Brief Profiles of 2003 Inc. 500 Companies

Helpful tips and fun facts from the 2003 Inc. 500 list.

Doing Well by Doing Good

Seth Goldman's Honest Tea (page 60), which joins Timberland, Patagonia, the Stonyfield Farm yogurt company, and many others in the ranks of the Inc. 500 over the years who have made social responsibility a core part of their business mission.

Goldman's company, based in Bethesda, Md., has been steeped in social reform since his student days at Harvard, when public-service pioneer Alan Khazei was a mentor. Goldman still describes managing his $4 million tea company as "running a national service group but wearing a for-profit hat." He chose a small farming village in western South Africa to supply the ingredients for his Haarlem Honeybush tea and sends the town a royalty check for the use of the name "Haarlem." A similar partnership with the Crow Indian community of Montana supplies Honest Tea with leaves for its First Nation peppermint tea. "Tea is a product that's enjoyed by the wealthiest countries in the world but produced by the poorest," says Goldman. "We view that disparity as a chance to create wealth where it wasn't before." Honest Tea is also working to raise awareness about the amount of sugar Americans consume. Jess Mccuan

What causes a sleepless night?

Some Inc. 500 entrepreneurs see challenges on the horizon, some don't. Here's how they rank the factors most likely to limit their growth next year.

• 35% Sluggish markets
• 27% Nothing
• 15% Personnel issues
• 12% Lack of financing
• 9% Strategic decisions
• 2% Operational concerns

The Eureka Moment

Where did you get the original idea for your business?

• 52% The same industry I was working in
• 17% A related industry
• 14% My experience as consumer or client
• 12% From another source
• 5% I researched start-up ideas

Lessons From Corporate America

What do all Inc. 500 CEOs have in common? They work for themselves. That's not to say they don't admire big corporations such as IBM, Microsoft, and Starbucks: In our survey, more than half said they do. But would these CEOs want to spend their lives at one of them? Not really. Nearly a quarter said they started businesses because they wanted to be their own boss, and nearly 14% said they didn't like working for someone else. Corporate America did provide some useful lessons for those who toiled in its field. Working for 27 years as a meat manager at Kroger Co. motivated Larry Metz, CEO of L.E.M. Products (page 108), to maintain a small, close-knit feeling for his six-person meat-processing equipment distributing company. "Big companies don't go to the bottom where all of the work is being done," says Metz. "People have excellent ideas. Companies don't become big companies because of the bosses." Andrew Nadel, CEO of Pride Products Distributors (page 110), a distributor of corporate logo products, says Wall Street was a fabulous training ground. As a bond salesman at a boutique investment firm there, Nadel competed with some of the Street's biggest firms. He learned very quickly how to develop relationships, make a sale with no initial leverage, and earn faithful clients through follow-through and honesty. Nicole Gull

Masters of metamorphosis:

Inc. 500 companies have yoga-like flexibility. Here's how this year's group has changed in the years since they were started.

84% of Inc. 500 owners started companies without benefit of any formal market research.

• 42% We have added products or services that fit with our original business idea.
• 29% We have taken our original products or services into new markets.
• 15% We are in the same business, with the same target market, as when we started out.
• 11% We're in a completely different industry than when we started.
• 2% Other

Raising more money:

Among companies that raised money subsequent to their seed round, banks were the most common funders.

• 29% Bank loan or credit
• 17% Private equity investment
• 15% Personal assets
• 12% Venture capital
• 8% Other founders' assets
• 8% Family or friends
• 6% Other business entity
• 5% SBA loan or other government fund

Born to Run:

If practice makes perfect, it's little wonder that some Inc. 500 members were entrepreneurs when others their age were barely surviving puberty. At 15, Myers Group (page 66) founder A.C. Myers grew vegetables in his parents' garden. He paid them for use of their land and rented his grandfather's truck. When he reached college, he had a five-acre farm that employed up to 10 people at harvest time and netted $5,000 to $7,000 a season. As a high school junior, Yuchun Lee, CEO of Unica (page 26), launched Apollo Software, a drawing and painting program for early Apple computers. Lee eventually turned his attentions to his studies at MIT, but not before selling enough software to buy a car. Kenyon Hayward's big idea literally fell from the heavens, when a violent storm tore down branches and trees in the high school freshman's neighborhood. The V-Span (page 132) CEO raked in cash during the cleanup and liked the work so much he convinced friend Chris Miller to co-found H & M tree surgeons. In its best year, the company had gross revenue of nearly $50,000, which helped cover tents, a truck and eventually, college tuition. Hayward's neighbors still call him for services, though he's changed his fees somewhat: He charges them a cold soda and a chat. Josh Stewart