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
Stopher Bartol asks himself every morning, “What legacy will I leave behind today?” After all, Legacy.com was his creation during the Internet boom of the late 1990s, and every day the legacies of ordinary, everyday people are commemorated on the website.
Bartol, however, is happy that Legacy.com plays a behind-the-scenes role. Despite many critics having felt that Legacy.com should do more with its brand, such as prominent ads on the obituaries sections that the company hosts for newspapers, Bartol maintained that the company would not use its brand to overpower those of its affiliate newspapers.
The affiliates do not feel threatened or encroached upon, and instead view Legacy.com as a collaborator. Legacy’s brand stays in the background, so as to not outshine the brand of the newspapers.
Bartol feels this type of relationship is essential for continued business in this particular endeavor for both parties. Close to half of Legacy’s revenue is attributed to the company providing online obituaries services to these newspapers.
Bartol knows that the company’s success is not only his own. He maintains that from each employee that he interacts with, he gains some greater insight. Bartol recently hired an executive who he described as his “future replacement.” Although he has no current plans to retire, he wants to make sure there is a succession plan for the day he is no longer leading the company.
One financial obstacle in particular struck the company during its early years. Unlike other Internet companies, Legacy.com simply could not elicit support for continued operational funding. Bartol, however, was not disheartened. He decided he should target older investors who were at the point in their lives when they were reading the obituaries themselves.
With the help of a few angel investors, Legacy got the necessary funding needed to stay afloat. Within 24 months following the financial turmoil that hit many Internet business companies, Legacy.com became self-sustained.
How to reach: Legacy.com, www.legacy.com
Andrew Sieja began his career as a computer programmer specializing in knowledge management solutions and Web storage — and after a few years, the entrepreneur bug bit him. In 2001, he and two friends pooled their resources to form their own software-consulting firm, kCura.
After a few years, Sieja, president and CEO, realized that to be a market leader and to have the highest quality of employees, he had to make difficult decisions that might not be popular. There was a department that continuously launched products lacking the quality necessary for the company to maintain its market position. The situation was personally sticky because the head of the department was Sieja’s best friend and had supported him and kCura since its founding.
Intuitively, Sieja understood that he needed to dismiss his longtime friend and supporter. Persevering through the criticism, he supported the product work from the department. A year later, the product was launched successfully. The department was then functioning as a more cohesive unit, similar to other departments within the company.
The company culture that was created thrived on competition. The employees were passionate about the business and were engaged in Sieja’s vision of being the market leader. As the company grew, the culture has shifted to maintaining its market leadership position through innovation of new products.
Today, kCura’s software products are known in the industry as being able to handle large amounts of data and numbers of users, as being flexible and as having a user-friendly interface.
The company is also known for providing comprehensive employee training and what Sieja calls the “Ritz Carlton” level of customer support.
The company’s strategy differs from its competitors in the sense that kCura looks for long-term partnerships with its clients. The company does not operate project by project, but instead modifies its products to fit each customer and often is in contact with those customers on a weekly and sometimes daily basis.
How to reach: kCura, www.kcura.com/corporate
Private Equity/Venture Capital Backed
When they first got into the health insurance business, neither Brandon Cruz nor Clint Jones had much knowledge about the industry, except that there had to be a better way to utilize the Internet to help both the health insurance companies and the individual consumer.
This lack of familiarity allowed them to “think outside the box” and be innovators in the industry. Cruz, the president and chief technology officer, and Jones, CEO, founded GoHealth in 2001.
With their energy and skills to understand, challenge and help reshape a complex market for health insurance, these entrepreneurs stood apart from others.
While Cruz and Jones were establishing ways to compare insurance coverage over the Internet, adding sophistication such as an online quoting and customer relationship management solutions for agents, a dramatic event occurred — the Patient Protection and Affordable Care Act was approved. The disruption and uncertainty the PPACA brought caused upheaval among many insurance businesses, but not GoHealth.
Recognizing the potential arising, Cruz and Jones moved their business into an online/technology health insurance distribution platform for consumers, agents and carriers.
They believe the last five years has clearly validated their strategy, and even though this will continue to change over time, the key is execution — and they are focused on doing that.
While they have become more “corporate” in the last 18 months, Cruz and Jones have not lost their entrepreneurial drive. The pair has not shied away from moving forward amid uncertainty; they know what they do well and have leveraged the right people to make strategic moves.
Almost all the major health insurance carriers and numerous large corporations have recognized GoHealth’s value proposition.
Always leaders in innovation with technology, they continue to work hard to position themselves to be on the forefront in terms of technology when it comes to assisting their clients. Few companies can offer customers end-to-end service as GoHealth can.
How to reach: GoHealth, www.gohealth.com