Hall of Frame Profile: Dan Estes

On founding, and if necessary re-founding, a dream business.

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In 1978, Dan Estes and his wife and business partner, Peggy Nordeen, founded an advertising firm they called Starmark International. Rather than creating consumer campaigns, Estes and Nordeen concentrated on the underdeveloped business-to-business sector. They were successful enough to make the Inc. 500 list five times in the 1980s and then retire young. Estes and Nordeen got on a boat, sailed off to paradise -- and couldn't stand it. So they dove back into business. Since then Estes has placed Starmark -- a new Starmark, built from scratch -- on the Inc. 500 twice more.

I got to Chicago in 1970 through Playboy magazine as an art director, and I was there for about three years before I decided I wanted to become an entrepreneur. It was a great time -- the real rah-rah days of Playboy. The lesson I learned there, though I probably didn't think about it at the time, was to think big. Hugh Hefner was a visionary, and he didn't look at anything with limitations. I was from a small Midwest blue-collar town and being all of a sudden involved in this very large international organization opened my eyes tremendously.

After Playboy, I went out on my own and I started a design firm that did very well. I had 20 people on staff and offices on Michigan Avenue when I was 27 years old. But I decided that I didn't know enough about business to get where I wanted to be. I spent six to eight months scaling the company down while exploring companies that I wanted to join, companies with the kind of background I could learn from. At that time I had great ambitions, but I didn't know how to build a company. I had a master's in design, but I couldn't read a balance sheet. I picked a firm that had extremely disciplined financing policies and account management. After several years the agency decided to move to the suburbs. So my business partner, Peggy, who would later become my wife, and I offered to buy the company. They turned us down. In 1978 we founded Starmark.

It was my idea to start the company. Peggy is not entrepreneurial by nature. She is extremely loyal and a wonderful contributor to things, and I managed to talk her into starting Starmark. It was scary being a married couple running a business and we were cautious going in, but we managed because we had had a professional relationship for some years before it became personal. I run the company and she manages our clients and customer services. We're very respectful of each other's responsibility, and our working dynamic is the only thing that hasn't changed over the past 26 years. We have the best relationship of any couple I've ever met and we'll have our 25th anniversary next May.

For the first couple of years, we got kicked around a lot. Finally I just got tired of it and decided that we were not going to let the economy or clients or anybody else dictate our future. A business plan is critical to the success of a business. If you don't decide where you're going, somebody else will. I put a plan together and called our 10-person staff together and we all sat around our conference table and I laid out our strategy for how we could become a 65-employee, $30 million company in the next five years. And as I got into it, they looked at me more and more like I had absolutely blown out every bit of brains that I had. But at the end of the five years we had made the Inc. 500 and surpassed our original goals.

Our most successful ad in terms of longevity was a TV commercial for a client that manufactured ice melter -- what you put on sidewalks in the winter. We created this spot called "Walk Like a Penguin" that mixed images of people walking on ice with penguins. Over a couple of years of working with us, the client, Safe Step, became No. 1 in its category and the commercial is still running today, untouched.

All entrepreneurs go through a period of feeling spent, drained, and in need of an escape. After about 15 years running the company, I needed a break. At the time I was spending 12 weeks a year in Florida, having been struck by the sport-fishing bug. An agency in Chicago approached us about merging, so we sold the company -- but not the name, because it's kind of like my baby. I had always had this dream of retiring in my 40s. I was 49 and I thought that I was achieving my dream, but I hadn't thought through the practical end of it.We sold the business in 1994, got in the car to drive to Florida, and immediately I had this very empty feeling. We spent a couple months in the Bahamas with our boat, and I realized that I had made a mistake.

About six months later I bought a catalog company out in San Francisco. I hated the whole distribution end of it. Because I'd been in advertising, I was able to triple the sales in less than two years, but the purchasing, inventory, and warehousing were logistical nightmares. So I sold the company and bought a maid-service franchise company because I had done a lot of franchise work at Starmark. I thought it would be easy, but it wasn't any fun, so after a year I sold the business. By that time my noncompete was up, and in 1998 I restarted Starmark in Florida.

The main thing that has changed in Starmark between 1978, when we started, and 1998, when we restarted, is technology. We're not techies, so the first thing we did, even before opening our doors, was to buy an Internet company so that we would have that expertise on staff. There is also a huge fragmentation of the media now. Advertisers are finding it difficult to reach their markets through broad-based mediums like broadcast television. Starmark has capitalized on that trend because we're able to deliver a more targeted message through public relations, the Internet, custom publishing, and private TV networks. The fastest-growing segment of communications right now is custom publishing. We're doing a publication for Norwegian Cruise Line and the Lottery Winners Association. I predict that by the end of 2005 we'll be publishing 25 titles.

I'm going to have to retire from the advertising business because at some point I will become a liability to the company. It's a highly energized business. Right now the thirtysomethings still have a hard time keeping up with me, but I'm turning 60 next year. I have a succession team that I'm currently working with. It's a five-year program to orient them, and then I will go on the board of directors. By the time I turn over the reins, my goal is for Starmark to be a $100 million company. But it doesn't mean that I'm going to retire from business. I'm definitely a hopeless entrepreneur and will be forever.