Weinberg Tech Entrepreneurs
Idealistic Pragmatists with a Taste for Risk
They are risk-takers, enjoying the roller coaster ride that a tech startup entails, celebrating when they get their first customer, near despair when the server breaks down and their product starts crashing. They are able to live on ramen, to put their money where their ideas are, to forgo the bigger, more reliable paycheck that a different career would allow. They believe in their vision, even in the face of criticism—from business associates, from the press, even from family and friends. They are stubborn. When told their products won't work, that no one will want them, they persevere. They work relentlessly hard and postpone that South Seas trip, that promising Match.com date. They say it's not all about the money. They are idealists who want to create a company that makes life easier for a great many people, one that ultimately changes the world for the better.
To discover what makes a tech entrepreneur, or any entrepreneur for that matter, we interviewed three alumni who are at different points in their careers. They didn't all start out as "the kid with the better lemonade stand," but there are traits and viewpoints they share. Two majored in psychology. All appreciate the conceptual and analytical thinking skills they honed at Northwestern. They tell us this is a pretty good time to start one's own business and that Weinberg College is an excellent place to begin to uncover the passions that lead to startups.
Stella Fayman '09, FeeFighters.com
In April 2009, Bloomberg Businessweek heralded the "perfect entrepreneurial storm" brewing on college campuses. The fiercely independent Millennial generation, who wanted to be their own bosses anyway, faced a tough economy in which Wall Street firms could no longer offer job security and big bonuses. The entrepreneur was rapidly becoming the new rock star on campus. Enter Stella Fayman, who graduated that year, eager to solve problems with technology and to make her mark on the world.
Fayman's psychology major proved to be a good underpinning for her career aspirations, she says, since it taught her how to think about consumer behavior and understand different biases. But it was her extracurricular activities that convinced her she would enjoy carving her own career path. As a campus activist, she was troubled about the lack of knowledge about sexual health on campus, and helped start Sex Week, to begin to clear up misunderstandings. She also helped found SHAPE, the Sexual Help and Assault Peer Education program.
An entrepreneurship class at Northwestern made her realize that what she was doing with Sex Week, she could actually do for a living: seeing a need and developing a solution.
"Troy Henikoff, who taught that class [in the Harvey Kapnick Business Institutions Program], was just paramount in making me realize that a startup is what I wanted to do after graduation," says Fayman.
She had learned from Henikoff the importance of networking, and became a "networking bandit," she says, meeting with people two or three times a day, and attending networking events throughout the week. She used the Northwestern alumni network to find people in companies that sounded interesting to her.
When she met two business school grads who were starting a company to help small businesses with credit card processing, the idea appealed to her altruistic nature.
"Every time you buy at a boutique or coffee shop, the merchant has to pay a small chunk of that to a credit card processor," she explains. "We've seen small businesses pay as much as 7 or 8 percent per transaction, which is crazy."
Feefighters has created a marketplace in which small business owners go online, enter some information about their business and receive a list of competitive bids from reputable processors. It's Fayman's job to market to new customers and build community relations. The company now has helped 30,000 businesses save approximately $75 million in credit card processing fees.
And Fayman hasn't stopped with Feefighters. Last year, she founded Entrepreneurs Unplugged, a series of inspirational talks, in which successful startup owners speak onstage to those who wish to follow in their footsteps. Over 1,000 people have grabbed the chance to hear the founders of SitterCity, Groupon (Northwestern grads), and Google/Chicago share their success stories.
Graduating without a job was risky, she says looking back, especially since she had turned down a lucrative offer from a consulting firm.
"But there's a lot of excitement, a lot of opportunity in startups. I took mitigated risks at a time in my life that I could. I was being paid pennies, with no health insurance. But that's when I laid the groundwork for a future success a couple of years down the line. Besides, I just love helping people."
Jed Kleckner '94, Delivery.com
While funding may be harder to find during a recession, talent is more easily available, so starting a business in a down economy may make good business sense. That's just one of the lessons about timing that Jed Kleckner, CEO of Delivery.com, has learned. Kleckner grew up in Palo Alto, California, with his father a doctor and his mother an entrepreneur. While at Northwestern, he was a busy econ major with a facility for languages but postponed study abroad until after graduation. After a year's program in France, he decided to stay there and look for opportunities. The timing was terrific.
"It was just serendipitous that I was connected to some of the guys who founded Netscape—they were from my high school—when they were looking to launch the business in Europe," says Kleckner. "That's where I experienced the entrepreneurial bug. I was joining a company that was at the cusp of what became an explosive period of growth for digital media and technology."
