Studies have shown that most entrepreneurs are over the age of 30; but with the rise of companies like Facebook and its young founder Mark Zuckerberg, who was just named Time Magazine‘s “Person of the Year,” more attention is being paid to young entrepreneurs (i.e., those under 25 years of age). Bloomberg BusinessWeek scoured the U.S. looking for companies founded by young entrepreneurs that its staff believed merited attention. The criteria for selecting the 25 finalists was: “Their founders were no older than 25 at the nomination cut-off date, and they appeared to hold promise based on business model, founders’ experience, outside capital, and revenue.” [“America’s Best Young Entrepreneurs 2010,” by John Tozzi, Bloomberg BusinessWeek, 23 September 2010]. Having identified the select group of 25 companies, the magazine let readers vote on their favorites. Before revealing the readers’ picks, let’s look at the candidates [“2010 Finalists: America’s Best Young Entrepreneurs,” by John Tozzi, Venessa Wong, and Lauren Hatch, Bloomberg BusinessWeek slideshow]. Below is the list of the 25 finalists.
1. 9 Clouds — Founded by John T. Meyer, 25, 9 Clouds is an online marketing consultancy.
2. Campus Buddy — Founded by Mike Moradian, 25, Campus Buddy publishes data on college class grading.
3. Cirtex — Founded by John Xie, 21, Cirtex provides web hosting.
4. CitizenGroove — Founded by John Knific, 23, Marc Plotkin, 24, Eric Neuman, 24. and Kyle Napierkowski, 24, CitizenGroove provides software for digitizing music school applications.
5. Convasis — Founded by Alexey Ossikine, 22, Convasis provides product development for startups.
6. DefySupply — Founded by Brent Gensler, 25, DefySupply provides online furniture sales.
7. Coach Line — Founded by Ray Land, 23, Coach Line provides luxury motor coach charters and tours.
8. Forever Lazy — Founded by Tyler Galganski, 25, and Dave Hibler, 25, Forever Lazy Sells one-piece pajamas for adults.
9. Freshbox Catering — Founded by Joe DeLoss, 25, Freshbox Catering provides corporate catering.
10. Game Origin — Founded by twins Ajay and Anil Patel, 22, Game Origin resells used video games.
11. Growth Spark — Founded by Ross Beyeler, 23, Growth Spark provides web design and online marketing.
12. Hodara Real Estate Group — Founded by Alex Hodara, 23, Hodara Real Estate Group brokers real estate rentals and sales.
13. Infegy — Founded by Justin Graves, 25, and Adam Coomes, 25, Infegy monitors customer feedback online.
14. Innova Dynamics — Founded by Alexander Mittal, 25, Arjun Srinivas, 25, and Michael Young, 24, Innova Dynamics provides advanced materials engineering.
15. Krossover — Founded by Vasu Kulkarni, 24, Krossover Culls data from video footage for sports teams.
16. LifeServe Innovations — Founded by Zach Bloom, 23, and Rick Arlow, 22, LifeServe Innovations develops medical devices.
17. LiveProud — Founded by Phil Tepfer, 24, and Charles Bogoian, 24, LiveProud sells apparel made from trash.
18. Milo — Founded by Jack Abraham, 24, Milo tracks products on store shelves.
19. Mobiata — Founded by Ben Kazez, 23, Mobiata provides mobile apps for travelers.
20. New Media Campaigns — Founded by Joel Sutherland, 25, Clay Schossow, 24, and Kris Jordan 25, New Media Campaigns makes websites for politicians and businesses.
21. PrimeTime Lacrosse — Founded by Tyler Low, 23, and Jason Wellemeyer, 25, PrimeTime Lacrosse runs lacrosse leagues, training classes, and camps.
