Meet tomorrow's moguls today. For this year's roundup of 25-and-unders, we had a record crop of nominations. Here are a few finalists
Richard Ludlow, 22, turned down a job offer from McKinsey and deferred admission to Harvard Business School to start New York's Academic Earth, an online hub for videos of university lectures and other educational content. Backed by angel funding, he aims both to earn a profit and to improve society—by making academic material widely available online so as to lower the cost of education around the world.
In between homework and basketball practice, high school senior Jasmine Lawrence, 17, landed deals with Wal-Mart and Whole Foods to carry her line of natural cosmetics. Lawrence started Eden Body Works in Williamstown, N.J., to offer alternatives to chemical products after a bad experience with a hair relaxer.
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Marcellus Alexander III, 23; Brandon Davenport, 24; and Elwood Green III, 25, created text messaging provider Vesta Mobile Solutions after sensing the TV and radio stations two of the team had worked for could use texting to make programming more interactive. Today, the Baltimore company is profitable and has clients that include Hearst Argyle Television, Comcast, and clothing retail chain Downtown Locker Room.
Running Their Own Show
These are just a few of the finalists in our fourth annual roundup to discover America's most promising young entrepreneurs. As in previous years, we asked BusinessWeek readers to nominate candidates aged 25 and under who are running their own companies that show potential for growth and establish the talent of the founders behind them. Given the current credit crunch and the ailing economy, we were pleased to receive a record number of nominations this year.
After the call for nominations ended in late July, our staff sifted through the nominees to ensure founders and co-founders met the age criteria. Then we asked Richard Branson, BusinessWeek contributor and Duke University executive-in-residence Vivek Wadhwa, and the Kauffman Foundation's Bo Fishback to help us pick the most impressive from among this batch.
Like last year's crop, a few of this year's finalists had landed investments from angels or venture capitalists, some were already profitable, and most of the companies were based around the Internet.
Helping the Teacher
"In many cases, young entrepreneurs aren't starting a company right away—they're starting a Web site and seeing if it works," says Fishback, 30. "We've been seeing kids creating businesses for a long time, but most were service businesses that were difficult to scale. The Internet is the great equalizer." That was the case for Artia Moghbel, 21, who built a Web site during his senior year of high school for his English teacher, who wanted to distribute a 70-page reading assignment without having to make photocopies. At the time, Moghbel didn't realize he was laying the groundwork for SchoolRack, an online service intended to make it easy for teachers and students to communicate outside the classroom. He expects the business, which broke even in February, to bring in $1.2 million in revenues in the 2008-09 academic year.
Of course, there were a few more traditional companies in this year's crop, making their mark in the real estate and apparel industries, among others. In 2004, during the housing bubble, Daniel Negari, 22, invested in an Arizona property that soon appreciated $150,000. He refinanced to get a $100,000 line of credit, which he used in 2006 to start Beverly Hills Mint, a high-end real estate finance business brokering commercial and residential loans worth $5 million or more. The company now has 14 commission-only brokers and two employees, including Negari's mother, Berta, 47, whom he brought on board late last year. Negari says Beverly Hills Mint took in $650,000 in 2007. Despite the credit crunch, he finds that business is booming at the top of the market.
Johnny Earle, now 26, turned his skill creating iconic T-shirts into a rapidly expanding company, with locations in Los Angeles and Boston and overseas distribution. Last year's sales hit $2.29 million, and Earle—who says the business became profitable in 2006—expects revenue to jump to $3.75 million this year. Like Negari, Earle hired his mother.
The biggest difference between this year's nominees and last year's? More entrepreneurs voiced a desire both to make a profit and to make the world a better place.
Another difference this year, frustratingly, was a smaller batch of women finalists, though Lawrence's success landing her deals at the two giant retailers was encouraging, as was 23-year-old Andrea Marron's custom dressmaking e-tail business, Studio 28 Couture, and Truly Unique Vision co-founder Ebele Mora's online TV network aimed at college kids. Elaine Allen, a Babson College professor and co-director of the group that compiles the Global Entrepreneurship Monitor, says the discrepancy in startup rates is common to high-income countries like the U.S.
