(FORTUNE Small Business) – Most people have never heard of Daryl Harms, even though he's created businesses that touch countless lives daily. In the past 20 years Harms has quietly built the third-biggest privately held cable TV company and the largest privately held cellphone and home-security companies in the U.S. The son of an Illinois hog farmer, Harms spots trends sooner and bears down harder than most entrepreneurs--a combination that has made him wildly wealthy, if not exactly famous. But his next venture--more on that later-- just might transform him into a household name on the order of, say, Warren Buffett. Like Buffett, Harms, 51, patiently trolls for perfect businesses in which he can build long-term value via his Masada Resource Group, based in Birmingham. He hunts down overlooked opportunities that don't trade on trendy brand names or cutting-edge technologies. "Among all those dot-coms, there was this passion to get rich quick," says Mike Wheeler, a founder of HBO (whose parent company is the publisher of this magazine) and a longtime friend of Harms's. "I've never seen any of that in Daryl's enterprises. He's always built businesses based on the fundamentals."

With his disciplined approach, Harms is both a throwback and a harbinger, the old-fashioned breed of entrepreneur likely to reemerge from the wreckage of the once-glamorous new economy. "We need to know our business better than anyone else on the planet," says Harms, with nary a hint of irony. "I love the mental challenge of business--a lot."

Such steely resolve might be expected from someone who until recently raced vintage sports cars "to take my mind off business." That relentless drive, coupled with an instinct to take an original perspective, has anchored Harms's success. When selling cable service, Harms went block to block, zeroing in on houses with the tallest antennas. Other salesfolk reflexively bypassed such homes because they assumed that better reception wasn't an issue for them. Harms targeted those customers first. "I told them, 'I can see you stand tall. Of all the people on the street you understand the value of TV,' " he recalls saying. " 'If we put cable in, you can compare it with what you have now. If you don't like it, we'll come back and take it out.' " Such "influencers," in Harms's lingo, made it easier for him to convert whole blocks.

Harms took a similarly counterintuitive tack in building his cellphone business. Focusing on sparsely populated areas in the Plains States, he let rivals slug it out over metro markets. "People thought we were crazy," recalls Gordon Page, who co-founded Cass Cellular with Harms in 1988. Over a four-year period the company unloaded its four modest properties for a combined $336 million, yielding a robust profit.

Harms exited his investments in cable TV and home security for around $450 million, giving him a stake to build the business he thinks will dwarf those ventures. In fact, Masada has already spent ten years (and $30 million) quietly laying the groundwork to build plants that will convert household garbage and sludge into ethanol, a gasoline additive and a fuel alternative. And over the next decade Masada Oxynol, as the venture is known, plans to build 150 plants around the world. Spurred by a poll that showed that 92% of Americans considered themselves "environmentalists," Harms and his employees spent a year studying the recycling market only to decide that the real money lay in garbage. From there they sought out the best ethanol conversion technology. Having found it--at the Tennessee Valley Authority--they worked for five years to tweak the science, an effort that has earned Masada 18 patents. "Today's risky business climate warrants thoroughness," Harms says.

He still faces the daunting task of raising $50 billion--to enter an industry in which one company, Waste Management, controls 60% of the market. Harms is clearly unfazed. That's because this venture follows his familiar formula. "The theme is that there is always a consumer need to be addressed," explains Wheeler. "People will always talk on the phone, watch television, and produce garbage."

If Harms's vision falls short of glamorous, that may reflect his rural upbringing. He was in elementary school when his family got indoor plumbing. In college he studied engineering, a discipline that informs his business sense. "We've contorted and bent this model in so many ways, and it just won't break," he says, describing Masada Oxynol as if it had been welded and bolted together.

Harms's innate drive has been similarly bent and contorted by sheer adversity. Fifteen years ago he endured a bout of cancer so deadly that even his doctors refused to give him survival odds. Ten years ago a freak kitchen fire put Harms in the hospital for six weeks with third-degree burns. Jerry Clark, a longtime friend, visited Harms regularly there, "but never once did he complain about the pain," he recalls. "All he wanted to know was 'What do I have to do to get better?' "

Asking the right question, it seems, comes naturally to Harms. Entrepreneurs fail, he believes, because they "get too microscopic in their thinking. In business it's very easy to get the right answer to the wrong question." According to Wheeler, Harms failed to ask the right question when he set up a venture called Postron, which allowed cable TV subscribers to receive their bills via cable and print them out on a printer attached to their TVs. What Harms didn't ask, says Wheeler, was "whether consumers wanted another piece of hardware." They didn't.

