Private Equity/Venture Capital Backed
Revolution Dancewear knows the meaning of repeat customer. Since 2008, the company has retained an astounding 86.5 percent of its top 500 customers.
That’s a good showing for a business that was started in a basement in 1996. Scott Harris founded the company, now a leading designer and marketer of dancewear, costumes and footwear that sells directly to dance studios in the U.S. and Canada and directly to studios and consumers in Europe.
Those impressive facts had their origins with Harris’s experiences as a lifelong entrepreneur. He co-founded a radio station during high school and then a home security business during college. After college, he joined his family’s third-generation dancewear manufacturing business.
When his vision for the dancewear business differed from his family’s vision, he left the security of that business and founded Revolution Dancewear. His plan was to bring an innovative business model to the dancewear industry and to provide the ultimate customer experience. Harris’s goals also were to provide superior product quality and instant shipping directly to dance studios — still key goals of the company.
Introducing an innovative business model did not come without challenges. Harris’s vision was to sell his dancewear products directly to dance studios, since they were the ones best suited to determine what students’ needs were. At first, he had to convince studio owners to sell dancewear. Many studio owners are dancers and teachers first — and business operators second. Few had ever sold dancewear, and many were concerned that it would distract them from their passion to teach.
He taught them that dancewear could improve their bottom line while simultaneously improving the experience of their customers by allowing studios to become a one-stop location for dance education and supplies.
Harris promised his dance studio customers that Revolution Dancewear products would be exclusively distributed through dance studios and not directly to consumers. He has kept this promise throughout 17 years of business.
How to reach: Revolution Dancewear, www.revolutiondance.com
Matt Matros, founder and CEO of Protein Bar, pays attention to details — after all, that is what counts to his customers. So every little detail from the lighting and carpet, to the volume of hip-hop music playing in the restaurant is vitally important to building the customer experience. Customer feedback, submitted through the Protein Bar email account or website, comes directly to Matros’s iPhone. That’s how he measures success of the customer experience.
Matros responds to each email himself, averaging 25-30 messages a day. The feedback helps the company improve the customer experience going forward. He believes it is important that the customer be completely satisfied because Protein Bar doesn’t spend any money on marketing. The company’s strategy is to win on the customer experience and let word-of-mouth lead to growth and sustainability.
Matros acknowledges that his biggest strength is knowing the customer. He believes he understands the customer because he is one. The idea to create Protein Bar came to him from a need he had to get high quality, healthy food during a rushed lunch hour. Matros had just lost 60 pounds and was committed to keeping a healthy diet, He wasn’t alone in this need to eat well in a hurry; it is typical to see lines out the door during lunchtime at any of his restaurants.
While not a trained restaurateur, he focuses on attracting the highest performing team. He finds people to join the team who have a proven track record in their area of expertise. It’s similar to putting together a type of puzzle to ensure the talent fits together and creates the ultimate experience for the customer. With this approach, the company has been able to attract and retain talent from successful companies such as Potbelly and Apple.
Since launching in 2009, Protein Bar has opened eight restaurants and will be almost twice the size by the middle of 2014.
How to reach: Protein Bar, www.theproteinbar.com
There were six would-be entrepreneurs incubating at a company called Focal Communications; after each left the business on his own accord, they came together in 2008 to build a venture that they felt had no peer.
The result was Peerless Network, Inc., one of the largest interconnection networks in the country. Through Peerless, wireless carriers, local exchange carriers and cable companies can connect with each other
Under the leadership of John Barnicle, the entrepreneurs created a culture that is acutely focused on providing excellent customer service. Barnicle has a great deal of respect for the team and has established a culture designed to achieve results which are fair and rational.
The entrepreneurs have built a team of committed individuals. Peerless has experienced very low turnover in its workforce. In building the team, the entrepreneurs focused on recruiting individuals they have experience with. They have provided many of their employees with stock options, which has contributed to their success in attracting and retaining talent.
