Little Big Company

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After Tom came aboard, Mike wanted to keep it just the two of them -- because the two of them were having so much fun. Company life wasn't terribly different from high school life: every time one brother made a phone sale, he got to fire several shots from his BB gun at a target outside their first-floor window. But they soon ran out of pellets -- and the resources to handle the growing business on their own. Mike decided they needed help and a real office.

Even in little Sparta, a 90-minute drive from Manhattan, the brothers found plenty of talented people who were eager to work close to home. Their first hire was a childhood friend who was then attending medical school but soon dropped out. (He is now the company's number two salesman, behind Tom.) Another friend had nine years of industry experience. A former classmate left IBM to join High Point's sales force. Several members of the technical team once ran small businesses of their own.

But even as the company doubled its sales each year, Mike kept a careful eye on the head count. Staying small is how the company discovered its calling.

High Point Solutions sells internetworking hardware, the stuff that companies use to put their networks on the Internet. The business doesn't design networks. It doesn't install them. It doesn't maintain them. High Point makes no attempt whatsoever to be a one-stop service provider -- because that would require lots of people. Instead, the Mendiburus carved out the most profitable business they could (net margins are about 15%) with the fewest employees.

The company found its niche as a "logistics" expert, helping confused corporate buyers with technical details and tailoring its operations to the needs of a small group of customers. "That's the story," says Mike. "We only need 50 good customers." But until recently the business has actually thrived on far fewer: historically about 20% of High Point's 50 or so clients, which include large telecom companies, provide 80% of revenues. "We latched onto some very large customers, and they trusted us with more and more," says Mike.

"You have these two non-college-educated brothers, and their clients don't mind at all," says Ernst & Young's Bolson. "The amazing thing is the clients are Fortune 100 companies. It's not normal."

The Mendiburus attribute their customers' enthusiasm to High Point's ability to bring off tricky network updates without a hitch. In many cases, the company's salespeople serve as the liaison between a customer's purchasing staff and its engineering or IT department. After the sales rep assesses a company's needs, he or she can usually locate the parts in High Point's warehouse. Buying smart is crucial, says Tom, who has a knack for finding good deals on new and used equipment. High Point's eight technicians simulate complex installations to head off problems before the actual rollout. "You don't want to screw up a 'hot swap' on a Saturday," says Tom. Translation: customers can't afford to bring their networks down to make changes and repairs. High Point virtually guarantees they won't have to.

Corporate buyers reportedly appreciate High Point's efficiency. The company recently delivered 80 Cisco routers to a customer in just two days. It might have taken Cisco six weeks to fill such an order, according to Tom. The brothers credit their speedy spartan workforce for such achievements. "We realized by just doing logistics we could stay lean and mean," says Mike. What the company sacrifices in lower-margin hardware, it makes up for in lower overhead.

It sounds simple, but don't be deceived, says CFO Curran. "I've worked with people who have a lot more education but don't have the skills of Mike and Tom," she says. "Both of them have very brilliant business minds. They're honest and treat everyone with respect. They get things done. And they communicate. We get a deal, and Tom comes out and thanks everyone. Little things like that mean a lot." (So does the generous bonus program.)

Although High Point will be hard-pressed to sustain such blistering growth, the brothers insist their approach to getting new customers will stay relaxed. "I tell my salespeople, 'Don't try to click with people who are not worth clicking with," says Tom.

As for exit strategies, Mike has one wish for retirement: to turn his weekend farming into a full-time career. "Farming is awesome," he says. "You have to trust God to get you through. When you're successful in business, you don't think you need anybody. Farming is a good reminder for me. That and the economy."

Susan Greco is a senior writer at Inc. Kate O'Sullivan also provided reporting for this story.

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