Matthew Szulik Red Hat, Inc.

Ernst & Young Strategic Growth Forum 2008

Nationally sponsored by: Strategic Growth Forum

It’s the Ernst & Young Strategic Growth Forum, the country’s most prestigious gathering of high-growth, market-leading companies. An event Forbes.com hailed as one of its seven “get-ahead executive retreats.” The 22nd annual Entrepreneur Of The Year awards concluded the Forum, which we believe was our best yet. Congratulations to Matthew Szulik of Red Hat, Inc., our overall winner, and to all of our national category and regional award recipients — you’re all winners because what you do makes life better for all of us. You can read many of their stories on the following pages. The 2008 Forum featured more than 100 prominent speakers, who discussed, debated and provided advice on growth strategies, including how to continue growing your company in the face of an uncertain economy, manage the impact of climate change on your business, remain innovative, maintain and foster an entrepreneurial 2/3 Cover flap culture, conduct a successful IPO or strategic transaction, learn about various capital opportunities and much more. This one-of-a-kind event also included nearly 30 highly focused content-rich sessions. Participants also heard from successful CEOs, eight of the world’s largest private equity firms, two of the world’s top sovereign wealth funds, as well as leading investment bankers, institutional investors, board members, attorneys, Ernst & Young professionals and others. The Forum is designed to provide CEOs with the kind of “first to know” information and access that results in valuable industry insights that help companies achieve their true potential. Participants also had an unparalleled opportunity to meet and network with their peers — the best CEOs in America. The Ernst & Young Strategic Growth Forum is designed to provide you with the kind of knowledge and access that you can’t get anywhere else. We hope to see you back again at next year’s Forum, which will be held November 11–15, 2009. For more information as well as highlights please visit www.ey.com/us/strategicgrowthforum. Sincerely,

Maria Pinelli Americas Director Strategic Growth Markets Ernst & Young

Fold Making history In this unprecedented year in our nation’s economy, entrepreneurial growth companies continue to serve as a beacon of hope. The extraordinary resilience of entrepreneurs nationwide has been nothing short of historic. Entrepreneurs wake up each day with a glass-half-full mentality, ready to dream what often seems like the impossible dream and turn it into reality. Ernst & Young recognizes that now, more than ever, our economy depends on successful entrepreneurs to develop and prosper. That is why we are proud to be the undisputed leader in serving the Russell 3000, high-growth private companies, IPO-bound companies, and companies with significant venture capital or private equity investments. We are dedicated to helping entrepreneurial growth companies stay ahead of the competition and maximize their potential. Side 2 of flap The Entrepreneur Of The Year® awards were created 22 years ago by Ernst & Young to pay homage to the endeavors of the exceptional men and women who create the products and services that keep our economy moving forward. The awards have grown dramatically since then and now include programs in more than 100 cities and more than 50 countries around the globe. The Entrepreneur Of The Year awards program is the concluding event of the Ernst & Young Strategic Growth Forum, named by Forbes.com as one of its seven “get-ahead executive retreats.” Held annually in November at the Desert Springs JW Marriott Resort & Spa in Palm Springs, California, the Forum is the country’s most prestigious yearly gathering of high-growth, market-leading companies. Ernst & Young is pleased to acknowledge the individuals who defy the odds and forge ahead despite the naysayers — people like Matthew Szulik. As Chairman of Red Hat, Inc., a Raleigh, N.C.-based open-source public company that gives customers the freedom to design software to meet their individual needs, Szulik has revolutionized the software market. Under his leadership, Red Hat has become the leading open-source Linux provider, with more than 80% of the business market and 3,000 people in 60 offices worldwide. Discover Matthew Szulik’s tremendous accomplishments in the pages that follow, along with this year’s Entrepreneur Of The Year national category winners and finalists. We congratulate the 2008 participants on their commitment to community and industry, which serves as a model for entrepreneurs everywhere. Sincerely,

Larry Haynes Deborah Pargmann Phil Anderson Americas Director Chair Americas Director Entrepreneur Of The Year Strategic Growth Forum Entrepreneur Of The Year Ernst & Young Strategic Growth Forum Maria Pinelli

Making history Larry Haynes, Deborah Pargmann and Phil Anderson

2. Legacy of honoring entrepreneurial excellence

3. Ernst & Young Entrepreneur Of The Year Winners Network

4. Meet the 2008 Judges

6. Ernst & Young Entrepreneur Of The Year 2008 Technology Category: Matthew Szulik, Chairman, Red Hat, Inc.

38. Venture Capital Award of Excellence Seth Merrin, CEO and Founder, Liquidnet Holdings, Inc.

40. Ernst & Young World Entrepreneur Of The Year 2008 Jean-Paul Clozel, M.D., Actelion Pharmaceuticals Ltd. Category winners and finalists

Technology Media, Entertainment and Communications 9 Paula Long and Don Bulens — EqualLogic, Inc. 25 David Liu — The Knot, Inc. 9 Glen Tullman — Allscripts 27 Jeremy Allaire — Brightcove, Inc. 9 David Vieau — A123Systems 27 Diane Hessan — Communispace Corporation 27 Dan King and Scott King — ReadyTalk Distribution and Manufacturing Real Estate, Hospitality and Construction 10 Amin Khoury — B/E Aerospace, Inc. 12 Yvon Pierre Cariou — Dynamic Materials Corporation 28 Alan D. Gold — BioMed Realty Trust, Inc. 12 Arthur W. Huge — Menasha Corporation 30 Jim Abdo — ABDO Development, LLC 12 James A. Rubright — Rock-Tenn Company 30 Charles J. Berkel — Berkel & Company Contractors, Inc. 30 J. Doug Pruitt — Sundt Construction, Inc. Emerging Retail and Consumer Products 13 Steven Nichtberger, M.D. — Tengion, Inc. 15 Rick Alden — Skullcandy 31 Tom Sullivan — Lumber Liquidators, Inc. 15 John Edwards — Move Networks, Inc. 33 Randy Boyd — Radio Systems Corporation 15 Weijie Yun — Telegent Systems, Inc. 33 Stephen C. Flagg — Quality Bicycle Products, Inc. 33 Robert A. Peterson — Norcross Safety Products LLC Energy, Chemicals and Mining Services 16 Dr. Bernard J. Duroc-Danner — Weatherford International Ltd. 34 James R. Barnes — OAKLEAF Waste Management 18 Dick Alario — Key Energy Services, Inc. 36 Magid M. Abraham, Ph.D. and Gian M. Fulgoni — 18 Jerry D. Dumas, Sr. — Flotek Industries, Inc. comScore, Inc. 18 Tom L. Ward — SandRidge Energy, Inc. 36 Michael R. Haverty — Kansas City Southern 36 Harold Mills — ZeroChaos Financial Services 19 Thomas A. James — Raymond James Financial, Inc. 21 Seth Merrin — Liquidnet Holdings, Inc. 21 Rodger Riney — Scottrade, Inc. 21 Patrick G. Ryan — Aon Corporation Entrepreneur Of The Year magazine Health Sciences Ernst & Young Entrepreneur Of The Year Americas Directors — Larry Haynes and Phil Anderson 22 Jay Flatley — Illumina, Inc. Program Director — Betty Pilcher 24 Michael R. Davin — Cynosure, Inc. 24 Frank H. Laukien, Ph.D. — Bruker Corporation Editorial Director — Warren Rappleyea 24 Wayne T. Smith — Community Health Systems, Inc. Managing Editor — Doris Fenske Art Director — Tonya Johnson Photography Director — Helen Oller Contributing Writers — Kathy Bull, Nick Iversen, Roger Morton, Richard Osborne, Warren Rappleyea, Lindsey Siegle, Chuck Thomas

Entrepreneur Of The Year 2008 For 22 years, the Ernst & Young Entrepreneur Of The Year awards have honored the men and women who build the companies that help make the world a better place. In these pages we have chronicled their innate ability to create new products and services, transform organizations, enrich individual lives and contribute to the vibrancy of national economies. Each year, the most successful entrepreneurs vie for the Ernst & Young Entrepreneur Of The Year awards, the most prestigious honor in its class. Their names and companies are among the most influential and recognizable in the business world — Jeff Bezos of Amazon.com, Sergey Brin and Larry Page of Google, Inc., Arthur Blank of Home Depot, Richard Caruso of Integra LifeSciences, Maxine Clark of Build-a-Bear Workshop, Wayne Huizenga of Huizenga Holdings, Inc., Pierre Omidyar of eBay, Kevin Plank of Under Armour and Howard Schultz of Starbucks Corp., to name a few. The annual Entrepreneur Of The Year awards begin each year with programs across the United States. Seven to 10 winners in varying award categories in each program are selected from among nominees by independent judging panels, comprising local business, financial, academic and media figures. In 2008, 26 US regions hosted Entrepreneur Of The Year awards and honored their winners at award galas in June. All regional winners are contenders for the national awards. National Entrepreneur Of The Year winners are chosen in each of 10 national categories by independent judging panels under the auspices of the Ewing Marion Kauffman Foundation. From these winners, the judges debate the merits of each to narrow their selection to an overall winner — the individual whose leadership and overall entrepreneurial excellence sets him or her apart. That person is honored as the Ernst & Young Entrepreneur Of The Year and represents the United States at the World Entrepreneur Of The Year event, which takes place in Monaco. See page 40 to read about the 2008 winner and to learn more about the World Entrepreneur Of The Year program. National Ernst & Young Entrepreneur Of The Year winners and finalists are announced at our annual, black-tie awards gala at the Desert Springs JW Marriott Resort & Spa in Palm Springs. The awards are the culminating event of the Ernst & Young Strategic Growth Forum. As part of the event, all regional and national winners are also inducted into the elite Entrepreneur Of The Year Hall of Fame, on permanent display at Ernst & Young’s US headquarters building at 5 Times Square in New York. The following pages will introduce you to the 2008 judges and our Ernst & Young Entrepreneur Of The Year winners and finalists. Find out what makes them stand out as examples of entrepreneurial excellence. For complete information about the Entrepreneur Of The Year awards program visit www.ey.com/us/eoy or call 1-800-755-AWARD. Ernst & Young Entrepreneur Of The Year Winners Network

Congratulations to all regional and national award winners on your outstanding achievements as a 2008 Ernst & Young Entrepreneur Of The Year® award recipient! You are now a part of the Ernst & Young Entrepreneur Of The Year Winners Network, an exclusive community that includes all Entrepreneur Of The Year award winners from regional programs held across the country and national programs held in Palm Springs over the last 22 years. The members of this elite group are exceptional leaders whose Richard businesses have influenced the way we live, the products and services we depend on, Caruso and the economic vibrancy of our local communities and global markets. Who’s part of the Network? They include some of the most recognizable names in business today, including Sara Richard Caruso of Integra LifeSciences Corp.; Michael Dell of Dell Inc.; Herb Kelleher of Blakely Southwest Airlines; Pamela Morris of CareSource Management Group; Pierre Omidyar of eBay, Inc.; Howard Schultz of Starbucks and now Matthew Szulik of Red Hat, Inc. and many other household names.

“We are creating the Winners Network as an active community of the country’s most innovative and successful business leaders,” says Larry Haynes, Americas Director, Entrepreneur Of The Year. “We aim to build a legacy of sharing and learning that reconnects and fosters the relationships this group has made while participating in Entrepreneur Of The Year and the Strategic Growth Forum.” How we connect Activities the Ernst & Young Entrepreneur Of The Year Winners Network has planned in the coming year include:

Enhanced Winners Network pages on our ey.com site to include Winner Spotlight Wayne • Huizenga interviews, Ernst & Young Entrepreneur Of The Year logo downloads, current topic polls and surveys and much more • Exclusive Winners Network audiocasts on timely topics with your peers Catherine • Winners Network newsletters and events you won’t want to miss Hughes We want to hear from you! Our goal is to make the Ernst & Young Entrepreneur Of The Year Winners Network a valuable resource. Should you have any questions or comments about this influential Network, including your ideas as to how we could make it even more useful, please feel free to contact us at 1-800-755-AWARD.

3 Ernst & Young Entrepreneur Of The Year 2008 National Judges

Fourth row (left to right), Victor Tsao, Miven Holdings; Third row, Mark Dankberg, ViaSat Inc.; Jeff Grady, Digital Lifestyle Outfitters; Anup Jacob, Michael Roberts, The Roberts Companies; Dave Moody, Virgin Green Fund; Bryant Keil, Potbelly Sandwich Works. C.D. Moody Construction Co., Inc.; Andrew Raguskus, Sonic Innovations, Inc.; Don Holzworth, Futures Group International; Chris Duda, Goldman, Sachs & Co.; Jessie Knight, Sempra Energy; Sherrill Hudson, TECO Energy, Inc.; Jim Davis, Chevron Energy Solutions; David Brandon, Domino’s Pizza, Inc.; Joe Scarlett, Tractor Supply Company; Craig Clark, Forest Oil Corporation.

