FAST COMPANY
144 SHARES
•••
THE WORLD'S MOST
INNOVATIVE
COMPANIES
WE CANVASSED THE EXPERTS, ANALYZED THE
PRODUCTS, AND CRUNCHED THE NUMBERS. FROM
VISIONARY UPSTARTS TO STORIED STALWARTS,
HERE ARE COMPANIES THAT DAZZLE WITH NEW
IDEAS — AND PROVE BEYOND A DOUBT HOW
BUSINESS IS A FORCE FOR CHANGE. WE CALL
THEM THE FAST 50.
BY MARK BORDEN, BILL BREEN, JEFF CHU,
JOSH DEAN, REBECCA FANNIN, AMY
FELDMAN, CHARLES FISHMAN, PAUL
HOCHMAN, DAVID KUSHNER, MARK
LACTER, ROBERT LEVINE, DAVID LIDSKY,
ELLEN MCGIRT, DANIELLE SACKS, CHUCK
SALTER, ELIZABETH SVOBODA, LINDA
TISCHLER
#1 GOOGLE
The faces and voices of the world's most innovative company.
#2 APPLE
Careful readers of this magazine may be scratching their heads
right now, in light of our recent cover story laying out the many
challenges facing Apple. But the company has had,
indisputably, one hell of a run. In the past year alone, three
major new products — iPhone, iPod Touch, and Leopard OS —
fueled triple-digit revenue growth. So while analysts forecast a
more earthbound Apple in 2008, it deserves praise. And extra
points for style.
#3 FACEBOOK
In 2007, the social-networking juggernaut had variously
impressed with its ability to reinvent the wheel (opening its
platform to outside developers) and drawn cyberpickets with its
boneheaded missteps (trying to sell advertising by telegraphing
its users' every move). But after a year lived dangerously,
Facebook is officially A-list, with a $15 billion valuation to
boot, thanks to Microsoft's $240 million investment. That's
nothing to throw a sheep at.
#4 GE
GE makes our list not on reputation but on the strength of its
breakthrough products. Among them: an HD CT scanner that
reduces radiation exposure by half, a reengineering of the bestselling CF34 jet engine for the booming Chinese aviation
market, and a hybrid locomotive that cuts emissions by 50% —
evidence that Ecomagination is more than just marketing
babble. Coming up, commercially viable OLED lighting by
2010.
#5 IDEO
Nobody can accuse the Palo Alto — based design firm of taking
on easy clients in 2007. The CDC asked Ideo to help tackle
childhood obesity; the Acumen Fund enlisted the shop to
collaborate on delivering clean water in the developing world;
and the Red Cross hired it to help encourage blood donations.
"As social issues increasingly become business issues," says
Ideo CEO Tim Brown, "this will be a critical new direction for
design." Of course, there were awards too. The company's
designs for the Eclipse 500 Very Light Jet cabin and cockpit
instrument panel won IDEA Gold medals, as did its LCD
monitor for Samsung. But it was Ideo's "Keep the Change"
campaign for Bank of America that had perhaps the most
impact. Based on research showing that boomer women with
kids tend to round up their financial transactions, Ideo
developed a service that rounds up debit card purchases to the
nearest dollar, then transfers the monetary difference from the
customer's checking account to her savings. In its first year, 2.5
million customers signed up.
#6 NIKE
You expect fancy footwear from Nike. But its latest
masterstroke is social networking, online and off. From events
to the Web to unique retail hubs, Nike is blurring the line
between brand and experience.Mark Borden
Read More: Consumer Experiences and Consumer Products
#7 NOKIA
Once a maker of wood products and tires, the Finnish firm has
thrived in the wireless world. Today, Nokia has a 37% (and
growing) share of the global cell-phone market, more than twice
that of its closest competitor, Motorola. How? A two-tiered
design process that identifies the "remarkable similarities in
what global consumers want and need in their mobile devices,"
says senior design manager Rhys Newman, then adds local
insight. Bright colors are key to success in India, China, and the
Middle East, "where a phone can show status," he says. Markets
with low literacy rates get phones without written menus. The
company’s next challenge is to gain momentum in the U.S.,
where it has less than 10% of the market. It’s betting big on the
feature-rich N95 smartphone — and a strategy of welcoming
third-party apps.
#8 ALIBABA
When Alibaba went public last November and raised a stunning
$1.5 billion — the biggest Internet IPO since Google’s — it also
raised eyebrows around the world. But probably not those of
founder Jack Ma, who back in 1999 recognized that China’s 42
million small and medium-size companies (the vast majority of
businesses in the country) just might create some opportunities
for e-commerce. Alibaba provides a point-and-click system for
suppliers to get online and connect with distributors and
consumers all over the world. The Chinese site today boasts 16
million users, and the English iteration has 9 million. Watch out,
eBay.
#9 AMAZON
Without much fanfare, Amazon has more than tripled its
revenues since 2002, to $13 billion. The key: giving customers
choices, not just among products, but also between buying from
Amazon directly or from outside vendors on the site. Amazon’s
new digital offerings — in e-books, videos, and music —
present a fresh menu of options. The company’s digital music
store, launched in May, already comprises 3 million songs, all
compatible with any device and any music software. Similarly,
Unbox allows Amazon customers to rent or buy films and TV
shows, and watch them on a variety of players. In an era of
fighting formats and fears of piracy, that’s uncommonly
ecumenical.
