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Gobs of Great Companies

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Today's a big day: we have officially unveiled the 26th annual Inc. 500 and the first-ever expanded rankings, the Inc. 5,000. (To check out Inc.com's coverage, click here. For a full explanation of the subtleties of the two lists, click here and here.)

As always, this project offers a window onto the ever-changing economy, which my colleagues and I will be blogging about over the next few days. For starters, one often finds ebbs and flows in various markets. In recent years, for example, the defense sector has been robust (I'm talking about the Inc. 500 here). But this year, we noticed that many defense companies were branching out into other kinds of government work, so we renamed that category "Government Services." Talk to the entrepreneurs themselves and you realize that something else is happening: firms that used to rely very directly on defense dollars (including some that, when faced with the dot-com bust of 2000 and 2001, completely reorganized themselves around security matters) are now looking ahead to a possible withdrawal of U.S. forces from Iraq. Many of them are certain that, regardless of our force levels in Iraq, there will be plenty of business for contractors. Still, you are seeing companies take steps to reduce their reliance on the Pentagon.

Another observation: California is making something of a comeback. I've worked at Inc. for 11 years, and the Golden State has always had the most Inc. 500 companies. But in recent years, the Washington, D.C., area seemed to be vying with California as the psychological epicenter of the Inc. 500 world for some of the reasons I describe in the previous paragraph. Last year, there were only 66 California companies on the list. This year, however, thanks to strong totals in metro Los Angeles, San Francisco, and Silicon Valley, California boasts 81 Inc. 500 companies. (For the record, D.C. remains the top city, although Maryland fell out of the top ten states in terms of total number of companies on the list.)

I was surprised to learn that many of the Californian companies are in industries like advertising and marketing and finance—sectors better associated with New York.

One final note: as always, there are some crazy-ass companies on the list, including a business that makes bandages from the skin of shrimp, a company that sells totaled automobiles online, and a company that makes WiFi badges that resemble the Star Trek communication system. If it's growth rates continues apace, I suppose that very soon we'll all be comfortable saying "Beam me up, Scotty."

Last updated: Aug 23, 2007




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