4 Second row, Aaron Garrity, XanGo, LLC; Ron Kruszewski, First row, Howard Levitt, Tourneau; Bob Henry, Stifel Financial Corp.; Nina Vaca, Pinnacle Technical Investor and Consultant; Simon Bax, Broadcast Facilities Resources, Inc.; Reneé Amoore, The Amoore Group, Inc; Eddie C. Brown, Brown Capital Management; Inc.; Rob Scott, Colubris Networks; Pamela Morris, Victoria Haynes, RTI International; Howard Brodsky, CareSource Management Group; Pete Linsert, CCA Global Partners; Richard Caruso, Integra Columbia Biosciences Corporation; Nancy Briefs, LifeSciences Corporation; Jay Morse, The Washington Elemé Medical Inc.; Bernee Strom, Revitalization Post Company; Leo Ullman, Cedar Shopping Centers, Inc.; Partners, LLC; George Dalton, NOVO 1, Inc.; Manu Shah, Helen Greiner, iRobot; Bernard Dvorak, Liberty Global, M S International, Inc.; Blythe Jack, Rosewood Capital; Inc.; Larry Richman, PrivateBancorp, Inc.; John Shave, Globalcom Communications; Selim Bassoul, Jeffrey Goldfaden, Warburg Pincus; J.C. Huizenga, The Middleby Corporation. National Heritage Academies, Inc. Westwater Group.

Entrepreneur Of The Year 2008 5 Technology Matthew Szulik Chairman; Red Hat, Inc. Raleigh, N.C. Founded: 1995

6 “Our biggest competitive advantage is that we were not contaminated by traditional thinking.”

Matthew Szulik’s story — like those and the color of your hair are not quite Soon, the day Szulik had feared arrived. of many entrepreneurs who have as important as the strength of your The dot-com bubble burst and Red brought novel and seemingly ideas, Szulik says. Creative thinking and Hat’s stock plunged to $3 per share. improbable business ideas to market collaboration among Red Hatters and the Angry investors sought the company’s — has been one of continuously online Linux user community drive the liquidation. Szulik and his family began open-source culture, allowing the free receiving death threats. Szulik told a converting nonbelievers. exchange of ideas on discussion boards group of board members and “other smart So when he joined Red Hat as President to make the software better, faster. For people at Red Hat” that they needed to and CEO in 1998, his first challenge was Szulik, it was a perfect fit. outline a solution “or give investors back his staff. their money.” “When I recruit executives, I tell them: The youthful, eccentric workforce at ‘I’m going to make you 10 years younger; A welcome alternative the North Carolina company showed I’m going to make you hip,” Szulik says Then Szulik had a brainstorm. “I spent a their distrust of their new boss by with a laugh. lot of time with customers who were really making critical comments about him on But how did Szulik turn this Linux dissatisfied with their alternatives,” he companywide email broadcasts. “You had technology, which until then had been says. Customers who were not using open to have thick skin around here,” Szulik little more than a hobby for teenage geeks source were tired of paying for software remembers. “They were really honest who liked to write code, into a source of licenses, shelling out additional money for about what they thought. But I loved it.” business for a company that now rivals maintenance and then waiting forever for After all, free thinking had attracted Szulik Microsoft? In 1998, no one believed a upgrades, only to receive software that to open source in the first place. Open company could make money by giving contained bugs. source gives users the freedom to develop away free software. Szulik bet the company on a strategy to software for any application they choose “They thought I was the dumbest guy in compete in the enterprise computing because the code is freely available over the world,” Szulik recounts. “I remember market by offering businesses an the internet. Szulik became interested in taking Red Hat public and having people alternative to the Microsoft Windows open source following college, when he ask me, ‘When are you going to give up operating system platform. He shifted Red regularly attended lectures given at the this gimmick?” Yet when Szulik led Red Hat’s business model to give businesses Massachusetts Institute of Technology Hat’s IPO in 1999, it had the eighth- the flexibility of open-source code. “If you by Richard Stallman, the founder of the biggest first-day gain on Wall Street. listen closely enough, your customers will free software movement and author of tell you the answer,” he says. the GNU General Public License. It was Like most software stocks trading during the creativity, no-holds-barred-attitude the dot-com boom, shares of Red Hat In 2000, Szulik testified on behalf of the and collaborative approach to developing were red hot. Prices shot up to $312 a United States in the landmark Microsoft software — and its potential to change the share. There was only one problem: Red antitrust case, asserting that Microsoft’s world — that intrigued Szulik. Hat’s economic model was still in its early anti-competitive practices had “seriously stages, and the company was losing $70 warped” the technology industry, stifling A perfect fit million per quarter. The stock moved with innovation to the detriment of the That’s why he didn’t hesitate when the mood of the market and had no basis in industry and society as a whole. Bill Kaiser, a venture partner from the fundamentals of the business. As share Under the approach put in place by Szulik, Greylock Capital, called him about the prices skyrocketed, so did Szulik’s anxiety. Red Hat’s business customers pay annual exciting opportunity at Red Hat. With an He knew there was nowhere for them to go subscriptions for support and training. average age of 29, Red Hat’s employees but down. Around that time, the company’s Its open-source model gives them the are anything but average. It’s the kind founders, senior leadership and core freedom to design software to meet their of organization where what you wear engineers cashed out and left Red Hat.

Entrepreneur Of The Year 2008 7 “If you listen closely enough, your customers will tell you the answer.”

individual needs without locking them into management philosophy of matching members. Many Fedora Project using particular proprietary software for one manager to every 25 employees (as innovations are included in new releases upgrades. Red Hat software is public, with opposed to his competitors’ 1:8 ratio), of Red Hat Enterprise Linux. no proprietary license, a primary benefit which empowers Red Hat’s people to make In 2005, Morgan Stanley recognized over chief rival Microsoft Windows. This the decisions required to serve customers Szulik with its Leadership Award for makes rapid innovation possible, using better. Employees write their own Global Commerce for his contributions open process and public forums. performance reviews. They prove their to improving society through commerce. competence and leadership skills through Silencing the critics Szulik agrees with visionaries like an entity called Red Hat University. And if Tim Berners-Lee that the internet is Although the company didn’t have a a jury of their peers nominates them, they the great equalizer, granting access to single corporate client in 2002 when the receive promotions. education and employment. To help enterprise software made its debut, Red In continuing to build Red Hat with an provide that access, Red Hat sponsors Hat became profitable in 2003. Suddenly, eye toward growth, Szulik orchestrated the One Laptop per Child program that Szulik was the smartest guy in the world. the acquisition of leading open-source furnishes laptops to disadvantaged kids. “Our biggest competitive advantage middleware company JBoss, in 2006. Today, Szulik’s future is unscripted. In is that we were not contaminated by Middleware is software that allows late 2007, he turned over the reins traditional thinking,” says Szulik. applications to work together. JBoss was of Red Hat’s day-to-day operations to designed after Red Hat’s open-source, In just 10 years, Szulik has built Red Jim Whitehurst in order to spend more subscription model, making it a tailor- Hat into the only profitable public open- time with his family, several of whom made match. source software company, revolutionizing are experiencing health challenges. the software market. Its unconventional In 2007, Microsoft’s CEO offered Szulik He remains Chairman of Red Hat and and collaborative business model drives hundreds of millions of dollars for Red a frequent and active advocate for the the growth that has made it the leading Hat to abandon its free software model potential of open-source before the North open-source Linux provider, with more to become Microsoft’s strategic Linux Carolina legislature and US Congress. than 80% of the business market. Red partner. Szulik refused. His commitment How does Szulik view his contribution to Hat has become one of the world’s most to open software was not for sale. society? “It should be a great testimony recognized technology brands, with Since then, Red Hat’s market share has that if those crazy nuts at Red Hat can 3,000 people in 60 offices worldwide. increased, and the company has posted build a billion-dollar business on free record profits. Its annual sales for 2007 Since 2004, Red Hat has renewed software, through honesty and integrity, were $523 million. contracts with 398 of its 400 major then anyone can pursue any dream.” enterprise customers. “We have to An ongoing commitment And if you ask Matthew Szulik about his deliver consistent value with this model,” Szulik’s dedication to using open-source proudest accomplishment, he’ll tell you it’s says Szulik, “or who would renew their software for social change has led Red his family. But professionally, his kin is the support subscriptions?” In 2005, 2006 Hat to sponsor the Fedora Project, a open-source community that has helped and 2007, Red Hat was rated No. 1 for community-supported open-source to create thousands of new jobs and product quality, service and value by initiative that aims to promote the rapid improve education. And by the look of IT executives surveyed by CIO Insight progress of free and open software. Rapid pure joy that washes over his face when magazine, outranking IBM, Google, Cisco progress is possible through updates he talks about either, it’s clear he’s made and Microsoft. crafted by Red Hat employees who the right choices in life. A major factor in Red Hat’s stunning develop the code along with community subscription-renewal rate is Szulik’s

8 Technology

Paula Long Glen Tullman David Vieau Vice President, Founder CEO; Allscripts; Chicago; President, CEO; A123Systems; Don Bulens Founded: 1986 Watertown, Mass.; Founded: 2001 President, CEO; EqualLogic, Inc.; Finalist: When Glen Tullman acquired Finalist: When three technologists who Nashua, N.H.; Founded: 2001 struggling packaged medications provider had come up with a brilliant invention Allscripts in 1997, he had a mission: to turned to David Vieau for help, he Finalist: When Paula Long and her improve medical history access to save heeded their call. They had launched colleagues discovered they could apply money and lives. Today, more than 40,000 A123Systems after developing a new strategies from other IT industry segments physicians use Allscripts’ software for battery that, with 5 times the power to solve data storage challenges, they patient care. and 10 times the life of a traditional founded EqualLogic, Inc. Together, rechargeable, had the potential to replace According to Tullman, 1.5 million people Long and EqualLogic President and CEO gasoline to power cars. Don Bulens have built the company into one per year are harmed by prescription of the leading networked storage vendors. errors that could be prevented with When Vieau came on board in 2002, a system to catch dangerous drug he quickly impressed forward-thinking First, Long raised more than $50 million interactions. To address this, Tullman Fortune 500 executives, and Black & amid the largest venture capital recession launched the National ePrescribing Patient Decker became the company’s first in history. EqualLogic’s innovative systems Safety Initiative™, a coalition of leading major client. But Vieau knew the simplify how businesses store and protect technology and healthcare companies, to battery’s real power lay in the hybrid information, eliminating traditional data provide free electronic prescribing systems auto market. In 2007, General Motors storage inefficiencies. Then, under Bulens’ to physicians. awarded A123Systems a contract to marketing leadership, the company supply batteries for the Saturn Vue In 2008, Allscripts merged with Mysis LLC, implemented an “all features standard” and Chevrolet Volt. The company increasing its subscriber base to one-third — sales philosophy that promotes product also began collaborating with General of US physicians. Today, Allscripts provides usage and is a key factor in EqualLogic’s Electric to develop fuel cells for hybrid a full suite of applications to improve all 40% repeat business rate. In 2006, sales buses, and was awarded a $15 million aspects of healthcare delivery. grew by 125%, and in 2008, Dell Inc. battery development contract by the US acquired EqualLogic for $1.4 billion. Tullman exemplifies Allscripts’ values by Department of Energy. serving on the International Board of the The executive team maintains an in- Vieau’s goal is to reduce US oil Juvenile Diabetes Research Foundation. kind donations program through which consumption by working to make He encourages employees’ community EqualLogic gives needed storage hybrid electric vehicle technology more involvement by granting them a paid day to technology to nonprofit organizations. affordable and efficient. volunteer at their charity of choice.