Each of the entrepreneurs has responsibility for a particular function, including finance, sales and marketing, operations, voice operations and engineering. Due in a large part to a focus on excellent customer service, personal attention and technological innovation, the company has never lost a single customer.
Peerless’ approach to winning and keeping business is somewhat unusual in the telecommunications space. Company leaders believe that the personal relationships they have cultivated are key to Peerless’ initial and continued success.
In building its business, Peerless has been able to leverage the historic relationships of each of the entrepreneurs to establish a trust with prospective customers. This trust, along with the reputation the individuals have within the telecommunications industry, has ultimately attracted customers to Peerless.
While the entrepreneurs’ relationships with customers have helped to win and keep business, Peerless’ ability to provide superior services has been the real key to the company’s success.
How to reach: Peerless Network, Inc., www.peerlessnetwork.com
Al Goldstein, president of Pangea Properties, candidly admits that he believes real estate is an entrenched industry, with a “good ol’ boy” network.
Nevertheless, Goldstein and longtime high school friend Steve Joung fought and clawed their way past that hurdle when launching their new venture, Pangea Properties.
While they did not know much about the real estate market, they did know the Internet/marketing data side of the business, and wanted to provide a better product to a market they felt was underserved. They wanted to incorporate technology and best in class customer service to the rental market in multifamily apartment complexes within distressed communities.
Coming off the sale of his first successful venture, CashnetUSA, a short-term consumer lending company, his new company started buying units in the south side of Chicago in 2009, and its holdings have now grown to more than 8,000 apartment units in three markets: Chicago, Indianapolis and Baltimore, with a goal of 15,000 units by 2015.
In three years, more than $180 million of capital has been raised. Pangea now employs 300 employees.
One of the largest obstacles was convincing the right people that they knew enough about real estate, which they admittedly did not, in order to raise capital to drive growth.
However, with Goldstein’s unwavering dedication to the business and his faith in his team, the company overcame these obstacles and continued on the path to success.
Pangea’s average property is 30 units, as opposed to the 300-unit properties its closest competitors were offering. Most major apartment rental firms purchase large apartment complexes that already had the “right” types of tenants and didn’t require much marketing or effort to fill those units.
Goldstein looks for a good product and value to his tenants, but he is also more interested in wanting to give something back to the communities and people that had largely been neglected for years.
How to reach: Pangea Properties, www.pangeare.com
The inspiration from mentors that Heather Sanderson received while developing as a professional didn’t go unnoticed — it helped her become an entrepreneur. While raising a family as a single mother in California, she met other successful women entrepreneurs at networking events, and the wheels began to turn.
When she relocated to the Chicago area in 2001, she cofounded Overture Premiums & Promotions based on her desire to start a promotional marketing agency that was more than just a distributor and could act as a creative branch and provide integrated marketing strategies to its clients.
Using the financial and operational experience gained while serving as CFO for an advertising specialty institute supplier and the vast network she had built over time, Sanderson also attributes her success to establishing high-quality standards for the company’s services and investing in the corporate culture.
She leads by example, applying her belief in continually improving internal processes at the company and investing in technology and staff. Overture has stood out from its competitors because it internalized most of its product supply chain, which reduces production costs and increases control over the product quality.
Due to the variety of services offered — from warehousing to embroidery, screen-printing and graphic design — Sanderson establishes the tone for the corporate culture and relies on the expertise of her directors to help her make managerial decisions.
During the 2008 economic downturn, Sanderson had to downsize Overture and used her management expertise to re-evaluate the business model. The changes she made allowed the company to become more efficient and also helped manage potential risks and operational expenses.
For the future, Sanderson hopes to double the company’s revenue and obtain another large customer while maintaining its current clientele. However, she and her management team believe their continued focus on maintaining the company culture, improving internal processes and targeting potential business development can help overcome the challenges of expansion.
