Back in February, President Obama penned the Recovery Act, flooding the economy with $787 billion to be spent on the nation’s health, education, energy, and infrastructure needs. Most of that money will be spent in 2010, and many small businesses are eager to get a piece of it. However, the federal contracting system remains daunting to those small business owners who are not familiar with the process, and the tools and resources available to help them navigate it. According to Lourdes Martin-Rosa, the American Express (AMEX) OPEN advisor on government contracting, the United States federal government is the largest purchaser of goods and services in the world, and small businesses already have an edge in government contracting. They just need to know where to start, she says. ”Twenty-three percent of all the federal government’s expenditures must be spent with small businesses,” Martin-Rosa explains. “That means that if the federal government is tripling their spending, there are more opportunities for small businesses out there.” The process of doing business for the federal government is competitive because the money is plentiful and the work is generally consistent. In order to even be considered for a federal contracting bid, every small business must first register with the Central Contractor Registration (CCR), which is the primary registrant database for the federal government. The CCR stores company information for hopeful small businesses, and disseminates that data to agencies looking to hire contractually. Businesses must then submit a bid for each contract, and they can learn about contracting opportunities through several websites, including FedBizOpps.gov, which publishes all federal contract solicitations with a value of $25,000, while the U.S. General Services Administration (GSA) Scheduling Program establishes the largest government-wide contracts. Then, federal officials will decide on procurement based on a company’s proposal and the business’s general proficiency.  “The biggest obstacle that I see is that [small business owners] do not prepare their companies properly,” Martin-Rosa says. “They do not go on the different websites to get knowledge on positioning themselves in order to win government contracts, and they do not get their companies’ contracts ready.”   Martin-Rosa, who is also president and CEO of the Miami, Florida-based consulting firm Government Business Solutions, suggests that networking is another way to learn about and win contracts. She advises that small businesses owners become involved with organizations, such as the ‘Give Me 5′ program, co-sponsored by AMEX OPEN and Women Impacting Public Policy (WIPP), which provides federal contracting information for female business owners. Other groups, such as the Business Matchmaking Online Network, can match contractors with sub-contractors. Kris Wittenberg, owner of SayNoMore! Promotions, an Eagle, Colorado-based promotional marketing firm, is one small business owner who has been researching the federal procurement process with the hope of winning a bid. She says the process is still relatively new to her, since her industry typically does business through orders rather than contracts, but she has been attending several networking and government contracting events in an effort to better understand the system. ”I believe the most helpful advice I received about government contracting was the power of networking and building relationships,” Wittenberg says. “I have attended events sponsored by WIPP, the ‘Give Me 5′ program, and I have enrolled my company with the CRR. And, we have been working with the State Department, the IRS [Internal Revenue Service] and the Government Printing Office (GPO) to learn more about obtaining contracts.” Although, Wittenberg says she has not been able to dedicate nearly as much time as she would like to win a bid, she will continue attending government contracting events, and she is looking to get SayNoMore! on the GSA’s schedule. “It does take some time, and a certain set of operating procedures. We haven’t won a contract yet, but I remain hopeful that we will secure a bid,” she adds.   For more information on understanding government contracting, visit: •       Central Contractor Registration: www.ccr.gov

Registering with the CCR grants access to small businesses that are searching for federal contracting opportunities. In registering, small businesses supply their company information and statements of their expertise, which can then be viewed by contracting officers, prime contractors, and the general public.•       Fed Biz Opps, or Federal business Opportunities: www.fbo.gov Fed Biz Opps maintains a database of active federal opportunities, which allows government users to post, manage, and award opportunities, and vendors and citizens to search, monitor and retrieve opportunities.•       The Office of Management & Budget: www.usaspending.gov In accordance with the Federal Funding Accountability and Transparency Act of 2006, a searchable website is required to be made publically accessible for every federal award. Here, detailed records are available to small businesses and government officials so they may obtain information about the business receiving the award, how much the award is for, the business’s location, and additional information.•       AMEX OPEN & WIPP’s ‘Give Me 5′ Program: www.giveme5.com The ‘Give Me 5′ program was established to help facilitate stipulations from The Equity in Contracting for Women Act of 2000, which specifies that federal contracting officers award 5% of all contracts to women-owned businesses. This national program was designed to educate female business owners on how to apply for and secure federal procurement opportunities.•       The General Service Administration’s Schedule Program: www.gsa.gov The GSA oversees the business of the federal government, and delivers products, services and policies to federal customers. The GSA Schedule Program establishes government-wide contracts with commercial firms, and allows for small businesses to be considered for sub-contracting positions.

Susan Gregg Koger saw sales at her company, ModCloth, soar to $15 million in 2009. She hopes to build upon that success next year by finding a mentor with experience in fashion and by collaborating with more established businesses in her industry. “I’d like to meet other thought leaders in the e-retail space, and meet more ModCloth customers face to face,” she says. Her personal goals include making time for daily journal entries, travel to Asia, and improving her photography skills.

