Ep. #926 - Making the Inc. 5000

Matt DeCoursey 00:00
And we’re back! Back for another episode of Startup Hustle. Matt DeCoursey here with Matt Watson. Hi, Matt.

Matt Watson 00:07
What’s going on, man? I’m just making a list.

Matt DeCoursey 00:09
1-2-3-4, it’s gonna take me a long time. I was in, man. That’s a long list. Right?

Matt Watson 00:21
And it’s a big list.

Matt DeCoursey 00:22
We’re talking about the Inc. 5000. Is that what we’re talking about today?

Matt Watson 00:26
It is. I think it’s one of my favorite things that they do every year.

Matt DeCoursey 00:30
Yeah, well, you’re all over it. You know, we’re going to talk a little bit more about that. And what the Inc. 5000 is, how Full Scale made the list, thank you, Full Scale, and a bunch of other companies too. So we’re happy about that. Before we get too far into this episode, today’s show is powered by FullScale.io. Helping you build a software team quickly and affordably. Full Scale is an Inc. 5000 company as of 2022, first-year eligible. You know, Matt, when you think about the Inc. 5000, you mentioned that it’s one of your favorite things. And we’re going to, you know, kind of outline, I think, a lot of people want to know, you know, what, where, how, when, who, why, and all of it. When you think about it, well, before I asked you this, you know. The Inc. 5000 lists the 5000 fastest-growing private companies in the US. And, you know, it’s a list based on the percentage of revenue growth over a three-year period. So this year’s list, which is the year 2022, last would have been 2021, 2020, and 2019. So it looks at three years. And, you know, when you say private companies, that’s going to be startups. But they’re not all startups. I mean, there are some companies with huge amounts of revenue. But when you think of Inc. 5000, what comes to mind?

Matt Watson 01:57
Well, there are a lot of rewards like this for startups. And you can have something like Gartner, you know. We’ll have something like Gartner’s Cool Companies or Forrester Wave. And there are all these kinds of different things that, you know, if you’re a startup, you want to have this on your pitch deck or whatever. And we’re like, oh, we’re a cool company because we achieve this thing. And honestly, I feel like 80% of them are scams, and they pay to play things. You’re like, oh, I paid $2,000 to CIO.com, so we could have this badge to put on our thing or whatever. To me, like Gartner and Forrester, definitely legit. But Inc. 5000, to me, is one of the most legit ones. And it’s just, it’s simple. It’s just the fastest growing company in the United States. And they print it in the magazine. Your grandma can go get it at the grocery store, open it up, and look at the list. And I just think it’s cool. It’s just kind of, every year, benchmarks of the fastest growing companies. I think they do a really good job with it.

Matt DeCoursey 02:52
Yeah, I agree. That’s a great explanation. Thanks, man. You can also find the listing at INC.com, which I think a lot of people find there. And Matt did a great job of describing what it is. Now in regards to the 5000 companies, there’s a hell of a lot more than 5000 companies that apply to be on the list. And they do charge an application fee to be on, you know, to be considered. You have to send in some financial statements. And it’s pretty nominal. Yeah, they look at who you are. Now, I agree with you about the quote list game. It’s amazing how many emails I have received over the last four or five years that are addressed to Full Scale, Gigabook, Startup Hustle, all of it. And you know what, Matt, we have amazingly made their list. If we want to pay a publication fee or something like that, and I’m looking at him, I’m like, who? Who is this? They’re very scammy. Yeah, and there is a lot of that stuff that is pay-to-play. Now, you know, with that. I don’t have a problem, like paying an application fee. Because someone you know, they’re running a business, and in case they do. They do want you to license their logo. They do, you know, so yeah. Now that said, I mean, I have respect for the fact that they’re running the business. I don’t think that’s pay-to-play. Because they’re not going to not put you on the list. Because you didn’t buy the logo, right? They give you like a whole, I mean, when you say you buy it, you license the ability to use their name, and your print and other stuff. And they give you a whole slew of stuff like they get you to know, now, you know, you gotta respect the hustle a little bit on that now, that’s a lot different than you’ll make the list if you pay.

Matt Watson 04:49
Yeah. Oh, yeah.

