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What sorts of people launch growth companies, anyway?
Some left big-company jobs; many never had them. Some always planned to start a business; others never dreamed their hobbies might become vocations. The founders of Inc. 500 businesses sometimes appear driven to company building by as many different motives as there are names on the list. But the truth, we insist, is otherwise. Look closely, listen hard, and patterns emerge from the sewing-bee quilt of entrepreneurial impulses. Types appear. Ask founders What Made Them Do It, and some reasons just keep coming up.
Here are a few of them.
The 'Working for Ourselves Was Obvious' Naturals
Joel, Jon, and David Field; #131
Field Brothers Construction, Marion, Ohio
$8.4 million in sales; 120 employees
"My brother Jon and I have always been close because we were twins. We did everything together. We were farmers, but when we graduated from high school, the farming industry wasn't too strong, and Dad said there wasn't enough for all of us to do. Jon stayed at the farm, and I went to work in a factory and entered Ohio State. After just a couple of months I decided I didn't like either, and Jon and I had always wanted to work together, so we went into business. [Older brother David joined them later.]
"We couldn't decide between carpet cleaning and construction, either of which we could get into with little investment. I had business cards made up for both, but construction actually was cheaper, so we got a couple of paintbrushes and a couple of ladders and started painting houses. It really didn't matter how much money we made, because we weren't making much money at the time, anyway. They were trying times. But we always had the camaraderie of each other. We had fun.
"I never pictured working for anyone else. From a very young age I was working hard, milking cows two times a day, always working for myself, my family." -- Joel Field
The Glass-Ceiling Refugee
Judith Armstrong; #262
ADA Technologies, Englewood, Colo.
$1.8 million in sales; 20 employees
Judith Armstrong's difficulty in trying to advance at Hughes Aircraft wasn't just that she was female -- "as a woman in mathematics, I've always been the one woman in a room full of men" -- but that the company kept bringing in managers from outside offices. "There was not an attitude of growing from the inside," Armstrong says.
She served as technical director for a $25-million data-processing project for Hughes, but, she says, "when I finished, they didn't have a project for me. I'd just delivered this big thing to the government, I felt really good and high about what I'd accomplished, and there was no follow-up. So I sat around for a couple of months and got bored."
The result: Armstrong split and, with three partners, founded her own R&D company, funded primarily by Small Business Innovation Research grants. She's now putting together a sister company, ADA Instruments, to market the technologies that were developed. "There's been enormous personal growth on my part as I've become someone who really wants to drive this commercialization process, maybe start a manufacturing company. I didn't set out to grow into this person, but I became her anyway."
The Hobbyists Who Got a Little out of Hand
Gerald, Scott, Judy, and Kim Kruger; #121
Baseball Card World, Anderson, Ind.
$13.9 million in sales; 63 employees
Marvel comics, Planet of the Apes memorabilia, 1940s first-edition paperbacks -- everybody, at some time, has collected something. Only the lucky ones, though, stumble into turning their hobby into a $14-million business.
The tale of the Kruger family reads like a Disney script. Son collects baseball cards -- what else? -- in Indiana bedroom. Starts selling off complete 1955-1977 sets when he's 15. Goes to card shows, buying and selling. Gets set up by father in a small trading shop, "just to give him spending money." Carries card-protection sheets. Places ads in sports magazines to sell sheets nationally. Mother quits job at General Motors plant four years later, in 1985, to work in growing mail-order business. Father leaves GM two years after that, as does daughter two years further on.
Today Baseball Card World is a manufacturer as well as a distributor of supplies for collectors. "This business has far exceeded any goals we ever talked about," says son Scott, who heads up purchasing and operations. "One thing I try to stay away from these days is turning my hobbies into businesses," he adds, admitting he's thought about buying the racetrack where he drives stock cars. "Not that I regret the one I've got. But sometimes hobbies need to stay hobbies."
The 'I Can Do It Better Than My Old Boss' Opportunist
Mark Cohn; #6
Damark International, Minneapolis
$194 million in sales; 500 employees
A Seiko combination computer/watch: Mark Cohn and David Russ knew it was a sure thing. After abandoning stable jobs at a fast-growing retailer of discounted merchandise when the company brought in professional management, they had become wholesalers, supplying their former employer. But the company declined to pick up the Seiko doodad -- though Cohn, who'd nabbed an option on 6,000 of them, made his pitch four times -- and the two men figured it would be stupid not to sell the watches themselves.
After launching a little black-and-white catalog, Damark (a combination of Cohn's and Russ's first names) continued to seek new products for the old company while adding the rejects to its own offerings. But a few months later Cohn and Russ were called on the carpet. Either be a supplier or be a competitor, said their former boss. You can't be both.
