I had the pleasure of visiting The Wharton School recently as a returning Entrepreneur-in-Residence. I found myself more encouraged than ever about the student body and their desire to be entrepreneurs. When I earned my MBA at Wharton, from 1997-1999, I was a bit of an outlier as an entrepreneur in a class of almost all aspiring consultants and bankers. In my class, there were a few entrepreneurs, such as John Lusk and Kyle Harrison, the co-founders of MouseDriver (I recommend reading their book on the experience), and Gregg Spiridellis, the co-founder and CEO of JibJab. John is at it again with Rivet & Sway and Gregg is still running JibJab, an unusually long tenure for any Wharton graduate in my class. Gregg is my most humorous friend and his talent has shown in so many ways at JibJab. But, at Wharton, I was even more strange than John, Kyle, and Gregg. And that is because I was founding and running businesses while I was still in school.
I founded my first business in the craft I had learned right before Wharton - consulting. A senior manager from Deloitte Consulting - where I had worked just prior to Wharton - called me in November of 1997 in a panic right before my winter break after my first semester at Wharton. He had sold a client - the Department of Labor in the State of Louisiana - on a project where he would build a system to replace the tracking of their adult education system with a client-server design versus their current paper-based, filing systems. This would allow for more efficiency and better reporting and analytics. The problem was - he had a very small budget and no idea how to build it. So he turned to me. And I was in. I had written all of my essays when applying to Wharton about my passion to start my own businesses. I had two weeks over that winter break to create the entire system - from scratch. I learned a new programming language with the help of a very smart friend who happened to be visiting the Wharton campus to consider whether he would also earn his MBA. And I worked my butt off. I was absolutely determine to prove that I could do it. I literally worked every day and night until around 3am over that two-week period, including during the ball dropping to celebrate New Year's Eve. Fortunately, I have a very understanding and independent wife, Debra, and she wanted me to prove to myself that I could do it. The confidence that gave me was transformational. I knew after completing that project - and the completed system performed well and was installed all over the state of Louisiana - that I would never have to take a job again. I would be an entrepreneur for the first of my life - following in my parent's footsteps. Hurt Technology Consulting, LLC was born.
I continued to grow the consulting business throughout my time at Wharton. I employed Wharton undergrads - specifically those in the Management & Technology (M&T) program, which are by far the most brilliant undergrads I've ever worked with. But I knew at Wharton that a consulting business would pay the bills (and then some, I cleared around $350/hour on several projects), but that it would never rapidly scale. I'll write a post later on consulting businesses as "first-stage" entrepreneurship and how Austin is mostly in this stage and needs capital and mentorship to scale to "second-" and "third-stage" entrepreneurship. But that post is for a later time. I strongly believe that if you are ambitious - if you want to change the world - then you should swing for the fences when you are a young entrepreneur. You have little to lose, and once you become encumbered with children, a mortgage, and a higher-cost (i.e., not a student budget) lifestyle, you can become stuck and never have the time to realize your grandest ambitions. So I kept the consulting business going, but I also swung for the fences with three other businesses.
One was a business named MBA ZoNe, and I had two co-founders - a husband and wife who were both in my class - Brenda and Marc Mizgorski. It was a virtual community for MBA prospects, students, and alumni. It was advertising based, just like Facebook is. I was the CTO and I built the whole site. I also sold our first advertising - to Deloitte Consulting. I believe it was a $7,000 banner ad campaign with a certain number of impressions. There was just one problem - I didn't like selling advertising. So that business - for me - ended with me selling my equity stake back to the husband and wife, and they still run it today - I believe more as a lifestyle business.
Another was a business named BodyMatrix. I had made a lot of money in consulting over the summer, and I had half of the summer off to enjoy. My parents were always retail and direct-marketing entrepreneurs, so I decided to try my hand at retail - but online. I built the eCommerce engine from scratch - using Microsoft ASP with a Microsoft Access back-end. I remember telling my parents how Debra and I "were going to sell our products all over the world" versus just locally like in the "old days of retail". And we did. We launched after one month and we were getting orders from the US, UK, and US military bases all over the world. We chose to sell sports nutrition products - vitamins, PowerBars, etc. - as they are products that customers frequently reorder. Debra and I knew - because we were customers ourselves and exercised almost every day (we still do). I negotiated an agreement with a Dallas-based supplier to retailers and they handled all of the inventory management and shipping for us. It cost us around $150 to launch (mostly in hosting and incorporation fees), and with quite a bit of sweat equity. I remember that a few months after we launched BodyMatrix, the Jewish newspaper in Philadelphia put Debra and I on the front-page - "selling all over the world from a brownstone in downtown Philadelphia". Several of my Wharton professors read that article and they were quite complimentary.
