Who wants to be an Entrepreneur?
These mavens want to be judged by the company they keeptheir own. Theresa ORourke learns the secrets of their success and why so many college students are eager to play boss. saying that Matt Kelley has a way with words is like claiming Michael Jordan knows a thing or two about basketball. Humbly eloquent, hes a poet with purpose, speaking words of wisdom that belie his 20 years. No wonder the Seattle-Post Intelligencer likened the sophomore at Connecticuts Wesleyan University to "a hip-hop rapper who aced his verbal SATs."
Born to a Korean mother and Caucasian father, Kelley
created Mavin as a much-needed forum for the multiracial population. The magazine was the end result of a long process of self-discovery. "I went through a big racial consciousness between senior year in high school and freshman year in college," he explains. "[It was] really tumultuous in terms of my own racial identity. I didnt realize it, but there [was] definitely a feeling of ambiguity, a feeling of placelessness."
Having spent two arduous years shaping Mavin (the first and only publication to tackle the mixed-race experience), hes been able to give his peers a voice as well as a home, at least in the pages of his magazine. And though he may seem more of a humanitarian than a businessman, hes a bit of both. Mavins readers tell Kelley that hes given them a sense of place. "Maybe for the first time in their lives," Kelley notes, "theyre feeling a connection."
Originally intended as a newsletter for college students of mixed-race backgrounds, Mavin has morphed into a magazine with a sub-scriber base of 32,000, sold nationally at newsstands and bookstores. Kelley intends to boost the readership to 50,000 and form a not-for-profit Mavin foundation to foster communi-cation and discourse. "To have something that will leave a legacy," he asserts, is "definitely a long-term goal."
Blessed with such fearless tenacity, Kelley is no anomaly on todays campus. Hes part of a generation of young entrepreneurs who refuse to rest on their laurels. Individually diverse and collectively inspiring, their visions far surpass their ages, and their drive often dwarfs that of their superiors and elders. Rather than waiting for the establishment to listen, theyre creating opportunities to be heard on their own terms. Though the anything-goes climate of the Internet takes center stage, the industries they enter run the gamutfrom catering to trendspotting to cosmetics. All are veritable hotbeds for dogged undergrad talent.
But perhaps whats most endearing is that these young magnates arent necessarily roused by the almighty dollar. Instead theyre driven by an innate desire to create, fill a philanthropic void, and even redefine work as we know it. In the process, however, many are making a fortune.
The New Rite of Passage
As a University of Texas-Austin undergrad, Michael Dell launched his namesake computer empire in his dorm room. Internet super-portals like Yahoo! and Excite soon followed, with their own tales of modest beginnings in cramped quarters at Stanford University. These success stories linger in every wannabe tycoons wet dreams and have undoubtedly left an indelible impact on the collegiate psyche. At the dawn of the new millennium, more eager phenoms are riding their coattails into this brave new world.
Media overkill can lead to false impressions: As the headlines tell it, building your own business is the new lotteryall you need to win big is a dorm room and a dream. Still, many of todays biggest players did give birth to their mega-businesses on campus. Where else can you find relatively affordable room and board, a pool of business-savvy professors, an exhaustive amount of resources and free high-speed Internet access?
Eschewing the status quo, the college crowd is now embracing self-employment as a virtual rite of passage. A poll conducted by Students in Free Enterprise (SIFE)a nonprofit organization that helps students develop leadership skillsrevealed that 66 percent of American college students believe they will someday own a business. Links survey of more than 700 students found that 19.5 percent want to work for themselves (turn to page 17 for complete results). With such a career itinerary mapped out, its as if todays students beam with a sense of poetic justice. After all, their generation has often been deemed devoid of drive and burdened by apathy. But todays wunderkinds can grin in the face of suited-up cynics.
Whats the impetus behind their good fortune? In this booming economy, students feel entitled to a piece of the pie. Look no further than Wall Street for the evidence. As Steve Spinelli, director of the Arthur M. Blank Center for Entrepreneurship at Babson College, maintains, "Theres a clear transfer of wealth in the movement of capital from the Dow to the NASDAQ, [and] tremendous wealth-creating possibilities. Todays students are so well prepared to take advantage of it. [They] arent scared of technology. They embrace it, they experiment, they enjoy it."
