Saturday, January 29, 2011

The Body Jewelry Magnate

With Vanessa Nornberg at the helm, Metal Mafia, a supplier of body jewelry, has not felt the effect of the recession.

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Mark Hartman

Vanessa Nornberg, President of Metal Mafia

What recession? Sales at Metal Mafia, a New York City–based company that supplies body jewelry -- nose rings, belly rings, and more -- to 4,000 retailers in 23 countries, surged more than 30 percent over the past year. Indeed, growth has been steady since Vanessa Nornberg founded the business in 2004. Metal Mafia brought in $3.5 million in 2008, sending it to No. 258 on the 2009 Inc. 500.

I think body jewelry is like chocolate or cigarettes: It's something that gives people comfort even in the worst of times.

I have a tattoo and multiple piercings; I've had a nose ring since I was 17.

My first job out of college was working as a sales rep for a business that sold sterling silver body jewelry. I quit after a year to get my master's and eventually moved to France. A few years later, my old boss hired me back to run the company for him. Two years later, I started my own business.

We started with the idea that we could do things for our customers that weren't being done by our competitors.

We do all our own designs. While we offer a lot of basic products like a plain tongue or navel barbell, we also have products that are more decorative and innovative. Our ball-bearing tunnels are earrings for people with stretched earlobes; they contain actual ball bearings that spin. We also use interesting materials, such as olive wood and crocodile wood.

All 15 of our employees are based in one office in Midtown. We stock 7,000 products there. I am a control freak, so I like to have my people and products in my line of sight.


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Friday, January 28, 2011

The High Fives: The Top 5 Minority- and Woman-Run Companies

A look at some of the most interesting people and places on the Inc. 500

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Getty

Raj Prasad
WDFA Marketing • No. 5

Prasad was born in Fiji and moved to the U.S. at 2. He landed his first advertising job at 16 and at 25 founded WDFA -- which runs microadvertising campaigns. "It's all about buzz."

Kevin Paul
KPaul • No. 10

Paul moved from India to Indianapolis at 8 and joined the Army straight out of high school. His business, KPaul, sells supplies to the government. Paul says 14 years in the service taught him how to handle clients. "Just give them the facts -- don't sugarcoat anything."

Siva Kumar
TheFind • No. 12

Kumar's grandfather started one of India's major movie studios, and his relatives operate theaters and produce movies. But Kumar chose to forge his own path. He moved to the United States in 1981 and started the e-commerce site TheFind.com in 2004. "I just want to do things on my own."

Michael Evangelista-Ysasaga
The Penna Group • No. 13

Evangelista-Ysasaga started a general contracting firm at 18. When he became a lawyer, his clients were builders. Now he manages construction projects for federal agencies. "Contractors don't always generate good paperwork. But for the government, documentation is critical."

Amit Raut
Digital Advertising • No. 14

Raut, the son of Indian immigrants, launched Digital Advertising in 2000. The company does just what its name suggests: manages online marketing and lead generation campaigns. "It's all about delivering superior service."

29 San Francisco Bay Area

23 Dallas-Fort Worth-Arlington, Texas

27 Los Angeles-Long Beach

48 New York metro area

48 Washington, D.C., and Maryland and Virginia suburbs

Jamie Arundell -- Latshaw
Lexicon Consulting • No. 4

A West Point grad and former officer in the U.S. Army's Transportation Corps, Arundell-Latshaw founded Lexicon in 2005. The company creates mock Iraqi and Afghan villages used to train military personnel. "Service members need the most realistic training possible."

Maria Vogt
Ayuda Management • No. 22

Vogt learned the ropes of government contracting at her father's IT business. In 2002, she launched Ayuda Management, which provides construction management services to government agencies. "I thought, I might as well win work for myself and hire good people to do the work."

Marie Diaz
Pursuit of Excellence • No. 26

Diaz puts family before work. In the early days of Pursuit of Excellence, the human-resources firm she founded in 1994, she often turned away work to spend time with her three sons. "Now, it's easier to focus on the business."

Eileen Gittins
Blurb • No. 47

Gittins is the founder of Blurb, a website on which writers and artists design, print, and sell books. She attributes Blurb's success to the rise of social media. "People who are not authors now have audiences that want to see their books."