#10 NINTENDO
By now you know the story: After Sony and Microsoft kicked
the Mario out of Nintendo’s GameCube in the Video Game War
of 2001, the cutest and smallest of the three platform makers
needed a new plan. "Nintendo took a step back from the
technology arms race and chose to focus on the fun of playing,
rather than cold tech specs," says Reggie Fils-Aimé, president of
Nintendo of America. The resulting Wii system, with its
intuitive motion-sensitive controller and interactive games,
appealed not only to teen boys but also to their sisters, moms,
and dads. In 2007, Wii outsold both the PlayStation 3 and Xbox
360. But get this: Unlike its competitors—which lose money on
each console and earn it back on software — Nintendo turns a
profit on its consoles, makes more selling games, then takes in
still more in licensing fees. "Not to sound too obvious," FilsAimé says, "but it makes good business sense to make a profit
on the products you sell." Wall Street thinks so too. The
company’s stock has more than doubled over the past year.
Nintendo’s upset is doing more than attracting new gamers and
bruising Sony and Microsoft. Says Sega of America president
Simon Jefferey: "It has opened doors of creativity throughout
the video-game business."
#11 PROCTER & GAMBLE
When Procter & Gamble’s stock tanked by more than half in
2000, CEO A.G. Lafley knew he was facing the dilemma of
giant companies everywhere: Despite pouring money into R&D,
P&G couldn’t create new products fast enough to keep growing.
The only way out, Lafley realized, was to innovate innovation.
So he launched the Connect + Develop program, which allows
outside developers to get their concepts and designs into P&G’s
product pipeline. An applicator developed by Cardinal Health
(now Catalent), for example, helped P&G launch Olay
Regenerist Eye Derma-Pods, now its top-selling skin-care item.
Today, 42% of P&G products have an externally sourced
component. And this giant is growing: Revenues rose 8%, to
$78 billion, last fiscal year, while profits climbed 14%, to $11
billion.
#12 NEWS CORP.
As if buying MySpace didn’t cement News Corp. as a maverick,
Murdoch & Co. last year pledged to go carbon neutral by 2010,
launched the Fox Business Network, and, oh yeah, snapped up
Dow Jones and The Wall Street Journal.
#13 AFFYMETRIX
Imagine going for a half-hour doctor’s visit and coming out with
a treatment plan tailored to your unique genetic blueprint. That’s
the vision at Santa Clara, California–based Affymetrix, which
makes lab tests that scan tissue samples for variations in
thousands of genes. The company banked an estimated $405
million in revenue last year, spurred by its AmpliChip test,
which identifies people who metabolize drugs slowly. Now the
race is on to develop advanced tests for genetic predisposition to
heart disease and the most common types of cancer.
Photograph: Chris Greenberg/The New York Times/Redux
#14 DISNEY
Two years into the job, CEO Bob Iger continues to mold Disney
into the digital-media innovator to watch. ABC was the first
network to sell TV episodes on iTunes and to stream them for
free on its Web site. Pirates of the Caribbean and High School
Musical showed multiplatform agility. And Pixar’s latest hit,
Ratatouille, was a masterful blend of technical brilliance,
artistry, and narrative that evoked Walt’s original magic. Pixar
cofounder Ed Catmull, now president of Pixar and Disney
Animation Studios, is encouraging the Big Mouse to rediscover
and build on its rich tradition.
FC: How are you reviving hand-drawn animation?
EC: People focus on the art of the old Disney films, not the
interplay between art and technology. Disney did the first bluescreen matting, the first multiplane camera. We brought back
that interplay. The art and technology inspire each other. One of
our experiments is going paperless. Changes are easier on a
digital tablet.
What worked at Pixar that is now helping Disney?
We’ve made two short films at Disney like we do at Pixar. A
small team does everything—the story, the technology—and it
allows them to stretch. "Glago’s Guest" is more somber and
realistic than the usual Disney look.
How do you encourage innovation?
In a hierarchy, everyone is working for the person making the
film, but we push control far down into the organization. Does
everyone own the project? Are we taking an honest-to-goodness
risk? If we’re not scared, really scared, we’re not doing a good
project.
#15 SAMSUNG
The first bendable OLED screen. An ultrathin double-sided
LCD. A solid-state drive to replace the hard disk in your laptop.
And soon, in a collaboration with game company Reactrix: a TV
that lets viewers move what’s on the screen with the wave of a
hand. Just a taste of the impact of the world’s fastest-growing
consumer-electronics company.
#16 METHOD
"I describe it as green trench warfare," says Adam Lowry,
cofounder of Method, the San Francisco–based company that
makes ecologically sound cleaning products. Last February,
Lowry and his partner, Eric Ryan, launched an assault against
Procter & Gamble’s blockbuster Swiffer. Method’s Omop, a
sleek silver reusable mop, employs sweeping cloths made from
corn-based plastic (PLA). Instead of clogging landfills, they’re
100% biodegradable — and just as effective.
This isn’t the first time Lowry, a 6-foot-6-inch chemical
engineer who founded Method with his highschool buddy Ryan
eight years ago, has given the middle finger to the consumerproducts playbook. Two years ago, Method rolled out dryer
sheets that use plant-based oil instead of the industry standard,
beef fat. The company had a triple-concentrated laundry
detergent a full two years before Unilever and P&G started
crowing about all the water and shipping waste they would
eliminate with their own. Meanwhile, Method’s were also
nontoxic, and packaged in bottles that look more MoMA than
Kmart.
Last year’s numbers were a landmark for Method, proving to the
industry that clean products are as viable as conventional ones
and that slick design can transform even the most mundane
commodities into objects of desire — all while priced for the
masses. In 2005, Method’s sales clocked in at a mere $15.3
million. In 2007, they hit nearly $100 million. Seventh
Generation, the green products pioneer, hit $100 million last
year too, but it took nearly two decades to get there. The fastrising Method is on a completely different trajectory.
