have full-time customer service, we have human beings instead of answering machines answering the phone.

"We can work out marketing and other arrangements with manufacturers, and because of our size, we can get larger discounts. We are also one of the only companies capable of handling 500 or 1,000 homes and hardly blinking in doing so."

Jim Collins, 43
Management educator, coauthor of Built to Last: Successful Habits of Visionary Companies and author of the forthcoming Good to Great: Why Some Companies Make the Leap ... and Others Don't

"To be a great company, you absolutely must be the best in the world at something. That doesn't mean that you need to be the largest, however. To cite one example: Patagonia Inc., absolutely without question the best company in the world at outdoor clothing, with an environmental conscience. Yet Patagonia explicitly shuns size and in fact got itself in trouble in the mid 1990s when it grew to be too big.

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