Mindy T. Withrow
CSS Distribution Group • No. 55

Withrow and her husband, Daniel, were packaging-industry veterans when they launched CSS, a warehouse supply business, in 2006. Mindy got the CEO title thanks to her sales experience. Being a certified woman-owned business helps CSS land key accounts. "Clients can get tax breaks for dealing with companies like us."


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A Supplier of Film Extras Now Trains Military Troops

Jamie Arundell-Latshaw's company Lexicon Consulting creates mock villages to help train troops who are headed overseas.

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Lexicon Consulting, in El Cajon, California, got its start by providing extras for big-screen military battles. Now CEO Jamie Arundell-Latshaw's company creates mock Afghan and Iraqi villages to help train troops who are headed overseas. She spoke with Inc.'s Jason Del Rey about Lexicon (No. 4), the top woman-run company.

What are the most radical circumstances your employees replicate?

At Fort Irwin, in California, as troops and medics drive up to a village, a rocket-propelled grenade goes off, a car explodes, and we have role players screaming and chanting. We hire amputees who fall out of vehicles. The wounds look realistic, and they're set up in a way that the medics have to put pressure on the wounds and stop the bleeding. Our goal is to make the simulation as real as possible.

Where do you find your role players?

One of the reasons we have our office down in El Cajon is that there's a big Iraqi population there. Our recruiters know what we're looking for.

So, what do you look for in a role player?

We want people who can speak the language and understand the culture. And we also want people who have a passion for training troops the right way. Without that, you're not going to be motivated to go above and beyond to provide a better service.

What is your biggest challenge going forward?

We're growing so fast, so our challenges are hiring people who share our goals and having liquid cash. We don't always get paid by the government within 30 to 60 days, so we have to balance trying to get new work with making sure we have money to perform the work.

And the most rewarding part of the job for you?

When troops return from multiple deployments overseas, the role players and managers who worked with them often get feedback like, "Learning what to do in each scenario made a difference in how I performed over there."

To learn more about Lexicon's military training work, "Lexicon Consulting," and to browse the complete Inc. 500/5000 list online, go to www.inc.com/inc5000.

Inc. Live: Ask Top Entrepreneurs Your Questions

Check out our new series of live video chats featuring accomplished entrepreneurs such as Inc. columnist and 37signals co-founder Jason Fried, Zappos CEO Tony Hsieh, Mint.com founder Aaron Patzer, and Method co-founder Eric Ryan. To view the schedule of chats and watch archived chats, and to pose a question during our next chat, go to www.inc.com/live.


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How Bill Bartmann Lost It All and Got It Back

Bill Bartmann lost $3.5 billion and his company. Some people would have been discouraged by that.

As told to Darren Dahl |  Sep 1, 2010 Ready for More Bill Bartmann says losing $3.5 billion really wasn't so bad.

" href="http://www.inc.com/uploaded_files/image/feature-94-Bartmann-pop_4927.jpg" alt="Ready for More Bill Bartmann says losing $3.5 billion really wasn't so bad."> Mike McGregor

Ready for More Bill Bartmann says losing $3.5 billion really wasn't so bad.

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Bill Bartmann has known great success, but he is best remembered for losing some $3.5 billion in paper wealth and his status as one of the richest people in the U.S. That was 12 years ago, when his debt-collection company, Commercial Financial Services, collapsed in scandal. But Bartmann has been climbing back, using Bill Bartmann Enterprises first to tell his story through books and on the speaking circuit, then to teach other people how to make money collecting debt the way he did with CFS. And now, at 61, he has yet another big idea.

In October 2008, I was watching television with Kathy, my wife of 38 years. We were watching C-SPAN at the moment Secretary of the Treasury Henry Paulson stood up on a podium and asked Congress for $700 billion. After he said that, we just looked at each other with stupefied looks on our faces that said, "Is this really happening again?"

What Paulson was doing was running the same plays the government did back in the 1980s with the Resolution Trust Corporation after the failure of the savings and loan associations. We had built our company, Commercial Financial Services, at that time by buying up debts from the government on the cheap and then collecting on them. After we experienced that sense of déjà vu, I asked Kathy if she wanted to go do it all again. She said no, that was a lot of work and we're older now. That's when we decided to do it a different way. We would show other people how to do it.

