For all the worries that traffic congestion and out-of-sight housing costs are causing Los Angeles to slip from its place as a premier economic center, the region remains a cauldron of new business activity. And there is no better proof than these companies: they have found a niche to serve and a way to prosper despite the naysayers and obstacles. The Business Journal’s annual list of 100 fastest growing companies this year includes firms with two-year aggregate growth rates topping 75 percent and a median revenue nearly hitting $32 million. The profiles of the top 25 companies were written by Sarah Filus, David Geffner, Bonnie Lee, David Nusbaum, Anne Riley-Katz and Aarthi Sivaraman.
1. Kurtzman Carson Consultants LLC
Eric Kurtzman
Age:
35
Title:
Chief Executive Officer, Co-Founder
Business:
Provides database for bankruptcy attorneys to more easily process filings.
Growth rate:
927.7%
Getting started:
My partner, Jonathan Carson, and I were both corporate bankruptcy lawyers specializing in Chapter 11 cases. We noticed there were no players in the market who understood the needs of the attorneys.
Launch money:
The initial amount was $400,000. Our loan agreements were three years. It was mainly friends-and-family money.
How the product works:
One of the things you have to do is put together a list of all potential creditors. The thing the lawyers want to do is have someone in their firm, even if it’s a junior associate, chase down all that information. So we’ll alleviate that burden. The client pays us less than the lawyers for this type of service, and the lawyers get to focus on what’s most important in the case.
One Big Break:
There was a case called NRG Energy in 2003, the second largest bankruptcy case filed that year. We had worked with the lawyers when we were attorneys and also as consultants prior to the case. It had a large media profile and launched us into the public eye.
One defining deal:
Delphi Automotive. It’s an enormous case. We knew we had something big when we created a Web site for general information about the case and the hits were at 700,000 per day for several days.
Biggest pitfall of a growing company:
Moving into areas that are outside your core focus too soon. We were approached a while back to do the administration on a class action case. There was a large dollar figure on the table, but we said no because we were concerned about doing the job right. You never want to burn a client for the revenue on a single job.
Key to managing growth:
Hiring the best people regardless of whether you need them at the time. We were not so large as to need a chief operating officer when we hired him. But we knew we would need him as we began to grow, and if we hired based on need, with our backs to the walls, we might get someone not as good.
Handling competition:
The barriers to entry are fairly high, because of the complexity of the technology. My guess is that we hold between 10-20 percent of the national market. But then again, even if the revenues of all our competitors added up to $150 million, there’s no telling how much of the market is untapped.
2. IAG Coffee Franchise LLC
Steven Shoeman
Age:
56
Title: Chief Executive
Business:
Coffee house franchiser
Growth rate:
700.7%
Getting started:
Marty Cox and Louise Montgomery founded It’s a Grind in 1994. By 1999, they had five retail coffee stores in Long Beach and were trying to decide what direction the company should take. I met them through a friend, who was also one of their regular customers. My entire career has been in franchising I started in Florida with a fast food franchise called All-American Hero. After I spent a single day touring Marty and Louise’s stores, I knew they had a fantastic concept.
Financing:
Marty and I both put up our own money, and we raised about $500,000 from friends, who were mainly customers from the stores. Marty and Louise spent 14 hours a day working in the stores, and they got to know their customer base very well.
Biggest break:
Probably that Marty and myself ever met. We spent eight months developing the company before we offered a single franchise. The problem with many franchise startups is that you have an operator who knows his product but doesn’t have experience in sales. Or you have a guy with franchising experience, like myself, but no clear idea of store operations.
Hardest lesson:
That you have to be a good fit with the franchisee. When we were new, we would sign up anyone who came into our office waving a check, whether or not they shared our philosophy.
Secret to managing growth:
Committing the resources to build an infrastructure before growth begins. We hire the people we need six to eight months before franchisees open their locations so they can understand our system.
Best/Worst attributes:
I’m a great strategic planner. I can see the future two or three years out and put into actions the principals and methods to get us there. My worst is being detail oriented, and that’s where Marty picks up the slack.
Biggest single deal:
We did a 27-store deal in Las Vegas our very first year. It was a husband and wife and they basically bought the entire Vegas territory.
3. eTelecare Global Solutions
Derek Holley
Age:
40
Title:
Co-Founder, President
Business:
Outsourcing services via call centers
Growth rate:
675%
Starting out:
Jim Franke and I were working at McKinsey & Co. in Los Angeles, in their call center practice. We saw a market that was filled with mediocrity. Hardly any companies had a performance-based culture that we saw as critical to a service industry. Many viewed the business as a commodity, with cost-cutting as the driving force.
