People Who Made Millions Before Graduating
Posted by Media Outrage on February 20, 2010
Some people possess serious business acumen and know how to make it work wonders for their pockets. Well these next few people have the “it” factor and more. Jamie Murray Wells made millions before graduating college…
Valuable lessons from preternatural wealth builders.
American philosopher Eric Hoffer said, “If a society is to preserve stability and a degree of continuity, it must know how to keep its adolescents from imposing their tastes, attitudes, values and fantasies on everyday life.” Too bad Hoffer never met Jamie Murray Wells.
In 2004 while studying for final exams at University of the West of England, Wells, then age 21, went shopping for a pair of prescription glasses. Nonplussed by the $150 pound ($300) price tag, Wells decided to funnel his $2,000 student loan into what would become Glasses Direct, a London-based online retailer that now generates $5 million in annual revenue.
Wells is part of an elite club of preternatural wealth builders who managed to cobble million-dollar enterprises before they graduated from college. The “million-dollar” measure refers to either total revenue generated or the value of the enterprise built (as opposed to the size of the total profit pile). That’s no mean feat for any entrepreneur, let alone one who can barely buy a drink legally in the States.
The nine entrepreneurs featured in our slideshow — six from the U.S. and three from the U.K. — started launching businesses by the tender age of 15, and one before he broke double-digits. Some of these wunderkinds, like Wells, identified problems and created companies to solve them; others turned their hobbies into money-making ventures. Some teamed up with friends, siblings and mentors; others plowed ahead on their own. Their common thread: singular focus, preternatural financial savvy and the optimism and confidence to wrest financing from seasoned investors.
Here’s a look at how a few of them pulled it off.
Smelling Opportunity: Jamie Murray Wells
When Wells was bemoaning the price of his lenses, four retailers dominated the U.K. prescription glasses market; all relied on pricey retail stores to move their merchandise.
Wells figured he could move the entire purchasing process online. All he needed was a factory to make the lenses, assemble them with frames and package them. He would then ship them to shoppers, who would simply e-mail or mail in their prescriptions and pay for their glasses online. Without the costly infrastructure, Wells could sell glasses for about one-tenth the price of the established brick-and-mortar players.
A nifty new business model isn’t nearly enough to launch a thriving company, let alone when you’re 21 and have no track record. “I was knocking on the door of an industry, saying, ‘The way that you’re selling glasses is wrong, and I’ve got a better idea,'” says Wells.
Luckily he had friends and family members who agreed to put up a few thousand pounds to help him get started. Wells didn’t disappoint: In the first year, Glasses Direct’s revenue topped $2 million. And unlike many zealous entrepreneurs, Wells figured out how to manage his cash flow to bootstrap the business. The company took credit card payments upfront but didn’t pay suppliers for another month. Wells used part of the float to hire a public relations firm to hype his low-cost strategy.
The next year Wells turned to professional angel investors. “With some investors, I simply walked in to a meeting with a sales graph and let that speak for itself,” says Wells. As demand grew, Wells raised $34 million in venture capital from the likes of Highland Capital, Index Ventures, and Munich-based Acton Capital Partners. That should tide Wells over until he turns his first profit.
Asking for Help
Wells believes his age and inexperience helped him. “Having a young founder helps to add a lot of personality to a business,” he says. Still, you can’t cover payroll with personality.
Recognizing his limitations (yet another challenge for many entrepreneurs), Wells sought out mentors, including ophthalmologist Dr. David Spalton, and David Magliana, a marketing guru who helped bag the 2012 summer Olympic games for London. While Spalton lent credibility with the eye-care community, Magliana worked with Wells on getting the word out about Glasses Direct.
“As an entrepreneur, it’s a lot easier than you’d think to reach out to people,” says Wells. On the flipside, “entrepreneurs love to be written to and asked for their advice,” he adds. “If your question is appropriate for them and they’re emotionally interested in you, you will get a letter back, and you will get to meet them for coffee.”
