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
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.
Getting Started
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
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.
Getting Started
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
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
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. Whateverlife.com: Ashley Qualls
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. Whateverlife.com: Ashley Qualls
 |
Conceived
by 14-year-old Detroit native Ashley Qualls as a personal portfolio
with pictures and graphics, the ad-supported site evolved to offer free
MySpace layouts and tutorials for teens who wanted to learn how to do
their own graphic designs and coding. Whateverlife.com, which Qualls
owns outright, claims to nab 7 million unique visitors a month and
counts Verizon Communications as an advertiser. In March 2006 Qualls
reportedly received an offer (from an undisclosed buyer) for $1.5
million, but turned it down.
Source
by 14-year-old Detroit native Ashley Qualls as a personal portfolio
with pictures and graphics, the ad-supported site evolved to offer free
MySpace layouts and tutorials for teens who wanted to learn how to do
their own graphic designs and coding. Whateverlife.com, which Qualls
owns outright, claims to nab 7 million unique visitors a month and
counts Verizon Communications as an advertiser. In March 2006 Qualls
reportedly received an offer (from an undisclosed buyer) for $1.5
million, but turned it down.
Source
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