Money to get started:
We raised some seed capital from family and friends in 1998. Jim left McKinsey, first to put together a business plan, and we split my salary until we raised more money and I could leave. We ended up getting $10 million from a company in the Philippines called SPI Technology. It was controlled by four or five institutional investors. We spun off SPI into our own ownership, with shares going to the SPI investors who had first backed us.
Defining moment:
Four months after we went live, we signed a deal with a large financial services company. The plan was that they would outsource a small amount of work to us over six months and gradually increase their commitment, if all went well. After three weeks, they said we’ll give you all the work now. That was the moment we knew we were on the right track.
Hardest lesson learned: You’re only as good as the last call answered. What that means is that you have to drive accountability down throughout the organization.
Biggest frustration:
Most of the industry views call centers as commodities it doesn’t matter where or who as long as you’re saving money. It’s not just the clients who feel this way; it’s also our competitors. They believe it’s easier to do a call center that’s the same as everyone else and compete solely on price, rather than performance and service.
Bedtime worries:
It’s much easier to grow a product than it is to grow people. I ask myself how we can make eTelecare feel the same with 15,000 employees as it currently does with 8,000.
Growth solution:
Not letting the bottom line influence your beliefs. Even though it costs more to have mentorship and training and coaching programs, we need them to keep our culture consistent and have everyone on the same page.
Best and worst attributes:
I have a very clear vision of our priorities, and I stick by them in the face of challenges. That means making short-term sacrifices in order to build long-lasting goodwill with clients. My flaw is that I’m not organized at all. But my partner, Jim, is a fantastic manager and very
organized.
4. Red Peacock International Inc.
Ruby Mansakhani/John Lalwani
Ages:
39/42
Titles:
President/Vice President
Business:
Distributor of consumer electronics to offshore-based retailers and wholesalers
Growth rate:
423.5 %
Getting started:
(John:) The roots go back to Hong Kong, where I grew up. I had built up a half-million dollar company from scratch in the back of my father’s store. I was exporting non-branded Chinese-made electronic goods throughout Europe and the Far East.
Financing:
I moved to L.A. in the early 1980s and got a job as a rep selling long-distance phone service to corporations. I had $20,000 saved up. I said to Ruby (co-founder and Lalwani’s wife) we can buy a house that appreciates 5-7 percent per year, or I can dump my corporate life and we can start our own business. In 1997, we paid a friend $2,000 to design a Web site, and started the business in our bedroom.
First big break:
It wasn’t one big huge deal, but rather a series of small steps with the biggest names in the industry. It took a long time to secure credit lines from major manufacturers. The rep from Olympus gave us a $2,000 line of credit, which was barely enough to scratch. But it did allow us to put Olympus on our trade reference page.
Biggest lesson:
Be flexible with your products and pick something that fits your strengths. We had no idea what product we were going to sell when we started the company. We tried out different things until our customers began clamoring for digital cameras no plugs, no systems, better margins than Walkmans.
Keys to your success:
Fast-paced selling. It’s almost like the stock market in the way prices and values of the goods fluctuate. The key is to have the goods sold before the palettes arrive at the warehouse.
5. Goetzman Group
Greg Goetzman
Age:
43
Title:
Founder, Chief Executive
Business:
Accounting placement on a project basis
Growth rate:
360%
Getting started:
I managed business development for Accountants Overload and was frustrated with the unpredictability of the industry, even though the temporary staffing market kept growing. I saw all this great talent as a transient workforce, not committed to the companies representing them. I wanted a model that would find them a permanent home.
Business model:
We offer long-term employment agreements that guarantee them pay, whether they are on a job or not. We offer benefits like 401(k), paid vacations, dental, vision, etc. I had never seen another temporary company use this model before. Some of our consultants have been around five or six years.
Financing:
I used a very small amount of my own seed money, around $5,000. We’ve always been self-funded and plan to stay that way.
Defining moment:
The first big break was securing Kinko’s and Universal Studios as clients. People had never heard of Goetzman, but they certainly knew Universal and Kinko’s. We also aligned ourselves with some very high-quality consultants: accounting professionals who had worked 60-hour-plus weeks for Fortune 500 companies and were looking for a better work/life balance.
Hardest lesson:
Not getting too far ahead of ourselves. The temptation in this business is to over-hire, so you never get caught short. But that can water down your commitment to your existing employees.
