Wharton Business Plan Competition Series: Rohan Deuskar, Founder & CEO of Stylitics

BPC 15Yr - BPC Homepage - FINALBy Izzy Park WG’15

Editor’s note: This article was originally published in the Wharton Journal.

This article is a part of a special series on the Wharton Business Plan Competition (WBPC). Stylitics, the grand prize winner of the 2011 WBPC, is on a mission to bring fashion analytics into the digital world – one closet at a time. I caught up with co-founder Rohan Deuskar (WG’11) to find out what’s been keeping him busy. Started in Rohan’s small Brooklyn apartment, Stylitics has raised over $3.2M, grown to 16 people, and helped thousands of fashionistas find their unique styles.

Rohan Deuskar

Rohan Deuskar (WG’11), Founder and CEO of Stylitics

Wharton Journal: Where did you get the idea to start Stylitics?

RD: Stylitics is the confluence of my personal need as a consumer and a major need in the fashion industry.

Stylitics was born from my frustration that although like most people I was spending a decent amount of money and time on buying clothes and deciding what to wear, my closet was still one of the most inefficient parts of my life. I’d wear only 20% of my stuff, I’d forget what I owned, and I’d buy duplicates of clothes I already owned. It struck me that the closet was one of those central experiences in people’s lives that is still completely analog and tied to one physical location. I realized that if you had a digital version of your closet – essentially all your clothing data in one place online – then you could unlock an amazing set of new capabilities. Imagine putting together packing lists on the go, or tracking stats like cost per wear of each item, or getting online outfit advice from your friend or a digital stylist.

And not only would consumers be better off, but with the user’s permission brands and retailers could see what people are wearing and buying in real-time, for the first time. That means better and more personal recommendations, more targeted offers, and better insights.

WJ: How did you meet your co-founder, Zach Davis?

RD: Zach is a friend and colleague from Chicago. We were both early at a mobile startup called Vibes Media. In 2010, he was in Seattle while was I interning at Amazon so we talked a lot about startups. During Sell Weekend I was back in Seattle and shared this concept with him. He got it immediately and began working remotely on it with me on top of his full-time job. Then he quit his job, I turned down my job offer, and the day after my graduation we were working on this full-time in New York!

WJ: Both you and your co-founder didn’t have technical backgrounds – can you tell us how you were able to get your business started?  

RD: While I believe it is absolutely feasible to have two non-technical founders build a technology-based business, you are definitely starting with a lot more risk and at a disadvantage. For the first 2 years, finding good and affordable developers was the most difficult and challenging thing. For our first engineer, we hired a new grad in Iraq who was referred through my cousin at Berkeley. He ended up working with us for 2 years. Our first designer is a stay-at-home mom in Serbia who at the time had very little English but had the right attitude and talent. She is still with us. For our first senior engineer, I went to a Ruby on Rails meetup, made sure to walk back to Center City with the speaker, took him to dinner, and sold him on the vision. He was with us for a couple of years.

If this sounds easy – it was not. We’ve scoured LinkedIn and sent messages to hundreds of developers to get one great one. In fact, to put together the great 9 person engineering team we have now meant going through about 20 contractors and a couple full-timers.

If I can offer a few lessons learned that will make the process easier:

  1. You are responsible for understanding how engineers work, how technology works, and how product development works. This is not someone else’s problem. To hire and manage engineers, you need to know this. You don’t have to learn to code, but you do need to understand the principles and culture of software engineering. It’ll save you and your engineers a lot of grief.
  2. Until you know all the above really well, only consider engineers or contractors who score very high on communication and attitude. Doesn’t matter where in the world they are, or if they are “senior”. If there are red flags about irregular and unprofessional communication, walk away as soon as you can. Nothing is more costly and frustrating than chasing down your engineers for updates.
  3. Pay your engineers from Day 1. Even a little. It works better for everyone that way. There are too many good opportunities for decent engineers for you to show up empty handed. Options don’t count.
  4. Software engineering is a creative endeavor. It is not an assembly line for code. Treat development and developers accordingly.

WJ: When developing the pitch presentation for the competition, what were some of the most important pieces of the narrative?

