PowerPoint presentation using speaker notes; vision and mission statements, 3-4 Strategic Objectives, minimum of 5-6 slides

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● S E P T E M B E R 2 0 2 1 ● I N C . ● 4 3

GROW LIKE YOU MEAN IT

Every day, my colleagues and I meet with

young entrepreneurs seeking funding and

expertise to help grow their businesses. All of

them have one goal in common: to achieve the

kind of success that might one day land them

on the Inc. 5000. It’s an honor we’re familiar with, as the outfit I founded and ran for nearly two

decades, Big Ass Fans, appeared on the Inc. 5000

for 11 consecutive years. That’s a feat matched by

few companies.

Behind that accomplishment was a deter­

mination to increase revenue and put profits

back into the business to expand product lines

and markets; a firm belief that excessive profits

at year­end meant missed opportunities; and a

steadfast refusal to accept outside investment.

And, honestly, after making the list the first time,

I always wanted to climb higher in the rankings

the next year.

This focus on top­line growth accomplished a

couple of important things: First, it allowed us to

operate the kind of business we wanted, one that

delivered quality products and service and that

took good care of its people. And, second, when

we decided to sell, we had plenty of suitors. Pri­

vate equity firms find nothing more enticing than

a company with lots of potential for cost cutting.

It all worked out fine, but were we to do it

over again, would we make the same decisions?

Maybe not. And while I much prefer to look

ahead, hindsight (never mind the notion that it’s

always 20­20) can be an excellent teacher. So

it’s useful to reflect on what we might have done

differently.

But, before getting into that, I’ll give a quick

and tidy version of the Big Ass Fans story for any­

one who might not know it.

MOVING A LOT OF HOT AIR

You’ve no doubt seen a Big Ass Fan. These very

large, very slow­moving overhead fans are now

everywhere, from arenas to zoos and all kinds of

food­related facilities. One of our tag lines used to

be that everything you ate for breakfast had spent

time beneath a Big Ass Fan.

We launched in 1999 with six people, funded

with the proceeds from the sale of a roof­based fan

business and a lot of credit cards. From the start,

we knew we had a great product that solved a real

problem—keeping people (and animals) comfort­

able in buildings too large for air conditioning. We

were convinced that it was only a matter of time

before the world recognized this.

Our first year, we sold 146 fans. By our fourth

year, the number had jumped to 1,900. I remember

someone asking how large I thought the market

might be, and I said, “Maybe 50,000.” Little did I

know. We sold our 100,000th fan in 2013, and every

year after that we sold hundreds of thousands.

From 2002 to 2008, our revenue increased

around 45 percent annually on average. Then the

recession hit. Sales took a dive, but I was damned

if I was going to lay off anybody. So we launched

a new installation service and did a little penny

pinching. Everyone kept their jobs, and we even

eked out a tiny profit. As soon as the economy

picked up, we had the people we needed to keep

growing. The rest of the time I owned the company,

sales grew at a minimum 30 percent annual pace.

Constant development of new products and

services played a huge role in that growth. After the

recession, installation turned into a lucrative divi­

sion. Our R&D efforts paid off as we expanded from

simply manufacturing and selling industrial fans

to developing silent, elegant fans for commercial

spaces. And when we learned about work being

done by an innovative motor designer in Asia, we

brought the man and his home ceiling fan into the

Big Ass Fans founder Carey Smith led the fan and light maker from $0 to its $500 million sale. He started working at age 9 and has never stopped. His “secret” to success is common sense, and he’s happy to share it. His firm, Unorthodox Ventures, focuses on finding small companies with big potential.

R I G H T , Y O U ’ R E W R O N G ❱❱ C A R E Y S M I T H

My company spent a decade-plus on the Inc. 5000. Of course, I’m proud of that. More important for your company, increasing the top line gives you better opportunities to focus on the things that matter more than money.

