As a 21-year-old cop in rural Missouri, Caleb Arthur rushed to the site of a meth lab explosion and--fearing there were children inside--entered the building. The lungful of anhydrous ammonia he inhaled consigned him to bed for four months. When his pregnant wife urged him to seek alternative employment, Arthur launched a solar-equipment-installation business, even though he was still racked by pain, with devastating headaches and unrelenting thirst. Most of his customers were in St. Louis, so for two years he logged 5,000 miles a month in his car.
"I had to train subcontractors, which meant climbing up on roofs and walking around construction sites completely out of breath," says Arthur. "In the evenings, exhausted, I would put on my dress pants and go out to sell systems. It was very hard." Arthur's company, Missouri Sun Solar, debuts on the Inc. 500 at No. 156, with $9.8 million in revenue and 2,326.7 percent growth.
The Inc. 500--an annual ranking of America's fastest-growing private companies--is the theme of our most celebratory issue: a roll call of quantified, verified business successes. In the midst of a presidential campaign often light on substantive discussions of economic growth and employment, these businesses demonstrate what real progress looks like. The 2016 class has achieved an impressive median growth rate of 1,580.5 percent over the past three years and created a total of 55,704 jobs. Some of these companies are disrupting old industries or pioneering new ones. But on another level, this issue is not about economic growth or innovation. Rather, it is about 500 companies whose founders--like Arthur--have been on the most terrifying, exhausting, exhilarating journey of their lives.
The Inc. 500 seem like the invincible inverse of those roughly 50 percent of startups that, famously, don't survive their first five years. But these companies aren't so different. No, they didn't die. But that doesn't mean they didn't almost die.
The Inc. 500 have plenty to crow about. Yet when we asked the founders about their greatest achievement in their first year, we got the same answer again and again. "Not going out of business." "Keeping the doors open." "Surviving." "Surviving." "Surviving." In interviews, most of them candidly--and many of them eagerly--related the lapses of luck or of judgment that nearly did them in.
"Doing a startup is an act of violence and chaos," says Steve Blank, a serial founder, author, and professor of entrepreneurship at Stanford and other schools. "Near-death experiences--your co-founder quit; your biggest customer walked away; you lost your funding--that's what happens before launch. You go through a series of trials, and from each one of them you come out stronger."
Consider Shawn Lange and Derek Pietz, who in 2011 founded L2F as an engineering firm that designs customized manufacturing tools for high-tech startups in Silicon Valley. Their first customer dropped into their laps, and they quickly parlayed a $150,000 consulting gig into a $1.5 million contract. The partners invested in hardware, software, and space. But the deal evaporated when the client's funding was yanked because it had pivoted without informing its venture investors.
"We licked our wounds a little bit," says Pietz. They landed a second client; it went bankrupt. A third client hired away L2F's only employee. Then it terminated its contract.
Lange worked his professional network and found another customer. In a hail mary pass, the founders managed to pull off in seven weeks a project they said would typically take 20. With a greater focus on industrial robots, they began landing job after job, including a contract from SpaceX. L2F is No. 237 on the list this year, with revenue of $2.8 million and a growth rate of 1,654.2 percent.
"It was a rocky start, and it stayed rocky," says Lange. "But when you hit a roadblock, you can power through so long as you're completely dedicated to the cause."
Respect for endurance and determination are baked deep into Western culture. Job proved his righteousness by remaining faithful to God despite Satan's tests. Horatio Alger chronicled boys whose grit propelled them to success. Popular books and movies--including the Star Wars and Harry Potter series--follow the "hero's journey" schema laid out by mythologist Joseph Campbell, in which the protagonist sets off on an adventure and must face ordeals before claiming his reward. In the following pages, you will encounter many versions of the hero's journey: tales of entrepreneurs soldiering on through circumstances that would cause most folks to pack it in. However, their achievement isn't predicated on endurance alone. Yes, what didn't kill these entrepreneurs made them stronger. But it also sharpened their minds as well as toughened their spirits.
Entrepreneurs who succeed, says Blank, are those who emerge from the crucible with heightened self-knowledge. "When you talk to them, you know you're not just talking to smart people," he says. "You know you are speaking to wise ones."
What Powered This Year's Growth
As usual, the Inc. 500 list contains a few familiar names, such as Ipsy (No. 104), Kabbage (No. 183), and Dollar Shave Club (No. 65, which Unilever recently agreed to buy for $1 billion). Other honorees are less known but have cracked the shelves of major retailers or made themselves indispensable links in Fortune 500 supply chains.
Some Inc. 500 companies are trying to disrupt industries. Livionex (No. 441), for example, is breathing down toothpaste's tube with a plaque-attack gel; and ImagineAir (No. 390) wants to Uber-ize private air travel. Other honorees are realizing massive growth through the addition of panache to proudly quotidian products. This year we have both Chicken Salad Chick (No. 37) and the Chicken & Rice Guys (No. 206). In addition to noting the predictable strength of industries like health care and financial services, we've noticed a few smaller trends:
Healthy food, fun food: As in years past, virtuous food companies dominate the Inc. 500. But indulgence may be resurgent. Companies that thrived this year with a taste-first message include Mod Pizza (No. 373), Melba's New Orleans Po Boys (No. 123), and Edward Marc Brands (No. 421).
How the 2016 Inc. 500 Companies Were Selected
This list measures revenue growth from 2012 to 2015. To qualify, companies must have been founded and generating revenue by March 31, 2012, and be U.S.-based, privately held, for profit, and independent--not subsidiaries or divisions of other companies--as of December 31, 2015. The minimum required 2012 revenue is $100,000; the minimum for 2015 is $2 million. Revenue listed in the company profiles is for calendar year 2015. Employee counts are as of December 31, 2015, and include all employees receiving benefits. Inc. reserves the right to reject applicants for subjective reasons. The companies of the Inc. 500 represent the top tier of the Inc. 5000, which can be found in its entirety on Inc.com.
List managed by Marli Guzzetta, Patrick Hainault, and Alyssa Parsons, with additional research by Melissa Studach and Skyler Inman.