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Isaac Larian
MGA Entertainment
Ernst & Young
Entrepreneur Of The Year
2007
Presenting Sponsor
National Sponsors
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When just being nominated is an honor.
Winning has its advantages, but with the Ernst &
Young Entrepreneur Of The Year® awards, it is truly an
accomplishment just to be nominated. Bank of America
salutes all the regional winners for impacting the
business world and our communities. Congratulations.
bankofamerica.com
Investment banking and capital markets products and services provided by Banc of America Securities LLC, a subsidiary of Bank of America Corporation and member NYSE/FINRA/SIPC. ©2007 Bank of America Corporation.
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Success Is a Journey
I
n an age where faster, better, cheaper has become a mantra, entrepreneurial growth
companies continually find better ways to develop, grow, and prosper. They take
words like “can’t” and “no” and turn them into motivational tools. Telling an
entrepreneur that something can’t be done is a surefire way to create a solution. And
as these innovative men and women grow their companies into market leaders, they’re
making valuable contributions to industries, economies, and individual lives.
Ernst & Young’s Strategic Growth Markets practice understands what entrepreneurs
face as they shepherd an idea to its full potential. We are the leader in serving the
Russell 3000, high-growth private companies, IPO-bound companies, and companies with significant venture
capital or private equity investments. We’re committed to serving entrepreneurial companies throughout their life
cycles—from the emerging stage through their growth into successful market leaders.
We created the Ernst & Young Entrepreneur Of The Year® awards 21 years ago to recognize and honor the
accomplishments of the outstanding men and women who develop the products and services that create jobs,
support communities, and keep our economy moving forward. The awards have grown dramatically during that
time and now include programs in more than 135 cities and 50 countries around the world.
The Entrepreneur Of The Year awards program represents the largest gathering of entrepreneurs in America
and is the culminating event of the Ernst & Young Strategic Growth Forum. Held each November at the
Desert Springs JW Marriott Resort & Spa in Palm Springs, Calif., the Forum is the country’s most prestigious
annual gathering of high-growth, market-leading companies. It includes the annual IPO Transformation~CEO
Retreat and, in 2007, a Cleantech Symposium as well as the special seminar, “Private Equity and the Changing
Transaction Landscape.”
Ernst & Young is proud to recognize the accomplishments of individuals who are turning their passion and
ambitions into industry-shaping companies—people like Isaac Larian. The president and CEO of MGA
Entertainment, Larian left Iran at age 17 with $750, washed dishes to put himself through college, and has grown
the company he founded in 1982 into the largest privately held toy company in the world. His line of multi-cultural Bratz dolls successfully challenged the Barbie doll and is now the top fashion doll brand in the world. The
company’s other brands include Yummi-Land, Storytime Collection, West Coast Choppers, Market Racers and
Marvel Toys.
The following pages profile Isaac Larian’s amazing achievements, as well as those of this year’s Entrepreneur Of
The Year national category winners and finalists. We think you’ll agree that their stories of vision, perseverance,
commitment and community service illustrate the potential of every entrepreneur to become a market leader.
Sincerely,
Philip Anderson
Americas Director
Entrepreneur Of The Year
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CATEGORY WINNERS & FINALISTS
Retail & Consumer Products
Success Is a Journey. . . . . . . . . . . . 1
Sustaining Entrepreneurial
Growth Through Risk and Control
Tom Campion
Zumiez.............................................. 13
Michael J. Hagan
NutriSystem, Inc. ............................. 13
Tony Hsieh
Zappos.com, Inc. ............................. 13
Frank Gori
Americas Director
Risk Advisory Services . . . . . . . . . . . .3
Distribution, Manufacturing & Security
A Legacy of Honoring
Entrepreneurial Excellence . . . . . . 5
Kenneth Hendricks
ABC Supply Company, Inc. ............. 16
Clayton M. Jones
Rockwell Collins, Inc. ...................... 16
Larry K. Powers
Genlyte Group ................................. 16
Meet the 2007 National Judges . 6
Venture Capital Award
of Excellence . . . . . . . . . . . . . . . . . .8
Ernst & Young
Entrepreneur Of The Year 2007
Isaac Larian
President, CEO
MGA Entertainment . . . . . . . . . . . . . 10
Manu Shah
M S International, Inc. .................... 14
Emerging
Michael V. Roberts
Steven C. Roberts
Roberts Hotels Group ...................... 17
Bruce Hansen
ID Analytics, Inc. ............................. 19
Les Spero, Ph.D.; Rafi Spero
NeatReceipts. ................................... 19
Mark Stagen
Emerald Health Services ................. 19
Energy, Chemicals & Mining
Harold Hamm
Continental Resources, Inc. ............. 20
H. Craig Clark
Forest Oil Corporation .................... 22
Jeff Morris
David Wiessman
Alon USA ......................................... 22
Dave Warren
Energy Alloys LLC ........................... 22
Entrepreneur Of The Year magazine
2
Financial Services
Ronald J. Kruszewski
Stifel Financial Corp. ...................... 23
Americas Director
Ernst & Young
Entrepreneur Of The Year:
Philip Anderson
Program Director:
Betty Pilcher
Editorial Director:
Warren Rappleyea
Managing Editor:
Rebecca L. Grasso
Art Director:
Tom Hickey
Contributing Writers:
Kathy Bull
Nick Iversen
Roger Morton
Health Sciences
Richard Osborne
Warren Rappleyea
Lindsey Siegle
Chuck Thomas
Pamela B. Morris
CareSource Management Group ..... 26
Todd Crosland
Interbank FX.................................... 25
Geoff Davis
Unitus .............................................. 25
Li Yu
Preferred Bank ................................. 25
E N T R E P R E N E U R O F T H E Y E A R 2007
Sachiko Kuno, Ryuji Ueno
Sucampo Pharmaceuticals, Inc. ...... 28
Jim Pearson
Suros Surgical Systems, Inc. ............ 28
Randy H. Thurman
VIASYS Healthcare Inc. ................... 28
Media, Entertainment & Communications
Michael Walrath
Right Media .................................... 29
James F. Geiger
Cbeyond, Inc. .................................. 31
William D. Marks
SeaMobile Enterprises.................... 31
Andrew D. Ory
Acme Packet .................................... 31
Real Estate, Hospitality & Construction
William Gay
W.W. Gay Mechanical
Contractor, Inc. ............................ 32
William C. Bayless, Jr.
American Campus Communities ..... 34
Richard Fain
Royal Caribbean Cruises Ltd. ......... 34
Allen Tate
Allen Tate Company......................... 34
Services
Harold “Max” Messmer Jr.
Robert Half International, Inc. ....... 35
Robert O. Carr
Heartland Payment Systems ............ 37
Nicholas DeBenedictis
Aqua America, Inc. .......................... 37
Elliot Sainer
Aspen Education Group................... 37
Technology
Marc Benioff
Salesforce.com, Inc. ......................... 38
Douglas Bergeron
VeriFone, Inc. .................................. 40
John S. Chen
Sybase, Inc. ...................................... 40
Lawrence Ng
Oversee.net ...................................... 40
World Entrepreneur Of The Year
Guy Laliberté
Cirque du Soleil .............................. 42
Sustaining Entrepreneurial Growth Through
Risk and Control
By Frank J. Gori
I
Understand and control your risk profile
t has been said that those who will not take risks cannot
win. Nowhere is this more true than for entrepreneurial
companies. Examples abound of successful entrepreneurs
who built their businesses on embracing challenges, taking
calculated risks, and reaping substantial rewards. Many of
today’s most successful companies—eBay, Starbucks and
Coca-Cola to name but a few—all started as small, entrepreneurial businesses with a keen understanding and willingness
to take control of their risks.
Many business leaders today focus on performance while failing to recognize the importance of risk and control activities.
As an entrepreneur, it is vitally important to both build and
protect the value of your growing organization. The ability
to understand and control your unique risk profile through
a formal risk management framework—and reduce duplication or gaps in risk coverage—can become a key competitive
advantage.
As a leader, you guide your company through new challenges
on a daily basis. When your company was smaller, it may
have been easier to control your business risks, and make do
with incomplete, ad hoc risk management practices. As your
company grows, however, it becomes increasingly difficult to
manage risks appropriately to enable sustainable performance.
Increasingly, you may be
entering multiple relationships with suppliers,
distributors, and agents or
be involved with mergers
or acquisitions, expanding
overseas, launching new
products, or preparing to
go public.
Success in navigating
these challenges does
not come by chance or
luck. As an entrepreneur,
managing risk appropriately allows you to more
effectively grow revenues,
outpace competitors, attract top talent, and undertake successful ventures in new markets. All of these outcomes contribute
to your goals of achieving the financial position necessary to
secure financing or to take your company public. What’s more,
while your company experiences success and rapid growth,
you may find yourself faced with challenges never before
encountered or more complex than you’ve seen in the past.
Risk management framework: a three-pronged
approach
For entrepreneurial companies, the pace of business change
makes achieving effective risk management a daunting challenge. To facilitate this,
you should strive to align
and coordinate functions,
processes, and activities,
and drive overall efficiency. This type of risk
framework must address a
number of key questions
related to governance,
people, and methods and
practices.
GOVERNANCE
As a leader in a fresher,
rapidly evolving organization, setting the
appropriate tone and strategy is a key element to future success. Policies and procedures can then be articulated, providing guidance for consistent approaches to risk and control.
Further, having a strong organizational focus on compliance
will create an environment that is risk-aware and has a greater
ability to keep your company out of trouble.
PEOPLE
In this business environment, it is vitally important to not just
“make do” with a piecemeal approach to risk management, but
to make a concerted effort to “get it right.”
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The people that make up your organization are fundamental
to the success of risk management and internal control activi-
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ties. Ultimately, the underlying competencies and capabilities
of your people are critical to your ability to manage risk and
control in a manner that keeps the organization out of trouble
while simultaneously enhancing performance. Clarity around
roles and responsibilities for risk and control is crucial, and
people must understand and accept their obligations related to
risk and control. Key functions must also be aligned and coordinate risk and control activities across your organization, not
just within functional silos or geographic areas.
METHODS AND PRACTICES
World-class methods and practices enable your people to
effectively and efficiently manage risk and control across the
breadth of the enterprise. Methods
and practices designed in accordance with your overall corporate
strategy and objectives—paired
with a clear mandate for risk management and control—will provide
you with actionable information
regarding your overall risk profile.
These may include risk identification and testing, control design and
effectiveness, process improvement
and efficiency, monitoring and
escalation, and communication and
reporting. Evaluating the application of methods and practices within
the existing business processes, activities and functions will
provide you with the greatest insight into your overall risk
management capabilities.
file—a chance to truly “get it right,” confident that you are
focusing on the right risks, with the right level of effort, at the
right time.
Getting it all right
The complexities of building a robust risk management infrastructure, developing methodology, providing training, and
monitoring compliance are vast. As a leader responsible for
the overall success of your organization, it is your challenge
to make sure a system exists and that it is working well. This
doesn’t, however, mean that you have to go it alone. Many
leading entrepreneurial companies have determined that partnering with organizations to advise, develop or even wholly
outsource many elements of their
risk management programs offers
them a greater degree of flexibility
and improves the quality of their
risk management capabilities.
Having access to highly qualified
advisors and other risk management resources can be a costeffective way to quickly respond
to changing needs without compromising the overall quality of
your risk management and control
framework.
“While your company experiences success and rapid
growth, you may find yourself
faced with challenges never
before encountered or more
complex than you’ve seen in
the past.”
Sustaining risk competency
Building risk competency within your organization is but the
first step in supporting your strategic growth objectives. For
a growing number of companies, the key to achieving sustainable success lies in the ability to consider a broad array
of risks, incorporate the breadth of operations, and align to
overall strategies and objectives. With this alignment, you will
reduce the burdens placed on lines of business, and allow for
greater focus on primary business activities.
A holistic approach adds transparency and provides the confidence to stakeholders that risks are being proactively assessed,
improved, and monitored. This allows entrepreneurial leaders
to truly create value while optimally allocating capital and
resources based on greater insight of their evolving risk pro4
Without a robust, leading-practice
risk management structure, highgrowth companies risk regulatory exposure, potential litigation, and loss of investor confidence. Having a solid financial
controls and risk management structure in place is not just a
necessity, it’s also a good business decision. Those companies
who “get it right” have a competitive position much stronger
than those who just “make do.”
Twenty-one years ago, Ernst & Young first recognized “those
who got it right” through the Entrepreneur Of The Year program. Today the program celebrates and acknowledges entrepreneurial excellence in more than 50 countries and gives
Ernst & Young the privilege of working with and learning
from the world’s most successful entrepreneurs. We are proud
to celebrate and encourage entrepreneurs and their achievements around the world.
Frank J. Gori is the Americas Managing Partner, Risk Advisory
Services, Ernst & Young LLP.
A Legacy of Honoring Entrepreneurial Excellence
or more than two decades Ernst & Young and the
Entrepreneur Of The Year awards have honored and
celebrated entrepreneurial men and women and the
companies they create and grow into market-leading organizations. During that time we have chronicled their capacity to
transform organizations, create new products and industries,
enrich individual lives, and contribute to the vibrancy of local
and national economies.
F
National Ernst & Young Entrepreneur Of The Year winners and
finalists are announced at an annual awards gala, the culmination of the Entrepreneur Of The Year event held in November
at the Desert Springs JW Marriott Resort & Spa in Palm
Springs. As part of the event, all regional and national winners
are also inducted into the elite Entrepreneur Of The Year Hall
of Fame, on permanent display at Ernst & Young’s U.S. headquarters building at 5 Times Square in New York City.
Entrepreneur Of the Year winners represent companies that are
market leaders or have the unmistakable potential to become
one. They are among the most influential and recognizable
names and brands in the world—Jeff Bezos of Amazon.
com, Steve Case of America Online, Wayne Huizenga of
Blockbuster, Pierre Omidyar of eBay, Howard Schultz of
Starbucks Corp., and Kevin Plank of Under Armour
The following pages will introduce you to the 2007 judges
and our Ernst & Young Entrepreneur Of The Year winners and
finalists. Find out what makes them stand out as examples of
entrepreneurial excellence.
For complete information on the Entrepreneur Of The Year
awards program visit www.ey.com/us/eoy or
call 1-800-755-AWARD.
The annual Entrepreneur Of The Year awards begin each year
with programs across the United States. Seven to 10 winners
in varying award categories in each program are selected from
among nominees by independent panels of judges, comprising local business, financial, academic and media figures. In
2007, 26 U.S. regions hosted Entrepreneur Of The Year awards
and honored their winners at awards banquets during the
month of June. All regional winners become contenders for
the national awards.