Maureen Kelly’s company, Tarte Cosmetics, will mark its 10th anniversary this spring by launching a new, limited-edition collection of “green” cosmetics, developed in conjunction with celebrity makeup artist Tina Turnbow. But Kelly strives not to let new product launches disrupt her work-life balance. “I’m going to make more time, even if it’s getting up an hour earlier and hitting the gym or coloring with my two little boys,” she says.

Michael Simmons, co-founder and CEO of Extreme Entrepreneurship Tour and the JourneyPage Virtual Business Incubator, has a very specific goal for 2010: “Earn an additional $120,000 in net income.” Beyond boosting profits, Simmons says he will continue to streamline the work flow within both companies so that his employees can be as productive as possible. “We’re working to build solid systems for every role in our business, so that new employees know exactly how to do their jobs and my co-founders and I can work on the business instead of in it,” he says.

Grace Ueng rebounded both personally and professionally from a bike accident that resulted in a brain injury four years ago. In 2010, Ueng, whose athletic pursuits began with a marathon to raise funds for the Leukemia & Lymphoma Society, will launch a corporate social responsibility program at her marketing consultancy, Savvy Marketing Group. She plans to continue biking, for charity and for leisure, as well. “I hope to sign up for six races,” she says.

Next year, Dogfish Head Craft Brewery will open two brewpubs and introduce Namaste, a Belgian beer fermented with dried orange slices and lemongrass. Sam Calagione, Dogfish’s founder and president, has ambitious goals outside work as well: he and his wife are training for the New York Half-Marathon in March. But, he says, “I resolve to sleep under the same roof as my kids, Sammy and Grier, every single night of July and August—meaning no overnight brewery-related trips this summer.”

Although online clothing retailer Bonobos saw its revenue rise substantially in the past year, it didn’t quite hit the mark for CEO Andy Dunn, who plans to alter the company’s approach to revenue projections: “In 2009, we had an awesome year, nearly tripling the business in a tough economy, but we aimed for even better. Next year, we methodically plan a double. In some ways it will be more satisfying to aim more realistically, plan for it, and exceed it if we can, then to shoot for the moon and be happy with not quite getting there.”

Ada Polla, CEO of skin care company Alchimie Forever, made her debut on QVC this year. She has compiled a myriad list of seven goals for 2010, both for her company and for herself: “Break even. Take up yoga. Stop doing things that I can delegate to others. Find a distributor for Europe. Develop a mission statement. Be on The Oprah Show. Replace some e-mails with handwritten notes of thanks and gratitude.”—April Joyner

A look at the year’s greatest hits, based on online traffic, from the editors of Inc. Magazine and Inc.com.

The Top 10 Profiles and Articles

1. And the Money Comes Rolling In

How can Markus Frind work one hour a day and bring in $10 million a year? He keeps things simple. Read more

2. The Way I Work: Jason Fried of 37Signals

Jason Fried hates lame meetings and treating his employees like children. A peek inside his typical workday. Read more

3. 19 Blogs You Should Bookmark Right Now

We scoured the Web and came up with a list of the smartest business bloggers. Their advice just might help you run a better company. Read more

4. America’s Fastest Growing Privately Held Company? It’s in Insurance

When the big insurers exited the Florida market, a start-up saw an opportunity. Read more

5. The Way I Work: Matt Mullenweg of WordPress

How Matt Mullenweg, founder of Word Press and Automattic, manages a successful Internet business where everyone is working from home. Read more

6. The Start-up Guru: Y Combinator’s Paul Graham

Part business school and part investment fund, Paul Graham’s Y Combinator has launched 145 companies — for a lot less money than you would think. Read more

7. The Secrets of Super-Productive CEOs

Tim Ferriss, the author of The 4-Hour Workweek, shares his secrets to personal productivity. Read more

8. The Zappos Way of Managing

How Tony Hsieh and a staff of believers made Zappos one of the most blissed-out businesses in America. Read more

9.How I Did It: Dallin A. Larsen of MonaVie

Through multilevel marketing, the Brazilian açai berry becomes a billion-dollar business. Read more

10. Jim Collins: How to Thrive in 2009

The future will be marked by uncertainty, chaos, turbulence, and risk. In other words, it will be good to be an entrepreneur. Read more

The Top 10 Lists and Slideshows

1. 11 Business You Can Start In Your Pajamas

2. The Best Industries for Starting a Business in 2009 (More on the following page)

3. How This Kid Made $170 Million in Two Years

4. 10 Free (or Cheap) Tools for Start-ups

5. America’s Weirdest Businesses

6. 4 Mistakes Young Salespeople Make

7. How to Become an Internet Mogul in 4 Easy Steps

8. How to Clean Your Keyboard

9. America’s Coolest Young Entrepreneurs

10. 7 Start-up Success Stories

The Top 5 Opinion Columns

1. Joel Spolsky: Why I Never Let Employees Negotiate a Pay Raise

At Fog Creek Software, every worker at the same level is paid the same salary. And when one gets a raise, they all do. Read more

2. Joel Spolsky: Thanks or No Thanks

 A young employee came up with an idea that added a million dollars to our bottom line. How do we reward him for the contribution? Do we even have to? Read more

