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Wednesday, June 24, 2009

Growing your business exponentially

Want to know how to grow your business 20,000 per cent over the next three years? Take a look at the September issue of US entrepreneur's magazine Inc., which contains this year's list of the fastest growing private companies in America.

The ludicrously high headline figure (20,128.9 per cent, to be precise) comes from a company called MemberHealth, which struck it rich in the US health market prior to agreeing a tasty $630m buyout offer earlier this year. But while it leads Inc.'s highly-respected Top 500 listing, it's just one of many companies enjoying super-quick growth. Companies from a broad cross-section of industry have made it into the ratings, and as always, the tech sector has a fair showing.

One point that stares you in the face on the listings is just how big a part luck plays in making silly money. After MemberHealth, the second fastest-growth company on Inc.'s list this year is a telephone switch supplier that happened to get a big break from a deal with a large US cable company. Net result? Three-year growth of 14,853 per cent with current revenue of $68.1m.

But while luck matters, good ideas still count. In the software field, Turning Technologies is the highest ranked company at number 18 - it develops software and hardware extensions to Microsoft PowerPoint which allow members of the audience to interact with a presenter using handheld devices. If the thought of presenting in public makes you break out in a cold sweat, this is probably the last thing you want to get involved with, but the software clearly has applications in education and other fields.

Other noteworthy representatives from the software sector include SPADAC at number 32, which makes predictive geospatial software - the sort of stuff governments use to predict where terrorist infrastructure attacks might take place, and the stuff companies use to work out where they should locate. And then there's TopCoder, 45th in the growth stakes with revenue of $14.8m and three-year growth of 2,459 per cent. This is a company that really is breaking the mould with its software coding competitions, where companies - including blue-chips - submit coding problems to a network of over 115,000 freelances, who compete to provide answers. The set-up works well for everyone: the customers get some relatively cheap development work, while prize money for freelances can reach a cool $100k.

Inevitably, though, the success of some of the top-performers is less about technology and more about its creative application. Take Bill Me Later, number six in the list with three-year growth of 8,650 per cent, revenue of $53.6m and 100 employees. It provides an online billing system that eases consumer concerns about entering credit card details over the internet by using purchasers' birth dates and part of their social security number. As its name implies, consumers also get billed later, which definitely helps get them excited.

And good ideas don't have to be ground-breaking ideas either. Position number 34 in Inc.s' list is held by a company that sells software for medical practice billing and record-keeping, and brings in revenue of $38.2m in the process. Likewise, TaxStream, which makes accounting software for large public companies, comes in at 51.

Finally, if you're of a creative bent, take comfort from the fact that style can indeed win over substance. The consumer products field is led by one of last year's listed firms, Digital Lifestyle Outfitters, which makes a range of accessories, including cases, for iPods and other handhelds, and was recently bought out. No mystery there about the cause of its success - although with revenue of $98.6m and just 70 employees, it definitely fits into the 'wish I'd thought of it first' category.

By Keith Rodgers