National Entrepreneur Of The Year winners are chosen in one
of 10 national categories by independent judging panels under
the auspices of the Ewing Marion Kauffman Foundation.
From those winners, judges narrow their selection to one
person—an individual whose leadership and overall entrepreneurial excellence clearly sets him or her apart. That person
is honored as the Ernst & Young Entrepreneur Of The Year
and represents the United States at the World Entrepreneur Of
The Year event, which takes place in Monte Carlo. See page 42
for more about World Entrepreneur Of The Year and the 2007
winner.
Entrepreneur Of The Year judges have firsthand knowledge
of what it takes to grow and lead a successful business. Many
are past national or regional Entrepreneur Of The Year winners
themselves. They have experienced the rewards and challenges
of building winning enterprises and understand that success
is not measured in dollars alone. Judges take a number of factors into consideration when making their decisions, including
the type of business, its everyday practices with respect to
employees, and its impact on the community.
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Ernst & Young Entrepreneur Of
Third row, standing, from left: Sherrill Hudson, TECO Energy, Inc.; Selim Bassoul, Middleby Corporation; Christopher Duda, Goldman, Sachs & Co.; Jay Morse, The Washington
International, LLC; Dave Moody, C.D. Moody Construction Co., Inc.
Second row, standing, from left: Leo Wells, Wells Real Estate Funds, Inc.; Simon Bax, Docufide Inc.; Howard Brodsky, CCA Global Partners; Blythe Jack, Rosewood Capital; Richard
Partners, LLC; Emilio Piñero Ferrer, Banco Popular de Puerto Rico; Eddie Brown, Brown Capital Management; Leo Ullman, Cedar Shopping Centers, Inc.; Andrew Raguskus, Sonic
First row, seated, from left; Joe Scarlett, Tractor Supply Company; Rob Scott, Colubris Networks; Jeffrey Goldfaden, Warburg Pincus & Co.; Matthew Boyer, The Carlyle
Heritage Academics, Inc.; Helen Greiner, iRobot Corp.; Howard Levitt, Tourneau, Inc.; Steven Trager, Republic Bancorp Inc.; Jessie Knight, Sempra Energy
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The Year 2007 National Judges
Post Company; Jim Davis, Chevron Energy Solutions; Donald Holzworth, SRA International, Inc.; Victor Tsao, Linksys, a division of Cisco Systems; Bob Henry, Arbonne
Bendis, True Product ID, Inc.; George Dalton, Novo 1, Inc.; Nancy Briefs, Eleme Medical, Inc..; Victoria Haynes, Ph..D., RTI International; Bernee Strom, Revitalization
Innovations, Inc.; Edward Iacobucci, DayJet Corporation
Group; Richard Caruso, Ph.D., Integra LifeSciences Corp.; Reneé Amoore, The Amoore Group, Inc.; Steve Demetriou, Aleris International, Inc.; J.C. Huizenga, National
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Venture Capital Award of Excellence
The award criteria include
a focus on companies that
achieved strong success
with less than $100 million
in venture capital investments; equity and revenue
growth; earnings before
interest, taxes, depreciation
and amortization (EBITDA)
margins; and the story of the
entrepreneur.
Tony Hsieh
CEO
Zappos.com, Inc.
Henderson, Nev.
“Zappos.com is an outstanding example of a company
that was able to achieve its
vision for growth and service as a result of venture
capital investment,” says Joe
Muscat, who leads Ernst &
Young’s Americas Venture
Capital Advisory Group.
“The investments of venture
capitalists are vital to our
economy. They provide the
critical capital necessary
to help growing companies
hire the right team, expand
operations efficiently, and
enter new markets.”
Tony Hsieh has been a part
of Zappos.com’s success
literally from the beginning.
In 1999 Nick Swinmurn
founded the company to provide a hassle-free way to buy shoes. Hsieh was with Venture
Frogs, which initially funded the upstart business with
$11 million. The following year, Swinmurn brought in Hsieh
as Zappos.com’s CEO.
Founded: 1999
T
ony Hsieh, CEO of online retailer Zappos.com, is the
recipient of the second annual Ernst & Young Venture
Capital Award of Excellence. The award recognizes
an Ernst & Young Entrepreneur Of The Year regional winner
whose company has received venture capital backing.
Hsieh was chosen from over 90 venture-backed companies
among the Entrepreneur Of The Year 2007 regional winners
by a panel of four independent VC judges—Scott Carter
of Sequoia Capital, Cynthia Ringo of VantagePoint Venture
Partners, Josh Goldman of Norwest Venture Partners, and
Marc Lederman of NewSpring Capital. Judging took place
in September at the offices of Sequoia Capital.
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Hsieh guided the company through the dot-com bust, a recession, and limited early financing by focusing on service
and creating the best possible online shopping experience, a
strategy that often meant challenging the company’s bottom
line. Zappos.com wasn’t the first online business to offer
free shipping, but it discarded the drop-shipping model,
opting instead to house its products within a single central
Zappos.com has adopted a near-fanatical focus on customer
service, a strategy that has resulted in a 60 percent rate of
repeat business among its more-than-5 million customers
worldwide. Customer service isn’t a department at Zappos.
com, it’s the entire company—from a 24/7 call center employing 1,300 people to service representatives who don’t work
from scripts and will spend as long as it takes to respond to
each customer inquiry. In fact, within Zappos.com the unofficial motto is: We are a service company that just happens to
sell shoes.
Today, Zappos.com is the leading online shoe retailer,
accounting for 20 percent of the estimated $3 billion online
footwear business. But shoes were just the beginning. Zappos.
com carries 3 million shoes, handbags, and apparel and accessory items and more than 1,100 brands. It has doubled its
sales every year since 1999, generating nearly $600 million in
sales in 2006. And Hsieh believes the company can make that
sales figure $800 million in 2007.
Venture Capital judges (standing): Marc Lederman, NewSpring Capital (left);
Josh Goldman, Norwest Venture Partners;
Seated: Scott Carter, Sequoia Capital; Cynthia Ringo, VantagePoint Venture
Partners
warehouse, at a steep cost of 25 percent of revenues. The
warehouse’s carousel system—touted to be the world’s largest—fully automates material handling to expedite delivery,
better control fulfillment, and ensure customer service
standards.
Hsieh’s vision for Zappos.com is straightforward:
• One day, 30% of all retail transactions in the U.S. will
be online.
• People will buy from the company with the best
service and the best selection.
While he focuses on growing the business at a
rapid pace, Hsieh works to maintain the culture
of a small company.
• Zappos will be that
company.
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Isaac Larian
President, CEO
MGA Entertainment
Van Nuys, Calif.
Founded: 1982
W
hen Isaac Larian
left Iran at age
17, his destination was America, the land
of opportunity—a place
where, if you worked
hard, you could pursue
your dreams of success.
When he arrived in Los
Angeles, he had $750
in his pocket and the
determination to make his
dreams come true.
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At the end of his first month in the U.S., however, Larian had
only a handful of quarters and very few options remaining.
He walked 11 miles, stopping at restaurants, car washes, and
gas stations looking for work. He eventually found a job in a
coffee shop, working as a dishwasher on the graveyard shift—
11 p.m. to 7 a.m.—for $1.65 an hour, an opportunity that he
refers to as “lucky.” The work enabled him to attend college
during the day, eventually earning a civil engineering degree
from California State University.
But Larian would never use the degree. Shortly after college,
he launched Micro Games of America, acting as a licensee
of other company’s products, including Nintendo, Power
Rangers and Hello Kitty. Larian soon saw that being a licensor provided the greatest opportunities for growth, and began
building MGA’s own brands and licensing them to others,
beginning with the wildly popular Bratz line of fashion dolls
in 2001.
Larian believes the key to being a successful entrepreneur
is very similar to what it takes to being popular with kids.
“You always have to be looking for something new,” he says.
Larian learned that lesson the hard way. When he sought the
American distribution rights to
Nintendo he was refused. He persisted and eventually prevailed,
selling $22 million of Nintendo
merchandise in a single year. But
trends in toys change as quickly
as fashion, and the following
year MGA had $10 million of
Nintendo inventory that didn’t sell. Larian used the experience as a learning opportunity.
asm gives Larian insight into what kids want. Nowhere has
that insight been more accurate than with the Bratz doll. “The
market was looking for a doll for girls over the age of six,”
explains Larian. While the Barbie doll reflected what girls of
the fifties and sixties may have aspired to as adults, the Bratz
dolls reflect today’s girls. “They’re multicultural, and they’re
fashionable,” says Larian of the dolls, whose tag line is “the
only girls with a passion for fashion.”
Since their introduction, the Bratz dolls have grown into a
billion-dollar franchise. Bratz is now the number one fashion
doll brand worldwide—a title held for more than 40 years
by the Barbie doll—and the leading seller in the 6–12, or
“tween,” age bracket. It was the No. 1 fashion-themed doll
during the 2006 fourth quarter according to the consumer
tracking service The NPD Group. Bratz products won Family
Fun magazine’s Toy of the Year award four years in a row and
took home top honors at the 2006 Family Fun Toy Of The
Year Awards.
Larian says the idea for the original Bratz doll was crystallized when his daughter Jasmin was visiting the MGA offices.
The creative staff pitched the idea to her and “she thought it
was really cute,” Larian explains. “I
knew that if she liked it, other girls
would too.”
“What I know is the emotions
of a kid, and in selling toys,
that’s the key.”
In fact MGA holds focus groups
regularly to find out exactly what
kids want. Children “kid test” the
dolls and report back with their
thoughts. The company also invites
feedback via its members’ clubs, and solicits children’s
comments through Bratz fan sites. “Kids are very honest,”
explains Larian. “They’re not afraid to tell you what they
think, or show their emotion.”
In 1998, as the company transformed into a full consumer
entertainment products company, Larian changed its name to
MGA Entertainment, Inc. MGA has since grown to become
the largest privately held toy company in the world. It currently manufactures and produces more than 20 product lines
of toys and games, dolls, consumer electronics, home décor,
stationery, and sporting goods, including such household
names as Bratz, Yummi-Land, Storytime Collection, Rescue
Pets, Miuchiz, West Coast Choppers, Market Racers, and
Marvel toys.
One example of how MGA listens to what girls want is the
company’s “Become a Bratz Designer” promotion, launched
in 2006 exclusively through retailer Wal-Mart. Girls submitted their fashion ideas, and one design was chosen from each
of two age groups (five–nine and 10–14) from over 50,000
entries. The winning entries each received a $10,000 college
savings bond, as well as the honor of seeing the doll wearing
the fashions they designed.
And nobody is having more fun than Larian. “This is my art,”
he says, “I love that I get to help kids have fun—it’s my passion and my life.” Larian’s imagination and passion make him
well-suited to the toy industry. “My wife says I’m a big kid,”
he says with a smile. And apparently that childlike enthusi-
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Larian believes that consumers want product innovation and
creative style, and he’s structured MGA to deliver. Managers
are empowered to run their departments as though they were
their own businesses, and Larian holds weekly management
meetings to coordinate efforts between the departments.
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Brainstorming is a big part of MGA’s culture. “I encourage
everyone to contribute at any time,” Larian says of his opendoor policy.
explains Larian, “but what I know is the emotions of a kid,
and in selling toys, that’s the key.” His goal is to make Little
Tikes a billion dollar brand by 2010.
In fact, Larian credits MGA’s more than 500 employees and
product designers as the source of ideas he taps into regularly.
In 2002 an intern introduced the idea for an accessory—a spa
for the Bratz dolls—that inspired the first-ever Bratz play set.
The product also garnered MGA the Toy Industry Association
People’s Choice Toy of the Year that year.
Larian’s toy company turnaround plans have extended to
Europe as well. In May 2007 MGA acquired Smoby—rescuing France’s largest toy company, and Europe’s second largest,
from bankruptcy.
The Bratz dolls and additional spin-off lines, including Bratz
Babyz and Bratz Kidz, have spawned fashion magazines,
CDs, television shows, movies, and apparel collections that
reinforce the brand name by reaching almost every aspect
of girls’ lives—from what they wear to the games and toys
they play with and how they listen to music. MGA currently
has more than 400 licensees worldwide bringing together
innovative companies and cuttingedge fashion styles to create exciting
new products—from Bratz Stylin’
Cosmetix to Bratz Sporty Flair
Bedding.
It’s Larian’s goal to create world class
entertainment brands through MGA
Entertainment. In 2004 the company
signed a deal with Twentieth Century
Fox to create a live action/animated
feature based on the Bratz fashion
dolls. The same year, MGA entered
into a partnership with Simon Brand
Ventures, the business-to-consumer
arm of Simon Property Group mall
operators, to launch the animated
“Bratz Babyz the Movie” DVD,
released by Fox Home Entertainment. Set for introduction this fall is a boys’ radio-controlled action figure
property called Alien Racers.
Although he’s learned the art of the
deal, instinct and trusting your gut is
something that Larian says is innate.
When he met his future wife at a party,
he told her right there that he’d marry
her. She laughed. Today, a few decades
and three children later, she knows his
intuition is right on.
Giving back is very important to Larian,
who takes advantage of opportunities to
share what he’s learned
with others. He teaches
entrepreneurship classes
through his alma mater’s
“Professor for a Day”
program and suggests
to students and aspiring
entrepreneurs: “Don’t do
what I did; have a business plan, but stay flexible, and keep
changing it with the market.”
“Trust your instincts,
stay humble, and be
true to your roots.”
Larian continuously looks for new opportunities to put into
play what he’s learned in his years in the toy industry. Having
a good feel for what kids in the age six and up category want
inspired him to explore creating products for kids under the
age of six, including the purchase in 2006 of Little Tikes, the
Hudson, Ohio-based maker of durable plastic toys and play
sets for toddlers and young children. The company’s sales
had flattened in recent years, something Larian has set his
sights on turning around. “Little Tikes had been bought previously by Newell Rubbermaid, who know plastics very well,”
12
Despite his success, Larian still thinks and acts like an
entrepreneur and offers this advice to others: “Trust your
instincts, stay humble, and be true to your roots.” For Larian,
those roots reach back to the Middle East, where bartering
in bazaars is a true art form, and, he believes, one of the best
training grounds for an entrepreneurial businessman. While
working for his father’s small textile business, Larian learned
the art of negotiation. Today he considers those negotiating
skills essential when selecting manufacturers to produce any
one of MGA’s wide array of rapidly
changing toys.
Even the youngest of audiences benefits from Larian’s experience and outlook. “I teach my children values through what
I’ve learned,” he says. “I came here with little, started as a
dishwasher, and got a chance to live the American Dream.”
For Isaac Larian living that dream is continuing to make the
magic happen for MGA Entertainment and children around
the world.
Tom Campion
Michael J. Hagan
Chairman
Zumiez
Everett, Wash.
