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Kelly Flatley, 28, & Brendan Synnott, 29
PROJECTED 2007 SALES $50 million
DESCRIPTION: Manufacturer of all-natural granola products
ITS ALL NATURAL: Childhood friends KeUy Flatley and Bren-
dan Synnott were in between jobs in 2002 when Flatley, ever the
health nut. bt-gan making all natural granola in her kitchen and
enlisted Synnott to help. "The whole food chain [has hecomel
so processed andfilledwith artificial ingredients," says Synnott.
"[To both ofus], it just didn't makesense why you would want
to put that in yoiu- body, if you are what you eat." Flatley and Syn- nally, Flatley and Synnott upped the ante: At 7 o'clock one mom-
nott each invested $3,500 and moved back in with their parents ing, they showed up in matching outfits, armed with granola,
as they began selling hand-wrapped bags of granola at street fairs. yogurt, milk and fruit "|to] bring the buyer breakfast in bed,"
HEALTHY R[ TURNS Repeatedly pitching Bear Naked prod- explains Synnott, "which was so cheesy, but it worked." In fact,
ucts to local grocer Stew Leonard's yielded no response. Fi- when their target buyer wasn't there, they spotted Stew Leonard
Jr. walking by. "He [said,] 'Come on in.'" To-
day, Bear Naked is also sold at Costco, Kroger,
Safeway, Target and Whole Foods, and four
of its products are sold in Canada.
' 'i •• '• ' •• Scaling their company
upward was challenging. "It was often difficult
to maintain the balance between the amount of
product our sales team could sell and the
amount of product our manufacturing team
could produce." says Flatley.
Not wanting to give up their control to in-
vestors, they built from within. Says Synnott,
"It forced us to ensure that every decision we
made yielded value and success for us, even if
it was the harder decision."
FOLLOW THE!P LEAh Do something creative—
but still in line \vith your product philosophy—
to distinguish yourself to buyers. JV L T.

Herman Flores, 34; Myles Kovacs, 33;

DUB Publishing Inc., CITY OF INDUSTRY,
PROJECTED 2!.)0/ SALES $50 million-plus
DESCRIPTION: Publisher of automotive maga-
zine DUB
GF^ING ON THE BLtNG: In the custom auto in-
dustry, the word dub conjures up images of
tricked out cars, big wheels and celebrities. Stars
like Shaquille O'Neal and their rides frequently
grace DUB's pages, bringing the car culture into
the limelight and popularizing the look. "If you
had chrome wheels or large rimsfiveto 10 years
ago, [people] thought you were a thug or a drug
dealer," says Myles Kovacs. These days, auto-
makers offer oversize rims as an option for new
RMAWLORES. cars, and the "bad boy" stigma has dissolved
YLES KOVACS & into the mainstream.
AYTHEM HADDAD DRIVING FORCE: It was their lifelong obses-
sion with cars and previous work with celeb-