Entrepreneur Of The Year 2008 9 Distribution and Manufacturing Amin J. Khoury Chairman, CEO, Founder; B/E Aerospace, Inc. Wellington, Fla. Founded: 1987

Amin Khoury’s grandparents were Khoury did just that. But when he started commercialization of the equipment immigrants who escaped religious attending Villanova University, he had he invented. to leave after just one year. “There was persecution in Lebanon by settling in When Technicon had difficulty selling the too much to do between making money America in the early part of the last equipment, Khoury, sure of his abilities, and helping the family and conducting century. During World War II — “went to the owner and told him I could studies,” he explains. a time, Khoury recalls, “when do the needed sales job,” he recalls. “He people wanted to fight for their Khoury was fortunate to get into a gave me a try, and we started selling a lot country” — his mother worked at the technical personnel development program of the equipment.” with Wyeth, the research-based, global US Army’s Quartermaster Depot The business grew to the point where pharmaceutical company. With his drive, in Philadelphia, where she sewed a search for a president was to be Khoury sailed through the program, soldiers’ uniforms. conducted. For the second time, Khoury becoming a senior scientist — equivalent went to the owner and, based on his track After the war, she joined Khoury’s to earning a master’s degree in chemistry. record as the person who had invented father in the restaurant business before the product, created the manufacturing venturing into the clothing business by A knack for invention plan and sold the product, asked for a trial replicating haute couture dresses. While working at Wyeth, Khoury’s as the new president. He was given the problem-solving ability led him to invent But when Khoury was just 12 years old, opportunity and succeeded again. equipment that performed automatic his father left the family. His mother then testing of finished pharmaceutical As president, Khoury says, he educated turned to her son and told him he was dosage forms. Technicon, a company himself on matters like financial and now the man of the house. In addition to that manufactured instrumentation business reporting and marketing. His having to keep his three siblings in line, for automatic analysis, hired Khoury ability to tackle these areas “came, too, his new role meant that he had to go to to help complete development and from watching my mother and father and work to help his family financially.

10 “It was all about blocking and tackling. That’s where my business school training helped.”

entrepreneurship kind of met classical Khoury’s dedication, training and business opportunity analysis,” Khoury entrepreneurial acumen worked to says, explaining that their business model sustain the company. “It was all about “was to find and purchase companies blocking and tackling,” he says. “That’s where we could be market-share leaders where my business school training in a growing niche in a competitive helped. We husbanded our resources environment.” but spent enough on innovation and product development so that when the Florida-based Bach Engineering was just turnaround in demand came from the such a company. It had annual revenues airlines, we benefited greatly. We’ll do a of less than $3 million and was in the little over $2 billion this year. aerospace business. Its purchase was the genesis of B/E Aerospace. Between 1987, when the company was founded, “The business, and 2001, the business grew organically and through acquisitions. By buying from teetering on independent companies that were leaders doing the accounting over the weekends” in their areas, Khoury created a company the brink, so to during the years when they were running he can now claim to be the world’s largest their restaurant business. manufacturer of equipment for the speak, has now interiors of airplanes. Striking off on his own become a very, Aerospace industry hit hard His determination and entrepreneurial drive led Khoury to strike off on his The biggest challenge the company very successful own, creating a business plan and has faced was the terrorist attack of seeking venture capital to support it. September 11, 2001, followed by the company. We’ve He found the financing and worked in outbreak of the SARS virus. Khoury partnership with another company that remembers that these events made turned it around.” grew substantially within 18 months. He people afraid to fly, which hit the stayed there for five years, then left and aerospace industry incredibly hard. B/E “The business, from teetering on the ever since has been buying and starting Aerospace nearly went bankrupt, he says, brink, so to speak, has now become a businesses. “B/E Aerospace is the largest and company volume declined by more very, very successful company. We’ve of those businesses,” he says. than a third. turned it around,” Khoury says. Khoury was already running a company Khoury was forced to consolidate when he went to Northeastern University facilities, reduce headcount and install to earn an M.B.A. He recalls meeting a single IT and a single engineering people from the Harvard School of workstation throughout the company. Business who were impressed with There were no more acquisitions from his success and were looking to 2001 to 2006. participate in a venture. “That’s where

Entrepreneur Of The Year 2008 11 Distribution and Manufacturing

Yvon Pierre Cariou Arthur W. Huge James A. Rubright President, CEO, Director; President, CEO; Menasha Corporation; CEO; Rock-Tenn Company; Dynamic Materials Corporation; Neenah, Wis.; Founded: 1849 Norcross, Ga.; Founded: 1936 Boulder, Colo.; Founded: 1965 Finalist: Openness, honesty and Finalist: Industry conditions worsened Finalist: Willingness to take risks is communication are hallmarks of soon after James A. Rubright assumed a defining trait of the entrepreneur. A Arthur Huge’s approach to business. leadership of Rock-Tenn Company in native of France and Divisional President Since he joined the company in 2001, 1999, with globalization playing a part there of a global industrial materials those traits have enabled Huge to make in decreasing product demand. But company, Yvon Cariou could have necessary changes in privately held Rubright’s clear vision and steady hand remained on a successful career path. Menasha Corporation, a niche-based at the helm have brought unquestioned But when the opportunity came to leave packaging, logistics and marketing success to his company, a leading that comfort zone and move to the US, servicing company. manufacturer of packaging products, he took the risk, eventually becoming the merchandising displays and recycled For years, stockholders were comfortable head of Dynamic Materials Corp. (DMC). paperboard. with the structure and profits they had A 32-year resident of the US, 18 of them been receiving. Huge’s research revealed Rubright’s plan was to use company assets as a citizen, Cariou used his sensitivity that true profits were not evident to achieve a competitive advantage, to cultural diversity to foster a positive because of internal pricing mechanisms. sometimes through strategic acquisitions. multicultural attitude throughout the His ability to communicate the company’s He also flattened the organization, making many divisions of DMC which operates in needs to enough stockholders permitted strong moves to empower employees France, Germany, Sweden and the US. him to take measures that doubled in order to achieve breakthroughs in shareholder value within three years. manufacturing and administration. All With keen business acumen, Cariou Huge restructured the company into business-unit heads report directly to eliminated underperforming divisions four operating units and refocused the Rubright, improving access to data and and absorbed three European investment of its capital. speeding decision-making. competitors. Today, DMC is the worldwide leader in the explosion- Huge, who has led the company Although he had no background in the welded clad metal business. since 2004, is respected for his company’s businesses when he joined, entrepreneurial vision, leadership skills Rubright’s entrepreneurial drive has paid A significant step in enhancing the and innovative approach to meeting off handsomely. Since he became CEO, company’s position has been the creation challenges. He believes the company’s company revenues have doubled, and of an environment of communications, reputation for ethical conduct is its the number of employees has grown by teamwork and trust within DMC divisions. greatest strength. It is the creed by a third in a culture that values employee which he lives. empowerment.

12 Emerging Steven Nichtberger, M.D. President, CEO; Tengion, Inc. East Norriton, Pa. Founded: 2003

The two strong drives of his life’s to various hospitals to consult specialists. pre-select paperless grocery coupons work came to Steven Nichtberger, After his brother had undergone testing, at home and transmit them to a M.D., in his early years. His father a doctor — usually wearing a starched supermarket in advance of shopping. was an entrepreneur who grew a white coat — would discuss the test The patents for the process are seminal to painting company from modest results, making his parents feel better marketing on the internet and have since while working to improve his brother’s been licensed to leading internet-based beginnings to become the largest condition, Dr. Nichtberger says. He paperless coupon companies. company of its kind. resolved to be like that person. After completing his studies at the To pursue the twin goals of becoming University at Buffalo, School of “We are doing a doctor and an entrepreneur, Dr. Medicine and Biomedical Sciences in Nichtberger attended the University of just three years, Dr. Nichtberger had good to do well.” Pennsylvania and the Wharton School the opportunity to work at the National to obtain undergraduate degrees in Institutes of Health (NIH) during his “Whether he got the next loan from the biology, economics and entrepreneurial fourth year. It was there he interacted bank to support the growth or the next management. with two leading investigators who were job or new employees and so forth ... Ahead of his time conducting gene replacement therapy all of that was dinner conversation research. The work had a profound between him and Mom,” Dr. Nichtberger Before entering medical school, Dr. influence on him. During the six years recalls. He wanted to be a business Nichtberger made his first foray into of his residency and fellowship at success like his father. entrepreneurship by going to Wall Street Mt. Sinai Medical Center in New York, to seek and obtain funding for a business Dr. Nichtberger continued doing research At the same time, Dr. Nichtberger’s older plan he had written as part of his Wharton at NIH. brother had an unusual and ill-defined studies. The high-tech business he started chronic illness that required family trips in the early 1980s allows consumers to

Entrepreneur Of The Year 2008 13 Merck & Co. approached Dr. Nichtberger That dream was realized when he was Transforming patients’ lives as he was taking cardiology training. Over offered an opportunity to become The company’s mission — one that Dr. a year and a half, he had 44 interviews involved with and co-found Tengion. Nichtberger considers the “Holy Grail” in with the manufacturer and distributor “Being a clinician with hands-on medicine — is to do something that will of pharmaceuticals. “Regulatory people knowledge of gene therapy helped me transform the lives of patients. “If you thought I’d do well, clinical people said, take the risk. As a businessperson who can prevent kidney failure or the need ‘he’s a clinician,’ and the marketing people understood entrepreneurship, I had the for dialysis, the impact on society and an said, ‘let’s put him here.’ They didn’t know confidence to leave Merck and enter the individual patient is worth a lifetime,” what to do with me,” he says. venture from scratch,” he explains. he says. Eventually, he joined the New Products To succeed, Dr. Nichtberger believed it And when compelling, life-saving group at Merck where, over a nine-year was imperative to hire leaders and experts products are brought to patients who period, he assumed responsibility for with proven track records. Only a few of need them, he believes, the rest — in leading the production and logistics the company’s more than 100 employees terms of commercial success — will take of some $3.5 billion of the company’s have left over the course of Tengion’s care of itself. brands, and, ultimately, for overseeing five-year history. marketing strategy for all brands and “We are doing good to do well,” Dr. The first product they have been pipeline programs. Nichtberger says. “The advice I give to developing is a neo-bladder that targets entrepreneurs is to figure out what you’re children with spina bifida, adults with Finding his mission good at, pursue your passion and if it’s in spinal cord injury and bladder cancer Yet Dr. Nichtberger felt hard-pressed the field of medical care, just focus on the and incontinence patients. In addition to figure out what he was doing with good of patients.” to the neo-bladder, which is in mid- to his life. Finally, he decided that what late-stage testing with the US Food and he really wanted to do was to make Drug Administration, products under meaningful advances for patients through development include vessel grafts for a business that tapped into “the magic of dialysis patients, bypass grafts for regenerative medicine.” His vision was to patients with coronary disease and create neo-organs or tissues for patients augmentation kidneys. in need of transplants.

“If you can prevent kidney failure, or the need for dialysis, the impact on society and an individual patient is worth a lifetime.”

14 Emerging

Rick Alden John Edwards Weijie Yun CEO, Founder; Skullcandy; CEO; Move Networks, Inc.; President, CEO, Founder; Park City, Utah; Founded: 2003 American Fork, Utah; Founded: 2005 Telegent Systems, Inc.; Sunnyvale, Calif.; Founded: 2004 Finalist: A passion for snowboarding Finalist: His entrepreneurial spirit led Rick Alden to create his first served John Edwards well in his role as Finalist: Conventional wisdom holds two companies and to hone his Executive Vice President of Novell and that the future of mobile television lies entrepreneurial drive. The first, National then Chairman and CEO of I-Link Corp. in digital technology. Weijie Yun has a Snowboard, Inc., produced snowboarding His sensitivity to emerging cultural, social different perspective. He is pursuing events across the country. The second, and technological trends led him to join in it based on his previous experience in Device Manufacturing, offered the first the creation of Move Networks. product management and strategy and step-in snowboard boot and binding as an executive at other tech companies. The company utilizes standard web system. Alden sold both companies. protocols to stream television over the Telegent, the company Mr. Yun co- Alden’s third venture is Skullcandy. Its internet, to PCs and mobile devices. The founded, offers a single chip that includes initial product, the Link, is a set of stereo differentiator is proprietary technology an analog solution permitting cellular headphones offering one plug for music that produces full-screen, high-definition phones to play free-to-air television as input and another for a mobile phone. video without buffering, stalling, stopping easily as full-size television. Critics viewed It is now an industry standard. Alden’s or the low-quality viewing symptomatic of his analog solution as backward and risky. formula for the company includes a first- competitive technologies. But within three years, Telegent had class R&D facility that has aided in the become the fastest-growing company in Edwards combines his high-tech creation of highly successful additions to the history of the semiconductor industry, background with a commitment to help Skullcandy’s offerings. making mobile TV accessible to more than others thrive. This has allowed him to 10 million consumers in markets outside Confidence in his vision led Alden hire and work with exceptionally talented the US. to finance the venture with his own employees whom he recognizes as critical money, using profits from the sale of his to the company’s growth. Mr. Yun’s entrepreneurial drive is snowboard binding company, along with augmented by his ability to attract and Edwards’ success also springs from his a second mortgage on his home. The retain employees who are drawn by openness to new ventures, willingness to risk paid off. Year-over-year revenues the opportunity to work on leading- solve problems in fresh and exciting ways, for 2007 grew an amazing 291%, with edge technologies. In the open work and his firm belief that he can fail only if profits up 18.1%. environment he has created at Telegent, he ever stops trying. all employees, including Yun, work in cubicles.