Spinelli adds that parents are also partly responsible for the surgealbeit obliquely. "A lot of them [were] laid off," he says. "I think theyre less enamored by the big-business process. They see the benefits of an entrepreneurial career. So [they] dont apply the same pressure of 10 years ago. Today, if you come home and say, I have a great idea for an online bridal consulting business, your mom and dad will say, Go get em."
The dream-inspiring economy and a new generation of parental guidance are cer-tainly vital ingredients to this entrepre-neurial revolution. But it wouldnt be complete without the Web. Short of being hailed as a cure for everything but the common cold, the Internet has played a crucial role in fueling the current craze of youth-preneurs. "With the explosion of the Internet," says Ken Ramberg, cofounder of Jobtrak.com, "more and more graduating seniors are opting to take a chance and, worst-case scenario, come away with a lot of hands-on experience."
So much for Alan Greenspans cries of "irrational exuberance." Thats how the Federal Reserve Board Chairman described the technology surge that rocked the stock market back in 1996. Still going strong, the Internet is forcing business schools across the country to redefine their programs in the new economy. (See sidebar: "U. Can Do It!" p. 38.)
And students have unparalleled options. Even if theyre not ready to swing it solo, theyre willing to get their feet wet by working for a start-up. With so many new ventures offering enticing stock options, a mere paycheck suddenly seems like pathetic compensation. According to a recent Jobtrak.com study, 26 percent of students were interested in working for start-ups, while 16 percent were eyeing self-employment.
Frankly, university career centers say, entrepre-neurship and start-ups make sense right now. "I bet that in 1980, 69 percent of job seekers were focused on big companies, entrepreneurial opportunities were rarely thought of, and start-ups were considered suspect and risky in terms of career growth," says Richard White, director of career services at Rutgers University. "Its amazing how technology and the economy have turned the world of work and career expectations upside down."
On the downside, the Internet has thrown a monkey wrench in the definition of business success, resulting in some nebulous consequences. "Companies no longer feel the need to generate profit or even revenue," observes Bill Schatz, whose Web site, Startuprx.com, offers start-up solutions for business hopefuls. "Many entrepreneurs would consider raising money as the sole indicator for success."
But todays student is ready to ride the uncertain wave for all its worth. And with good reason, says Spinelli. New venture creation will remain at the core of young peoples careers from now onor at least, he predicts, for the foreseeable future. The trick, he notes, is not falling prey to the notion that every start-up is destined for billionaire bliss. "A lot of 19- and 20-year-olds havent been through ups and downs," he says. "This is a unique economy, and I fear they wont be able to understand some of the gyrations."
$200 Million? Sorry, Not Enough
At the University of Virginias McIntire School of Commerce, the class of 2000 is prepping for this months graduation ceremony. Bill Martin
, unfortu-nately, had to take a rain check. The 22-year-old dropped out as a sophomore to devote all his time to Raging Bull, his aptly titled company. A financial message-board Web site with attitude, it lets you click an "ignore button" to block posts from inane surfers while youre getting the latest stock updates.
No need to shed a tear for Martin. Born three years ago in his UVA dorm room, Martins ragingbull.com was a force to be reckoned with in mere months. It caught the eye of CMGI, the world's largest and most diverse network of Internet companies. Its chairman, David Wetherthell, hammered out a deal to fund the site over pizzas with Martin and his two cofounders. In February, the start-up was acquired by portal and search engine behemoth AltaVista for an undisclosed sum. How much? A few months before the buyout, Martin turned down an offer of $200 million. Raging Bull currently controls about 5.6 million shares of AltaVista stock, according to Securities and Exhange Commission filings. So you do the math. "Now were playing in the big leagues," Martin quipped after clinching the deal.
The secret to such success? An appetite for risk. "Being an entrepreneur, there is some degree of a rebellious attitude," he says. "I interned for Goldman Sachs the summer before I started Raging Bull. I had a lot of fun there, but the whole game plan was set and there was [too much] bureaucracy. It just wasnt for me."
School, for right now, is on the back burner. Though Martin says his mother often asks if hell ever finish his degree, his plate is too full to even consider the option. Between Raging Bull, his recent investment in Novix Media (an online media venture for twentysomethings) and his role on the board of directors of Learn to Invest (a non-profit organization devoted to educating high-school students about the stock market), time is at a premium.
