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Mail: May 2002

Readers react to articles from recent issues of Inc magazine. Plus, an update on 1999 Inner City 100 winner Fitigues Inc.
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Greg Gianforte is a serial entrepreneur whose start-up strategy is to do things on the cheap, wrote Emily Barker in her February feature, " Start With Nothing." Great companies have always been bootstrapped, agreed editor-in-chief George Gendron in his FYI column that month. The tremendous response to those pieces suggests that thrift is back. If the 1990s were an era set to the tune of "Money for Nothing," when capital was cheap and everyone with an idea got a chance to roll the dice -- well, today you have to be a whole lot savvier just to get in the game.


The Young and the Cashless
Perhaps "the new parsimony" is a result of good parenting.


I am a young entrepreneur starting an office-supply business. I just wanted to say thank you for confirming everything my parents have ever taught me, including "It is not how you make it but how you spend it that will make you a success."

John Shami
Owner
SupplyPath
Sacramento


Perhaps you should stay lean even as your company grows.


I greatly enjoyed your February article on bootstrapping. I was, however, disappointed that you stopped short of highlighting the value of using a bootstrapping philosophy later in the life of a small and growing company. I regularly work with companies that after receiving an influx of capital begin purchasing expensive operational solutions they don't need. Bootstrapping works because it successfully forces companies to think about their own needs and the needs of their clients. As a result, a company ends up with inexpensive solutions that work instead of expensive ones that don't.

Jake Perlman
President and Founder
Demeter Solutions
Denver


And perhaps bootstrapping isn't all that it's cracked up to be.


I used to agree with you. Having run a company from nothing for many years, I found lots of creative ways to save a nickel here and dollar there. But I've changed my stance completely. The severe emotional toll of running an undercapitalized company combined with the time wasted thinking about insignificant money-saving techniques is a drain on the business. Plus, in this environment you're giving the staff the wrong message. They quickly translate such frugal behavior into "Our company cuts corners." I'm now convinced that the ideal business model uses a moderate amount of capital, reasonable operating costs, clear goals, and an agreed-upon exit strategy.

An old adage correctly contradicts your "shoestring" approach: "Never jump over dollars to pick up nickels."

Eric Holmquist
Director of Technology Services
The Secura Group
Los Angeles


Taxicab Indiscretion
Irwin Simon presides over Hain Celestial Group, America's leading natural-foods company. But writer Hesh Kestin's profile of the savvy risk taker (" The Apprenticeship of Irwin Simon," March) revealed an aggressive side of the CEO that angered readers because it seemed so different from the values implied by Simon's wholesome products.


I was shocked at one of the anecdotes in your rags-to-riches profile of Irwin Simon. The story goes that years ago he flew to New York for a job interview and couldn't find a cabbie that was willing to take him where he wanted to go. Did he offer the cabbies more money? Did he charm one of them with his wit and personality? No. Instead, he impersonated someone else so he could ride in a waiting limousine. That's not resourceful; that's deceitful -- by any standard. There's a remarkable contrast here, because the people who buy Hain's products are trying extra hard to "do the right thing." If Simon can tell that story without apology, his principles do not match those of his customers. In the future, this customer will have one thing in common with the empire builder from Glace Bay: both of us will be looking to buy good brands that Hain hasn't yet acquired.

Bill Satterness
Market Analyst
Site Matters Inc.
Eden Prairie, Minn.


Irwin Simon is another egocentric and shortsighted CEO developing a rape-and-pillage business that misunderstands its core customers. Organic and health are not foods but a demographic, a lifestyle. While Simon talks of expanding brands and selling off production, his customers are concerned with localization, sustainable growth (including business growth), and un-branding. The word will spread of Simon's blatant cynicism for the demographic he is counting on to sustain his organic empire. When it does, he will begin to see that this demographic isn't just a bunch of stupid ex-hippies who are willing to pay $3 for 30 cents worth of beans; we're intelligent consumers who'll spit out Simon's mindless branding and exploitation faster than he would spit out one of his own veggie burgers.

Mark F.
Portland, Oreg.


Run for Your Life
In " How to Run a Marathon," staff writer Ilan Mochari wrote about entrepreneur Steve Costello's love affair with running and how you might start to love it, too.


I absolutely loved Ilan Mochari's article on marathons. To Steve Costello, my congratulations! Welcome to the club.

