The Inc. 5000 list tracks the fastest-growing private companies in the country (with minimum revenue of $2 million a year). Some of the figures on the list are eye-popping too: PopSockets, the Boulder, Colorado–based company that makes the ubiquitous smartphone attachment that allows for easier texting and better selfies, saw its revenue balloon by a completely absurd 71,424 percent over the past three years, reaching a 2017 revenue of $168.8 million. In all, twenty of the companies on the list had growth of at least 10,000 percent in that three-year period, in industries as diverse as cheap cellphone attachments, meal-kit delivery services, and private charter jets.
In Texas, the fastest-growing companies aren’t posting PopSocket-like booms—our biggest gainer, the Irving-based social media manager Monkedia, saw a merely ridiculous 4,395 percent revenue growth over the past three years. But there are an awful lot of them. In all, 421 Texas companies made the list, more than any other state except California. Here are some things worth taking away about the state of Texas business, based on those 421 companies and how they’ve grown.
Takeaway No. 1: There are more health-based companies than energy companies.
Twenty-one of the 421 Texas companies listed are in the energy sector. That’s a good chunk, but it’s nothing compared to some of the other industries represented on the list. There are 43 health companies on the list, more than 10 percent of the total. There are 35 software companies listed; 26 advertising and marketing agencies; a whopping 50 companies fit into the “business products and services” category, a catchall that includes everything from companies that repair refrigeration units in restaurants to law firms that focus on catastrophic personal injury cases to companies that help dentists develop their practices; another 26 companies are in “consumer products and services,” a similarly diverse catchall category that includes companies you may have actually heard of. It’d be a mistake to draw too many conclusions about what that means for energy in Texas, especially since the list focuses exclusively on privately held companies—while 9 of the 11 largest publicly traded companies in the state are in the energy sector. Still, it’s interesting that energy represents a smaller percentage of fast-growing companies than health, software, marketing, and other industries do.
Takeaway No. 2: How ’bout that Poo-Pourri?
Addison-based Poo-Pourri, the cheeky (sorry) company that makes a variety of sprays you can use to rid the bathroom of the stench associated with a necessary bodily function, has been doing pretty well for itself. The company has seen its revenue spike by 275 percent since 2014, which is good for a total 2017 revenue of $56.5 million. Apparently there are an awful lot of people who are self-conscious about the way their poo stinks, and the company has wisely tapped into that market.
Takeaway No. 3: Several of the fastest-growing companies are for consumers.
Every time you see a list like this, a lot of the companies on it are B2B businesses that, unless you’re in the market for an advertising agency or commercial kitchen maintenance, most folks would have never heard of. And while there are certainly a number of companies on the list that fit the bill, there are a surprisingly large number of companies right at the top that consumers have reason to interact with. Favor, the Austin-based delivery service that operates throughout the state (and which was acquired by H-E-B in February), clocks in at number five on the list of Texas businesses. (Overall, it’s the 138th fastest-growing company in the country.) The company has grown by 2,917 percent over the past three years and scored revenue of $29.2 million in 2017.
Favor is hardly the only consumer-facing company to place well, either. Student Loan Hero, which provides borrowers with resources to help them understand and manage their debt, clocks in just below the delivery service, with growth of 2,916 percent and $11.2 million in revenue in 2017. Maggie Louise Confections, the Austin-based chocolatier known for its handcrafted chocolates, grew by 1,703 percent and was worth $2.2 million in revenue last year. Addison-based Nothing Bundt Cake, which has bakeries in more than 35 states, grew by 178 percent, earning an eye-popping revenue of $220 million. Dallas-based Studio Movie Grill grew by 68 percent, with revenue of $211.7 million.
Takeaway No. 4: “Fastest-growing” doesn’t mean the most revenue.
You may have noticed that Studio Movie Grill made nearly 100 times the revenue of Maggie Louise Confections, while the chocolatier’s growth was nearly 30 times that of the cinema chain. That’s typical to the disparity between growth and revenue—the more revenue you have, the more rare it is to have the sort of boom that defines the top companies on the growth list. It makes sense: If you go from a business that makes low-six-figure revenue in 2014 to a business that brings in $2.2 million in 2017, you’ve experienced a dramatic rise. If you had that same sort of growth as a company bringing in $211 million, you’d suddenly be an enterprise that made several billion dollars a year. As T. Boone Pickens once explained to Drake, the first million may be hard, but “the first billion is a helluva lot harder.”
So let’s take a second and look at which companies posted both $100 million or more in revenue and a growth rate of at least 500 percent. There are three: Frisco-based J. W. Logistics, which provides vehicle fleets on demand and which grew by 520 percent to see its revenue hit $278.9 million in 2017; Houston-based Discount Power Texas, which offers commercial and residential electricity to customers and which grew by 1,459 percent to revenue of $148.8 million; and Karya Property Management, which manages more than 10,000 apartments in Houston, Dallas, Austin, and San Antonio and which boomed by 2,860 percent to post revenue of $124.8 million. If you want to have a better understanding of where the sweet spot is between growth and revenue, these are the places to look.
Takeaway No. 5: Houston, Austin, and Dallas are still the business capitals of Texas.
When it comes to fast-growing businesses, the vast majority of them are located in either Houston, Austin, or—especially—the Dallas–Fort Worth Metroplex. DFW accounts for a massive 181 companies on the list; Houston gets another 99, while Austin has 91. San Antonio, the next-largest hub of Texas business, includes just 21. The rest of the state has just 29 between all of its other cities.
Some of those cities have massive companies, though. The Reagor Dykes Auto Group, in Lubbock, represents $780.9 million in revenue; Lubbock-based marketing company Primitive Social, which manages social media for businesses, posted three-year growth of 2,484 percent, good for number 174 in the U.S. On the scale of quality, rather than quantity, things are a little more diverse.
But when it comes to the Big Three Texas cities, the sheer number of fast-growing companies is impressive when you put it in perspective: There are as many Dallas-area companies on the list as there are companies in Pennsylvania, the nation’s fifth-most populous state; and there are more Houston- and Austin-based companies than there are companies in Michigan and Tennessee, respectively. Among all American cities, Houston, Austin, and Dallas all rank in the top 10 in terms of how many companies they place on the list. Which means that they’re not just the business capitals of Texas, they’re among the business capitals of the entire United States.