• :...rft
FASHION STATEMENT Wben Lance Lawson and Jim Wetzel
realized that Chicago's fashion conscious sboppers were look-
ing outside tbe city for tbe latest trends, the pair decided to revo-
lutionize tbe local fasbion scene with their designer specialty
store, Jake. Raising the sophistication level, they've introduced
Chicago to collections from the likes of Doo.Ri and 3.1 Phillip
Lim, as weil as emerging designers whose fashions fit Jake's style.
They also upped the level of customer service by offering com-
plimentary alterations, deliveries and even champagne. In re-
turn, some customers spend $75,000 to $100,000 annually.
Taking out a home equity loan, Lawson and Wet-
zel pooled jbout $150,000 and opened the first location in 2004.
And combining Wetzel's extensive experience at major fashion
houses with Lawson's prior consumer marketing and sales work
didn't hurt. They have since opened two more Chicago locations
and plan to expand to other underserved markets across the U.S.
"We have good buzz in Cbicago, and we feel like this concept is
really strong," says Wetze!. Already, their stores and website
( have received national acclaim.
i-,i;v.; . > ,;i-i .H Lawson and Wetzel have created buzz
thanks to active marketing efforts at the grass-roots level. They
reward downtown concierges with lavish gifts in return for di-
recting customers their way. They send gift boxes to their best
customers every season, host a luncheon every spring with in-
I formal modeling of the newest trends, and put a face to fash-
ion by regularly inviting top designers to their stores. Says Law-
rities at an entertainment magazine tbat inspired the three son, "To have a designer personally tell you in a fitting room
friends to borrow $20,000 in 1999 to start tbe magazine out what piece from their collection they think would be great
of their home offices. Since then, they've taken tbe DUB name for you is an amazing experience."
and brancbed out beyond tbe FOLLOW THEm LEAD: Raise the standard and you'll find that
print publication with custom car you'll never go out of style. -S.W.
ONLINE EXCLUSIVE: want to sbows that bave sponsors like
learn more about our young miliionaires Best Buy, Dodge and Pepsi and
and how they found success before 40? average 15,000 attendees; tbree Jacob DeHart, 25, & Jake Nickell, 27
Visit to lines of toys; two brands of, CHICAGO
view an inspiring siide show. wheels; a video game; and even a y $25 million to $30 million
spot on tbe small screen. "We DESCRIPTION; Online T-shirt design company
were fortunate to work with MTV back when we were the first READY TO WEAR: A great business idea can come from life's
of our kind,' Herman Flores says of their experience co- basics—just ask Jacob DeHart and lake Nickell. Every day,
producing a DUB edition of MTV Cribs. about 150 T-shirt designs from all corners of the world are
YOUNG AND RESTLESS Success didn't come easy, but submitted to tbeir website. With designs ranging from politi-
Haytbem Haddad says that being young and confident took cal to comic to abstract, the artists bebind tbem hope their
them a long way. "Tbe celebrities, tbe kinds of cars we creations will be selected as a favorite of tbe company's online
bave—we all felt it was a strong concept," be says. "We were community. Each day, members of the online community can
trailblazers—tbe first in our industry to profile the content cast tbeir votes for tbe week's winning designs, wbicb are
that we bave in our magazine." He says being naive and tak- put on T-shirts and made available for sale. Since the site
ing risks actually helped push the brand forward. launched six years ago, every design printed has sold out.
FOLLOW THEIR LLAD Use your youth to your advantage by VIL LAGE VC CF Understanding tbat uniting a community comes
introducing something new into tbe markeL --J.F. witb responsibility, DeHart and Nickell regularly consult witb
tlieir users for feedback and are careful to protect tbe integrity
of tbe T-sbirts. They've turned down offers from Target and Ur-
Jim Wetzel, 38, & Lance Lawson, 36 ban Outfitters, preferring to work with smaller vendors instead.
Jake, CHICAGO Says Nickeli, "We were just another product to put in their stores,
PROJECTED ;?007 SALES: Nearly $7 million and that's really not the way we view ourselves."
DESCRIPTION: Independent, luxury fashion retailer for men A COMMON THREAD: Witb more tban 500,000 registered users,
and women is sizing up to be a powerful force. It just opened


its first retail store in Chicago; launched, Megan Duckett, 35
a new children's clothing line; and has plans to expand distri- Sew What? Inc., RANCHO DOMINGUEZ, CALIFORNIA
bution internationally and obtain partners in Europe. The site PROJECTED 2007 SALES- $4.6 million
today is also just one of many communities under the partners' riFSCRIPTiON: Manufacturer of custom theatrical draperies
larger umhrella company, SkinnyCorp; other communities in- and distributor of flame-retardant fabrics
clude Naked & Angry, which pursues the same idea on can- •••"'••.i'r . . •. ,, After immigrating to the U.S. at age 19,
vases like neckties and wallpaper, and 15 Megs of Fame, which this native Australian found work as a technician for a concert
puts the spotlight on undiscovered musicians. production company—and started sewing in her spare time.
,, . :ti_i.i 1 L Aij Give your customers a voice, and they Her first gig was sewing fabric coffin linings for a Halloween
just might use it to spread the word about your business. show. "I rented a [sewing machine] and lined 10 coffins," re-
-S.W. calls Megan Duckett. "[I discovered] that I had a talent and an
ability to manipulate the fabric in a craftlike way, and I really