Running on Empty: Michael Furdyk
In 1996, as the dot-com boom started to simmer, Michael Furdyk started a Web site, called MyDesktop.com, an online computer magazine, in the basement of his parents’ home in suburban Toronto. Furdyk was 16 and a bona fide computer geek. His site was filled with tips and advice Furdyk gleaned in online chat rooms, where he also came across fellow teenager Michael Hayman in Australia. The twosome figured they could turn their passion for technology into a paying business. Hayman was so convinced that he moved to Toronto to get things started.
Just one problem: Their only source of income was Furdyk’s paper route. Solution: barter. In exchange for Web site storage space, they ran their host’s ads on MyDesktop.com. They negotiated cheap rent on their modest office by designing their landlord’s Web site.
Soon MyDesktop.com was bringing in $60,000 a month in advertising revenue from blue-chip clients like Microsoft and IBM. Furdyk and Hayman used some of their excess cash to scoop up smaller technology sites for $5,000 to $10,000 apiece. By 1999 the company was attracting 1 million unique visitors a month (serious numbers back then). Furdyk, Hayman and a third partner sold the company to Internet.com for “over $1 million,” says Furdyk.
Absorbing the Blows
As part of the MyDesktop sale, Furdyk and company received a small amount of venture capital funding for their next project, a product review site called Buybuddy.com. They raised an additional $5 million and brought on an outside management team. But the good times were short-lived. In 2001 the tech bubble burst; Buybuddy suffered and shut down within three years.
Furdyk hasn’t soured on entrepreneurship; indeed, he is promoting it via TakingITglobal.com, a nonprofit social networking site he launched for youngsters and educators interested in using technology to solve global problems. “Never be afraid of failure,” says Furdyk. “Just learn from it. When you’re young you have even less to lose.”
Going With the Flow: Fraser Doherty
While his fellow mini-moguls were making a mint on the Internet, Fraser Doherty was doing things the old-fashioned way. In 2002 at the age of 14, Doherty started making jams from his grandmother’s recipes in his parents’ kitchen in Edinburgh, Scotland. Neighbors and church friends loved them. As word spread Doherty received orders faster than he could fill them, so he leased space at a 200-person food processing factory several days a month.
By age 16 Doherty left school to work on his jams full time. In early 2007 Waitrose, a high-end supermarket in the U.K., came knocking, and within months there were SuperJam jars on the shelves of 184 Waitrose stores. Doherty borrowed $10,000 from a bank to cover general expenses and more factory time to produce three flavors: Blueberry & Black Currant, Rhubarb & Ginger and Cranberry & Raspberry.
Spreading the Word
Last year Doherty ramped up the company’s marketing efforts, printing 50 million coupons in newspapers across the U.K. He also ran a promotion in the Sun newspaper offering readers a free jar of jam. Good moves: SuperJam’s revenue hit $1.2 million in 2009, flat from the prior year. Doherty’s retailers now include U.K. chains Asda Wal-Mart, Morrisons and Tesco. This year he plans to introduce three new flavors.
Doherty remains the company’s only full-time employee, although he hired three part-time staffers to hand out samples in grocery stores. Within the next four months, he hopes to produce mini jars for airlines, hotels and gift boxes. Based on a reasonable valuation multiple of one time revenue (jelly maker J.M. Smucker generally trades between 1 and 1.5 times revenue), Doherty’s debt-free stake is worth between $1 million and $2 million.
As for taking SuperJam up a notch, Doherty asserts that his supply chain and operations can safely scale to meet heavier demand. “We’re sticking with what works,” says the entrepreneur, now a seasoned 21 years old.
MyYearbook.com: Catherine Cook
In 2005 Catherine Cook, 15, and her brother Dave, 17, were flipping through their high school yearbook and came up with the idea to develop a free interactive version online. The Cooks soon merged their social networking site with Zenhex.com, an ad-supported site where users post homemade quizzes, more than doubling traffic to their site. By 2006 MyYearbook had raised $4.1 million from the likes of U.S. Venture Partners and First Round Capital. The business attracted advertisers such as Neutrogena, Disney and ABC, grew to 3 million members worldwide and raked in annual sales in the “seven figures,” says Catherine.
Mediaoutrage– Kudos to every entrepreneur making it happen against the odds.