While driving home this afternoon, my wife’s car was rear-ended. The car that she was following stopped suddenly, forcing her to stop suddenly. The next driver in the chain wasn’t quite able to stop in time. Fortunately, nobody in either car was hurt, but, it was pretty traumatic for my wife and kids and my 6 year old son, Noah, was crying.

Enter the North Carolina Highway Patrol. Police officers often get a reputation for being cold or unsympathetic, and I’ve certainly met some of that type. The officer that helped my wife today, though, was the exact opposite. Very kind and patient, particularly with my boys. After the paperwork was completed, she went to her car and returned with a stuffed puppy that she gave to Noah. She explained that she’d been carrying it around in her car for a while but wanted him to have it because he’d had a rough day.

As simple as that, a single small act of kindness turned completely changed the complexion of the afternoon, at least for one little boy. Tears were replaced with a smile by applying a little empathy to the situation. Sure, it will be annoying going through the process of getting the car repaired, but my lasting memory won’t be of the accident. It will be of the compassionate police officer who made my son’s day just a little bit better.

Below: We’re getting so many submissions for our “Bootstrapped, Profitable, & Proud” series that it’s tough to find room to profile everyone. So here’s a roundup post featuring a quick look at several different companies that have $1M+ in revenues, didn’t take VC, and are profitable.

Litmus
Litmus is a tool for email marketers. It helps them test their email designs across a range of different email clients. The founders attended 37signals’ Building of Basecamp workshop in Copenhagen and afterwards self-funded the business. It’s now “significantly above $1m in revenue, very profitable, and growing by around 10% every month,” according to founder Paul Farnell.

Litmus shows you screenshots of your email newsletter as it looks across all major email clients.

According to Farnell, there is no exit strategy:

We have no plans for a big “exit”. Being acquired and working for years at a big company sounds terrible to me. Why would we want to give up the flexibility and freedom we have right now? To us it’s not just about money, it’s about enjoying what we do and believing in it.

I wouldn’t advise starting something you’re not passionate about. It’ll be your life for the next 5+ years. Make sure you relish the idea of spending 12+ hours a day thinking about it.

Here’s his take on competitors:

I attended Geoffrey Moore’s talk at the Business of Software conference last year. What he said really stuck with me, and changed the way I think about what we do.

We have a handful of competitor’s doing a similar thing. For a couple of years we watched them closely and tried to keep up with them in terms of features. It felt like there were things we “had” to have, in order to be comparable. That was wrong. What Moore discusses is being competitive by innovation, not by keeping up on features. It’s similar to your own ideas about underdoing the competition.

Since then we’ve made some big calls not to build features that other people already have. We decided they weren’t necessary. Turns out they’re not! Since ignoring our competitors and focussing on what new and interesting things we can build, we’ve been happier, more productive, and seen more success.

Visit Litmus.

A Small Orange
Douglas Hanna is CEO of hosting company A Small Orange and writes, “A Small Orange has had over $1,000,000 in revenue for more than three years now and has been well in the green pretty much since it was founded. We have 13 full-time employees and about 25,000 or so customers.”

Here’s why his company emphasizes customer support:

The hosting industry has undergone a lot of consolidation and bigger companies and investment groups tend to view customer service as a cost center instead of a potential profit center. When I do our books, I’m tempted to split up our support costs as half marketing and half operating expenses. When we provide great service (which we try to do as frequently as possible), our customers notice and appreciate that. A lot of times it results in them telling their friends and social networks about us, which leads to more sales and greater customer loyalty. Companies that view customer service as a necessary evil to prevent customers from canceling miss out on that and have to market with their wallets instead of their customers.

Visit A Small Orange
Photos of the company’s datacenter.

Re: the iPhone 4 antenna hubbub, Apple held firm in the face of constant coverage from tech blogs, a class-action lawsuit, and vocal customer complaints. So it’s interesting that the company finally blinked in response to an old school media outlet: Consumer Reports.

In large measure, the article in Consumer Reports was devastating precisely because the magazine (and its Web site) are not part of the hot-headed digital press. Although Gizmodo and other techie blogs had reached the same conclusions earlier, Consumer Reports made a noise that was heard beyond the Valley because it has a widely respected protocol of testing and old-world credibility. Mr. Jobs acknowledged as much, saying: “We were stunned and upset and embarrassed by the Consumer Reports stuff, and the reason we didn’t say more is because we didn’t know enough.”

Consumer Reports got taken seriously because it’s so different than other media outlets. It’s been around since 1936. It’s part of a nonprofit organization. It has a mission (“to work for a fair, just, and safe marketplace for all consumers and to empower consumers to protect themselves”). It doesn’t allow advertising or accept free samples. It doesn’t go for a snarky tone. It does tons of extensive lab testing. It doesn’t focus just on glamourous products (for every iPhone it tests, there are tons more mops, air conditioners, and other “boring” products it examines). It doesn’t rely on page-view-pimping bloggy business as its bread and butter. Instead, it sells thoroughness and trustworthiness.

And that’s why when CR raised its red flag, it was taken seriously.

Consumer Reports’ approach is working too. It’s one of the top-ten-circulation magazines in the country. And its various outlets have a combined paid circulation of 7.2 million, up 33 percent since 2004.

Reminds me a bit of how Cook’s Illustrated thrives while other food publications are going down the drain. Everyone’s wringing their hands about the fate of media outlets, but these two publications show how a strong philosophy and a willingness to buck trends can lead to success.

