Hot 100

Entrepreneur, June, 2003 by Amanda C. Kooser

While our economy may seem to be in a holding pattern, signs of change are evident in this year's Hot 100 list. Our 9th Annual Hot 100 listing of America's fastest-growing new entrepreneurial companies is compiled with assistance from D&B, the leading provider of global business information and technology solutions. What's changed since last year?

This year's hottest industry is business services: 25 of the 100 companies listed fall into this category. Within business services, a couple of subcategories stand out: There are nine companies providing logistics services (such as freight-handling, trucking and transportation) and six providing marketing and advertising services.

Home-related products and services--from construction to home-improvement products and services--declined from 27 companies last year to 14 this year. Tech businesses have made a slight comeback, up from 13 companies last year to 19 this year. (However, telecom dropped from six companies last year to two this year.) And health care seems to be up-and-coming, growing from two companies last year to five this year.

Speaking of things that are going up, this year's Hot 100 companies reported total sales of $923.5 million for 2002, a sizable increase over $673.7 million for 2001. And while the average 2002 Hot 100 company started with $391,100 in capital, this year's launched with an average of $565,000.

But some things haven't changed: 37 of the companies on this year's list were on last year's Hot 100. In fact, our top company has held the No. 1 seat for the second year in a row. Read on to see how these sizzling success stories happened--and be sure to open the gate fold for a look at our complete listing.

COKeM

LIGHTNING REALLY DOES STRIKE TWICE IN THIS CASE.

HE DID IT AGAIN. CHUCK BOND, FOUNDER AND owner of GOKeM International Ltd., has taken the top spot in the Hot 100 for the second year in a row. With 2002 sales of about $125.5 million, up from $77.8 million in 2001, the value-added Plymouth, Minnesota, video game and home-entertainment software marketing company is really cooking. Those sales figures represent a heady rise from the company's start in 2000 with $250,000 out of Bond's own pocket. What's more, Bond expects COKeM to reach sales of $150 million in 2003.

While COKeM's sales have skyrocketed in recent years, the number of employees has stayed steady at 65. "I'd rather have fewer people and pay them more than have more people and pay them less," explains Bond, 47. Something else that hasn't changed about the company is the cloak of privacy COKeM employs. Search the Web for "COKeM," and you'll hardly find a peep out of them. That humble attitude stems directly from Bond's personal down-to-earth, no-need-to-brag approach to his business. "I don't buy a bright, canary yellow new truck. I buy a black one. It's still a truck," he says.

One reason for COKeM's remarkable growth and success over the past year lies in purchasing large amounts of product and then creatively repackaging or building customized sets of games and software for customers such as Best Buy, Sam's Club and Wal-Mart. The COKeM team works to keep all their products at low prices--"under the ATM-machine $20 bill," as Bond puts it. Those low price points, in combination with the strength of the video game market, help protect COKeM from the whims of an up-and-down economy.

When we spoke with COKeM last year, they were about to embark on a major bank financing expedition. It turned out to be one of their greatest challenges in 2002. Eight months of intense work finally landed them the cash infusion they sought. "Cash is king," Bond explains. "It enables you to play at that next level." They are also looking into expanding their "playground" by offering video games or computer software at places like children's hair salons and other nontraditional locations. Further growth in Puerto Rico, Mexico and Canada is on the list as well.

Bond's favorite advice for other entrepreneurs is not to set any limits for themselves and not to fear failure. With COKeM, he brings those valuable pieces of advice to life. "We'd rather not react; we'd rather be the leader," he says. "We don't mind taking chances. Occasionally, we take an arrow, but that's what pioneers do."

ARBITECH

LIFE'S A BEACH FOR THESE SUCCESSFUL ENTREPRENEURS.

A "BOARD MEETING,, AT LAGUNA BEACH, CALIFORNIA-based computer commodities trading company Arbitech is more likely to include the Pacific Ocean and surfboards than a big table and office chairs.

Co-founders Torn Pavia, 31, and William Poovey, 32, really know how to have fun. Lunches for all 26 employees are catered every day, the group often surfs together, and an annual corporate retreat sends everyone off to lovely locales like Puerto Vallarta. Arbitech has the opposite problem most businesses do: "I have to call people and tell them to go home at my company," says Pavia.

Pavia and Poovey also know how to get down to business. Arbitech doubled its 2001 sales by hitting the $60 million mark last year. They've come in at No. 2 on our Hot 100 list for the second year in a row. They're shooting for $90 million this year and are already well on track.