RD: I think you have to sell the big vision and then solve the big roadblocks. The judges are coming in cold and watching critically, but they are also there for the love of business and bold ideas. Hook them early. Our pitch started with “There’s a massive gap in fashion. Unlike nearly every other major industry, there is no billion dollar analytics company in fashion.” We then explained why we thought that was the case, why that had to change given market forces, and what our plan was for becoming that company.

Then you have to anticipate and answer the questions that will inevitably spring up. One trend I’ve noticed while judging business plans is that teams leave a lot of obvious questions unanswered. The audience will think of those difficult questions so you might as well address them. You don’t need the perfect solution, but you do have to show you have thought about realistic solutions to the big problems.

And finally, I think any pilots/tests/proofs of concept that you do will go a long way. We did a very low tech pilot to prove that people were willing to share their outfits in detail for a small incentive. Rather than saying – “we believe it will work” we were able to say “given our test with 250 people, we believe we can get 25,000 people to do this, which becomes one of the largest fashion panels in the world.”

WJ: Can you tell us how the trajectory of Stylitics changed after winning the competition?

RD: I’m not sure if the trajectory changed so much as the number of opportunities increased. We met a few judges who made intros to people who made intros to other people …and so on down the chain until we met the angel investors who led our early rounds and continue to be great supporters.

Actually, the most important impact was that it kicked off a “spiral of success” (do they still teach that?).  It solidified in our company the confidence that we can dream big and actually achieve unlikely goals, even as a tiny startup.  I have no doubt that luck was a big ingredient in winning the competition, but we also felt like winners. Feeling like winners and expecting to win has a powerful impact on culture. It gives you the confidence to attempt things that are out of your league. If we succeed, it reinforces our confidence. If we fail, we think “we know we can succeed, so let’s figure out why we failed this time and fix it.” vs. “Well, of course we failed. We’re just a startup. Let’s stick to what’s manageable today.” In fact, as part of their daily status email, each Stylitics employee lists any big wins they had the previous day.

WJ: How has Stylitics been able to keep up with the latest technology trends and keep competitors away?

RD: We were a little late to building on mobile, which now has about 4X the activity as web. We could have been quicker there. Besides that, we tend to be ahead of the curve with the technology and concepts we use, especially in the fashion industry. We tend to have a bias for innovation, so our challenge is making sure that we don’t get too far ahead of the market without testing what clients and consumers actually want.

We tend not to worry about competitors too much. We’re really competing with our own shortcomings and with the status quo in the fashion industry. What we’re doing is hard and the opportunity is huge, so good luck to all – for now

WJ: You’ve managed to successfully navigate a great entrepreneurial career at Wharton and onwards. Looking back, what was the most memorable experience at Wharton? (aside from winning the competition of course)

RD: Well, I would not call it “a great entrepreneurial career” yet…someday, hopefully!

A memorable experience:

When I arrived at Wharton, I was on crutches with a broken ankle. While I was hobbling by the river one morning, I saw these beautiful, streamlined boats go by with the rowers in perfect sync and wondered what kind of discipline and training it must take to be one of those people. It seemed unreachably far.

Fast forward a year and I was stepping out of a Wharton Crew novice team boat after an intense race at the Dad Vail Regatta where we won the silver medal. I owe 95% of that experience to my Wharton/Penn classmates. My coaches, team captains, teammates were mostly students and all volunteers. Many had raced at top undergrad programs, but would train with the novice team (their classmates) in the freezing rain at 6 a.m. so we could get better. The next year, we second-years tried to pay it forward, by spending hours each week organizing, practicing, and coaching. There is something really special at Wharton that calls on people to help each other achieve their personal goals.

WJ: Any professors or courses you’d recommend?

RD: Prof. Kartik Hosanagar was one of my favorites. I also loved the advanced communications class on speaking with the press. Classes on corporate taxes, managing people, and financing were helpful post-Wharton.

WJ: Best thing about being an entrepreneur?  

RD: You get to dedicate your entire mind to creating something good and useful in the world and you get to see others take up your cause as you grow.  And if you’re lucky, someone will hand you millions of dollars to pursue your dream. That still blows my mind.

WJ: What’s next for Stylitics?

RD: Today Stylitics has the largest digital closet platform, with over 100,000 closets via word-of-mouth. We expect to cross 500,000 this year, but hopefully 1 million. Starting later this year, our users will be able to sync their purchases instantly to their closet from major retailers.