Biggest challenge:
Retention. We’re building the brand of the company through our people, and if we lose them, we can’t effectively grow.
Bedtime worries:
Anticipating the right project for the right individual. You have to know your people as individuals, which is different from what I had seen in temporary staffing. The industry has been geared to volume, not specific talents.
6. CaseStack Inc.
Dan Sanker
Age:
39
Title:
Founder and Chief Executive
Business:
Logistics outsourcing business
Growth rate:
332.1%
Getting started:
I was at Deloitte & Touche doing consulting work, and I saw that a lot of companies had a lot of problems with the supply chain management system. So I thought it was a great idea to integrate warehousing and transport services with the system itself. I had to develop a technology package to do that and so I worked with an engineer to create the first model. That’s how it all started.
Early financing:
I sold my house and put most of my money into it. Other than that, money came from friends, family, and later venture capitals and private equity funds.
Business plan:
We don’t have any clients who are responsible for more than 10 percent of our sales. I keep the concentration of customers and vendors to a minimum. If the business depended on only one major deal, then it becomes too vulnerable. A good business model and sticking to the original plan definitely helps.
Hardest lesson:
I have learned that when you choose your partners, vendors, customers, investors or employees, you should do a lot of due diligence. A while ago I would not turn away even one customer but I will do that now. When I was starting the business, an investor wrote me a check for $500,000, but didn’t really have the money. That was my first lesson on the investor side.
Biggest frustration:
I want us to grow even more quickly.
Secret to a growing business:
Three things: collaboration with partners, technology and people.
Bedtime worries:
They change all the time. It depends on the stage of growth and can vary from selling more, improving service, developing new technology and trying to find good people to work with.
Best attributes:
I have a real entrepreneurial nature. I’m like a dog with a bone. I will not let go of a problem until it gets fixed.
Worst attributes:
I do get a little impatient sometimes.
7. Outsource Partners International Inc.
Clarence T. Schmitz
Age:
56
Title:
Chairman, Chief Executive
Business:
Business process outsourcing firm providing finance and accounting services
Growth rate:
324%
Getting started:
It was with a business plan that came across my desk when I was doing some private investing. I liked it and stepped in and became a full-time chairman and chief executive, starting in 2000.
Financing:
Personal money and a small private equity fund.
Milestone:
Acquiring an outsourcing firm of KPMG. It was relatively small but gave us the branding we needed.
How to avoid pitfalls:
Pay full attention to the market. Don’t get ahead of it and spend money foolishly. Listen to clients because they will tell you what their needs are and how satisfied they are with your services. They will guide you with your business model, and by listening, you can make changes.
Biggest frustration:
That 2004 was very slow. That was largely because of the attention paid to offshore business. It was also the first year of Sarbanes-Oxley implementation.
Biggest regret:
No big regrets.
Secret of success:
A company should not get caught up in the fascination of what they want to build and wait for customers to come or even assume they will come.
Bedtime worries:
When you are rapidly growing and managing various facets of a company, you are always concerned about one piece getting ahead of the other. Keeping all of them in sync and maintaining high quality is quite a challenge.
Best attributes:
I’ve had a long history in the accountancy profession and with managing groups of accounting professionals.
Worst attributes:
I’d say impatience with the market. I keep thinking why the market is not maturing more quickly.
8. Newegg.com
Howard Tong
Age:
35
Title:
Vice President of Marketing
Business:
Online retailer of computers communications components and consumer electronics.
Growth rate:
276.9 %
Starting out:
We recognized an emerging “do-it-yourself” market where customers wanted to upgrade, add memory or make modifications to their existing machines, rather buy new ones. Newegg was born to address that section of the market.
Early financing:
We are a private company and we had no financing to start, just $100,000 from our founder Fred Chang, so everything was organic.
Biggest break:
Our timing. If you remember back to 2000, it was the worst time for any dot-com company. Our goal was to create the best online shopping experience possible, and we got the chance to learn from the experience of other companies after the Internet bubble burst. We wanted to make sure we got it right.
Biggest deal:
It’s our relationships with our customers and suppliers that keeps us at the top. Our focus is on the latest and greatest technology, so many of our customers are really on the cutting edge of the market. We also are very strong with our Asian relationships, so we have a network established to get the latest and greatest products. We are shipping about 25,000 orders a day now.
Hardest lesson:
Trying not to get ahead of ourselves. We have grown so quickly but we don’t want to grow so fast that our quality levels drop.