3. Joel Spolsky: Why Circuit City Failed, and Why B&H Thrives

Many companies that have gone bust didn’t die because of the recession. They failed for one reason: They treated customers poorly. Read more

4. Joel Spolsky: Start-up Static

A new business is like a shortwave radio. You have to fiddle patiently with all the dials until you get the reception you want. Read more

5. Joel Spolsky: A Visit to Microsoft and Google

Back-to-back trips to Microsoft and Google remind me just how smart these guys are — and just how much I love running a small company. Read more

The Top 10 News Stories

1. Kid Entrepreneurs Build iPhone App

2. Marketers Learn to Talk Like a Pirate

3. Study: Inc. 500 CEOs Aggressively Use Social Media

4. Inside Goldman’s $500 Million Small Business Initiative

5. How Businesses Use Twitter to Find Customers

6. Inc. 500 Company Canopy Financial Subject of FBI Probe

7. Report: More Businesses Went Bankrupt in 2008

8. Wellness Programs Survive Budget Cuts

9. Is Entrepreneurship in Your Genes?

10. Is Wal-Mart Killing Your Business?

The Top 10 Topics

1. The Inc. 5000

2. Starting a Business

3. Entrepreneurial Success Stories

4. Writing a Business Plan

5. The Goods: Your Business Toolbox

6. Sales

7. Marketing

8. Leadership

9. 30 Under 30: America’s Coolest Young Entrepreneurs

10. Motivating Employees

iPodProducts intended to set the world afire are launched all the time. Rarely do they live up to expectations. But on October 23, 2001, a new digital music device called the iPod changed the way we live now. It was expensive, bulky, and had that awkward scroll wheel thing, but it was a hit, laid the foundation for iTunes, the iPhone and the iTouch, brought Apple to the forefront of American companies, and was even featured in a MoMA design exhibit. Not bad for a simple little music player — one that has sold more than 220 million units since its inception.NetflixMovies delivered to your mailbox. It’s a simple concept executed to perfection. So well in fact, that’s it one of the few companies that can say it went toe-to-toe with Walmart (which tried a rival service) and beat ‘em. The ubiquitous red envelopes are now sent out to 11 million subscribers, but many now stream The Karate Kid and Paul Blart Mall Cop directly to their TVs and computers — technology that will help ensure the company’s survival in a post-DVD world. As CEO Reed Hastings told Inc. in December 2005, “That’s why the company is called Netflix and not DVD-by-Mail.”BlackBerryThe BlackBerry debuted as a two-way pager in 1999, but it didn’t take long for QWERTY keyboards and e-mail-equipped phones to become essential tools of 21st century business. Yes, it’s obnoxious when someone is “thumbing” through a romantic dinner, but there’s a reason “Crackberry” entered the lexicon. With roughly 28.5 million subscribers, it’s clear there’s an endless supply of hardcore BlackBerry users in need of a fix.Google AdWords/AdSenseSure, those Google ads can be a mild annoyance, but these two programs make up the bulk of the company’s billions in revenue. So ignore the “Cheap Viagra” or “Free Cheddar Cheese” links and enjoy what they enable Google to bring us for free: Gmail, Maps, Finance, Translate and the chance to keep an eye on your childhood home with Earth.Garmin GPSThe concept wasn’t new, but sometimes technology has to wait for the government to catch up. On May 2, 2000, “selective availability,” an intentional limit on satellite accuracy mandated by the military for commercial use, was discontinued. As dashboard GPS became commonplace, Garmin became the standard. Our cars will never be littered with crumpled-up old roadmaps again.Nintendo WiiAnd parents around the globe rejoiced. Finally, a video game system that requires some physical activity, is easily understandable at any age, and features non-threatening Miis engaged in wholesome activities like bowling. Add in the party favorites Guitar Hero and Rock Band and video games opened up to a world beyond hyped-up adolescents (while keeping alive the legend of bands like Ratt.)E InkThe E Ink Corporation, founded in 1997 at MIT, provides the display for all kinds of electronic portable devices. It’s the Guttenberg Press of electronic ink, with its sharp black-and-white text powering both the Sony Reader and the Amazon Kindle. Coming soon, color. And maybe a future for the newspaper business.SnuggieRidiculous? You bet. Is kitsch a primary part of its appeal? Absolutely. But these silly blankets with sleeves somehow turned into a runaway hit, with a reported $5 million in sales since 2008 and Snuggie pub crawls popping up across the country. During a decade when our airwaves were filled by Billy Mays and his ilk, peddling countless As Seen on TV wares, the Snuggie stands out.Tesla RoadsterAutomotive technology centered on the ever-elusive solution to replacing the internal combustion engine, or at least lessening the amount of gasoline it needs. Nothing reached critical mass; it took Toyota nearly 10 years to sell a million hybrids in the United States (and that includes the Prius.) Until a true green machine takes hold, we’ll take the sleek 200+ mile range, 0-60 in under 4 seconds Tesla Roadster. It’s not that the six-figure Roadster is going to save the world, but it sure makes the drive on the road to what’s possible a whole lot sexier.The Text MessageUG2BK! R U Seriou