Entrepreneur Of The Year 2008 15 Energy, Chemicals and Mining Dr. Bernard J. Duroc-Danner Chairman, CEO; Weatherford International Ltd. Houston Founded: 1941

Bernard Duroc-Danner calls himself He went on to purchase additional rigs teaching, which he did in the course of a “growth guy,” an entrepreneur at and simply did not stop. Why would he? pursuing his Ph.D. from The Wharton heart. “I always liked growth,” he Within his first year, sales had grown School of the University of Pennsylvania, says. “Who doesn’t?” from zero to $54 million. Needless to he remained unfulfilled. say, he found no reason to return to his However, lest anyone think Dr. Duroc- So when he was given the opportunity consulting job in Boston. He was named Danner moved into an area completely to trade in his role as an economic President of EVI in 1989. consultant in Boston for what others alien to his background, it should may have seen as an improbable In that role, Dr. Duroc-Danner put down be pointed out that he grew up entrepreneurial challenge, he didn’t the roots of what became Weatherford understanding both the passion and the hesitate. He was, he says, even more International, now one of the world’s parlance of the industry he ultimately single-minded than most entrepreneurs. largest diversified oilfield services entered. His father, Jean, was in charge Growth, he says, was the only thing he companies. Under his leadership, of exploration for a French oil producer really liked. highlighted by leveraging more than 200 and worked extensively in the Middle East. strategic acquisitions, Weatherford’s It was as a result of his father’s contacts An oil rig shopping spree 2008 revenues are expected to be that he got the call from EVI. about $10 billion. Today, the company His challenge was to take a tiny public Still, he found himself in a new field — has 43,500 employees and 128 company called Energy Ventures literally and figuratively. In his economic manufacturing facilities supporting 809 Incorporated (EVI) and go on a shopping consultant position with Arthur D. Little, service bases in more than 100 countries. spree. The Texas owners of EVI provided he had worked more in metal and power him with $3 million to buy oil rigs at an Dr. Duroc-Danner’s accomplishments are generation than in oil and gas. But the auction in New Iberia, La. He purchased especially impressive for someone who opportunity with EVI was simply too three broken-down drilling rigs on barges initially seemed headed in an entirely intriguing. The idea was to buy a few rigs and had to have them repaired because different professional direction. “I was and padlock them until the economics of they had lost their ability to float. an economist, which meant nothing,” energy improved. “It was a very simple he says of his time as a consultant. asset play,” he says. And while he adds that he did enjoy

16 “Entrepreneurship is the highest form of value creation one can have.”

A million here, a million there The journey to that success has And he was building something, not been tremendously satisfying for taking something away. “We were not So in 1986 — a “terrible time” in the Dr. Duroc-Danner, both personally and being scavengers,” he says. “That industry — he and his pregnant wife went professionally. “A son always wants to wasn’t the mentality at all. I just found to Houston. And he started shopping. make his father proud,” he says, “and I it enormously appealing to build on “We spent a few million here and a few am no exception.” something that was in ashes.” million there, and before we knew it, we had some real assets,” he says. Given his It was, he acknowledges, a “messy” love of growth, it was a heady time for “I dug a hole I process. “Growth is messy,” he says. him, creating growth in an industry that “Entrepreneurship is messy. It’s sort otherwise appeared to be collapsing. could not get out of like adolescence. It’s creation, and creation is a messy thing. But without it, He was, he says, “immensely intimidated” nothing exists. Entrepreneurship is the by his newfound circumstances. “I didn’t of, so I kept on highest form of value creation one can really have to fight my way to the top have,” he asserts. because there wasn’t anyone else,” he digging.” says. “I dug a hole I could not get out of, If Dr. Duroc-Danner has any regrets, it so I kept on digging.” Back to his roots is that such exponential growth cannot continue forever. “We are so big now, I But instead of plunging deeper, Despite his meager experience — he had can see the limits on the growth,” he says. Weatherford “grew and grew and grew.” It worked a series of summer jobs at Mobil But like any great entrepreneur, he still became a new breed of service company, while studying for his doctorate — he has an ambitious goal: “We are going to providing extended products and services, felt at home in the industry. “Sort of by try one more time to double it.” more efficient operations, greater osmosis I understood oil and gas,” he geographic diversity and more powerful says, because he had always been around research and development capabilities. oil people. “It was going back to my genetic roots.”

Entrepreneur Of The Year 2008 17 Energy, Chemicals and Mining

Dick Alario Jerry D. Dumas, Sr. Tom L. Ward Chairman, President, CEO; Chairman, President, CEO; Chairman, CEO; Key Energy Services, Inc.; Flotek Industries, Inc.; SandRidge Energy, Inc., Houston; Founded: 1977 Houston; Founded: 1985 Oklahoma City; Founded: 1984 Finalist: Under Dick Alario’s leader- Finalist: “I never thought of myself as Finalist: After remarkable success ship, Key Energy Services, the world’s an entrepreneur,” Jerry Dumas says. “I at Chesapeake Energy, which he took largest provider of onshore well servicing, am just impatient.” Arguably, it is just from start-up to a $20 billion enterprise, has enjoyed an astounding turnaround. that impatience that has been the key Tom Ward decided he was ready Shortly after Alario became president and to his impressive track record as CEO of for another challenge. In 2006, he COO in January 2004, the company was Flotek Industries. Since Dumas assumed invested $500 million in Riata Energy forced to restate five years of financial leadership in 1998, Flotek has sped to Corp., a small private exploration and statements due to serious issues arising success in the oilfield services business production company. He believed Riata from a 2003 audit. It was one in a long through innovation. had potentially valuable core assets that list of troubles Alario inherited, including could be developed with the right capital Flotek’s beginnings were based on failing company credit, lawsuits and a and team. the Petrovalve, an improvement over broken corporate culture. the 50-year-old ball-and-seat valve Ward renamed the company SandRidge Instead of fleeing what others may have that drives the company’s success in Energy and relocated it to Oklahoma viewed as an impossible situation, Alario its down-hole drilling segment. Under City. Under his leadership, SandRidge embarked on a painstaking three-year Dumas, Flotek has acquired or developed successively completed an acquisition turnaround. He refinanced outstanding patented technologies that differentiate and an IPO in 2007 and has grown to debt, sold noncore assets, improved the company, including a biodegradable become the sixth-largest driller in the US, operating margins, rebuilt the equipment “green” micro emulsion chemical with more than 2,000 employees and a fleet, increased safety standards, technology that drives the company’s market cap of more than $6 billion. decreased employee turnover and chemical segment. Research has shown How did he do it? “I just went to work enhanced customer relationships — all the a 47% increase in production when micro and tried my best every day,” Ward while, increasing profitability. By October emulsion is used, translating into 66% says. He still does, maintaining a 24/7 2007, Key Energy Services was again listed growth for Flotek in this segment. commitment to SandRidge. He owns 25% on the NYSE, now a more strategically Dumas claims he doesn’t have a job, of the company and is directly involved in focused and disciplined company. but “a place where I come to have fun.” all aspects of its operations. Today, the company stands as a powerful Judging from Flotek’s success, he’s testament to Alario’s entrepreneurial having a wonderful time. spirit and skills.

18 Financial Services Thomas A. James Chairman, CEO; Raymond James Financial, Inc. St. Petersburg, Fla. Founded: 1962

Entrepreneurial drive showed itself After attending Harvard Business “Other than early in the life of Thomas A. James. School, James went to law school in He tells of selling corsages he made St. Petersburg, where his father Raymond reading a lot of with his grandmother’s orchids had started the brokerage business that when he was 10 years old. At age eventually became Raymond James Financial. The elder James, a self-taught cases at Harvard 15, he asked his father to co-sign a financial planner, had pioneered many $5,000 loan that he used to begin a Business School ideas relating to the use of living trusts business with a friend collecting and and other estate-planning techniques. and having the selling coins. The venture was highly successful, and James hired a couple A CEO at age 27 arrogance of of retirees, funded them and became During his law school years, James held a coin dealer. a full-time job with his father’s company. “I describe the experience as going to youth, nothing As a Harvard undergraduate, James, who classes from eight a.m. to noon and had started as a rock musician while a working from noon to eight p.m.,” he in the world junior in high school, joined a band that recalls. The firm was small, so James became greatly popular in the Greater prepared me for functioned as controller and wore many Boston area. Demand grew so steadily different hats. But within four years, that he began hiring additional musicians. the job.” James was named CEO by his father, By the time he graduated, James was who wanted to concentrate on sales. booking a Dixieland Band, a jug band, His father was 47 and James, 27. a full dance band for formal affairs and three or four rock-and-roll bands.

Entrepreneur Of The Year 2008 19 “You can’t make decisions about operational details until you’ve established a set of values and developed a strategic plan.”

“Other than reading a lot of cases at When James saw that the concept Delegating is key Harvard Business School and having the was catching on, he began recruiting As James devotes his expertise and arrogance of youth, nothing in the world aggressively through national advertising. energy to starting new ventures, he prepared me for the job,” says James. Many joined. The new approach meant has learned that, “You have to provide “It was a learning experience in real life that the company didn’t have to open control to make sure things are getting in the cauldron of the market from 1970 offices and sustain early start-up losses, started in a good fashion, and then every through 1975.” which allowed it to grow at a rapid rate year, you sort of have to re-pot yourself without a large capital base. Financial conditions at that time were in terms of the activities you’re involved difficult even for old-line firms. James Diversification was running on a parallel with and delegate more responsibilities to found himself opening offices and then course. James discerned a niche in the other managers. This is a hard thing for having to close them in order to conserve marketplace for firms that could offer most entrepreneurs.” what little capital the firm had. He became consulting to profit-sharing plans, pension For beginning entrepreneurs who want to heavily involved in financial planning funds and trusts and then manage the succeed, James advises that the first step because it represented the only income money. “So we got into that business, is to find something they want to build — he could pay himself, since neither James which has become a strong part of our something they would love to do. Next is nor his father took salary at the time. overall business,” he notes. to establish the values to use in operating “It was one of the best training grounds,” James personally managed the creation the business. he says. “If you could survive that, you of Eagle Asset Management, which “You have to look at a lot of the soft can pretty well survive anything.” now manages more than $37 billion in things that most don’t even think about investments. He also helped create new Fortunately, the market rebounded because they’re so focused on operational ventures such as Raymond James Capital, in October 1974, and the company details,” he says. “But the fact is, you Ballast Point Ventures and the Raymond immediately became profitable. can’t make decisions about operational James mutual fund group. details until you’ve established a set of A revolutionary idea Raymond James Financial went public values and developed a strategic plan for In response to an internal demand, James in 1983 and today is a multinational what kind of business you want to have created a business model focused on diversified financial services holding and how you’re going to grow it. independent contractors — a revolutionary company with subsidiaries engaged “Once the plan is put together, it’s a concept at the time. This innovative in investment and financial planning, question of attracting the best people “franchisee” approach appealed to as well as investment banking and you can find. My father always said that brokers who wanted to run their own asset management. Under James’ people were the most important thing businesses rather than sell packaged leadership, the firm has won national about an organization.” products from more rigid institutions. recognition for its community support and corporate philanthropy.