22. Pyknic — Founded by Andrew Marshall, 24, and Stephen Thompson, 23, Pyknic sells decorated T-shirts.
23. SeatGeek — Founded by Russell D’Souza, 25, and Jack Groetzinger, 25, SeatGeek predicts prices of event tickets.
24. VillageVines — Founded by Ben McKean, 24, and Dan Leahy, 25, VillageVines helps restaurants sell excess capacity.
25. Vino Gallery — Founded by Alex Head, 24; and Rachael Buehrer, 24, Vino Gallery is an art gallery and wine shop.
From those 25 candidates, Bloomberg BusinessWeek readers were asked to select their favorites. Before revealing the readers’ five favorite picks, let me provide you with my favorites (in alphabetical order):
DefySupply — “In 2007, after graduating from University of Wisconsin, where he had studied real estate and finance, [Brent] Gensler traveled through China to meet with companies that supply furniture to U.S. retailers. He moved back to Minneapolis at the end of the year, and in 2008 launched DefySupply to sell furniture from Chinese suppliers directly to customers in North America. … He invested $50,000 of his savings and secured $200,000 from an angel investor in Minneapolis. The business, which began with sofas, bar stools, and patio furniture from five manufacturers, has since expanded to include 3,700 unique products from 45 suppliers. Customers have to be patient—it takes about six weeks for an order to arrive—but Gensler says prices are about half what retailers would charge. DefySupply has 10 employees in China and five in the U.S. Gensler expects $5 million in 2010 sales, twice as much as in 2009.”
DefySupply clearly takes advantage of both globalization opportunities and information age technologies. Although the company’s profit margins could shrink as the “China price” and transportation costs increase, Gensler’s business model is still sound and I anticipate he will continue to be profitable.
Infegy — “Justin Graves and Adam Coomes were running a game technology company, Invented Existence, in 2004 when they got a side offer from an ad agency to build a tool that could monitor online discussions about businesses. That job led them to create software to monitor and analyze customer conversations and comments on message boards and social networks such as Facebook. The pair used $50,000 of their own money to launch Infegy in 2006. Since then, the Kansas City (Mo.)-based company has expanded to 25 employees and a second office in Birmingham, U.K. Now more than 50 clients … use Infegy for its database of more than 6 billion individual Tweets, blog posts, and customer comments. In 2009, Graves says, the company had over $350,000 in revenue and became profitable. He expects between $1.5 million and $2 million in revenue in 2010.”
Almost everywhere I turn nowadays I read articles about the importance of social networks and corporate reputations. My guess is that Graves and Coomes will find a buyer for their company and will end up with a very nice nest egg.
Innova Dynamics — “Alexander Mittal developed a process for imbuing plastics and polymers with new properties while pursuing a dual major in engineering and economics at the University of Pennsylvania. In his 2006 thesis project, he used that technique to create water pipes that would repel microbes in remote Honduran villages, making drinking water safer. He and his co-founders Arjun Srinivas and Michael Young founded a company, now called Innova Dynamics, in 2008 to commercialize the technique, which he says can be used to improve or develop products in a range of industries. … Innova’s process, which the company calls Innlay, has been used to create antimicrobial surfaces for hospitals, including floors and phones. Mittal says the company is working on changing the properties of solar panels to make them more efficient. Clients include the U.S. Army, DuPont, and PPG. Innova, which has 10 employees, raised $5.5 million in venture capital in May, and recently relocated from Philadelphia to San Francisco. Mittal says revenue in 2009 was in the ‘low six figures’ and this year he projects over $1 million.”
Readers of this blog know that I’ve been interested in development and healthcare for some time. Innova Dynamic’s initial product addresses challenges in both areas. My prediction is that Innova will do well selling their products in both developing and emerging market countries.
LiveProud — “During their senior year at Babson College in 2007, suitemates and longtime sailors Phil Tepfer and Charles Bogoian borrowed $25,000 from friends and family to launch their SailProud clothing line of moisture-wicking T-shirts and rash guards to protect sailors from chafing. LiveProud, which contracts out its design and manufacturing to factories in Georgia, Illinois, and British Columbia, turned profitable in less than a year because it operates on low inventory, filling orders as they come in. In November 2009, LiveProud started using fabric derived from recycled plastic bottles and other waste such as corn husks and coconut shells for the 25 styles of T-shirts, jackets, and polos. Tepfer says all the clothes are now made from materials reclaimed from landfills, with each shirt saving about 5.5 pounds of carbon emissions. In addition to SailProud, the pair sell outdoor gear for hikers under the brand TrekProud and a line of yoga clothes called BeProud. Tepfer says the company had $110,000 in revenue in 2009, and expects $375,000 in 2010.”
