No. 1

R.j. Gordon & Co.

Business: Electronic commerce

Location: Los Angeles

Percentage Growth: 607

The biggest challenge in describing R.j. Gordon & Co. is listing all the different things it does.

The company, in essence, is in the business of finding undeveloped niches with the potential for rapid growth and jumping in with both feet. It is a holding company that controls several different operating subsidiaries all of them founded by Chairman Richard J. Gordon.

Ten years ago, R.j. Gordon described itself as a management consulting firm. Today, it’s a cluster of businesses, most of which are centered on electronic commerce defined as any type of non-face-to-face sales, such as through the telephone, television or Internet.

“We were one of the very earliest companies to recognize the potential of electronic commerce,” said Gordon.

In 1989, Gordon began researching the then-nascent electronic commerce market. Since then, “electronic commerce has burgeoned beyond my wildest dreams,” he said.

And as electronic commerce has grown, so has R.j. Gordon & Co.

Gordon’s biggest subsidiary is Electronic Card Services, a credit card verification service sold to direct marketers who sell through infomercials or the Internet.

Visa and Mastercard, Gordon explained, only verify that the card is valid and the card holder has a certain amount of credit. Gordon’s company provides a “front end” to that basic verification, by indicating the amount of activity on the card, and whether the card is currently in use elsewhere. Such information gives merchants a better idea whether a card is stolen or otherwise being abused.

This type of extra verification is important in a business in which people take card numbers without actually seeing the card, or the card holder. Merchants subscribing to the service call Electronic Card Services to verify credit card numbers, and ECS charges a per-transaction fee.

“We developed numerous mathematical algorithms that look at the buying patterns of people and their behavior, and we advise the merchant in advance, before he provides goods and services, so he has a high probability of getting paid,” Gordon said.

Other R.j. Gordon business lines include an advertising agency, an interior design firm, a publishing venture and the .com Management Group (pronounced “dot-com”), which provides outsourced management services for trade associations.

Most of these organizations specialize in telecommunications and electronic commerce; for example, the publishing company puts out a trade magazine for the electronic commerce industry.

Gordon has “more energy than a dozen people. He is a very bright man,” said Ted Mason, president of Eureka-based Humboldt Bank of Eureka, which processes credit card transactions for R.j. Gordon. The banker describes Gordon as “really on the leading edge of telecommunications-based commerce.”

Morris Newman