"Method changed consumers’ viewpoint from ‘This [cleaning
product] is something necessary and not good-looking’ to ‘This
is something that’s almost an art object that I want everyone
who walks into my house to see,’ " says Lynn Dornblaser, who
tracks consumer-product trends at global research house Mintel.
"They’ve lured shoppers who hadn’t thought about
environmental cleaners by getting them to come in through the
back door." Method’s minimalist bottles of surface cleaner,
detergent, soap, and air freshener — originally designed by
Karim Rashid, now designed in-house — can be found
everywhere from Whole Foods and Target to Duane Reade and
Staples. Last year, Lowry and Ryan opened their first European
office, in London; in January, they launched a television show
on the Home Shopping Network; and in May, they will release
their first book, Squeaky Green, a home-detox guide that reveals
some of the industry’s nastier secrets.
None of it has been easy. Ryan, a former ad guy who sports
skinny ties and metal-frame glasses, explains that in 2005, when
they first set out to create the Omop, he and Lowry met with
every U.S. manufacturer of Swiffer-style cloths. "Every single
one of them said you cannot make [the cloths] out of PLA,"
Lowry says. So the duo scouted out a factory in China that was
willing to take on the challenge. Now that Method has proven
the formula works and there’s consumer demand for it, Lowry
says, the manufacturers who snubbed them are crawling back.
The trench warfare with the majors is only going to intensify,
though. Last December, Clorox launched Green Works, the first
entirely new plant-based line to emerge from one of the
dominant firms. Instead of heading for cover, Lowry and Ryan
plan to stay ahead of the competition as they always have—by
using ingenuity to feed the product line. "When we started this
company, we had a saying that we were never going to try to
out-Clorox Clorox," says Ryan. "We shifted the playing field
where now companies are trying to out-Method Method." —
Danielle Sacks
#17 TARGET
Target’s strategy of rolling out capsule collections by wellknown designers has kept the store’s fashion merchandise
leading the trends. In 2008, that strategy will take the form of
vintage-inspired sports apparel and footwear with Converse, and
a line of bedding, linens, and baby goods designed by
StudioDwell. Target’s appetite for hip design also extends to its
marketing initiatives, such as 2007’s "model-less" fashion show
at New York’s Grand Central Terminal (think holograms
strutting down virtual runways) and a 2005 "vertical fashion
show" at Rockefeller Center (left). Internally, the company
encourages non-big-box thinking with a quarterly Big Idea
contest. Winners don’t just get a star on their performance
reviews; they get a cash prize and a chance to see their ideas
brought to life.
#18 HP
When CEO Mark Hurd took over the demoralized post–Carly
Fiorina company in 2005, he knew it would be a messy job —
and that was before the spying scandal. But in just two years,
HP has stolen Dell’s leadership in the PC market, tripled its own
stock price, and grabbed some heat with an ad campaign that
features Gwen Stefani and Jay-Z. Then there are the new
products, such as Blackbird 002, an extreme-performance
gaming computer that has opened a new market in high-margin,
premium PCs.
#19 TESCO
Two or three times a week since November, a Fresh & Easy
grocery has opened in California, Arizona, or Nevada. It’s part
of a plan to open 200 stores in two years envisioned by the
chain’s British parent, Tesco, the world’s third-largest retailer. If
Tesco’s past is precedent, the U.S. grocery business ought to
pay attention: Tesco has already quashed challenges from WalMart in the U.K., and overseas expansion is its biggest growth
generator. With more selection than a 7-Eleven but less than a
standard supermarket, Fresh & Easy is geared toward the typical
American shopper who buys only a few hundred products. The
company plans to keep costs low by centralizing distribution,
selling more store-brand items, and relying solely on automated
checkout. By 2011, sales are projected to reach $4 billion,
according to TNS Retail Forward.
#20 AUSRA
Give Ausra CEO Bob Fishman a 92-by-92-mile expanse of
desert land — an area less than one-tenth the size of Nevada —
and he could power the entire United States. Fishman doesn’t
control that much land, of course, and transporting electricity all
over the country would get tricky. But that doesn’t make the
power of Ausra’s solar technology any less mind-boggling.
While most older solar setups depend on pricey photovoltaic
panels, Ausra’s installations boast mass-produced mirror
clusters that focus the sun’s rays onto water-filled tubes. When
the water begins to boil, it produces enough steam to turn an
array of turbines. Fishman estimates electricity generated this
way will cost 10 to 12 cents per kilowatt-hour — on par with
power from polluting sources such as coal, and 50% less than
photovoltaic power. "Photovoltaic is constrained because it uses
high-grade silicon," he says. "We’re using everyday materials
— just steel, glass, and water."
VC extraordinaire Vinod Khosla invested $25 million in Ausra
last year, and Kleiner, Perkins, Caulfield, & Byers kicked in
another $15 million, a colossal vote of confidence that has
proven contagious. In November 2007, Pacific Gas & Electric
signed a 20-year power purchasing agreement with the company
that will generate more than $1 billion in revenue (Ausra’s first
California plant is slated to be up and running by 2010), and
Ausra officials are in talks with utilities in Florida and Nevada
to cement similar deals. "I don’t think it’s out of the question for
us to get 30% of the national grid within 20 years," Fishman
says.
#21 TIMBERLAND
Rather than just going carbon neutral (which it aims to do by
2010) or using sustainable materials (which it does in everything
from its products and packaging to its factories and stores), New
Hampshire–based Timberland has taken the bully pulpit in its
environmental efforts, leading the way to greater responsibility
even as it struggles financially. The company aims to influence
its consumers’ and employees’ behavior with big benefits for
hybrid-car buyers, community-service incentives, green
scorecards on its products — even recycling its billboards into
tote bags.