4 4 ● I N C . ● S E P T E M B E R 2 0 2 1 ●

Kabir Barday, co-founder of OneTrust, No. 1 last year on the Inc. 5000, bootstrapped his company to be able to develop products without having to meet investors’ aggressive targets. See inc.com/ magazine.

company. After some tweaks,

we christened it Haiku and

made it smart—the first

ceiling fan to join the internet

of things, as it was quaintly

called. The Haiku quickly

grew into a $60 million divi-

sion. Sales poetry.

LEARNING FROM MISTAKES

There were misses, too. I

was loath to venture into

M&A territory, and that

probably held us back. For

example, at the end of the

recession, a competitor—

one that sold more than

just fans—was looking for

a buyer, and at $40 million,

the cost was quite reason-

able. If I had pursued that

deal, we might have more

than doubled our revenue.

As time went on, we

also saw opportunity in

some shiny objects we probably shouldn’t have

approached. If we’d rethought these, we might

have improved the bottom line while not detract-

ing all that much from the top.

For example, our customers told us they

needed brighter, more energy-efficient lighting,

so we took a deep dive into industrial LEDs. From

there, we added more lighting products and even

ventured into home lighting. Our lighting division

was profitable, and we made a good product, but

it took longer than anticipated, and it diluted our

focus. Worst of all was the fact that we were con-

stantly chasing leaders like Philips, the Dutch

electronics giant, in a very competitive market. 

The large, existing companies regularly improved

their offerings and benefited from size efficiencies.

In that respect, we were out of our comfort zone.

We were used to being ahead of everyone with our

fans. The lighting venture also led us to change

our name from Big Ass Fans to Big Ass Solutions,

something we soon regretted.

ON THE OTHER HAND

We may have gotten involved in some areas we

shouldn’t have, but keeping a foot on the growth

pedal paid off. If we hadn’t put so much money and

effort into new product development, we would

have almost certainly run into scaling problems. If

we’d kept all our eggs in one basket and sold only

industrial fans, we would have had a hard time

keeping up the pace of growth while maintaining a

high-quality product. As it was, our gearbox sup-

plier had to expand its facility to meet our demand.

At Big Ass Fans, our primary focus was always

on quality. But we were also determined to increase

sales, because we believed in our way of doing

busi ness—and the more we grew, the greater the

impact we could have on our community. I always

said we weren’t in business to make money; we

made money to stay in business. If we had money at

the end of the year, I truly believed that meant we’d

missed an opportunity to invest it in the company.

We always made a profit—just not as much as we

might have if profit had been our top priority.

If I had it to do over, I would’ve sought more

advice—assuming I’d found anyone I believed

worth listening to. Maybe they would have told

us to acquire more companies, as I would tell

my former self today. Our acquisition of Haiku

worked out great. But I was reluctant to make

other deals because we lacked the expertise on

staff; because when we did consider them, the

companies either had bad products or too much

baggage; and because we would have had to bor-

row money, which I did not want to do.

Our success tells you that, for the most part, we

made good decisions. Focusing on revenue growth

allowed us to spend on the things we believed

were more important and interesting than money.

Our customers loved us, as evidenced by a net

promoter score that would be the envy of any

company. We owned the market. And when it

came time to sell, we were an enticing property to

private equity and VC firms. I got my asking price

of $500 million, and because of a plan in place to

share the wealth, more than $50 million of it went

to colleagues. Twenty of them became instant

millionaires. Several have used that money to start

businesses of their own—and they each have a

game plan of their own for reaching the Inc. 5000.

AT BIG ASS FANS, OUR PRIMARY FOCUS WAS ALWAYS ON QUALITY. BUT WE WERE ALSO DETERMINED TO INCREASE SALES, BECAUSE WE BELIEVED IN OUR WAY OF DOING BUSINESS—AND THE MORE WE GREW, THE GREATER THE IMPACT WE COULD HAVE ON OUR COMMUNITY.

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