The Winning Young Entrepreneurs 2010
Businessweek.com readers like results. Invited to vote for the most promising of 25 businesses run by entrepreneurs age 25 and under, readers did not choose the startups that raised the most money, had the biggest ideas, created the most sophisticated technology, or showed the most potential to reach huge markets.
Instead, over the past month, readers selected mostly bootstrapped businesses already generating positive cash flow. The five winners that garnered the biggest shares of more than 13,000 votes cast are all either profitable or cash-flow positive. Three were bootstrapped completely and none raised more than $40,000 in seed money. They could be models for how to build companies in lean times: Keep costs low and have a clear path to generating enough revenue to sustain the business.
No. 1: The winning company, with 2,106 readers' votes, was CampusBuddy. The Los Angeles-based site sells subscription access to grading data at public colleges that CampusBuddy compiles through public records requests. Founder Mike Moradian says the five-employee company's database draws on more than 100 million grades from schools across America. A business economics major who graduated from the University of California, Los Angeles in 2007, Moradian used his earnings from working at accounting firm KPMG to launch the business in 2008.
CampusBuddy is free to most of its 280,000 active monthly users. Moradian says a small percentage pay fees of $1 to $1.50 per month for premium access to grade data. The company also generates revenue from advertising and lead generation, referring students to textbook sellers, for example. Moradian expects revenue of $400,000 in 2010 and $1 million next year.
No. 2: Readers' second favorite (990 votes), T-shirt maker Pyknic, was similarly bootstrapped. Founders Andrew Marshall and Stephen Thompson have no employees and run the company from their warehouse in Robbinsville, N.J. "We funded everything ourselves. We didn't have that much money to begin with," Marshall says. The pair used school printers at their college, DeSales University, to make fliers advertising their initial run of T-shirts. Now, turning a profit on strong demand from abroad, the pair expect $500,000 in revenue this year.
No. 3: Taking third place (978 votes) was PrimeTime Lacrosse, a profitable lacrosse league and training-camp company founded by two Babson College grads, Tyler Low and Jason Wellemeyer. They raised a small amount of money in 2008 from angel investors to build a website and market the brand. They say the business is profitable and project $650,000 in sales this year.
No. 4 and No. 5: Next was Freshbox (969 votes), a social venture that provides corporate lunches to Columbus (Ohio)-area businesses while helping homeless-shelter residents learn job skills. Founder Joe DeLoss raised $40,000 in seed money from local donors and churches in 2009 and projects $135,000 in sales this year.The fifth-place finisher, consulting company Convasis (780 votes), helps other startups build Web applications. Founder Alexey Ossikine, who graduated from Babson this year, says sales should top $200,000 this year.
For a closer look at these winners and the other finalists in our 2010 roundup, see our slide show and special report.