Founded: 1978
Chairman, CEO
NutriSystem, Inc.
Horsham, Pa.
Founded: 1972
FINALIST: Mallbased specialty
retailer Zumiez
began as a single
store in Seattle’s
Northgate Mall
called Above the Belt, selling only
shirts. Today, Zumiez carries a broad
array of products for the action sports
lifestyle and has grown to 235 stores
operating in 23 states with nearly 800
employees generating more than
$298.2 million in sales in 2006.
The creative force behind that success
is Tom Campion, who, with colleague
Gary Haakenson, left his job at J.C.
Penney to launch their first store. Astute
decisions kept the company growing,
and in 1988 Campion took a risk and
added skateboards and snowboards to
the product mix. By the early ’90s he
had expanded the company’s product
line to include action sports apparel,
shoes, and accessories and changed
the company name to Zumiez to better
reflect its image and target market
of teens and young adults. In 2001,
Campion partnered with private equity
firm Brentwood Associates and in 2005
took Zumiez public.
Campion is now sharing his passion and
values with others through the Campion
Foundation, which invests in preserving wild places in the Northwest and
creating systemic
change to end
homelessness
in Washington
State.
FINALIST: When
NutriSystem
introduced
the prepackaged diet
meal concept in the
early ’70s
it launched
an industry. A
decade later it was an iconic brand,
but in the early ’90s dieting industry
regulation and the high fixed costs of a
brick-and-mortar business model sent
the company into bankruptcy.
In December of 2002, a small group
of investors, led by Mike Hagan, took
control of NutriSystem with the goal
of a turnaround. The complicated
transformation involved unwinding
franchise agreements, analyzing and
segmenting the market, investing in
a neglected brand, relaunching it as a
small player, and revamping the entire
prepackaged food offerings to create
the NutriSystem Nourish program.
Hagan transformed NutriSystem into
a marketing-driven e-commerce company with strong brand recognition
and a low-cost, highly scalable model.
Even though 90 percent of
NutriSystem’s business is conducted online, Hagan opted for
traditional marketing channels
to drive profitable customer
growth. The direct-to-consumer
business model has generated
400,000 new customers in the
last two years alone.
FINALIST: In 1999 Tony Hsieh invested
nearly $11 million in venture capital to fund the company founded by
Nick Swinmurn that would become
Zappos.com. The following year Hsieh
became the company’s CEO and since
then has grown sales from $1.6 million to $587 million in 2006, with a
goal of $800 million this year. One
of Time’s 25 Sites We Can’t Live
Without in 2006, Zappos.com has
more than 5 million customers and
accounts for 20 percent of the online
footwear market.
Key to that success has been a nearfanatical focus on the customer
experience—from a 24/7 call center
with unscripted service representatives
and no time limits on individual calls
to free shipping and returns—that has
resulted in nearly 60 percent repeat
customers. Zappos.com also eliminated drop-shipping, and completely
warehouses its 3 million items and
1,100 brands, including shoes, handbags, clothing and accessories, in a
single 900,000 sq ft warehouse with
fully automated material handling.
The goal at Zappos.com is what is
known internally as the “wow” factor.
That’s when a customer says, “Wow,
that was the best
Tony Hsieh
shopping experiCEO
ence I’ve ever
Zappos.com, Inc.
had.”
Henderson, Nev.
Founded: 1999
13
Manu Shah
Chairman and CEO
MS International, Inc.
Orange, Calif.
Founded: 1974
M
anu Shah and his wife, Rika, had a very modest
goal—create a small, home-based business that
would enable Rika to bring in some extra income
to supplement Manu’s earnings as a mechanical engineer. The
money would come in handy. The couple, married in 1971,
had come to Ft. Wayne, Indiana, by way of Bombay with $210
in their pockets and $3,000 of debt.
Three years later, they were beginning a family and were
focused on the future. Because one of his brothers worked in
the natural stone industry back in India, Shah knew enough
about the business to see the possibilities of importing stone
14
for use in monuments. “Our aim was very clear,” he says. “We
defined a small segment and we wanted to be a player. That
was our aim. That was all.”
But being a meticulous planner by nature, Shah found himself
constantly reexamining the possibilities and putting the pieces
in place for MS International’s next steps. “We kept expanding our definition of what we wanted to be,” he says. “And we
kept using our capital to grow the business.”
By 1981 the company’s definition had expanded to the point
that Shah felt it could be a contender in the competition for
of state-of-the art technologies and has succeeded in reducing
the price of natural stone by approximately 5 percent every
year for the last 10 years by increasing efficiencies in the
supply chain.
one of the most historically significant contracts in America.
He learned that Maya Ying Lin’s design for the planned
Vietnam Veterans Memorial in Washington, D.C., called for
the use of black granite. The opportunity captured Shah’s
imagination, and he was confident that MS International
(MSI) was ideally suited to win the contract.
Only four countries—the United States, Sweden, South Africa
and India—mined the stone needed for the memorial, Shah
explains, and he already had established a direct line to the
latter. And for different reasons, none of the other countries
was a strong contender. Shopping centers and homes had covered most of the land where the stone could be mined in the
U.S., quarries were becoming depleted in Sweden, and social
issues interfered in South Africa. Shah was convinced that
India was the logical source, and MSI was the logical distributor. He proved to be right on both counts.
When the deal was executed Shah left his position as a project
engineer for International Harvester and joined the family
business full-time. Three years later he moved the company
to Southern California, which he had determined would be
the ideal location for distribution, and
another three-year plan was set in motion.
In 2003, MSI began importing slate and other landscape stone
and now imports natural stone from more than 30 countries on
five continents and maintains an inventory of approximately
20 million square feet nationwide. Additionally, the company has incorporated bathroom tile and other unique stone
products that appeal to homebuyers. These innovations and
advances have helped MSI become the number-one distributor
of stone to consumers in the United States. Even with home
sales dropping over the past two years, MSI has seen growth
of more than 100 percent since 2004.
One of the top priorities for MSI is to provide the highest
level of service in the industry to its customers, which include
some of the nation’s largest retailers, such as The Home Depot
and Lowes. MSI believes that it’s in the information business
of natural stone and provides its customers with an array of
services, including state-of-the-art information systems for
accurate, real-time information on inventory availability and pricing, product
knowledge seminars to help train sales
forces, and in-store natural stone display
systems.
“We kept expanding
our definition of what
we wanted to be.”
“Each time we would define a new segment, we would not go beyond three
years,” Shah says of MSI’s strategy. In
1987, yet another course was charted
when Shah recognized that there was
phenomenal potential for MSI—up to that point primarily a
distributor of granite memorial monuments—to adopt natural
stone for commercial and residential use as well.
“What if I can make black granite a part of living rooms and
family rooms?” Shah wondered. “I began to talk to builders, to
anyone who would listen to the story of black granite. And by
1987 I started to get a break.”
Because the stone was freely available only from India, MSI
enjoyed a natural advantage as the market segment opened.
For the last 10 years, Shah has embarked on his vision to make
MSI the only nationwide distributor of natural stone in the
United States. In that time MSI has opened six mega distribution centers and has amassed more than 2,000 recurring customers in all 50 states.
MSI differentiates itself from its competitors in a number of
significant ways. The company’s commitment to continuous
innovation is reflected in its goal that 15 percent of product
mix each year is new products. MSI has increased productivity
by 20 percent annually for the last three years through the use
21 Y E A R S
OF
When Shah reflects on the factors
responsible for his success in a field far
removed from his initial professional pursuits, his thoughts
return to his native India. The youngest of nine children, he
lived in a rural area until he was six, when the family moved
just outside Bombay. The move meant the family went from
poor to “not much better than poor,” he says.
As the youngest child, he saw few opportunities to be first in
anything. “But I wanted to be in the first tier,” he says. And the
secret to reaching that goal, he believes, is careful planning.
That penchant for planning is woven into MSI’s corporate culture and is reaping rewards. Today the company has nearly 400
employees and boasts 14 consecutive years of growth.
Clearly, Manu and Rika—who are now joined in the business
by their sons, Raj and Rup—have come a long way from that
basement business they started in Ft. Wayne. But Shah says
they take the most satisfaction from the opportunities they
have created for others. There are 30 million jobs in the stone
industry worldwide, he says, and calculates that MSI plays a
part in 100,000 of them. “It makes me and my wife and our
family very happy,” he says. “We are doing our part.”
EXCELLENCE
15
Kenneth Hendricks
Chairman, CEO
ABC Supply Company, Inc.
Beloit, Wis.
Founded: 1982
FINALIST: As owner of one of the largest commercial roofing businesses in
the nation, Ken Hendricks was tired of
dealing with multiple suppliers scattered around the country. So he and
his wife, Diane, took matters into their
own hands. In 1982, they acquired three
supply centers, which became the first
locations of the new American Builders
and Contractors Supply.
Today, with 5,800 associates and more
than 350 locations in 45 states and the
District of Columbia, ABC Supply is
the largest wholesale distributor of roofing in the United States and one of the
nation’s largest distributors of siding,
windows and other select exterior building products.
The path to that progress was paved in
customer service. ABC added a catalog
division to give contractors easy access
to more than 6,000 items from hand
and power tools, fasteners,
caulks, and sealants to
ventilation equipment
and specialty materials. A portfolio
of products
and services
provide contractors with
marketing
tools, and
an in-home
finance program allows contractors to offer
financing to their
customers.
16
FINALIST: When
he was named
president
of Rockwell
Collins in 1998,
Clayton Jones
faced a formidable
challenge—
reuniting
a divided
company.
Founded
Clayton M. Jones
as the
Chairman,
Collins
President, CEO
Radio
Rockwell Collins, Inc.
Company
in 1933, it Cedar Rapids, Iowa
Founded: 2001
had been
acquired
by Rockwell International in 1973 after
an unsuccessful foray into the computer
industry, then split into separate businesses.
A former fighter pilot in the U.S. Air
Force, Jones reestablished the strength
of Rockwell Collins as an aerospace
company. It was spun off in an IPO in
2001, but a mere two months later, the
company faced the fallout of the 9/11
terrorist attacks, followed by wars in
Afghanistan and Iraq.
Given the nature of the company’s business, that “perfect storm” of negative
forces might well have been disastrous.
Indeed, the company’s commercial business lost 27 percent of sales in a twoyear period. Rockwell Collins survived
the crisis and today is among the most
profitable companies in the aerospace
and defense arena. Under Jones’ leadership, Rockwell Collins provided a total
shareholder return of 313 percent in
its first five full fiscal years on its own
and in 2006 was named one of Forbes
magazine’s America’s Best Performing
Companies.
FINALIST: From his humble beginnings
on the family cattle ranch to chairman
and CEO of the world’s largest company
dedicated exclusively to the design,
manufacture and marketing of lighting
fixtures, Larry Powers has embodied
true entrepreneurial spirit. The Genlyte
Group’s 45 brands are among the most
recognized and well-regarded in the
industry and are sold and distributed
through a direct sales force, independent
agencies and distributors.
Formed in 1984, Genlyte struggled
through high debt until 1993, when
Powers was appointed
president. He organized the company
into decentralized
business units that
focused on
their end
markets and
adopted
an entreLarry K. Powers
preneurial
Chairman,
managePresident, CEO
ment style
Genlyte Group
in which
Louisville, Ky.
each division
Founded: 1984
manager has
complete
profit and
loss responsibility. The
manager is challenged to emphasize
innovative new product development
and drive these products through their
specific niches. Genlyte’s business units
compete against each other on various
performance measures but also work
together to share best practices and gain
advantages within the marketplace.
The results have been remarkable. Under
Powers’ leadership the company has
more than doubled its revenue. In 2006
alone, Genlyte introduced more than
20,000 new products and more than 380
new product families.
Emerging
Michael V. Roberts (left)
Chairman, CEO, Founder
Steven C. Roberts
President, COO, Founder
Roberts Hotels Group
St. Louis, Mo.
Founded: 2003
rothers and business partners Michael and Steven
Roberts founded Roberts Hotels Group (RHG) in
2003 with the purchase of their first property, the
historic Mayfair Hotel in downtown St. Louis. Combined with
their latest forays into the hospitality industry, the Roberts’
ongoing real estate ventures have helped to stimulate the
revitalization of often depressed and predominantly AfricanAmerican sections of cities across the country.
B
to president and COO Steve Roberts, refurbishing the Mayfair
was just the first step. “It created additional real estate opportunities, because we asked ourselves what we could do to
make that piece of property more successful.” The Mayfair
became the hub for subsequent development, including a 24story condominium project innovatively connected so that
residents can avail themselves of the hotel’s amenities, including exercise, concierge and dining services.
The Mayfair, a St. Louis fixture since 1917, was in disrepair
at the time of its acquisition, but the brothers had a desire to
contribute to the revitalization of their hometown. According
St. Louis is also the site of one of RHG’s most recent acquisitions earlier this year, which will be unveiled soon as the
Roberts Ultra Hotel and Spa, “the model for our ventures
21 Y E A R S
OF
EXCELLENCE
17
Emerging
going forward,” according to Michael Roberts, chairman and
CEO. “We’re real estate guys,” he says, “and buying existing
buildings that are undervalued is the model that makes sense
to us. We can then turn it around into a reasonably priced,
good-quality hotel for Americans who are now more mobile
and looking for better vacation opportunities or places to conduct business.”
Today, RHG owns and manages 11 hotels, primarily in the
Midwest and South, increasing the company’s employment
base from 50 to well over 1,000 workers. The development
provides local jobs and infuses new life into distressed urban
areas. “We look at it not only as a business, but as a commitment to a community and an industry,” Steve explains. “You
can’t have arm’s-length commitment. You have to roll up your
sleeves and get your hands dirty. The people in a new venture
must learn to understand that your commitment is as great as,
or greater than, their own.”
“Entrepreneurial” is an apt description of the Roberts brothers’ careers. “An entrepreneur is a
visionary, someone who looks beyond
what’s there today, and is something
of a risk-taker,” says Steve. Roberts
Hotels Group is just the latest in more
than 70 ventures over the last three
decades—beginning with RobertsRoberts & Associates, a consulting
and construction management firm,
as well as highly successful broadcasting and wireless businesses.
with reward. One of the biggest challenges for RHG is balancing the pace at which new hotels are purchased while newly
acquired hotels are being renovated and newly renovated
hotels are being positioned to gain market share.
Two additional properties in St. Louis and Memphis will be
transformed into Roberts Indigo Hotels, reflecting the brothers’ relationship with another major player, Intercontinental.
“The Roberts standard is to exceed the brand’s standards substantially,” says Mike, and the brand name hotel companies
they do business with are happy to be affiliated with RHG,
whose upgrading reflects well on everyone, especially the
community.