Biggest frustration:
Wanting to jump up to the next level as fast as we can. We stayed under the radar for a long time because we wanted to manage our growth and stay customer-centric.
Biggest regret:
None, really. One of the reasons for going slowly and surely is to avoid mistakes.
Secret to success:
Our products and customer service, we totally focus on those. We want to pay a lot of attention to all of the details, and to us it’s all a matter of execution.
Bedtime worries:
I sleep pretty well at night, but the only thing in my mind that could cause us defeat is ourselves, if we grow too fast.
Best attributes:
Our ability to execute things quickly we are all about efficiency, advancement and innovation.
9. American Apparel Inc.
Dov Charney
Age:
36
Title:
Co-Owner
Business:
Manufacturer, distributor and retailer of men’s and women’s T-shirts.
Growth rate:
276.1%
Getting started:
Selling shirts in Montreal that I was importing from the United States.
Financing:
The company grew by buying and selling and with a little help from the family.
Biggest break:
When I entered retail and opened my first three stores New York, Los Angeles and Montreal. It showed me how to do business.
Hardest lesson:
Even at the most pessimistic of times you have to be a little optimistic. That’s when you are at the low point. When you are looking back from a high point, you remember that it happened that way.
Biggest frustration:
I worry that I’m being misunderstood, like in terms of how society perceives me. (A former employee has filed a sexual harassment suit against Charney, charging him with exposing himself to her. In a separate suit, another former employee alleged that Charney conducted her job interview in his underwear.) People may not understand my philosophy in business. It comes back to the creative process.
Biggest regret:
That I am maybe getting distracted by the wrong details when I should be seeing the big picture.
Best/Worst attributes:
My positive and negative attributes are all the same and that is because I am an alternative thinker. That can get you into trouble and also get you a lot of success. I think differently. Some people are intrigued by that and others are offended at the same time.
10. SCI Real Estate Investments
Marc Paul/Bob Rovotii
Ages:
48/59
Titles:
President, Co-Founder/Chief Information Officer, Co-Founder
Business:
Commercial real estate investment and acquisition
Growth rate:
211.4 %
Starting out:
Bob was one of the largest private lenders in the area, and he and Janice Jay, another partner, were doing privately funded jumbo loans with about 100 to 150 private investors. After the (Northridge) quake, there were a lot of foreclosures on quake-damaged property, and no one would give a loan on those. Bob and Janice could raise the money, so we started buying earthquake-damaged property. We bought more than 50 homes and 50 apartment buildings over a period of about two years. A lot of our investors then wanted to share in the profit, so they became investor-partners instead of investor-lenders.
Biggest break:
In 2002 the IRS came out with new guidelines on tenant-in-common investment. It changed the market. Real estate now offers the last remaining tax shelter available and offers the opportunity to buy property, have it appreciate, sell it, take the profits and re-invest in larger property and defer all the taxes on the profit.
Hardest lesson:
We have had such better returns for our investors when we buy better properties.
Biggest regret:
We didn’t hire really skilled, professional, top-notch people earlier.
Bedtime worries:
Knowing that there is a responsibility for your actions. If we decide to buy a $70 million shopping center, we are going to have to take the responsibility for a long time.
Best attributes:
We have always had the ability to change, be flexible and adapt to the market.
Worst attributes:
It’s hard to admit this, but we were not very good property managers. We recognize that and now we outsource it.
11. Pull’R Holdings
Robert G. Adams
Title:
Chief Executive, President
Business:
Hardware manufacturer
Age:
47
Growth rate:
209.3%
Getting started:
I was recruited by the family that owned Maasdam Pow’r-Pull (a Pull’R brand) in order to turn it around and position it for sales. I ended up buying it from the owning family.
Financing:
WestCap Partners.
Biggest deal:
Acquiring Bucket Boss. That deal almost doubled the company and prompted us to hire more staff and buy more warehouse space.
Biggest frustration:
The speed at which the market has adapted to our quality. Both the retailers and consumers are focused on price. That’s why you see a rush of imports and a drop in U.S. manufacturing.
Biggest regret:
No regrets. I’m glad that we’re in the middle of this ride and I’m excited about the opportunities that are presenting themselves.
Bedtime worries:
I guess I’m just an eternal optimist, but I believe in what we’re doing and the products. Of course, I do have eight kids so I worry about them.
Best attributes:
I like to believe that I am receptive to new ideas and that I’m flexible. I like to work with people who are smarter and more creative that I am.
Worst attributes:
I tend to be a little impatient, or I come across as pushing too hard. I have high expectations for myself and my company, and the people who work for me.