On the analytics side, I believe we can have 50 of the top 100 retailers using our insights dashboard by the end of the year.

Stylitics logo

We’d love support from the Wharton/Penn community. You can download the Stylitics app on iPhone and Android, and use it to track your outfits, chat with stylists, and take your closet on the go! More details at www.stylitics.com/mobile.

Izzy Park picBio: Izzy Park WG’15 a Vice President of the Wharton Design Club and a regular contributor to the Wharton Journal. Before Wharton, she was part of Deloitte’s Innovation+Growth team and served in the Office of the CTO, bringing new digital products and services to market.

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The Journey, Not The Exit

By Evan Bayliss C’16

One Friday recently a friend suggested that I check out a brown bag lunch sponsored by the Wharton Alumni Relations Council and Alumni Relations. A Wharton alumnus named Joe Meyer was going to be talking. On a whim, I decided to go. That whim may very well have changed the direction of my life.

Joe Meyer is a serial entrepreneur and Wharton MBA—he was the CEO of HopStop.com, recently acquired by Apple. I walked in knowing only this, and honestly expected to understand about 2% of a talk coming from a man capable of successfully building multi-million dollar companies from scratch.

Joe spoke about his experiences running and working in startups, and what I heard was refreshing, inspiring, and powerful. He described the entrepreneurial life: there is no easy way in entrepreneurship, it is a struggle and a journey, but entirely worth it for those who can stomach the risk and extremes. He was unwaveringly supportive of learning on the job as the best form of education for an entrepreneur.

It was amazing to hear from a successful entrepreneur that great grades are not necessarily the key to success and jobs: there is no substitute for performing in the real world. Joe’s talk changed my mindset about entrepreneurship. I was convinced that only the brightest people in the room could be entrepreneurs. Joe let me see it’s really courage, emotional stability, and perseverance that define a good entrepreneur. The ability to weather the storm and learn on the fly can trump an MBA. Walking out of that room, I thought about my future differently—with entrepreneurship at the top of my mind.

Besides the business side of his life, Joe talked about family and opened up about how entrepreneurship has changed his lifestyle. What was most moving for me: the journey matters most, not the exit—so enjoy the journey. That goes for businesses, for jobs, and for life in general. Especially at Penn, we focus so much on getting to the next step that we can all too easily forget to appreciate and cherish where we are in the moment.

I’m glad I followed that whim and went to hear Joe Meyer speak. Thanks to him, I see opportunities all around me now, to be an entrepreneur in business and in life.

Evan BaylessBio: Evan is a Penn sophomore studying Science, Technology, and Society. He hopes to work in startups or innovative corporate functions after he graduates. As the founder of PennConnect, he has dabbled in managing a club and concept from scratch – more information can be found at http://pennconnect.us/.

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Cash Management for Startups

By Mike Taormina, Wharton MBA alumnus and Co-founder of CommonBond

Editor’s note: This article came out of an exchange on the Venture Initiation Program listserv, where current and former members of the program go to ask the community for help in solving their entrepreneurial problems. We thought Mike’s advice to a fellow VIP alumnus was so terrific that we asked him to turn it into a blog post.

Commonbond logo

There is a wealth of advice out there for startups trying to raise money—and for good reason. Without that first round or seed funding, many great ideas would never become anything more than an idea.

We also live in a highly innovative fundraising environment today, and the attention paid to helping entrepreneurs navigate their options and access capital is critical. As a founder, it’s incredibly exciting to be starting a business at a time when doing so—while I wouldn’t say is “easy”—has never been more possible for so many people.

So, let’s assume for a moment that you’ve successfully raised capital for your business (congratulations, by the way). The question then becomes: “What is the best strategy for managing this newfound cash?

Given the diversity of products and the multitude of providers, this could quickly become a time-consuming, complex process. When CommonBond raised its first round of funding in November 2012, we confronted the same question on how to best manage our cash, and it was incumbent upon us to find the optimal answer.

Here’s how we approached it:

First, the considerations.