Tim Vanderhook, 26; Chris Vanderhook,

28; & Russell Vanderhook, 30
..-v^^^^.^. $70 million-plus
DESCRIPTION: Online advertising company
THREFSCOMPANv Building a multimillion-
dollar business wasn't really on Tim Vander-
hook's mind at age 18. He was just tired of work-
ing odd jobs and saw potential in online
advertising. So, in exchange for a share in the
startup, he persuaded older brother Chris to let
him charge $99 to his credit card for a domain
name. For $33. Russell jumped onboard shortly
thereafter. With no experience, "we taught our-
selves everything," says Tim of their 1999 launch,
"First we learned online advertising, then we
taught ourselves advertising as a whole. This was
a gun-slinging, wheeiing-and-dealing-type at-
mosphere, because nobody had done it before."
CHANCING TiMES- With that self-schooling, they
pioneered the use of the pop-up ad on main-
stream websites. From 2000 to 2003, they were
dominating the pre-Google online advertising
market, and "making a million bucks a month,"
says Chris. "We were high-fiving in the office
every day. But [then] the reawakening happened"
While they were celebrating, the market picked
up again after the dotcom crash, and Goo^e came
to take over online advertising, leaving Specific
Media in its shadows. They were forced to get se-
rious, so they shifted their focus to their cur-
rent concept, which compiles internet user dem-
ographics to create target profiles for creating
more relevant advertising. Today, clients include
more than 200 companies from the Fortune 500.
LOFTY GOALS Though the guys are happy with
how far they've come and the strong product
offering they have today, they've set their sights
on bigger things. "In reality, we're not where we
want to be," says Russell, adding that interna-
tional expansion is in the works.
FOLLOW THEIR LEAD: Stay focused and don't
lose sight of why you're in business. -LH. (I. TO R;


enjoyed it." Duckett worked evenings and weekends on her Brad Sugars, 36
craft business, and in 1997shequit her full-time job, rented a ActionCoach, LAS VEGAS
warehouse and officially incorporated. P- I 'O; ./ t-S:$220mU!ion
BUILDING BUZZ Not one to wait for the phone to ring, Duck- DESCRIPTION Executive business coaching
ett used every inexpensive marketing tool she could, such as DPtVENTO SUCCEEEi When other 15-year-old boys were ob-
mailers, tliers and handmade husiness cards. She also chatted sessing about video games and girls, Australia-born Brad Sugars
up her company's services every chance she got. "Everyone was was dreaming up business ideas. By the time he was 22, he'd
a potential customer," she says. That grass-roots marketing led owned more businesses than most 50-year-olds and was edu-
to her making draperies for theater, concerts and special events cating business owners about how to run their companies.
worldwide. SIREEI SfcrAR S: Although the path to success was fairly short
CREATIVE COVERINGS: Manufacturing the custom draperies for the trained accountant, Sugars absorbed a wealth of busi-
for Rod Stewart's latest concert tour was a highlight for Duck- ness know-how. At 22, he founded ActionCoach, bis business
ett. "We made about 1,500 yards ofthe Stewart family tartan," coaching franchise company, but Sugars didn't settle for just one
she says. "We made it into this enormous design that would reg- entrepreneurial venture. "Over the years [since I started Action-
ister onstage with the audience—it was totally unique," The work Coach] , I've owned and operated pretty much everything, from
of Sew What? has also graced the tours of such legends as Gwen magazine publishing to insurance to dog-food businesses," says
Stefani, Prince and Fleetwood Mac, to name a few. But despite Sugars. "And now it's good because I coach in what I do, not
a packed schedule, she still makes time to help the community: what I theoretically believe." As it turns out, business coaching
Duckett (bunded From Stages to Students, a prog.ram that pro- is the perfect endeavor for Sugars: It combines his love of deal
vides free or low-cost draperies to school theater programs and making vdth his adventurous entrepreneurial spirit.
community rehabilitation centers that teach sewing. STAKF ^M; ;?T i: Quality employees with a range of expertise
FOLLOW HER LEAD: Chat up your new business every chance are his company's most valuable assets. Says Sugars, "You have
you get, as you never know where leads will come from. N. i. ' to make sure you bave not just good people around you, but


