In this, our summer of earthquakes, drenching rainstorms, and economic discontent, let's pause for a ray of sunshine from the small-business world.
Philadelphia has revved up its entrepreneurial mojo over the last year, according to one measurement. The 2011 Inc. 500 list of the fastest-growing privately held companies, released last week, included 18 firms from the Philadelphia area.
That was good enough to place the region fifth among metropolitan areas with the most Inc. 500 firms. With 50 such enterprises, Washington was home to the most, followed by New York City (43), Los Angeles (42), and San Francisco (19).
While you might argue that's where Philadelphia ought to rank based on the size of its population, this region has tended to underperform in producing companies with sizable three-year revenue-growth rates, the criterion Inc. magazine uses to select its annual list.
Only six local companies made the grade last year and just nine in 2009.
In 2011, the region's fastest grower sounds like something straight out of Star Wars: re2g, of Doylestown.
The solar-panel installer, formerly known as Solardelphia, placed No. 24 on the Inc. 500 list, with revenue growth between 2007 and 2010 of 7,493 percent. The company had 2010 revenue of $10.6 million and 23 employees.
You can kind of understand the name change, given that re2G has been ex-
panding northward beyond Pennsylvania, New Jersey, and Delaware, where it's been operating since 2001. (Unfortunate-
ly, the new name is kind of close to that of a Pittsburgh robotics firm called RE2 Inc., which is listed at No. 788 on the magazine's wider Inc. 5000.)
Tired of obsessing over the lack of growth in the U.S. economy? Poring over the Inc. 500/5000 lists always renews my faith in American ingenuity. It's amazing how many different ways people find to make money.
New York was home to the nation's fastest-growing firm, called ideeli, which turned in an astounding growth rate of 40,882 percent. Not bad for the online "flash-sale" fashion retailer with $77.7 million in 2010 revenue and 145 employees.
Among the locals, I was struck by the growth in a company that I'd written about three years ago. Petplan, which sells pet insurance, reported a three-year growth rate of 2,207 percent, making it the fourth-fastest grower in the region.
According to statistics Petplan supplied to the magazine, revenue grew to $18.7 million in 2010 from $812,000 in 2007. Think about that: A pet insurer grew dramatically throughout the worst recession since the Great Depression and a subsequent weak recovery.
Founders Natasha and Chris Ashton told me the firm now has 100,000 policyholders, and they believe the company is on track to reach its goal of $1 billion in gross written premiums over the next five to 10 years. Plus, it's branched out into publishing with its Fetch magazine.
Natasha Ashton made sure to spread the credit for Petplan's success to its 50 employees and to Commerce Bank founder Vernon W. Hill II, who invested in the Phila-
delphia firm in spring 2008 and became its chairman. "He was quite the catalyst, a dynamo," she said.
(Another Hill investment, Saladworks, a Conshohocken-
based franchiser of salad restaurants, also made the Inc. 5000 list at No. 4,667, with 13 percent growth.)
In all, 143 companies in the region made the 2011 Inc. 5000. Of those, 80 appeared on last year's list.
The city of Philadelphia was home to 24 of those fast growers. Blue Bell and King of Prussia can lay claim to seven each, while Conshohocken and Wilmington are the headquarters for six apiece.
If you were to guess that the information-technology services sector accounted for most of the local companies - that would be 21 - on the list, you'd be correct, but just barely. Twenty firms are involved in business products and services, while 17 are in the health field, according to how Inc. magazine categorized them.
According to Inc. magazine, the median revenue for all Inc. 5000 companies this year was $10.73 million, and the median number of employees was 51. To be considered, a company had to have 2007 revenue of at least $100,000, while the minimum 2010 revenue to qualify was $2 million.
In the good old days, you'd read this list to find the likely candidates of companies that might go public one day. And, in fact, one local company is trying to do just that.
Epam Systems Inc., a Newtown-based software development firm, filed a registration statement with the Securities and Exchange Commission June 10. At No. 2,491 on the Inc. 5000 list, Epam does most of its work overseas, using tech talent in Russia, Hungary, Belarus, Ukraine, Kazakhstan, and Poland.
Founded in 1993, Epam has appeared on Inc.'s list seven times over the years. The $221.8 million company moved its headquarters to Bucks County from Lawrenceville, N.J., in 2009.
PhillyInc: Inc. 500 for 2011
The Philadelphia region placed three times the number of firms (18 in all) on Inc. magazine's annual list of the 500 fastest-growing privately held companies this year as it did last year. The top 10 local companies by revenue growth from 2007 to 2010:
Rank Company name, location 2010 revenue Pct. chg.
24. re2G, Doylestown $10.6 million 7,493%
48. Leadnomics, Philadelphia $5.8 million 3,932%
67. NextDocs Corp., King of Prussia $9.8 million 3,213%
123. Petplan, Philadelphia $18.7 million 2,207%
150. Optimal Strategix Group, Newtown $6.5 million 1,878%
151. Free For All, Marlton $2.5 million 1,871%
182. Magic Hat Consulting, Fort Washington $3.4 million 1,669%
214. Aromatic Fusion, Bensalem $5.3 million 1,455%
238. Decision Distribution, Yardley $34.5 million 1,335%
272. Ohana Cos., Wilmington $8.4 million 1,187%
SOURCE: Inc. magazine
Contact columnist Mike Armstrong