20 Financial Services

Seth Merrin Rodger Riney Patrick G. Ryan CEO, Founder; CEO, Founder, President; Executive Chairman; Liquidnet Holdings, Inc.; Scottrade, Inc.; St. Louis, Mo.; Aon Corporation; New York; Founded: 1999 Founded: 1980 Chicago; Founded: 1964 Finalist: Liquidnet is the third Finalist: When the concept of discount Finalist: Patrick G. Ryan’s father was technology firm started by Seth Merrin. brokerages emerged, many were skeptical. involved in the automotive industry, In its relatively few years of existence, the Founding a firm that offered investors low which gave the young man deep insights company has become the world’s leading cost per trade took courage and conviction into its operations. What he saw was a electronic marketplace for facilitating — characteristics that remain Rodger lack of professionalism in the way dealers institutional equities trading. Riney’s hallmarks. His vision was to set and handled matters of finance and insurance meet high personal standards and provide at that time. Remarkably, Merrin dropped his only outstanding customer service. These traits computer programming course at Tufts Just five years out of college, Ryan’s have propelled Scottrade to the forefront University, where he graduated with a willingness to take risks to confirm of the industry. degree in political science. After college, his judgment led to the creation of while gaining limited trading experience, Riney’s entrepreneurial instincts also led a specialized insurance company he saw a need for a better way to effect him to offer online trading in 1996, when pioneering the sale of insurance and equity trades than through manual buy- ecommerce was still relatively new and its warranties through auto dealers. Today, and-sell orders. future anything but secure. And he bucked the company’s preeminence in the conventional wisdom again by continuing industry is testimony to his vision. Ryan’s Merrin’s solution was to develop to expand Scottrade’s branch network, early decision to go beyond the domestic the industry’s first electronic order convinced that the combination of online market and become an international management system, an idea that initially trading and branch-office support offered force has paid handsome dividends. met with broker reluctance and is now value. Today, that 350-branch network is an industry standard. His vision and Success has come through a combination a key component of the company, bringing entrepreneurial drive paid off, allowing of organic growth and the integration of in and supporting new accounts. Merrin to use the profits to found more than 425 acquisitions into Aon’s Liquidnet. Today, its platform facilitates Through challenging economic times, insurance and reinsurance brokerage the direct and anonymous trading of Scottrade has continued to grow. and human capital consulting business. large blocks of equities by institutional Preferring his independence, Riney has Even with the multiplicity of additions, investment firms. It claims 472 members, resisted outside offers for Scottrade and is the global giant continues to maintain its representing 70% of all US institutional looking to expand into the United Kingdom founder’s dedication to service, integrity assets under management. and Canada. and values.

Entrepreneur Of The Year 2008 21 Health Sciences Jay Flatley President, CEO, Director; Illumina, Inc. San Diego Founded: 1998

In the summer of 1999, Getting personal “The application of what we do is where the romance comes in,” he says. “We are entrepreneur Jay Flatley had a “I come from a computer family,” he doing things that improve human health.” mission. “I was looking for the says. His father worked for IBM in the next great start-up,” he says. early 1950s, he explains, “So I got Illumina was founded a little more than “It happened to be Illumina.” interested, even though at that time a year before Flatley was called upon to computers were not a personal thing.” assume leadership of the company. Two It was a marriage made, if not in heaven, in Computers, of course, eventually became of its founders from venture capital firm the fascinating and highly complex world very personal — especially so to Flatley CW Group — associate John Stuelpnagel, of genetic research — a world in which the when he saw the role the technology DVM, and general partner Lawrence A. rapid evolution of computer technology could play in life science. Bock — uncovered what would become and multiple discoveries in molecular Illumina’s BeadArray technology at Tufts medicine have intertwined. The confluence University. They negotiated an exclusive of these revolutionary forces offers the “The application license to that technology, and Illumina promise not only to expand life expectancy, was born. Stuelpnagel acted as the but also to change our understanding of of what we do is company’s president until he and the the human makeup itself. where the romance board prevailed upon Flatley to join them For Illumina, this has meant astounding as President, CEO and Director. growth and a pivotal position in the comes in. We are The timing was perfect. Flatley had development of personalized medicine recently sold his DNA-sequencing through analysis of genetic variation and doing things that company, Molecular Dynamics, to function. And for Flatley, it has provided Amersham BioSciences and was ready for the joy of working in a field that both improve human a new challenge. Upon joining Illumina, speaks to his innate interests and gives Flatley and Stuelpnagel, who became him the opportunity to contribute to health.” Vice President for business development, advancements that serve mankind.

22 “Our continued focus on innovation is the real key to our success.”

Following its IPO, Illumina began offering In pursuit of innovation SNP (single nucleotide polymorphisms) It’s not surprising that from Flatley’s genotyping services to major perspective, “Our continued focus pharmaceutical and academic customers. on innovation is the real key to our From 2002 to 2004, Illumina’s technology success.” What some may find surprising, enabled the International HapMap however, is just how deeply the pursuit Project, which became the foundation of innovation is embedded in Illumina’s upon which researchers draw their corporate culture. Flatley energetically understanding of genetic diversity and the seeks ideas relating to all aspects of the genomic cause of disease. In the not-too- business, from suggestions that may distant future, Flatley says, genotyping lead to product improvements to matters will be common at the moment of birth. affecting day-to-day work. Today, Illumina has grown into an industry To that end, he conducts open forums leader in genetic analysis. In less than every quarter in each company location. nine years, Flatley has led Illumina The voluntary sessions are designed to focused the company on developing from being a 24-person company to encourage open dialog with employees. and miniaturizing its core BeadArray one with more than 1,000 employees. “They are very comfortable with the fact technology. Doing so allowed researchers The company has advanced from the that this is a nonthreatening forum,” he to turn the enormous scale of raw genetic development stage to become the says. As a result, no issue is considered information created by the Human dominant player in its field, with a $500 too insignificant to address with the Genome Project into medically valuable million revenue run rate and a market cap CEO — even, for example, the prices information that ultimately would be the of $4.4 billion. basis of personalized medicine. employees are charged for food in the Through its proprietary technology, company cafeteria. A momentous decision Illumina has reduced the cost of “There often are quick things I can do,” genotyping by a factor of more than Under Flatley’s leadership, Illumina Flatley says. And getting things done — 2,000. Flatley intends to continue this completed its initial public offering in big and small — has been the hallmark of rate of innovation and implement it July 2000. However, the transition this entrepreneur’s success. to becoming a public company was within the company’s DNA-sequencing not without its difficulties. Illumina’s technology to make possible an era of stock traded below $2 per share amid consumer-based genomics, the study of marketing challenges and an industry genetic material. “Part of the mission downturn. In a bold move, Flatley chose of our company is to take what we are to independently develop and market doing and push it into the consumer Illumina’s BeadArray technology. That space,” he says. move proved to be a seminal event in the company’s future success.

Entrepreneur Of The Year 2008 23 Health Sciences

Michael R. Davin Frank H. Laukien, Ph.D. Wayne T. Smith Chairman, CEO; Cynosure, Inc.; Chairman, President, CEO; Chairman, President, CEO; Westford, Mass.; Founded: 1991 Bruker Corporation; Community Health Systems, Inc.; Billerica, Mass.; Founded: 1960 Franklin, Tenn.; Founded: 1985 Finalist: In 2002, Cynosure was on the brink of bankruptcy. The company had Finalist: Bruker Corporation started Finalist: Following a 23-year career a strong technology base — patented its existence as Bruker Physik, a at Humana, where he led a successful laser technologies for a range of medical company founded in Germany in 1960 turnaround effort, Wayne Smith assumed and aesthetic applications — but lacked by Frank Laukien’s father. Today, leadership of Community Health Systems strategic direction, the capital to invest it is the parent entity of a group of (CHS) in 1997 and set it on a course of in new products and the marketing companies operating in the life sciences unprecedented growth. Today, CHS is muscle to sell to an increasingly global and analytical systems segments. one of the nation’s leading operators of customer base. general acute-care hospitals. After earning his Ph.D. from Harvard in Michael Davin became CEO of the 1988, Laukien assumed responsibility In a bold move, Smith led the company’s company in 2003 and immediately for Bruker’s US magnetic resonance $6.8 billion acquisition of Texas-based introduced a host of initiatives. Key business, taking it to the number-one Triad Hospitals in 2007, which made strategies included recruiting new talent, position in the domestic market. In CHS the largest publicly traded hospital developing new products, improving 1995, he undertook the turnaround of company in the US. The company’s sales and marketing and implementing the group’s mass spectroscopy business, affiliates own, operate or lease more a more efficient manufacturing model. Bruker Daltonics, which is now the than 160 hospitals in 28 states, with an Davin also oversaw the expansion of number-four player in its field worldwide. aggregate of more than 17,000 licensed Cynosure’s sales force in both the US and beds. CHS-affiliated hospitals are the sole Laukien oversaw the transformation international markets. provider of healthcare services in more of Bruker Daltonics to a broad-based than 65% of its markets. Cynosure completed a successful IPO in life sciences enterprise. After Bruker 2005. Every quarter since then has seen Daltonics went public in 2000, Laukien Smith has accomplished all this through revenue growth. In 2007, the company guided the gradual consolidation of the a deep commitment to each community had a record year with all revenues entire group into this public vehicle. CHS serves. Little wonder, then, that derived from products introduced since His vision is to continue to leverage for the last two years, Institutional Davin assumed leadership. the culture to sustain Bruker’s organic Investor magazine has named him the group while keeping groundbreaking number-one CEO in the healthcare technological innovation at the heart of facilities sector. the business.

24 Media, Entertainment and Communications David Liu CEO, Co-Founder; The Knot, Inc. New York Founded: 1996

When David Liu was pitching his idea sure everything we did was sustainable Following that plan, The Knot has been for a bridal services website in 1996, and scalable.” a success pretty much from day one. Its many aspects of it ran counter to website signs up 4,200 new members the prevailing internet commerce “We created a each day and is the largest site of its kind, wisdom. In an era when size meant with 3.2 million unique visitors a month. success, “We wanted to intensely bit of a social “Are you a bridezilla?” serve a relatively small market,” he The media company’s motto is “Weddings says. At a time when 80% of internet phenomenon.” for the Real World.” But its website has users were male, “We focused on become much more than simply an online women planning their weddings.” A magnificent obsession catalog of invitation stationery, cakes, And when investors pushed back by Liu knew that conventional thinking flowers, photography, favors, programs pointing out that once his customers was not what would make The Knot and, of course, dresses. Here you can got married, they would disappear, succeed because its customers are learn about hot wedding colors, themes, Liu and his three partners realized not conventional thinkers. They are transportation, unique locations and they would need to find a way to brides-to-be who are planning the most wedding customs. There are entertaining regular features such as a quiz page keep replacing them. important day of their young lives — “obsessed with that one day,” he says, (“Are you a bridezilla?”) and the “Ask For those reasons and more, raising “obsessed for a year, during which Carley” page, where anxious brides-to-be money for The Knot, Inc. and its the intention to spend is so high in a get answers from the site’s editor-in-chief, flagship website, The Knot.com, was concentrated period of time.” Carley Roney, The Knot’s co-founder and a real challenge. But that challenge Liu’s wife. ended up serving the company well, Liu His business plan was simply to match says. “It trained us to be extraordinarily their desire with the products and frugal and very conservative. We made services of his vendors and advertisers.

Entrepreneur Of The Year 2008 25 “We made sure everything we did was sustainable and scalable.”