We started CFS in 1985. It was phenomenally successful and was a four-time Inc. 500 company. We also had a lot of fun. I once leased 27 Boeing 747 jets to fly our 3,900 employees and their guests to Disney World for a weekend. Another time, I dressed up like Caesar and was carried on a throne into a Las Vegas casino, where I then wrestled Hulk Hogan in front of 6,000 people. In 1997, I was called the 25th richest person in the U.S. Then I lost it all.

CFS ceased to operate after an associate of mine was convicted of a crime. Everything came to light after someone sent an anonymous letter to the credit rating agencies. When I confronted my associate about it, he didn't deny it. He eventually went to prison for five years, but our reputation was ruined.

You can't imagine how hard it is as all of your friends start running away from you. The words of those people who accused me and made allegations have faded. But when I think back to the friends who weren't there -- that hurts more than strangers accusing me. It's easy to forgive strangers since they don't know any better.

It got worse when the federal government decided to indict me on 58 felony counts. That's a world-class problem. That's not like having a bad-hair day or losing a deal with a customer. When the government indicts you, it's calamity time.

Fortunately, Kathy and I mustered the courage and strength to deal with the adversity. I was innocent of the charges and refused to take the misdemeanor deal they were offering. I challenged them and went through a full-scale trial. Eventually, I was acquitted. I even received an apology from the government for prosecuting me, which rarely happens.

But I was bankrupt, and I wondered why all this bad stuff was happening to me. But what could I do? Blame someone else? Cry in my beer? It wasn't the first time I had lost everything. I needed to find a way to crawl out from the hole I was in, to come back one more time. I have always gotten back up after someone knocks me down. I grew up in a rough neighborhood and pulled myself up time and time again. I'm not sure why. Maybe I'm still trying to prove something to my third-grade teacher.

I took a good look at my personal inventory by asking questions like, Who am I? What do I know? What am I good at? What am I not good at? From that, I figured out I had a great story to tell about overcoming adversity and challenges. I decided what I should be doing is teaching my story so that when other people suffer their own calamities, my experiences might encourage them. So, I wrote a book and started traveling on a speakers' tour with people like Steve Forbes and Colin Powell. It was called the Get Motivated! tour. And so I stood onstage in front of 50,000 people and told my story.

I got to tell about what it was like to go broke, something most people don't like to admit. But I would tell them with a smile that I went from the 25th richest person in America to the 25th brokest person. I let them see that you can survive anything. It is every bit as bad for people suffering from losing jobs and their homes as it was for me to lose $3.5 billion. My job was to give them hope and inspiration that they could overcome their challenges.

But then there was Paulson on C-SPAN. Lo and behold, I recognized the same economic gaps that existed in the 1980s were back. I thought, Wow, this is too coincidental. There must be a purpose to this. At 59 years of age, I didn't want to build another billion-dollar company. But I could teach other people how to do what we did at CFS, to buy people's debts for nickels on the dollar and then treat them with dignity and respect. People want to pay their debts, but not everyone has to for you to make money. Now, we teach people how to create their own businesses during these tough economic times, which helps them make money and overcome adversity at the same time.

Our program is like going to school. We offer a two-day seminar in Palm Springs that introduces the topic and the industry. We also offer a five-day program where I'm the instructor. When people pay you money, they want to learn from you, not a surrogate or substitute. We have had more than 2,000 people go through the program.

As we saw how well our students were doing, Kathy and I looked at each other again. And this time, we said, "This is too good an opportunity to pass up. We need to do this." So, we launched a new company on July 1, 2010, called CFS II. We hired eight former CFS employees to get started and then started talks with hedge funds on raising $400 million, which we will use to build a new debt portfolio.

We are about to see history repeat itself. I see a great future coming out of this bad economy. I really feel bad for all the people on the wrong side of the coin. But if we help those people come out of it and we get paid, that's a great thing.

Going broke has helped me by providing me with opportunities to succeed. What separates successful people from those who aren't is the way you deal with problems. And, as an entrepreneur, there will inevitably be problems. It's the nature of the beast. I do understand that there could be another challenge in front of me, something I accept and embrace. But I do work hard every day to make sure it doesn't happen. I want my two daughters, who both work in the business, to succeed me and have a thriving business to manage in their lifetimes. You have to be a masochist not to hope for a happy ending this time.


