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Soul Searcher of the Year
In February, a melancholy memo from Starbucks (NASDAQ:SBUX) CEO Howard Schultz to top management lamented the "dilution" of the experience at the company's stores and the "commoditization" of the Starbucks brand. "I take full responsibility myself, but we desperately need to look into the mirror and realize it's time to get back to the core and make the changes necessary to evoke the heritage, the tradition, and the passion that we all have for the true Starbucks experience," wrote Schultz, in a rare fit of fast-growth remorse.
The memo's leakage was met with the kind of emotion and analysis generally reserved for State of the Union addresses. First out of the gate were the skeptics ("gotta be phony"), followed by critics ("it's the people/business model/frontline operations, stupid"), concerned investors ("no, no, not the brakes!"), and admiring marketers ("a fiendishly clever PR ploy"). Meanwhile, loyal customers and frustrated baristas shed grateful tears.
Whether Schultz was being shrewd, sincere, or both remains debatable, as does the value proposition of nostalgia to an $8 billion company with 13,000 stores worldwide. What is remarkable about the memo is its reexamination of the company's direction in relation to its founding values. Schultz's memo nudged leaders everywhere not to argue with success (get real) but to engage it in a friendly discussion about what it really means. Has your definition of success changed with its achievement? Are you OK with that?
Blogger of the Year
It seems a sure bet that history will not remember Marc Andreessen for his writing. That's a shame. The engineer-savant who co-founded Netscape and who sold his second company, Opsware, earlier this year for $1.6 billion is the curator of the best entrepreneur's blog we've seen. Part personal service, part financial advice, and part entrepreneurial philosophy, Blog.Pmarca.com is a refreshing break from a universe of online journals written by self-satisfied venture capitalists, self-promoting marketers, and blowhards of all stripes. Pmarca is all the more interesting because Andreessen writes from deep in the weeds of his latest effort--a social networking start-up called Ning, which raised $44 million from venture capitalists several months ago. For entrepreneurs who haven't been as lucky with investors, Andreessen's advice is characteristically encouraging, insightful, and funny. "One 'no' doesn't mean anything--the VC could just be having a bad day," he writes. "Or she had a bad experience with another company in your category, or she had a bad experience with another company with a similar name, or she had a bad experience with another founder who kind of looks like you, or her Mercedes SLR McLaren's engine could have blown up on the freeway that morning--it could be anything. Go meet with more VCs."
Exit Strategist of the Year
Mary and Gary West are probably the richest American couple you've never heard of--and they did it the new-fashioned way. They took their company public, got rich, then took it private again and got richer still. The couple's business, West Corporation, provides large corporations with a variety of services--call centers, teleconferencing, even bill collection--and also runs the technology backbone for the national 911 system. In 2006, the company's top line exceeded $1.8 billion, up from $317 million in 1996, the year of its initial public offering. Timing the private equity bubble adeptly, the Wests closed a deal at the end of 2006 whereby two large funds bought up 66 percent of West Corporation, taking it private. For the founders, it was quite a payday: $1.45 billion plus 23 percent of the company. So how are the Wests spending their newly liquid fortune? First, they plan on funding start-ups in their hometown of Omaha, starting with a payment-processing company called Planet Group, in which the couple recently invested an undisclosed sum. Meanwhile, the Wests continue to indulge their passion for horseracing. Though their Kentucky Derby mounts have run poorly to date, they own several fine horses, including High Limit, Dollar Bill, and a 1999 stakes winner named, yes, Entrepreneur.
Upstart of the Year
When Whirlpool (NYSE:WHR) announced in May 2006 that it would shut down its Maytag division in Newton, Iowa, it offered transfers to a select group of employees. Twenty-year veteran Jordan Bruntz, the manager of the 90-person division, turned down the offer. He wanted to stay in Newton.
An idea sprouted. Bruntz started attending classes on entrepreneurship, and last December he gathered his seven top managers and asked them to be co-owners in a company he was starting. It would be based in Newton, would be called Springboard Engineering, and would do just what their division had done before-- industrial design and engineering. The managers agreed, and the notion gained quick support from the other Maytag employees.
Bruntz is starting a company that can thrive in Newton: Corporations are outsourcing extra design and engineering work instead of adding to their head count, and an American company full of trained engineers should be attractive. Bruntz talked the town into offering him tax rebates, then got the state of Iowa to give him both grants and zero-interest loans. (He also financed Springboard with bank loans and cash from each new owner.) He bought a large amount of used equipment from his bosses at Whirlpool and spent $600,000 on a former Kmart for his new headquarters. Fifty onetime Maytag employees will have jobs at Springboard. The new company opens its doors January 7, two weeks after Maytag's Newton office closes for good, and Bruntz has already talked both John Deere and Whirlpool itself into becoming clients.
Do-Good Capitalist of the Year
WaterHealth International sells water filtration centers to rural villages in India. A village's water supply is piped into a center (about the size of a typical suburban garage), filtered, then subjected to a UV device that knocks out the DNA of the pathogens that cause waterborne disease. Villagers can tap a clean-water tank for about a penny per six liters. The entire process is 6,000 times more energy efficient than boiling water.
The brilliance of this technology, however (it was invented by Ashok Gadgil, an Indian-born physicist who is now WaterHealth's head of scientific affairs), is not why investors have backed WaterHealth to the tune of $22 million. The key to that was a revamped business model courtesy of CEO Tralance Addy.
Senior contributing writer Max Chafkin has profiled companies such as Yelp, Zappos, Twitter,
Threadless, and Tesla for the magazine. He lives in Brooklyn, New York. @chafkin
Reporter Nitasha Tiku covers technology, finance, green business, and social entrepreneurship for Inc. magazine and contributes to the staff’s daily links blog. Her work has appeared in New York magazine, The Villager, Chelsea Now, and on nymag.com. She lives in Brooklyn, New York. @nitashatiku
Leigh Buchanan is an editor at large for Inc. magazine. A former editor at Harvard Business Review and founding editor of WebMaster magazine, she writes regular columns on leadership and workplace culture. @LeighEBuchanan
Mike Hofman was previously editor of Inc.com and a deputy editor at Inc. magazine, which he joined in 1996. The site was nominated for a National Magazine Award for Digital Media in 2010, and was named the best business website by Folio Magazine. In 2006, Hofman was part of a team of writers nominated for a Webby Award for best business blog. He lives in New York City. @mikehofman
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