Small Business CEO of the Year: Durango's Marc Katz and Mercury Payment Systems prove the mountainous potential of high-tech enterprise.

• Author: Taylor, Mike
• Position: Marc Katz - Cover story - Company overview

From his house high on a hillside at the north end of Durango, Marc Katz can see far up the spectacular Animas Valley where the red-rocked La Plata mountains frame the Animas River, one of the last free-flowing rivers in the Western United States and renowned for its world-class fly-fishing.

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Katz, the CEO of Mercury Payment Systems, his wife Jane and their two kids moved into the house seven months ago. It's not a dream house from the standpoint of being custom-built to suit the CEO, but it is 5,000 square feet, about triple the size of his old house.

"It's not really so much to reflect the company's success that I moved out here," says Katz, still with a slight New York accent despite being more than 20 years removed from the East Coast. "More the fact that my 7- and 11-year-olds are getting to the age where you get a bunch of their friends over, you want to have some place for them to go to be themselves and not be right on top of you."

Managing growth has been the story of Katz's life for the last couple of years, a problem every business owner would like to have, but a problem nonetheless.

In five years, Mercury Payment Systems, a credit-card payment processor, has gone from a plan put down on paper by Katz and his brother, Jeffrey, to a company that has posted triple-digit revenue gains three straight years, after two initial years spent entirely on research and development. With 170 employees, Mercury is one of the largest private employers in Durango and perhaps exemplifies better than any company in Colorado how technology with the right strategy can greatly alter business prospects in some of Colorado's fabulously alluring but remote mountain towns.

Marc Katz is this magazine's Small Business CEO of the Year, although his company's success is less a story of one man's leadership than it is of working partnerships. Mercury's story starts with two brothers from Long Island, N.Y., who conceived and launched the firm, and has extended to Boulder-based consultant Jana Matthews, who holds a doctorate from Harvard in management planning and was hired by Mercury to help the company deal with growth issues that have required it to take on new employees at a rate of 300 percent a year the past two years.

"At one stage we went from 20 to 50 to 90 to 120 employees," Marc Katz explains. "There were some incredible spurts where we needed to hire in a hurry because the business was flowing in, and one of the dangerous things for us is if we couldn't hire or train people fast enough, then we couldn't support the customers. If we couldn't sign them up, couldn't answer their questions, we'd risk our reputation."

Almost with relief, Katz says he expects business to level off so that he anticipates Mercury only needing to hire 60 to 70 new people in 2007.

The Small Business CEO of the Year award is for firms with fewer than 200 employees and is judged by the magazine's editorial board on three criteria: financial performance, challenges or adversity faced by management, and the uniqueness of the company's story. Privately held Mercury disclosed its revenues for 2004 and 2005 to the magazine's editorial board for the purposes of the...