Innholdsfortegnelse for July/August 2019 i Inc. Magazine

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ETHAN AGARWAL Founder and CEO of New York City–based fitness app-maker Aaptiv Do co-working spaces help with building a coherent corporate culture, or undermine it? • In our co-working space, the guy next to us was a jeweler, and there was a small PR firm and the local office of an industrial company. The people around us were not startup people, so the culture wasn’t that How can you ensure productivity? • I can’t tell you how many times you’ll be kicked out of a conference room because there’s something wrong with the booking process or the phone booth, or something is broken. Does working near other companies promote collaboration? • You can easily hear what everyone is saying and what they’re talking about. They can hear what you’re saying…

Much has changed since the late 1970s—tax rates, telephony, theories on why dinosaurs became extinct—and you can add big-name tech IPOs to that list. IPO valuations for the 21st-century tech titans are galactic (unlike the more modest debuts of Microsoft, Amazon, and Apple, which as of this writing sport the world’s top three market caps); if you’re Uber, a hulking valuation is matched by a seriously bulked-up prospectus, too. Consider this: The “risk factors” section of Uber’s S-1 was almost as long as Microsoft’s entire S-1 filing in 1986. And yet one thing remains consistent: The shock of the new when entering the markets often makes for choppy early performance. Take heart, Uber staffers and investors: The markets didn’t show much love for Facebook and Amazon in their early days,…

When you go through an acquisition, it’s always in your mind that maybe you and the new leadership won’t see eye to eye. We had a simple disagreement over price points and strategy. That was it. I had no idea I was going to be fired. It happened on January 9, 2018, via email: “Your services are no longer needed. We thank you for everything you’ve done for the company.” My first thought was, “Are you kidding?” I called my wife, packed up my office, said goodbye to the staff, and left. The next day, I got up and did the usual stuff—you call accountants and lawyers, put people in motion to do what they need to do. And then I went to a movie. I’ve always done this. At…

We never thought of Harry’s as only a direct-to-consumer company, or as only a subscription service. Eventually, we didn’t think of ourselves as only a men’s shaving company. It’s men’s and women’s personal care. One thing we heard from our customers was that we weren’t as convenient as they’d like. They wanted to pick us up on their Sunday family shopping trips. Seventy-five percent of our online customers shopped at Target. We felt it was important to be where they wanted us—so one of the first big moves beyond our roots came in 2016, when we started selling in Target. As we and others were launching online, some people had cut back on leaving their homes to buy razors, so the category had started to decline in stores. That gave…

“The things we are trying to do, we’ve never done before,” says Away’s Jen Rubio. “It would be irresponsible for us to not look for answers elsewhere.” That’s why, when necessary, she and her team plumb their networks for guidance. Last holiday season, Away produced a pair of TV commercials for a splashy national ad campaign. But, after viewing the final versions, Rubio found them lackluster. She’d envisioned dreamy and evocative travel footage — but because of a tight shooting schedule, the spots were filmed entirely in a New York City studio. “Because we were under short timelines,” Rubio says, “we ended up getting the second or third best of everything”—from directors to actors to locations. And, she thought, it showed. So she phoned someone she turns to frequently for…

In Lagos, there’s huge wealth disparity. You see people who are incredibly wealthy—who ship their cars to Paris to get them serviced. You see people who maybe get one meal every two days. And for the most part, they live side by side. It’s a city of amazing contrast. It’s crazy cramped. It once took me two hours to drive a mile. But people love that chaos. My family lived in the suburbs. My maternal grandma built an import-export textile business that became very successful—she owned many homes and sent all her kids to college, despite not having a degree herself. My mom co-owned a small pharmacy with my aunt, in addition to holding down a day job at the central bank of Nigeria. My dad was a microbiologist who,…