(Bear in mind all revenues are self-reported.)
The Top 10:
Brian Pedone, 25
Programming and boxing sound like an unlikely pair of business interests, but Brian Pedone has managed to pursue both as the founder of ABP Software, a software development firm, and Pedone's Heavy Hitters, a boxing gym. While the gym is a sideline business, Pedone thinks ABP's latest application, an online password-management tool with 2,000 registered users, could catch on. Designed with the inexperienced computer user in mind, Pedone says the application's Web site, NeedMyPassword.com, is designed to easily store and retrieve passwords. He recently filed a patent for a voice-activated version of the application, which he says will be accessible from any phone. Pedone says ABP had revenues of $50,000 in 2007, mainly from consulting jobs, and expects the business will be profitable by January.
Richard Ludlow, 22
New York City
Richard Ludlow turned down a job offer from McKinsey and deferred admission to Harvard Business School to start Academic Earth, an online hub for videos of university lectures and other educational content. Backed by angel funding, the goal of Academic Earth, which Ludlow plans to launch in September, is to make university lectures and course material widely available online so as to lower the cost of education around the world. University lectures will be offered for free, but Ludlow plans to monetize other content—for instance, lectures from think tanks—with advertising deals, subscriptions, and sales of such related services as tutoring.
While Academic Earth is Ludlow's first for-profit venture, it isn't his first entrepreneurial endeavor. The Yale grad founded the Students for Organ Donation network, which now has 120 chapters, and he also started the Yale Economic Review, a journal of popular economics.
Add the Flavor
Corey Capasso, 21
Can you make flavored plastic? That was the question that led Corey Capasso to do some research and eventually get help from Tim Osswald, a University of Wisconsin plastics expert, to achieve his mission. They created a plastic capable of emitting flavors, including raspberry and lemon, that can be used to sweeten everything from baby pacifiers to water bottles.
The venture, called Add the Flavor, will sell flavored plastic pellets to manufacturers. As he waits for his first sale, Capasso says Add the Flavor has received four letters of intent from several manufacturers interested in the new technology since the first sales efforts launched in May 2008, and he plans to break $1 million in sales by the second quarter of 2009. As for safety, he says the plastic conforms to FDA guidelines and is the same type used in toys and food packaging. Now a senior at Wisconsin studying finance, Capasso says balancing the company with homework comes down to energy management: "You have to know what needs to be done and what it'll take out of you."
Anik Singal, 25
College Park, Md.
When Anik Singal was a pre-med student, he decided medicine wasn't for him—much to the chagrin of his parents. Instead, Singal wanted to try his hand at business. Determined to support his business venture on his own, he searched the Web for ways to make money and found a forum where he says he was thrilled to learn that people were "making six figures from their basements." He learned all he could. Soon he was doing consulting, with the plan to self-finance his own online venture. In January 2005, he launched Affiliate Classroom, a training site, charging fees starting at $30 a month to people who want to become affiliate marketers and one-time fees of up to $5,000 to companies that use affiliates.
Blaming the affiliate marketing industry's negative reputation on "misperceptions and a few bad apples," Singal says his business has been profitable since its first year, with revenues increasing 100% year over year. In 2007, he opened offices in Mumbai and Hyderabad and had around $1.5 million in revenue. Today, Singal, who ended up graduating with a degree in finance from the University of Maryland at College Park, says the business has 10 staffers and 15 contractors. He expects $2.5 million to $2.8 million in revenues in 2008.
Beverly Hills Mint
Daniel Negari, 22
Los Angeles, Calif.
Daniel Negari started his first business at age 12, selling custom-made computers through a Web site he built with friends. He got into real estate at 18, working as an apprentice to a Los Angeles mortgage broker. "I essentially set up his computer networks and everything, and in turn he taught me the loan business," Negari says. He was landing loan commissions while still an undergrad at the University of Southern California's Marshall School of Business.