After he helped build Netscape's European operations, the business was acquired by AOL. He moved back to California and started a company—a web-based check-in service built to enhance the browsing experience invented at Netscape, and a precursor to location-based check-in sites like Foursquare. And he learned the reverse of that lesson about timing: that it's hardest to start a company when it's easiest to find money.
"In 2000, having Netscape as my experience, it was easy to collect investments from people who were interested in getting in on the opportunity. But it was a tough time to build a company because it was expensive to find engineers. How do you hire someone when they have a really good job somewhere else? You have to pay them a lot more money, when money is the one thing that is so dear to you when you are starting a company…. I am not going to say that every entrepreneur is a success their first time. It was a learning experience and we were able to sell the company."
After a Wharton MBA and a stint in investment banking in New York, Kleckner again experienced good timing: leaving Wall Street in 2008, right before the downturn. He was also fortunate in getting to know Howard Lutnick, chairman of Cantor Fitzgerald, the global financial services firm.
"When I joined Howard to create Cantor Ventures in 2008, it was with the intent of starting or investing in businesses that were, at their core function, market places," says Kleckner. "There was a business called Delivery.com already started in New York. It was a natural fit, based on Cantor being an intermediary for the financial services sector and Delivery as a meeting ground between merchants and consumers."
With Delivery.com, people shop through their local neighborhoods online, buying everything from takeout food, to groceries, wine and liquor, and pet supplies. Unlike Amazon, which warehouses items at a remote location before shipping them, with Delivery.com, one buys from the local merchant, who has the items on hand, and delivers them when ordered.
Says Kleckner, "We are acting as a go-between. It's a way for you to shop more efficiently. Rather than go to five stores, you can make all your purchases on our site. It's great for someone with a busy urban life."
The individual pays nothing for the service; merchants pay Delivery.com a fee, and collect the rest, attracting customers they might otherwise miss.
Kleckner distinguishes between good ideas and good business conditions.
"Almost every good idea as it relates to the Internet was invented in the late '90s," he says. "But they were not necessarily well advised or well timed. The creative thinking was there but not the cost structure. It was more expensive to build technology than it is now. The processing power of the hardware has increased over the past decade by a magnitude. There's also a lot of open source software available on the Internet that you can use as a platform on which to build something and personalize it."
Kleckner's advice for prospective startup owners: Don't be afraid to fail. "You come out of it stronger and more prepared for the next time. In business a lot of people are scared that if they fail, it puts the scarlet letter on their CV. I think it's actually the opposite—it means that you are willing to stand for what you believe in. It may not work the first time or the second time or even the third time. But ultimately, you will succeed."
Aashish Dalal '99, ParkWhiz.com
Aashish Dalal, a Pittsburgh native, graduated in '99 with majors in biology and psychology, intending to be a doctor. When he saw his buddies swept into the dot.com boom, he joined them, planning to postpone medical school for "at least a year."
Fast-forward to 2012, and Dalal is busy running ParkWhiz.com, a consumer website that helps drivers find and reserve parking, specifically for those heading to a sporting event, concert, or play. Reserve parking on the web? That would avoid many moments of frustration for anyone going to a special event in a major city, and give drivers that elusive peace of mind.
"I don't think most people care for parking," says Dalal, with a laugh. "But with the car the predominant form of travel, parking impacts people every day and not finding a space can easily ruin anyone's event, including my own."
After receiving a master's degree in computer information systems at DePaul University, and trying his hand at sales, Dalal became intrigued with the untapped potential of the parking industry. After considerable research, Dalal wrote out a business plan to structure his thoughts. He got married in 2005, and made the commitment to go full speed ahead with plans. He says his wife, an attorney, believes in the idea and has been very supportive.
"There were definitely down times in the business and she helped us get through those times."
ParkWhiz currently has coverage in more than 100 major venues, including Soldier Field, Wrigley Field, and the United Center in Chicago. Top markets are San Francisco, Boston, Dallas, and Chicago, with the New York market moving up fast. And the business is expanding: Dalal is moving ParkWhiz beyond event parking, which accounts for just 6.5 percent of the $15 billion parking industry, and now offers 24/7 reservations in Chicago.
"We look at the airline industry as the father of all industries in the way it's evolved," says Dalal. "Today everyone books their flights online. Our biggest challenge with parking is moving consumer behavior, to get them to realize there is an easier, better, more convenient and cost saving way to get to your destination. Reaching the masses is never an easy thing—it's what keeps us up at night."
Fortunately, creative thinking and understanding consumer behavior were strong components of his Weinberg education. Dalal says his professors "challenged me and taught me how to solve problems. Classes which I wouldn't associate with the my path made a lasting impression in teaching me how to think and challenging my assumptions."
He says, echoing other startup gurus, that his biggest goal is nothing less than to help change the world.
"Don't just live in it," he says. "Help change it."