The Leaders of the Inc. 500

I think that the Inc. 500/5000 intrigues me because it is really a list of inspiration.  It turns out to really be about the men and women who lead those companies.  The Inc. 500 publication is full of profiles and stories of the individuals who took a dream or an idea and pushed and pulled and manipulated that dream or idea until it became a fast growing company.

In today's blog, I want to take a brief look at the thoughts and thinking of the men and women who lead the fast growing companies who made the list.

• 42% said that their greatest challenge is "finding and keeping skilled workers."
• Asked to rank 21 traits associated with outstanding leaders, trustworthiness came in first, sincerity second and capacity to inspire third.  Likability came in 21st.
• 38% said they get their best ideas for new products and services from customers, 20% from employees.  Yet only 37% of companies have a formal method for collecting customer ideas.
• In one of the more intriguing factoids in the magazine, 87% of Inc. 500 leaders said that the right question is more important than the right answer.
• 93% believe managing and leading are two different things.
• 15% worked more than 100 hours per week in the first year.  Just 3% work that much now.
• Only 27% started paying themselves when they started the business.  9% waited until the fourth year.  
• 20% started their own business because they wanted to be their own boss.  18% did it because they had an idea they had to try out.  29% felt that entrepreneurship suited their skills and abilities.
• 61% started their business with less than $10,000.
• The entrepreneur the Inc. 500 leaders admire most is Richard Branson, followed by Elon Musk, Jeff Bezos, Bill Gates, and Mom and/or Dad.
• 29% said that work-life balance is "a nice fantasy."  The other 71% say they are working on it.

There are tons of stories behind the Inc. 500.  The editors of the magazine have admitted that one of the benefits of creating this annual list is that it helps highlight subjects for future magazine profiles.  I know some bloggers who might do the same!

A List of What's Unique About The Inc. 500

We love lists and rankings.  My daughter's college just sent out their alumni magazine and the cover was festooned with their latest rankings on the various publications that list and rank colleges and universities.  The local newspaper does an annual best of the county and some local companies work very hard to generate the votes to allow them to claim that they are "One of the Best of the County."  Whenever I write a blog that has a numbered list of points, I get more readers and more comments.  We love lists.

So with that in mind, I present to you the 11 things that make the Inc. 500/5000 interesting and a top list among lists!

1. The Inc. 500 recognizes and ranks private companies.  Private companies are...well...private.  They don't have the public reporting requirements that publicly-traded corporations do.  Because of that, it is harder to get information on these companies.  Each year the Inc. listing provides a peek behind the private boardroom doors.
2. The Inc. 500 has more.  If you pour over the list of the 500 fastest growing companies and just haven't had enough, you can go online and find 4500 more companies, similarly ranked and similarly laid out for inspection.
3. The Inc. 500 has longevity.  This is the 32nd annual list.  It started out as the Inc. 100, expanded to 500 shortly thereafter and has been the Inc. 5000 for the last several years.
4. The Inc. 500 is a positive sign of the times.  The Inc. editors headed this year's 500 list with the statement "Five hundred reasons to be optimistic about leadership, innovation, and the health of the American dream."  In the American mindset, business growth has always been a sign that things are going well.  If we look at the growth represented by the Inc. 500/5000, things are going very well!
5. The Inc. 500 seems attainable.  We are talking about companies that a few years ago were operating out of someone's garage or basement.  We are talking about leaders who started companies by maxing out their credit cards and asking their friends and relatives for a financial vote of confidence.  Only 15% of the Inc. 500 got their start-up capital from venture capital or angel funding. 71% used personal savings.  This is grassroots stuff. This is how we would all have to do it if we were starting a business.  
6. The Inc. 500 is about superstars and no-names.  And often the no-names beat out the superstars.  Yeah!
7. The Inc. 500 is about individuals as much as it is about companies.  Related to #5 and #6, many of the companies on the Inc. 500 (and even more on the Inc. 5000) are on the list because of the dreams, determination and drive of an individual.  As important as Steve Jobs was to the resurgence of  Apple, it is impossible to say that it was just because of him.  He was the conductor, but he had an orchestra to conduct.  Many on the Inc. 500/5000 list are like conductors of one-man bands.
8. The Inc. 500 is about the American Dream.  Actually it is about entrepreneurial dreams which I think goes well beyond the shores of the United States.  While the list focuses on US private companies, it is easy to see that the entrepreneurs behind those US companies come from all over the world.
9. The Inc. 500 is understandable.  Inc. uses a simple, straightforward formula for calculating its list.  Agree or disagree with the value of listing companies in terms of growth (I questioned if it was the best measure of company success in my last blog) you can understand how the rankings are determined.  This simplicity is one of their strengths.
10. The Inc. 500 is about growth, not size.  There are some pretty small, regional companies on the list.  There is a good chance that you may do business with a company or two on the list.  It is guaranteed there are several companies on the list that you have never heard of, or never will hear of again.
11. The Inc. 500 is constantly changing.  By its very nature, it is hard for companies to sustain the level of growth that puts them on the Inc. 500 for very long.  Because of that, the Inc. 500 avoids the type of list stagnation that plagues many lists.  For example, the company that topped the Inc. 500 in 2012, Unified Payments, is at #2374 on the 2013 list.  The company that topped the list in 2011, Ideeli, is not on the list in 2013.  That doesn't happen with regularity on the Fortune 500 or the Forbes list of wealthiest individuals or US News and World's top colleges and universities list.

Next blog I will have a few final observations from the Inc. 500 list.

The Medici's of the 21st Century

I received a message a little while ago on LinkedIn.  The sender was not someone I knew well or corresponded with often.  But his message was unusual.  Trevor Gilette wanted to start a business, but he lacked the resources to do so.  So Trevor decided to try to work his contacts.

Trevor's message, in part, read:

This is what I'm asking for help on. I need to raise some capital for my business, $5000 by Friday, July 19. I'm asking for 1000 people in my networks to donate just $5 to me. It's less than a cup of Starbucks Coffee. I'm very excited to become a business owner and I am very much grateful to anybody who is willing to donate just $5 to help me get there. If you can spare $5, please send it to me via paypal at trevgillette@gmail.com.

In the 14th century, if you were an artist and you were looking for a commission or an entreprenuer looking to start a new enterprise, you often found yourself talking to a member of the Medici family.  The Medici family is often credited with helping jump start the Renaissance, a time of great growth and productivity in virtually all of the arts and commerce.

In the 21st century, if you are an artist and you are looking for funding to pursue an artistic endeavor or a visionary looking to start a new business, you often turn to one of the many crowdsourcing sites like Kickstarter.  Or LinkedIn.

I was intrigued by Trevor's initiative, so I reached out to him with permission to write about his effort.  He agreed and we exchanged a few emails in which he answered some questions.  Trevor characterized the response he got to his message as a mix of supportive and skeptical.   His effort did not generate the support he had hoped, although Trevor did get some inquiries asking to see a business plan and more details on the proposed business. At the time we talked, Trevor was still deciding whether he would put together a business plan to share with those who inquired.

There are a few lessons that can be learned from Trevor's project:

• The landscape has changed and there are many more ways to accumulate capital and support for a project than there were just a few years ago.
• The increase of funding options does not minimize the need to do good solid preplanning and the need to be able to communicate that plan in an effective way.  Trevor indicated that if he were to change anything about his appeal, he would have done a business plan prior to making the ask.
• A cup or Starbucks coffee has become the new standard cost comparison.
• Some people are generous to a fault.  Some people are jerks whenever they get a chance.  Most people ignore an opportunity most of the time.  The challenge of the artist or the entreprenuer making an ask is to capture the reader or viewers' attention and ignite their excitement or at least their curiosity.
• If at first you don't succeed...

Related articles

• The modern business plan
• Crowdsourcing

One is the loneliest number...

A month ago I posted a blog on the value of jumping into the marketplace with a new venture.  You can read it here.  In it I espoused the value of not waiting until you have everything just so before you push your venture into the marketplace.  I believe that to be true.  However, I got a couple of comments to that post to which I want to respond.  If you go to read that past blog, make sure to read the insightful comments.

First of all, Jeff Hoffman posted a comment that gave me pause and prompted me to think about what I had written.  Jeff wrote "I can understand what you're saying. The key is knowing WHEN to jump. Crossing every T and doting every I is one thing and starting too soon with too many holes unaddressed in your plan is another. I've seen too many people crash and burn on business ventures because they weren't ready either emotionally or financially and figured they could "wing it" because they didn't have someone to whisper to them "not yet, what about this?" or chose to ignore them."

Jeff is absolutely right.  He goes on to espouse the benefits of working collaboratively with a group of people.  The more people you have looking over things, questioning assumptions, ground truthing plans and adding their skills and perspectives to the effort, the better off you are.  Implicit in this is that the more varied your group is, in terms of expertise, level of experience, background, etc. the better off you will be.

Having a team is essential.  It is essential to getting things ready to enter the marketplace and it is even more essential to weathering the ups and downs of the marketplace that every start-up eventually goes through.  Many wiser and more experienced voices than mine tout the importance of developing a team as part of a entrepreneurial adventure.  Starting your own company does not mean starting a company alone!

The other comment I got was from Emily Mooney.  I have the pleasure of knowing Emily and her husband and business partner Todd.  Their venture, a creative media company called Mooney Media, is exactly the type of venture I had in mind in my initial comments.  They are versatile, creative and able to react quickly to the market opportunities that come their way.  Apparently, from Emily's comment, being in the market early has provided them with more advantages than not.

The answer, it seems, is to walk the razor's edge between being overly cautious about jumping into the market and overly frivolous about preparations before you enter.  And listen when someone like Jeff is kind enough to whisper in your year "what about this?"

Don't Wait For Perfection

"Artists who seek perfection in everything are those who cannot attain it in anything."     Eugene Delacroix  (1798 - 1863)

I read an online article recently that advised that entrepreneurs and dreamers seeking to start a business shouldn't wait until they have everything worked out perfectly before they make things operational.  Better to get into the marketplace and test out your vision and theories in the real world, the article advised, than to tinker away in the ivory tower striving for theoretical perfection.

I guess I am doing just that with one project I am a part of.  I am working with a group of much more talented and much harder working people that are starting a community radio station. We certainly did not wait until we had things worked out to perfection, had the line up nailed down or even the entire venture completely imagined.  Instead, we started broadcasting and started talking about what we are trying to do with anyone and everyone who would listen.

The community support we have received and continue to receive has been nothing short of remarkable.  People want to see this happen.  I think that it is true that people tend to want to support what one mentor I had called BHAGs, Big Hairy Audacious Goals.  This is especially true if there is evidence of some amount of energy, effort and resources being devoted to the BHAG.

Also, when you road test a dream, when you drag it off of your sketch pad and into reality, interesting things start to happen.  Opportunities occur that you never would have been able to anticipate or plan for.  Bumps in the road, some good and some not so, help to start to shape the culture of your budding enterprise.  New people step up and a few step back.  Reality, when it meets dreams, can create some awesome and plan-altering fireworks!

One of the lessons I have taken from this venture so far is that it is worthwhile to roll up your sleeves, put your shoulder to the wheel and roll your dream into the marketplace.  While it is almost always scary, it is a also a great way to see how your plans and dreams stand up to the harsh spotlight of reality and the marketplace.

Oh, and by the way, if you want to listen to our station, we broadcast 24/7 on www.harvardradio.net or at AM1610 if you are in Harvard, IL.  Thanks for listening, even though things aren't yet perfect!

Small Business

Entrepreneurs come in all shapes and sizes.  They all share one thing...commitment to a dream.

If you've seen this short film Caine's Arcade about a remarkable young entrepreneur, you know what I mean.

If you haven't, be prepared.  You will be moved to smiles and possibly tears.