I grew up in a very loving family in Taipei. I never felt like I lacked anything. I didn’t realize until I got older that we were poor. But my parents couldn’t afford to care for me. When I was a newborn, my father threatened to drop me off at the orphanage. My mother wouldn’t let him. He left when I was 3. We moved in with my mom’s parents, and she and I shared a bunk bed. Eventually, I moved into the basement, which everyone used for storage—we blocked off a corner with some thin boards. I slept on a mattress on top of some boxes. There were mice. But I had my own bathroom. In elementary school, I had a side hustle collecting cans and bottles to recycle.…

Like every teenager, I pined for pizza—but not just because I grew up in Chicago and our pies are the best in the world. The delivery guy was the guitarist in a local grunge band and looked the part: unruly long hair like Chris Cornell’s; a goatee; a wardrobe of black T-shirts. He’s why my friends and I ordered lots of pizza. But meeting guys that way is going away, thanks to autonomous last-mile logistics. It’s hard to get excited about logistics. (It isn’t exactly the stuff of Soundgarden lyrics.) But I’m here to change your mind. The last mile is a vital link to your customers, and creating a new version of it means huge savings and opportunities. Fully autonomous—that is, self-driving—cars remain years away. But we may soon…

Christopher Cabrera’s awakening happened while he was working at a Silicon Valley startup in the 1990s. He was halfway through hiring an eight-person team when his boss pointed out that all of his hires were white guys in their early 20s. “This isn’t a fraternity” his boss said—a phrase that haunted Cabrera more than a decade later when he was launching Xactly, a sales-performance-management-platform company. So imagine Cabrera’s surprise in 2014, when, while researching his 300-person company’s sales data, he found that his female employees closed deals 3 percent more often than their male colleagues and yet, on average, were paid less. It turned out that his hiring managers were being rewarded for bringing in new employees for as little as possible, which worked against women, who are less likely…

Recruiting software company Virgil was just three years old when founder Ron Mitchell went looking for an acquisition that would allow the business to scale faster. But, like many young firms, the Chicago-based Virgil, which matches workers with employers through testing, lacked capital. He did not lack experience, though, which has plenty of value in itself. “We’re not your 23-year-old CEOs,” the 49-year-old says. “It’s great to invest in the dream, but you have to look at fundamentals.” His fundamentals said no to venture capital—too much focus on hyper-growth and not enough emphasis on cash flow. Mitchell had been down that road before as both an investor in the late 1990s and a serial entrepreneur in the career-development industry since 2002. And his acquisition target—a hospitality-talent-recruiting company called Hcareers—was being…

During his company’s Series B financing round, Apu Gupta, co-founder and CEO of social commerce platform Curalate, got a “respectful, but firm nudge” from his investors: “Hey, can you get back to us?” Gupta’s intense travel schedule and focus on bringing on new customers was taking up most of his time—and making him neglect his inbox. “I was bringing unnecessary risk to our fundraising process simply because I had taken on too much,” says Gupta, whose Philadelphia-based company also has offices in New York, Seattle, and London. So, after completing the round, he hired an executive assistant. Now, having somebody who can “keep things moving along in my absence is enormous,” Gupta says. “There’s just better use of your time.” Delegating more responsibilities has allowed Gupta to address an increasingly…

When did you start thinking about selling the company? When you’re running a company, you’re not thinking about selling it. Some people asked, “What’s your exit strategy?” and I was like, “What the hell are you talking about?” As we grew, private equity firms were constantly knocking on our door. What I wanted to know was: Can you help me grow this business? But they had no interest in that. So there was a disconnect. Finally, 18 years after we started, I mentioned to my COO that I was frustrated. I said, “I’m just tired of this stuff.” How did you land on $500 million as the price you wanted to sell for? Selling was not something I intended to do, and that’s why I picked that number. It wasn’t…