#22 IBM
IBM racked up 3,125 U.S. patents in 2007, more than any other
company — for the 15th year in a row. It also celebrated the
first anniversary of InnovationJam: CEO Sam Palmisano
pledged $100 million for the best ideas at the companywide
brainstorm; he ultimately funded 10 of the 37,000 submitted,
including five new businesses. "Everyone’s trying to figure out
the holy grail of collaborative innovation," says IBM VP David
Yaun. So now IBM is selling the InnovationJam methodology
itself.
#23 ARUP
Founded 62 years ago, Arup is the graybeard of eco-sensitive
engineering and design. Its work represents a world tour of
avant-garde architecture — Paris’s Pompidou Center, the
Sydney Opera House, the London Eye. Arup’s latest work is no
less ambitious: A massive Beijing airport expansion, opening in
time for the Olympics, will accommodate 55 million passengers;
an eco-village in England will include zero-carbon homes; a
"personal rapid transit" system will shuttle Heathrow passengers
in driverless pods. Arup has done projects in 160 countries, but
its Google-like governing philosophy (set down 38 years ago by
founder Sir Ove Arup, a Danish philosopher and engineer) has
remained constant: "Our pursuit of quality should in itself be
useful."
#24 ANOMALY
There’s a dead body lying on the floor — no actual flesh, just
the crime-scene white-tape outline of a 6-foot-tall man frozen in
a mad dash. "Here it is, death of the old advertising model,"
smirks Jason DeLand, a partner at Anomaly, pointing at the
floor of his company’s Soho loft space. "Shot as he was running
out."
It’s worth a chuckle, despite the cliché of yet another new-breed
creative agency taking a shot at its predecessors. Unlike most of
the hot shops that have emerged in recent years premised on the
demise of the 30-second spot, Anomaly has definitely earned its
bragging rights.
Instead of claiming to reinvent advertising, Anomaly shirks the
ad categorization altogether. In 2004, DeLand set out with four
former colleagues from Chiat\Day and Wieden+Kennedy to
build a new kind of company: part branding firm, part design
shop, part innovation think tank, part VC firm. Anomaly has
created a model that attacks the fundamental flaws of the agency
machine. Most ad agencies still earn their paychecks from time
sheets and media spend, which means they’re motivated to be
inefficient and to produce ideas that are wedded to expensive
media. Anomaly takes a different approach, negotiating upfront
either a predetermined fee or, better yet, royalties or an equity
stake in a product. So when a client comes in with an
advertising problem, Anomoly addresses it more broadly as a
business issue, analyzing everything from design to product
development. "They have a talent that goes beyond your typical
artist or creative," says Brian Kelley, president of Coca-Cola’s
Still Beverages, a client. "It’s an eclectic group of people who
think about driving every piece of your business."
In thinking about their own business, the partners recognized
that as branding experts, they could just as well create original
products too. "We would rather invent the next VitaminWater
than do the ads for VitaminWater," says partner Carl Johnson.
So while half of Anomaly’s business is doing client work, the
other half is building brands from scratch. "What we’re really
doing is generating profit from clients, then reinvesting in a
venture fund for our intellectual properties," Johnson says.
Anomaly’s Sand Hill Road–meets–Madison Avenue approach
isn’t yet ubiquitous — or dominant — but it is showing results.
Profitable in its first year of business, the New York–based
agency has doubled its revenue every year since. In 2007,
Anomaly brought in nearly $20 million, with new clients
including Converse and Bluetooth-headset maker Jawbone. New
businesses it has launched include Avec Eric, a culinary line
with Le Bernardin chef Eric Ripert; Eu, a high-end skin care line
with former Neutrogena chemist Tammy Ha; and EOS, a massmarket skin-care line. As the firm has gained momentum, the ad
industry has taken notice: At least two of the major agency
holding companies have offered to buy Anomaly in the past two
years. Instead, after reaching their self-imposed max of 100
staffers this year, DeLand and crew opted to take an innovative
approach to their own growth. Wary of becoming another large
agency where creativity suffers with scale, Anomaly launched
an offspring: Another Anomaly, an autonomous company with
its own balance sheet, partners, clients, and an office just a few
city blocks away.
The venture that best illustrates the Anomaly model is the
luggage it created for Virgin America last year. Richard
Branson’s new airline hired the team in 2005 to feed ideas into
every part of its operations. Anomaly realized it could use the
crew’s luggage as branding medium and brought in snowboard
company Burton to help craft an edgy black suitcase with
skateboard wheels and a removable cosmetics pouch. Sales from
the luggage, which will be available commercially later this
year, will be shared three ways among the companies. "What
would have been a cost for Virgin is now an additional revenue
stream," says partner Johnny Vulkan. — Danielle Sacks
#25 AUTODESK
Since 1982, designers, engineers, and architects have made
Autodesk’s 2-D AutoCAD drafting programs the default choice
for creating anything from buildings to sailboards. Last year,
sales grew by more than 20%, and revenue reached $1.84
billion. Now Autodesk is targeting the latest growth area in
product design: 3-D virtual prototyping that eliminates the need
for building physical models. With the company’s Inventor
software, designers can not only create a rendering that shows
how a product will look (as with the Wuhan Blue Sky Chinese
apartment project at left), but they can subject it to tests that
show how different elements will respond to gravity or torque.
What’s more, whereas competitors’ forays into 3-D prototyping
were prohibitively expensive and hard to use, Inventor costs
$5,300 and uses click-and-drag functionality that allows objects
to be changed, redrawn, and saved as easily as in a Word
document. As Buzz Kross, a VP at Autodesk, brags: "We’ve
delivered this tool into the hands of designers. It has become
one everybody can use."
Rendering: Courtesy of Anderson Anderson Architecture.
Photograph: Herman Miller Inc.