Matt DeCoursey 04:53
I’ve received some real wild ones over the years. You know, I was, I think in the last few months, I was invited to the party. Participate as a participant in a reality TV show. As long as I had $50,000, I was like, wow.

Matt Watson 05:11
Yeah, there’s a lot of weird pay-to-play stuff out there.

Matt DeCoursey 05:13
You can watch Startup Hustle TV for free. And you don’t have to pay 50 grand for that. But okay, so you know, we mentioned what the Inc. 5000 was. Now we’re, you know, as Full Scale, which we often talk about on the show, it’s a business and Matt, and I own together was eligible for the first time this year. And in order to do that, you have to have three years of financial statements. So I will say it is a little possibly a little easier to make it in year three or four, because you have little numbers will probably be little numbers, we did over a million dollars in revenue in our first year in business, which is not typical for, and it wasn’t even a full year. It is, I think, a little easier on the math, it’s a little easier to have a higher ranking in your earlier years because you’re looking at three-year averages, the smaller number in the beginning, so but you see a lot of people like anytime the Inc. 5000 list comes out, you go to your go-to lengths, and you’re gonna just see a ton of people posting it. It’s the people that are there. They’re like, yeah, this is our eighth straight year or something like that, which I have a lot of respect for because that means you’re continuing and sustaining the growth. So this is slow and steady. Yeah. And that’s exactly what this is, though, is a measurement of revenue growth. The industry. It’s industry agnostic. So you look at some of the, you know, the top companies on there, which well, there is kind of a funny story, because the number one company on this year’s list is I don’t think of a company anymore, are they?

Matt Watson 06:57
Yeah, it was blocked. So they were a big crypto company in crypto, that you could give them your crypto or your dollars. And it’s like a savings account, basically. And maybe they did some of the things. I’m not an expert on what they did. But that all went belly up over the last few months when crypto melted down when the stock market melted down, and all that. And yeah, I think FTX bought it for 10 cents on the dollar or something. And now, block five will be a service under FTX. And FTX. For those who don’t know, it is one of the larger crypto exchanges like Nance and Coinbase. Whatever. Yeah. So they basically, yeah, they had this for the last four years and blew up.

Matt DeCoursey 07:36
They were thinking that they might still make the list next year. Who knows, 245,000% growth, you know, and I know that all of you listening can’t see me right now. But I am wearing a hat with a skull and crossbones on the pirate ship laundry logo. I’m wondering if that’s if I’m secretly honoring block fie in that regard because I think a lot of money. I think a lot of treasure went into that chest, and a lot of it, and then it was gone.

Matt Watson 08:05
Well, it just goes to show, right? Like sometimes, these high-growth companies, especially when they’re VC backed and all that, right, like they take off like a rocket ship. But sometimes, they explode in glorious fashion. And it’s so funny that block phi is the perfect example of it.

Matt DeCoursey 08:20
Yeah, I hadn’t even thought about that. And so you brought it up, and the less came out. Did you go to get help? Who’s unless you looked at it, and you’re like, oh, so. Yeah, so that happened? Yeah. Anyway, so, you know, I mentioned industry agnostic. So these are all when you talk about the Inc. 5000. Everything is ranked. They do categories, they do states, and they do metropolitan areas. So we’re talking about Full Scale. So Full Scale ended up being number 878 on the list of 5000. And, you know, I mean, that’s, that’s a pretty good score. I’m okay with that. We were number six in the state of Kansas. That number sounds a little bit better. And then we were number 78 In the category that they put us in, which was kind of interesting because we were business products and services, but not necessarily it.

Matt Watson 09:18
So in Kansas City, in general, when you talk about tech companies, we were definitely first top of the list. Yeah. Which was really cool.

Matt DeCoursey 09:27
We were number nine in Kansas City. Now for those of you who aren’t aware of Kansas in Missouri, Kansas City more of it’s in Missouri than it is in Kansas, and someone listening, and that just blew their mind. Yeah, the Kansas City Chiefs play in Missouri. I remember when Eric Perkins and his brother were on Startup Hustle TV and the moment that they told him that Kansas City was actually in Missouri. Do you remember the look on his face? He’s like, Wait, What? What?

Matt Watson 09:55
Yeah, so is it gonna shock you when I tell you the New York Giants play in New Jersey? Yeah.