s? WTF! LMAO! The fact that of most of you can decipher this proves the point. English teachers can kvetch, but communication has permanently changed. Without the text message, there wouldn’t be Twitter. And without Twitter there wouldn’t be… well, we’re just happy there are a lot fewer cell phones going off during the movies. LOL!Salesforce and PayPalWeb-based business services became an essential part of day-to-day business in the last decade. Two companies that came-of-age are Salesforce and PayPal. The former is a tool that allows salespeople to manage customer relations, while the latter handles e-commerce  payments. Because how else would you pay for that Elvis collectible plate set you just bought on eBay?JetBlueIt seems the only advancements commercial airlines made in the last few years were charging for bags, eliminating lunch, and allowing passengers time to enjoy a view of the tarmac. Since 2001, however, JetBlue has provided a low-cost, high-service alternative. The airline has had its ups-and-downs, but it has never wavered from putting passengers first. Direct routes, per-trip pricing, free TV, wireless Internet, and tasty snacks offer a welcome alternative to the major carrier cattle cars. JetBlue has sparked other entrants like Virgin America, and hopefully (doubtfully) the big fellas are paying attention to the grounded idea of making the skies friendly once again.Exergen Temporal Thermometer and LifeStraw Water PurifierTwo simple devices that make a world of difference in the lives of children. The non-invasive Exergen temporal thermometer simply requires a soft rub of the forehead to record body temperature. The LifeStraw has even greater benefits. Roughly 1 billion people on the planet do not have access to clean drinking water, which leads to the deaths of thousands of children every day. The lightweight, portable, point-of-use purifier is a lifesaver, and along with the thermometer, an example of how inexpensive medical technologies can pay huge dividends.Netbooks, Flip Video Camcorder, and One Laptop Per ChildLife without modern technology would be rough. But that doesn’t mean everyone on the planet needs — or can afford — tech toys with every proverbial bell and whistle. That’s why the past decade has seen a rise in back-to-basics, low-cost electronics like the netbook and the Flip Video Camcorder. For under $400, the next teenage tech guru can have more computing power than a young Bill Gates ever dreamed of, and for $200, the next Spike Lee can start shooting an indie HD opus. Perhaps the best example of this is the One Laptop per Child program, which aims to have kids all over the developing world logging on and bringing us all closer together.Military Medical AdvancementsSadly, this decade has been largely defined by war and terrorism. But one thing we can all be grateful for is the incredible medical advancements on the battlefield, and back at home, that have aided American troops. Take the bionic Power Knee. Developed by the Icelandic company Ossur, the Power Knee uses sensors and artificial intelligence to allow an amputee to walk on prosthetic legs naturally. The first recipient was Lt. Col. Greg Gadson, who lost both legs as a victim of a roadside bomb in Baghdad. At a demonstration at Walter Reed, he said they were the closest to the feeling of normal legs. Keep your magic legs, Lt. Dan, Lt. Gadson’s got something better.Car of TomorrowIn the wake of Dale Earnhardt’s death at the 2001 Daytona 500, NASCAR made a number of changes to improve safety, including the development of a safer car, spending millions of dollars creating the “Car of Tomorrow.” In 2007, the “CoT” made its Sprint Cup debut. The car was raised and widened, the seat was moved toward the center of the cockpit and the roll cage was moved back allowing for larger crumple zones, and the exhaust was shifted to move heat away from the driver. Critics complain that uniformity has taken away driver skill, but no driver has died since old #3.The OfficeWe’ll let the television geeks battle over whether David Brent or Michael Scott is the epitome of managerial malfeasance. We’ll simply say, The Office is the best look at the daily grind of middling white-collar employment on television. The beauty of the show? It isn’t entirely a soul-crushing existence, it’s just… work. Some days are good, some are bad, and sometimes co-workers fall in love.Throwback Jerseys and SneakersAfter 30 years, hip-hop grew out of its infancy and started looking back. Old-school rappers found 21st-century fans, as the originators of the craft appeared in retrospectives and on reality shows. Fashion-wise jerseys from companies like Mitchell & Ness harkened back to the sports stars of the ’70s, ’80s and ’90s, while Nike brought back retro (and often high-priced, limited edition) versions of old favorites like the Air Force 1 and Air Jordan.Zappos Free Two-Way ShippingEliminating all the expense of operating retail stores means savings for consumers in other ways. Zappos became a favorite of cyber shoppers (not to mention Amazon, which shelled out more than $900 million for it) with top-notch service and selection, but its free shipping and free return shipping took the guess work out of point-and-click purchases. Now, if we only had more room in our closet.SkypeBelieve the Skype. In the third quarter of 2009, users made 28 billion minutes of Skype-to-Skype calls, providing a low-cost lifeline for high-powered executives and beaming grandparents alike, the world over.Social MediaAnd unto the world was born Friendster, which begat MySpace, the current king of the hill, Facebook, and then Twitter.  These social networking sites (and the countless lesser versions) provide a valuable resource for staying connected in an increasingly disconnected world. We think. Hey, half a billion users couldn’t possibly be wrong.

