Share this article

print logo

THREE AREA FIRMS ON INC. 500 LIST <br> LOCALNET, DDM DIRECT AND FETCH LOGISTICS CITED FOR RAPID GROWTH

Marc Silvestri launched his company 10 years ago with six computer modems and one employee: himself.

But his persistence has paid off. Today, his Amherst-based Internet on-ramp company, LocalNet Corp., has 100 employees and manages more than 16,000 modems.

His company's rapid growth over the past five years has also won LocalNet Corp., a spot on Inc. magazine's annual list of the 500 fastest-growing privately held companies in the country.

Two other Buffalo area companies also made the list this year: Amherst-based Fetch Logistics, and DDM Direct, a direct mail company in Buffalo.

Inc. creates its list based on nominations, so it is not comprehensive. But it spotlights rapidly growing companies, ranking them by their average annual sales growth rates over a five-year period, rather than their total sales.

Fetch has made the list three years in a row, and LocalNet made it for the third time in five years. DDM Direct earlier this year made Inc.'s Inner City 100, a list of the fastest-growing inner city companies.

LocalNet still promotes its $9.95 per month, flat-rate dial-up service as its flagship item. Silvestri said he is confident dial-up isn't going away anytime soon. He noted that there are 65 million dial-up customers in the country, and LocalNet has 125,000 of them.

"We have tremendous market-share ability to continue to grow the company," he said. On Inc.'s list, LocalNet ranked No. 436, with an 85 percent average annual sales growth and $10.2 million in sales.

Silvestri's company has grown to employ 100 people, including 85 at its call center. He said LocalNet tries to keep the work environment fun, offering pizza and wings the first Wednesday of the month. When the company moved into the call center, employees were invited to choose posters to hang to give the place a personal touch. LocalNet turned the posters into plaques.

While LocalNet focuses on the Internet, DDM Direct mail has found a niche in religious publications. The company's 100 percent average annual growth was No. 366 on Inc.'s list.

DDM Direct prints and mails all types of media, but the religious publications niche stood out because its founder, Carl Falletta, had experience with those mailings. "It's an area that we knew well," he said.

The company, which generated nearly $6 million in sales last year, tries to expand its customer base by using its Ohio call center to contact parishes in other states every day, seeking their business. It also uses direct mail to reach potential customers.

The highest-ranking local company on the Inc. list was Fetch Logistics, at No. 281, with a 129 percent annual average growth rate.

Fetch generated sales of $17 million last year. Robert Closs II, the chief executive officer and an owner, said the company took a close look at its needs after a few years of rapid growth. "We invested heavily in technology," he said.

Fetch has stuck by its original plan of having only one physical location, in the Buffalo area. It has 18 people in other cities who work for Fetch in home offices, to keep overhead costs low.

Closs said the industry Fetch serves faces challenges: a truck shortage, rising fuel prices, and higher insurance rates that have driven some carriers out of business.

The shortage of trucks would seem to harm Fetch's business, but Closs said the impact is just the opposite. "(Shippers) need to partner with third-party logistics services to find a truck," he said.

More than 50 people work for Fetch, including some who are independent contractors, he said.

The owners of all three companies say they appreciate how far their businesses have come.

"It's still fun," Silvestri said. "It was fun on day one, and it's fun now. I was talking to my insurance agent and he said, 'You sound the same as you did when you started years ago.' "

To be eligible for Inc.'s list, companies had to have had at least $200,000 in net sales in the base year of 1999 for Inc. 500 alumni, and in the year 2000 for new applicants, and $2 million in net sales for 2003. Their 2003 sales had to exceed their 2002 sales.

e-mail: mglynn@buffnews.com