Matt DeCoursey 10:00
Now, I mean, the San Francisco 40 Niners play in Santa Clara. So you know, which is basically San Jose. Alright, so here are some of the categories. Are they random by industry, so you have advertising and marketing agriculture, arts and entertainment, automotive, business products and services, which is what Full Scale and the category we were put in computer hardware construction, consumer products, consumer services, crypto, and blockchain e-commerce, education, energy? Engineering it’s a lot of categories, right?

Matt Watson 10:34
There’s a lot of categories. You know what I looked at automotive, for fun, and you would immediately think, well, like, wow, Tesla must be on the list. They’re not even on the list.

Matt DeCoursey 10:41
They’re not a private company. Oh, yeah. Okay. Yeah. That’d be a private company, which means you can’t have your IPO so environmental services, financial services, food and beverage government health. So health has product services, human resources, insurance, IT services. Yeah, it was so yeah, we were curious about what they bundled us into because they asked for your suggestion and then kind of made the determination on their own legal logistics manufacturing media real estate retail security software. So we could have I mean, sometimes I put us in the software category. Yeah, I mean, because that’s what we do, we make it to FullScale.io to learn more about sports, telecommunications and travel and hospitality, so we were out of the hole last year number 78 in our industry. So like I said, when you make the list, you make the big list. You make your state list, you make your city or regional list make your industry less so you actually carry a win for awards which I think is pretty cool. So yeah, so you know Inc delivers us we got you know, then we did license the logos, you know, it was I think it was like 1500 bucks, and they send us a whole pack they I mean we didn’t have to like build a lot of stuff and they send us everything we need and we can now include that and it’s it’s great validation so you talk about like why that’s why there’s I look I do look at a lot of people’s websites and I see a bunch of badges and they’re like yeah, and I won the boy scout badge of honor in 1988 some of the yeah I think this is a good one when it’s it’s pretty well known it’s pretty established um out here’s the crazy thing you’re on this thing three times yeah, baby. Three times 123 is easier to count to than 5000. Let’s talk about that for a second because in addition to being involved with Full Scale you know, we own the company but you have also been involved with you. You went to Camp Digital, which is known as well. I will let you explain.

Matt Watson 12:59
Well, so I joined the company a few months ago so I have like nothing to do directly with the growth over the last four years the company the company was called home and local services and they’ve since renamed to camp digital and you know, they they brought me in to help improve the technology and grow it and all these things. Now what’s interesting, though, is Full Scale helped them build the original version of their software, and that’s something else we should talk about like didn’t we find there were like 15 or 20 companies on the list that Full Scale had worked with?

Matt DeCoursey 13:31
No that had been on Startup Hustle. Oh, that had been on the podcast Yeah, okay. Yeah, a lot of our clients Unfortunately now we’re we can mention camp digital go to camp digital.com To learn more about that but you talked about like roots running deep I mean, when you are originally suggesting Full Scale to them and that’s yeah, you know, we still have a relationship with them and so much that you’re involved in the company now so and you know, so we did have a couple other a couple of active clients on the list and you know, we have a lot that we have a lot of clients and we have a lot of we felt we have found 16 past Startup Hustle guests that were on this year’s list that’s just this year yeah, I mean for if we went it would have done a lot of work yeah back and look through all of them. And you know, I would be if we look back over 900 episodes that we have a triple-digit number. If not, I mean I’m probably I would I would guess that at least 25% of our guests are 21 and five have been on this list at some point.

Matt Watson 14:37
That’s pretty awesome.

Matt DeCoursey 14:38
I would say that’s probably fair Yeah, yeah, I mean it’s or worked at a company that was and that’s and that’s how deep this runs now so So alright, so you got Full Scale now we got smoked by man camp digital Roland Full Scale up and smoked it summer camp, man.

Matt Watson 14:59
Cuz yeah, you got those 365 around 1,621%, the last three years and so we are where we’re a digital marketing agency for home service company. So that’s a totally different industry from Full Scale.

Matt DeCoursey 15:13
Full Scale only grew 723%. Only. I know, you know, the craziest thing about that number, Matt is during that three year period, we purchased no advertising.