That includes RHG’s employees. “Our employees know we
are first a people-oriented organization because we give them
the opportunity to share the entrepreneurial spirit,” says Steve.
Much of the Roberts’ success is built on their ability to recruit
and retain key people. Each hotel actively recruits women and
minorities, trains them, and provides opportunities for them to
rise through the ranks of the hospitality industry.
“We look at it not only as
a business, but as a commitment to a community and
an industry.”
And success is what Michael and Steven expect of each of
their companies. “We’re proud of our achievement in growing
the hotel division so quickly,” says Steve, “but this business is
a stand-alone company with independent management” that
must earn a profit, and does.
Following RHG’s development of the Mayfair in St. Louis,
the brothers evolved a pattern of taking over existing hotels
and investing in the staff their brand of personal management
care. RHG properties in Atlanta, Dallas, Tampa, Houston,
Spartanburg (S.C), Shreveport (La.), and Ft. Myers (Fla.) were
name-brand hotels before becoming part of the Roberts Hotels
Group. That strategy of working with larger, more established
hotel brands has helped to propel RHG into the hospitality
mainstream in only five years. “We like the hotel management
side,” says Steve, “and we don’t think anyone manages as well
as we do, from an owner’s perspective.”
That management acumen includes effectively balancing risk
18
Steve and Mike believe that it’s
important to let their employees
know that the company is in it for
the long haul. “That takes personto-person relationship-building,”
says Steve. “They need to see
updates and improvements that
make the properties real assets,
not only for us but for the community.”
“Everyone wants us to succeed,” agrees Mike, whose support, along with his brother’s, of local political and charitable
efforts helps to create a winning situation all around. As chairman of the National Association of Black Hotel Owners and
Operators, Mike works not only to increase ownership by
African-Americans, but to help other emerging entrepreneurs
for the benefit of their communities as well as the hospitality
industry.
Whatever Michael and Steven Roberts decide to do next with
their considerable business success and unflagging entrepreneurial spirit, it is certain to have the imprint that remains the
heart and soul of each of their ventures. They will undoubtedly bring jobs and economic turnaround to distressed areas.
But more importantly, they will give both their employees
and the neighboring communities reason to hope for a better
tomorrow by the pride they take in their life’s work and by the
example they set.
Emerging
FINALIST: By all
accounts, identity
theft and credit card
fraud are an increasing
risk and cost to
consumers and
businesses
alike. Bruce
Hansen is
helping to
deliver a
solution.
ID Analytics’
Identity Risk
Management
solutions provide
a cost-effective
way to manage
Bruce Hansen identity risk and
Chairman, CEO prevent identity
ID Analytics, Inc. fraud throughout
San Diego
the customer lifeFounded: 2002
cycle by applying
its one-of-a-kind
advanced pattern recognition technology. ID Analytics’ cross-industry
approach detects behavior patterns from
multiple perspectives rather than just a
single company or industry. By more
accurately separating fraudsters from
genuine customers, ID Network members can open more legitimate accounts
more quickly, save millions of dollars in
real time, and protect valued customers.
Under Hansen’s leadership, ID Analytics
experienced a compounded annual
growth rate of 185 percent for the three
years ended in 2006. The company is
delivering its solutions to six of the
top 10 credit card issuers and four
of the top five wireless carriers,
as well as retailers, government
agencies, and health care providers and earlier this year
secured $20 million in financing to fuel new product
development and expansion.
Les Spero, Ph.D. (standing)
Mark Stagen
CEO, Founder
Rafi Spero: COO, Founder
NeatReceipts
Philadelphia
Founded: 2002
CEO, President
Emerald Health
Services
Marina Del Rey, Calif.
Founded: 2002
FINALIST: Like many people, Rafi Spero
was often faced with the problem of
organizing receipts for business reports.
He believed there had to be a way to use
technology to manage the paper mess.
His father, Les, agreed, and the pair
pitched the idea to seasoned software
developer David Gitlin.
FINALIST: In
2002 Mark
Stagen recognized the
shortage of
nurses nationwide and had
a mission to
provide temporary staffing services to hospitals
by placing nurses
on long-term
staffing assignments. His commitment to having
a positive impact on the health services
industry and providing an enriching
career experience for his employees has
enabled Stagen to grow Emerald Health
Services from a single traveling nurse in
2002 to more than 600 nurses on assignments at more than 250 hospitals.
The NeatReceipts Scanalizer scans
receipts and other business and personal
documents, then converts the images to
text files, searches the files to extract
pertinent information, inserts it into a
spreadsheet and stores it in a database on
a PC. The company marketed its scanner/software product in 2003 at a kiosk
at Philadelphia International Airport,
targeting business travelers.
Within a year, Les and Rafi Spero
opened a second kiosk and began selling
their product on TigerDirect.com. Today
the NeatReceipts Scanalizer is available
at 16 kiosk locations and
is distributed by online
and traditional retailers, including Staples,
Office Depot,
Office Max,
CompUSA,
and Amazon,
as well as
neatreceipts.
com. The
company has
also added Neat
Business Cards,
which scans cards
to organize
contacts.
Emerald identifies qualified nurses in
well-staffed areas and recruits them to
work in areas with shortages. Travel and
housing expenses are paid, and compensation is competitive. Key to Emerald’s
success is its geographic focus, developing relationships with hospitals and
apartment buildings so that nurses can
stay in the same city and housing when
changing assignments.
Stagen had no outside funding, but in the
five years since its founding, Emerald
has grown 400 percent, averaging an
enviable 50 percent increase year-overyear. An impressive 70 percent of the
business comes from referrals. Among
competitors that are more than 20 years
old, Emerald Health Services is ranked
third in California and 15th nationally.
19
Energy, Chemicals
& Mining
Harold Hamm
Chairman, CEO, Founder
Continental Resources, Inc.
Enid, Okla.
Founded: 1967
P
rogressing from modest circumstances to head up
something big and important is not that unusual a
personal success story in the oil industry. A quick
path to wealth has seduced many, and many have hit it big.
But Harold Hamm stands out from the pack.
One of 13 children and largely self-educated, Hamm has
become known as one of the oilfield service industry’s
important innovators and role models as well as a staunch
advocate and defender.
20
Hamm went into business for himself in 1966 with a huge
amount of work ethic and determination and one small
used water pump truck he bought with a cosigned note at
the bank for $1,000. He began by hauling wellfield fluids
and servicing drilling rigs. The venture was the beginning of a progression of businesses, one of which became
Continental Resources, today a leading independent oil
and natural gas exploration and production company with
operations in the Rocky Mountain, mid-continent, and Gulf
Coast regions of the U.S.
“My family moved to Enid when I was a junior in high
school,” Hamm recalls. “The drilling industry really caught
my imagination. There were boom times in Enid then, and
I was intrigued by the wealth that oil could create. Not
having been around the oil industry before and then suddenly being exposed to it was more than just interesting—
it was exciting.”
Hamm wanted to get into exploration and production, but
had neither the formal education nor the financial backing. But he was both ambitious and eager to soak up all the
knowledge about the science of the business that he could,
beginning in the oilfield service industry.
Hamm has been an important innovator from the early days.
“Operating a company in an ethical manner was really important
to me and was pretty much the
business plan for my first company,” he explains. “In the early
1960s the oilfield service industry was an unscrupulous environment, and I didn’t want to identify
with that. Our high-integrity
approach brought a fresh outlook
to our customers, and soon they
didn’t want to do business with
anyone else. I feel we established
a new
a new plateau of integrity for
the entire oilfield service industry. There were definitely some
times of self-doubt, but it worked.”
Hamm has built his small one-truck business into the largest provider of oilfield fluid
transportation in Oklahoma and the fifthlargest well servicing contractor in the U.S.
directionally so that the bore could be drilled horizontally—a technology that has been immensely important in
shortening the time it takes to develop successful wells and
make them commercially feasible. “Many companies said it
couldn’t be done,” Hamm says. “I was convinced it wasn’t a
novelty as most others thought.”
In 1983 Hamm’s company drilled 16 wells for its own
account under the town of Enid, using directional drilling. The first big oilfield he developed was the Cedar
Hills Field in North Dakota in 1995—at the time the largest onshore discovery in the United States in 23 years. A
subsequent find, the Bakken Field in Montana, is expected
to be even larger. Hamm developed both of them using
horizontal well drilling. As of the end of 2006, 86 percent
of Continental’s estimated proved reserves were
located in the Rocky Mountain region.
Hamm and the oil industry have weathered some
tough times together. In the late 1990s the governments of Venezuela and three other countries had
been dumping cheap crude oil in the U.S. at less
than the cost of production to force high-cost producers and those with marginal wells out of business. Hamm led a coalition that brought a trade
case against them. “That time was difficult for
many people,” Hamm explains. “There were exits
from the business and a lot of hardship and unemployment, but our
case succeeded.”
“Operating a company in an
ethical manner was really
important to me and was
pretty much the business
plan for my first company.”
The big next step for Hamm was entry
into exploration and production—drilling
his own leases and working as a contract
driller. Hamm met the classic definition of
a wildcatter: someone engaged in speculative oil drilling in
areas not known to be productive. His first wildcat found
the Aline Oakdale Oswego field and came in at 75 barrels
of oil per hour; his second made 100 barrels per hour. But
Hamm also took the risks inherent in the oil patch—his longest dry-hole streak was 17 in a row.
Today Continental Resources uses horizontal drilling and
other modern technologies such as fracture stimulation to
unlock resources from unconventional geologic formations. Hamm and a small handful of others were the early
champions of refining the technique of using a rig to drill
21 Y E A R S
OF
Hamm had a number
of mentors over the
years, including
engineers, geologists, and treatment
specialists who were
instrumental to his
success. “Most of the
people in the industry who I became
involved with have been very supportive,” he says. “I’ve
found that in dealing with others, especially your employees, the most basic and important thing is to treat them
fairly and have a high regard for what they contribute.”
His hardworking nature—and persistent belief in doing
things a better way—have lifted Hamm to a respected
position as an astute oil finder, a philanthropist, and the
leader of a prominent and successful company. Continental
Resources ended 2006 with revenues of $483.7 million, and
in May of this year Hamm led the company’s IPO.
EXCELLENCE
21
Energy, Chemicals & Mining
FINALIST:
Reinvigoration of
a 90-year-old
company
can be a tall
order, even
for someone with
an entrepreneurial
spirit as
deeply
ingrained
H. Craig Clark
as Craig
President and CEO
Clark’s.
Forest Oil Corporation In 2003,
Denver, Colo.
Forest
Founded: 1916
Oil
Corporation had come a long way,
but on the wrong road. It had lost
its focus on old-fashioned oilfield
expertise and operations knowledge,
and investor confidence was flagging. With a background as a field
hand in the East Texas oilfields
and long management experience,
new president and CEO Clark
knew the business. He also knew
the company needed a complete
strategic overhaul. He was up to
the challenge.
Clark reduced debt and costs,
reallocated capital spending, and reorganized business units. He ended the
spending associated with unproductive
exploration and walked away from major
international monetary commitments.
All employees now have an equity position in the company.
After decades of poor stock performance, Forest Oil shareholders have
received a 162 percent return on stock
ownership from three years ago. The
company is now one of the best performing stocks among its oil and gas
industry peers and has become the largest Denver-based oil and gas company.
22
FINALIST: In 2000, the French oil company Total, which had acquired Belgian
national oil company Fina, decided to
sell its Dallas-based U.S. refining and
marketing assets. It couldn’t have been a
worse time in the industry.
Refining expert Jeff Morris, a 25-year
Fina veteran, was tapped to represent the
selling company. Enter potential buyer
David Wiessman, a successful entrepreneur in Israel. As CEO of the familycontrolled Alon Israel, Wiessman had
introduced the convenience store concept to Israel with such familiar brands
as Pizza Hut and KFC.
Jeff Morris (right)
President, CEO
David Wiessman
Executive Chairman
Alon USA
Dallas, Texas
Founded: 2000
The buyout of Fina’s refining operations by Wiessman resulted in
the creation of Alon USA. Morris moved
to the buyer’s side of the table and put up
the entire proceeds from his 401(k) savings plan to help the deal. Wiessman and
Morris organized a major turnaround for
the company and in 2005 took it public.
Under their leadership, Alon USA has
grown its starting equity of $7.5 million
and 95 percent debt to more than
$1.4 billion of market cap and raised the
productivity of its major refinery from
near the bottom of the list of 92 facilities
in 1989 to number six.
Dave Warren
President, CEO
Energy Alloys LLC
Houston, Texas
Founded: 1995
FINALIST: When Dave Warren and his
two co-investors founded Energy Alloys
in 1995, they left stable, well-paying
jobs to establish an oilfield metals distribution company that was different. Their
target customer base was equipment
manufacturers who produce and sell
downhole tools to the oil and gas drilling
and exploration industry.
Warren had labored in the oilfields
of the Gulf Coast region, and after
college worked in the oilfield equipment manufacturing industry, so he
knew that no one in this specialized
wholesale distribution industry was
offering high-level customer service.
Business relationships were typically
transaction-oriented and adversarial.
The business model of being a valueadded supply chain partner that promoted longer-term business alliance
relationships and just-in-time inventory
arrangements appealed to him.
Energy Alloys’ success has been a tribute to Warren’s belief in creating harmony and growth
out of challenging circumstances. The company
has expanded to Canada,
England, Scotland, and
Singapore, and
has survived two
significant industry downturns.
Today it is the
leading competitor globally
in its industry
niche and has
increased revenues nearly
tenfold since
2002.
Financial Services
Ronald J. Kruszewski
Chairman, President, CEO
Stifel Financial Corporation
St. Louis, Mo.
Founded: 1890
W
hen Ronald Kruszewski took over the leadership
of Stifel Financial Corporation it was an extraordinarily difficult moment in the company’s history.
The company was shrinking and faced significant litigation
with the IRS. Because of its problems, the then-107-year-old
company was rumored to be for sale.
Kruszewski, the new president and CEO, was a mere 38 years
old, so you might think he would temper his remarks to the
troops. But Kruszewski’s message was anything but tempered
when he announced: “We are getting out of the foxhole and we
are charging the hill.”
21 Y E A R S
OF
That rallying cry said it all about Kruszewski and about the
future of Stifel. The company has been out of the foxhole for
years and enjoys a comfortable perch on the hill. Since 1997,
Kruszewski has reinvigorated the company with his entrepreneurial spirit and clear-eyed perspective, guiding Stifel on a
trajectory of consistent growth that has included 11 straight
years of record revenues—from $122.8 million to more than
$800 million expected this year—and a nearly sixfold increase
in the value of the company’s stock.