12. Freeman Beauty Labs
Larry Freeman
Age:
67
Business:
Manufacturer of natural hair, skin, and body products.
Growth rate:
200%
Getting started:
My great uncle was a distributor of beauty products to beauty salons. My father worked for him during the Depression. My father came out here in 1939 and started a manufacturer’s rep business selling beauty products to beauty wholesalers. I worked for Clairol for two years then joined my father in the manufacturer’s rep business. In 1973 I started my own cosmetic business. The company began to grow and in 1998 it was sold to Dial Co. They just offered me too much money. In 2003 I bought the company back out of bankruptcy because Dial had sold it to someone else who put it into bankruptcy.
Financing:
In 1973 I used my own money. I sold cosmetic products and I took the money and reinvested it. It was the most serious investment I ever made in the industry. In 2003 I bought it back with my own cash.
Biggest break:
There really wasn’t a break. From 1973 to 1984 we beat our head against the wall and nothing happened. It wasn’t until 1985 that we were really successful.
Biggest deal:
When our products were picked up by Wal-Mart.
Frustration:
Competing with multi-national, multi-billion dollar companies such as Procter & Gamble and Unilever.
Bedtime worries:
I had them for many years when the business was growing. Now that we have a solid business, my only concern is coming up with new ideas.
Mentor:
My father. Even though he died very young at 54, he was the one that taught me ethics and that there is no substitute for hard work.
Worst attributes:
I’m not good with detail.
Best attributes:
I would like to think that honesty, integrity, and creativity are my strong suits.
13. United Pacific Mortgage
Randy Levine
Age:
46
Title:
Chief Executive
Business:
Mortgage banking company
Growth rate:
186.8%
Getting started:
The last two positions I held were at Security Pacific Bank and United Savings Bank. I ran the Southern California regional office for United Savings Bank until the operation was shut down. I took the United from United Savings Bank and Pacific from Security Pacific Bank and started United Pacific Mortgage the next week. Over the years we’ve opened new offices. We now have about 400 people in seven offices.
Financing:
Initially it was completely a different operation than it is now. Now it takes a big balance sheet. When we started out it as was mortgage broker. There is little need for financing as a mortgage broker.
Biggest break:
In late ’91 I brought in a partner, Daryl Wizelman. We took a leap of faith and stepped into the role of businessmen.
Biggest deal:
In 1999 we formed a new business line called Mandalay Mortgage, which focuses on sub-prime wholesale lending.
Bedtime worries:
That I can’t control the macroeconomic environment.
Best attributes:
The ability to use common sense in running the business and financial skills.
Weakness:
Making really tough decisions regarding human capital, the people. Someone once said you should hire slowly and fire quickly. Sometimes we don’t pull the trigger as quickly as we should.
14. Pricegrabber.com LLC
Kamran Pourzanjani
Age:
45
Title:
President, Chief Executive
Business:
Comparison shopping
Growth rate:
186.8%
Getting started:
In 1999, I had just sold my previous company and I met some young savvy Internet entrepreneurs. They were looking for some guidance. I had a lot of background in starting businesses and running businesses.
Financing:
We raised two modest rounds through friends and family. First time was a million. We hadn’t met profitability. The second was a half a million. We ended up not even needing the second round.
Biggest break:
After the dot-com bubble burst. People began thinking again about profitability and revenues. That was our value proposition to our partners. We were well-positioned to take advantage of that.
Mentor:
I have had a lot of them through the years. There is always one person or several people who show you the ropes.
Biggest deal:
There are always great deals that come about but the first entity that comes to be your partner means crossing a big hill. It was that first sale with Buy.com.
Biggest frustration:
Fortunately, there are not too many frustrations, not really even day to day. Maybe not a frustration but a challenge is finding new resources and bringing new help to the company.
Biggest regret:
Not having started Pricegrabber 23 years ago but that was before the Internet was big.
Secret to a growing business:
Having the right team of people is a tremendous help.
Bedtime worries:
That’s the time to get your rest for the next day so I tend to sleep quite nicely.
Best attributes:
Finding the right talent and hopefully listening to the advice of good talent.
Worst attributes:
Working too hard. Does that count?
15. Guidance Software Inc.
John Colbert/Shawn McCreight
Ages: 40/39
Titles: Co-Founder, Chief Executive Officer/Co-Founder, Chief Technology Officer
Business: Computer data investigative software.
Growth rate: 183.7 %
Starting out: The need for computer forensics founded this company. There is a high burden for evidence. Shawn developed software that met those demands. The demand grew very quickly.