“We don’t want to be forced to do things we don’t want to do.” Mention Heath Ceramics to design nerds or high-end restaurateurs, and chances are they’ll fawn endlessly over its retro, midcentury tile or brightly glazed stoneware. Heath devotees are nothing new: Since visionary ceramicist Edith Heath and her husband started the company in 1948, enthusiasts have included architect Frank Lloyd Wright and chef Alice Waters. Yet the company likely wouldn’t be around today were it not for Catherine Bailey and Robin Petravic. When the couple—designers prowling about for a new project—stumbled into Heath’s Sausalito, California, showroom in 2003, the company was struggling, unable to cover its bills and pay all of its employees. At the time, Edith was in her early 90s, with failing health and no succession…

“I’m super passionate about my business, so when I start to feel apathetic, I know something’s wrong. I seek out success stories that can inspire me: entrepreneurial podcasts, magazine profiles, even Shark Tank episodes. Anything motivational just turns it around for me. To beat burnout, I don’t want to look sideways; I want to look forward.” SHERRI LANGBURT Founder and CEO, BabbleBoxx (advertising and marketing) 2018 RANK NO. 449 GROWTH 1,136% 2017 REVENUE $2.3M “I used to do emails in bed before going to sleep and wake up in the middle of the night with the phone glued to my face. Now, I keep my phone in airplane mode at night, and I don’t check it before I leave the house in the mornings.” MICHAEL ACTON SMITH Co-founder and co-CEO,…

One of the great privileges of working for Inc. is getting to meet entrepreneurs at every step of their journey. In May, Inc. held our first Fast Growth Tour event, in Chicago, at which my colleagues and I were pleasantly surrounded by entrepreneurs from all ranks: from those who are just figuring out their business plans, to Inc. 5000 founders like Angela Keaveny of Rowdydow bbQ (No. 1,701 in 2018) and Christina Stembel of Farmgirl Flowers (No. 739), to titans like Adam Lowry of Method and Ripple Foods and Kendra Scott. This issue of Inc. extends the same privilege to you. Our annual “How I Did It” package introduces you to entrepreneurs big and small, who are eager to share with you their tales of toil and triumph. The package,…

TECHNICUREANS • noun Tech-savvy cooks who seek kitchen appliances with built-in recipe, meal delivery, and larder-replenishment apps. As long as my microwave still has a popcorn button, we’re good. Source: Digital Trends A PLUS • acronym Rejoice! A new investing acronym! It encompasses Airbnb, Pinterest, Lyft, Uber, Slack, Stripe, and Square. So, really A PLUSSS—but who caresss? Source: Forbes CRYPTO WINTER • noun The “bearish run” in crypto that has seen many currencies “suffer an 80 to 90 percent decline from their all-time high.” I think the word they really want is gravity. Source: Cryptopolitan MILLENNIAL MONEY MULES • noun Young people tricked into opening bank accounts “to help launder ill-gotten gains of cybercriminals.” Sounds terrible—but do I still get my frequent-flyer miles? Source: CPO Magazine…

I’ve always been really good at assessing new problems, breaking them down into their component parts, and then figuring out how to solve them. In high school, I was always good at math, but I was really good at logic, which is a classic chief operating officer skill. Having been Orchard’s COO, there were many challenges at Climb where I was like, “Oh, yeah. I’ve done this.” Different company, same thing. It’s not rocket science. When I was approached for Climb’s top role, the biggest question was, “Do I want to be a CEO?” I talked to a lot of people, but being a CEO is kind of like childbirth. People can explain it a million times, but you won’t know it until you go through it. You consistently deal…

Natural deodorant was long the domain of the granola set—until Jaime Schmidt came along. In 2010, the then-32-year-old living in Portland, Oregon, concocted an aromatic formula in her kitchen and started Schmidt’s, which in 2017 was acquired by Unilever. Schmidt’s opened the door for a slew of startups taking radically different approaches—in packaging, ingredients, and marketing—to elevate the utilitarian commodity into a new frontier of beauty brands. Born in a Craft Market Whole Foods first got a whiff of the product at a Portland holiday craft market in 2012. Two years later, its appearance on Fox News led to a surge of web traffic, and Schmidt’s began investing in PR and social media. In 2015, the company took an undisclosed amount of capital from investor Michael Cammarata, who later became…