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For These Business Partners, Age Is Just a Number

Amy Gonzales and Kelly Caldwell didn't allow their difference in age to stand in the way of their partnership.

As told to Darren Dahl |  Sep 1, 2010 Good to See You Kelly Caldwell (left) and Amy Gonzales get together once a month or so.

" href="http://www.inc.com/uploaded_files/image/feature-128-AKEnviro-pOP_4929.jpg" alt="Good to See You Kelly Caldwell (left) and Amy Gonzales get together once a month or so."> Mike McGregor

Good to See You Kelly Caldwell (left) and Amy Gonzales get together once a month or so.

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Amy Gonzales, a geologist and wetlands scientist, played mentor to Kelly Caldwell, a biologist, at their former employer, for which they did environmental-impact studies of proposed gas pipelines and other energy projects. When Gonzales grew frustrated with her bosses, Caldwell, who was 17 years her junior, suggested they start their own company. The result is AK Environmental, which performs environmental surveys and manages construction projects nationwide. The women run their company virtually—Gonzales lives in New Jersey; Caldwell, in North Carolina.

Kelly Caldwell: I think people thought we were nuts to quit our jobs and start our own business. I think they also said, "Is Amy crazy to trust this kid?" I was just 26 at the time. She was the one with all the experience.

Amy Gonzales: I didn't even think about her age. If people can do their job, it doesn't matter how old they are.

KC: People would always tell me that it was strange that Amy and I never worked in the same place. But we never did. She mentored me, but I was in New Jersey, and she was in Pennsylvania. I call her 10 times a day and e-mail constantly. Communication has never been an issue between us.

AG: I own 60 percent of the business, and Kelly owns 40 percent. In the beginning, we both worked from our homes. In 2004, we hired my husband, Ed, who is an engineer. That's when I moved my office out of the house, because we couldn't work together very well.

KC: Around that same time, I had my first daughter and stopped doing fieldwork. We were doing other hiring as well, and as we started to grow—from six employees to 11 and then to 40—it became increasingly important for me to focus on the business side of things anyway, like payroll, invoicing, and insurance. When I had my second daughter a few years later, I did payroll in my hospital room as the nurses went in and out.

AG: I focus on the technical and marketing aspects of the business, and Kelly does an amazing job focusing on issues like banks and payroll. There isn't a lot of overlap.

KC: I admit that I miss doing the fieldwork from time to time. But this role was what I needed to do. Now, I don't think I could trust anyone else to do this.

AG: I've had employees ask me why they have to carry a business card around that says our company is a woman-owned enterprise. And I tell them, "Because it is." We work in a male-dominated industry, and we're proud of how quickly we can turn projects around and cut through the red tape. And, while we are serious about our business, we like to be lighthearted, too. Sometimes when we're in meetings with clients, it's like they have never heard anyone laugh before.

KC: The funny thing is that Amy and Ed are very well known in the industry. I have had employees or customers ask if I'm Ed's daughter. I even had an employee tell me he didn't know I was one of the owners. It makes me laugh to think about it. Ed actually reports to me, but mostly just for technical reasons. The three of us work well together.

AG: Kelly makes a real effort to visit the staff out in the field, so she sees more of them than I do. We have done work in 20 states, so we have staff all over the place. We encourage everyone to call and talk to us. We also try to do marketing things together so that our clients can see the face of AK. They always seem excited when they figure out that, Oh, AK comes from Amy and Kelly.


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Inc. 5000 Update: Dirt Pros

Business lessons from the basketball court.

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Jeffery Salter

Marcell Haywood of Dirt Pros

Marcell Haywood, a former point guard for the Florida State Seminoles, says most of what he knows about business came from sports. In particular, Haywood, now 30, stresses teamwork at his 280-person company, Dirt Pros, which provides maintenance services for businesses in South Florida. Dirt Pros brought in $2.6 million in 2008 and captured the No. 232 spot on the 2009 Inc. 500.

I got the idea for Dirt Pros back in 2003, when I was still in school. Before a game against Georgia Tech, I met a gentleman who had just sold a janitorial business for $6 million. As I sat there icing my elbow, I knew I wasn't going to play basketball forever. Starting a business like his seemed like the way to go.