I think there is one aspect of the marathon mystique that was not addressed adequately in the article, however. Finishing a marathon is more about mental toughness than it is about physical preparation. Too many people advocate extremely long training runs (up to 20 miles) and increasing weekly mileage, which discourage some people from ever trying to run a marathon and all too often results in runners' injuring themselves during training. A better formula for success may be one that includes reasonable runs (90-minute duration max), cross training for cardiovascular fitness, solid mental preparation, and a sound race-day strategy. Anybody can do it. Finishing a marathon involves training, but ultimately it is a mind-over-body experience.

Bud Boughton
Greenwood, Ind.


Next Stop, Management
This reader is a believer in giving employees a detailed long-term plan for career advancement, which was the subject of Kate O'Sullivan's February article " Why You're Hiring All Wrong."


I am the director of training for the fourth-largest automobile-dealership group in the nation, and your article speaks very much to our industry. As our people climb the management ladder, they can become owners of a significant portion of their dealership and can even own and run multiple dealerships. That's an important ingredient to our rapid growth and profitability. I believe that's the only way to keep and attract the best people.

David Nassief
Director of Training
Automotive Investment Group
Phoenix


Whither Raskin?
Has Andrew Raskin's column, " Letter From Silicon Valley," outlived its usefulness?


I think it's time to reinvent Andrew Raskin's column. The first one was cute. But now I feel every month it's a waste of space in your magazine. I find your magazine very informative, but you need to hold every page to high standards. I'm tired of hearing the same dot-com story over and over and over. The readers of your magazine need to focus on the future, not the past.

Scott Segal
Royal Oak, Mich.


CONTACT US: E-mail your comments to editors@inc.com. Or address your snail mail to Inc Letters Editor, 38 Commercial Wharf, Boston, MA 02110, and include your name, address, and phone number for verification. Letters may be edited for space and style. For help with your subscription, call 800-234-0999.


Update: Urban Flight

If inner cities are supposed to be so cool, why did one company abandon its big-city digs?

One man's dump is another man's potential palace. And when it comes to office space, the CEOs from companies on our annual Inner City 100 list have often displayed a knack for spotting dilapidated architectural gems and creating corporate quarters that are not only functional but also downright chic.

Among the chic elite was May 1999 cover boy Steve Rosenstein, cofounder of Fitigues Inc., a high-end casual-clothing manufacturer and retailer. Rosenstein had turned a vacant scrap-steel warehouse in the River North neighborhood of Chicago into a stylish HQ for his growing business. The "polished rawness" of the space reinforced Fitigues' design aesthetic, Rosenstein told Inc back in 1999. "It lends itself to people's feeling they can dress the same way, with simplicity but with style," he said. "That's what our collection and our stores are all about."

Times change, people change, hemlines change. Today Fitigues is based in the land of faceless office towers and metastasizing industrial parks, a.k.a. Scottsdale, Ariz. "It really wasn't a business decision; it was more of a lifestyle decision," Rosenstein explains. "I hit 40 and came to the realization that I'm living nine months of the year waiting for the three months I really love."

Replicating the charming, open character of the company's Chicago digs in Arizona was not easy. Rosenstein found an unfinished building and was able to tailor the rest of the construction to his specifications. "I said, 'Don't do anything to it,' " he says. "'Don't touch the floor, just put sealer on the cement, leave the bricks on the wall exposed." The entrepreneur also shipped spare bricks and glass blocks from the basement of the Chicago building and used the materials to build the reception desk.

Fitigues moved into the new space late last summer. Twelve of 22 staff members relocated to the new home base, with Rosenstein picking up the tab. The warehouse-and-distribution part of the business remains in Chicago, along with one IT guy, a human-resources person, and a few members of the marketing department. Fitigues still leases space in the building it grew up in, though Rosenstein sold the property -- which he bought for $1 million -- for nearly $5 million. "I wish I got those margins in clothing," he jokes.

One benefit of the new location is new inspiration. Rosenstein recently unveiled a tennis-and-golf line. "That probably wouldn't have been part of our mind-set if we were still sitting in Chicago," he says. "In Arizona you look out the window and see the big blue sky and the mountains. A lot of days I'm out of here at 2 and going to the driving range." --Christopher Caggiano

Last updated: May 1, 2002




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