Windows VistaIt’s never good to have the phrase “New Coke” thrown around after a product launches, but that was the label that stuck to Windows Vista. Five years in the making, Vista consumers complained about speed, bugs, hardware incompatibility, even a poor selection of built-in games. Microsoft claims sales were fine and Vista lived up to expectations, but they sure got Windows 7 out quickly. As the kids say, FAIL. Some good did come out of the debacle, though. Vista provided more fodder for John Hodgman as the delightful “PC” in the long-running Mac ads that poke fun of Vista.

Absurd BurgersBurgers served between two donuts, burgers topped with foie gras that cost $175 dollars, burgers topped with mozzarella sticks, and Hardees’ hideous 1,320-calorie 860-grams-of-fat Monster Thickburger. Enough. America’s greatest contribution to food should be made the In-N-Out way. Cheap, unadorned, reasonably sized, and not designed to give the eater an instantaneous coronary.

CrocsSee what “Casual Fridays” hath wrought? People who have no problem wearing a glorified sponge o

n their feet to the theater. We hate to see any American company fall on times, but… what’s the adage about not having anything nice to say about hideous footwear?

SegwayOn December 3 2001, the Segway Personal Transporter and the urban “revolution” was underway. Do you remember where you were when the world, ummm, changed? Mall cops, rejoice.

The UroClubThe portable, golf-club-shaped urinal is the “discrete sanitary way for your urgent relief,” according to its website. Right. That’s much less problematic than say, going behind some trees — considering you’re on a golf course. There is, however, a great Tiger Woods joke in here somewhere.

Big Mouth Billy BassIn a way, the once-popular animatronic musical toy fulfilled its destiny as a gag gift. It became a minor pop culture sensation and even starred in an episode of The Sopranos. In many more ways, though, it’s an insipid rubber singing fish destined for landfills, rummage sales, trivia nights, and of course, its comeback on VH1’s inevitable I Love the 2000s.

The Tiddy BearEven if there were an honest-to-goodness national pandemic of women who “could hardly breathe” due to the patriarchal torture device known as the seat belt shoulder harness, we still wouldn’t encourage anyone to buy a “Tiddy Bear.” The nomenclature is cheesy, and the stuffed animal packaging is downright creepy.

Comfort Wipe and BodysnakeThe Comfort Wipe is an anatomically designed toilet paper extender for the germaphobe in your life (The first technological advance since the 1880s!), while the BodySnake is for folks too rotund to wash their backs. The only thing dumb about these products is that nobody has combined them into the ComfortSnake. Get us product development!

Nail MatIn 2009, nail beds became a hit in Sweden, even though there seems to be no scientific evidence of actual healing powers. Don’t let that stop you, though. As a 46-year-old yoga instructor told The New York Times, “It’s quite painful initially.” Suck on that, Sealy Posturepedic!

Weather Modification OfficeIf it sounds like something straight out of Communist China (not too mention a Legion of Doom board meeting), it’s because it is. The technology to control the weather has been in development since the days of Mao, but in the 2000s, Chinese efforts were stepped up. The office spent more than $100 million a year on efforts to make it rain, or in the case of the Beijing Olympics, to keep it dry via airplanes and rocket launchers. Just last month, thanks to cloud seeding, snow fell in Beijing to combat drought. The mad scientists are winning, and this just isn’t right.

The Pontiac AztekA picture is worth a thousand words.

Pets.comWe almost feel bad for the now-infamous sock puppy, as he’s become the poster pooch for the ridiculously profligate dot-com era. Then we were reminded that the company burned through a reported $300 million dollars in two years of operation. They could afford a Super Bowl ad, but not someone whose primary job was to ask questions like, “Will people really pay a $20 shipping fee for sleeves of cat food?”

3-1-1 LiquidsSomeone please explain to us how slowing up the security line — by having some poor woman dig through her suitcase to throw away a tube of half-used toothpaste — will prevent another 9/11? All we’ve been able to understand is that it will cost us $4.95 for bottled water on the other side.

Bluetooth HeadsetFans of the device would say it frees up hands for safer driving and easier mobility. We say the gizmo’s best feature is that it’s a foolproof jackass locator.

CueCatRemember the CueCat? No, we don’t either. But in the early days of the decade, the CueCat was going to allow us all the thrill of opening a URL link by scanning a barcode in a magazine ad. Naturally, it was shaped like a feline. Years later, a liquidator was reportedly offering two million CueCats at 30 cents apiece, minimum 500,000. Act now!

Boyfriend Arm PillowWhy do we get the sad feeling Jennifer Aniston owns one of these things? Oh Rachel Green, will you ever find true love?

Social MediaConsidering what a time suck MySpace, Twitter, and Facebook are, we’re going to say it — half a billion users are wrong.