Matt Watson 15:25
That is really incredible. It’s crazy.

Matt DeCoursey 15:31
And now almost 300 employees, we did this podcast, we did a lot of content marketing through a blog. And we did host people at our suite events, which has been a huge hit, because it just got us in front of and around a lot of people that we started conversations with. But yeah, during that three year period, there was no external advertising, no CPC, no, nothing. That’s pretty crazy. Yeah. So then there’s a third company. And that’s the one that we were talking about. Last year, you had a successful exit when a stack of I was acquired by Huntington Beach, California based NAT trio. Yep. And they’re on the list.

Matt Watson 16:09
They’re on the list number 3453 through 151%. Now, that includes all of Metro, not just stack fi that I sold, but last year sacrifi was on the list on its own, and we were ranked 379. Yeah. 379 list.

Matt DeCoursey 16:25
So it was when, when, when that’s what you’re trying to say?

Matt Watson 16:29
And honestly, I have a really cool plaque on my wall in my office, from last year from Stack fi being on the list. And it’s one of my favorite things. I’ve always loved the Inc 500. And my old company VinSolutions was in the Inc 500 multiple times and I have a plaque in my office from what I’m looking at right now. It’s just cool. I just always think it’s one of the coolest accomplishments.

Matt DeCoursey 16:49
If you go to Watson’s home office, it’s just draped in awards. And plaques and yeah, it’s crazy. You walk in and money just starts falling. And if he touches you, you turn into gold. It’s really weird.

Matt Watson 17:02
No, it looks like my little kids have destroyed my office. Oh, really.

Matt DeCoursey 17:05
I was thinking something different. I know. I did mention when we’re at the office, and we’re looking at the list sounds like shit, Watson’s on here three times. And I was like, I’m gonna be back guys. I’m just gonna go see if I can get him to touch me some more. Because I think I might turn to gold. So no, congratulations. But yeah, I mean, there’s so there’s, there’s, it’s legit. And that’s, you know, that’s okay. So there is one thing that happened after I won, or after Full Scale won, and I don’t, I don’t want to use the word I didn’t win shit. Our company as a whole? Yeah, they did, I got the easy job. There’s 300 people that show up and do great stuff. But you know, so I went to the bank afterward, and I was out the teller window, and I had that little plastic tube and I was trying to shove the Inc. 5000 award in it. Get it in the frickin tube. And I was trying to shove in there, like, you’re gonna need to come into the lobby mat. And so I went in, and I was, you know, I tried to fill out a receipt and they said the amount and I put 5000 in the box, and I passed it to the teller and she said, What are you doing? So I want to put this award in the bank and can’t put an award in the bank. And I was like, I thought about it. And I was like, actually, it did cost a little bit of money to win this award. So then, I realized I’m like, oh, so the award really doesn’t mean shit. Unless you do something with it. Now, not everybody feels that way. Some people like the validation. But I think if you’re going to do stuff like this, you need to have tasteful and productive ways to make the award do some work for you. Matt, when you think about that, I mean, I think that, you know, you talk obviously, you know, you know, things like social media posts, you put it on your website, maybe email signatures, things like that. I mean, when you do stuff like that, it helps other people that want to do business with you see some of the mainstream validation, which in my opinion, makes it easier to buy from you.

Matt Watson 19:23
You know, everybody loves third party proof, right? If you’re talking to an investor or potential customer or whatever, it’s great third party proof, right? Like if I’m looking to buy whatever kind of tool, it looks pretty cool. If I’m looking at their website, and like, wow, they’re one of the fastest growing companies, they must have a cool product, they must be doing something the right way, and must be a well run business. Right? Like, it’s just great third party proof. And the other thing that’s great about it is it’s a it’s a good reason to talk to the press like I’ve been in the Local Business Journal before and we’ve been on other startup you know, online, publishing things that interviewed us because we were in the list and so it’s a great thing. to use to help make some noise for various reasons.

Matt DeCoursey 20:03
Yeah, I think that’s as with everything you mentioned, you know, I think another thing that it’s good for is, you know, at Full Scale, we sent out an image to our employees. Yeah. And, you know, like and said, Hey, if you want to post this, and you’re proud of it, go for it, and a ton of our employees did. And, you know, those are the people that make it happen.

