2 L.A. Firms Make Their Mark in Inc.: They’re Tops in Growth
Telephones and forklifts have propelled two Los Angeles-area companies into the realm of fastest-growing private firms in the United States.
That’s according to Inc. magazine, which has ranked the pair-- Justice Technology Corp., a Los Angeles reseller of telecommunications services, and Pico Rivera-based Power Lift Corp., a distributor of forklift trucks--No. 1 and No. 2 on its Inc. 500 list for 1998.
The 17th annual list ranks the nation’s 500 fastest-growing private companies by sales growth over the last five years. Inc. 500 alumni include such familiar names as Microsoft, Oracle and Domino’s Pizza. This year 83 California companies made the list, more than from any other state.
So how did top-ranking Justice Technology manage its eye-popping revenue growth of 26,899% between 1993 and 1997?
By being in the right place at the right time--in this case Argentina in the early 1990s--according to 33-year-old company founder David Glickman.
Justice, now one of the industry’s largest resellers of international telephone service, began as a cost-cutting project for American Express in Argentina, where Glickman had taken a job after college. Charged with reducing overhead at that foreign office, he was appalled to find the state-run phone company charging American Express $25,000 a month for international calls.
Glickman did a little research and found some U.S. telecommunications companies offering offshore customers a service known as “callback” that could slash the price of international calls by as much as 75%. The technology essentially allows foreign customers to legally circumvent their local phone company and originate international calls from the United States, where deregulation has made phone service the cheapest in the world.
Fearful of antagonizing Argentina’s state-run telephone company, American Express took a pass on Glickman’s idea. But they gave him the go-ahead to moonlight for one of the U.S.-based callback services. Business was so brisk that in 1993 he launched his own callback company, Justice Technology, to keep a bigger slice of the profit.
Today the firm operates in 70 countries, has more than 100 employees and last year posted sales of $55.3 million. Glickman credits the entrepreneurial staff he has assembled with fueling the rapid growth.
“I just surround myself with people who are smarter than me and let them do their jobs,” he said. “That’s the only way I know how to succeed.”
In contrast to the freewheeling telecommunications industry, the forklift business is mature and slow-growing. Richard Cowan, founder and president of Power Lift, made his way onto the Inc. 500 list by essentially reinventing his industry.
In a business filled with mom-and-pop operators who tracked inventory by hand and let customers come to them, Cowan computerized his operation and used telemarketing, print and radio advertising to grab market share.
He also realized that the sale of forklifts would be only a part of his business. Although the company now ranks among the top 10 Caterpillar dealers in terms of sales, Cowan said repairs, service, rentals and parts now make up the lion’s share of the business.
“It’s the difference between selling razors and razor blades,” said Cowan, whose company posted $43 million in sales last year. “The key is building long-term relationships with your customers.”