But that was only the beginning. “We to pregnancy and the newly born. A created a bit of a social phenomenon,” 2008 acquisition enabled Liu to change Liu now says with modesty. Today, his the acquired entity’s pre- to post-natal customers represent “over 80% of all the website to a name in keeping with his own people planning a wedding.” Through brand. The result? First, The Knot; then, its chat rooms, the brides-to-be can The Nest; and now, The Bump. exchange tips, war stories, family secrets Reinforcing the messages in these and otherwise calm each other down. three conjoined websites are wedding, These online relationships have become decorating and early childhood a great source of comfort to the brides, periodicals, books, videos — even a Liu says. Many continue their chats even newsletter on baby matters called — what after the wedding is over, when they’re else — The Poop. The whole enterprise is back from the honeymoon and beginning backed by a streamlined value chain of their married lives. vendors, advertisers, product marketers “It got so that our chat rooms and warehousing facilities, all built on the were becoming dominated by the conservative, sustainable and scalable conversations these married people were business plan drawn up by Liu and his having about things like buying houses, partners at the outset. mortgages, cars, insurance,” he says. To And talk about extending the brand: an end this congestion, he gave them their early publishing company acquisition now own site, TheNest.com — the answer to produces The Knot wedding magazine that skeptical investor’s question about in both a national quarterly format and how to keep the customer coming back. in regional editions. The Knot’s online In TheNest.com, a bride can take all the bridal registry is one of the largest. And experience she gained from planning and tune into the Oxygen cable channel to participating in her wedding, put it up on see The Knot on TV. This reality format her personal space and invite others to show follows one real-life couple as share their own experiences. they prepare for the big day, with all the Knotties and Nesties endlessly fascinating stories that make this moment so memorable for so many. At the same time, the site offers an enormous range of goods and services David Liu and Carley Roney’s own for the newlywed couple to, well, feather wedding was, they admit, one that a their nest. The “Knotties” and the true wedding planner would consider a “Nesties” form a close-knit community, disaster. And yet, out of that chaos has with nearly 200 message boards emerged a truly entrepreneurial success producing more than a million postings story based on one of the common each month. experiences of our society: launching your life. The next logical step in extending the brand, the third “lifespace” from Liu and his team, made its debut in May 2007. NestBaby.com was a website devoted

26 Media, Entertainment and Communications

Jeremy Allaire Diane Hessan Dan King Chairman, CEO; Brightcove, Inc.; President, CEO; CEO, Director, Founder Cambridge, Mass.; Founded: 2004 Communispace Corporation; Watertown, Mass.; Founded: 1999 Scott King Finalist: Already successful blending Director, Vice President, Founder; media with the web, Jeremy Allaire Finalist: Under Diane Hessan, ReadyTalk; Denver, Colo.; formed Brightcove, Inc. because he was Communispace Corporation developed Founded: 2001 convinced that online video would become the first online communities that the dominant media format, poised to allow organizations to truly listen to, Finalist: Dan King co-founded Ecovate transform the television industry. and engage with, their customers. Its Inc. in 2000 and, within a year, brought patented specialized social interaction his brother Scott in as sales vice president. His idea was a web-based software software provides real business value and But the company experienced severe product allowing media publishers to competitive advantage to her customers, financial problems in the dot-com crash manage, program and distribute online at a 90% retention rate for Communispace. and was reformed under the same video content and, just as important, corporate name. This time, the brothers make it profitable through online Early in her tenure as CEO, Hessan provided most of the funding in pursuit of advertising. By also tracking consumer listened to a client’s suggestion and their idea, ReadyTalk. viewing behavior, Brightcove offers a changed the strategic direction of horizontal platform that brings together Communispace in order to realize the Their go-to-market strategy was based all the technical, operational and business potential she saw in creating private on the concept that web conferencing processes needed to run an online social networks for accessing customer is a complementary service to audio television enterprise. insight. The company went on to pioneer conferencing. With ReadyTalk, the the application of collaborative enterprise web service is integrated with an audio Today, Brightcove’s client roster features software to build online communities that conferencing service, allowing a customer some of the world’s largest broadcast help organizations do just that. to do an audio-only call, a web-only call or network, electronic and print media a combination of the two. Its service runs companies. But it also includes small Hessan developed a subscription business on virtually any computing program and independent producers who use its model that gave the company reliable offers a recording capability that enables on-demand online service that allows revenue visibility and predictability, customers to publish calls as podcasts. any media owner to launch a global TV resulting in profitability well ahead of channel in a day. Allaire’s latest product other companies in the space. Expanding With the success of its hosted solution gives customers the ability to deliver on her breakthrough idea, Communispace to conferencing technology, ReadyTalk’s instant broadcast-quality streaming video is now developing multilingual, future looks bright, as the King brothers using standard web browsers, with no multicultural online communities. plan to introduce a video-conferencing special software plug-ins. solution in 2009.

Entrepreneur Of The Year 2008 27 For some business owners and executives, the entrepreneurship bug bites only after a career setback forces them to reconsider long- held notions about the meaning of security and success. For others, the bug bites when they happen upon a novel idea, and it occurs to them that they don’t need to give that idea away for someone else to reap the rewards. “The core values of our company Real Estate, Hospitality include trust, and Construction loyalty and Alan D. Gold integrity.” President, CEO; BioMed Realty Trust, Inc. San Diego You can put Alan Gold in yet another Founded: 1998 category. “I’ve always been an entrepreneur,” he says. “I can go back to being a paperboy at 10 years old.” You’ll need to go just as far back to discover the roots of the philosophy he brings to his business endeavors — a philosophy that boils down to doing the right thing. “I’ve always been a Boy Scout,” he acknowledges. “I believe in the philosophy of the Scout Law.” Even now, the Eagle Scout has no trouble reciting its tenets: “A scout is trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, brave, clean and reverent.”

28 “I’ve always been an entrepreneur. I can go back to being a paperboy at 10 years old.”

Addressing an unmet need those needs in 1989, when he faced include trust, loyalty and integrity,” he the difficulty of finding financing for a says. “Everything goes to our mission No wonder, then, that Gold felt there was scientific research laboratory. “I needed to statement.” a perfect combination of forces at work become an expert in the product in order when he came across an unmet need that The mission statement includes a to convince bankers and lenders that this presented both a business opportunity commitment to “building quality was something they should invest in,” he and the opportunity to contribute to relationships, developing exceptional explains. research that would improve human environments for our tenants and health. As a mortgage broker in Southern He came to understand the real estate contributing to the communities in California, Gold had become aware of a and capital needs of the life science which we work and live.” pent-up demand for rentable laboratory industry as a whole, learned the Green is good and office space available to tenants in barriers to entry and organized a team the life science industry. To make that of consultants and principals who also An example of how that mission is space available, he launched what would became experts in various life science carried out is “Kendall D,” also known become BioMed Realty Trust, a real estate operations. BioMed Realty Trust — the as the Genzyme Center, the 13-story investment trust that enables life science consolidation of investments in several headquarters building of Genzyme Corp., companies to lease rather than purchase life science assets over a period of several a public biotechnology company located real estate, thereby allowing them to years — was the eventual result. in Cambridge, Mass. The building utilizes allocate more of their capital to research. innovative, environmentally intelligent A swelling property portfolio design and received the American BioMed focuses on a niche sector Benefiting from the emerging capital of Institute of Architects’ 2004 Excellence that traditional lenders and investors the life science industry, Gold took the in Sustainable Design Award and the had shied away from. This market company public in 2004 and raised $465 AIA COTE 2004 Top Ten Green Projects niche requires facilities that contain million in its IPO, using the proceeds to Award. It also was recognized as being sophisticated laboratory space and acquire eight additional properties. Since a Platinum Rated LEED (Leadership expensive climate-control systems. While then, BioMed has established a strong in Energy and Environmental Design) many early-stage life science companies track record of financial performance, Compliant Building — the highest rating may have significant amounts of capital, and the original 13-property portfolio possible for green buildings. it is not always economically sound for has grown through acquisitions and them to spend it on the construction Gold endeavors to carry out his development to encompass more than 67 of infrastructure. BioMed provides the personal and professional mission properties. BioMed Realty has achieved solution by acquiring, developing, leasing through philanthropy as well. He and best-in-class status among American and managing more than 100 buildings his wife, Debbie, are supporters of REITs and has experienced one of the located in America’s core life science many national campaigns and local fastest growth rates in the US. markets such as Boston, New York, causes in the San Diego area. It all San Diego, San Francisco and Seattle. Gold attributes this success to the emanates from the principles he learned fundamentals of entrepreneurship — as a child. The Boy Scout philosophy, BioMed’s portfolio concentrates on having a good idea and acting on it — but he says, is really quite simple: “It is a metropolitan, easily re-leasable properties also to conducting business in a manner commitment to community.” with HVAC, electrical and plumbing keeping with his personal philosophy of systems consistent with the needs of life. “The core values of our company its clientele. Gold had first encountered

Entrepreneur Of The Year 2008 29 Real Estate, Hospitality and Construction

Jim Abdo Charles J. Berkel J. Doug Pruitt President, CEO; ABDO Development, Chairman; Berkel & Company Chairman, CEO; Sundt Construction, LLC; Washington, D.C.; Founded: 1996 Contractors, Inc.; Bonner Springs, Inc.; Tempe, Ariz.; Founded: 1890 Kansas; Founded: 1959 Finalist: Jim Abdo’s refreshing Finalist: As leader of Sundt perspective on how business and Finalist: Fifty years ago, Charles Berkel Construction, Doug Pruitt has transformed community can come together has was instrumental in helping Chicago- a conservative century-old company with enabled him to become a thriving real based Intrusion-Prepakt develop an mixed performance to a nimble, high- estate developer. Abdo is dedicated advanced concept in heavy foundation performing company that is creating to the development and restoration work called Auger Press Grouted (APG) a secure financial future for its 1,600 of economically distressed areas of Piling. Seeing the concept’s advantages employee-owners. Pruitt is an “internal” Washington, D.C. over traditional methods of creating entrepreneur who fundamentally changed foundation holes, Berkel started his own the course of Sundt, previously a family- In 1996, he incorporated ABDO company with APG as its focus. owned enterprise that found itself with Development, a development and serious financial challenges between construction company specializing in For the past half century, with Berkel at 1996 and 1998. luxury residential and retail development the helm, Berkel & Company has built with a focus on urban revitalization. on that success, becoming the nation’s Pruitt took the company’s helm in 1999 Shortly after starting the company, leader in deep foundation construction. and embarked on a program of strategic he took bankers to a crime-ridden The innovations spearheaded by Berkel planning involving heavy investment in neighborhood in the inner city and include a technique called Auger Pressure employee and management training. His explained his vision. They were not Grouted Displacement (APGD), which approaches proved to be instrumental in convinced. Undaunted, he took out a enables the displacement of material that the growth and financial success Sundt $400,000 line of credit against his own is drilled out to the sides of the hole. has enjoyed over the past decade as the residence and redeveloped a boarded-up company moved from a family-owned firm Over the years, the company has taken building covered with graffiti. Once his to a 100% employee-owned company. on ever-more-complicated projects, Victorian lofts were completed, they sold including the challenge of stabilizing the With its employee-owner underpinnings, out immediately. walls surrounding the collapsed World Sundt Construction emphasizes the power To date, ABDO Development has Trade Center after 9/11. Under Berkel’s of its people. Under Pruitt’s leadership, undertaken more than 30 development leadership, the company’s revenues have employees are groomed for future projects in the D.C. area. For his efforts, grown by more than 400% in the last management positions so that the success Abdo has been recognized not only as an decade. Now an octogenarian, he has no he has helped forge will continue long into important business leader, but also as a plans to retire. the future. catalyst for a better community.

30 Retail and Consumer Products Tom Sullivan President, Founder; Lumber Liquidators, Inc. Colonial Heights, Va. Founded: 1993

When Tom Sullivan, the founder of old lumber that crowded the yards where “Once I found the Lumber Liquidators, got started he picked up raw materials for his decks. in the lumber business, he knew Weekend sale draws crowds business model what not to do. Years of struggling, When he asked about the “scrap wood,” primarily in the contracting for Lumber the yards were more than happy to have business, had driven home some a chance to unload it. Sullivan began Liquidators, I put important lessons. printing up flyers and sending out faxes “Initially, when I started, I thought announcing a weekend sale to be held at all my energy into you needed a big, fancy advertising a warehouse in an industrial park. The agency,” the Boston native says, “and location wasn’t an accident, since Sullivan that and stopped if you had that, business would just fall was doing everything he could to keep his trying to come up out of the sky.” overhead down. But after losing a considerable amount That weekend he sold nearly everything with something of money with a franchise remodeling he had purchased, with an advertising business that collapsed despite some budget that didn’t get much beyond else.” nice-looking advertising, Sullivan moved the cost of paper and ink and a facility on and was soon doing much better with a expense that allowed him to turn enough deck-building company. of a profit to know that he would do a sale again. While operating in the black was a pretty good feeling, Sullivan, who had “I was still doing the decking, but pretty experienced a couple of other business much every month or so, I would put a failures, couldn’t stop looking for a bigger sale together, and it was working out opportunity. He found it in the stacks of really well,” Sullivan says.

Entrepreneur Of The Year 2008 31 “It’s not about a big, fancy showroom or a big, fancy location. It’s about offering a good deal.”