On the court, I was a point guard. My job was to facilitate and distribute and get everyone involved. I use those same skills now as a CEO.

My responsibility is to give the people the resources they need to be successful and then get out of the way.

We made the decision to switch to using only environmentally friendly chemicals and products, because we didn't want our employees exposed to anything that would harm them. We stopped using bleach, for example, because it causes upper respiratory problems. It cost us a mint to make the switch, and we got pushback from some of our customers. But it was the right thing to do, and it has paid off for us since.

One of our missions as a company is to create 1,000 quality jobs in South Florida. Part of that is doing our best to engage our employees as much as possible. Rather than tell them what to do, I ask a lot of questions about what we should be doing. Our turnover rate is one-third of what is typical in the industry. I'm proud of that.


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Thursday, January 27, 2011

How Google Cost Me $4 Million

Being penalized by Google made Ryan Abood’s company stronger.

As told to Nitasha Tiku |  Sep 1, 2010 Take Your Medicine Ryan Abood fessed up, then made big changes.

" href="http://www.inc.com/uploaded_files/image/feature-102-Abood-pop_4947.jpg" alt="Take Your Medicine Ryan Abood fessed up, then made big changes."> Mike McGregor

Take Your Medicine Ryan Abood fessed up, then made big changes.

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When Ryan Abood looked at the books for his parents' New Hampshire flower shop, one number popped out. Without a bit of advertising, sales of gift baskets had grown 400 percent. For a year and a half, he worked a hundred hours a week to make his spinoff, GourmetGiftBaskets.com, into the third-largest player in his niche. Then, one day, he woke up to find that Google, the source of 80 percent of the company's revenue, had banished his site from its search results. His company ended up the better for it.

On November 11, 2008, I woke up at 6 o'clock and did a Google search on my phone, like I do every morning. We're usually one or two for just about every industry keyword. But we were nowhere to be found. I opened up my laptop. We weren't in the first thousand results. This was right before the holiday season, when we typically make 40 to 60 percent of our annual revenue. It was really, really devastating.

We weren't sure what had happened. Occasionally, Google will drop a site from the index -- just algorithmically forget about you for a few days. People said, "You either have some type of temporary exclusion, or you have a penalty."

I called the two companies we hired to improve our ranking. In the past, I'd done all our search-engine optimization myself. But as we grew, we started paying companies to reach out to relevant sites and ask them for links. Instead, one of the companies admitted it was paying for links. Google looks at that like buying an election.

Google has a form called the re-inclusion request. We call it the Google confessional. We said, "These are the links that were paid; these are the links that weren't paid. We've obviously violated your trust, and we're taking steps to remedy it."

That holiday season, we pay-per-clicked out the wang. We spent a lot of money. They penalize you organically, but they still let you buy ads. We leaned on our affiliate channel. Meanwhile, we were slashing inventory, letting people go, getting neat and trim. It ended up costing us $2 million in sales that winter and another couple million in 2009.

Before the penalty, we had zero social media presence. We sort of looked at it like, "It must be nice to have the time to do that." Now, as part of our whole strategy of never buying a link again, we blog about anything. We're up to 3,200 Facebook fans. We Twitter every day.

This March, we also hired a manager of comparison shopping, a social media manager, an affiliate marketing manager; and we have someone in-house to watch our link portfolio. If somebody might misinterpret a link as paid, we take it down. We're not messing around.

We didn't see the kind of ratings we had before the penalty until Google's Caffeine update, this June. That was our final pardon. Now we're back at the top.

Without the Google penalty, we wouldn't be anywhere near as far along as we are. You have two choices: You can roll over and die, or you can grow beyond it.


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Why I Stepped Down

Why the former CEO of Eco-Products, Steve Savage, thought the family business would be better off with a more experienced leader.

As told to Jason Del Rey |  Sep 1, 2010 Letting Go Steve Savage wondered if the family business would be better off without him.

" href="http://www.inc.com/uploaded_files/image/feature-186-Savage-pop_4942.jpg" alt="Letting Go Steve Savage wondered if the family business would be better off without him."> Mike McGregor

Letting Go Steve Savage wondered if the family business would be better off without him.