And finally I launched Coremetrics. Coremetrics grew out of BodyMatrix - you've heard the saying, "necessity is the mother of invention". Well, I lived that. The most frustrating part of BodyMatrix was that all customer behavior was masked by a Web browser. At least in my parent's stores you could ask customers questions like, "are you finding everything you need?", "how did you hear about us?", and "what other products do you think we should carry?". But online, we were blind. Yes, we could sell all over the world with no inventory costs or shipping hassles. But we couldn't "see" anything happening inside of that "black box". So, I built the technology to see. And because I had built the eCommerce platform myself - and knew all of the code inside and out - I did what I thought was most logical. I wrote the customers' actions as they occured directly to the Microsoft Access database that powered the site. Where did they visit us from - recorded. What products did they look at - recorded. What products did they buy - recorded. What products did they search for - recorded. What products did they abandon from their shopping cart - recorded. This work got the attention of several professors, including Eric Clemons. Eric had a brilliant PhD student, Il-Horn Hann, who was searching for his thesis and had focused a lot of energy already on the emerging field of eCommerce. Il-Horn started to work with me as I used these recorded actions to personalize the site. I began to target customers who viewed - but didn't buy - products like fatburners with targeted offers. Only those customers saw the offers because I used cookies to personalize the offers to them. I was able to almost double my conversion rate from around 2% to 3.5% using these techniques. To validate if this was the big business I had been looking for, I talked with two of my classmates working at Amazon and CDnow, respectively. The CDnow executive was Matt Laessig, who graduated a year earlier and now thankfully works for us at Bazaarvoice. I showed them a demo of my analytics solution and how I was using it to personalize offers. To my surprise, they were blown away. I fully expected them to give me a lot of ideas on how to improve it based on their presumably much more sophisticated systems. But they didn't - instead they told me that I should start this business as soon as possible. I remember those meetings like it was yesterday, and I walked out of them more excited than I had ever been. I named the business Coremetrics - because if you listen carefully, executives will use the words "core" and "metrics" frequently. I wrote about the importance of naming your company in this post. And you remember those Wharton M&T undergrads I bragged about above? Well, one of them, Joe Greenstein, helped me design the initial database schema for Coremetrics. Today, he is the founder and CEO of Flixster. He's brilliant.
I kept all four businesses going - Hurt Technology Consulting, MBAZone, BodyMatrix, and Coremetrics - until I was about to graduate. I frequently worked through the night, fortunately having the ability to capture a little sleep as most of my classes started late. In retrospect, this may have been insane. But I was driven by the passion to be an entrepreneur, and I have no regrets about that. I wrote about finding your passion in this post and about how to hire those that are passionate in joining your cause inthis post - you need to validate their passion. Once I determined that Coremetrics was the business I had been looking for - a huge market opportunity and one that stoked my interests (which in hindsight is now obvious to me in my retail and programming background, as I wrote about in my post on the future of retail) - I sold the other three businesses as fast as possible and went after Coremetrics with all I had. That story is more documented, so I'll stop talking about my time as a student at Wharton here other than to say Coremetrics wasn't an easy journey with the dot-com boom and collapse, and that journey - and the learnings from it - are well documented in this Austin American-Statesman article.
At The Wharton School today, it is a very different story. There are many entrepreneurs today that are like I was in 1997-1999. Maybe this is because of the high unemployment rate. Maybe this is because of the financial crisis, where banking both shed jobs and lost some of its luster as it almost tanked the world economy. Maybe this is because of how much entrepreneurial knowhow has been developed among the Wharton alumni and faculty since I graduated. Since graduating, I've been back around eight times to serve as an Entrepreneur-in-Residence, and I know many others have been too. Or maybe it is because of how well First Round Capital has prospered and especially Josh Kopelman, the co-founder of First Round Capital and a fellow Wharton graduate who recently relocated First Round's headquarters to the Penn Campus and started the Dorm Room Fund (which I just agreed to be a mentor of after Josh asked me). I believe it is a combination of all of these, and more. Entrepreneurship is seen as "cooler" than it was before - maybe that is because the new building that houses most Wharton classes, the $140 million Huntsman Hall, was largely donated by and named after a long-time entrepreneur, Jon M. Huntsman. At The Wharton School today, you can find everything from the Penn Founders' Club, where all Penn students are welcome as long as they are fervently working on a real business while they are in school, to Tyler Wry's class MGMT 806 (Formation & Implementation of Entrepreneurial Ventures), where students are working on real business plans and a careful selection process is applied for those that want to get into the class. Whatever it is, it is energizing. I spoke to Tyler's class, the Founders' Club, and served as an Entrepreneur-in-Residence for two days. I met with both undergrads and MBAs. I was more impressed than I've been on any previous EIR visit. One of the students I met is both a brilliant programmer and artist. He's already sold $65,000 of his own art - while he is still in school. He's 19-years old.
The finale for my visit was so-called the "Power Dinner". To my surprise, 250 students applied for the 12 spots to have dinner with me. I remember when entrepreneurs like Farhad Mohit, the founder of Bizrate and Shopzilla, visited our class. I was one of only 12 students that went to see Farhad speak. It was a brilliant and raw talk. He had been eating ramen noodle for a year but had finally just raised his Series A round. But there was little demand to see an entrepreneur like him speak during my time at Wharton. And now 250 applications for 12 spots? It made me excited for the future. Entrepreneurs create the jobs and the economic ripples. Almost all big companies, which some of you reading this work for, started with humble beginnings - with the passion of one or a small group of entrepreneurs that were determined to change the world. Pranav Kashyap was kind enough to write about the "Power Dinner" for The Wharton Journal, and you can read his takeaways from the advice I gave there.
I think Benjamin Franklin and Joseph Wharton would be very proud of the renewed focus on entrepreneurship at The Wharton School at the University of Pennsylvania today (Franklin founded the University of Pennsylvania and Wharton, of course, founded The Wharton School). Both of them made their biggest contributions in life as a result of being entrepreneurs. I'm certainly very proud as a graduate myself. Entrepreneurs are the job creators, and being around so many young and promising ones makes me bullish about the future.
Huntsman Hall proudly stands below: