As an established business owner I continue to be inspired by the “younger set” of entrepreneurs and rapid growth companies. The annual Inc. 500 is a good way to spot trends for success. I like to see how our company lines up and this year reveals a number of parallels.
Many of the new ‘launchers’ consider themselves unemployable. I recall the days of being a ‘company man’ but show me one entrepreneur who is willing to go from the pond to the ocean under someone’s thumb! Who could go back there? The current trend is to leverage entrepreneurship with the staff so they can enjoy the freedom fruits as well. That way we all grow together with the company.
Risk taking always tops the list for business success. At Edoc we challenge established business owners to take risk by stepping away from the status quo. This journey begins by taking down the walls externally as well as internally. Who wants to be hemmed in geographically for business opportunities or hiring? What staff member wants to be hampered by company rules and regulations limiting growth and innovation for the company and individual staff members? Inc. 500 Jeff Suffolk founder of Human Movement Management went against his instincts and brought in a COO. He says:
“The new chief operating officer implemented policies about workday hours, email protocol, and reporting structure. The spirit of the company died almost instantaneously. He lasted 60 days. People follow passion not titles or protocol.”
It’s time to step outside the box folks! The initial Edoc recruits and I took a risk 17 years ago against the advice of naybobs by starting a company “without walls.” As one current TV commercials says, “it works, and I know it will work for you!” Inc. points out that without risk a company can’t be born. I would add to that, without risk, a company cannot continue to grow. Does stepping into the unknown seem a little scary? Let’s face it; is it any safer taking a job today? It is all a matter of who controls the destiny.
Bootstrapping is another common trait of the current company growth winners. We started that way (although 17 years ago I had not heard the term). The initial staff agreed to come on board with no pay until we had clients (they actually ended up being paid three years ahead of me). The initial equipment purchases were financed by a home-improvement line of credit (I took someone’s advice and applied for the home credit line before quitting my job). Working in an unfinished basement next to a rack of servers for the first 10 years was one startup luxury of our experience. Yet the finished office basement space has so much more meaning as a result and the first company car replacing the 12 year old worn out one was a morale booster for wife and company staff. 60% of this year’s Inc. 500 companies started with less than $10,000. Here is a quote from Inc:
“Bootstrapping is legendarily hard, requiring sacrifices that most people wouldn’t dream of making. Surely, in their darkest moments, these CEOs must have considered giving up some equity for money and peace of mind. But they never did it. Instead, they persevered and achieved Inc. 500 status without giving up either royalty or riches.”
Speaking of Perseverance, Ron Penn of Quest Nutrition said, “Never say never. Never quit. There were some gnarly times in the beginning, and I didn’t know how we’d get out of it. But we just wouldn’t stop.” My conclusion is that running a business is a constant run over a field of obstacles. With time, the obstacles become less scary and inhibiting. At Edoc, we ran completely out of cash and ability to make payroll for several weeks. Another hurdle was a major client that pulled out the day before launch after we brought 10 new staff onboard for the project. Then who can forget the 2009 economic meltdown we all felt? Entrepreneurs are survivors, we get through these things. Quitters need not apply!
Now, what kinds of leaders run these companies? “Leaders who dub themselves ‘servants’ outnumber ‘autocrats’ 4 to 1.” Ever hear the term “servant leadership”? I learned this well at Marriott Hotels and it carries over to all leadership positions. Do Inc. 500 leaders consider themselves lucky? 75% say that luck played a significant role in their growth. I could say the same, except the word luck should be replaced with blessed.
Is it appropriate to criticize some elements that resulted in success? Here goes. This year’s #1 ranked Inc. 500 Company for two years in a row (only one other company has achieved that pinnacle) is Fuhu. Here is how life there is described:
“Think 9 a.m. to 10 p.m. workdays. Very little vacation. Missed birthday parties and weddings. The rewards for all this work are potentially immense, including –for a select few employees—a stake in Fuhu.”
The article goes on to say that the growing pains so far have mostly taken the form of employee burnout and concerns about micromanagement. Is this too big a price for success? Who wants it? You decide.Jim Mullaney
READ MORE: If you like this article you will want to read “Face the Music“
Jim Mullaney is President and CEO of Edoc Service, Inc. a “Fast 55” virtual company based in Cincinnati, Ohio.