Kruszewski is not surprised at the success. “People given a
challenge like that are going to respond,” he says. “People do
EXCELLENCE
23
not want to feel they are in the bunker.” Besides, he says with
a laugh, “At 38, I didn’t know any better.”
Actually, Kruszewski was well-suited to his task. He had spent
10 years “preparing,” as he puts it, through his work at various companies, including serving as chief financial officer at
the Robert W. Baird & Co. investment firm. His experience
has encompassed private client sales, asset management, corporate finance, trading, mergers and acquisitions, legal and
compliance, operations, information technology, and finance.
Kruszewski also has advised several financial institutions on
strategic initiatives.
Every bit of his experience—not to mention his confidence—
was called into action at Stifel, where he was challenged to
bring a new spirit to a company steeped in tradition.
Founded in St. Louis in 1890, Stifel had a
long-established philosophy of investing
based on trust, understanding and solid,
studied advice. Kruszewski had no intention
of changing any of that, but it was his task
to chart new paths up the proverbial hill. He
outlined a Platform for Future Growth that
included a commitment to attracting and
retaining talented associates, and substantial investments in
technology and communications tools.
tory with the addition of the Legg Mason Capital Markets
business from Citigroup Inc. The transaction effectively doubled the company’s size and increased its geographic footprint
while significantly enhancing its capabilities.
The added resources in investment banking, research, equity
sales and trading, and taxable fixed income sales and training
have helped Stifel become one of the nation’s premier independent brokerage and investment banking firms and one of
the largest domestic equity research franchises outside of
Wall Street.
And earlier this year, Stifel broadened its reach by acquiring
Ryan Beck & Co., Inc., a regional brokerage firm based in
New Jersey. The addition of Ryan Beck has made Stifel the
12th largest brokerage firm in the country.
“You can’t acquire
people. You have to
motivate them.”
He also launched Stifel’s “Of Choice” strategy, which means
just what it says. “We want to be the advisor of choice to our
clients,” he says. “And the way we achieve our ultimate goal is
to get entrepreneurial people to join the firm. If we can attract
good people, the stock price will take care of itself.”
Headlines about the company’s difficulties, however, did
not do much to attract top talent. Clearly, changes had to be
made. “We flipped the organizational chart upside down,”
Kruszewski says. Associates were empowered and given an
equity stake for their efforts. The strategy worked—for Stifel,
its stockholders and its employees. “The employee ownership stake has increased by over a quarter of a billion dollars,”
Kruszewski says with justifiable pride. “And we have created
82 millionaires.”
A major turning point for the company occurred in 2005 when
Kruszewski orchestrated the largest acquisition in Stifel’s his-
24
All of these achievements, Kruszewski
says, are due to the power of human
capital. “You can’t acquire people,”
he says. “You can acquire widgets.
You can acquire land. You can acquire
assets. But you can’t acquire people.
You have to motivate them.”
Kruszewski’s attitudes toward business were developed early
in life. He is the second oldest of four children, and the first
in his family to go to college. He saw the importance of hard
work in the example set by his father, who supported the
family with three jobs—fireman, landscaper and barber.
Though Kruszewski thought early on that he might become
a lawyer, he was infected by the finance bug in college. “The
logical linear aspects of numbers appealed to me,” he says.
A CPA, Kruszewski received his BS degree from Indiana
University in 1981.
He met his wife, Sharon, in college, and credits her as another
model of success. The couple has four children, and Sharon
left a highly successful career in computer sales to become
“the CEO of the family.”
Kruszewski says the definition of success is a frequent topic
of discussion in the family. Money, he believes, is but a small
part of the equation, and he harkens to the lesson taught by his
parents: “If you want to get ahead, you have to work.”
Financial Services
FINALIST: Early on, Geoff Davis realized
he could either spend most of his productive years creating wealth for himself
and then using it to promote social good,
or he could spend all of his life improving the world by applying entrepreneurial skills and business principles to solve
social problems. That’s what drew him
to Unitus, a global microfinance
accelerator.
Todd Crosland
FINALIST: Despite a
Chairman, CEO, lack of familiarity
with the foreign
Founder
exchange market,
Interbank FX
Todd Crosland
Salt Lake City,
launched Interbank
Utah
FX (IBFX) as a
Founded: 2001
way to trade currencies directly instead of through a
broker dealing desk. The approach drew
the attention of individual traders who
asked to be a part of it.
Crosland faced considerable difficulties
implementing his ideas, including purchasing $100,000 worth of software that
didn’t work. There was also the headache of trying to make the technology
perform reliably 24 hours a day. Perhaps
the most difficult challenge was trying
to establish working relationships with
banking partners, all of whom required
a minimum net capital to initiate the
process. It took Crosland more than two
years to perfect the technology and the
relations with the company’s banking
partners, and he invested $500,000
of his own money before seeing any
revenue.
Today IBFX has 12,000 customers in more than 135 countries, and
Crosland wants them to succeed.
The company provides a variety
of free tools and resources, including debit and credit cards, an online
forum—both industry firsts—chart pattern recognition software, and an online
forex university.
Davis met the co-founders of Unitus
during graduate school at Harvard and
became the president and CEO in 2001.
He immediately set out to address the
biggest challenge facing microfinance:
scaling the industry to meet the needs
of the 400 million working poor who
were still beyond the reach of traditional
banking services.
The results have been tremendous. In
just over five years, Unitus has built a
portfolio of 16 microfinance companies
with loans, worth
more than
Geoff Davis
$150 million, to
President, CEO 1.8 million people
Unitus
in six countries.
Redmond, Wash. Now Davis is
Founded: 2000
focused on achieving even greater
impact through
the Unitus Equity
Fund, a $24 million
early-stage venture
fund to demonstrate
to the world’s
capital markets
that microfinance is an
investable
asset class,
not just a
charitable
cause.
21 Y E A R S
OF
EXCELLENCE
FINALIST: Li Yu started Preferred Bank
with $20 million in start-up capital
raised from friends, family and associates from prior business ventures.
His vision was to create an independent platform focusing on the niche
Southern California market, serving
both the Chinese-American and mainstream segments.
Yu’s vision began to take shape when
he was chairman of the board of the
former California Pacific National
Bank, a small bank that primarily
served the Los Angeles ethnic Chinese
business
community. He
oversaw
the operational
turnaround of
the bank,
culminating in its
sale to
Security
Pacific
Li Yu
Bank in
Chairman,
1986. The President, CEO
dramatic
Preferred Bank
growth
Los Angeles, Calif.
of the
Founded: 1991
ChineseAmerican
population in Southern California,
along with the general consolidation
in the area’s banking industry, created what Yu believed to be an underserved commercial banking market
for small- and mid-sized companies.
What started with a single branch has
grown to 11 branches and assets of
$1.35 billion. Preferred Bank listed on
the NASDAQ in 2005 and has consistently delivered strong performance,
including a stock appreciation of 60
percent.
25
Health Sciences
Pamela Morris
President, CEO
CareSource Management Group
Dayton, Ohio
Founded: 1985
A
nyone who has ever told Pam Morris “you can’t” has
likely felt sparks from the firestorm of her resolve to
prove otherwise. When Morris, CEO of the mandatory Medicaid managed-care plan now called CareSource,
was told there was no way around a federal regulation that
one-fourth of the plan’s enrollment had to be commercial customers—a requirement she felt would diminish its mission to
provide health care to the underserved—she took her case to
Washington.
Soon after, the federal Medicaid office received a fax from
Air Force One. Ohio Rep. Dave Hobson and then-President
George H.W. Bush were inquiring whether a waiver could be
granted. When the office responded that an exemption would
26
require an act of Congress, Morris and Ohio delegates quickly
met with legislators to explain the health plan’s mission—and
its plight. They had just two weeks before Congress recessed
and needed a unanimous vote to avoid losing vital federal
Medicaid funds. The exemption passed.
The hurdle was just one of many in Morris’ 21-year tenure
with the Dayton, Ohio-based HMO, each of which she’s met
with the same singular focus on success. “Failure wasn’t anything I ever thought about, which was probably good,” she says
with a laugh.
Today CareSource serves more than 525,000 managed care
consumers, making it the largest Medicaid managed care
lions of claims annually, with a turnaround for clean claims
that significantly exceeds regulatory standards.
health plan in Ohio—with over half of the state’s
Medicaid managed care market—and one of the
nation’s largest, recently expanding into Michigan
and Indiana.
Hiring those attracted to the organization’s cause, Morris
believes CareSource employs the industry’s best. “We’re
a mission-driven company and really care about making a
difference,” she says. “That resonates with our employees,
who work at CareSource because it feels good to go home
knowing that you really did help someone.” CareSource staff
investments include training through CareSource University,
performance bonuses, and tuition reimbursement.
In 1989, when Morris created what was then the
Dayton Area Health Plan, she had to overcome
the unpopularity of managed care, and convince
doctors and hospitals it would work for Medicaid
recipients. Because the concept was untested and
risky, the Ohio Department of Insurance increased
the price tag of its HMO license from $50,000 to
$300,000. The move forced Morris to raise additional money, since the plan’s development grant
had long since been depleted. Then, the Legal Aid
Society of Dayton filed a class-action lawsuit to
stop the plan because it didn’t think enrollment
should be mandatory, even with an opt-out provision. The suit was settled when the company
allowed Legal Aid access to its records.
Morris didn’t set out to be an innovator. She began
her career as a county social worker, which provided insight into what those without access to
health care experience. “It was one of my board
members, an entrepreneur, who told me what I was
doing developing this company was entrepreneurial,” relates Morris. “I didn’t really think about it
that way.”
Morris’ belief that managed care could improve
health care for the underserved continued to fuel
her passion. She met each challenge and developed
a model that is pleasing patients and providers
alike. Observing that many HMOs in the early ’80s
failed because they didn’t make the right investments, Morris was determined to avoid that mistake. She committed to serving clients with a better
model, one that invested in two important resources—people
and technology.
Morris made a key strategic investment in building strong
provider relationships by setting new market rates for reimbursements to 105 percent. “By being a tax-exempt nonprofit
we can pay our providers more, which they obviously like,”
says Morris. And paying providers more enables them to offer
additional services.
Investments in technology also give CareSource a decided
edge. An electronic claims processing system allows providers
to check claims status any time on the CareSource Web site.
Administrative efficiencies allow CareSource to process mil21 Y E A R S
OF
Despite significant investments, CareSource’s administrative
costs are among the lowest in the country at 7 percent, while
most publicly held competitors have cost rates of 10 percent.
CareSource also has the highest customer satisfaction rating
of any Medicaid managed-care plan in Ohio, which Morris
credits to a number of consumer-focused programs. Babies
First rewards expectant mothers for obtaining prenatal care
with gift cards to local stores. And a 24-hour nurse line,
CareSource 24, provides consumers with
answers to medical
questions. In one year,
nearly 60 percent of
callers who said they
would have gone to
an emergency room
were directed to a more
appropriate level of care. The cost savings have made it so
successful CareSource markets it to other HMOs through a
for-profit subsidiary.
“It feels good to go
home knowing that
you really did help
someone.”
In 2006 Morris created the CareSource Foundation to further
the legacy of the CareSource mission by seeking solutions
to some of the most pressing health issues facing communities today. Funding priorities include issues of the uninsured,
prevention and intervention in community health issues, and
critical trends such as childhood obesity.
Morris is not content to rest on her laurels. She is currently
positioning the company to take its experience to other
Medicaid populations that can benefit even more from the
managed care model, such as the aged and people with disabilities. “I’ve devoted my life to this cause and there’s so
much more to accomplish,” she says.
It’s a fairly safe bet that Morris will continue to be successful in breaking down barriers to health care. “My philosophy
has always been that as long as I’m having fun, feel like I’m
making a difference, and I’m challenged, I can’t think of anything else I’d rather do.”
EXCELLENCE
27
Health Sciences
Sachiko Kuno (left)
President, Chair, Co-Founder
Ryuji Ueno
CEO, Co-Founder
Sucampo Pharmaceuticals, Inc.
Bethesda, Md.
Founded: 1992
FINALIST: Drs. Ryuji Ueno and Sachiko
Kuno met in a lab conducting research
on the potential of prostones, a class of
compounds that derive from functional
fatty acids natural to the human body.
Their work resulted in more than 900
international patents and the Japanese
market launch of their first product,
Rescula eye drops—an anti-glaucoma
drug now sold in 40 countries.
In 1996 Ueno and Kuno founded
Sucampo Pharmaceuticals in order to
leverage their technology to the U.S.
Their foray into the American market
initially proved frustrating when a
strategic partnership fell through and
their products took longer to get FDA
approval than
expected. In
2006 their
second
prostone
product,
Amitiza, for
the treatment of
chronic idiopathic constipation, received
FDA approval. Ueno and Kuno completed an IPO filing in June of that year.
Revenues from Amitiza have allowed
Sucampo to develop and test other products, including two in preclinical testing
with potential uses for patients with
cystic fibrosis and Alzheimer’s disease.
28
FINALIST: When
Jim Pearson joined
Suros Surgical
Systems, the company had one
prototype
device for
minimally
invasive
breast
biopsy,
Jim Pearson
no no manPresident
agement
Suros Surgical
team or
Systems, Inc.
funding,
Indianapolis, Ind.
and a
Founded: 2000
market
in which
Johnson &
Johnson had been the sole device provider for nearly a decade.
Pearson immediately hired a management team, raised $19 million through
angel investors and venture capitalists,
and took the device to market. The Suros
MRI-guided breast biopsy eliminates the
need for radical procedures such as surgical biopsies for diagnostic purposes.
Suros became profitable within its first
year and has sustained hyper-growth for
five consecutive years, including three
consecutive years of 70 percent annual
growth.
In 2006 Pearson helped orchestrate the
$240 million merger of Suros with
Hologic, Inc.—the first time an imaging and an intervention company have
joined to deliver more complete solutions for better clinical outcomes due
to early breast cancer detection. Suros
continues its quest to develop compassionate biopsy devices and in 2007
launched Celero, the first ultrasoundassisted biopsy device.
FINALIST: Randy Thurman was thinking big when he decided to integrate 14
separate companies that he took public
within a year as a single global researchbased medical technology company.
He was just getting started. The result
is VIASYS Healthcare Inc.—the world
leader in respiratory and neurological
diagnostics, with growing positions in
several therapeutic areas, including sleep
and orthopedics.
Thurman has addressed a number of
challenges in building VIASYS. In 2003
he created an international operating
structure with five regional headquarters worldwide, each with its own direct
sales or distributor operations. The international business accounts for 40 percent of total revenues and in 2006 grew
30 percent over the prior year.