1.     Capital preservation is critical.

Angels and VCs invest in entrepreneurs to take risks in operating their businesses, not to take risks in making financial investments. Compounding the issue (no pun intended), any upside in today’s yield environment is so meager that it simply doesn’t compensate for any risk-taking, given the amount of cash early-stage companies have to manage. For example, let’s assume your $1mm account has an average balance throughout the year of $500,000. If we further assumed a yield of 0.10% (which would actually be quite high for a low-risk money market fund at today’s yields), we’re talking $500 for the year. That’s it.

If you instead decide to expose your cash to more risk in the hopes of a higher return, one of two outcomes are likely:

If the investment works out, yes, you’ll have more cash, but probably not a meaningful amount; or,

Your investment does not work out, and you lose principal—a cardinal sin that can quickly lose both your investor and your credibility with respect to subsequent fundraising rounds.

Given the relatively small capital base of a startup, there is simply too small an incentive and too great an investor confidence risk to take much investment risk with your cash management.

2.     Liquidity. Uncertainty abounds in startup land. You may need to liquidate an investment to free up cash, so make sure that doing so doesn’t lead to an uneconomical investment. Bank CDs, for example, typically provide a higher yield than T-Bills or money market funds, but only if you lock up the cash for a period of time. The penalty for exiting a CD early (and the negative yield it can create) may be reason enough for a startup to stay clear of CDs as instruments for short-term cash management.

3.     Cost management. Watch out for banks with minimum balance fees or those that charge a relatively high commission for a simple T-bill trade—a cost which can also lead to a negative yield on the transaction.

4.     Counterparty risk. If you invest in a money market account, make sure you’re comfortable with the counterparty risk—the likelihood that your financial institution of choice will run into bad times that results in either a lock-up or loss of your assets with the institution.

What to do next: 

  • Bank account. If you open a checking or savings account, you have the $250,000 FDIC protection, so this is a great place to start from a capital preservation standpoint.
  • Bank CDs. You could then invest in bank CDs. If you go this route, keep in mind consideration #2 above (“Liquidity”). You don’t want to end up locked up in a CD and having to pay a penalty to get out, negating any deposit income (again, for minimal yield upside).
  • Brokerage account. If you have a brokerage account, you could invest in T-bills, money market funds, or sweep accounts. With T-bill purchases, just make sure the fees being charged don’t lead to a negative yielding investment. So long as the yield covers the fees, this is a great way to preserve capital, since FDIC insurance only covers up to $250,000 for checking accounts. With money market funds, make sure the fund’s investment mandate and holdings align with your low-risk, capital preservation strategy.

In the case of CommonBond, we decided on a combined approach: we set up a checking account and a brokerage account, both at the same bank so that wire fees or transfer time were never part of the calculus. The brokerage account invests in short-dated T-Bills and/or in a bank deposit sweep account, and the checking account is funded to ensure the company has sufficient cash for one to two months of operations—an amount that will likely not exceed the FDIC insurance threshold for the typical early stage startup.

Doing some very basic but important cash management will allow you to focus on running your business. And pushing the business forward should, and will, generate infinitely more value than any cash management strategy could ever deliver.

Mike TaorminaBio: Michael Taormina is CFO & Co-Founder of CommonBond, a student lending platform that provides a better student loan experience through lower rates, exceptional customer service, and a commitment to community. CommonBond is also the first company to bring the One-for-One model to education and finance: for every degree fully funded on the company’s platform, CommonBond funds the education of a student in need abroad for a full year. Mike is a former VP at J.P. Morgan Asset Management and a CFA Charterholder.

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Entrepreneurial Intern Fellow: The Social Media Startup

Entrepreneurial Intern Fellowships are available to Penn/Wharton Undergraduates and First Year MBAs. They are awarded to students who plan to spend the summer in an entrepreneurial setting and who demonstrate both a commitment to entrepreneurship at Penn and to pursuing an entrepreneurial career. To apply, click here.

By Jasmine Kriston W’15, 2013-14 Dr. William Zucker Entrepreneurial Intern Fellow at Curalate

Last fall I set the goal of finding a start-up to work for Summer 2013. During the summer prior I had experienced working for a large company, AT&T. I ended sophomore year wanting to get a taste of what working in a company of less than 20 people would feel like.

I began my start-up search by making a list of some of the companies and industries I was most interested in. I was particularly fascinated by Pinterest’s success. Pinterest, the third leading social network, recently changed the experience of social networking from primarily text to images. Following Pinterest’s lead, several retail brands have adopted similar visual and interactive user experiences for their websites.