#26 HERMAN MILLER
The first product to emerge from Herman Miller’s secret R&D
lab in Michigan just over a year ago has nothing to do with the
company’s signature Aeron chairs or modular office furniture.
Convia Programmable Infrastructure transforms the way
companies install electrical systems, letting you reconfigure an
entire building — lighting, outlets, even heat and A/C — with
only a two-button point-and-click wand. The result? Not just
flexibility in managing space, but also up to 30% energy
savings. Times are good at Herman Miller. Among the dozens
of fresh developments in 2007 were a personal climate control
unit adapted from automotive technology and a voice privacy
system that scrambles cell-phone users’ voices to the ears of
random passersby. Coming soon: office furniture with built-in
cordless charging technology.
#27 REALNETWORKS
"There should never be a day when you don’t have your music
wherever you are," says Michael Bloom, general manager of
Rhapsody, RealNetworks’ subscription music service. As a PCtethered offering, Rhapsody couldn’t overcome a century of
ingrained music-buying behavior. But with its DNA now
embedded in MTV, Facebook, and tech gadgets from TiVo to
Nokia Internet tablets to Verizon VCast cell phones (coming
soon), Rhapsody’s ubiquity is starting to seem inevitable.
#28 LG ELECTRONICS
Early on, LG, then a tiny Korean electronics manufacturer, was
known as the "lucky group." It sure looks that way now: Half a
century old, LG is one of the world’s biggest producers of cellphone handsets, air-conditioners, front-loading washing
machines, DVD players, and flat-panel TVs. It has gone from
near anonymity here just three years ago to $11.5 billion in
North American sales in 2007. LG’s killer app, slated for 2009
release, is rumored to be a mobile TV, dubbed MPH, that can
pick up robust digital high-def broadcasts — even from the
backseat of a car going as fast as 100 miles per hour.
#29 BOEING
Not long ago, Boeing seemed destined for a future of eating
Airbus’s jetwash. But the 787 Dreamliner put the Seattle jumbo
back in contention. Fifty percent of the Dreamliner’s fuselage is
built from lightweight composite materials, helping shave 20%
off fuel consumption. The 787 is also 60% quieter than similar
planes and emits cleaner exhaust. Inside, in a bid to reduce the
headaches, dry mouth, and general misery of the long-haul
hangover, higher cabin pressure and humidity better imitate life
on the ground, and lighting adjusts with time-zone shifts. By
January, 55 customers had ordered more than 800 Dreamliners,
making it the fastest-selling commercial jet ever.
#30 OMNITURE
Omniture is like an intelligence upgrade for the Web. It provides
thousands of clients, from Bank of America to JetBlue, with
real-time information about how visitors use their Web sites;
those visitors, meanwhile, find an increasingly personal
experience rooted in previous behavior and interests. And the
data derived from this sort of high-IQ interaction have made
Omniture an essential tool for improving its return on online ad
spending.Last year, it managed $500 million in keyword
spending that led to $10 billion in actual commerce. "We want
to change the online experience," CEO Josh James says. "If
consumers are happy, everyone is happy." James certainly is:
Omniture grew about 80% in 2007, with sales topping $140
million.
#31 IROBOT
It seemed beyond the call of duty. But when iRobot, a
technology company in Burlington, Massachusetts, was testing
new versions of its military robot, it joined the Army.
Specifically, the company sent engineer Tom Frost to basic
training and on to Afghanistan, where he helped soldiers clear
caves with iRobot’s PackBot, a nimble creature that can shoot
audio and video and climb stairs (it even works underwater).
Frost, whose army nickname morphed from "Sweet Cheeks" to
"Tommy Gun" as he grew into his deployment, sent immediate
feedback: "This thing has got to be lighter."
The wars in Afghanistan and Iraq have provided a sad
laboratory for iRobot, a company better known for the Roomba,
a robot that vacuums floors, then cruises back to its charger base
like a dutiful pet. For Helen Greiner, one of iRobot’s three
founders, the war has provided the impetus for the military to
fast-track the adoption of new technology. "There is no reason
to send a person into a dangerous situation when a robot can
help," she says.
Before robots, the state of the art for cave clearing was to tie a
rope around a solider’s waist and have him crawl around with a
grappling hook. While in the field, Frost was able to improve
the machine in real time, downloading code updates via satellite,
cobbling together solutions to signal problems that occur in
caves, and suggesting improvements, such as switching from a
laptop interface to a more familiar joystick control. The result is
the first infantry bot, priced to move at around $50,000 and
weighing in at about 40 pounds. In December, the company won
a $286 million contract to deliver as many as 3,000 of them to
the U.S. Army.
IRobot was born of the purest geek passion. The three founders
met at MIT and bonded over their love of robots: Greiner and
CEO Colin Angle were undergrads together; CTO Rod Brooks
was Angle’s thesis adviser. (Angle’s senior project with Brooks,
a six-legged autonomous walking robot named Genghis, was
later installed at the Smithsonian’s National Air and Space
Museum.) Ultimately, the trio decided it wanted to build robots
that real people could use — better living through robotics. "The
challenge was that robots cost more to build than they delivered
in value," Angle says. "What would it take to have them touch
people’s lives on a daily basis?" The founders left the rarefied
air of academia and went into business in 1990. Government
and university projects sustained them initially — they built the
behavior-controlled rovers for NASA that led to the Mars
explorer — but they were seriously strapped for cash. "We went
six-and-a-half years never starting the month with enough
money in the bank to make payroll," Angle recalls. "But we
always made it."
While Greiner deepened the company’s military relationships —
iRobot joined a DARPA program for robotics in 1997 — Angle
spearheaded the consumer division. IRobot spent part of the
1990s making industrial cleaning robots for SC Johnson and
toys for Hasbro; when both contracts expired, Greiner and
Angle decided to combine what they’d learned into the Roomba.