NEUTRALIZE YOUR JOB ADS You know better than to post for a “bright young gal” to answer the phones, but it might be less obvious that other terms—rock star, ninja, dominate—can be just as off-putting for women. When Johnson & Johnson started using the tool Textio—which uses A.I. to flag and replace gendered language with more neutral wording—it saw a 9 percent bump in female candidates. And it’s not just individual words that make a difference, says Buffer’s Seiter. “We’ve found that women tend to apply if they feel like they can knock it out of the park, while men apply if they meet only 50 or 60 percent of the qualifications.” So Buffer has added language to each job ad, encouraging candidates to apply even if they don’t meet…

ACCEL-KKR Menlo Park, Calif.$15 million–$200 million ALPINE INVESTORS San Francisco $5 million–$100 million BERKSHIRE PARTNERS Boston $100 million and above BLUE POINT CAPITAL PARTNERS Cleveland $20 million–$300 million $752B Amount of uninvested capital that PE companies have at their disposal. That’s a record, up from $469 billion in 2014. Source: Preqin BRENTWOOD ASSOCIATES Los Angeles $25 million–$500 million BRIDGE GROWTH PARTNERS New York City $50 million–$500 million CCMP CAPITAL New York City $250 million–$2 billion enterprise value CLAYTON, DUBILIER & RICE New York City Typically invests $100 million and above CLEARVIEW CAPITAL Stamford, Conn. $4 million–$20 million ebitda CORTEC GROUP New York City $40 million–$300 million ENDEAVOUR CAPITAL Portland, Ore. $25 million–$250 million FRONTIER CAPITAL Charlotte, N.C. $10 million–$30 million GENERAL ATLANTIC New York City $25 million–$300 million GENESIS PARK…

Selling your company to the same private equity firm twice may sound a little crazy, but that’s exactly what Bill Clendenen did. And if that doesn’t seem implausible enough, consider that the first time he sold Medic First Aid, a publisher of CPR and first-aid training materials, the business wasn’t even for sale. “We kept saying we weren’t interested,” Clendenen says. He got interested in 2006, after executives from the Riverside Company, a New York City–based PE firm, flew to Eugene, Oregon, to pitch their rollup idea. To deal with his company’s two major nonprofit competitors, the American Red Cross and the American Heart Association, Riverside would use its Micro-Cap Fund, which acquires businesses with up to $10 million in ebitda, to acquire a majority stake in Medic First Aid.…

During a trip to Maine, fashion executive Patrick Robinson fell in love with the art of wooden-boat building. Over the years, it’s been the perfect remedy to a stressful career: “Boat building lets you see your faults. I strengthened my business by pushing people to move at a pace that breaks things,” he muses, noting that when he breaks pieces while building his boat, it often means starting over. By letting things flow naturally, Robinson has mustered a second wind. In 2015, a year after leaving Giorgio Armani, he founded Paskho (from the Greek word for “passion”), a profitable line of travel athleisure wear that raised a $2.4 million seed round in January 2018. That Is Mahogany! When he discovered boat building in 2001, Robinson purchased schematics and materials and…

One sound bite still lingers from the days before the Great Dot-Com Crash of 2000, courtesy of an investment banker who insisted he wasn’t concerned about the tsunami of funding sloshing around the IPO market. “It’s Wall Street’s job to throw money at companies,” he said. And investors’ job to sort the winners from the losers. Throw money Wall Street did—to any entity ending in .com run by any group of idiots. How much? There were 486 IPOs in 1999, which collected $92.2 billion, and another 406 in 2000, for another $96.7 billion. Inflation-adjusted, that’s $283 billion worth of equity raised. And then razed, in large measure: The Nasdaq, where much of that dot-com money lived, lost 78 percent of its value peak to trough. Consider some IPOs from one…

