Go­ing the Dis­tance

Dis­cover the se­crets of Amer­ica’s most in­no­va­tive pub­lic com­pa­nies—from the en­trepreneurs who have guided them through IPOs and onto our list

Inc. (USA) - - CONTENTS - By Vic­to­ria Fin­kle, He­laine Olen, and Kate Rock­wood

Dis­cover the se­crets of Amer­ica’s most in­no­va­tive pub­lic com­pa­nies, from the en­trepreneurs who have guided their star­tups through IPOs and onto our Founders 10 list.

IMPINJ JUST MIGHT BE the most ubiq­ui­tous tech com­pany you’ve never heard of.

Last year the Seat­tle com­pany, which makes ra­dio-track­ing tags, con­nected some six bil­lion items around the world. Air­bus He­li­copters uses Impinj tags on its air­craft assem­bly lines; Macy’s uses them to keep tabs on mer­chan­dise. Hospi­tals around the coun­try rely on Impinj de­vices to track equip­ment and even pa­tients. And ev­ery Novem­ber, the or­ga­niz­ers of the New York City Marathon stick Impinj chips on bibs

For this pa­tient tech founder, suc­cess was a marathon, not a sprint

to track the times and progress of some 50,000 run­ners.

It’s a sweet, if mostly si­lent, world dom­i­na­tion for CEO Chris Dio­rio, who co-founded Impinj with Cal­tech physi­cist Carver Mead in 2000 and took it pub­lic last year. “I look as far ahead as I can to what’s pos­si­ble and then try to fig­ure out what it takes to get there,” Dio­rio says. “And not just what’s pos­si­ble—but what’s ex­cit­ing, what’s trans­for­ma­tive.”

That sort of long- dis­tance plan­ning and fo­cus on in­no­va­tion is com­mon to all the founders whose com­pa­nies made this year’s Founders 10 list. Ev­ery one of them had an out­stand­ing “score” of patents ap­plied for and granted in 2016, ac­cord­ing to IFI Claims Patent Ser­vices, which helped Inc. iden­tify the en­trepreneurs who now run Amer­ica’s most in­no­va­tive pub­lic com­pa­nies.

Yet new prod­uct de­vel­op­ment is not the only way these com­pa­nies ex­cel—they’re fi­nan­cially out­stand­ing, too. With the help of Ernst & Young (EY), which pro­vided in­dus­try me­dian bench­marks, Inc. crunched the num­bers on the founder-led, paten­thun­gry North Amer­i­can com­pa­nies that have gone pub­lic in the past three years. These 10 com­pa­nies (in­clud­ing seven past Inc. 5000 hon­orees) have since matched or out­per­formed their peers, in terms of me­dian an­nual rev­enue or profit recorded since the year of their IPO.

While Inc. usu­ally fo­cuses on pri­vate star­tups, once a year we shift our at­ten­tion to those en­trepreneurs who have re­cently de­cided to take on the pub­lic mar­kets. One part of the IPO process is that you open up your books, which gives us an un­usu­ally wide win­dow into com­pany per­for­mance. An­other part is that many watch only your stock price and your lat­est re­sults— the short term rather than the long; or the wed­ding rather than the mar­riage, as Jac­que­line Kel­ley, EY Amer­i­cas IPO leader, writes (see “For­get Stock Price,” page 80).

The short term isn’t al­ways pretty. Newly pub­lic com­pa­nies tend to un­der­per­form the stock mar­ket, and quar­terly busi­ness re­sults are of­ten dis­ap­point­ing. Our Founders 10 mem­bers aren’t im­mune to some of these strug­gles—but their founder- CEOs aren’t let­ting the short-term re­sults dis­tract them from their long-term vi­sion. This list rec­og­nizes those en­trepreneurs who have main­tained an in­no­va­tive, for­ward­look­ing lead­er­ship dur­ing and some­times de­spite the dis­trac­tions of go­ing pub­lic.

For Dio­rio, for ex­am­ple, out­per­for­mance has meant a reg­u­lar will­ing­ness to pivot—and to plan ahead for the rapid evo­lu­tion of dig­i­tal tech­nol­ogy. When he co-founded Impinj at the turn of the cen­tury, Dio­rio thought its new tech­nol­ogy would im­prove the per­for­mance of ra­dio fre­quency used by cell phones. But when the dot- com bub­ble burst, so did Impinj’s early cus­tomers. So the Seat­tle-based startup shifted its fo­cus to a still- de­vel­op­ing tech­nol­ogy: ra­dio fre­quency iden­ti­fi­ca­tion (RFID), the use of ra­dio waves, spe­cial­ized tags, and read­ers to track the lo­ca­tion of ob­jects.

To­day, Impinj’s tags are a key part of the huge and grow­ing tech ecosys­tem known as the in­ter­net of things. They in­habit some­times-un­ex­pected cor­ners: The Univer­sity of Ten­nessee Med­i­cal Cen­ter, for ex­am­ple, uses Impinj- equipped smart trash­cans in its op­er­at­ing rooms, to bet­ter track sup­plies dur­ing surgery. Dio­rio con­tin­ues to in­vest in im­prov­ing Impinj’s hard­ware and soft­ware—and to iden­tify new mar­kets for its use, such as track­ing food prepa­ra­tion and ser­vice at restau­rants. “In the same way that the in­ter­net ex­panded and changed how we in­ter­act with peo­ple, the in­ter­net of things, by con­nect­ing items in our world, will again change our lives,” he says.

Impinj went pub­lic last July so it could raise cap­i­tal to “tur­bocharge our ef­forts” and ac­cel­er­ate its al­ready rapid growth, Dio­rio says. In its first year as a pub­lic com­pany, Impinj fi­nan­cially out­per­formed the me­dian for post-IPO tech com­pa­nies; and Dio­rio credits the IPO process for forc­ing him to re­fine Impinj’s pri­or­i­ties and in­no­va­tive mis­sion. “Maybe you thought you un­der­stood where you were go­ing,” he says. “But when you have to ex­plain it in very sim­ple terms, it helps you from a strat­egy per­spec­tive and from an in­no­va­tion per­spec­tive.”

# ON YOUR MARKS Run­ners at the start of the 2016 New York City Marathon cross the Ver­razano-Nar­rows Bridge from Staten Is­land to Brook­lyn. For the next 26.2 miles, Impinj chips on their bibs tracked their progress.

& NO MORE LOST LUG­GAGE Last year, Delta Air­lines in­tro­duced a mo­bile app that lets fliers check the sta­tus of their bags, to con­firm they’ve been loaded onto the right plane. Its se­cret weapon: Impinj RFID tech­nol­ogy.

$ CHRIS DIO­RIO CO- FOUNDER, CEO 2016 PATENT SCORE 20 2016 REV­ENUE $112.3 MIL­LION —

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