Seven Lessons From Inc. 500 Companies

Last Updated Sep 30, 2010 12:43 PM EDT

Inc. Magazine's annual list of the 500 fastest growing U.S. privately-held companies just hit the newsstands, accompanied by an expanded list of an additional 4,500 on Inc.com (full disclosure: I'm a contributing editor at Inc.). Since it measures revenue growth over a four-year period (2006-2009 for the 2010 list), the list is typically a striking reflection of socioeconomic and industry trends.
For instance, in 2007, construction, manufacturing, and human resources firms were rocking the list, and were then eclipsed by IT services in 2008 and 2009. This year, you'll notice a huge increase in government services firms, as well as food and beverage companies that put a healthy spin on their products. For more general information on the list, check out Jim Melloan's "Finding Growth in a Recession" on Inc.com.

Personally, I love the list for the wisdom it imparts through the dramatic tales of the companies on it. So in the spirit of Upstarts and Alpha Dogs, which tires mightily to bring you valuable advice from the coolest and smartest entrepreneurial companies, I thought I'd share some of my favorite lessons from this year's Inc. 500 companies:

Lexicon Consulting (#4) started out in the movie industry by providing extras for military battle scenes. Today, the El Cajon, CA company builds mock Afghan and Iraqi villages to help train our troops on home soil before they're faced with the real thing. Lesson: The business you think you're in may actually contain a germ of an idea for a far more lucrative venture. And if that idea involves serving the U.S. government, so much the better.

Stella & Dot (#67) sells reasonably priced custom jewelry through in-home trunk shows hosted by independent reps that the company calls stylists -a whopping 10,000 of them who brought in more than $32 million in revenue for the company last year. CEO Jessica DiLullo Herrin says the stylists run the gamut from women who are running million dollar sales organizations of their own, to moms who want to make a few thousand in income a month. Lesson: There's nothing as powerful as a motivated, well-compensated sales force that's invested in your company's success.

Sundia (#130) created the first national watermelon brand by licensing its name to distributors who benefit from Sundia's nationwide promotional campaigns, like this goofy Mr. Watermelon video. The company now focuses primarily on selling fruit cups to big grocery chains like Kroger and A&P. Lesson: You can brand just about anything and if you do it cleverly and consistently enough, consumers will fill your pockets.

Bird's Barbershop (#180) isn't your dad's barbershop. The Austin-based company has four shops that offer moderately priced haircuts ($15 for a Mohawk) in a party-like atmosphere that befits its hometown. Think rock and roll, murals painted by local artists, a foosball table, concert ticket giveaways, and a free beer with every haircut. Lesson: You can't go wrong by aligning your company with the local culture and establishing yourself as a hometown favorite.

GourmetGiftBaskets.com (#238) took a major hit in revenue in November 2008 when Google suddenly dropped the company from its index. CEO Ryan Abood says the cost to his company was nearly $4 million, but the incident also served as a wake up call: prior to Google's smack down, he didn't use social media at all, but simply relied upon search engine optimization and links on relevant site. Now, Twitter and Facebook are central the company's marketing strategy and the GourmetGiftBaskets.com is thriving once again with growth driven by it's own social networking steam. Lesson: What may look like a disastrous turn of events may just be the kick in the pant you need to rethink your growth strategy.

FriendFinder Networks (#303) operates over 30,000 websites, many of them sexually oriented social networks, and has more than 350 million registered users in over 180 countries. It also publishes Penthouse and other men's magazines, and licenses the Penthouse brand. Lesson: This one's easy, folks. Sex sells, end of story.

Crumbs (#422) is the largest retailer of cupcakes in the world, with more than 30 bakeries nationwide. Currently the cupcake of the month is S'Mores, described on the company's website as "chocolate cake filled with marshmallow cream cheese frosting topped with chocolate cream cheese frosting covered with chocolate chips, marshmallows and graham cracker pieces." Lesson: C'mon, you don't need me for this one. It's cupcakes, for heaven's sake! But if you'd like to read more about Crumbs, check out How Does a Cupcake Company Rock the Inc. 500 List?
Image courtesy of Inc. Magazine