Matt Watson 20:27
It’s gonna wait for them to feel successful to absolutely, yeah, share the success rate internally.

Matt DeCoursey 20:31
Yeah. Okay, so we did skip over a couple things. And wow, you know, if you hear a thunderstorm in the background, it just really started raining, or I’m out.

Matt Watson 20:42
So lightning struck three times this year, and then did it on the Inc. 5000.

Matt DeCoursey 20:46
Yeah, yeah, I see. I see what she did there. Alright, so we talked about the eligibility and criteria, and some people are interested. If you’re interested in how you can apply, I mean, you can go to inc.com. They will walk you through, you know, they have a whole application process. And those applications get processed by the end of March, and whatever year that is going on, you do have to have generated at least it well, at least for recent ones, you would have had to have done 100,000 in revenue in your first year and 2 million in your third year.

Matt Watson 21:30
That’s a lot of growth.

Matt DeCoursey 21:31
Yeah. So that was their criteria, and then you need to be privately held for profit, based in the United States and independent, meaning not a subsidiary, or a division of another company.

Matt Watson 21:46
Yep, yep. There you go.

Matt DeCoursey 21:47
So that’s the criteria. And then, you know, we talked about when Atlas comes out every year, right around right around this time, right around mid August, August ish.

Matt Watson 21:58
Yeah, if you’re listening to this, and you’re like, Man, I should have been on the list. It’s something you gotta get your marketing team or somebody you know, get, make them aware and have them look out for it. Another company I’m invested in, that’s here in Kansas City, is coming called dealer queue. And they’re killing it and automotive right now. Some old VinSolutions team there, they should have been on the list. They didn’t apply. And so that’s the thing you’ve got to apply. And, you know, things you have to look out for is if you’ve got to make marketing, it’s something they should have on their radar.

Matt DeCoursey 22:30
Well, and the reason that you have to apply is because there are seven roughly 7 million companies that meet what could meet the criteria. Yeah. And the issue is, as you know, that data is free flowing for private companies, private companies aren’t charged with reporting this information publicly. So if you’re not going to share it, then how are they going to know? What are they? What if the award falls in the forest? And no one’s around? Did it really make a sound?

Matt Watson 23:00
And what I would recommend is, you know, as your company, you know, how fast you’re growing? Right? You know, what your revenue was in 2018? And 2021, do the math and say, Okay, we’re, we’re growing, we have we’re growing 30% We’re going on 3,000%? What have we grown? And if you’ll feel like the numbers are high enough that it would make the lists, think go for it. You know, it’s something fun that you can do. Now, I feel like, Oh, we’ve only grown 40%. It’s probably not going to make the list. And you know, fine, don’t don’t apply.

Matt DeCoursey 23:25
So, yeah, 40% wouldn’t get it done. Let me know, let me go down. I mean, hang on, let me count. I’m gonna do it out loud.

Matt Watson 23:33
While I scroll to make the like, top 500. You’re gonna be like hundreds of percent.

Matt DeCoursey 23:40
Yeah. I mean, well over 100% it, you know, it’s not that crazy to be at the bottom of the list. Now. It was like 150% growth. I mean, you still have that some people might look at that. And Amelia, it doesn’t sound like that much. Go do it.

Matt Watson 23:56
It’s hard. I mean, let’s be honest, for most companies growing 20, 30, 40% year over year is a big accomplishment. Yep. Right. But the older a company gets, like Microsoft or Apple or Amazon, growing that fast is huge, you’re talking about huge numbers at that point. And at one point, and that’s why they do it at one point. Yeah, but at one time they did. So it’s a lot easier when you’re small.

Matt DeCoursey 24:21
Well, you know, I want to give everyone an additional reminder that today’s episode of Startup Hustle was brought to you by 2022 Inc. 5000. Number 878 full scale.io helping you build a software team quickly and affordably. And we can help you be on the list. We can help you out, help us come help us have a better ranking next year and the prior year or the no the year after that the year after that year and we can help your business grow. Yeah, and you know with that there’s a lot that well, let’s talk about that for a second. This is kind of on our way out the side Episode. Yeah, I still don’t like the fact that why aren’t there. You know how we need to see some less for who makes the most profit, not just the most revenue? Because while there are 5000 companies on here, how many of them do you think are actually profitable?