The company raised $38 million in investor cash in 1998,
started developing the cute digital domestic (most users name
them, as they would a pet) in 1999, and debuted its first version
in 2002. The Roomba now accounts for around 2% of the
vacuum market.
As the company has grown — it went public in November 2005
— innovation has become a priority. The consumer side runs
periodic "bake offs" where inter-disciplinary teams develop
ideas that have been languishing in-house. The last round
produced the Looj, a gizmo that cleans gutters, currently in beta.
The government-and-industrial arm opened the platform for its
basic PackBot to outside developers last year as a way of
driving innovation based on iRobot’s proprietary operating
system. The move paid off quickly. "We partnered with an
explosives-sensor company that was able to hook into our
onboard computer," Angle says. The resulting bomb-sniffing bot
generated 25% of the revenue for the G&I division last year:
"We shipped 150 in 2007," mostly to Baghdad.
"Nobody wants war," Angle says, but "the nature of conflict has
changed forever." That’s true of many aspects of life, and the
team is always thinking about the future, about a world where
houses clean themselves and an aging population uses robots to
help them manage the small but frustrating chores of daily life.
Says Greiner: "We’ve got the technology. How do we get there
first?" — Ellen McGirt
#32 WAL-MART
In 2007, Wal-Mart came to symbolize corporate environmental
transformation. Most famously, the company doubled the U.S.
market for energy-saving CFL lightbulbs, selling 100 million in
nine months. It rolled out an online system for tracking how its
suppliers reduce their packaging, launched a nationwide
program to teach employees about sustainability, installed solarpower systems on some stores and warehouses—the scale is
astonishing. But there’s also this: Last year, Wal-Mart hit sales
of $1 billion a day, a world record. It was only in 1980 that WalMart broke $1 billion a year.
#33 LIVE NATION
A lot of fuss was made when Live Nation signed Madonna to a
reported $120 million deal last year. The Material Matron
dropped Warner — her label of 25 years, which still owns her
catalog and will get two more albums — and made the Clear
Channel spin-off her exclusive music partner: record label,
concert promoter, ticket vendor, and merch agent. The usual
phrases were thrown around: "paradigm shift," "artist
empowerment," "death of the label." But the real big news is
what comes next. Live Nation plans to go solo and end its
partnership with Ticketmaster at the end of this year. In doing
so, it will break up a long-running duopoly, keep a larger share
of lucrative ticket fees for itself, and crucially, cut Ticketmaster
off from key customer data. "Forty million fans were coming to
our door, and we let Ticketmaster have their addresses and
email," says Live Nation CEO Michael Rapino (left). "That’s
ludicrous."
#34 INTEL
Intel had a rough 2006: Its slipping market share forced layoffs,
a reorg, and a complete overhaul of its chip offerings. But
adversity fired Intel’s competitive metabolism (even if it did
torch a feel-good partnership with Nicholas Negroponte’s One
Laptop Per Child, which Intel came to see as a competitor to its
own Classmate PC). By the end of 2007, Intel had 83% of the
chip market and a new 45-nanometer core processor that has
double the number of transistors and uses 30% less energy.
#35 BURTON
The earth is warming. The snow is vanishing. So snowboard
maker Burton now owns ... a surfboard manufacturer, Channel
Islands. A year after that 2006 purchase, Burton opened a
11,500-square-foot combo surf, skate, and snow mega-store on
L.A.’s Melrose Avenue, part of a strategy for breaking down the
boundaries that traditionally separated the categories—and for
rolling out product year-round in the process. And roll it out
Burton does: some 45,000 different items, each replaced
annually. We’re not sure if it offers a Greenland longboard yet,
but for Burton, there is no bad weather.
#36 WHOLE FOODS
Sure, CEO John Mackey got spanked in 2007 for his
anonymous posts on message boards, but the real Whole Foods
story remains its relentless drive to raise the bar in terms of the
foods it offers, their presentation, and how they’re transported to
the store. Sometimes that leadership verges on silly (e.g.,"butter
bars," at which customers can have their butters custom-mixed
with special herbs and salts). But more often, Whole Foods’
innovations foster social responsibility — such as its "Whole
Trade" concept, which certifies that products from developing
countries are produced in economically and environmentally
sustainable ways. Perhaps the most innovative Whole Foods
effort of the past year was a loan program for its food suppliers.
The company, which will pass $7 billion in sales in 2008,
created a pool of $10 million per year to provide low-interest
loans to small food producers to encourage the local-agriculture
movement.
#37 CISCO SYSTEMS
Back in the dotcom boom-boom days, Cisco Systems was
synonymous with back-end infrastructure. It built devices
consumers never saw that connected Internet servers and made
the information superhighway run at autobahn speed. Routers,
modems, switches — strictly behind-the-scenes action. But
growth stopped with the crash, and Cisco needed a front-end
strategy. Badly. Today, the company's Linksys brand is selling
phones and Webcams in addition to its ubiquitous wireless
products. And by employing the same Ethernet strategy it used
to cash in on connecting office printers and computers in the
'90s, Cisco now plans to use its Scientific Atlanta TV-set-top
box to network home computers, entertainment systems, and
phones. The new consumer businesses accounted for $3.5
billion in 2007 sales, 10% of the total. Next up: a
videoconference technology called TelePresence 3000, which
employs flat-panel screens on each end, microphone speakers,
cameras, and special lighting rigs. In its debut year,
TelePresence was installed in more than 40 countries. Now the
company is building a family-friendly version it hopes will one
day complete the home entertainment — communication loop
and (finally) make Cisco a household name.
