The Middle Market Represents…
3% of all U.S. companies
1/3 of all jobs
Almost 33% of private sector GDP
More than $10 trillion in annual revenue
1.2-plus million new jobs in 2012-2013
Superior growth rates, a track record of innovation, an exceptional corporate culture, charismatic leadership, compelling business models—these are some of the qualities we sought in choosing the Chief Executive’s Mid-Market Elite. Applying that criteria, our researchers and judges selected 100 companies that stand out amid the middle-market universe—identified as 197,000 private or public firms with between $10 million and $1 billion in annual revenues by our partners, the National Center for the Middle Market at the Fisher School of Business at Ohio State University and GE Capital.
The economic impact of this middle-market sector is real and impressive—collectively they account for 40 percent of the U.S.’s GDP. From a qualitative standpoint, these are the types of companies and leaders who fuel our nation’s reputation for innovation, passion and perseverance. Among them, the companies that make up 100 Mid-Market Elite shine for outpacing their industry peers and demonstrating strength in various qualitative attributes, from those taking on the giants in traditional industries (Jeni’s Splendid Ice Creams and the Boston Beer Company) to those leveraging technology to forge new business arenas (Zillow, Yelp, Otterbox). The pages that follow offer a capsule look at all 100, as well as a more in-depth peek at five of the Mid-Market Elite.
“I would never ask someone on my team to do something that I am not willing to do myself, and that includes calling a prospect or explaining a problem to a key client.”
In a society where the dollar volume of the online ecosystem increases at an exponential rate, the issue of data security looms large. Entities ranging from merchants and schools to health clubs, non-profits and faith-based organizations demand highly innovative and secure methods to receive payments online. A provider of secure-payment technologies, Atlanta-based Bluefin Payment Systems, serves this rapidly growing business imperative.
A decade ago, founder Ruston Miles (today, Bluefin’s senior vice president and chief of product innovation) was quick to understand that the growth of the World Wide Web and various mobile technologies were taking off while the arrangement for how people and organizations made payments lagged behind. Recognizing the potential of payment technology, Miles developed a system that helped customers feel more secure about their transactions and made processing two to three times faster than traditional methods. Today, the company’s security suite includes point-to-point encryption (P2PE), transparent redirection, tokenization and store-and-convert processes, and it is partnered with over 100 software companies and serves 15,000 merchants.
“We provide simplicity in payment integration,” explains CEO John Perry, “that allows small businesses the same type of cost savings, access to data and service that, in the past, were only available to much larger companies.”
Perry, a West Point graduate, who also holds an MBA from the Kellogg Graduate School of Management, sees his role as CEO as symbiotically connected to that of Miles. “I am an innovative leader,” says Perry, “[who] is willing to try different things in motivating my team or adjusting our business model. I am not an inventor.” This management model has paid off. Bluefin’s revenues have had a compound, annual growth rate north of 90 percent over the last three years.
The cross disciplines of innovation and managerial acumen should fuel Bluefin’s future growth. “We are adding new products and solutions that allow our clients to grow their businesses using our mobile-payments software,” says Perry, “and, at the same time, [to] ensure they have one of the best and most secure products in the payments industry using P2PE.”
“In time, the consumer even comes with us and starts to say ‘OtterBox was a case company; now they are an integrated technology company.’”
Like many startup success stories, OtterBox began life in a garage. It was there that Curt Richardson crafted the first in a series of water- and crush-proof dry boxes. These boxes were in demand by water-sports athletes, who needed them to protect various electronic devices.
As the fledgling company’s sales shot past $2 million in annual revenues, a recent college graduate named Brian Thomas joined the company. From then on, OtterBox evolved rapidly from a producer of generic dry boxes to device-specific protection products. It was Thomas who recognized the potential in the burgeoning consumer-electronics space and set about forming relationships with industry players Hewlett-Packard, Palm and Apple. Soon appointed director of sales and marketing, he continued leveraging OtterBox’s product innovations with advances in personal computers, smartphones and tablets. After nine-plus years of mentoring, Richardson turned the corner office over to Thomas.
By creating a high value, protective product, OtterBox established an industry category. The company is now the No.1 selling case for smartphones in the U.S., according to NPD Group, a global market-research company. Going forward, OtterBox is focusing on international growth with an EMEA facility in Cork, Ireland and an APAC headquarters in Hong Kong.
Viewing his role as spurring OtterBox’s associates to work at optimal performance, Thomas focuses on a two-step development process. First, he looks to bring employees to at least 80 percent of optimal performance. Once there, the task is to get them to 100 percent. Within the confines of OtterBox’s state-of-the-art headquarters, Thomas has created a Leadership Academy to help aspiring associates hone their management and leadership skills.
At Otterbox, viewing current and future product lines through the eyes of the end user is paramount. When you view your customers with empathy, you add value to the equation, says Thomas.
“Elevate yourself to be the best in class. There is always an opportunity to improve.”
In 2001, corporate CPA Shelly Sun and her then-fiancé faced a dilemma encountered by a growing number of Americans. Her fiancé’s grandmother was ill and in need of at-home care. Months of searching for a quality caregiver proved fruitless; and on the day before the two were married, the grandmother passed away. “Through our personal journey, we identified a gaping hole in the healthcare sector,” notes Sun. “We saw the need for a better in-home care option.”