Tangent: The CR site has a neat archive of vintage photographs showing its tests of consumer products over the decades.

Below: Q&A with Dan Clifford, Co-Founder and Managing Partner of AnswerLab. This is part of our “Bootstrapped, Profitable, & Proud” series which profiles companies that have $1MM+ in revenues, didn’t take VC, and are profitable.

What does AnswerLab do?
We provide user experience research and consulting for web, mobile and software applications. Our research helps clients improve areas that are confusing or frustrating, so that they can deliver compelling products that are easy to use.

The market research industry exists because of basic human nature – it’s really challenging for people to truly put themselves in other people’s shoes.

We help clients understand how their products are perceived by their target customers. For example we recently conducted a study for a company that was producing games for the iPhone. The development team learned that users had trouble understanding the game rules, however once they understood the rules they loved the game. Without user experience research the team would not have known about this critical roadblock to game adoption.

This San Francisco Business Times story on AnswerLab shows Founders Dan Clifford and Amy Buckner.

How successful is the business?
We’ve been very happy with the success of the business. AnswerLab is approaching its 6th anniversary. Each year, we’ve been profitable and have grown our year-over-year revenues. Our top-line revenues have already been made public since we were on the most recent Inc. 500 list of fastest-growing privately held companies. In 2009, our revenues were $2.7 million. Our run-rate so far this year exceeds that so we expect another year of record revenues. We often compete and win against $1 billion+ research firms. Clients that choose us are industry-leaders such as eBay, Yahoo, FedEx, Electronic Arts, ESPN, and more.

How did you fund yourself at first?
My co-founder Amy Buckner and I funded the company ourselves. The nice thing about a professional services firm is it doesn’t take much capital to get started. All you need is a couple of phones and laptops. Add a website and you’re in business.

Amy and I continue to own the business and we haven’t taken on investors. We’ve both worked at multiple companies before starting AnswerLab and saw that the demands of outside investors to hit quarterly numbers can really impact the relationship companies have with their clients. Pressuring a customer to ensure that they sure they sign your agreement before the end of the quarter does not create a trusted advisor relationship.

Card sorting studies help clients develop a site navigation structure that makes the most sense to their users.

Below: Q&A with Vishal Kapur of iTeleport. This is part of our “Bootstrapped, Profitable, & Proud” series which profiles companies that have $1MM+ in revenues, didn’t take VC, and are profitable.

What does your business do?
iTeleport is an iPhone/iPad app for controlling your computer remotely from anywhere in the world. Our focus is performance, usability, ease of setup and unique UI innovations (our touchpad-like mouse interface is patent-pending). The vision of the company is to develop products that get users access to their stuff from any device, anywhere in the world. This might mean an app that streams your music from your desktop, or lets you watch your videos, or gives you full screen control of any application on your desktop.

How successful is your business?
The app has been out in the store from July 2008 (a couple of weeks after the App Store opened), and it’s been priced at $25 since day one. Since then, the app has been in the Top 100 Grossing apps for both iPhone and iPad (it’s currently #33 in the Top Grossing iPad apps).

With the success of our iPad/iPhone offerings, our revenues for the past 12 months have crossed the $1M mark. We’re very proud of what we’ve built, and while we don’t believe revenues alone are a mark of success, we feel that they are a testament to the fact that our customers appreciate the work we’ve done, and believe that we do provide a unique solution that is built with quality.

Vishal Kapur (left) and Jahanzeb Sherwani.

This is part of our “Bootstrapped, Profitable, & Proud” series which profiles companies that have $1MM+ in revenues, didn’t take VC, and are profitable.

In 2004, Gwyn ap Harri was a full time teacher with a couple of ideas. One was to use screen recording software for kids to demonstrate what they had learnt in the classroom. After doing a search, he didn’t find any suitable software for use in schools. One piece of software was almost there, so he contacted the creator, who lived in Beijing. After a few modifications, Gwyn put it on the market and sold it to a few schools.

He kept teaching and used the cash from those sales to fund the development of one of his other ideas: realsmart. The product started from his own frustrations. “As a teacher with all the usual pressures of getting results out of kids, I ended up teaching to the exam, and the kids weren’t learning anything real,” he says. “I had to be part of the solution, not the problem.”

So he came up with realsmart. “realsmart is certainly not a traditional piece of educational software,” according to Gwyn. “I recognised that at the epicentre of what I was doing was the young learner. So many educational products have the teacher at the centre, and they’re not.”

“realsmart is based on self assessment rather than the teacher telling you what to do,” continues Gwyn. “Students own their portfolios and can build them at their own pace. It’s based on the idea that we learn as we reflect and record our learning, not when a teacher tells us we’re a B- and could do better. It tries to help us learn like we do in the real world ie on our own, with our friends to help us, and occasionally some feedback from an expert.”

Students use realsmart to build “learning portfolios” via collaborative websites, blogs and podcasts, mind maps, and more. “It’s assessment software that doesn’t have any grades or percentages or deadlines or anything like that. They’re quite hard to explain in a few words, which is why we have loads of videos showing them off on our website,” according to Gwyn.

Gwyn ap Harri at Arsenal football stadium, where smartassess sponsored the Achievement Show 2010.

Getting off the ground
It wasn’t an instant hit though. “We used the money from the screen recording software to create our first version of realsmart, but it looked crap, and it didn’t do that much to be honest. It was like trying to sell half a car. We knew we weren’t going to be able to sell enough to fund the next step. We were spending more on diesel than we were bringing in.”