LiveProud not only taps into a profitable niche market it attracts environmentally-conscious consumers as well. As concerns about keeping trash out of landfills grow, companies like LiveProud will find their valuation increasing.
Milo — “[Jack] Abraham came up with the idea for a website that would let users search for products in stock at local stores in real time. After raising more than $400,000 from investors, including his professor at the Wharton School of Business, Abraham moved from Philadelphia to Palo Alto, Calif., in November 2008 to launch Milo. He later hired Chief Technology Officer John Evans and lead engineer Ted Dziuba, a Google veteran. The website taps into the inventory systems of more than 50,000 stores, including Best Buy, Crate & Barrel, and Home Depot, to let customers know where an item they’re searching for is in stock. Milo gets a commission from retailers when its visitors click through to their sites or use Milo to buy things that customers then pick up at the stores. The company has a staff of 25 and raised $4 million from early-stage venture capital firms and angel investors. Abraham says Milo had revenue of less than $500,000 in 2009 and projects around $1 million for 2010.”
Milo addresses a challenge that many retailers are just beginning to face — how to deal with multi-channel operations. Milo is also a good target for supply chain companies looking for an acquisition opportunity. Those are my top five favorites, but I have to give honorable mention to two other companies.
Coach Line — “Ray Land … founded the company in high school after finding charter buses he had hired for class trips lacking. He bought his first bus, a used, 49-passenger Van Hool, online for $25,000—using a loan and $5,000 of his own money—and set up the fabulouscoach.com website in 2004. Today, the 77-employee business has more than 40 vehicles. Land, who still drives buses himself, aims to make bus travel luxurious, starting with red carpets for boarding passengers. He takes his cues for new features such as seat-back monitors, wood-grain floors, leather interiors, and espresso machines from airlines, cruise ships, and luxury hotels, rather than from the auto industry. The charter rate for a 56-passenger bus: about $1,150 per day. … The company’s largest deal to date was a $1.1 million, eight-month contract with the military to move troops around following Hurricane Katrina in 2005. Land says revenue reached $3 million in 2009 and forecasts $4.5 million this year.”
Coach Line has transported important groups like the White House press corps and the need for chartered transportation isn’t going away anytime soon. What I like about Land’s approach is that he upgraded a basic service so that customers receive more than they anticipated when they travel in his vehicles. Smart lad.
LifeServe Innovations — “Zach Bloom and Rick Arlow were life science students at Lehigh University in Bethlehem, Pa., when they began to develop a new way to open patients’ airways in emergency situations such as might occur in combat zones. The device is intended to help emergency medical providers with minimal training to deliver oxygen to patients with results similar to those a hospital surgeon might obtain. … Their device, based on the design of a viper’s fang, is intended to open airways via minimally invasive procedures that can be performed in 60 seconds or less, compared to 10 to 15 minutes for a comparably effective surgical procedure. It’s now in pre-clinical testing on models, cadavers, and animals. The pair raised $100,000 in grants and prizes from business plan competitions and is applying for funding from the National Institutes of Health and the Defense Dept.”
LifeServe Innovations isn’t really far enough along to know whether it will become a successful firm. It won’t survive on a single product. If the first product does become profitable, however, I suspect that the innovative entrepreneurs behind the company will generate more money-producing and selling life-saving products.
Another company that would have made my honorable mention list is Freshbox Catering. I didn’t include the company, however, because it made the readers’ pick list. Before reviewing that list, I would like to give a shout out to Babson College which helped educate individuals associated with 16 percent of the recognized companies. The winners were announced in late October [“The Winning Young Entrepreneurs 2010,” by John Tozzi, Bloomberg BusinessWeek, 28 October 2010]. The readers’ picks’ company blurbs are drawn from the slideshow by Tozzi, Wong, and Hatch in ascending order were:
Number 5 — Convasis — “A self-taught programmer who began coding in 9th grade, Alexey Ossikine started Convasis in 2009 during his junior year at Babson College to help companies build Web applications. … With eight currently active clients, Convasis has so far served from 20 to 30 mostly Boston-area startups developing consumer-facing websites. Ossikine has five contractors in Boston and others based overseas. He says Convasis had revenue of $50,000 in 2009 and is projecting over $200,000 in 2010.”