Sun set out to create a business that would fill the unmet needs of those wanting quality, at-home care. Her brainchild became BrightStar Care, a company that stands at the zenith of a major demographic trend. Better medical technology has led to longer lifespans, which, in turn, is driving increased demand for professional caregivers. In fact, as many as 10-million Americans over the age of 50 are grappling with the need to care for aging parents, according to recent studies.
Sun’s business model sought to address that need. “We set out to start a business that would offer families like us a service that we were once desperate for, a service that was not being provided anywhere else,” she explains.
To expand the company’s reach, Sun opted to make BrightStar a franchise business. The company currently has more than 250 locations around the country and was recently named by the Women’s Presidents Organization as one of the nation’s 50 fastest-growing, women-led companies. Going forward, Sun is focusing on developing the talent and tools to continue that growth trajectory. “We are incubating future executive-level talent,” she says, adding that BrightStar is leveraging technology to better serve its target market. “We’ve elevated the quality of care we provide through the use of online tools. By providing free, online resources, we foster and improve the relationship between the family and the caregiver.”
Sun, the only child of an entrepreneurial father, learned perseverance at a young age. “Trying to be good is not enough for me. Never accepting failure is in my DNA.”
“Keep in mind that data analytics are becoming mainstream. We saw that data was a blind spot for companies. What most companies need is the data they don’t have and that’s what we provide.”
Some of the best ideas are created in adverse environments, which is exactly the case with Ryan Smith and Qualtrics. As a college sophomore, Smith was working for Hewlett-Packard in a summer program when his father, Scott Smith, was diagnosed with throat cancer. Smith returned home to spend time with his father and help in his recovery. To pass the time, father and son worked together to develop a system that would make it easier for academics to conduct research themselves. This idea evolved into Qualtrics.
Today, Qualtrics provides real-time insight into Big Data for more than half of the Fortune 100 and 96 of the top-100 business schools. “Qualtrics pioneered the online survey market by developing a sophisticated yet simple-to-use solution for academic researchers,” says Smith. “What started in academia has since spread like wildfire to corporations.” Qualtrics propels the ability to digest data beyond researchers to anyone in any business who wants insight into what customers think and, more importantly, what customers want.
Smith prides himself in giving his clients not only insight into big data but an exceedingly intimate level of customer service. “I was the only sales rep at Qualtrics for the company’s first three years,” he says. “The only time I find myself getting depressed is when I’m not talking to customers.”
Another source of satisfaction for Smith is Qualtics’ corporate culture. Other than Smith’s CEO post, there are no job titles at Qualtrics. “We’ve developed an execution system that is transparent,” he explains, “Notes from every meeting and every internal document are published and available to anyone.” This level of transparency allows employees to focus on the external factors impacting Qualtrics, instead of spending intellectual capital determining what is going on inside the company.
Qualtrics’ success has not gone unnoticed. The company was recently listed as one of Forbes’ “Most Promising,” while Smith was recognized as one of the “Most Promising CEOs under 35.” As Qualtrics expands its client base at home and abroad, Smith pledges not to rest on his laurels. “Innovation,” says Smith, “has a short shelf life.”
“North American Power is the most perfect reflection of everything that is important to me.”
North American Power is the result of Kerry Breitbart’s inability to retire combined with his desire to transform a moribund marketplace.
Before co-founding the company, Breitbart had already achieved success, spending 30 years in commodity and energy trading at United Companies. During his tenure, United Companies became the first over-the-counter energy broker in the derivatives and futures markets, opened offices in London and Singapore and was a market leader in brokering energy products, including crude oil, gasoline, heating oil and fuel oil. Breitbart began his career at United as a crude-oil broker and worked his way up to president and CEO. When the company was sold in 2005, Breitbart retired.
Sitting on the sidelines, however, did not mesh well with Breitbart’s persona. Spotting potential in the $70-billion retail-electricity industry, which was undergoing deregulation, the then-59-year-old came out of retirement to create North American Power in 2009.
North American Power supplies electricity (much of it generated using renewable sources) along the East Coast, including Connecticut, Maryland and Pennsylvania. The company competes with traditional utilities by buying energy in the wholesale market and delivering it at lower cost (using the same utility’s own infrastructure). Breitbart’s innovation lies in the vanguard concept of network marketing. Via network marketing, customers switching to North American Power can earn cash rewards through referrals. “We looked at Amway, Mary Kay [and] Avon and realized that one bad element was that [customers] did not earn money,” says Breitbart, who set about revolutionizing the retail-electricity space. “I wanted to give a robust financial incentive, as well as [to] give people the tools to educate others to do the same.” Empowering consumers paid off. Today, North American Power boasts 260,000 customers and growth prospects remain strong.
North American Power plans on moving aggressively into the renewable-energy segment. Breitbart hopes to leverage people’s desire to take control of their individual energy needs by offering a methodology to promote renewable energy.
“I have no ego because I am not foolish enough to believe it is all me,” says Breitbart of his leadership style. “I am not humble but a very self-aware CEO.”
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