Early financing: We are entirely organically funded. We started by selling software and training. We applied any positive revenue toward growing the company.
Biggest break: I started working with Shawn part time teaching people how to use the software. We realized on day one that there was a demand for the technology. We literally could not grow fast enough to keep up with demand.
Biggest deal: Most of our corporate clients ask to remain anonymous. Our largest deal was valued at $2.5 million. We have a pipeline for larger deals.
Hardest lesson: The pain of opening new divisions and growing quickly. We have done things organically that could have been done better by bringing in somebody from the outside. We learned to take the time and spend the money to bring in a highly qualified person to fill roles growing our company in a way that makes sense to us rather than trying to do it how other people do it.
Biggest frustration: Gaining market recognition for our product. We are trying to build our brand name worldwide.
Bedtime worries: Hiring people too quickly. Sometimes that causes problems, especially if folks are not adequate for the role. We should have brought in industry experts earlier to help us grow our business.
16. David Lewis Co.
David M. Lewis
Age: 46
Title: Founder, Chief Executive
Business: Project-based finance and accounting consulting services
Growth rate: 176.7%
Concept: One of the key tenets in business is find a need and sell it. We saw that there was a gap in the market in executing smaller scale financial projects at companies of a non-infrastructural nature. We decided we would be a good solution for that.
Hardest lesson learned: Other people who work here are generally much better than I am at doing a lot of things that I used to do myself. It’s not an unpleasant lesson just getting out of the way but it took me a while to figure it out.
Biggest regret: None. Anything that didn’t happen exactly according to plan, or was suboptimal, is a learning experience. That’s not just a platitude; it’s really true.
Best attributes: I think I’m very good at identifying and hiring excellent people; that’s my strongest attribute. And I also have very good math skills. When you’re running a business, understanding financial implications in a transaction is really critical for a growth company and I think our company has a lot of confidence in that arena.
Worst attributes: No matter how well the company is doing, I’m generally not satisfied. And I actually think that can create discomfort for people in the organization. It would be nice if I could be more content with the way things are. But I’m not engineered that way and most of the people in the company aren’t either.
17. Intelli-Tech
Cindy and Darrell Johnson
Titles: CEO/President
Business: Reseller of computer hardware and software
Growth rate: 174.4%
Starting out: We had always wanted to have a business of our own. We looked for an industry that wasn’t cyclical. The computer industry looked like a growing area.
Financing: We used our savings. Nobody would loan us money.
Biggest break: We landed the Commonwealth Land Title account that had lots of offices throughout the state. We networked all of their offices in California and never looked back after that.
Biggest deal: Our contracts with Northrop Grumman. They’ve been a customer for 13 years. We’ve had contracts with Northrop since they were building the B-2 bomber. They nominated us for the Small Business Administration’s Administrator’s Award for Excellence, which we won.
Hardest lesson: The amount of hours it takes to start a business. We put in a lot of 60-, 70- and 80-hour workweeks. If you want your business to succeed, you have to do whatever it takes and it takes time.
Biggest frustration: Growing and not having enough space. We have a parking lot that holds 18 cars and we have 30 employees.
Biggest regret: We didn’t start this earlier in life. It’s so much fun. I worked for somebody else for nine years. It’s been the best 13 years of our lives because we work together. We didn’t see each other a lot when we had separate jobs.
Bedtime worries: None, I sleep like a baby.
Future plans: Our plan is to keep growing. We have the people and we can handle more work.
18. The Kern Organization Inc.
Russell Kern
Age: 49
Title: Founder and President
Business: Direct marketing and response advertising agency
Growth rate: 168.3%
Getting started: My love for direct marketing came from my dad. When I was growing up we used to study New York Times ads at the back of the paper. I started my own agency when I was 24, along with my former high school principal. We re-met by chance and shared the same philosophy. In 1991, I decided to reform the agency without partners.
Early financing: At first, everything was financed personally, with our own credit cards. We were two people and a secretary using 400 square feet of office space. We sort of starved our way to slow success.
Biggest break: Just being able to stay in business is a big break. In 1980 I landed our first client, a software distributor, and there have been many along the path. Landing the big clients is always big, too.
Biggest deal: I can’t name any one, all of them are very big our top four are DirecTV, Nextel, Verisign, and SAP.
Hardest lesson: How to be a good manager. How to measure, monitor, inspect and refine operations. You start as an entrepreneur and need to learn how to run a sizeable business organization.