#38 CORNING
Most companies don’t change the world even once. With its role
in technologies that light our homes, reduce air pollution, and
entertain us, Corning has transformed our lives repeatedly. This
year marks the 100th anniversary of Corning’s storied R&D
operation, now called "Sullivan Park," after Eugene Sullivan,
who created the firm’s first lab and cultivated the firm’s
innovative culture. Corning now spends more than $2 million
each workday on R&D, employing 1,800 researchers and a
process that’s both rigorously disciplined and near Google-like
in its openness. That’s how it has democratized technology over
the past century, bringing to ordinary people everything from
lightbulbs to light-speed communication. — Charles Fishman
Read More: Corning's History
#39 TOYOTA
The year 2007 will go down as a historic one for Toyota, its
50th in the United States. The company won 16% of the
American market — more than double its share 10 years ago —
and passed Ford to take the number-two spot in U.S. car sales,
despite an uncharacteristic slip in quality ratings. The company
unveiled its next-gen Prius (due in 2010), a plug-in with a
carbon-fiber body, but ironically, its most successful rollout was
the redesigned Tundra pickup. Toyota sold 3,800 of the jumbo
18-mpg trucks per week this year — 300 more than Prius.
#40 REAL D
When Beowulf hit theaters in November, it marked the dawn of
the next — some say ultimate — wave of 3-D movies. Making
the display possible was a California outfit called Real D, whose
technology uses circularly polarized light from digital
projectors, avoiding the eye fatigue of the old 3-D. Theaters are
banking that the technology will stop the box-office slide, and
Hollywood’s biggest players have projects in the pipeline.
That’s not enough for Real D: "Our view is that 3-D images
change the business on all visual displays," says CEO Michael
Lewis, who envisions Real D at home and even on mobile
screens. The company is already experimenting with alternative
content, from multiplayer in-theater video games to an NBA
game converted into 3-D in real-time. A U2 3-D concert film
(above) is out now.
#41 MICROSOFT
Critics like to crow about Redmond’s stumbles. The struggling
Zune. The Xbox 360’s "red ring of death." And as for Vista,
well, cue the clearing of throats. Then again, ever hear of a little
game called Halo 3? And maybe you missed the biggest surpise
to emerge out of the PR squall this year, the tabletop computer
Surface, a foray into multitouch technology that rivals the
iPhone in coolness. Windows and Office continue their
dominance, of course, and Microsoft’s stock was up about 20%
in 2007.
#42 PAYLESS
Last September, when actresses Sophia Bush (One Tree Hill)
and Brittany Snow (Hairspray) landed backstage in Lela Rose’s
showroom at New York Fashion Week, they swooned over the
designer’s new shoe collection that was about to debut on the
runway. Rose, best known for $1,500 frocks, happily handed
pairs of navy peep-toe pumps and polka-dot round-toe pumps
over to the young celebs, who would soon be flaunting them on
the sidelines of the catwalk. "Did they know they were Payless
shoes?" says Rose, who’s now designing her fifth exclusive line
for the discounter. "Absolutely. They didn’t care. They looked
cute to them and that’s all that mattered."
Payless? Since when did the dusty dungeon of cheap footwear
have anything to do with the front lines of fashion? Since 2005,
when Matt Rubel, who previously turned around Cole Haan,
took the helm of the now $3.5 billion company and decided it
needed a design intervention. While the 4,500-store chain had
thrived for years on the low-price, self-service model it
pioneered in the 1950s, the last decade saw the company losing
the discount wars to beasts such as Wal-Mart. If thrift was no
longer its competitive edge, reasoned Rubel, then Payless would
have to design shoes that Sex and the City’s Carrie Bradshaw
would drool over at prices Roseanne could afford.
To do that, Rubel has injected a fashion sensibility into every
arm of the Topeka, Kansas–based company. Last year, he built
its first design studio in Manhattan and recruited Robert
Mingione, Kenneth Cole’s head of footwear, and Bernard
Figueroa, top footwear designer for Michael Kors, to run it.
Taking a cue from fashion democratizers like Target and H&M,
he has lured up-and-comers such as Rose, Laura Poretzky, and
Alice + Olivia’s Stacey Bendet — even Sex and the City’s very
own Patricia Field — to design exclusive shoe and handbag
lines that sell at higher prices and employ sophisticated
materials such as silk crepe, snake skin, and perforated kidskin.
At the retail level, Rubel has given a 21st-century facelift to the
chain’s 1970s-hued stores with two new formats. He has opened
22 "fashion labs" — more-upscale hubs, with modern décor
bathed in pristine white, that offer the pricier fashion-forward
lines — and retooled nearly 400 existing locations with an airier
design that puts trendy collections in the spotlight. "More and
more women who never would have shopped at Payless are
becoming Payless customers," says Lori Holliday Banks, a
senior analyst at fashion consultancy the Tobe Report. "Rubel’s
reinventing the whole self-service business."
Rubel, crowned Footwear News’s Person of the Year for 2007,
isn’t stopping the extreme makeover there. In 2006, Payless
nearly doubled its earnings. Then last spring, the CEO shook up
the industry with two major acquisitions: $91 million for
Collective Licensing International, a brand-management
company that owns names such as Airwalk and American Eagle,
and $800 million for Stride Rite Corp., whose brands include
Keds and Saucony. Collective Brands Inc. (the parent
company’s new name) is now the largest non-athletic-shoe
company in the western hemisphere, giving Rubel a triple threat
of retail, wholesale, and licensing leverage. Says Rubel, who has
become a regular at Fashion Week: "Initially it was pretty
difficult getting designers on board to sell cheap shoes. Now
we’re getting phone calls from designers who want to work with
us." — Danielle Sacks
#43 AIRASIA
Seven years ago, former music exec Tony Fernandes paid 25
cents for an ailing carrier with two creaky planes and $12
million in debt. Today, AirAsia’s bottom-of-the-pyramid
strategy has created one of the world’s fastest-growing, mostprofitable carriers, with the lowest operating costs in the
industry and fares as cheap as $3. "It’s like our bus," says Yap
Choo Ying, who runs a market stall in eastern Malaysia and
now regularly jets to Kuala Lumpur to see her grandkids. In
November, the Malaysian company made a risky bet by going
long-haul, adding flights to Australia; this year, it will add
flights to China and India, where billions of people have yet to
take to the skies.
