What the Fast 50 teaches about growth in a tough market
Each year, the Washington Technology Fast 50 celebrates the success of small businesses in the government market. The story is about growth, but in this market, it is also about resiliency and diversity.
Of the 50 companies on the 2012 list, 15 are making return appearances. Last year’s top company, SAVA Workforce Solutions, moved just one spot, from No. 1 to No. 2.
Others making repeat appearances and proving they are more than one-year wonders are Integrity Management Consulting, Innotion Enterprises, FedSys, Soft Tech Consulting, Evoke Research and Consulting, VAE, and MicroTech.
MicroTech, which is also on Washington Technology’s Top 100 list of the largest government contractors, is making its fourth consecutive appearance on the Fast 50.
The No. 1 spot this year goes to newcomer Universal Understanding, whose growth has skyrocketed in the past five years, from $122,698 in 2007 to $102.7 million in 2011. The company’s compound annual growth rate is a whopping 437.91 percent.
Even the No. 50 company has something to crow about. CollabraLink Technologies makes its debut with a compound annual growth rate of 68.8 percent from 2007 through 2011.
Keep in mind that the Fast 50 isn’t about raw revenue or bulk. There are only three companies on the list with more than $100 million in revenue: Universal Understanding, MicroTech (No. 17), and DMI (No. 37).
But those small businesses have found a way to grow rapidly in a very tough market.
Many of the companies on the list are taking advantage of programs for small disadvantaged businesses, for companies in Historically Underutilized Business Zones (HUBZones) and for companies owned by service-disabled veterans.
Universal Understanding, for example, is both a HUBZone and a service-disabled veteran-owned company. “Socioeconomic indicators are very important in the federal market and are becoming more important in mainstream companies,” said John Metzger, the company’s president.
The Fast 50 group represents a well-oiled economic engine. The total aggregate revenue they earned in 2011 is $1.4 billion. In 2007, the same companies brought in a total of $65.6 million. As a group, their compound annual growth rate is 115.32 percent from 2007 to 2011.
Each of the companies on the list, though, has a bigger story to tell than their growth and revenue numbers. They represent the diversity of services and products demanded by the federal government.
MicroTech, for example, is a reseller. Octo Consulting Group (No. 42) does what its name implies; it consults. DOTMLPFI Inc. (No. 32) provides high-end systems engineering and research and development services to Defense Department customers. Trowbridge and Trowbridge (No. 46) is building a broad-based IT services and telecommunications company.
While many of the companies on the list are focused on a diversity of market segments, they share a belief in customer service, employee satisfaction and agility in tackling new opportunities.
“One of the keys for me was building a unique culture to attract top talent,” said Mehul Sanghani, president of Octo Consulting.
Karen Trowbridge, president and founder of Trowbridge and Trowbridge, is quick to share the spotlight with others for her company’s success.
“I won’t take credit,” she said. “I have a phenomenal group of executives.”
Although their growth has been strong, these companies are not living in a vacuum and are acutely aware of the many challenges in the market because of the current budget environment and uncertainty about when projects will get funded.
The current environment can work to a small company’s advantage because it can quickly respond to customer needs, but large companies have more resources to fall back on, Trowbridge said.
Like nearly everyone else in the market, the overriding wish is for a budget to be passed. “We would love to see the federal government actually have a budget and actually award contracts that they’ve submitted for bids,” Metzger said.
The current budget environment has forced some companies to stretch beyond their original game plan to look for growth opportunities.
Trowbridge and Trowbridge made an acquisition that got it into the telecom services business. Octo Consulting has expanded beyond consulting into delivering systems to customers.
“We went reluctantly into [execution],” Sanghani said. “But now we’ve seen tremendous growth.”
And that relentless search for growth is what drives the Fast 50 companies. Quoting her father, Ron, Karen Trowbridge said: “If you aren’t growing, you are dying.”
Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.