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During a summer hike with his son, Steve, in 1990, Kent Savage proposed they start a business that would distribute products made from recycled content. Over the next decade, they built Boulder, Colorado–based Eco-Products into a profitable distributor of items such as earth-friendly disposable cups and cutlery. After Kent died, Steve oversaw an ambitious shift in the business model. The change spurred phenomenal growth. But with that growth came a startling realization for Steve: Perhaps the best thing for the business would be for him to step aside.

My dad retired in 1999. That's when I became president and CEO. For 15 years, we were a retail distributor for other manufacturers. We started to have abnormal success in restaurant supplies and realized if we ever really wanted to grow the brand, we needed to start manufacturing the products ourselves.

In 2005, we began a two-year process of transforming into a manufacturing wholesaler. We wanted to expand into new sales channels, such as office supplies and retail, but I didn't have any experience in those areas. We also wanted to start making acquisitions.

At first, we tried to hire a CFO who had the experience we needed. It was during that process that I thought, You know, I don't think having a CFO is going to solve our problem. I realized that we needed to look at my position. The company is very special to me. It's a family business, so I wanted what was best for it, and I thought it may be best to hire a more experienced CEO.

I mulled over the decision for three or four weeks. My siblings and mom own stock in the company, but they aren't involved in business decisions. My wife was supportive, though she was more nervous than I was about the move. I also had lunch with Aaron Kennedy, the founder of Noodles & Company. He told me that going from CEO to executive chairman of his business was the best decision he ever made. That helped.

It was definitely emotional, but by the time I made up my mind, I was 100 percent certain it was time to step down. I led the process to find a replacement, with the help of three board members. We notified our management team, and they interviewed our final two candidates. One of them was Bob King, who had taken Corporate Express from a $50 million business to a $4.5 billion business. It was obvious that he would be a great replacement.

I announced the news to the rest of the company at 8 o'clock in the morning on Bob's first day in July '09. The team was a little nervous at first, but when Bob stood in front of the group and started to talk about his background and the future of Eco-Products, they responded very well.

As expected, Bob has expanded Eco-Products into new channels with ease. Today, our products are available on the Staples and Costco websites. I'm chairman of the board. I go to the executive meeting every week, so I know what we're doing and why; I'm just not involved in rolling it out. I spend 10 percent of my time on Eco-Products and the rest on National Eco Wholesale, a distributor of eco-friendly products, and Ellie's, a retail store. Eco-Products was my firstborn, but I love what I'm doing now.

My father passed away in 2003, so he didn't witness the transition. But people who know my family often say, "Your dad would be proud." I know he would be.


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The Case for the Virtual Company

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jQuery.event.add(window, "resize", resizeFrame);jQuery.event.add(window, "scroll", reposition);var startpos;var startpos2;function posinitiator() {var offset = $("#inctv-player-wrap").offset();var offset2 = $("#incsharebox").offset();startpos = offset.top;startpos2 = 0-(offset2.top - offset.top);}function resizeFrame(){ var w = $(window).width(); $("#incsharebox").css('float','left'); $("#incsharebox").css('margin-left','-98px'); $("#incsharebox").css('border-color','#CCCCCC'); reposition();}function reposition(){var s = $(window).scrollTop();var w = $(window).width();$("#incsharebox").css('position',(s>startpos) ? 'fixed' : 'relative');$("#incsharebox").css('left',(s>startpos) ? '50%' : '0px');$("#incsharebox").css('top',(s>startpos) ? '0px' : startpos2);$("#incsharebox").css('margin-left',(s>startpos) ? '-575px' : '-98px');}The Case for the Virtual CompanyStephen Felice | Dec 9, 2010 ' />  Tweet
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Ten years ago, technology made virtual companies possible. Today, advances in everything from virtualization to cloud computing will change not just where business is done but also how. Entrepreneurs are ideally positioned to extend their reach and effectiveness while maintaining the humblest of physical presences.  Experience firsthand this new workplace, and learn best practices to take your company virtual.

Stephen Felice, president of Consumer, Small and Medium Business at Dell, discusses these trends.


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Tab 1Tab 2Revenue is between
$1 million$5 million$10 million$25 million$50 million$100 million$500 million$1 billion$5 billion$20 billionand$5 million$10 million$25 million$50 million$100 million$500 million$1 billion$5 billion$20 billion$40 billionGrowth Rate is at least %Rank is between
and # of Employees is between
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