Besides, Martin seems more comfortable at the head of the class. Hes lectured at both his would-be alma mater, UVA, and Rutgers University. So whats the most crucial lesson he would teach the eager undergrad?
"You can take a risk now, and work for a start-up," he suggests. "The Internet culture breeds a young camaraderie culture. Its just more fun, and worth the risk. If it doesnt work out in two years, you can go back and work at Morgan Stanley."
With a drive this undaunted, its doubtful Martin will ever have to play corporate puppet again. But the satisfaction he feels cant be measured in dollar signs. "Its just fun," he says. "I mean, money is great. But when Im in a restaurant in New York City and two guys in front of me are talking about Raging Bull, now thats incredibly satisfying."
Not Business as Usual
Speaking of satisfying, imagine this scenario, as conceived by Larry Page
, cofounder of the search engine Google. You head into work. Youre a bit hungry. Thankfully, an array of breakfast cereals awaits you. Come lunchtime, a chef serves up a dish to suit your tastes. Ditto at dinner. As the day winds down, youre feeling a bit achy, so you head to the office masseuse for a quick rubdown. Sound like utopia?
In Pages offices, its reality. As he would argue, these arent amenities in todays start-up; theyre necessitiesespecially if youre based in the über-competitive technohub of Silicon Valley. At Google, work and play are one and the same.
"People can work wherever they want [in Silicon Valley]," Page, 27, explains. "Our employ-ees spend a lot of time [on the job], and having a nice envi-ronment is important. We also play street hockey two times a week."
Google came to life four years ago, when Page and his partner were Ph.D. students at Stanford. By the time the duo was handed their first round of funding in September 1998, their coveted product was already creating 10,000 searches a day.
Andy Bechtolsheim, cofounder of Sun Microsystems, was immediately impressed. As Page recounts, "He said, This is a no-brainer. How about I write you a check for $100,000? We agreed. So he wrote it out to Google, and we had no company, no lawyer. We hadnt incor-porated the company yet, so we couldnt cash the check. There was no paperwork."
Too unassuming to gloat over their newfound funding, the quirky pair commemorated the event over Whopper combos at a Burger King down the block. "We figured we should celebrate by being really unhealthy."
Humility aside, Google is proof positive that a superior product will have venture capitalists crawling on their knees. "We didnt talk to a single investor who wouldnt give us money when we were going through our [first round of funding]," Page proclaims. "We had a product that was obviously better and worth a lot."
The duo found their niche fast. They urge any would-be entrepreneurs to memorize their market. "Its really important to talk to CEOs at the large companies that will be your competitors," Page stresses. "You can get access to them if youre clever about it, and certainly if you have an interesting product, show it to them. Dont worry about them copying you. Chances are theyre too lazy."
The Million-Dollar Toenail Polish
What if a gene held the key to the entrepreneurial spirit? What would its traits and net worth be? Would people want to reproduce it? While most of the visionaries in this article agreed their tenacious drive was innate, Dineh Mohajer
claims to not be inclined to CEO status.
If there were ever a reluctant entrepreneur prize, Mohajer would take home top honors. The founder of Hard Candy cosmetics admits that if she never had to look at a budget again, shed die happy. Says the 27-year-old, "I didnt really want to be an entrepreneur. Im not interested in the stock market. Im much more of a creative person. Profit-and-loss [is] impossible stuff as far as Im concerned."
The self-deprecating Mohajer is now sitting on a cosmetic goldmine, worth more than one million dollars. It all started by accident five years ago, when the former University of Southern California pre-med student couldnt find a toenail polish to match the color of her sandals. "I was just doing a summer project and it went haywire on me," the down-to-earth mogul recalls. "Then everyone caught wind of [the polish] and liked it. So I realized at that point that there was a really big opportunity. And then as people were interested, I pursued making it bigger."
Rather than study for her medical school admissions test, Mohajer set up shop in Beverly Hills, and she hasnt looked back since. Though her company was acquired by upscale fashion house Louis Vuitton Moet Hennessey last year, Mohajer still maintains complete creative control over her products and the company image. She readily relinquished her monotonous production duties. "I dont miss that at all," she says.