#44 CURRENT TV
"We wanted to democratize television," Al Gore told us last
summer, of his quest to create a cable network that piped
content pitched to — and created by — young people. But if the
initial idea was Gore’s, credit for Current TV’s subsequent
traction goes to CEO Joel Hyatt. Launched in August 2005,
Current became profitable in 18 months. "I knew nothing, and I
mean nothing, about the cable industry," Hyatt says. But that
ignorance freed his team to dream big, and by the end of 2007,
more than a third of Current programming was being created by
viewers and delivered to Current via the Web. Hyatt reinvented
the ad model as well, inviting the likes of Sony and Toyota to
tap his audience’s creativity; to date, 39 viewer-generated ads
have aired.
#45 SUN MICROSYSTEMS
Data centers account for some 3% of world energy use, and Sun
has taken that as a dare. Last year, its mad-scientist approach to
energy efficiency — and $2 billion R&D budget—caused
ripples across the industry as the company released the
UltraSPARC T2, the world’s most efficient processor; Project
Blackbox, the first modular data center; and a new Silicon
Valley data center that increases computer power by 456%
while cutting energy costs by more than 60%. With four straight
profitable quarters for the first time since 2001 and 6% revenue
growth, the forecast is sunny.
#46 BMW
The opening of the new $275 million BMW Welt (BMW
World) in Munich was a high-water mark for the automaker’s
marketing department. Some 1 million pilgrims a year are
expected to push their noses to the glass; 45,000 customers will
pick up their cars here. But there’s a better reason BMW
remains the world’s number-one premium marque. After
overhauling its much-criticized onboard computer, the company
has refocused on what’s important: the badass automobile. Look
for the $30,000 rear-wheel-drive 1-Series coupe (debuting in the
United States this year), the 2008 Mini Clubman (a supersize
version of the Cooper), and, most impressive, the prototype
Hydrogen 7. Yes, Honda has a hydrogen car too — but if you’re
going to be stranded by the roadside for lack of H, wouldn’t you
rather it be in a BMW?
#47 TATA GROUP
Within the first 10 days of 2008, Ratan Tata, the magnate
behind India’s $72.8 billion Tata Group, made a reported $2
billion bid for Ford’s Jaguar and Land Rover brands and
unveiled its long anticipated $2,500 "People’s Car" (called
Nano) at a New Delhi auto show. Think about it: In the same
week, India’s largest conglomerate shook up both the high-end
and the rock-bottom car markets, and made a clear statement
that Indian business is not just a tech and outsourcing ghetto.
In truth, it wasn’t the first time that Tata himself, the fifth
generation in his family to run the company, had demonstrated
his global savvy. In the 1990s, when he first took the helm of
Tata, its trucking unit was posting the biggest losses in India’s
history. Since then, through a series of international acquisitions
(Tetley Teas, steelmaker Corus), the 70-year-old has
transformed the company into a mosaic of 100 diverse
businesses. Clearly, Tata knows what India’s 300-million-strong
emerging middle class is hungry for. Apparently he knows the
rest of us, too: This year, more than half of the company’s
revenue is expected to come from non-Indian operations.
#48 AKQA
Most interactive-ad shops master either the creative or the
technical; AKQA is expert at both. Whether building a Pixarquality interactive online universe for Coke’s breathtaking
"Happiness Factory" campaign (below), or masterminding a
multimedia "alternate reality game" for Microsoft’s Halo 3, the
digital powerhouse doesn’t just dream up mind-bending ideas, it
actually writes the code that brings them to life. Which is why,
after five consecutive years of profitability, AKQA is one of the
most dangerous global forces in the ad industry. While ad
holding companies and tech firms spent billions in 2007 to snap
up digital shops, AKQA fended them off, opting instead for a
$250 million investment from private-equity firm General
Atlantic. In the meantime, the 700-person agency boosted
revenues 39% to $100 million and added new clients such as
Unilever, DoubleClick, and Cadbury Schweppes — on top of
existing accounts with Nike and McDonald’s.
#49 PROSPER
"What we’re really trying to do is to create an eBay for money
and credit," says Chris Larsen, CEO of two-year-old Prosper
(and founder of E-Loan, which he sold in 2005). The company
melds the debt market with online social networking, allowing
people to borrow money from one another without any banks in
the middle. So far, Prosper has facilitated the transfer of more
than $100 million, and delinquency rates have been low.
Borrowers include stretched homeowners, college-goers, creditcard junkies, and entrepreneurs; lenders are average folks,
including Larsen himself (who has funded more than 450 loans).
#50 BAIDU
We started this list with Google; we end it with a startup that has
dared to go up against Google — and has won the first round.
Baidu, the king of Chinese search (60% market share in 2007),
performs better in Mandarin and has more features customized
for locals. Cofounder Robin Li is convinced that Baidu will
"become bigger than Google," and he is in a hurry to get there:
He recently launched a Japanese search engine, introduced
search for ad-supported streaming music, and was first to offer
mobile search in China.
Eric Ryan and Adam Lowry of Method | photo by Suzy Poling
A version of this article appeared in the March 2008 issue of Fast
Company magazine.