Above and beyond his shrewd business sense, James Cash Penney had an enduring desire for fairness in his business dealings. Raised by a Baptist minister, Penney had a greater interest in the spirit than in the letter of religion. As he once wrote, isn’t serving people “part and parcel of business? It seems to me so. Business is therefore as much religious as it is secular.” As an example of this philosophy, Penney initially called his stores the Golden Rule Stores, and made that rule part of company culture. But he was also pragmatic enough to open his store for half days on Sundays.

Although he made them work on Sundays, Penney treated his employees well and they were a large part of his success. The company’s rapid expansion was fueled, in part, by encouraging store managers who had saved enough money to open a new store as part owner, with Penney providing two thirds of the start-up capital. He was also one of the first entrepreneurs to use corporate profit sharing to encourage employees to have a stake in the company’s success. 

Penney was born in 1875 on a farm near Hamilton, Missouri. With 12 children — only half of whom survived to adulthood — the family was often cash-strapped. At the age of eight, Penney’s father told him he would be responsible for clothing himself, and soon he was earning more than enough for his sartorial needs selling junk, growing watermelons and raising pigs.

After graduating from high school, Penney worked as a sales clerk in Hamilton’s general store. He had a strong work ethic and a knack for merchandising, and within two years of taking the job, his salary rocketed from $25 a year to $300. In 1897, Penney was diagnosed with tuberculosis, which forced him to uproot in search of a drier climate — and a new business venture.

His first taste as part owner of a store came in 1902 in Kemmerer, Wyoming, a mining town of 1,000 people. It already had a company store, but Penney came in with a cash-only policy, despite a warning from a local bank employee that three previous businesses had failed to compete against the credit offered by the mining company. The first year, Penney saw almost $29,000 in sales and a hefty profit, and five years later, he bought out his partners, opened two new stores elsewhere in Wyoming. He was off and running.

Penney set up headquarters for the growing chain in Salt Lake City, Utah, and later in New York City to be closer to his major suppliers. Between 1920 and 1930, 1,250 new Penneys popped up in small towns across the country and the company went public in 1927. The company continued to grow by incentivizing store managers, and later employees, with stock. 

But while his company was thriving, Penney had made some side investments in Florida real estate that eventually went sour, and he almost lost his entire holdings of $40 million. This served as a wake-up call, and Penney consequently turned his attention away from side projects and back to running the company down to the microscopic details. 

As the mall became a cultural phenomenon in the 1950s, the company was well positioned to cater to the needs of middle-income suburban America. As late as the 1960s, Penney would still make the rounds of his stores, even stepping behind the counter to assist customers. He continued to serve the company on the board of directors until his death in 1971 at age 95. Today, the store still has 1,109 locations throughout the United States and a market capitalization of almost $8 billion.

Ultimately, Penney was characterized by the faith he put in his own hard work and in the potential in his employees. “Give me a stock clerk with a goal and I’ll give you a man who will make history,” he once said. “Give me a man with no goals and I’ll give you a stock clerk.”

We’re accustomed to living in a meritocracy, so the notion of getting ahead based on anything other than skill and hard work seems cruel, almost Kafkaesque. But what if random job promotion turned out to be a better alternative to the Peter Principle, which posits that employees will continue to be promoted until they can no longer do their job well?A group of Italian researchers ran a simulation of a 160-person company with a six-level pyramid structure. Each employee was assigned a degree of competence and the researchers ran two simulations comparing different ways for competence to carry over to a new position when an employee was promoted. The simulations pitted the “Common Sense Hypothesis” where an employee is as good at their new job as at their old one against the “Peter Hypothesis” in which they have a random chance of succeeding in their new role. In each of these cases, the researchers tested three promotion strategies: promoting the most competent employees, the least competent employees and promoting randomly. Finally, with increased corporate efficiency as the measure of success, the researchers reached their counterintuitive conclusion.

