Who Knew?! 2012/01/23

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“Who knew?” is a phrase I’ve been using a lot lately. I used it when I learned about the long-term dynamism and resilience of Minnesota’s economy as detailed by the U of M Carlson School’s Professor Myles Shaver. As I’ve written before, we’re Minnesotans and we don’t brag, and that means it is sometimes easy to surprise us with our own success. Professor Shaver’s work details some of that success.

This week’s “who knew” moment came when I completed a joyful annual ritual. I bought and downloaded The Business Journal’s “Electronic Book of Lists (EBOL).” You may see the individual lists every week in The Business Journal, you may get their annual publication of the year’s lists, but you’re not really in business intelligence nirvana until you download the electronic version when it is available every January! I am in data visualization bliss right now! But, my “aha” moment this week didn’t come from a complex multivariate four-dimensional animation, just a simple sort. Yes, sort, one of the humblest of algorithms that introductory computer science students study, the kind of tool so ubiquitous as to render it trivial in some people’s minds. Here’s the deal: The EBOL lists the top one hundred publicly traded companies in our market, from UnitedHealth Group to Aetrium Inc. (originally published 4/1/2011). And it lists the largest privately held companies from famously large and famously private Cargill to the Dakota Electrical Association (originally published 5/20/2011). So, what would happen if you merged the two lists (private and public companies) and sorted the merged list? What would you expect? Cargill with $107 billion in revenue would beat UnitedHealth Group’s $94 billion in revenue, of course, but then you might expect the public companies to obliterate the private companies, right? That’s what I thought too. So imagine my surprise to see how well our local private companies did! In fact, the number 100 private company, Dakota Electric Association (annual revenues of $199 million), has revenues better than forty-four of the publicly held companies. That’s right, better than Digi International Inc. ($187 million), HickoryTech Corp.($162 million), Famous Dave’s of America Inc. ($148 million), Communications Systems Inc. ($120 million), and Stratasys Inc. ($117 million). It’s true, among the top twenty only four are privately held companies, but within the top fifty, public companies make a very respectable showing.

So what’s my conclusion? With the goal of every entrepreneur to “go public” and the goal of all investors to reach a stratospheric “liquidity event”, perhaps those of us who build businesses should be more circumspect and learn the (literally) valuable lesson from our local private companies who succeed quietly and privately on their own. “Who knew” it could be so rewarding?

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