great people." It was Sugars' aptitude for finding skilled em-
ployees that helped him franchise his business. After being
trained by ActionCoach, his employees had the skills and knowl-
edge to take on clients of their own, so Sugars decided that if
he wanted to keep his brand strong and meet his goals for ex-
pansion, franchising was the way to go.
GLOBAL EXPANSION: In the 14 years since Sugars started
ActionCoach (formerly known as Action International), the
company has expanded to 24 countries and more than 1,500
coaches. Essential to its success is ActionCoach's mission of help-
ing other businesses. Sizars—who is also one of's
experts—says, "I love a business where you can make a profit
and help people at the same time."
FOLI-OW His LtAlJ Knowledgeable team members can help
you grow your business to new heights. ~K.O.

John Vechey, 28; Brian Fiete, 29; & Jason Kapalka. 37

PopCap Games, SEATTLE
More than $20 million
DESCRIPTION: Creator and provider of downloadable games more in common with Pac-Man and Tetris than with World of
LEVEL ONE: When game designer Jason Kapalka first met John Warcraft. PopCap is helping to engineer a shift from compli-
Vechey and Brian Fiete in 1997, the two 19-year-olds had just cated, hard-core gaming to casual gaming for general audiences.
been wooed from Indiana to work at Kapalka's former employer, Says Kapalka, "We're moving toward the democratization of
a gaming company. "We hit it off really well," says Kapalka, video games." And that's a winning formula.
who was impressed by an online game the two teens had cre- FOLLOW THEIR LEAD: No matter how fast your company grows,
ated. "We kept in touch, and around 2000, we were all a little stay focused on keeping your product quality standards high.
unhappy with our jobs. We thought, 'Hey, we could start our -A.C-K.
own company.'"
BEYOND THE BUST: As it turned out, the years 2000 and 2001
weren't kind to internet companies. "We didn't have the best Nathan Jones, 37
timing, but we survived because we didn't have many ex- Xlear Inc. OREM, UTAH
penses," says Kapalka. The business's first low-overhead stomp- PROJECTED 2007 SALES: $13 million to $14 million
ing grounds were in tbe co-founders' respective apartments. DESCRIPTION: Manufacturer of xylitol products
PopCap adapted to uncertain times by experimenting with di- BORN FROM NECESSITY Nathan Jones was deeply involved
rect game downloads from its website. The gamble paid off, in underwater welding when a breathtaking opportunity
and within a couple of years, the
company moved to a real office
in Seattle. It has since added
offices in Chicago; San Franciscn;
Vancouver, British Columbia;
and Dublin, Ireland.
HIGH SCORE: "We're just trying
to keep a very simple business
model: Make games. If people
like them, they'll buy them," says
Kapalka, adding that top sellers
inciude Bejeweled, Bookworm,
Chuzzle and Peggie—all games
that are easy to learn but hard to
master. People certainly love Pop-
Cap's games: Their content gen-
erated around $75 miUion in sales
of their content across all plat-
forms and partners in 2006. A lot
of that is because the games have


