Breakout Companies of 2010

Why they’re on the list: For turning down $6 billion from Google

Few start-ups have experienced the kind of immediate breakout success that Groupon has. Ever. In just two years, the company, which partners with businesses to offer deal-of-the-day coupons, has added some 2,700 employees and expanded into 29 different countries – while earning an estimated $2 billion in annual revenue – eye-popping statistics that have some calling Groupon the fastest-growing company of all time. The company recently earned even more notoriety after Google reportedly flirted with acquiring it for a price tag of some $6 billion. Perhaps even more impressively, Groupon turned the offer down, indicating that it has even bigger goals in mind.

Why they’re on the list: Because they’re hiring like crazy (about an employee a day)

Either in spite of or because of the recession, consumers seem to have acquired an insatiable appetite for bargains – a trend that has helped fuel the explosive growth of LivingSocial, the social buying company. Customers can now tap discounts to their favorite restaurants, spas and movie theaters in more than 100 cities around the world. And, by raising some $50 million in investment capital this year, including a $175 million with Amazon.com, LivingSocial, which continues to hire a new employee just about every day, promises to keep its growth trajectory on the fast track.

Why they’re on the list: Because they’ve tripled their revenue

The rise of cloud computing has had a dramatic impact on everything from how people socialize to where they store their information. Box.net has capitalized on this trend by becoming an inexpensive and reliable go-to storage solution for millions of individuals looking to back up their photos and music stored on their computers, iPads and iPhones. But it’s in the corporate arena, where the company has enrolled some 60,000 businesses including big names like Coca Cola, T-Mobile and Volvo, where Box.net has enjoyed breakout success. Thanks to those corporate clients, Box.net has seen revenues more than triple this past year.

Why they’re on the list: Because they’ve added 4 million registered users (and counting)

With the advent of the iPhone, and the onslaught of so-called “smart phones” that followed, it was only a matter of time before companies found a way to get customers to use their phones for more than just playing Tetris. Then came Foursquare, the company that now enables some 5 million users around the world to use their phones to “check-in” at, say, their local coffee shop, and then notify their friends of their location via Facebook and Twitter. The application also awards “badges,” a kind of online plaque, to users for frequent and unusual check-ins, which has made Foursquare not only addictive, but also wildly successful. The company recently passed the 100 million mark for total number of check-ins to its site.

Why they’re on the list: For adding 12 million new users

Social media was once simply a set of tools entrepreneurs could use to promote their businesses. Now, with the advent of Yelp, customers can share their feelings about their latest shopping experience in a whole new way. The company, which is based in San Francisco, provides a forum where some 38 million unique users a month post reviews and ratings of businesses. With more than 12 million reviews now available, the site has become a go-to resource for users to evaluate the merits of thousands of restaurants, hotels and service providers in their neighborhood. What has helped the company reach a new level, though, is the launch of Yelp’s iPhone application which has been responsible for generating about one call every five seconds to a business.

Why they’re on the list: For helping artists sell 55 percent more stuff over last year

In its short history, Brooklyn-based Etsy has become the leading site for artists and craftsmen to sell their wares. Tapping into the tradition of local craft fairs (or the newer eBay approach), sellers set up their own personal storefronts where they can sell just about anything – including clothing, jewelry, and food products – for a flat fee of $0.20 an item. With vintage and handmade items always in demand, Etsy’s online marketplace has thrived, as thousands of sellers and even more buyers in 150 countries have resulted in an average of $30 million in goods sold a month (55 percent more than in 2009). Perhaps more importantly the company says it’s profitable and may consider an IPO in the coming year.

Why they’re on the list: For earning a $5 billion valuation

The popularity of Facebook continues to soar at least in part because of companies like Zynga, the software maker that has become one of the leading developers of social networking games. Fueled by the massive popularity of its games like FarmVille and Mafia Wars, which users pay fees to play, Zynga, which boasts some 320 million registered users, has seen its revenues skyrocket to a reported $500 million a year – leading analysts to value the company at about $5 billion. The company has also gone on an acquisition spree in the past year, fueled by capital supplied by high-profile investors Softbank and Google.

Why they’re on the list: For helping some 4,000 entrepreneurs get their project funded

One of the hardest parts of starting any new project can be raising enough money to do it. That helps explain the phenomenal success of Kickstarter, a company that provides an online forum for entrepreneurs of all stripes –moviemakers, artists and game developers – to connect with potential funders, something that has been coined “crowdfunding.” The company has reportedly collected $25 million in pledges from more than 300,000 backers across 10,000 projects to date. As the popularity of the site has grown, so, too, have the company’s coffers since it collects 5 percent on every transaction.

Why they’re on the list: For adding 90,000 new subscribers a day

Thanks to the advent of Pandora Radio, the days are long gone of having to change the dial on your radio to find a song you want to listen to. The company enables users to specify the artists and songs they enjoy and then streams similar music via a customized channel. The company operates on a “freemium” model, where it offers both advertising-supported free listening for up to 40 hours a month as well as an ad-free fee-based model. Pandora now offers more than 800,000 tracks in its library and boasts some 65 million users who listen, on average, for more than 10 hours per month – many of whom now do so via their smart phone.

Why they’re on the list: For expanding like mad despite a recession

You might not think there was room for another burger joint in your neighborhood, given the proliferation of all the chain restaurants these days. That’s what makes the success of Five Guys Burgers and Fries, a family-owned business, all the more impressive. Unlike its competitors who seem to offer an endless variety of menu options, Five Guys, which now boasts some 725 stores across the U.S. and Canada, sells only hamburgers, hot dogs and French fries. But, by focusing on those mainstays and using only premium ingredients, the company has become incredibly popular and a financial success, where it earns about $500 million in annual revenue. But, it seems, things are only getting started, as the company, which added about 200 locations this year, has some 1,500 more planned for the future.

Why they’re on the list: Because they have an appetite for expansion

Everyone loves cupcakes. But it seems like celebrities like Lee DeWyze of American Idol and singer Colbie Caillat can’t get enough of the sweet treats from Crumbs. Led by the husband-and-wife team of Jason and Mia Bauer, who founded the original pastry shop on the Upper West Side of Manhattan, the company has leapt into the mainstream after publications such as Star, Women’s Day and Elle have featured its scrumptious concoctions, particularly its Colossal Crumb, which is six inches tall by six inches wide and comes in 13 flavors. Not only did the company earn its first Inc. 500 award in 2010, it also expanded by opening new shops in cities like D.C. and Los Angeles as well as in new neighborhoods across New York City. It now operates some 30 locations with plans for more.

-- Darren Dahl