To compete with large global companies
well-established in the market, Thurman
invested over $100 million in product
development in VIASYS’ first three
years, as well as in new business segments that could generate high rates of
growth. Today, the company is first in
nearly every product segment where it
competes and was able to complete eight
acquisitions in a two-year period funded
from operating cash flow.
Randy Thurman
Chairman,
President, CEO
Founder
VIASYS
Healthcare Inc.
Conshohocken, Pa.
Founded:
2001
Media, Entertainment
& Communications
Michael Walrath
CEO, Founder
Right Media
New York, N.Y.
Founded: 2003
tarting out in one direction and ending up taking
another is consistent with the flexibility and openness
to experience Michael Walrath has always had toward
life. When he earned a degree in English literature, it was with
the expectation of becoming a teacher. But after graduation he
worked at a number of different jobs where he learned about
sales and marketing and how to manage a business.
S
ception of what went on in the business world was a lot of dry
numbers and just punching a clock.”
“Business wasn’t something I considered to be interesting or
anything I expected to see myself doing,” he admits. “My per-
While growing up, the measure of success in Walrath’s family
was never whether someone was making money, it was
21 Y E A R S
OF
But his experiences building his own company have proved
that innovators can make business so much more. “At its best,
it’s dynamic, creative and exciting, and you can do good in the
world,” Walrath says.
EXCELLENCE
29
whether what he was doing was something that mattered. For
Walrath, that is the litmus test. “I always felt that was a standard to live up to,” he says. “I never kept a job that I didn’t
feel mattered in some way, where I wasn’t doing something
important that made a difference.”
Walrath’s first job out of college was with the online advertising company DoubleClick. When DoubleClick struggled
through the post-Internet boom years and decided to merge
with another company, Walrath set out to build his own business and launched Right Media in 2003
The company began as a consultancy that produced good
results for its customers, but Walrath felt hamstrung by
the business model and the following year repositioned
Right Media as an auction-based ad network. But it’s not in
Walrath’s DNA to be content if he feels that something can be
better. And so he asked himself, “What if we build some technology that makes this more efficient?”
That “what if ” approach is endemic at Right Media, where
real world experience is valued as
much as a business degree. “We used
to say, ‘No business school answers
here,’” he notes. “That’s not a knock on
business schools. If I had spent time in
business school, I might not have made
so many mistakes. But at the same time
there was an advantage to not having
formulaic answers to questions. We
chafed when someone said, ‘Look. This
is just the way it’s done.’ Our response was always, ‘That’s not
a good enough reason.’”
now trade digital media on the Right Media Exchange.
The strength of Right Media’s model hasn’t gone unnoticed
as some of the online industry’s largest players seek to revolutionize the media buying and selling landscape. In October
2006 Yahoo! acquired a 20 percent interest in the company. In
April 2007 it announced acquisition of the remaining equity
interest in Right Media for $680 million, with Walrath serving
as a senior vice president at Yahoo!
While he sees challenges in maintaining the core DNA that
has driven Right Media’s success, Walrath says there is “commitment on both sides to get it right, to capture and preserve
the magic of our entrepreneurial spirit.”
That commitment includes Right Media’s employees as well
as Walrath. “There are hundreds of people who helped build
this company,” he says. “They all embrace the same ethos
of not taking short cuts or finding destructive ways to make
money. We’ve found ways to succeed while being
constructive.”
“If you’re not making
mistakes, you’re not
taking enough risks and
not trying hard enough.”
So the company evolved once again. In 2005 Walrath abandoned the traditional model of the online ad market for
interactive media, creating an open advertising exchange that
levels the playing field between buyers and sellers. Right
Media’s open application programming drives efficiency by
providing a common platform that enables buyers and sellers
to connect to each other and gain open access to media, the
ability to see the market as a whole, and a way for them to
maximize value on every ad call in a real-time auction.
The interfaces help to foster transparent relationships and
build a sense of community among participants, a model that
runs counter to more established advertising network systems,
where supply and demand information is not shared. As more
partners started running their businesses on the platform, a
community formed, and the Right Media Exchange was created. More than 30,000 advertisers, publishers and networks
30
Walrath understood the risks he faced
in creating Right Media’s business
model. He explains his drive to succeed as being willing to fall on his
face, stretching for something that
made him fly out of bed in the morning rather than playing it safe and not
being fully engaged.
Walrath’s credo is similar to that of many entrepreneurs:
embrace your own experience, follow your passion, and don’t
accept anyone else’s playbook. He admits to being wrong
more than being right at times, but considers mistakes to be
important data points for course correcting. “You’re going to
make lots of mistakes starting in business,” he says. “If you’re
not making mistakes, you’re not taking enough risks and not
trying hard enough.”
But it’s important, Walrath believes, for would-be entrepreneurs to start business in areas in which they have expertise.
“When you’re an expert in your field and surround yourself
with other experts in their fields, you can make countless mistakes and course correct in a way that will lead to success.”
Walrath also stresses the need to strike a balance between
listening to those with expertise and learning from them, “but
not putting yourself in a position where you can’t act because
you’re paralyzed by others telling you that you can’t do it that
way,” he stresses. “Every time you tell me it’s impossible, I
want to do it even more.”
Media, Entertainment & Communications
James F.
Geiger
Cbeyond, Inc.
Chairman,
CEO,
Founder
Atlanta, Ga.
Founded: 1999
FINALIST: The telecommunications
market was in decline when Jim Geiger
launched Cbeyond with the goal of
giving small businesses access to
advanced services previously available only to large businesses. Despite
the gloomy investment picture Geiger
secured funding in 2000 and the following year launched his first market,
Atlanta. Just five years later, Geiger took
Cbeyond public.
Cbeyond is an IP-based managed service provider delivering integrated
packages of more than 20 local and
long-distance voice as well as mobile
and broadband Internet applications,
including BlackBerry voicemail, e-mail,
Web hosting, fax-to-e-mail, data backup,
file-sharing and VPN, managed over a
private, 100 percent VoIP facilities-based
network. Customers receive services
at the right price point and an online
account management tool allows them
to manage their services without the
need for an IT staff.
Geiger has expanded his company to Dallas, Ft. Worth, Denver,
Houston, Chicago and Los
Angeles, and Cbeyond
now boasts more than
27,000 customers and a
99 percent retention rate.
Cbeyond continues to seek
to increase market share
and expansion into
other regions as
well as to offer new
application to its
customers.
FINALIST: A vacation cruise to Alaska
where there was no service for his
BlackBerry has led Bill Marks to completely change the way people live and
work at sea. Armed with entrepreneurial
experience gleaned as the founder of
DirecTV, Marks created SeaMobile to
provide wireless service to cruise ships.
He assembled a team of veterans in
engineering, sales, marketing, operations and finance to create a high quality
wireless solution that works in the sea’s
harsh environment. Then he developed
partnerships for equipment and network
access, established carrier roaming
agreements, and worked to build brand
awareness.
To expand its global reach and product line SeaMobile acquired Maritime
Telecommunications Network, the leading provider of global VSAT satellite
communications services, and Geolink,
a pioneer in satellite-based broadband
communications and networking services in Europe and Africa.
William D. Marks
Today
SeaMobile
offers remote
access to
mobile
phones,
PDAs, laptops, live television, Internet cafes,
financial services, and live television and enterprise services
with the addition of
SeaMobile Portal and
Wave Entertainment.
The company that
Marks built has
95 percent market
share and provides
connectivity and
communication
services to more
than 300 oceangoing vessels
worldwide.
Chairman, CEO
SeaMobile
Enterprises
Seattle, Wash.
Founded: 2005
21 Y E A R S
OF
EXCELLENCE
Andrew D. Ory
President, CEO,
Founder
Acme Packet
Burlington, Mass.
Founded: 2000
FINALIST: The
initial insight
propelling
success and
dominance for
Acme Packet in
its market was
Andrew Ory’s
realization that all real-time interactive
communication needs to be supported
across multiple IP networks. The point
at which service provider networks—
voice, video and multimedia—meet
to pass services between each other is
the weak link in the service delivery
process.
In 2002 Acme Packet introduced the
Session Border Controller (SBC), but
from the outset potential customers
had no SBC understanding or budgeting. Ory had to create a market
segment where none existed. First he
gained understanding of customer
technology and infrastructure. Then,
marshalling the energy of creative
engineers, he developed a product
suite that has the protocol breadth,
feature depth and configuration
to meet the world’s largest carrier
requirements.
Under Ory’s leadership, Acme Packet
filed for an IPO in 2006, the first U.S.
company to go public in the carrier
telecom equipment space in six years.
Not only is Acme Packet the SBC
market progenitor, it is dominant in
the industry, ending 2006 with more
than 360 service provider customers in
75 countries, representing 133 percent
revenue growth.
31
Real Estate, Hospitality
& Construction
William W. Gay
CEO
W.W. Gay Mechanical Contractor, Inc.
Jacksonville, Fla.
Founded: 1962
ike many men of his generation, William Gay was
raised to believe in the free enterprise system and with
a strong desire to do something constructive that he
could build or put his hands to. So after leaving the military
at the end of World War II, Gay decided to pursue a degree in
engineering
L
Henley & Beckwith on the construction of a gymnasium at
the University of Florida. “Mr. Beckwith turned out to be my
mentor as far as mechanical construction was concerned,” says
Gay, who continued working for Henley & Beckwith while
he studied. He graduated as a plumber apprentice in 1949 and
received his BSE from the University of Florida the same year.
There was no G.I. Bill for those who had served, as Gay did,
in the Merchant Marines. “I didn’t have a daddy that could
pay for my college education, which turned out to be a blessing for me,” says Gay. “I had to go to work.” To help pay his
way through college, Gay found part-time employment with
After graduation Beckwith offered Gay a job in Orlando at the
Naval Deepwater Sound Lab. Gay next worked on a hospital
in Vero Beach, a housing project in Valdosta, Georgia, and
then an engineering complex at Eglin Field, each providing
additional contracting experience. Eventually Gay returned to
32
Jacksonville and worked on what was at the time the tallest
structure in Florida, the Prudential Insurance Co. building.
“From there I moved into the office as an administrator, and
I’ve been doing that ever since,” he says.
pentry staff as well as specialists in a range of areas, including
heating and cooling, refrigeration, welding, computerized
fabrication, controls and automation, plumbing and piping,
petroleum storage and underground utilities.
In the early 1960s, Henley & Beckwith merged with another
mechanical contractor from New York and decided to concentrate solely on industrial work. Since Gay’s experience was
mainly in commercial work, he approached Beckwith and
explained his intention to form his own company. Beckwith
not only supported the move, he even offered Gay a commercial job that Beckwith’s company had just been awarded.
Despite his many years of success, Gay remains humble.
“I’ve been so blessed,” he explains. “People ask me how I had
planned my business. I didn’t plan any of it. I’d turn a corner
and there would be another opportunity. All I had to do was
take advantage of it.”
Gay focuses as much on people as he does on business. It
has always been his intention that his employees would own
the company when he is gone. W.W. Gay was among the first
companies to develop an Employee Stock Ownership Plan; in
existence since 1975 the ESOP currently owns 48 percent of
the company’s stock. In addition, the company sets aside 15
percent of income each year for employee profit sharing.
“That helped me a great deal in getting started,” Gay says
of his employer of 16 years, “because I had been running
Henley & Beckwith and had relationships and contacts with
customers. So it was natural that I would be able to just pick
up from there, especially since Mr. Beckwith didn’t look at
me as a competitor.”
During his 60-year career Gay has emulated his mentor by
helping others who have wanted
to start their own business. He
“I’d turn a corner and there would
provides capital and administrative services, retaining at least 51
be another opportunity. All I had
Bill Gay founded W.W. Gay
Mechanical Contractor with
the help of three partners who
cosigned a $200,000 line of
credit. The fledgling company
consisted of Gay, three contracto
tors, and one office employee.
“The first man I hired,” Gay
notes, “is still with me. He’s 80
years old and works three days a week.”
do was take advantage of it.”
Within a year, W.W. Gay had 15 employees. At the end of two
years Gay was able to buy back the company’s stock, delivering his partners a 100 percent profit. He never used the line of
credit, relying instead on cash flows from his customers.
W.W. Gay now has nearly 1,000 employees, with offices in
Gainesville, Orlando and St. Augustine, Florida; and Little
Rock, Arkansas. It ranks in the top 10 in revenue among
mechanical contractors in the United States, due in large measure to Gay’s unwavering focus on upholding high standards
of service, quality assurance and reliability. The company’s
reputation is so important to him that he will address problems even at his expense to ensure customer satisfaction.
That focus on quality extends to every aspect of W.W. Gay.
Although Gay works with general contractors on commercial
projects, industrial customers prefer a turnkey job. To provide
the necessary skills and services W.W. Gay employs a full car-
21 Y E A R S
OF
percent ownership in the ventures. When they are profitable,
the entrepreneurs buy back Gay’s shares. Of the 24 businesses he has helped to date, only five have failed and 15 have
already purchased their stock.
In some instances Gay has created his own competitors.
“Though they are competitors,” he explains, “they are friendly
ones. That doesn’t mean they won’t be low bidders, but I also
feel we get better quality competitors that way. So if they produce good quality jobs, their prices will be closer to ours.”
EXCELLENCE
33
Real Estate, Hospitality & Construction
William C. Bayless, Jr.
President, CEO
American Campus Communities
Austin, Texas
Founded: 1993
Finalist: Real world experience, clear
understanding of what had not been seen
as a separate real estate market segment,
and willingness to stay on course has
led Bill Bayless and American Campus
Communities (ACC) to lucrative leadership in the market.
Bayless saw off-campus student housing dominated by absentee landlords
who provided meager accommodations
with little or no maintenance and scant
customer service. Mainstream real estate
investors largely ignored the student
housing “niche.” Bayless’ experience
managing private student housing led
him to believe students would pay for
higher-end properties, so he and two
partners formed the company that was to
become ACC.
The first challenge was to establish
credibility. In its infancy the company
managed five assets. It then began
third-party development of facilities.
Significant growth followed and by
2001 ACC had a portfolio of $280 million in student housing assets. Garnering
venture capital allowed
Bayless to buy out his
partners, then complete a successful IPO
in 2004. Since then
the company has
grown its value
from $350 million to more
than $1.1
billion, and
what was
once a niche
is now a mainstream real estate
investment.
34
Richard Fain
Chairman, CEO
Royal Caribbean Cruises, Ltd.
Miami, Fla.
Founded: 1968
FINALIST: The business model that has
produced success for Allen Tate is to
combine all real estate services required
by a customer under one umbrella.
From mortgages through insurance and
title offerings to handyman services,
relocation assistance and everything in
between, both buyers and sellers are well
served by the company. Matching his
vision with a legendary work ethic, Tate
now owns the largest real estate firm
in the Carolinas—and the fifth largest independent real estate firm in the
U.S.—with more than 40 offices, 1,500
realtors, and $6.78 billion in sales last
year.