Biggest frustration: There is never enough time, and learning how to manage it can be difficult.
Biggest regret: I don’t have regrets. I love what I do, love the business and love the people I work with. It’s all part of the learning process.
Best attributes: Being driven and focused.
Worst attributes: I am impatient and restless.
19. Soltre Inc.
Vivian Chow
Age: 37
Title: Co-Founder, Chief Operating Officer
Business: Web hosting, applications management, outsourcing and Oracle systems integration.
Growth rate: 151.9%
Getting started: I was an Oracle business application software consultant since 1990. I saw the software process and economy coming down, and everyone was trying to cut costs. I believed in an outsourcing model because it’s more cost effective. I just found five business partners who believed in the hosting model.
Early financing: We went to a few people, private firms, friends of friends and the six of us also invested personally. The initial investment was about $2 million.
Biggest break: Becoming a certified partner of Oracle and becoming an Oracle reseller.
Biggest deal: YMCA, Los Angeles
Hardest lesson: Sometimes you do everything right but things can still go wrong, and it doesn’t work out. Always expect the worst-case scenario and be prepared.
Biggest frustration: Hiring good people fast enough; it’s hard to find and hire enough quality people to meet growing needs.
Biggest regret: I don’t really have any regrets. I am pretty grateful for what I have. In my personal life, maybe want to spend more time with my family, but not with my work.
Best attributes: I work very hard.
Worst attributes: I am not very organized, so I have to surround myself with good people who can remind of things and keep me on track.
Future plans: We merged with RCM Technology on Oct. 17, so I am planning to bring Soltre nationwide.
20. DSL Extreme
Jim Murphy/Ari Ramezani
Ages: 36/37
Titles: President/Chief Executive
Business: Consumer and business Internet service provider
Growth rate: 151.3%
Starting out: It was the second business we’ve started together. The first one was a paging and cellular phone business also based in Los Angeles. We realized we had a knack for service-based businesses.
Financing: Self-financed.
Biggest break: ‘Internet’ was a buzz word and we got into the market at a good time to capitalize on that. The demand for Internet access early on was very high.
Biggest deal: We signed a $13 million contract with SBC about two years ago to expand into 12 additional states. It made us better known in the industry.
Hardest lesson: You can be generous with advice to friends and competitors to a fault.
Biggest frustration: None.
Biggest regret: None.
Staying awake at night: The fast-paced world of technology. We are constantly worried about falling behind.
Future growth: We are going to fill in the areas of California in which we’d like to expand. We also plan to start moving into the Midwest.
21. Taryn Rose International Inc.
Taryn Rose
Age: 38
Title: Chief Executive and Founder
Business: Designer of wholesale and retail footwear for men and women.
Growth rate: 150%
Getting started: I wanted to do footwear because I felt there was a missing niche for high-end shoes, combining fashion and technology that would keep people looking good and feeling good at the same time.
Early financing: Typical of a business just starting out. I got an SBA loan and used my personal credit cards and the usual stuff.
Biggest break: Getting on “Oprah” in 2003. That generated a lot of business.
Biggest deal: Getting into Neiman Marcus stores.
Hardest lesson: How to keep the company properly capitalized, and understanding that profit is not equal to cash flow. I didn’t know anything about business when I first started.
Biggest frustration: How much time I need to spend on personnel issues. Creative design is what I would like to spend most of my time on, as well as meeting consumers for feedback on the products.
Biggest regret: Not having as much time as I would like with my family.
Secret to growing a business: Never give up. There are always new challenges, so you need to be adaptable and think on your feet. Another solution may be just around the corner if you can last long enough.
Bedtime worries: Coming up with new ideas creatively to keep the brand and product fresh. We do four collections a year and not every line does that.
Best attributes: Being straightforward and open to new ideas.
Worst attributes: Being impatient.
Future plans: Coming up with something new and different to bring to the footwear lines.
22. Livhome Inc.
Mike Nicholson/Steve Barlam
Ages: 54/43
Titles: CEO, Co-Founder/Chief Professional Officer, Co-Founder
Business: At-home assisted living
Growth rate: 139.2%
Starting out: Steve had a care management business, with geriatric referrals. I was in the staffing business for 25 years. BA Venture Partners married Steve’s business to my staffing background and turned two lines of business into one, using Steve’s company as a platform.
Early financing: Three rounds of venture capital fundraising. BA Venture Partners provided $2 million in the first round in 1998. Tullis Dickerson provided $14 million in 2000 and Kline Hawkes financed $5 million in 2003. We are now cash flow positive and profitable.