But Harms's instincts have almost always been on target. In 1974, when Harms was working as a troubleshooter for cable companies, he noted how industry leaders focused on rural markets, where TV reception was poor, and then leapfrogged from there to the densely populated cities. They overlooked the suburbs in between, where viewers, they figured, could pull a strong signal from the city. Going into the cable business for himself in 1979, Harms attacked the suburbs because he believed that cable TV was less about receiving better reception and more about providing cheap entertainment. He had, after all, watched plenty of prospective customers buy entire cable packages--after professing interest in only three cable stations. When Wheeler first met Harms 20 years ago, "Daryl and his partner were generating more revenue per subscriber than any of the cable operators we had been working with." Harms charged his customers $7.95 a month for an unlimited number of cable outlets--as opposed to the standard $3 per outlet per month--because he wanted viewers to get hooked.

Harms finds customers where no one else thinks to look. When he started selling burglar alarms in 1985, he didn't target high-crime areas. Instead he identified places where the perception of vulnerability was greatest--which he determined by calculating how much space the local paper devoted to crime. The first cellphone license he sought was for a desolate stretch of highway between Lincoln and Omaha rather than in a major population center. Why? Because, as Page says, "what else were people going to do in their cars but talk on the phone?" Aside from overlooked customers, Harms seeks another component to every business: recurring revenue of roughly $25 a month per user. "That's a bite that most people can get used to paying," he reasons. For him it translates into healthy cash flow, which fosters predictability and enables a business to survive hard times. Besides, "the more reliable the cash flow, the higher a multiple of that cash flow you can get for your company," he notes.

Indeed, Harms stands ready to sell should the competitive landscape shift--which it has in each of his ventures. For him, the signal to exit is clear: when competitors enter an industry for defensive purposes rather than to grow the market. That happened back in the early 1990s, for instance, when telephone companies began acquiring cable TV properties to deny their competitors market share. While Harms may be patient in building businesses, he is anything but that when they mature. "We don't like to tread water around here," he says. Putting aside his emotions--second nature to Harms when the subject is business--he gets out just when others are getting swept up.

Harms arrives at Masada's offices every morning in a dark suit and a starched white monogrammed shirt, his black shoes polished to a high gloss. Masada employs a brain trust of just 12 people in a low-rise, dark-glass bank building. No plants decorate the entryway, nor is there a receptionist. Harms explains their absence simply: "The reason we like recurring revenues so much is the same reason we don't like recurring expenses." When Harms flies to New York to meet with bankers, his approach is equally no-nonsense. He takes one of three leased planes at Masada's disposal, leaving at 4:30 A.M. and returning by 9 P.M. That affords him a full day in New York while avoiding the cost of an overnight stay. "Daryl is very intense," notes Gayle Sermersheim, a former HBO executive. "To him, sometimes the challenge of overcoming the odds is more important than the end result. He warms to the fight no matter how small the stakes." Adds Page: "He's intimidating and forceful, and he can be pretty mean."

Despite his abundant wealth, Harms has yet to set up a charitable foundation. He believes that "just giving someone cash doesn't further the goal" of "making the world a better place." He adds, "I'm a real 'teach a man to fish' Republican. I believe in capitalistic solutions to social problems." He has served as a mentor to fellow Birmingham entrepreneur Donald Watkins, who last year sought to become the first African-American owner in Major League Baseball (see "The Player," May 2002).

What buoys Harms about Masada Oxynol is less its green possibilities than its conservative design. Harms points out that the company will be contracting with stable municipalities to provide an essential service. It will build its plants on fixed-price contracts and operate them under long-term ones. The plants will not only provide garbage disposal at a predictable cost but also generate revenue by turning out ethanol and other industrial byproducts.

For the past six years Masada has been working with just one client, the town of Middletown, N.Y., on its first and thus far only plant. (Middletown, 90 minutes northwest of New York City in Orange County, found Masada when, with its two landfills overflowing, it sought a long-term solution to its garbage crisis.) Masada expects to break ground for the plant later this year and to have it running by 2005. Masada employees, including Harms, have already been up to Orange County for more than 200 public meetings and 44 different votes regarding the project. Five years ago it hired a local environmental engineer to establish a daily presence. "It's phenomenal how Masada put the whole economic package together," says Al Fusco, Orange County's former commissioner of public works, who says the plant could end up recycling 95% of the waste it processes. "I'm ecstatic."

So is Harms--well, in his understated way. "It's the most robust business model I've ever seen," he says, allowing for a hint of wonder in his voice. He's not one to spin a futuristic vision, filled with ethanol-fueled vehicles humming around town, spotless streets, and beaming taxpayers. What really matters to him are the elements closer to home: steady cash flow, long-term value, and a business that in the end makes as much sense as it does money. For Harms, that's as good as it gets.