“A lot of the things that drive these companies are not significantly different from what drives traditional companies,” notes Mark Evans, managing director of the Deloitte & Touche Technology, Media and Telecommunications Group.
For seven years in a row, Deloitte & Touche has sifted through public databases and direct nominations to find the 500 U.S. and Canadian companies with the greatest five-year revenue growth.
The consulting firm limits Fast 500 contenders to technology-focused companies, so the list is dominated by software, Internet, communications, biotech and similarly high-tech concerns. In the most recent Fast 500, companies needed to have had operating revenues of at least $50,000 in 1996, and to have achieved $1 million in 2000.
“Every year, the growth required to make the list gets higher and higher,” Evans says. For instance, the top-five companies in the most recent Fast 500 enjoyed an average revenue growth of 93,496 percent, compared to 59,367 percent the preceding year. Overall, more than 60 percent of Fast 500 companies were not on the previous year’s list.
At the top of this hyperkinetic bunch is eBay Inc., whose revenue grew 115,874 percent in five years. And the company doesn’t plan to slow down soon: Its 2001 revenues of $748.8 million exceeded the previous year’s by 73.6 percent; the online marketplace projects it could make more than $1 billion in 2002; and CEO and President Meg Whitman wants the company to reach $3 billion in 2005.
When she announced her (very) ambitious growth plans last year, Whitman noted that the “depth, breadth and potential of our business gives us great confidence in the future. The eBay marketplace is thriving across geographies, trading categories, pricing formats, listed items, user growth and the services we offer our community.”
One might listen to Whitman’s assessment and think, sure, it’s nice to have invented a better electronic mousetrap. And, indeed, “a good idea never hurts,” acknowledges Kevin Pursglove, senior director of communications for eBay.
But Pursglove stresses that the Internet success story has had its feet on the ground from its beginning in 1995. Founder Pierre Omidyar launched eBay with a team of “seasoned business veterans that brought bottom-line discipline to the company. I think a lot of the eBay management team has roots in the old economy,” Pursglove says.
Instead of pretending that profits are passé – as did many of its now-defunct Web peers – eBay always made profitability “a very important goal,” Pursglove says.
He notes that Whitman – whose resume includes high-level posts at bricks-and-mortar stalwarts Hasbro Inc., FTD and Stride Rite Corp. – stresses common-sense strategies. Expenditures, for example, are not allowed to grow faster than revenues. Or, a dollar invested must show a dollar returned.
There is nothing high-tech or flashy about those edicts. Likewise, the company’s strategy for reaching its $3 billion sales goal appears to be a renewed focus on core competencies. For instance, Pursglove says eBay will put a high priority on continuing to develop its core domestic market.