Mohajer is grateful for all the help shes received, especially from her mom. "I milked my parents for probably a couple hundred thousand over time," she admits. "My mom ran my fathers medical practice, so she understood how to run a business. She really made it happen for me."
Money for Nothing?
Mohajer secured her cash the old-school way: mooching. Its what the experts commonly refer to as the three Fs: family, friends and fools. But say your family is of meager means, your friends are all tightwads, and you cant find any fools willing to green-light your idea. Where do you get the cash to fund your dream?
You can head to your local bank and attempt to secure a loan. But perhaps theres a better way. Slews of investors stand waiting, ready, willing and able to burn cash like it grows on trees. Yep, venture capitalists are dangling their proverbial carrots in the faces of legions of college students.
The numbers speak for themselves. According to the National Venture Capital Association (NVCA) and Venture Economics (VE), last years venture capital investments totalled a record $48.3 billion, increasing by 151.6 percent over 1998. As NVCA chairman John Martinson notes, "More entrepreneurs are receiving funding than ever before, and we expect the upward trend to continue."
But there are sobering numbers to dash those trends, based on the simple formula of supply and demand. The National Commission on Entrepreneurship claims that an estimated 800,000 businesses are launched each year. The vast majority will be rejected by VCs. Even when VCs invest in your business, theres no telling when theyll pull out. The high-tech industry is particularly vulnerable. Fact is, argues Spinelli, capitalists gobble dot-coms in record numbers and spit them out when theyve had their fill, often spending one to four years on a prospect instead of the traditional four to seven years. According to John L. Nesheim, author of High Tech Start Up, the result is that 60 percent of high-tech companies that secure capital will eventually claim bankruptcy.
There is hope, says Harvey S. Jacobs, president of venture-capitalist.com. "Not everyone is going to do $4 billion in business in 18 months," he notes. "You havent even scratched the surface until youve been rejected by 50 to 60 venture capitalists. I ask people, Has someone paid you for your product or service? If [even] one person has, Im much more interested."
According to Page, you have nothing to lose. "As a student, you dont have a family and a huge income," he says. "Youre not risking your career. You have a lot of flexibility to do whatever you want, and a lot of resources."
An Education in Reality
Despite an apparent abundance of re-sources, Matt Kelley contends that Mavin is like a baby that monopolizes all his time. But, he jokes, "its not all that cute sometimes."
The consummate professional, Kelley has to force himself to socialize. There are always more readers to reach, more issues to tackle, more partnerships to create. "We just entered into a contract with AsianAvenue.com and Black-Planet.com," he explains. "We also collaborated with BET.coms relaunch. Im hoping Mavin can work with other community portals and organizations. Theres so much more to do."
Clearly theres a lot of work behind the smooth surface of lofty goals, including countless little details that cant be overlooked. Many entrepreneurial wannabes lose sight of a simple fact: To be your own boss, you have to put in the hours, the always-accessible, 24-7-365 kind. Are you ready to live and die by the ring of your cell phone? Can you imagine working 75-plus hours a week?
"Be darn sure that youre willing to be a multitasker," warns Don Spieler, a regional director for SCORE, the national, nonprofit association partnered with the U.S. Small Business Admin-istration. "Youve gotta be willing to turn the lights on and off, sweep the floors, and meet the payroll, regardless of what business you choose."
Last semester, Kelley realized that he was guilty of being a mediocre student and a mediocre publisher. Though he says he wants to continue his undergrad education, hes currently not enrolled. However, he notes that he is teaching a course at Wesylan called "Racially Mixed in the U.S."
So does the college education lose its value when the graduate with a degree is offered a $30,000 gig at an accounting firm, while a dropout rakes in millions for launching a successful Web site?
Bill Martin isnt exactly eager to champion a stay-in-school campaign. "When you go to school, you have to take these classes so you can get this job," he reasons. "And the educational system is degraded because of that. When I worked at Goldman, they trained you to do everything you needed to learn in six weeks. You go to UVA and they want you to take a two-year finance curriculum."
Still, others refuse to write off the campus experience. "If my business falls apart, you cant take that degree away from me," asserts Tina Wells. "I ran [The Buzz] for three years before I entered college. But there are so many things that Ive learned. I cant have one without the other."