How to reach: Overturn Premiums & Promotions, www.overturepromotions.com
After more than a decade of practicing law, Theodore “Ted” Koenig wanted a more entrepreneurial role as a career. He saw a market opportunity for an innovative, non-bank lender that was free from regulatory constraints.
With his experience and understanding of banking, as well as his relationships with middle market bankers and private equity firms, Koenig established a joint venture asset-based lending finance business.
After a successful four years, Koenig decided to leave the company and venture on his own to create something bigger. To Koenig’s surprise and as a testament to his leadership, all eight employees left with him to be a part of his vision.
Striving to maintain the highest professional standards for himself and the firm, Koenig is a frequent lecturer to high profile business and financial trade organizations on topics ranging from the current environment for senior and junior secured debt to the structuring of leveraged loan transactions and acquisitions of troubled companies. He was recently selected as the 2012 Middle Market Thought Leader of the Year by The Alliance of Mergers & Acquisition Advisors.
Koenig has successfully navigated the firm through three difficult business cycles, including the recent recession, when the majority of Monroe Capital’s competitors, such as hedge funds, banks, finance companies and other private investment firms, were shuttered.
While his competitors closed, Koenig sought to invest and grow his business so that when the downturn ended, Monroe Capital was in an even greater position of strength. Throughout the up-and-down business cycles over the last 10 years, Monroe continues to provide top-tier investment performance to its limited partners while remaining a consistent source of financing to its borrowers and private equity sponsor relationships.
Koenig prides himself and his team on developing and maintaining longstanding relationships within the middle market. He is a strong believer in personal relationships and takes a hands-on approach with everyone.
How to reach: Monroe Capital, LLC, www.monroecap.com
Consumer Products and Services
Any company would be proud of the record that Tom Mazzetta has earned with The Mazzetta Co., LLC, a frozen seafood supplier. Even considering the volatile economic times experienced since opening 23 years ago, Mazzetta Co. has made money every quarter.
Mazzetta is most proud that the company has such a strong reputation for living up to its commitments.
He became an entrepreneur by recognizing an opportunity to meet a customer’s needs. As the top salesman at his first job, when a customer suggested a species of fish that the company didn’t currently sell, he offered to coordinate the buyers, suppliers and negotiating needed for his employer to comply.
However, management declined to do so, and Mazzetta met the customer’s demands through his own side venture. Subsequently, he broke away completely and launched the Mazzetta Co. in the same office building it resides in today.
He believes his strength is in knowing the seafood industry and not expanding into other types of frozen food products.
Mazzetta has established such a solid reputation for his company that many of his customers assume he inherited it — rather than building Mazzetta Co. himself from scratch with only himself and one other employee, who is still there today.
Mazzetta’s management style is to encourage employees, regardless of job title or role, to approach their job like they are running their own business.
He has been able to retain key talent with virtually no turnover by promoting a culture in which personnel speak up when they identify areas for improvement. Since Mazzetta himself rose in the seafood industry with companies that gave him a lot of authority and autonomy, he has never put a great emphasis on titles. All employees are diversified in their duties — buyers are also sellers and any level of staff may be included on a sales proposal.
How to reach: The Mazzetta Co., LLC, www.mazzetta.com
When Michael Butler founded Life Spine, Inc. 10 years ago, his objective was to focus on a specialty of orthopedics — customized approaches to spinal surgery. He felt that he could create a company that would be flexible enough to quickly respond to these specialized surgeon requests.
Life Spine has become a fast-response, nimble company. Employees set goals for how many products they plan to build, time those launches and are empowered to make decisions quickly. Failures are “learning events,” and risk adverse perspectives are not welcome. This has been a key to innovation.
In addition, all employees are cross-trained, which provides a more seamless business model compared to larger corporations that tend to work in silos. Butler fosters a team model with supportive behaviors such as nicknames for employees, Friday lunch cookouts and so on.
