Indiana Growth 100: lessons from some of the state's high-growth, high-potential companies.

AuthorKaelble, Steve
PositionCover Story

WHAT MAKES A COMPANY grow quickly and steadily? The people at the Johnson Center for Entrepreneurship & Innovation ought to know. Every year they study Indiana companies to compile the Growth 100, a roster of high-growth, high-potential Hoosier companies.

"There are several important lessons to learn from these companies," says Thomas P. Hustad, professor of marketing at Indiana University's Kelley School of Business and interim director of the Johnson Center. One lesson is persistence. "There are many people who will declare that you should not proceed to develop your business, but you can only succeed if you commit to your venture," he says.

Another important factor is a tolerance for failure. "Some of the people who pointed out problems you would face are correct, but you need to discover the solutions that carry you beyond those problems," Hustad says. The third common feature he sees in Growth 100 companies is a tendency to treasure their customers. "What makes you succeed is ultimately not your persistence but the value you create for your customers--if you don't love them, they cannot love you in return."

More observations about fast-growth companies come from Donald F. Kuratko, who soon will take over as head of the Johnson Center following a noteworthy tenure running the highly regarded Entrepreneurship Program at Ball State University's Miller College of Business. "Companies that seek to become 'gazelle' companies always focus on the niche market that best suits their needs in order to position themselves soundly in the marketplace. This allows them to gain a deeper understanding of their customer in order to begin the growth process," Kuratko says.

"Then, through tenacity, hard work and proper planning, they can attack the growth curve," he continues. "However, they must be aware of the importance of building an innovative climate within their business in order to sustain real growth."

Indiana may be conservative in nature, but it is home to a number of forward-thinking entrepreneurial resources, Kuratko observes. There's the Indiana Venture Center, a coalition linking IU, Ball State, Purdue University, the University of Notre Dame and Rose-Hulman Institute of Technology. He also cites the Discovery Park facility being developed at Purdue, and the IU Research & Technology Corp., formerly known as the Advanced Research & Technology Institute. "We are also witnessing the increased awareness of the need for startup and growth capital in our state."

Hustad agrees that university and government resources are invaluable, "in addition to the wealth of experience found among leaders of other growth organizations," he says. "But to learn, you must first ask. The value of relevant advice and assistance can be more important than any financial incentives that could be available."

Indiana's Growth 100 companies have done plenty of learning during their high-growth histories. Following is a sampling of their secrets to success.

MAKE GOOD USE OF IN DIANA RESOURCES.

It's no accident that Griffin Analytical Technologies is located in the Purdue Research Park in West Lafayette. The company's lifeblood is Purdue technology.

"We are doing a technology transfer from the chemistry department at Purdue," says president Dennis Barket. "It is a portable mass spectrometer. It's a chemical analyzer that is the gold standard in the lab environment--we're trying to take it into the field."

The company just celebrated the third anniversary of its founding by Barket and Garth Patterson, both of whom earned Ph.D.'s in analytical chemistry from Purdue. Patterson's faculty adviser, Graham Cooks, developed the technology in its three years the company has grown into a 30-person operation, including 16 full-time employees along with interns, consultants and subcontractors. And it's growing, currently in the process of hiring five more employees.

Not only is it in the right place, but now's the right time for this kind of business. "People are very motivated to identify the nasties," Barket says, including potential chemical weapons and other toxins. Early adopters include the federal departments of Defense and Homeland Security.

Though some tech companies have complained about a lack of adequate investment capital in Indiana, Griffin Analytical Technologies has had no problems finding local investors. It has matched Small Business Innovation Research funding with angel and venture-capital investment from such entrees as Twilight Venture Partners and Rose-Hulman Ventures. "We've been able to procure all of that investment within the state of Indiana," he says.

And, needless to say, Barket's firm has also been able to find plenty of brains and technology without crossing the state line. "I think there is quite a resource in the state, in Indiana University and Purdue."

STAY FOCUSED.

"Sometimes the vast number of opportunities can keep people a-ore succeeding in one very well," says Angle Hicks, cofounder, chief marketing officer and namesake of Indianapolis based Angle's List. Her company, on the other hand, decided early on that "we're going to locus on our core business."