“Promoting at random or alternating the promotion of the best and the worst employees works much better according to our calculations,” said Andrea Rapisarda, the co-author of the study and a physicist at the University of Catania, in Catania, Italy. Inc. asked a handful of CEOs and management experts whether this sort of system could work in a real company.Jonathan Feinstein is a professor at the Yale School of Management in New Haven, Connecticut, with a focus on creativity and innovation.The main defense for what they’re putting forward is if you remove one of the extrinsic motivators, such as promotion or other rewards, people will be left just with the intrinsic motivators, as in ‘Do I like this job?’ If I know that my chance of promotion is totally random and has nothing to do with how well I do, then how I do on the job is going to be more based on how much I enjoy doing it and doing it well. The problem is it’s going to create a lot of loss of morale for people and a loss of effort if they don’t think their effort is going to be rewarded. On the other hand, if you try to reward people too much for being creative you might actually make them less creative. They won’t take risks if they feel that everything they do is being watched and evaluated. Creativity is partly about having fun and being more spontaneous and probably job enjoyment is too.Donald Asher is a consultant to MBA and undergraduate programs on career issues, as well as the author of Who Gets Promoted, Who Doesn’t, and Why: 10 Things You’d Better Do If You Want to Get Ahead.Some companies walked away from their fast track executive programs because they found they were promoting people that didn’t really deserve it or didn’t really want it. They also passed over for promotion people that weren’t in the fast track program and some of those people had tremendous capacity to perform that wasn’t identified. So those fast track rotational programs are controversial because of exactly this issue. Promoting randomly could work because people rise to the occasion. We say this about the United States presidency, that it’s not the person, it’s the position. Some people offer as evidence of this George W. Bush, who after the trials and tribulations of the terror attacks on September 11, 2001, did step up and act presidential, though that can be debated. Sometimes you have a situation where people that are patently incompetent get promoted so swiftly that they never have to answer for their incompetence. You want people to hang around long enough to pay for their sins and so any promotion system that allows people to walk away from their sins before facing them is going to allow bad seeds to advance.Adam Michaels, CEO of Cloud 9 Living, a Boulder, Colorado-based company that sells experience gifts ranging from horseback riding to skydiving. My first thought would be how the employees would react. If I tell my employees that promotion is based on randomness, the motivation to do a good job and to work hard is going to drop dramatically. Why go the extra mile if it’s not going to be recognized and if my less competent co-worker could get randomly promoted ahead of me? [You could try alternate rewards systems, but] I think to a lot of people a title and how you’re seen by your co-workers is more important. The No.1 reason people leave a job is for lack of recognition. Seth Goldman, Co-Founder of Bethesda, Maryland-based Honest Tea, which produces lightly-sweetened organic teas.No, random promotion would not be for us. We don’t think about promotion the way other companies do because we are a very fluid company; we have a lot of people moving from marketing, to sales, even into operations and accounting. So we’re not about pigeonholing, we think much more broadly than that. We get our summer interns in as jack-of-all-trades interns and it’s really a way to kick the tires on them. We put them in lots of different roles and they either work or they don’t work. If they work within our company culture they can move pretty fluidly around to different positions and different roles. About 10 percent of our workforce started as interns; we know when someone doesn’t work, it’s pretty clear pretty quickly.

Products intended to set the world afire are launched all the time. Rarely do they live up to expectations. But on October 23, 2001, a new digital music device called the iPod changed the way we live now. It was expensive, bulky, and had that awkward scroll wheel thing, but it was a hit, laid the foundation for iTunes, the iPhone and the iTouch, brought Apple to the forefront of American companies, and was even featured in a MoMA design exhibit. Not bad for a simple little music player — one that has sold more than 220 million units since its inception.

Movies delivered to your mailbox. It’s a simple concept executed to perfection. So well in fact, that’s it one of the few companies that can say it went toe-to-toe with Walmart (which tried a rival service) and beat ‘em. The ubiquitous red envelopes are now sent out to 11 million subscribers, but many now stream The Karate Kid and Paul Blart Mall Cop directly to their TVs and computers — technology that will help ensure the company’s survival in a post-DVD world. As CEO Reed Hastings told Inc. in December 2005, “That’s why the company is called Netflix and not DVD-by-Mail.”

The BlackBerry debuted as a two-way pager in 1999, but it didn’t take long for QWERTY keyboards and e-mail-equipped phones to become essential tools of 21st century business. Yes, it’s obnoxious when someone is “thumbing” through a romantic dinner, but there’s a reason “Crackberry” entered the lexicon. With roughly 28.5 million subscribers, it’s clear there’s an endless supply of hardcore BlackBerry users in need of a fix.

Sure, those Google ads can be a mild annoyance, but these two programs make up the bulk of the company’s billions in revenue. So ignore the “Cheap Viagra” or “Free Cheddar Cheese” links and enjoy what they enable Google to bring us for free: Gmail, Maps, Finance, Translate and the chance to keep an eye on your childhood home with Earth.

The concept wasn’t new, but sometimes technology has to wait for the government to catch up. On May 2, 2000, “selective availability,” an intentional limit on satellite accuracy mandated by the military for commercial use, was discontinued. As dashboard GPS became commonplace, Garmin became the standard. Our cars will never be littered with crumpled-up old roadmaps again.

And parents around the globe rejoiced. Finally, a video game system that requires some physical activity, is easily understandable at any age, and features non-threatening Miis engaged in wholesome activities like bowling. Add in the party favorites Guitar Hero and Rock Band and video games opened up to a world beyond hyped-up adolescents (while keeping alive the legend of bands like Ratt.)

The E Ink Corporation, founded in 1997 at MIT, provides the display for all kinds of electronic portable devices. It’s the Guttenberg Press of electronic ink, with its sharp black-and-white text powering both the Sony Reader and the Amazon Kindle. Coming soon, color. And maybe a future for the newspaper business.

Ridiculous? You bet. Is kitsch a primary part of its appeal? Absolutely. But these silly blankets with sleeves somehow turned into a runaway hit, with a reported $5 million in sales since 2008 and Snuggie pub crawls popping up across the country. During a decade when our airwaves were filled by Billy Mays and his ilk, peddling countless As Seen on TV wares, the Snuggie stands out.