Biggest break: We had to make a decision to go up the food chain and work with clients on the high end of the market. We would have had no business model unless we went up the food chain.
Biggest deal: Last September we purchased a four-state company called Advolife.
Hardest lesson: When we started the business in 1999, the Internet and other things were really flying. We opened up on a consumer products model. We had television commercials on major networks and full-page ads in magazines. We got a lot of hits, but they weren’t the high-end clients. We then took on a direct sales model. We spent millions of dollars of early round financing learning that lesson.
Biggest frustration: We provide a service that can meet the needs of 13 million baby boomers dealing with parental care issues. Ninety-five percent of them only look for a company like ours in a crisis and take the first referral.
Future plans: Our plan is to get to 30-35 locations in the next two years..
23. Robinson Helicopter
Frank Robinson
Age: 75
Title: President
Business: Design, develop and manufacture helicopters
Growth rate: 138.1%
Starting out: I worked for six different helicopter companies after graduating from college. I tried to interest other companies in building a small, personal helicopter, but they wanted to build bigger, more expensive helicopters for the military. When I was 43, I decided to gamble everything to see if I could start a company.
Early financing: There was an older fellow who had been retired and was interested in joining me. He put up some money. I put up the little that I had. From then on it was begging and borrowing. I got deposits on helicopters and sold a stake in the company. My interest fell to 23 percent but my original partner died and I gained control of his stake. Then I gradually bought out the other stakeholders. At this point I own 100.
Biggest break: I invited Don Fink, west coast editor of Aviation Week and Space Technology, for a demonstration of a prototype. He wrote a five-page article on this little helicopter. The other magazines picked up on it and they started calling. A lot of people were writing to me to put down deposits. That really helped me start to grow.
Hardest lesson: Don’t borrow any money if you can in any way avoid it. I was fortunate in using that principle from the very beginning. I was never buried in a deep hole.
Biggest frustration: The legal system, particularly as it relates to product liability laws.
Biggest regret: I regret that the industry itself has not been able to train pilots to the point where they have fewer accidents.
Future plans: I will gradually change my style of living and perhaps relax more and travel more.
24. Platinum Wireless Inc.
Jeff Javidzad/Baze Melamed
Ages: 33/30
Titles: CEO/President
Business: National authorized representative for Sprint/Nextel
Growth rate: 106.1%
Starting out: As a retailer going to the national carrier, you don’t have a good chance, but every retailer needed the service. After two to three years we reached a point where we achieved national status. We started setting up distribution points after that.
Early financing: Self-financed for first three years. We received venture capital after we achieved national status.
Biggest break: Achieving the national status. We are currently within the top three positions in the country.
Biggest deal: City of Los Angeles has close to 1,000 phones with our service. University of Irvine, Lowe’s Home Improvement and Homestore.com are also large accounts.
Hardest lesson: Every mistake becomes an expensive lesson as long as you learn from them.
Biggest frustration: Putting together a team that can focus on the ultimate goal of the company.
Bedtime worries: We’re in an industry where you either grow or die. We have been maintaining growth and would like to grow faster.
25. United Oil
Ron Appel
Age: 71
Title: President
Business: Gas station operator (120 stations in Southern California)
Growth rate: 100.9%
Starting out: The company was founded by my father in 1955. I got out of the Army and started working in the gasoline business and have been in it ever since. My son joined in the operation in 1982.
Early financing: Self-financed.
Biggest break: Things were tough in the 1990s. We took advantage by buying stations cheap. We expanded when things were tough.
Hardest lesson: Arco came into the market and I had to take a second mortgage to stay in business. I survived for a year and a half without drawing any money out of the company. After that, I never became cocky. Oil companies control your destiny. Now we deliver our own fuel and sell more than 30 million gallons retail per month.
Biggest frustration: How the government allowed all the oil company mergers. How they allowed Exxon to buy Mobil, BP to buy Arco. They eliminated all the competition, but now cry about high prices. Gasoline is high-priced, but the government allowed it to happen. There are very few refineries in California because of lack of competition.
Biggest regret: None. I love California. The only thing that I regret is that California is a tough place to do business. Also, federal and state gas taxes are tremendous.
Bedtime worries: If pricing really got out of hand. Gasoline went to over $3 per gallon but now it’s coming down. People started driving less and hybrid cars are coming onto the market. Consumers do control price.
Future plans: We have our own trucks, architect and construction department. Currently, we are building six or seven sites throughout Southern California. You just can’t stand still.