brought him quickly back to his way into a job as a stockbroker. Three years later, his
the surface. Jones' father, a entrepreneurial ambitions got the best of him, and he moved
family physician, had in- back to his hometown of Miami to work at his dad's store-
vented a xyiitol-enhanced fixture company. The nuts and bolts of store fixtures didn't fes-
nasal wash in a desperate at- cinate him. but customers' interest in clothes hangers—not
tempt to cure his patients' re- only for retail but also for personal use—sparked his curiosity.
curring ear infections. A natu- In 1999. Rifkin had found his new business idea.
rally occurring sweetener, ALL HUNG UP: Rifkin's early forays into market research were
xylitol had primarily been conducted with a phone and the White Pages. "I actually called
known in Finland for its ef- [consumers] and asked them where they bought their
lectiveness in preventing hangers," he says. "I learned that everybody hegged for
tooth decay. The nasal wash hangers when they bought Iclothes] in the stores, or they took
brought relief to his father's
bangers from hotels. That's how I got the idea to start the busi-
patients—and inspired a new
ness." A business devoted to hangers was an unexplored ven-
direction in Nathan's own life.
ture, and Rifkin quickly became its Magellan, garnering atten-
In 2000, armed with $40,000 startup capital from a friend, tion from eager retailers, consumers and celebrities alike.
Jones purchased the rights from his father, founded Xlear Inc. I - 'ii» AR J Thecompany, whichsellsmorethan400kinds
and started manufacturing a line of xylitol products that now of hangers—from fabric to cedar to custom designs—on its web-
includes dental products, candy and even a recently launched site, has just launched the first-ever mail-order catalog for
xylitol gel-filled pacifier. hangers. And even with celebrity customers like Jerry Seinfeld
LEADER OF THE PACK: Being an early xylitol player required and Jennifer Lopez, Rifkin hasn't let it go to his head: "Too many
educating thi- public about its benefits. "Four years ago when people get caught up in the business of the day, and they don't
I started going to dental conventions, they didn't even know pick their heads up and say, 'This is what I want to build'"
what [xylitoli was," says Jones. But regularly attending trade
shows and dental conventions paid off, helping Xlear secure
shelf space at more than 6,000 retailers nationwide and in parts
of Europe, with even hroader distribution expected by next
year. The early start also enabled Jones to build up the com-
pany's purchasing power in order to snatch up a significant
portion of the world's limited supply.
SHAPE-SHinEr- Specializing in such a niche and hard-to-obtain
product naturally reduces the number of competitors, but to
better position the company even further, (ones applied for a
trademark on diamond-shaped gum, which he plans to license
to other companies. The shape will indicate to consumers when
a gum is 100 percent xylitol sweetened, preventing competi-
tors from stealing the market witli anything less.
FOLLOW -tlS LFAD' Don't let a good thing pass you by. Seize
the right opportunity, and you just might become the market
leader. -S1'

Devon Rifkin, 33
The Great American Hanger Company/, MIAMI
PROJECTED ?.QQ1 SALES: $10 millioii-pius
DESCRIPTION: Manufecturer, wholesaler and retailer of clothes
FRAME OF REFERENCE: The fact that Devon Rifkin never at-
tended college is just a tiny footnote in his success story. The
fact that he has made millions selling hangers is slightly more
unique. But for Rifkin. defying the standards means nothing
if his business isn't successful—or if his team isn't sharing in
the success. Says Rifkin, "To me, people have made the biggest
difference because they're the face of the business."
HIRE EDUCATION: After high school, as his friends went off to
attend Ivy Leagues, Rifkin moved to New York (^ity and talked


FOLLOW HIS LEAD: Just because you haven't taken the cookie- FRUITFUL BUSINESS: From there, Sambazon expanded its
cutter path to entrepreneurship doesn't mean you can't make products and distribution and opened the first ai^ai process-
your business a success. —K.O. ing facility in the Amazon. Last year, they won the U.S. Sec-
retary of State Award for Corporate Excellence. "We were rec-
ognized not so much for our profits, but for the intangible
Ryan Black, 32; Ed Nichols, 32; & Jeremy Black, 34 things we're doing," says Ryan. "It was really cool for the State
Sambazon, SAN CLEMENTE. CALIFORNIA Department to recognize something that's not just on our bal-
PKOJtUI t u zuu/ bALt;. $15 million to $20 million ance sheet."
DESCRIPTION: Manufecturer of Brazilian a^ai berry products Adds Jeremy, "We've been given this incredible opportunity
JUNGLE: I ~ When Ed Nichols and Ryan Black took a surf to make a lot of positive change with this berry"—change they
trip to Brazil, they never expected to end up far from the water's hope includes getting ai;ai in every supermarket nationwide
edge and deep in the Amazon. Through the country's surf cul- and expanding internationally.
ture, the friends discovered a<;ai (pronounced "ah-sigh-ee"). a FOLLOW THEIR LEAD: Let your passion be the driving force in
Brazilian berry popular for its uniqueflavorand nutritional prop- your business. -L.H.
erties. "We fell in love with it," says Nichols. "We didn't want to
leave Brazil without it." So they teamed up with Ryan's brother,
Jeremy, to become the United States' first supplier of ai;ai. Amy SmilovJc, 39
Through extensive research, they learned about the berry's Tibi, NEW YORK CITY
other benefits. "The native people make more money selling PROJECTED 2007 SALES: $21 million
a<;ai than they do selling nonrenewable resources," explains DESCRIPTION: Designer of an upscale boutique clothing line
Nichols. "We [realized we] could drive preservation by em- HUSTLE AND BUSTLE Even as a child, Amy Smilovic was a
ploying the people to harvest the fruit instead of wood." budding entrepreneur, forming everything from mini baby-
ORGANICALLY GROWN: The guys founded Sambazon in 2000 sitting networks to lemonade stand chains. Her business sense
and then hit the streets. Getting people to try the exotic berry eventually landed her a successful marketing career, but the self-
was a challenge, but once they did, they loved it. Business starting side of Smilovic dreamed of bigger things. When her
really picked up after Dr. Nicholas Perricone named a<;ai the husband was relocated to Hong Kong in 1997, Smilovic joined
No. I "superfood" in his 2004 book. The Perricone Promise. him—and stumbled upon the idea for Tibi. As she walked the
"All of a sudden, thefloodgatesopened," says Jeremy. "It really streets of her new hometown, she noticed that no one made
helped accelerate the knowledge of what a^ai is." clothing to fit a modern Western woman's lifestyle in Asia,