That business is collecting and sharing consumer referrals and ratings of a wide variety of service businesses (as the company's slogan suggests, "from plumbers and handymen to movers and mulch"). The company was launched in 1995 by Hicks, then a recent DePauw University graduate, and Bill Oesterle, with whom she had interned when Oesterle was general partner in the Columbus, Ohio, office of the Indianapolis-based venture-capital firm CID Equity Partners.

The company was patterned after Carmel-based Unified Neighbors, a Consumer Reports-like service that compiled company ratings from members and shared them with other members. Hicks and Oesterle launched their firm in Columbus, but soon acquired Unified Neighbors and began building an empire from an Indianapolis base. Oesterle assumed the CEO title in 1999, though he recently spent some time on leave while running the successful Indiana gubernatorial campaign of Republican Mirth Daniels.

Angle's List, says Hicks, started out with a single employee but quickly grew and developed big ambitions for spreading the word-of-mouth business to other cities. "Our goal is to be in 50 markets," she says. By adding Sail Diego this month, Angle's List is now in 23 cities, coast-to-coast. It has added 10 in 2004 and hopes to tack on 20 more in 2005.

Though the company has stayed focused, Hicks says it's also important to change with the times. "Our business started pre-Internet and adapted to the Internet, which has brought about opportunities," she says. "The Internet plays a big role in our business."

One more bit of advice from Hicks: "Make sure you've created a good culture around your company. Make sure people are having fun. People are more productive when they're having fun."

MAKE IT EASY FOR CUSTOMERS.

Own a natural spring flowing with clean, healthy water? It's a great time to go into the bottled-water business. You'll need machinery to treat and filter the water, put it into bottles, tighten bottle caps, affix labels and assemble 12-packs. A lot of bottlers buy a bottle filler from one manufacturer, a capping machine from another, a conveyor system from a third vendor, and hope it all works well together.

A growing number of bottlers, on the other hand, call Jeff Ake's company, based in the LaPorte County community of Rolling Prairie. He's owner and president of Equipment Express, and he believes in making customers' lives easier.

"We're kind of a one-stop shop, where you can get virtually everything you need for a liquid-packaging line," he says. "We build it or buy it, ship it and install and service it. That's rare in our industry. We're vertically integrated in terms of taking care of the customer. We sell and install a turnkey solution."

Ake launched the company in 1995, and ever since "we've been growing in the number of customers, sales volume and profits as well as our reach globally," he says. Equipment Express employs about 20, has sales in the $4 million range and has customers from Iceland to Indonesia. Its products can fill bottles with all kinds of liquids, but water is one of its strongest areas. 'It's the fastest-growing beverage in the world," he says.

Ake is a believer in beginning with a simple concept. "Start small and define the transaction that creates wealth, then do that over and over and over," he advises. He also says it's important for entrepreneurs to be well-acquainted with their financials. "Do your own books. You'll never truly understand your business unless you know your business from an accounting perspective."

A lot of entrepreneurs are inventors, but not all are salespeople, he observes. Yet being able to sell is just as important as creating a great product, so those who aren't natural sellers must hire people who are. "You need to find somebody to sell," he says. "You don't have anything without a sale."

SURROUND YOURSELF WITH THE BEST PEOPLE.

The secret to success is simple for Jeffrey Lacy: "It's really making sure you hire the right people that fit in culturally, mentally and personality-wise We tend to hire slowly. We tend to put people through a little more rigorous interviewing process."

But the due diligence pays off. "We like to say one of our people is worth three or four somewhere else," claims Lac> president and CEO of Elkhart-based Electronic Commerce Inc.

ECI handles payroll, benefits, tax filing and related human resources tasks for mostly mid-sized companies. Founded in 1996, the company has grown its revenues an average of 35 to 45 percent every year, Lacy says, and now has 1,100 clients in 48 states.

As the company has grown, it has used acquisitions to branch into related businesses. It acquired an insurance agency Lo expand its benefits offerings and provide employers with everything from worker's comp to property insurance. And its Career...

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