He then had to heed the other important able to hear what they thought when Expanding operations lesson from his early struggles: to they read our ads. It gave me a good Less than five years after opening his focus on one thing. Building decks was perspective on things,” he says. Those first retail location in Boston, Sullivan profitable, but selling lumber — ultimately, ads, and pretty much all the subsequent had stores throughout New England and hardwood flooring — was the business store ads, haven’t been much different down the East Coast and had moved that best fit Sullivan’s vision and “was just from Sullivan’s first handwritten flyers. operations to an 80,000-square-foot much better to deal with.” He explains Clearly, the lesson about the limits of facility in Virginia. that lumber people left a giant mess when expensive advertising is one that he they picked through the wood looking for hasn’t forgotten. The choice of Virginia was not the result what they wanted. But when people came of sophisticated market research. “I While meeting demand required a lot in for flooring, “they would just take the looked at a map, and Virginia was in the of Sullivan’s attention, acquiring an bundles and go.” middle of the East Coast, so I drove down adequate supply also became a major I-95 and looked for a good spot close to task. Early on, he joined the hardwood A winning business model the highway,” he says. flooring association and was soon in “Once I found the business model for frequent contact with lumber mills to Soon, the company needed even Lumber Liquidators, I put all my energy secure product. more space. Today, its home base is a into that and stopped trying to come up 300,000-square-foot facility that includes with something else. Seven days a week “We bought excess stuff,” Sullivan says, production capabilities for its own selling hardwood flooring,” Sullivan says. noting that mills often have a buildup Bellawood line of pre-finished hardwood of a particular type of wood that they By January 1996, he was ready to open flooring, a main warehouse, a store and are eager to unload when orders for his first store. Located in a garage behind corporate offices. But to Sullivan, it’s the something else come in. a strip mall on Route 1 in West Roxbury, same business he started with when he Mass., the store wasn’t much to look at, With a nationwide reach always part of held that first weekend sale. Sullivan says. But the rent was cheap, Sullivan’s plan, even picking up excess “Part of my job now is to keep people which fit nicely with his low-cost model. wood directly from the mills wasn’t going realizing it’s not about a big, fancy to meet the demand. So, relatively early Sullivan was pretty close to being a one- showroom or a big, fancy location. It’s in the company’s formation, Sullivan man show when the store opened, but he about offering a good deal,” he says. moved to not only placing orders with believes that being in the store as much mills, but arranging to buy their entire as possible and talking to customers was year’s production. a great way to learn the business. “I was

32 Retail and Consumer Products

Randy Boyd Stephen C. Flagg Robert A. Peterson CEO, President; Radio Systems President, CEO, Founder; President, CEO, Co-Founder; Corporation; Knoxville, Tenn.; Quality Bicycle Products, Inc.; Norcross Safety Products LLC; Founded: 1991 Bloomington, Minn.; Founded: 1981 Oak Brook, Ill.; Founded: 1995 Finalist: In the dog-eat-dog competitive Finalist: Stephen Flagg has his company, Finalist: Robert A. Peterson knows world of pet products, Randy Boyd keeps Quality Bicycle Products, Inc. (QBP), on a there are no shortcuts when it comes to coming out on top. Boyd, founder of 27-year winning streak. When he founded safety, and thousands of working men Radio Systems Corp. (RSC), moved the company, he and his wife Mary were and women around the world appreciate into the world of electronic pet behavior taking orders from local shops and packing his insight. Peterson, a founder of products in 1991 after customers of his and shipping the products themselves. Norcross Safety Products LLC (NSP), farm supply distribution company began Every year since then, QBP has seen an launched the company in 1995 with the clamoring for a product called Invisible increase in sales and profitability. purchase of a Rockville, Ill., protective Fence. When the company that made shoe company. Flagg’s ability to spot opportunities and the product wouldn’t sell it to him to recognize industry trends, such as the rise Following his strategy of offering in-spec/ distribute, Boyd risked his life savings to of Japanese bicycle parts suppliers and on-time, head-to-toe products, Peterson create a product of his own. the emergence of mountain bikes, have has steadily introduced new products By 1995, RSC had a line of more than helped fuel QBP’s rise from a mom-and- and acquired a dozen related enterprises 20 items, all related to electronic pet pop operation to the US market leader in in his effort to make NSP a leader in the behavior training. That year also saw bicycle parts distribution. worker protection sector. In the process, intense competition in the industry, NSP has gone from roughly 200 workers It has been an exciting ride for the but within two years, under Boyd’s to more than 3,000, and revenue has entrepreneur, who fell in love with cycling leadership, RSC had captured more climbed from $23 million in 1995 to when he took his first ride on a 10-speed than 70% of the do-it-yourself pet more than $600 million in 2007. Peugeot as a teen. Today, QBP has more electronics market. Since then, the than 400 employees and serves more than Today, Norcross is a recognized leader company has continued its rapid growth 5,000 independent bicycle retailers across in the personal protective equipment through investments in new products the country. It even has its own bicycle industry, and Peterson has the company and strategic acquisitions, including the brands: Salsa, Surly and Civia. well positioned for future growth, having maker of Invisible Fence. Gross sales in recently completed the sale of the 2007 were up by 250% from 2004. company to Honeywell International, Inc. for $1.2 billion.

Entrepreneur Of The Year 2008 33 Services James R. Barnes President, CEO; OAKLEAF Waste Management East Hartford, Conn. Founded: 1995

“The foundation of all this really rests on challenging and changing the business model.”

No one hauls trash like Jim Instead of physically hauling trash, Being green and loving it his company contracts with retailers, Barnes’ company, OAKLEAF Waste It isn’t easy being green, but done right, restaurants, property management Management. It isn’t sheer size it can be profitable. Having started with companies, hospitality companies and or asset base that makes Barnes’ a $40,000 loan from one of Barnes’ corporate clients and hires haulers in the company unique or noteworthy. It’s friends and headquarters set up in immediate area to do the actual removal. just that OAKLEAF doesn’t operate a horse stable outbuilding in 1995, And OAKLEAF captures every opportunity quite like most other waste disposal the East Hartford, Conn., company is it can to recycle waste material. In fact, now the most rapidly growing waste companies. Barnes placed a huge emphasis on outsourcing company in the US, with recycling long before the current “green” 750 employees and a national network movement took hold. of 4,800 certified haulers, recyclers and waste diversion experts.

34 “The most important attribute for our organization is customer centeredness. We realize we’re only as good as the last transaction.”

Founded on the premise that customer Finding a better way Keeping green consciousness very high on service is paramount, and that it could the corporate agenda requires research, Barnes gleaned insight into the waste flourish by helping other companies and OAKLEAF, by its nature, is asset-light management business while working for perform better and work smarter, and relies on people, knowledge and his uncle’s trash-hauling business, where OAKLEAF today has five subsidiaries, technology. A big challenge is watching, he was frustrated by low margins and a blue-chip client roster and annual anticipating and integrating the changing high client turnover. Those five years of revenues of more than $700 million. regulatory requirements affecting clients experience as a manager, combined with Wal-Mart, CVS and Home Depot are in all 50 states as well as Canada and his exposure to computers as an IBM three of its flagship accounts. Puerto Rico. intern during his Marist College years, The company has made a $15 million inspired him to come up with a new way “We are really a resource optimization investment in developing its own of doing waste removal. company,” Barnes adds. “We allow sophisticated proprietary software our customers’ waste streams to be He reasoned that if he could apply the to streamline communication, order evaluated, processed and put back on the right IT systems and infrastructure and processing and invoicing and to process market as something saleable. Almost develop a really efficient way of handling more than two million transactions each every day, either through a contact or back-office data processing tasks such month. It has been recognized nine times other research, we’re discovering a new as invoicing, he could offer a sustainable since 2001 by Inc. magazine and named way to divert certain waste products from value-added service to customers, add four times to the Inc. 5000 list. landfills. Already, there is very little in the customers rapidly, build great route waste stream that is not reclaimable. “The foundation of all this really rests on density and business volume for the challenging and changing the business haulers and gain access to large national “We’re experiencing a huge pull for model,” Barnes explains. “The traditional accounts. OAKLEAF assumed the role recycled products. When we identify one was flawed. When a hauler charges of general contractor. But in effect, it something new that can be recycled, job fees by location or percentage of savings, became the largest customer of each one for us is to assign the proper kind the fees become commoditized. A hauling company it engaged. of pickup or recovery process and get hauler’s accounts stay with him for only Be willing to try again the right economics attached to it. We’re a couple of years and then are churned. applying a lot of research and intellectual There’s no long-term, sustainable value What are the lessons learned and effort to move our business forward. added to the customer as time passes. recurring themes from Barnes’ OAKLEAF’s people are really passionate entrepreneurial journey? about what they do.” “The customer, typically a management company, would realize a degree of “I think it’s the value of being tenacious Not surprisingly, with his characteristic savings and inevitably come back to the in hard situations — the ability to keep aggressive approach to business, Barnes hauler and say, ‘What can you do for pushing and encouraging,” he says. “One has committed himself to continuing his me now?’ In essence, people on both thing that has become part of our culture company’s 30% annual growth rate and sides of the equation were constantly is the readiness to try it one more time, looks forward to becoming the number- scrambling for new clients and new try one more approach to a problem. one green recycler in the US. service providers.” The most important attribute for our organization is customer centeredness. We realize we’re only as good as the last transaction. My uncle kept stressing integrity — the need to build trusting relationships.”

Entrepreneur Of The Year 2008 35 Services

Magid M. Abraham, Ph.D. Michael R. Haverty Harold Mills CEO, Co-Founder Chairman, President; Kansas City CEO; ZeroChaos; Orlando, Fla.; Southern; Kansas City, Mo.; Founded: 1999 Gian M. Fulgoni Founded: 1887 Chairman, Co-Founder; Finalist: ZeroChaos, an innovator in comScore, Inc.; Reston, Va.; Finalist: Not everyone has the chance the workforce staffing industry, began its Founded: 1999 to revitalize a railroad holding company existence handling back-office processes well past its 100th birthday. But Michael such as time, expenses and invoicing for Finalist: For many, the late 1990s were Haverty, Chairman and President of independent contractors. This model the heyday of e-commerce. But marketing Kansas City Southern (KCS), had grown didn’t pan out, but the company won researchers Dr. Magid Abraham and up in the business. In 1995, KCS was big instead by changing its approach to Gian Fulgoni realized that the two major struggling to maintain its viability in business-to-business transactions and companies then providing internet site the rail business. With the significant working with large enterprises such as ratings still weren’t measuring the actual movement of manufacturing operations Fortune 100 companies. ecommerce activity taking place. The from the US to Mexico, Haverty saw huge Harold Mills, one of the founding officers two men set out to become the premier potential for greatly extended railway of ZeroChaos, knew a good thing when provider of the measurement and analysis capacity that would link industrial Mexico he saw one and completed a of consumers’ online behavior. to the primary US markets. management buyout of the company The company they founded — comScore, In his multiyear leadership of a project in 2004. Since then he has turned it Inc. — could be called the web counterpart that was completed in 2005, Haverty into one of the fastest-growing private of TV’s Nielsen ratings, except that its achieved 100% percent ownership for companies in the US. body of panelists is much larger, including Kansas City Southern of its Mexican rail ZeroChaos is not only one of the hottest more than two million internet consumers franchise. The daring move established success stories around, but also one of who have given comScore permission major north-south railway service, running the biggest minority-owned companies to confidentially capture their browsing counter to the conventional wisdom that in the US. It has logged revenue growth and transaction behaviors. (The Nielsen railroads should be east-west oriented. audience numbers only 10,000.) of more than 300% over the last Kansas City Southern de Mexico is well three years and has grown to 5,200 Proprietary data collection technology on the way to realizing its spectacular employees, with operations in enables comScore to track and gather potential, with 2007 fiscal-year revenues 50 states and five foreign countries. panelist activity into reports for its more quadrupling the levels achieved in 2004 — than 900 customers. The company went the year immediately preceding public in June 2007 and continues its the acquisition. rapid growth.

