Verne Harnish

How Fast?? When Verne Harnish launched the Association of Collegiate Entrepreneurs back in 1984, most young businesspeople were hocking used books and pizzas. A few young standouts like Steve Jobs and Michael Dell, however, were beginning to catch the national eye. And Verne Harnish was there holding the monocle. Since the mid-1980s, he has identified hundreds of rising stars, and helped countless others -- in China and the U.S. -- reach those heights themselves. Today, he is head of the Young Entrepreneurs Organization and reigning expert on TV on the Web's Fast Growth Network, profiling the men and women behind the new economy's fastest growing companies and spreading the wisdom of his Fundamentals for Fast Growth" checklist. Verne Harnish was also recently appointed by the Secretary General of the Organization of American States, to chair the Millennium 1000 Award, which will identify and honor the top 1000 young entrepreneurs 35 and under in the Western Hemisphere.

What numbers do you use to define fast growth companies?

The real authority on that is Dr. David Birch over at Cognetics in Cambridge, Massachusetts. He's the one who actually coined the term Gazelle -- the good health in the economy. And so generally speaking we target that number as first five to 100 million in revenue, doing at least 20 percent a year growth. They're the real job generators of the economy. Everybody misunderstood David and they thought he said small businesses are all the job generators. And it's really just 15 percent of those small businesses that are the gazelles in the economy.

How have you seen just the sheer number of fast growing companies -- Gazelles -- increasing with the Internet boom?

It's an unbelievable contrast to back in the early '80s, when it really was not fashionable to be a young entrepreneur. We constantly got folks from the college kids and the like saying, "When are you going to get a real job?" And that wasn't even a joke. I mean Steve Jobs really was the first to come along and start to legitimize that a young person could build any kind of a significant company. And back then still, you got a lot of kind of vanilla-flavored companies, so to speak. There were more traditional things like Neil's closet business and Julie's yogurt business. And lots of them had pizza chains on their college campuses and stuff like that. But today, you're able to -- because of technology -- launch significant companies before you're 20 in many cases. So there's no doubt that the cliché that we had a change in the foundation of the economy causes that to accelerate is just fact. And that's what we see.

What do you find are the most common problems facing fast growth companies?

You really do have to discern between small business and fast growth companies. They tend to get lumped together. I actually kind of draw a chart in this program I do up at MIT where 96 percent of the companies are really just one to three employees. And then there's quite a gap, which only puts about 4 percent of the companies in the U.S. ever make it north of a million dollars in revenue, which was the criteria we set for the MIT program and the criteria we set to get into the Young Entrepreneurs Organization. But there's actually 90 percent of the companies that get north of one million, but don't get much further than about three million in revenue.

There's only about four-tenths of one percent of all companies that ever gets around the ten million mark or larger. And then there's only about 20,000 firms that are somewhere north of 50 million in revenue. And then, of course, there's the Fortune 2000 and the Private 500 companies, and they're something north of three to four hundred million in revenue. So it gets elite fairly quick. It depends on where you are in that growth cycle. From startup to about a million in revenue, your biggest issue is just revenue. You just have to figure out that you've got something enough people want that it can get you up to that kind of critical mass of a million bucks where you can start to afford some overhead and structure to build the company.