Automotive technology centered on the ever-elusive solution to replacing the internal combustion engine, or at least lessening the amount of gasoline it needs. Nothing reached critical mass; it took Toyota nearly 10 years to sell a million hybrids in the United States (and that includes the Prius.) Until a true green machine takes hold, we’ll take the sleek 200 mile range, 0-60 in under 4 seconds Tesla Roadster. It’s not that the six-figure Roadster is going to save the world, but it sure makes the drive on the road to what’s possible a whole lot sexier.

UG2BK! R U Serious? WTF! LMAO! The fact that of most of you can decipher this proves the point. English teachers can kvetch, but communication has permanently changed. Without the text message, there wouldn’t be Twitter. And without Twitter there wouldn’t be… well, we’re just happy there are a lot fewer cell phones going off during the movies. LOL!

Web-based business services became an essential part of day-to-day business in the last decade. Two companies that came-of-age are Salesforce and PayPal. The former is a tool that allows salespeople to manage customer relations, while the latter handles e-commerce payments. Because how else would you pay for that Elvis collectible plate set you just bought on eBay?

It seems the only advancements commercial airlines made in the last few years were charging for bags, eliminating lunch, and allowing passengers time to enjoy a view of the tarmac. Since 2001, however, JetBlue has provided a low-cost, high-service alternative. The airline has had its ups-and-downs, but it has never wavered from putting passengers first. Direct routes, per-trip pricing, free TV, wireless Internet, and tasty snacks offer a welcome alternative to the major carrier cattle cars. JetBlue has sparked other entrants like Virgin America, and hopefully (doubtfully) the big fellas are paying attention to the grounded idea of making the skies friendly once again.

Two simple devices that make a world of difference in the lives of children. The non-invasive Exergen temporal thermometer simply requires a soft rub of the forehead to record body temperature. The LifeStraw has even greater benefits. Roughly 1 billion people on the planet do not have access to clean drinking water, which leads to the deaths of thousands of children every day. The lightweight, portable, point-of-use purifier is a lifesaver, and along with the thermometer, an example of how inexpensive medical technologies can pay huge dividends.

Life without modern technology would be rough. But that doesn’t mean everyone on the planet needs — or can afford — tech toys with every proverbial bell and whistle. That’s why the past decade has seen a rise in back-to-basics, low-cost electronics like the netbook and the Flip Video Camcorder. For under $400, the next teenage tech guru can have more computing power than a young Bill Gates ever dreamed of, and for $200, the next Spike Lee can start shooting an indie HD opus. Perhaps the best example of this is the One Laptop per Child program, which aims to have kids all over the developing world logging on and bringing us all closer together.

Sadly, this decade has been largely defined by war and terrorism. But one thing we can all be grateful for is the incredible medical advancements on the battlefield, and back at home, that have aided American troops. Take the bionic Power Knee. Developed by the Icelandic company Ossur, the Power Knee uses sensors and artificial intelligence to allow an amputee to walk on prosthetic legs naturally. The first recipient was Lt. Col. Greg Gadson, who lost both legs as a victim of a roadside bomb in Baghdad. At a demonstration at Walter Reed, he said they were the closest to the feeling of normal legs. Keep your magic legs, Lt. Dan, Lt. Gadson’s got something better.

In the wake of Dale Earnhardt’s death at the 2001 Daytona 500, NASCAR made a number of changes to improve safety, including the development of a safer car, spending millions of dollars creating the “Car of Tomorrow.” In 2007, the “CoT” made its Sprint Cup debut. The car was raised and widened, the seat was moved toward the center of the cockpit and the roll cage was moved back allowing for larger crumple zones, and the exhaust was shifted to move heat away from the driver. Critics complain that uniformity has taken away driver skill, but no driver has died since old #3.

We’ll let the television geeks battle over whether David Brent or Michael Scott is the epitome of managerial malfeasance. We’ll simply say, The Office is the best look at the daily grind of middling white-collar employment on television. The beauty of the show? It isn’t entirely a soul-crushing existence, it’s just… work. Some days are good, some are bad, and sometimes co-workers fall in love.

After 30 years, hip-hop grew out of its infancy and started looking back. Old-school rappers found 21st-century fans, as the originators of the craft appeared in retrospectives and on reality shows. Fashion-wise jerseys from companies like Mitchell & Ness harkened back to the sports stars of the ’70s, ’80s and ’90s, while Nike brought back retro (and often high-priced, limited edition) versions of old favorites like the Air Force 1 and Air Jordan.

Eliminating all the expense of operating retail stores means savings for consumers in other ways. Zappos became a favorite of cyber shoppers (not to mention Amazon, which shelled out more than $900 million for it) with top-notch service and selection, but its free shipping and free return shipping took the guess work out of point-and-click purchases. Now, if we only had more room in our closet.

Believe the Skype. In the third quarter of 2009, users made 28 billion minutes of Skype-to-Skype calls, providing a low-cost lifeline for high-powered executives and beaming grandparents alike, the world over.

And unto the world was born Friendster, which begat MySpace, the current king of the hill, Facebook, and then Twitter. These social networking sites (and the countless lesser versions) provide a valuable resource for staying connected in an increasingly disconnected world. We think. Hey, half a billion users couldn’t possibly be wrong.