FINALIST: Although the ship wasn’t
foundering when Richard Fain took the
helm at Royal Caribbean Cruises, Ltd.
(RCCL), a decision had to be made
whether to remain a niche player
or become a major force in the
world’s cruise line market. The
decision: RCCL was to become
a leader. With his intelligence,
education, training and entrepreneurial drive, Fain was the right
person to lead the transformation.
With a focus on customer service Fain
spearheaded two significant initiatives.
First, the speed with which customer
calls were handled was increased so that
80 percent were answered within 20
seconds. Second, crews were upgraded,
with high standards for hires and significant efforts made to retain them once
they were on board.
In 1997 RCCL acquired Celebrity
Cruise Lines and Spanish cruise and
tour operator Pullmantur in 2006. From
the four ships RCCL owned when Fain
joined in 1988, the company now has 34
active ships and seven more on order.
The three brands are the leaders in North
America and gaining momentum in
Europe and Latin America.
Allen Tate
The son of a grocery
store owner from a
small town in South
Carolina, Tate
moved to
Charlotte and
opened a oneman, oneoffice real
estate and
insurance
company.
His motto:
“If they’re
going to pay
you $1.00,
always do
$1.25 worth
of work.”
Chairman and
Founder
Allen Tate Company
Charlotte, N.C.
Founded: 1957
Tate has
succeeded
by forging
strategic
partnerships,
enduring through the ups and downs
of interest rates and zoning issues, and
entering new ventures through acquisition. Tate was also the driving force
in the creation of Reliance Relocation
Services, a major network for independent brokers.
Services
Harold “Max” Messmer, Jr.
Chairman, CEO
Robert Half International Inc.
Menlo Park, Calif.
Founded: 1948
I
n many ways, Max Messmer is a textbook entrepreneur—which means, of course, that he often breaks the
rules and contradicts conventional wisdom. No wonder
a BusinessWeek article a few years ago called Messmer “the
contrarian.”
Case in point: At 31 Messmer was already a successful corporate merger and acquisitions lawyer, yet he decided—against
the strong advice of respected leaders in his firm—to get into
the temporary staffing business. With the backing of two of
his clients, he purchased Robert Half International from its
namesake in 1986. Why did he take the risk?
21 Y E A R S
OF
“I enjoyed my professional career at O’Melveny and Myers
as a corporate lawyer but felt I would be more content in a
people-to-people business, particularly one that represented
a significant entrepreneurial opportunity,” Messmer explains.
“Robert Half was small but already had a respected name
in accounting staffing, particularly full-time recruitment. I
believed that by offering temporary staffing in accounting
and finance at a very professional level, businesses would
overcome their fears of using temporary staff at higher skill
levels.”
Messmer’s goal was to take the well-known franchisor and
EXCELLENCE
35
Services
build a company-owned operation by acquiring the independent franchises. He believed that specialized “white collar”
demand would grow. He also believed that going against the
conventional wisdom of the time—to franchise rather than
build a large company—was the most promising course to
capitalize on that demand. He was right. Under Messmer’s
leadership, Robert Half has grown from annual revenues of
$7 million to a $4.2 billion business.
Yet it’s Messmer’s childhood favorite, The Little Engine That
Could, that provides enduring relevance to him. “The way you
handle obstacles in your career defines your success far more
than the way you handle the easy situations,” says Messmer.
“I am a believer in the power of persistence and positive attitude. I also believe in smart risk-taking and not listening to
those who tell you something can’t be done. We live in a cynical world; people are always willing to tell you why something won’t work.”
Clearly, the initial strategy worked—as did Messmer’s subsequent strategies for continued growth. “The professional
Messmer has a bottom-line philosophy that distills the mansegments are the fastest-growing areas of the staffing indusagement lessons he has learned to a simple formula: “Success
try,” Messmer says. “This was an untested concept when we
as a business leader starts with hiring good people,” he says.
acquired the Robert Half business in 1986 and decided to
“You will develop what Bill Gates called the Spiral Effect.
extend the strategy beyond financial staffing services to other
Good people hire other good people and before you know it,
professional disciplines such
you have a formidable team.”
as technology, marketing
Messmer believes that the definition of
and creative, high-end office
“I believe in smart risk-taking
“team” goes beyond the employee and
administration and law.”
extends to his or her family. “Building
and not listening to those
While defying the naysayers
a business is a time commitment, and
who tell you something can’t
and striking out on an unconthat often can mean time away from
ventional path may have been
the family,” he says. “I don’t think
be done.”
the first “contrarian” step
the role of family in any successful
Messmer took in building his
person’s career can be overestimated.
success at Robert Half, it was
In my own case, the constant support
hardly the last. In 2002, in the face of enormous criticism, he
of my wife and family has been critical.”
and his team started an internal audit and risk consulting busiThat belief has translated into Robert Half’s corporate culture.
ness called Protiviti after hiring more than 700 former partAt annual senior leadership meetings, not only does the manners and other professional employees of Arthur Andersen.
agement team discuss strategy and long-term plans, Messmer
One of the then-Big Five international accounting firms,
meets with their husbands, wives and partners. “They are
Andersen had fallen into disarray in the wake of the Enron
partners in the success of the company, and we use this as an
scandal. Messmer believed there was huge potential gain
opportunity to acknowledge that vital role,” he says.
for Robert Half from tapping the expertise of the Andersen
It is yet another creative approach learned from life experiemployees. Once again his against-the-prevailing-wisdom
ence and seldom taught in business school. But Messmer
approach worked. Today Protiviti contributes to a 14 percent
believes firmly there are many more lessons he has yet to
share in Robert Half’s total revenue.
learn. He subscribes to Henry Ford’s philosophy: Anyone
With such success, it comes as little surprise that Messmer’s
who stops learning is old, whether at 20 or 80. “Learning is a
ideas are now the stuff of lesson as well as legend. In a very
lifelong process,” Messmer says, “and it is even more critical
real sense, he has rewritten the textbooks on entrepreneurship
today in our age of rapid technological and economic change.
and management. He is the author of several advice books,
This is the key to managing a business that is successful over
including 50 Ways to Get Hired, Managing Your Career for
the long term.”
Dummies and Motivating Employees for Dummies.
36
Robert O. Carr
Chairman, CEO
Heartland Payment
Systems, Inc.
Princeton, N.J.
Founded: 1997
FINALIST:
Heartland
Payment
Systems
was created when
Robert
Carr partnered with Heartland Bank to
form a new kind of credit card processor. Carr believed transparent pricing
and a fair deal philosophy could level
the playing field between small businesses and national retail chains while
growing market share. The bank contributed $1 million in capital and Carr
contributed a portfolio of 2,500 merchants representing about $500 million
in volume.
Three years later, Carr bought back 100
percent ownership of Heartland Payment
Systems and completed a management
buyout in 2000. In addition, he gave
about one-third of the company to toplevel employees and hourly workers.
They received stock options until the
company went public in August 2005
with a $1 billion IPO. As a result, 63
of Heartland’s employees at the time
became millionaires. Today that
number is 75.
Carr believes the success of Heartland
Payment Systems—the sixth largest
provider of payment services in the U.S.
and 15th worldwide—is due primarily to its direct sales team
of more than 1,450 people.
They establish relationships
with the customer base and
receive a significant percentage of their compensation
from ongoing client revenue.
FINALIST: Founded in 1886 as
Springfield Water Company, Aqua
America has moved in a variety of directions, including an attempt to transform
itself into a technology company in
the 1980s and ’90s. When Nicholas
DeBenedictis came on the scene in
1992, he recognized the company
was in an identity crisis. He put
his background in water engineering to work and reformed
Aqua America into its original
mold as a water company. He
also brought a new approach.
While most businesses focus on
a three-legged stool—customers,
shareholders and employees—
DeBenedictis added a fourth leg: community. He believes this “enlightened
self interest” has been key to the company’s success. Building trust and adding
value to the local community has made
it easier to work with local government
officials, for example, to coordinate
efforts such as digging up streets for
pipe replacement and pavement.
Under DeBenedictis’ leadership, Aqua
America has enjoyed a consistent history of earnings and dividend growth.
His community efforts, coupled with
a growth-through-acquisition strategy,
Nicholas DeBenedictis
Chairman
Aqua America, Inc.
Bryn Mawr, Pa.
Founded: 1886
have enabled the company
to triple its customer base
and increase its market
capitalization from $200
million to approximately $3 billion,
making it the largest
publicly traded water
company in
the U.S.
Elliot Sainer
President, CEO, Founder
Aspen Education Group
Cerritos, Calif.
Founded: 1998
FINALIST: Aspen
Education Group has
its genesis in
1989 when
Elliot Sainer
became
CEO of
College
Health
Enterprises
(CHE), a
regional
health-care provider of psychiatric services. It was evident to him that there
ought to be better alternatives for helping troubled youth than placing them
in hospitals. Mt. Bachelor Academy, a
residential school for high school students with emotional needs, was created
in Oregon and became the precursor of
Aspen Education Group.
Based on the program’s success, Sainer
helped start a wilderness program in
Utah and several other programs in the
early 1990s. He wrote a business plan in
1994 that culminated in the creation of a
youth services division of CHE. Under
his leadership, the division was spun
off to create Aspen in 1998. That same
year, two private equity firms bought a
75 percent interest in Aspen, and Sainer
rolled over his equity into the new company. In 2002, Warburg Pincus made
an additional $15 million investment to
allow for further growth.
From 2000 to 2006, Aspen opened 15
new programs and acquired 12 more.
Last year, it operated 33 programs in
12 states and the United Kingdom and
assisted more than 4,500 young people
from every state in the U.S. and 32
countries.
37
Technology
Marc Benioff
Chairman, CEO
Salesforce.com, Inc.
San Francisco, Calif.
Founded: 1999
hen some of the technology industry’s titans
and first-movers predicted software as a service
instead of a product as recently as two years ago,
Marc Benioff and Salesforce.com, the company he founded
more than six years earlier, had already cleared the path. “The
era of the traditional software ‘load, update, and upgrade’ business and technology model is over,” Benioff has said. As a pioneer in a new, on-demand model, he is in a position to know.
W
Web companies like Google, eBay, and Amazon.com were
intuitive and easy to use, and people had become comfortable
using the Web for personal transactions. I thought managing business processes on the Web should be this easy and
believed that we could take the architecture that it created and
deliver an entirely new model. The Internet provided a new
way to deliver the software applications that corporations used
to manage their businesses.”
In 1999, recently departed from a stellar 13-year career at
Oracle, Marc Benioff had a plan to create information utilities
that would make traditional enterprise software obsolete. “I
was intrigued by how websites like Amazon.com revolutionized the way consumers shopped,” he explains. “Consumer
From the start Benioff and Salesforce were able to offer customers something they couldn’t get anywhere else—
on-demand, integrated, completely customizable enterprise
applications. Reduced risks and costs were certainly part of
the appeal, but there was more to it than that, according to
38
Benioff. “It wasn’t just the staggering costs—millions of dollars—of the old enterprise system. The greater problem was
that the programs were so complex that users were only using
a fraction of what they were paying for. Worse, more than half
of the systems completely failed!”
“Our idea was to offer a solution that was much less expensive. Subscribers paid a much smaller fee—$50 per user
per month in the beginning. But another part of our appeal
was that we’d host it so there would be no mess with installation for the customer,” Benioff says. “Some of the biggest
companies in the world use Salesforce—Cisco, Dell, Merrill
Lynch—and those customers don’t care how cheap a solution
is if it doesn’t meet their needs. The product has to be better
than anything else that’s out there.”
Along with his vision for on-demand enterprise software,
Benioff is a leader in Silicon Valley’s philanthropic community. He’s written two books on corporate philanthropy and
created Salesforce.com’s innovative “1%” model for corporate
giving. The company donates 1 percent of its equity to the
non-profit Salesforce Foundation, 1 percent of all employee
work time—six paid days per person each year—to community service, and 1 percent of its product to non-profit
organizations. The philosophy is elegantly simple: a
commitment to be one with the earth.
It was. Salesforce.com quickly
went from start-up to profitability—from a standing start to $5.7
million in revenues in fiscal 2001.
The following two fiscal years
yielded revenue increases of 277
percent and 142 percent, respectively. And the company is on track
to become one of the top 25 software companies by revenue this year as sales approach
$1 billion. Salesforce.com, which went public in 2004,
posted $497.1 million in revenue for its most recent fiscal
year, ended January 31, 2007.
“Customers don’t care how cheap a
solution is if it doesn’t meet their needs.
The product has to be better than
anything else that’s out there.”
Building a “better than anything else” framework set the
company up for its next big move. Earlier this year Salesforce
rolled out Force.com, a platform upon which customers and
others can build applications to manage other business functions.
“We started philanthropy at Salesforce the same day we
started the business,” Benioff says. “We built it into the DNA
of the company. It’s become a part of our culture, it’s important to employees, it helps us attract new talent, it helps us
work with partners and vendors, and it helps make a positive
difference in the communities in which we operate.”
“It was not always part of the plan,” says Benioff, “but it was
one of our most pivotal decisions. Initially, we wanted to
show that business applications could be easier to use, less
costly and less risky than traditional software. We had built
this amazingly scalable, secure infrastructure that took a lot
of time, money and years to perfect. At the same time, our
customers and partners were asking for more—they had so
much success using the Salesforce applications, they wanted
to build new applications to manage other business functions
that leveraged all of our infrastructure.”
And make no mistake; Salesforce and its employees are
making a world of difference. In six years they have donated
more than 46,000 volunteer hours and $10 million in grants in
35 countries around the world. More than 2,200 non-profits
globally use Salesforce to manage organizational needs ranging from managing constituent relationships to fundraising
and volunteer opportunities. In 2003 Salesforce.com received
the Points of Light Foundation’s Award for Excellence in
Corporate Community Service.
The Force.com platform-as-a-service provides the building
blocks necessary to build any kind of business app—simple
or sophisticated—and automatically deploy it as a service.
More than 700 applications have been built on Force.com by
21 Y E A R S
customers, partners and employees. More than 35,000 companies worldwide now depend on Salesforce to manage their
sales, marketing, customer service and other critical business functions. That success hasn’t escaped notice. Industry
recognition includes Forbes’ Best of the Web in 2003, AMR
Research’s 2005 Innovation Award, and BusinessWeek’s Top
100 Innovators in 2006.
“We cannot be successful if our community is not successful,”
Benioff asserts. “We all must do our part to ensure a sustainable future.”
OF
EXCELLENCE
39
Technology
Douglas Bergeron
Chairman, CEO
VeriFone, Inc.