The company culture at Life Spine is a tight-knit entrepreneurial one that attracts and retains creative doers who want to control their own destinies. Butler believes that the key to retaining talented individuals is to make sure they are continually challenged. His rapid decision-making style and philosophy also applies to people management: If new hires are deemed to be less than a good fit with Life Spine and its culture, decisions to “help those people pursue other career opportunities” are quickly made.
The philosophy also extends to vendors. At one point, Life Spine had to change vendors and revalidate a part, which had formerly tested incredibly strong. Upon revalidation, the part was failing quality tests time and again. Unbeknownst to them, the vendor had used an alloy rather than titanium as specified. The problem was corrected immediately.
Butler has been able to guide Life Spine’s market entry into 19 countries. The company is currently pursuing new markets in India and China, where it sees significant growth potential. Life Spine built a factory in China in 2005 that currently provides a variety of instruments.
How to reach: Life Spine, www.lifespine.com
Consumer Products and Services
Chris Clawson has had a passion for the sports and fitness industry from a young age, and that has carried him through life and ultimately helped him get where he is today.
When asked what he wanted to be when he grew up, he never hesitated in his answer, “A professional baseball player.” He got to play professional baseball in the single A league for the Braves and Astros.
Then in the off-season, he got into the fitness industry. But it was after he started working at Life Fitness that he was identified as a “high-potential” employee. Company President Augie Nieto, co-founder, asked Clawson what he wanted to do with his career. Clawson said to Nieto, “I want to be sitting where you are.” Nieto told him step-by-step what it would take.
Clawson received his master’s degree and proved his leadership qualities at Stamina Products, Matrix Fitness Systems and Johnson Health Tech. In 2010, Life Fitness came back into his career. Within months of his return, he was sitting in Nieto’s former chair.
As president of Life Fitness, Clawson shares his passion about the company with its people. As long as his employees are willing to grow and learn, he will continue to push them to make the company the best in its industry.
Three times a year, Life Fitness customers come to their facility for an experience tour. They may come expecting to receive a sales pitch but they get just the opposite. They see how the company “makes wine” and learn the Life Fitness story. At the end of every tour, the customers have an affinity for Life Fitness and say the people blow them away.
Clawson invested heavily in product development and research knowing that Life Fitness would be prepared for consumer needs when the recent recession was over. When the market turned, Life Fitness sales increased and have continued to increase at record levels.
How to reach: Life Fitness, www.lifefitness.com
Consumer Products and Services
Howard Stillman has had one of the most roundabout journeys to successful entrepreneurship you can imagine.
The president and CEO of Level 6 Corp., dba Car Outlet, Stillman barely graduated from high school. Through a national exchange program, he was able to attend the University of Nevada at Las Vegas, and earned a dual degree in finance and real estate. Stillman went on to receive a master’s degree in international business from the University of San Diego.
He decided to pursue employment in Singapore, going from job to job. Next was a stay in Moscow to find a better job. When that didn’t work out, Stillman returned to Chicago and worked at an options exchange trading company, and then landed a position in a small consumer finance company.
At the finance company, many of his customers only spoke Spanish. Despite his inability to speak the language, Stillman had to teach himself key collection terms and find ways to meet his goals. However, the experiences led him to create a company that integrated finance companies and dealerships that would focus on customer service and generate long-term relationships with consumers — a used car lot.
He maxed out his credit cards, mortgaged his house, took a 70 percent pay cut, and risked financial security for his wife and special needs daughter. It took three to four years before the business could obtain its first line of credit.
Once the company, which gears itself to the Hispanic population, was on its feet, Stillman and his partners continued to grow the business to include insurance and auto financing.
It has since grown to 11 dealerships, and each year the company has continued to grow and become more profitable.
The majority of the company’s employees are Hispanic. But employee turnover is minimal as the company has embraced the Hispanic culture and utilized employee feedback to provide better customer service and a better work environment.
How to reach: Level 6 Corp., www.caroutlet.com