36 What it takes to lead?

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OUNG & Y RNST © 2008 E member firms of of organization a global to refers & Young Ernst legal entity. which is a separate of each Limited, Global & Young Ernst in the US. member firm located LLP is a client-serving & Young Ernst Venture Capital Award of Excellence

“If you have some experience and Seth Merrin, founder and CEO of some credibility, surround yourself Liquidnet, is the recipient of the third annual Ernst & Young Venture with others who have it.” Capital Award of Excellence. The award recognizes an Ernst & Young Entrepreneur Of The Year regional winner whose company has received venture capital (VC) backing or private equity funding. Merrin was selected by an independent panel judges, from more than 80 Seth Merrin Entrepreneur Of The Year 2008 regional winners who receive venture capital CEO, Founder; funding. The judges included, Scott Carter, Liquidnet Holdings, Inc. General Partner, Sequoia Capital; Anup New York Jacob, Partner, Virgin Green Fund; Carla Founded: 1999 S. Newell, General Partner, Technology Crossover Ventures; and Glenn T. Rieger, General Partner, NewSpring Capital. The VC judges focused on companies that achieved strong success with less than $100 million in venture capital investments; equity and revenue growth; earnings before interest, taxes, depreciation and amortization (EBITDA) margins; and the story of the entrepreneur. An incredible climb to success “Liquidnet’s unbelievable climb is the result of originality, degree of difficulty and entrepreneurial spirit,” says Joe Muscat, who leads Ernst & Young’s Americas Venture Capital Advisory Group. “Venture capital investments enabled Seth, whose first company was all self-financed on a shoestring budget, to hire the best people, retain the best talent and, in the process, revolutionize Wall Street.” Merrin was an unlikely candidate to bring computer automation to Wall Street, having dropped his only computer programming class when he was a student at Tufts University. By 1982, Merrin was a promising equities trader right out of college who knew there had to be a better

38 way to trade than through the manual money management institutions to paper method, which left room for error trade large blocks of equities directly “You need to and poor execution. and anonymously, with significant price improvement and little to no That conviction inspired Merrin to start be able to market impact. With Liquidnet, Merrin his first company, Merrin Financial, in delivered the trading industry’s first order 1985 and, a year later, to build the first communicate management system, the first compliance electronic order management system, system and the first electronic order the Merrin Financial Trading Platform. why and how you routing system for asset managers. This achievement eventually led to his These technologies are now standard being named one of the Top 10 Financial are going to win. on virtually every trading desk in the Technology Innovators of the Decade United States. by Wall Street & Technology magazine Nothing can be in 1999. After just five years, Liquidnet was consistently ranked as a top-10 left to chance.” The years immediately following the institutional broker on both the New launching of Merrin’s revolutionary York Stock Exchange and the NASDAQ. “Now is the time for entrepreneurs to system were challenging times for Merrin In 2004, it was named the fifth-fastest- refine their business plans,” he adds. “You because most brokerages initially didn’t growing private company in America, need to be able to communicate why and think they had a need for his product. according to Inc. magazine’s 23rd annual how you are going to win. Nothing can be However, his persistence and belief that Inc. 500 ranking. By 2006, Liquidnet left to chance.” he could improve the quality of investing was named by Institutional Investor led to success in the 1990s that peaked Liquidnet, now the number-one electronic magazine as the top brokerage firm for when Merrin Financial was acquired by marketplace for block trading, has achieved global trading. ADP in 1996. the following honors this year alone: Merrin knows the stakes are even higher In 1997, Merrin co-founded VIE Systems, • Best Trading System — Buy-side, for today’s entrepreneurs seeking Inc., a financial services application Financial News IT Awards 2008 investments from venture capitalists. integration software company that, in (Europe) “If you have some experience and some turn, was sold to New Era of Networks Best Electronic Alternative Trading credibility, surround yourself with others • (NEON) two years later. Venue 2008 — Asian Investor Service who have it,” he advises. “The more you Provider Awards Scribbles on a napkin can build on those credibility circles, the Best Crossing Network — Sixth Annual Liquidnet, founded by Merrin in 1999 more VCs will take you seriously and • Waters Rankings (2008) after he scribbled a few late-night validate your concept. thoughts on a dinner napkin, allows

Entrepreneur Of The Year 2008 39 World Entrepreneur Of The Year Jean-Paul Clozel, M.D. CEO, Member of the Board, Founder; Actelion Pharmaceuticals Ltd., Switzerland, Founded: 1997

Jean-Paul Clozel, M.D., CEO, judging panel, says, “Jean-Paul took huge Overall, the group headed by Dr. Clozel member of the board and risks leaving a big, successful company to discovered seven compounds that entered founder of Switzerland’s Actelion found a new one in an incredibly difficult clinical trials. He has developed various Pharmaceuticals Ltd., was named sector — biotechnology. And those risks novel experimental models allowing the the 2008 Ernst & Young World have paid off, for Jean-Paul and his team, differentiation of these drugs, and was for his investors, and, most importantly, awarded the 1997 Hoffmann-La Roche Entrepreneur Of The Year on 31 May for the tens of thousands of patients Research Prize in recognition of his work at an awards ceremony held in Monte Actelion’s drugs help.” in that area. Carlo’s Salle des Etoiles. Actelion, a pioneering biotechnology company, Dr. Clozel, a cardiologist, was educated At the end of 1997, Dr. Clozel founded is a leader in the development in France and received further training Actelion with his wife, Martine, and work in pharmacology and physiology at the colleagues and friends Walter Fischli and of small-molecule drugs for the University of Montreal, Canada, and the Thomas Widmann, leaving the stability treatment of pulmonary disease. Its University of California, San Francisco. of his role at Roche. Initially focused products have improved the lives of After 11 years as a clinician, he decided primarily on research and development, patients worldwide. to move to applied research. During he became CEO of the company to take Clozel was selected for the prestigious his 12 years at F. Hoffmann-La Roche, Actelion public in April 2000. Just 10 award from among 48 entrepreneurs he was responsible for the selection years later, Actelion has become one representing 43 countries. All of the of the first T-channel blocker. He also of the biotechnology industry’s most nominees had been named Entrepreneur participated in the characterization recognized global success stories, Of The Year in their home countries of renin inhibitors as well as several with more than 1,500 employees and in 2007. Joe Schoendorf, Partner of endothelin receptor antagonists such as branches in more than 20 countries venture capital firm Accel Partners and bosentan and clazosentan. spread across four continents. Chairman of the prestigious seven-person

40 2007 Entrepreneur Of The Year Country Winners

Australia — Shane Yeend, Imagination India — B. Ramalinga Raju, Satyam Philippines — Wilfred Steven Uytengsu, Austria — Franz Padinger, Klaus Computer Services Ltd. Alaska Milk Corporation Schröter; NANOIDENT Technologies Indonesia — Dr. Ciputra, Ciputra Group Poland — Dariusz Miłek, NG2 Group Belgium — Simon-Pierre Gilliot, Ireland — Liam Casey, PCH Portugal — Carlos Martins, Jorge Amtoys (Noukie’s) International Martins; Martifer Group Brazil — Nizan Guanaes, ABC Israel — Lucien Y. Bronicki, Dita Russia — Aleksei Podsokhin, Communications Group Bronicki; Ormat Industries Association Alpi Canada — Peter E. Gilgan, Mattamy Italy — Lorenzo Targetti, Targetti Singapore — Robert Yap, YCH Group Homes Limited Sankey Slovak Republic — Miroslav Trnovský, Chile — Karina Von Baer, Oleotop S.A. Japan — Yoshiroh Chikaki, SkyBau, s.r.o. China — Hong Kong/Macau — Daisy NPC Incorporated South Africa — Ndaba Ntsele, Poon Wai, Ajisen (China) Holdings Ltd. Kazakhstan — Kairat Mazhibayev, Pamodzi Investment Holdings China — Mainland — Yonghao Liu, RG Brands Spain — Alberto Palatchi Rit, Pronovias New Hope Group Korea — Sam-Koo Park, Kumho Asiana Sweden — Laurent Leksell, Elekta AB Group Czech Republic — Tomáš Brezina, Switzerland — Dr. Jean-Paul Clozel, BEST, a.s. Malaysia — Edmund Santhara, Actelion Pharmaceuticals Ltd. Masterskill (M) Sdn Bhd Denmark — Peter Enevoldsen, Winnie Taiwan — King Liu, Giant Manufacturing Enevoldsen; PANDORA Jewelry A/S Middle East — Samih Darwazah, Company Hikma Pharmaceuticals PLC Finland — Jarkko Veijalainen, Turkey — Orhan Turan, ODE Insulation Inc. 3 Step IT Group Oy Mozambique — Dr. Fernand Amado Ukraine — Nikolay Lagun, Delta Bank France — Annette Roux, Bruno Couto, Manica Freight Services United Kingdom — Lord Phillip Harris, Cathelinais; Groupe Beneteau Netherlands — Dr. Ad J.M. van Wijk, Carpetright Germany — Wolfgang Gutberlet, Econcern B.V. United States — Isaac Larian, tegut…Gutberlet Stiftung & Co. New Zealand — Ashley Berrysmith, MGA Entertainment Hungary — György Jaksity, NZ Fresh Cuts Limited Concorde Securities Ltd. Norway — Jon Gjedebo, Styrbjørn AS

During his 25-year career in cardiology, CEO of Ernst & Young. “Their vision, event. Israel and Luxembourg will return Dr. Clozel has published widely in peer- leadership, determination and sheer in 2010. Known around the globe, reviewed medical and scientific journals. hard work inspire all of my colleagues the Entrepreneur Of The Year award From the beginning, his goal has and me, and that is why we are so proud provides a unique way of encouraging remained unchanged: to be involved as of the 22-year history of Ernst & Young entrepreneurial activity and recognizing closely as possible in bringing innovative Entrepreneur Of The Year. Through his the contribution of outstanding men and medicine to “his” patients. leadership of Actelion, Jean-Paul has women who inspire others with their epitomized the entrepreneurial spirit, vision, leadership and achievement. “It’s amazing how quickly Jean-Paul has improved the lives of thousands, and is built Actelion from nothing to a market The 2009 World Entrepreneur Of The very worthy of the title Ernst & Young capitalization of nearly €4 billion in a Year awards will be held 28–31 May 2009 World Entrepreneur Of The Year 2008.” highly competitive and complex sector,” in Monte Carlo. Prior World Entrepreneur says Greg Ericksen, Ernst & Young’s Founded by Ernst & Young in the Of The Year winners include: Guy Global Vice Chair for Strategic Growth United States in 1986 to recognize Laliberté, Cirque du Soleil, Canada, 2007; Markets. “His vision and passion have entrepreneurs who had created and Bill Lynch, Imperial Holdings, South enabled him to become one of the sustained successful, growing business Africa, 2006; Wayne Huizenga, Huizenga biotechnology industry’s most recognized ventures, the Ernst & Young Entrepreneur Holdings, United States, 2005; Tony Tan global success stories.” Of The Year program continues to evolve Caktiong, Jollibee Foods Corporation, and is currently presented in more than Philippines, 2004; N.R. Narayana Murthy, “Entrepreneurs achieve great things 100 cities worldwide in more than 50 Infosys Technologies Limited, India, 2003; and make a real difference to their countries. In 2009, Colombia, Estonia Stefan Vilsmeier, BrainLAB AG, Germany, customers, their employees, their and Mexico will launch programs, and 2002; and Paolo della Porta, Saes Getter communities and the global economy,” Greece will have a country winner join SpA, Italy, 2001. adds Jim Turley, Global Chairman and the World Entrepreneur Of The Year

Entrepreneur Of The Year 2008 41 Don’t get your hopes up

all alone.

Accolades are even more rewarding when they are shared with your

peers. The Ewing Marion Kauffman Foundation congratulates the

Ernst & Young Entrepreneur Of The Year® award winners. Their inspirational efforts

have helped create new businesses, grow the job market, and generate wealth across

the globe. The Kauffman Foundation and Ernst & Young share a common goal to

inspire the endless ideas, energy, and enthusiasm of amazing minds. Together, we

can make a better tomorrow.

www.kauffman.org

Proud sponsor of the Ernst & Young Entrepreneur Of The Year® awards since 1997.

KF_Ernst and Young AD Trophy 2.i1 1 10/14/08 5:12:43 PM Entrepreneur Of The Year 2008 43 Same time next year? This year’s Strategic Growth Forum brought together the world’s top CEOs, venture capitalists, industry experts and government officials with one thing in common: a drive to succeed and grow. Next year, Ernst & Young’s third annual Forum will continue the tradition, offering cutting-edge advice on growth strategies, successful IPOs, the impact of climate change and other issues vital to an entrepreneurial culture. Join us and your industry peers November 11–15, 2009 as we explore the many ways we can shape the future.

What’s next for your business? ey.com/us/strategicgrowthforum © 2008 ERNST & YOUNG L LP & YOUNG © 2008 ERNST of each Limited, Global & Young Ernst member firms of of organization a global to refers & Young Ernst in the US. member firm located LLP is a client-serving & Young Ernst legal entity. which is a separate Ernst & Young

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About Ernst & Young Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 135,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential. For more information, please visit www.ey.com. Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. About Ernst & Young’s Strategic Growth Markets Network Ernst & Young’s worldwide Strategic Growth Markets Network is dedicated to serving the changing needs of rapid-growth companies. For more than 30 years, we’ve helped many of the world’s most dynamic and ambitious companies grow into market leaders. Whether working with international mid-cap companies or early stage venture-backed businesses, our professionals draw upon their extensive experience, insight and global resources to help your business achieve its potential. It’s how Ernst & Young makes a difference. © 2008 EYGM Limited. All Rights Reserved. EYG no. GG0254

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