San Jose, Calif.
Founded: 1981
FINALIST: Doug
Bergeron was
the president
of private
equity firm
Gores Technology
Group when the
company took
electronic payment company
VeriFone private in 2001 in an acquisition from
Hewlett-Packard. Much like other private equity deals, the original intention
was to find a qualified CEO and move
on, but Mr. Right didn’t materialize.
Ultimately, Bergeron bought out his
partner’s interest in the company
and took over as CEO. He made big
changes at the company, setting it on a
path to profitability by leveraging the
technology infrastructure and streamlining R&D. Bergeron also focused
on providing customers with innovative products, and in 2003 VeriFone
introduced products that leveraged IP
connectivity for retailers, dramatically
improving credit card authorization
times and increasing capabilities
for third-party applications.
In 2005 Bergeron led VeriFone
back to public status in one of
the year’s most successful
IPOs. Fueled by organic
growth and strategic
acquisitions VeriFone is
now a leader in the field
of electronic payment
with a market cap that
exceeds $3 billion.
40
John S. Chen
Chairman, CEO, President
Sybase, Inc.
Dublin, Calif.
Founded: 1984
FINALIST: When John Chen joined
Sybase in 1997, the company was not
profitable and was losing ground to
much larger competitors. Chen’s first
move was to refocus the company on its
existing database business by streamlining business processes and focusing on
improving customer service. The resulting profitability enabled Sybase to fund
new markets, and Chen found the perfect growth opportunity in the increasing
need by enterprises to move data and
information to their mobile devices.
Sybase’s mobile business has grown by
double digit percentages in each of the
last five years, making the company the
leader in mobile enterprise software.
And in 2006 Chen extended Sybase’s
leadership in mobility with the acquisition of mobile messaging company
Mobile 365, now Sybase 365.
Under Chen’s leadership Sybase
achieved record profitability in 2006
and its database business achieved 18
percent license growth, outpacing major
competitors. Revenues for the year were
up nearly $60 million over 2005,
with more than two-thirds
of that in EBITDA, which
jumped from $223 million to
$263 million. Sybase
is approaching $1
billion in revenue
for 2007 and
its customers
include 80 of
the Fortune
100 companies.
Lawrence Ng
FINALIST: At
the tender
age of 21,
Lawrence Ng
and partner
Fred Hsu
founded Oversee.net with their own
savings and a belief in the business
viability of online advertising. The
result is Oversee.net, a company that
helps drive traffic—and makes sure it’s
the right traffic—to some of the biggest sites on the Internet.
CEO, Founder
Oversee.net
Los Angeles, Calif.
Founded: 2000
When it comes to search optimization, Oversee.net is the go-to company
for many of the largest players in the
mortgage, travel, real estate, and education industries. Ng developed technology that not only removes inherent
inefficiencies in online transactions,
it enables interactivity and delivers
advanced tracking and performance,
allowing Oversee.net to compete with
industry giants.
Ng subscribes to a fiscal discipline
that has made Oversee.net profitable
from day one and a philosophy of selffunding the company’s rapid growth,
including both organic growth and
the acquisition of 40 domains and two
marketing services. Sales have quadrupled since 2004, with nearly double
annual profit during the same period.
Don’t Miss the Second Annual
Ernst & Young Strategic Growth Forum
If you thought the 2007 Ernst & Young Strategic Growth Forum was great; next year’s Forum promises to be even
better. This exclusive event, held in Palm Springs from November 10—16, 2008, is the country’s most prestigious
annual gathering of high-growth, market-leading companies. The Forum enables companies to capitalize on
emerging market trends, establish new partnerships and relationships, learn from the most advanced thinkers in
business, and celebrate their success. Forum events will include:
The Ernst & Young Entrepreneur Of The Year awards—the largest gathering of entrepreneurs in America. Since
1986, these awards have been celebrating, recognizing and honoring the men and women who start and grow
market-leading companies. It has become the world’s most prestigious business award. Previous national winners
include:
à 2006: Richard Caruso, Integra LifeSciences Corporation
à 2005: Arthur Blank, Atlanta Falcons, Home Depot, Georgia Force
à 2004: H. Wayne Huizenga, Huizenga Holdings
à 2003: John Mackey, Whole Foods Market, Inc.
à 2002: Jeno Paulucci, Luigino’s, Inc.
The IPO Transformation~CEO Retreat—2008 marks the 12th year for this
Ernst & Young event that guides CEOs of growing companies as they plan
for a public offering or other strategic transaction.
Subsequent to attending the IPO Transformation~
CEO Retreat:
à Blue Nile raised $77 million
à Corel raised $104 million
à iRobot raised $103 million
à Crystal Decisions sold to Business Objects for $800 million
à NYSE raised $1.5 billion
à Shopzilla sold to Scripps for $570 million
The Ernst & Young Symposium—an annual event for CEOs on a hot-button issue, such as
cleantech (the 2007 Symposium topic). The event includes Ernst & Young professionals as well as strategy and
corporate development officers of large companies, investors from venture capital and private equity funds, and
government leaders.
Ernst & Young has long been committed to serving entrepreneurs and high-growth companies. We are the
undisputed leader in serving the Russell 3000, IPO-bound companies and companies listed on Forbes Largest
Private Companies. To find out more about our Strategic Growth Markets practice and the 2008 Strategic
Growth Forum, please visit www.ey.com/us/strategicgrowth.
Audit • Tax • Transaction Advisory Services
©2007 ERNST & YOUNG LLP
21 Y E A R S
OF
EXCELLENCE
41
World Entrepreneur Of The Year
Guy Laliberté
Founder, CEO
Cirque du Soleil
Canada
Founded: 1984
G
uy Laliberté, founder and
CEO of Canada’s Cirque du
Soleil, was named the 2007
Ernst & Young World Entrepreneur Of
The Year on June 2 in Monte Carlo.
Cirque du Soleil has revolutionized
the idea of what a circus can be. It has
toured more than 100 cities and has
permanent shows in purpose-built theaters in Florida and Las Vegas as well
as one soon opening in Macau, China.
The company has enjoyed double-digit
growth for more than five years.
Laliberté was chosen from among 44
entrepreneurs representing 39 companies for the prestigious award, each of
whom had been named Entrepreneur
Of The Year in their home countries in
2006. Members of the eight-member
independent judging panel are themselves well-known entrepreneurs. “Guy
has changed the face of entertainment
and had a huge global impact,” says the
chairman of the judging panel, Joseph
Schoendorf, executive partner of venture capital firm Accel Partners. “The
shows that Cirque du Soleil creates
and performs have brought joy to millions. All of this year’s
entrepreneurs were exceptional, but Guy’s commitment to his
artistic vision and the passion he has for his work were what
swayed the judges in his favor.”
In the mid-1970s, at the age of 18, Laliberté set off from his
native Québec to travel around Europe, supporting himself
for four years as a street performer—playing accordion, juggling, stilt walking and breathing fire to earn a living. When
he returned home in 1979 he remained a street performer.
In 1984, the province of Québec was celebrating the 450th
anniversary of Canada’s discovery and looking for innovative shows to mark the occasion. Laliberté proposed the first
Cirque du Soleil show and the company was born.
42
Already a multitalented artist, Guy Laliberté quickly dove
into the business world to plan and maintain the growth of the
young company. Despite the group’s lack of experience, he
managed to convince financial institutions to back the project,
winning them over with the originality and audacity of youth.
He also developed a network of partners around the world to
help Cirque du Soleil make a name for itself abroad.
Guy Laliberté was the first to orchestrate the marriage of cultures and artistic and acrobatic disciplines that is the hallmark
of Cirque du Soleil. Since 1984, he has guided the creative
team through the creation of every show and contributed to
elevating the circus arts to the level of the great artistic
disciplines.
Cirque du Soleil has brought wonder and delight to nearly
70 million spectators in over 100 cities on four continents,
presenting 15 shows simultaneously throughout the world
in 2007. From the original show in 1984 that employed 73
people, the Montreal-based company now has more than
3,500 employees, including nearly 900 performing artists.
Together the employees and artists represent more than 40
nationalities and speak 25 different languages.
2006 Entrepreneur Of The Year
Country Winners
“Guy has taken a great entrepreneurial journey from street
performer to CEO of a globally recognized brand,” says Greg
Ericksen, Ernst & Young’s Global Vice Chair for Strategic
Growth Markets. “Today he oversees every aspect of Cirque
du Soleil, and his vision goes far beyond creating entertainment. The company’s social action programs support at-risk
youth around the globe, and Guy’s One Drop movement is
dedicated to providing clean drinking water to the world.”
“Entrepreneurs sometimes talk about the luck they’ve had in
their careers,” said Ernst & Young Chairman and CEO James
Turley, in announcing the award, “but what we’ve seen over
21 years of the Entrepreneur Of The Year program is that luck
contributes little to these leaders’ successes. Passion, vision,
innovation—and a lot of hard work—are what make these
entrepreneurs and their companies exceptional. Guy demonstrates these traits in abundance.”
Since it was founded in 1986 by Ernst & Young in the United
States to recognize entrepreneurs who had created and sustained successful, growing business ventures, the Ernst &
Young Entrepreneur Of The Year program has grown throughout the world, expanding to over 135 cities in more than 50
countries on six continents. New programs in 2007 and 2008
include Chile, Kazakhstan, Korea, Mexico, Mozambique,
the Middle East, and Slovenia. Recognized globally, the
Entrepreneur Of The Year award provides a unique way of
encouraging entrepreneurial activity and recognizing the contribution of outstanding men and women who inspire others
with their vision, leadership and achievement.
The 2008 World Entrepreneur Of The Year Awards will
be held May 29 to June 1 in Monte Carlo. Previous World
Entrepreneur Of The Year winners include Bill Lynch,
Imperial Holdings, South Africa, 2006; Wayne Huizenga,
Huizenga Holdings, United States, 2005; Tony Tan Caktiong,
Jollibee Foods Corporation, Philippines, 2004; N.R. Narayana
Murthy, Infosys Technologies Limited, India, 2003; Stefan
Vilsmeier, BrainLAB AG, Germany, 2002; and Paolo della
Porta, Saes Getter S.p.A, Italy, 2001.
21 Y E A R S
OF
Australia—Mike Cannon-Brookes, Scott Farquhar;
Atlassian Software
Austria—Martin Essl, bauMax AG
Belgium—Bart Van Coppenolle, Metris
Brazil—Arri Coser, Fogo de Chão Churrascaria
Canada—Guy Laliberté, Cirque du Soleil
China–Mainland—Jiang Nan Chun, Focus Media (China) Holding Ltd.
China–Hong Kong/Macau—Horst Julius Pudwill, Techtronic
Industries Co. Ltd.
Czech Republic—Pavel Juřiček, BRANO Group, a.s.
Denmark—Jørgen Hallundbæk, Welltec A/S
Finland—Raimo Sonninen, Bella-Veneet Oy
France—Gilles Martin, Eurofins Scientific
Germany—Günther Cramer, Reiner Wettlaufer, Peter Drews,
Pierre-Pascal Urbon; SMA Technologie AG
Greece—Lavrentios Lavrentiadis, Lavrentiadis Group of Companies
Hungary—Gábor Bojár, Graphisoft SE
India—Tulsi Tanti, Suzlon Energy Limited
Indonesia—Jacobus Busono, Pura Group
Ireland—Anne Heraty, Cpl Resources plc
Italy—Roberto Tunioli, Datalogic S.p.A
Japan—Kiyoyuki Suzuki, Advanced Media, Inc.
Luxembourg—Abbas Rafii, Ireco Trading and Production S.A.
Malaysia—Tony Fernandes, AirAsia Berhad
Netherlands—Pieter Zwart, Coolblue
New Zealand—Richard Taylor, Weta Workshop & Digital
Norway—Ståle Kyllingstad, IKM Gruppen AS
Philippines—Senen Bacani, La Frutera, Inc.
Poland—Maciej Duda, DUDA Meat Corporation
Portugal—Belmiro de Azevedo, SONAE Group
Russia—Rostislav Ordovsky-Tanayevsky Blanco, Rosinter
Restaurants Holding
Singapore—David Teo, Super Coffeemix Manufacturing Ltd.
Slovak Republic—Miroslav Trnka, ESET, spol. s.r.o.
South Africa—Koos Bekker, Naspers Ltd.
Spain—Eugenio Sánchez-Ramade Moreno, Javier Sánchez-Ramade
Moreno; Grupo Sánchez-Ramade
Sweden—Thomas Klier, MPT AB
Switzerland—Domenic Steiner, Thermoplan AG
Taiwan—Teng-Hsiung Chao, Farglory Land Development Co., Ltd.
Turkey—Ersin Akarlilar, Mavi Jeans
Ukraine—Mikhail Levchenko, Millennium Capital
United Kingdom—J. Timothy Richards, Vue Entertainment
United States—Richard E. Caruso, Integra LifeSciences Corporation
EXCELLENCE
43
Great minds think global.
It’s like flying a bike.
Big ideas know no boundaries. During Global Entrepreneurship Week,
Greatof
minds
thinkwill
global.
November 17-23, 2008, dozens
countries
come together for the first
time to inspire millions of young minds to embrace innovation, imagination,
In the
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campaign,
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time to inspire millions of young minds to embrace innovation, imagination,
award.will
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congratulates
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help
tomorrow’s
leaders begin
to acquire these
the knowledge,
and creativity. Made possible by the Ewing Marion Kauffman Foundation and
thinking innovators
for their
in creating
new businesses,
networks,
and values needed
to success
grow innovative,
sustainable
enterprises. It’s
the United Kingdom’s Make Your Mark campaign, Global Entrepreneurship
growing
the
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wealth.
Asknowledge,
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that taps
the endless ideas, energy, and enthusiasm of amazing
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Inspire.
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entrepreneurs – during Global Entrepreneurship Week.
www.kauffman.org
www.kauffman.org
KF_EOY_Awards.indd 1
10/12/07 11:14:40 AM
With implementation services that help
support smooth deployment, SAP is for great
companies, not just great big companies.
In fact, more than 65% of SAP customers
are small and midsize businesses.*
Learn more at sap.com/cp-yoursize.
21 Y E A R S
OF
EXCELLENCE
*Among Dun & Bradstreet, Inc. listed companies with employee number information. Small and midsize businesses are deﬁned as those having between 1 and 2,500 employees, and include customers of SAP®
All-in-One and SAP® Business One solutions sold through resellers. © 2007 SAP AG. SAP and the SAP logo are trademarks and registered trademarks of SAP AG in Germany and several other countries.
E R N S T & Y O U N G LLP
© 2007 Ernst & Young LLP.
All Rights Reserved.
Ernst & Young is
a registered trademark.
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