YOUNG millionaires

Entrepreneur, Nov, 2000

LET'S PUT OUR BURNING ENVY ASIDE AND TRY TO LEARN SOMETHING HERE.

david reinstein, 25, and melody kulp, 25

Maybe you saw Jennifer Aniston sporting them as Rachel on Friends, or actress Sarah Michelle Gellar putting them in Jay Leno's hair on The Tonight Show. They're tiny crystals with Velcro backs that, when affixed to hair, make those wearing them look like they've just frolicked through a shower of jewels. Then again, you could've just seen one of the many Sparkles knockoffs that have plagued Mellies LLC, the El Segundo, California, hair accessories company founded two years ago by couple David Reinstein and Melody Kulp. Good thing this duo's savvy outweighed their lack of business experience.

While researching woman entrepreneurs for her former employer, The Learning Channel's Slice of Life show, Kulp began wondering why she wasn't making a name for herself. Then Kulp was amusing Reinstein's young cousins one day by placing yard-picked flowers in their hair and decided she wanted to craft something similar for the girls to maintain the look. Musician/composer Reinstein knew that if they found a way to do it, they'd have a destined hit so unique they could patent it--and they did, starting production with their own savings.

Mellies hit star status (boasting one account--the Fred Segal store in Santa Monica) when one hip Los Angeles twenty-something, after seeing Kulp sporting Sparkles, ran to the Fred Segal location in Los Angeles in a frantic quest for them--only to be disappointed and storm out. Reinstein and Kulp visited the second store that day and made their sale. Soon, fashion magazines featured Sparkles, celebrities wore them and stores worldwide were placing orders. This is Year One, mind you.

Unfortunately, demand caused many vendors to resort to buying faux Sparkles, which, despite the pending patent, were rampant. But instead of trying to beat the copycats, Reinstein and Kulp created their own Sparkles knock-off, Lulu's Twinkles. Now sold in supermarkets at a lower price point, Lulu's Twinkles helped sales climb to $9 million last year.

Reinstein and Kulp didn't forget the tough lesson when developing follow-up product HairLights: They didn't tell a soul until its patent was issued this year. They've also learned some creative marketing strategies along the way, like cold-calling department stores abroad, which landed them international accounts. Now, expecting Mellies to gross $40 million by year-end, they can finally stop to breathe. Says Kulp, "We've got the system set up where we can look ahead, rather than live day to day."

Michelle Prather

dwayne lewis, 30, and michael cherry, 31

Thousands of American youths would be without their groove thang these days if it weren't for the entrepreneurial genius of Dwayne Lewis (1.) and Michael Cherry. As founders of New York City-based sportswear company Damani Dada, Lewis and Cherry have given a voice and an ultra-hip style to the urban fashion scene. Formed in May 1995 with one lone product and a mere $1,000 in pooled paychecks, Damani Dada has since made a name for itself, holding its own among runway greats like FUBU and Phat Farm. Sales for 1999 reached $40 million, and projections for 2000 are soaring to $70 million.

When Lewis decided to leave his administrative job with a law firm to pursue his dream of owning his own company, who better to choose for a business partner than his childhood friend, roommate and fellow entrepreneur-at-heart? "I felt we should go into something that we had some connection to," explains Lewis. "Coming from New York City and being sharp dressers ourselves, we thought we would know enough to put out a good product."

Easier said than done. Lewis and Cherry admit they faced their share of challenges as beginners in the fashion industry. "It was very tricky to try and learn the business without a mentor," remembers Lewis. "We always struggled with the task of maintaining a strong financial backing, and we had to learn a lot by making mistakes." Their persistence paid off, though, in 1996, when Lewis set off to Las Vegas for MAGIC (Men's Apparel Guild In California) International, the largest men's apparel trade show in the world. Touting Damani Dada's first product, the five-panel Polo Hat, Lewis left the show with more than $10,000 in orders.

Damani Dada has since expanded its line to include a full line of men's clothing as well as a women's line that was introduced this fall. With distribution deals in Canada, France, Germany and Great Britain, and plans for another one in Asia, this dynamic duo has proved they know a thing or two about success. "Business is war, and there's more competition here than in any other genre," advises Lewis. "You have to be mentally strong, willing to sacrifice and willing to accept delayed gratification." By the looks of it, we'd say Damani Dada's gratification has finally come.

Talicia A. Flint

douglas stewart, 32

In the vanilla-and-chocolate-dominated ice cream world, it's nice to know one entrepreneur is having a little fun with the likes of mango, passion fruit and guava-strawberry. But it was more out of a sense of mission than fun that Douglas Stewart started Howler Products Inc. in 1994. The company, named after the Amazon's fruitloving Howler monkeys, manufactures exotic sorbets and gourmet gelatos with ingredients and flavors taken from rare rain-forest fruits.