In 2004, during the housing bubble, Negari invested in an Arizona property that soon appreciated by $150,000. He refinanced to get a $100,000 line of credit, which he used in 2006 to start Beverly Hills Mint, a high-end real estate finance business brokering commercial and residential loans worth $5 million or more. The company now has 14 commission-only brokers and two employees, including Negari's mother, Berta, whom he brought on board late last year. Negari says Beverly Hills Mint took in $650,000 in 2007. Despite the credit crunch, he finds that business is booming at the top of the market. "I have a client whose net worth is $100 million. He wants a $5 million loan. Every bank wants to do that loan."
Big Sky Outdoor Advertising
Caleb Hebel, 25
Caleb Hebel tried to start his own billboard company while he was a student at the University of Denver, but restrictions on outdoor advertising doomed the venture. Instead, at 21, he purchased Big Sky Outdoor Advertising, a 10-year-old company that installs and maintains bus shelters, benches, and other street furniture for the city of Denver in exchange for the right to advertise on the equipment. He bought the company in 2005 for $150,000, financed by loans from a bank and from the previous owner.
The company has since expanded from Denver to more than 40 cities and towns, including Salt Lake City, and Hebel says revenue increased from $120,000 his first year to over $2 million last year. He has acquired three similar companies in other cities, and his staff has expanded from one person to more than 30 full-time workers.
Bryan Goldberg, 25; Zander Freund, 25; David Finocchio, 25; David Nemetz, 24
San Francisco, Calif.
In 2005, a few years after graduating from college, four high school friends and longtime sports fans decided to launch a company devoted to their favorite teams. Goldberg, Freund, Finocchio, and Nemetz reasoned that the best, most compelling sports coverage was coming not from the pens of professional sports writers, but from fans. With savings and loans from family and friends, they spent six months developing their company, which they envisioned would make money by selling advertising.
In 2007, the four quit their jobs and moved back to their home town, San Francisco, Calif., where they recruited a stable of amateur writers and launched BleacherReport.com. According to the company, the site's traffic has grown to 1.5 million unique visitors a month since it went live 10 months ago. Last year's sales hit the low six figures and the founders expect their company—which landed $1.5 million in funding from local angel investors in November—to be profitable by the end of 2009.
Jeff Cassidy, 23; Boris Revsin, 22; Jared Stenquist, 23
Will college students use a Web site devoted to helping them find campus services and local businesses? CampusLIVE cofounder Jared Stenquist thinks so. About a year and a half ago, the self-taught Web developer started the site as a hobby in his University of Massachusetts Amherst dorm room. When advertisers started to contact him, he took a leave of absence to develop the business.
The site can now be customized for 18 campuses around the country, including the University of Vermont, University of Connecticut, and George Mason University. Stenquist, who isn't planning on going back to school, says the business, which employs five full-timers as well as interns, had just over $100,000 in revenues in 2007 and is negotiating a $1.25 million seed round with a group of angel investors. He expects it to be profitable by January.
Seth Flowerman, 22
After completing a successful summer internship in London in 2002, Flowerman decided that he wanted to recreate the same kind of winning experience for other high school students. So in 2003, he raised $30,000 from friends and family to establish Career Explorations, a firm that each summer links students to four- or five-week internships (everything from fashion to finance to medicine) in New York City and Boston.
This summer, 135 participating students paid between $5,500 and $7,000 apiece for room and board and seminars with industry professionals and university representatives (amid close adult supervision). Flowerman— who also launched and continues to run a tutoring company—is pursuing a dual MBA and Labor Relations degree at Cornell University. He broke even in 2004, saw sales of $800,000 last year, and expects to reach $1 million by next year.
Carlos Leon, 25
North Hollywood, Calif.
Carlos Leon is a media mogul in the making. With $25,000 in savings, and no outside financing, he managed to expand the multimedia business he started in a room in his parent's mobile home into a full-service production company with such clients as Warner Bros., VH1, Sirius, and MTV3. Leon, who earned a bachelor's degree in film from Full Sail University in Winter Park, Fla., says the business—which includes a 1,500 square-foot production studio that he built from scratch with help from friends—had about $150,000 in revenue in 2007. He estimates it will bring in $200,000 in 2008. Up next: Leon is starting an online TV channel and a record label.
Click here for the complete list of entrepreneurs.