Is there a better way to show your employees how much you care than [checks notes] sending them to the dentist? Probably. But consider Henry the Dentist, a New Providence, New Jersey–based mobile dentistry startup that will park in front of your company’s building (or, for that matter, wherever you want). There, patients get their teeth scraped and drilled while sitting in massage chairs, wearing noise-canceling headphones, and watching HBO or Netflix. “A lot of this,” admits founder Justin Joffe, who started Henry in 2016, “came out of people’s natural fear of going to the dentist.” Given the chairs and the entertainment options, he’s pitching this as a “luxury” experience. But there could be workaday advantages to Henry-ing: no need to take half a day off to visit a dental…

My in-laws bought Blackberry Farm in 1976. Back then, it was a super-small team. My mother-in-law cooked and rode a riding lawnmower with her son, Sam—my future husband. Sam and I started dating in high school. When he got into the California Culinary Academy, we moved to California. But he was always so excited to make a home on the farm. We returned to Tennessee in 2001, when Sam took over from his parents, and built our home on the farm in 2007. For years, my role was supporting Sam. He’d be at the Barn—the restaurant—until 2 a.m. I’d get up with the kids and get them ready for school (though he’d somehow drag himself out of bed to see them off most days). I have a master’s in accounting,…

When I was 7, my family moved from the Philippines to New Jersey. In the Philippines, I’d had the best schools and the best teachers. In New Jersey, I was the girl with an accent who ate different foods. Who was put into lower classes, because I was an ESL student. All of these things, I wanted to hide. I asked my mom to get me a speech coach, to get rid of my accent. I read a lot and watched a ton of TV. By high school, I was in all honors classes. The only downside is that I can no longer speak Tagalog. My career has been so weird and nonlinear. So many times, I was so uncertain. I wish my younger self could have known that that’s…

My favorite bands were ones that just went for it. Early Jane’s Addiction. Metallica. Primus. Nobody ever asked for the kind of music they were playing. I didn’t look for a niche in the market and decide there was a place for a craft beer with a strong personality. It came from my music background, and just wanting to freely express who we are. It’s a DIY mentality, often associated with punk rock—a go-your-own-roadness and a rejection of the norms. I never expected to sell more than maybe 100 cases of Arrogant Bastard Ale. In 1997, nobody in the industry would have said people wanted a 7.2 percent alcohol, overly hoppy, overly aggressive beer. It was a reflection of my feelings at the time, which haven’t completely changed: a high…

For six years, Matt Stadelman and his co-founders had pushed retirement savings to the bottom of their to-do list, as they plowed any spare cash into growing their St. Paul, Minnesota–based business, Jet Construction & Remodeling. “I was so focused on the present,” he recalls. “When we finally put together a retirement plan for our staff, the light bulb went off: We should be taking care of ourselves, too.” On some level, Stadelman thought he had been saving for retirement—by building up a business he hoped to one day sell. But when that time came, in 2007, the sale price was far lower than he’d hoped—or planned—for. And Stadelman, who now advises other entrepreneurs as a partner at Navalign Wealth Partners in Los Angeles, warns that he sees many others…

Holly Thaggard wasn’t looking for help for her San Antonio–based, kid-friendly sunscreen company, Supergoop. Being open to ideas, though, she met with lots of people. “I just took all those meetings. Investors wanted to get to know us. We were not obviously raising capital in a formal round at the time,” she says. One of those meetings was with John Kenney, a partner at San Francisco–based private equity firm TSG Consumer Partners. By the end of their conversation, in late 2012, she had an investor. Supergoop’s sunscreen sales amounted to about $1 million—not enough to interest TSG. Instead, Kenney offered to put up $100,000 of his own money. A sucker for an impassioned founder story, he was drawn to Thaggard’s verve and mission to protect people of all ages from…