Convio
Austin, Texas
Projected 2005 sales: $20 million
Description: Provider of online constituent relationship management software and services for nonprofit organizations

The sound of business: Austin, Texas, is known for its music scene, but it has also built a reputation for innovative technology. While so many tech startups were sprouting in Silicon Valley, Convio decided to launch in the Lone Star State. "We could build a business more economically here than we could on the West Coast," explains chief strategy officer Vinay Bhagat. What he and David Crooke, Convio's CTO, built is a for-profit company that uses the internet to improve the way nonprofits communicate and work with their constituents.

Money matters: Bhagat and Crooke met while attending school at the University of Cambridge in England--a long way from Austin. "We had dreamed and talked about one day starting a company together," says Bhagat. Years later, after reuniting at Trilogy Software in Austin, they got their chance. The Convio concept was born when Bhagat volunteered for a public TV pledge drive and was amazed at how antiquated the fundraising system was. He was confident that his idea to build an internet system for nonprofits would fly. Says Bhagat, "What attracted me to this idea was that it could be a neat way to combine building a business with having a real impact on the world."

Story continues below ↓

Without a net: When most entrepreneurs start a company, they risk losing capital if the venture fails. While Bhagat left his high-paying job to self-finance six months of research into Convio's business concept, Crooke risked being deported if the business didn't get off the ground--he was a British citizen who left his job to found Convio, despite the fact that he didn't have a green card. A $4.6 million round of venture capital from Austin Ventures in 1999 allowed the founders to breathe a sigh of relief.

Role models: Crooke's role as the technical force behind Convio hasn't changed, but Bhagat made a big move in 2003 to bring in an experienced CEO while he switched over to the chief strategy officer role. "I put my ego aside," says Bhagat. With the founders' focus, drive and passion, Convio has helped nonprofits raise over $175 million and put e-philanthropy on the map. --Amanda C. Kooser

Jonathan S. Bush, 36, & Todd Park, 32

Athenahealth
Waltham, Massachusetts
Projected 2005 sales: $38 million
Description: Internet-based revenue-cycle management provider for the health-care industry

Wisdom and war: Athena is the goddess of wisdom and prudent warfare. Athenahealth brings both qualities to its internet-based billing and revenue-cycle software solutions for medical providers. Wisdom is a quality the founders have picked up over the varied life cycles of the company. According to Jonathan S. Bush, "The prudent warfare is using technology to get large, impersonal insurance companies to pay their claims properly."

A business is born: In 1997, Athenahealth as it is today was just a gleam in the founders' eyes. Originally, Bush and Todd Park bought an OB-GYN clinic in San Diego county that they refer to as "the baby company." They both had backgrounds in health care and had met while working at strategy and technology consulting firm Booz Allen Hamilton. "We believe the battle for health care will be won or lost in the doctor's office, so we wanted to be close to that," says Park. But they didn't expect the jungle of red tape that came with getting claims paid.

Growing pains: Burned out and frustrated with the baby company's withering finances, they went looking for an internet-based billing solution to ease their woes. They couldn't find one, so they built one themselves--and discovered a larger truth. "Billing is killing and frustrating physician practices across the country," says Park. The founders realized they could do more good on a larger scale by making their technology available to physicians everywhere, and Athenahealth was born. Several rounds of VC funding got them growing.

Beyond billing: "We believe passionately that we are on the same mission we were on when we started the baby company, which is to make health care work the way it should," says Park. That mission doesn't stop with billing. Athena-health is rolling out a major new project for 2006 that will bring the same process control to the clinical side, helping to keep track of lab orders, results and prescriptions.

Athenahealth is the dominant online revenue-cycle management company in an industry that remains highly fragmented. "After all this success, we have less than 1 percent market share," Bush says. That leaves a whole lot of room for Athenahealth to grow. --Amanda C. Kooser

Ryan Duques, 29, & James Warner, 29

Shore Publishing
Madison, Connecticut
Projected 2005 Sales: $7.5 million
Description: Publisher of 16 community newspapers in Connecticut and Rhode Island

Class act: Walking around the halls of their high school together, childhood friends Ryan Duques and James Warner knew they wanted to start a business. They'd already tried their hands at lawn care and tie-dye T-shirts, and in 1994, just as both turned 18, they started a publishing company to help businesses market to the local community. Eventually, they produced promotional fliers and even a local restaurant guide. While attending college, their deep ties in the community as well as Duques' experience at his college's newspaper led the two to set their sights on something bigger--a community newspaper. Says Duques, "The first edition went out in March 1996, and we fell in love with the newspaper publishing business."

Set it free: The basic revenue model for Shore Publishing was to sell ads to local businesses and distribute the paper gratis to everyone in the community. But when Duques and Warner launched their second newspaper, they went the paid-subscription route. They quickly saw their mistake, as both advertisers and readers balked, and the company lost revenue. "We realized just how fragile things can rapidly become," says Duques. "You may feel that [your choice] is right, but if your customers aren't feeling the same way, you have to adapt." After re-evaluating the business model, they went back to what originally worked and re-launched the free paper.

Playing nice with others: Employee morale and passion are paramount to Warner and Duques. "We cultivate a corporate culture that is fun, creative, high-energy, aggressive and entrepreneurial," says Warner. The pair also entered into a partnership with New London, Connecticut-based Day Publishing, which took on an equity stake in the company in 2003, giving Shore myriad new resources, from IT support and better printing rates to capital and equipment.

Poignant press: Covering 9/11 through the eyes of a local businessman who traveled to New York City to distribute flashlights was a particularly moving moment for Duques. He and Warner love the niche they've carved out with Shore's 16 titles and plan to expand into even more Connecticut and Rhode Island communities. --Nichole L. Torres

Shawn Prez, 34

Power Moves Inc.
New York City
Projected 2005 Sales: $3 million
Description: Street promotion, marketing and event-planning company

Self-promoter: As senior director of promotions for Bad Boy Entertainment, Shawn Prez promoted CD and record releases for Sean "Diddy" Combs' label. Impressed clients sought out Prez to handle additional work after the initial projects with Bad Boy were completed. In 2002, Prez felt it was time to start his own business. "I knew promotions inside and out and was at a point where I made more money on the side than with my salary," he says. Combs supported Prez's entrepreneurial endeavors and became Power Moves' first client--he hired the company to be the marketing force behind his "Vote or Die" election campaign. Says Prez, "That was really my proudest moment."

Testy waters: Even with Combs as a client, startup wasn't totally smooth for Prez. Four months into business, a big client abruptly pulled out. "We lost a big chunk of our revenue, and it was sink or swim," Prez recalls. Rather than give up, he sat down with his staff and his accountant to strategically map out the next six months. Power Moves not only pulled through lean times, it flourished and has now served diverse clients ranging from those in the music industry to HBO to a labor union.

Street smarts: Prez knows traditional advertising doesn't work with Generation X and younger groups. Power Moves instead targets lifestyle locations, such as barber-shops, bodegas and even street corners, to embed clients' products in consumers' minds using posters, CDs and more. The company's handpicked "street teams" consist of hip, trend-dictating urbanites between the ages of 18 and 27. They're paid to report on what's hot and what's not, covering 31 markets in the U.S. as well as Europe and Japan. Prez stresses that the urban consumer isn't confined to a particular color or race. Says Prez, "It's a mind-set, a lifestyle." --April Y. Pennington

CONTINUED

< Prev | 1 | 2 | 3 | 4 | Next >

Discuss Story On Newsvine
Rate Story:
View popularLowHigh
Email
Instant Message
Print