Matt Watson 25:19
Well, and that’s a really good point. And that’s what I think that’s a big part of the problem with the startup culture, right is people look at the top line revenue, or they just look at how much money people raise. But nobody ever talks about if they’re profitable, right, and people get worried about them. I almost call them vanity metrics that are not really vanity metrics, like they’re important revenue and raising capital and stuff. Those are important things. I wouldn’t really call them vanity. But it almost feels like vanity instead of like, doing a business that’s actually profitable. That’s our real business people get so hung up about how much money we raise. And how much revenue do we have? But really, it’s about making money.

Matt DeCoursey 25:57
Yeah, we got a local publication here in Kansas City that’s overly obsessed with that shit. And it’s just like, top VC-backed companies, like, who make a fucking profit man who makes money? And how’s that going for block phi? Yeah, well, that’s my point. And you know, so much of this is a bunch of crap when it comes to, you know, like, who cares how much you raised? We haven’t really worked up. Full Scale is never on that list. We started it on our own.

Matt Watson 26:25
We didn’t raise, we ground it, and I’d much rather have a business grow. And yeah, I’d much rather have businesses growing 2030 4050 60% year over year. That is not losing a lot of money. Maybe, you know, maybe they’re losing a little bit of money because they’re investing in growth, but they’re just slowly plodding along and profitable good business, right? Like, those are awesome businesses. And they are less likely to blow up, too, because some VC tried to put rocket fuel into them. There’s absolutely nothing wrong with that. And that’s a huge accomplishment. Don’t get hung up on this growing 1000s of percent like growing 4050 60% a year. Huge accomplishment.

Matt DeCoursey 27:00
Well, we wrote big checks, but no one cares about that. Why is that different? I mean, why is that different from a VC? I mean, I think it’s actually better. You got skin in the game, man. Yeah, putting your own fucking chips on the table and play with them, you know, to make it work. I think that it takes more guts than doing it with someone else’s dough.

Matt Watson 27:26
But, you know, yeah, I guess.

Matt DeCoursey 27:28
Yeah. When you take these, come to the Startup Hustle chat and tell me I’m wrong. That’s what the people there do on a lot of days anyway, so that’s what it’s there for, though. Right?

Matt Watson 27:39
That’s what it’s for. I love the Startup Hustle chat. Love it a lot.

Matt DeCoursey 27:42
I could do too. I do too. I do too. Well, you know, man, I just, you know, we wanted to put an episode out. I think we covered everything here. We’ve covered you know what you know, where you can find yourself in a magazine and online, you can go to inc.com and work through the registration process or the application process. It did not take that long. I mean, it does take some effort, but I sent them financials. It wasn’t crazy now. If you don’t have your shit together on your financials, then you’re, then it might be a lot more work. You know, talking about the eligibility requirements is three years of growth and revenue, you do need to see some kind of spread on that growth less comes out annually and who’s on it is who’s on it. Now. If you do get on it, there are a couple things that I didn’t mention. You do get invited to a gala, a black tie gala which I will not be attending this year.

Matt Watson 28:32
Did you go? No? Yeah, no,

Matt DeCoursey 28:36
I don’t really do that shit.

Matt Watson 28:38
Do you know I mean, let’s be honest, Inc. You know Inc is running a business, right? And they make a lot of money off all this, and they make money off the gallons. I’ll take it. Yeah, it’s all away from them to make money. But it’d be a cool event to go to, I bet.

Matt DeCoursey 28:49
I did get invited to participate in their master’s program, though, which I had to apply for and have been approved for publishing content on ink.com. That’s cool. Yeah, so that’s common. Yeah. What should I write about? The podcast: why less? Why never show profit and only show revenue growth?

Matt Watson 29:13
Do you think that’s your first? All right.

Matt DeCoursey 29:15
Now, I gotta get back to work because now I’ve got to set the standard. I got to get on this list again and again and again. I think that’s real. That was like their fifth year in a row.

Matt Watson 29:24
Yeah, yep. There are a lot of companies in multiple years.

Matt DeCoursey 29:27
I’m out, man. I’ll see you right back to work.