Kelley makes a case for the dorm-room-and-a-dream argu-ment. "One thing that people fail to realize is that when youre at college, in addition to having a great time and having unparal-leled intellectual and social re-sources, youre also here to make connections." As he argues, "Whether theyre connections just on a friendship or relation-ship level, youre creating profes-sional relationships. Where else are you gonna be in such a microcosm of so much talent and resources?" >>
For every Michael Dell exalted in the media, there are countless unsung heroes hoping to manifest their works-in-progress into works of art. Link caught up with three students juggling books and budgets.
Ari Meisel: Three Dot-Coms at 17
Philosopher and author Ayn Rand claimed she wrote for the simple happiness of creating. So its not surprising that high school senior Ari Meisel
calls her one of his greatest inspirations.
"Im not really interested in money," he insists. "I realized that being a CEO means that you can solve problems all day, and thats fun. Its envisioning, doing, creating."
A self-proclaimed insomniac, Meisel is headed for the Wharton School at the University of Pennsylvania this fall. At 17, the New York City native already heads a trio of companies. He launched his first venture, Liontex (a Web site design company), at 14. His second, Tek, outfits homes and cars with across-the-board technology solutions. His latest, dial-food.com (now in a pilot phase serving New York City college students), offers online takeout menus.
Though many of Meisels clients are twice his age, the gap doesnt bother him. In fact, he embraces it. "If youre a good entrepreneur," he says, "you put your heart, blood, sweat and tears into your company. I think of my companies as my children. Theyre my ideas. I created them; I nurtured them; I made them what they are. I wouldnt do anything to jeopardize them."Tina Wells:
Whats in a Trend?
, 20, has been asking herself that very question since 1996. Then a mere 16, she launched The Buzz, a consulting service aimed at bridging the gap between teens and the clothing and cosmetic companies that target them. Having amassed more than 50 clients, including teen gems like Bongo jeans and Candies, Wells is now headed for Chicago to expand her business. The Hood College (Maryland) junior will complete her senior year at the Windy Citys Columbia College.
Shes ready to build The Buzz into a full-fledged consulting agency, offering product development, project consulting and market-research reports every quarter on teens and trends. And shes eager to take her peers along for the ride. "Im looking for a group of 10 to 20 college consultants," she explains. "Id offer them internship possibilities in Chicago with my partner. Were trying to keep it a very youthful company, but at the same time very professional."
And Chicago is only the tip of the iceberg for the ambitious communica-tions major. "My mom says to me, you know Oprah is talking about retiring," Wells says with a laugh. "I just think its time for teens to stop being passive and start being active. This is their world."Michael Scully: Not Your Average Cup of Joe
Whenever 21-year-old Michael Scully
feels stressed out from running Buy-Coffee.com, his online coffee business, he looks at a Post-It note tacked to his wall. "When I started, I was flat broke, and I dont come from a wealthy family," the University of Central Florida senior explains. "My mom struggles. And when I told her what I wanted to do, she sent me a check for a thousand dollars and a little Post-It that said "make it happen."
Suffice it to say that Scully is a man of his word. Despite taking a full course load and working on an honors thesis, the senior management information systems major has had such success with his company that Duck Head recognized him as an Entrepreneur of the Month in January.
Launched in November of 1998, Scullys company sells more than 40 different blends of brew. Though he now rakes in tall orders, he has resisted the urge to splurge. "Ive been reinvesting the money into marketing my company," he says. "You see the bank account numbers go up, and you think, I can take some of that, thats mine! But you resist the temp-tation. No fancy cars for me yet."
His self-discipline is paying off. Scully just signed a marketing contract with ShopNow.com, one of the largest shop-ping directories on the Web. And to make the BuyCoffee.com experience more upscale, he invested in new packaging and labels, which increased his per-centage for repeat business. Hes also working on new ways to extend his brand name. Among the projects on tap: BuyCoffee.com Wholesale to serve cafés as far away as Australia and South America, a free-coffee incentive to buy in larger quanities, and a monthly delivery service.
"When you see the potential every day, you say, I just gotta work a little harder," Scully says. "You know, sleep a little less."