"David and I knew at that moment we were going to be a competitor," Cohn says. "For one thing, we knew they were going to try to go around us to get our products at a lower margin. And we knew that we could be in this business. We loved making the ads, shipping the products, making the phone ring. We had this business in our blood." There was another thing, too: "I always felt that I knew more than the people I worked for."
Damark surpassed that company and more -- in 1990 it sold almost $194 million worth of discounted consumer merchandise such as fax machines, water purifiers, and brass planter sets. It's now one of the largest sellers of general discount merchandise. Russ retired this past summer.
Shari Tresky, Lee Tulp, Way Konigsberg, Deborah Starnes; #43
Abacus, San Francisco
$13.7 million in sales; 84 employees
When they first began operating out of their Haight-Asbury household in 1973, the founders of what would become Abacus were producing an environmental magazine. Members of an all-women business collective, they added housekeeping, gardening, and taxi operations to the venture because friends needed jobs. A graphic artist on staff led them into design work, and eventually they began selling computers, too.
Abacus now could be categorized as a computer sales and support company -- the bulk of last year's revenues came from computers, network and computer repair, and applications training, although the company also does graphics and multimedia production, runs a temp agency for technical workers, and operates a travel agency. That diversity isn't just to protect the company from recession -- it fits into the overall vision. "Our motivation has always been more abstract," says cofounder Lee Tulp.
"We're in the technology business," explains CEO Shari Tresky. "We want to take technology as far as it can go in terms of lifestyle options and improvement for humanity." Their ultimate goal, she says, is to help establish communities for cooperative living, re-creating ideas about how work and family life and artistic impulses can be combined. Twenty-eight Abacus employees, including the four owners and their management team, live in a cooperative now.
"Our basic impulse always was to do something very, very cool, very, very monumental, taking our ideas as far out there as we could," Tulp adds. Abacus, she says, is their way to develop technical skills and resources to do those bigger things. "In principle, integrating computers is not very different from integrating communities. In both cases you're providing services and comprehensive solutions."
The Big-Organization Convert
Lawrence Ybarrondo; #247
Scientech, Idaho Falls, Idaho
$17.4 million in sales; 139 employees
"I rose through the ranks at the Idaho National Engineering Test Site, got to be second-in-command, supervising 2,000 people, overseeing a $150-million budget. We ran the premier nuclear-safety tests in the world, and I was having a lot of fun, running experiments late at night, blowing up fuel bundles.
"I was sent to the MIT business school's senior-executive course. It's 10 weeks, very intensive, and it's a total spectrum -- we went back and read the Constitution, Karl Marx, ethics and business, the law.
"It was a turning point for me -- actually more like a renewal. I had gone to a Jesuit university and had taken courses on moral philosophy and ethics. The MIT session focused me like a laser beam on how all that fits into business. I just absolutely loved it.
"I came back all fired up to do strategic planning for the site, trying to think ahead five years and point out that the commercial nuclear industry was approaching maturity, that we had to be thinking about what the mission of the place was, where the jobs might be for these 4,000 people. But then the government decided that such questioning was a sinful activity -- that it was a threat to government power. It became clear that if I persisted, they'd kill me, in a business sense.
"I left six months later, and shortly after that it dawned on me: I'm free and clear now. It all crystallized one day when I was reading the Wall Street Journal at the airport, an article on entrepreneurship. I thought, That's what I want to do. I came back and talked to my wife about it and said, 'Let's start our own company.' "
The 'I've Always Had This Idea' Romantic
Rex Hardin; #416
$1 million in sales; 27 employees
For 30 years Rex Hardin was perfectly happy being a dentist. The money was good. There was time to golf. He had no complaints.
But in 1985, at age 60, shoulder surgery fried his career; he couldn't even hold a mouth mirror for more than a few moments.
What Hardin could hold on to, though, was an idea that had been percolating for a couple of years. Whenever he'd golfed in a pro-am -- paying $750 for the privilege of putting next to the stars -- the photo plaques he received to commemorate the great event came many months later. One plaque was broken down the middle. Another had the right photo, wrong names. "It kind of took the gloss off, getting them like that," Hardin says.
Someone could make a good business, he'd always figured, running a mobile photo-developing and engraving service to furnish plaques on-site. Since he now needed a job, he might as well be that someone. Nine months after his surgery Hardin launched his company with the dentistry-reminiscent name Insta-Plak. Last year the company serviced 90-odd professional-tour events and a smattering of corporate customers.