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Scorching comments fill the mailbag this month, most of them regarding stories that ran in our July issue. One correspondent suggests that a certain Inc writer may be "dangerously nave." Another is amazed at the "incredible stupidity" of the people we wrote about in an article on stock options. Even the kindest letter of the bunch delivers a barb: a longtime subscriber hopes that a young CEO we profiled "gets a social life." Lest you forget, Inc readers are the pugilists of American business.

Affirmatively unequal
Herb Stokes's controversial quest for diversity, described in senior staff writer Mike Hofman's article " It Takes All Kinds," prompts criticism from reader Ken O'Brien. Stokes, CEO of Alliance Relocation Services, says his hiring policies conform to the letter of the law and that seeking diversity does not constitute discrimination. O'Brien counterargues that Stokes uses race to intimidate his customers.

How in the world did "It Takes All Kinds" get past your staff? A story on a company like Alliance, whose business model includes discriminatory hiring and business practices, is simply not instructive and falls well below the standards of quality that Inc has nurtured over the years. Hiring based on racial discrimination and using the "race card" to nickel-and-dime large customers for contracts just don't cut it anymore. I suggest that your writer is either dangerously nave or consciously attempting to legitimize such unsavory practices. Neither scenario is worthy of your publication. Let Alliance upgrade its practices, and then see if it can compete with thousands of other small enterprises that earn their business through performance.

Ken O'Brien
Chatham, N.J.

In reply, Inc's Hofman E-mailed O'Brien:
Ken, thanks for your note. A few points: You suggest that Stokes's methods won't cut it anymore. But I think Stokes's badge of diversity has very demonstrably won him business. Alliance's clients include Nordstrom, McDonald's, Coca-Cola, UPS, and McGraw-Hill. Brenda Dizer, a procurement manager at Nike, was quoted in my piece supporting that viewpoint. Also, you say my article isn't instructive. I disagree. Knowing why and how corporations award contracts is vitally important to small-company CEOs. I think the pressure on big companies to solicit bids from minority-owned vendors is only growing. Stokes is a poster child for entrepreneurs who reap the rewards of that practice and, therefore, a proper subject for Inc to profile. --Mike

To which O'Brien replied:
Mike, we disagree, but that's OK. I can tell you -- having served as an officer in companies with caps greater than most of the ones you mentioned -- that the practice of using intimidation tactics peaked by the early 1990s. Stokes's formula does not now represent a way one can achieve steady and long-term small-business success. Creating a poster boy for something passÉ is not up to Inc standards. --Ken

Akin to racial profiling?
In the same article, Stokes was quoted as telling a manager at his relocation company that he wanted "a Hispanic in here."

Herb Stokes of Alliance Relocation Services makes an excellent case study of what is wrong with American business today. When hiring, if Stokes tells a manager, "I want a Hispanic in here," that would be discrimination, no matter how you try to twist it. If a police chief said, "Arrest some blacks today," he would be accused of racial profiling and run out of town on a rail.

Randall D. Lofland
Elkton, Md.

Look this way
Stokes also lamented that a vendor sent two white employees to a meeting at Alliance.

I commend Stokes's efforts, and I believe that diversity increases productivity. However, his comments will hurt his credibility. How can a champion of diversity in the workplace insist that he interface only with African Americans?

Scott Segal
CEO
SocioQuake Inc.
Detroit

Trust me
In the July issue, Edward O. Welles uncovered the litigious aftermath of CEO Naveen Jain's recruiting tactics in building his company, InfoSpace. Plaintiffs in several cases have charged that Jain lured key personnel with promises of equity, only to dismiss them once InfoSpace profited from their expertise. Interestingly, this reader does not find Jain blameworthy.

The most interesting aspect of the article " Options, Equity, and Rancor" was not the sleaze and arrogance of InfoSpace's CEO but rather the incredible stupidity of the so-called executives and other employees who apparently never received their options' contracts in writing. For such a basic lapse in business acumen, they don't deserve a thing. Unfortunately, they and their parasitic lawyers will continue to profit -- at the shareholders' expense -- owing to today's unwritten American credo: You're not responsible; someone else is.

Cliff Hoffmann
Breckenridge, Colo.

Not his bigness
For her July article " Size Counts," senior staff writer Emily Barker tracked down a variegated group of folks to muse about how large, or small, a business should be. One of those people was Jerry Brown, former governor of California, now mayor of Oakland. Apparently, Brown can still elicit strong feelings, as he was famous for doing in the 1970s.

Why choose Jerry Brown to weigh in on the merits of keeping a business small? Any local restaurateur or dry cleaner can offer more profound thoughts on the topic. "Governor Moonbeam" has been feeding at the public trough his entire life. And I will tell you that he is not the key reason that Oakland has done as well as it has. The success of the city is due to its location: an expanding Silicon Valley had nowhere else to go.

Kenneth Keller
Principal
Keller & Associates
Valencia, Calif.

Misspent youth
The profile of precocious entrepreneur David Koretz in Edward O. Welles's May feature, " The Billionaire Next Door," reveals a young man's all-consuming passion to build -- and be a winner at all costs. Should one so young work so obsessively?

David Koretz, at age 21, sounds as if he's priming himself to get burnt to a crisp by the pace he's following. I can only hope that he finds some outside interests, gets a social life, joins a church, furnishes his apartment, and takes a vacation. Life is more than work.

Alex Beamish
Principal consultant
TAB Software
Toronto, Ontario

Update

Fumbling Toward E-cstasy

Roy Wetterstrom came late to the dot-com party -- but being behind the times turned out to be a blessing

There's no shame in failing, especially when failure turns out so well, as it did for Roy Wetterstrom and his company, Plural Inc. Back when we profiled Wetterstrom (see " The Metamorphosis," Inc Technology, March 2000), this Inc 500 entrepreneur was hell-bent on transforming his 11-year-old company into an E-business phenom. The goal: to cut back its stable but boring client/server consultancy for flashy Web-development projects. With a plan like that, easy initial-public-offering riches were surely a motivation.

Plural indeed metamorphosed. Wetterstrom spent lavishly to place his $54-million consulting business (then known as Micro Modeling Associates) at the cutting edge of the Internet revolution. New personnel brought new skills to Plural, and the company's exhaustive branding efforts equaled those of nouveau-cool companies like iXL, Scient, and Viant. Wetterstrom began searching for a new CEO to forge a path toward a public offering.

But before the New York City-based company could reap the new economy's ephemeral bounty, investors took a scythe to the impressive market caps of those with-it ventures that Wetterstrom had hoped to emulate. By the time he tapped Neil Isford, vice-president of IBM's E-business Global Services, to take Plural's top job, the IPO window had all but closed -- and, boy, was Wetterstrom relieved that it had. In contrast to its struggling rivals, the Plural of 2001 is not beholden to short-tempered investors. Its customers include big banks, professional-services firms, and the Nasdaq.

Nevertheless, Plural's bosses have some regrouping to do. Though revenues jumped to $88 million in 2000, the company failed to make a profit for the first time in years. In response, Isford's first act as CEO was to cut 25% of the staff and shut down Plural's New Jersey office. "We were willing to make some uncharacteristic trade-offs [this year]," Wetterstrom says. "But I'm a big believer in running a profitable business." Wetterstrom should also be a big believer in luck as the ultimate competitive advantage. He is a fortunate entrepreneur -- one who bought into the dot-com hype but didn't get burned like so many others. In fact, Wetterstrom can boast of a rosy outlook. Microsoft acquired a minority stake in Plural on May 3, 2000. Not bad for a company that failed to achieve the goals its founder outlined in these pages only 18 months ago. --Tahl Raz

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