SPREADING THE WORD Just one month after the move,
Smilovic designed and manufactured a line of dresses that
meshed American sportswear witb hints of international in-
fluence. After showcasing the line to a group of women she'd
met in Hong Kong, the collection became an overwhelming
success. When summer arrived, many of tbe women returned
bome overseas, bringing the Tibi brand witb them and estab-
lishing Tibi's worldwide fame.
In 2000, Smilovic headed back to the States to open a
3,000-square foot loft in New York City's SoHo. Her designs
now hang in department stores such as Neiman Marcus, Nord-
strom and Saks Fifth Avenue, and tbey can be spotted in Istan-
bul, Turkey; London; Moscow; and Hong Kong. Tbe brand has
come a long ^vay, witb a second store in St. Simons Island, Geor-
gia, and even a shoe collection making its debul next month.
STYLES. NOT TRENDS: "If you just design for yourself, some- pany, Higliland Homes, and both use tbem as models to sbow
one will identify witb it," Smilovic says. "The world is big potential customers what tbey can do. The two fraternity
enough, and you'll find a group of people who want to dress brothers from St. Louis University used "creative financing"
like you." As a woman who has seen mucb of the world, and credit cards to lau nch tliei r vision in 2003. "We did every-
Smilovic certainly is a testament to tbis. thing except rob banks," says Sballenberger.
rOLLOW HER LEAD: When you fill a bole in the market with a IT'S A GREEN THING: Highland Homes isn't your typical
quality product, customers will take notice. builder. Each new bome comes with a plasma TV and tbe op-
tion ol special [lackages like "Elvis Live," which includes a stereo,
karaoke machine, CE) player and iPod Nano. Those are fun ex-
Bob Shallenberger, 37, & John Cavanagh, 38 tras, but the real difference comes down to Highland's envi-
Highland Homes, ST LOUIS ronmentally friendly building metbods; sustainably grown
PROJECTED 2007 SALES: $22 million-pius wood, rooftop decks, underground parking, lots of parklike
DESCRIPTION: Green residential builder green spate and high efficiency heating and cooling systems.
OPEN HOUSE: Bob Shallenberger and lohn Cavanagh enjoy Says Cavanagb about green building, "It's difficult and it's
having company over. Both live in homes built by their com- expensive to loarn. It's challenging, and there's some risk in it.
We see it as a big growth segment
of the market." Their next move?
"Being recognized as the top green
residential builder in tbe country is
the goal for us," he says.
•i'i H *.:•-: There's a definite spark
to Shallenberger and Cavanagh
when they discuss Higliland Homes
and tbe future of the business.
"When we design a building, we live
and breathe it," says Shallenberger.
They have no shortage of projects
lined up and no shortage of future
homeowners looking to buy into
their affordable and hip green ur-
ban developments. "We've got a
buncb of cool people working for
us," Shallenberger continues. "Tbe
people that we sell to are all really
cool, too."


)'ourself witb entrepreneurial-minded
employees and you'll gain a crea-
tive, dedicated work force and a
constant infusion of innovative
ideas. —A,C.H.%