Number 4 — Freshbox Catering — “In September 2008, Joe DeLoss took a job as director of social enterprise at Lutheran Social Services, a 300-bed homeless shelter in Columbus, Ohio. His main task: creating businesses that would employ shelter residents and help them develop job skills. A former investment analyst who ‘ate a lot of really crappy boxed meals’ from corporate caterers, DeLoss recognized an opportunity to serve the Columbus market with better-catered lunches. In September 2009, he launched Freshbox Catering with $40,000 in seed money from local business donors and churches. The for-profit company is owned by the nonprofit Lutheran Social Services. DeLoss hired three workers from the shelter and is in the process of adding two more. The goal is to equip them with skills— including kitchen safety and financial literacy—that they can take to other jobs, DeLoss says. The company had $30,000 in revenue in 2009 and is projecting $135,000 for 2010. DeLoss hopes to replicate the model as a ‘social-purpose franchise’ with nonprofits in such other cities as Pittsburgh, Indianapolis, and Cincinnati.”
Number 3 — PrimeTime Lacrosse — “Tyler Low and Jason Wellemeyer both played lacrosse at Babson College. In 2007, they started an informal summer league for 75 students, who each paid $100 to play once a week. That blossomed into an overnight camp the next year. Now PrimeTime Lacrosse runs camps, training programs, and a league known as Penguin Lacrosse. The company ran a tournament with 50 teams from across North America in June. Low says the two are responding to demand from lacrosse players who want to practice off-season. Their programs start for children as young as 7, with adults as old as 60 playing in their leagues. At peak times, they manage a staff of 50 people, mostly coaches. Close to 2,000 players will participate in training and leagues in 2010. Low says PrimeTime Lacrosse had $270,000 in revenue in 2009 and is projecting $650,000 in 2010.”
Number 2 — Pyknic — “College friends Andrew Marshall and Stephen Thompson started Pyknic in 2006 by selling a first run of 200 T-shirts they had decorated by hand with Sharpie markers to their classmates at DeSales University in Center Valley, Pa. Today they’re projecting $500,000 in sales for 2010, double what they recorded last year. Their T-shirts are targeted at youth, particularly high schoolers and college students interested in skateboarding and music. ‘It started to catch on like wildfire internationally,’ Marshall says; until recently, sales in Europe, Australia, and Japan exceeded U.S. sales. The pair run the operation on their own out of a warehouse in Robbinsville, N.J. The T-shirts, which retail for about $20, are conceived with food themes and rendered in cartoonish fashion. The shirts are printed by contract printers in the U.S. and China and sold online and at specialty retailers such as Hot Topic and Pacific Sunwear across the U.S.”
And the readers’ favorite company founded by a young entrepreneur:
Number 1 — Campus Buddy — “After experiencing a particularly rough time in a calculus class during his sophomore year at UCLA, Mike Moradian began to think students could benefit from knowing more about how professors grade. Through a Freedom of Information Act request, the business economics major got information about grade distributions at classes at the public university. That data became the basis for CampusBuddy, the business he launched in February 2008. Moradian aggregated public data on grade distributions for classes, professors, and majors at 250 public colleges, starting with the University of California system. … CampusBuddy employs 100 interns who work remotely for school credit and maintains a staff of five at its Beverly Hills office. Moradian says the company had $60,000 in revenue in 2009 and projects $400,000 this year.”
I admit I was surprised by most of the readers’ picks. Based on their number 1 selection, I’m guessing that the median demographic age of those who actually voted was fairly young (i.e., recent college graduates or those still attending classes). I wouldn’t worry too much about the numbers, the winner only received 2,106 votes and fifth place received 780 votes. Only time will tell; but I’m betting that the companies on my list do better than the companies on the readers’ favorite list.