THEY'RE baaaaaaack…

Entrepreneur,  March, 2001  by Peter Kooiman,  Nichole L. Torres

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ENTREPRENEUR'S YOUNG MILLIONAIRES, THE REUNION TOUR. YOU WON'T BELIEVE WHAT HAPPENED NEXT ...

mANY FACES HAVE GRACED THE PAGES OF ENTREPRENEUR OVER THE YEARS. WE'VE PROFILED MANUFACTURERS AND MARKETERS, DEVELOPERS AND DOTCOMS. AND THE ONE THING MOST OF THEM HAD IN COMMON? WE NEVER TALKED TO THEM AGAIN.

HOLD ON--WE'RE NOT AS HEARTLESS AS YOU MIGHT THINK. TO GIVE YOU A LOOK AT HOW SOME OF OUR ENTREPRENEURS OF OLD HAVE FARED OVER THE YEARS, WE'VE TRACKED DOWN SEVERAL YOUNG MILLIONAIRES WHO HAVE APPEARED IN OUR ANNUAL SPECIAL.

WHAT WE FOUND WERE BUSINESSES THAT HAVE MERGED AND GROWN, AND ENTREPRENEURS WHO HAVE DONE THE ONE THING MANY CAN'T DO: SURVIVE. WE COULD TAKE CREDIT AND SAY "WE ALWAYS KNEW THEY'D SUCCEED. WE SURE KNOW HOW TO PICK 'EM." INSTEAD, WE'LL POINT TO THE TENACIOUS BIZ OWNERS THEMSELVES AND SHOW HOW EACH HAS AUTHORED HIS OR HER OWN HISTORY.

A PROSPEROUS UNION

Todd Bernstein, L.A.-Tel (formerly Corporate Telecomm)

From an on-fire go-getter to a more mellow leader, life has changed considerably for Todd Bernstein, founder of Corporate Telecomm, since we last spoke with him in 1991. Though he continues to work from the same Van Nuys, California, location providing office phone systems, his firm changed size and shape after merging with L.A.-Tel in 1999.

"[The merger] was a good way for me to grow on a personal level and to instantly increase sales," says Bernstein, who took the lead role as managing member of the new company. But the change presented its challenges: Bernstein says it took about six months for the two company cultures to truly merge. Combining offices so the two groups of employees could work together helped. "We [didn't want] a 'we/they' mentality," he says. "Finally, people realized we're all the same company."

Over the years, Bernstein's ridden out the ebbs and flows of the changing economy. A dip in sales during the recession of the early '90s hurt, but Bernstein continued to run the business conservatively, always keeping enough cash on hand. His philosophy when times get rough: The owner is last to get paid and first to go without.

While Bernstein's economic instincts haven't changed, his role has. He says he feels more like a manager than an entrepreneur--instead of being involved with every meeting and decision, he delegates now. He sees himself steering the ship, not so much working the decks. "You get more mellow as you get older," he says. "When I started, it was [all about] burning the midnight oil. Now I'm 39, and I've got three young children. You just sort of take the perspective that you're working for a quality of life, and you need to bring balance [to it]."

THEN & NOW

No. of employees: 1991:20 2001: 40

Sales: 1991: $3 million 2000: $4.3 million

Biggest change: Corporate Telecomm merged with L.A.-Tel in 1999.

WHILE WE WERE AWAY

Hot cell phone In 1991: The Fujitsu Pocket Commander, weighing in at a chunky 10.2 ounces and costing $1,195

Hot cell phone In 2001: The Kyocera SmartPhone, weighing in at a low, low 7 ounces with a built-in Palm PDA, costing $499

PAGES OF PROFIT

Dominique Raccah, Sourcebooks

Bestselling books. Top-name authors. Continuous growth. It's been a wild, successful ride for Dominique Raccah, since we wrote about her company, Sourcebooks, in 1992. Back then, she published business-related titles and boasted sales of about $1 million. Today, she publishes all kinds of books-- from MediaFusion (books that come with audio) to fiction (under the Sourcebooks Landmark imprint)--to the tune of $25 million.

In an industry that publishes about 50,000 books a year, Raccah, 44, points to her company's fierce devotion to its authors and to publishing quality books as the secret of her success. That and the determination to prove her doubters wrong. People said Sourcebooks wouldn't be able to attract top-name authors and should only publish within a certain niche. Plus, building a successful publishing house in Naperville, Illinois, was unheard of--all the big names were in New York City. "There are a lot of cliches and assumptions about independent publishers in America today," says Raccah. "We've [heard] a long list of 'you can't, you shouldn't, it won't work that way' that we've been debunking for the past 13 years."

The changing face of the publishing industry in the past decade aided Raccah's cause. As larger publishers consolidated, midlist authors were hurt in the crunch. Smaller publishers like Sourcebooks thrived by giving those writers the special attention the larger houses couldn't.

The past few years have been especially triumphant. Three Sourcebooks MediaFusion titles--And the Fans Roared, We Interrupt This Broadcast and The Crowd Goes Wild--have made The New York Times Bestseller List. "The first time you make [the list], your jaw drops a little, and there's a silence that goes over the room," says Raccah.

Looking ahead, Raccah plans to enter the e-books market, where the challenge will be to get noticed. "With the Net and e-publishing, you're looking at millions of books. How will readers know about those, books and how to find them? We're going to have to find a way to get a reader to a book," she says. "That's going to [be harder] than when we had a limited number of books in a [more traditional] environment."