Before reaching out to any of the companies on my list, I created a video using Pinterest as a platform to tell my story:

I finished my video before I attended the Penn career services’ start-up fair. At the fair I spoke with several start-ups. I also met Curalate’s co-founder and CTO, Nick Shiftan. Curalate, a First Round backed company, does analytics for the visual web: platforms such as Pinterest and Instagram. At the fair, Nick was wearing a shirt, which said, “I’m huge on Pinterest-with Curalate.” We immediately started talking about our similar interest in Pinterest and other visual social media platforms.

A few weeks later my video was in the hands of Curalate’s marketing team. I received an email from Curalate’s CEO and founder, Apu Gupta WG’05, inviting me to their office.

Before we met, I spent hours researching Curalate and talking with several people in the start-up field who knew members of the Curalate team. I found that Curalate was well known for using their own analytics to create infographics, which displayed tons of interesting data in a fun, visual, and creative way.

I spent the night before my meeting with Curalate’s CEO making an inforgraphic titled “Curalate & Me” which outlined what I wanted to do for the company as a summer intern:

Curalate & Me Infographic

During my interview, Apu said it was refreshing that I had taken the time to outline what I wanted to do at Curalate: Rather than burdening the start-up with having to find a role for me. My interview lasted for hours; I spoke with more three team members to see how I was cultural fit.

I remember leaving the office and feeling really excited to have found a team of nerds who were just as interested in images and Pinterest as I was. A week later I received an offer to be a summer intern for the company and accepted.

I spent the summer working with Curalate as a sales and marketing intern. I watched the company grow from 13 employees to 25. I was also part of their big move from working in First Round Capital’s Philadelphia office to leasing their own space in center city. The Curalate team is one of the most fun and smart groups of people I have ever had the pleasure of working with. They’ve made it easy for me to decide that I will definitely want to pursue a start-up again this summer and after graduation. I feel privileged to be able to say I was part of the Curalate team for a summer.

JasmineBio: Jasmine is a junior at Wharton studying Finance and Management with two minors in Computer Science and Engineering Entrepreneurship. At Penn she sits on the Executive Board for the Wharton Undergraduate Entrepreneurship Club. Jasmine is also a founding member of the Dorm Room Fund (DRF), backed by First Round Capital. Jasmine oversees post-funding business development resources for DRF’s portfolio companies. She sources and cultivates one-on-one relationships with companies, which partner with Dorm Room Fund to offer resources to their portfolio companies. Jasmine has experience in development from interning as an Applications Developer for AT&T. She also recently interned for Curalate, a Philadelphia data and analytics start-up, as a Sales and Marketing Intern. This summer Jasmine will be joining Andreessen Horowitz, a $2.65 billion venture capital firm in Menlo Park, as an investment team intern.

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Worth a Taste Test

By Matthew Brodsky

Editor’s note: This post originally appeared on the Wharton Magazine blog.

It’s no bologna to say that second-year MBAs Nicole Marie Capp and Justin Matthew Sapolsky, W’08, are in the midst of a dream: starting their own food business.

Capp comes from a food family that operates high-end delis in Brooklyn, N.Y. Sapolsky, an investor before returning to Wharton, wrote his Wharton MBA entrance essay about getting into the food business.

“Being at Wharton definitely put the gas on that,” he told me, related how he has been able to realize his dream and passion while at School: With the food startup Matt & Marie’s Modern Italian Sandwiches.

Matt and Marie's

Second-year Wharton MBAs Justin Matthew Sapolsky, W’08, and Nicole Marie Capp earned Twitter praise after they catered an event this past fall for Wharton entrepreneurs.

As the story goes, the pair met as vice presidents of the Wharton Entrepreneurship Club in November 2012. By January 2013, they were launching Matt & Marie’s as a catering operation. They worked during the summer out of the Wharton MBA space at 2401 Walnut St. (open as free office space to MBA entrepreneurs) and tapped into Wharton Entrepreneurship resources as part of the Venture Initiation Program (VIP). Through fall 2013, they had catered as many as 25 events around campus. For cooking, they were sharing kitchen space at Enterprise Center at West Philly, a health-grade commercial kitchen that allows operations to rent by the hour.

I initially reached out to Matt & Marie’s during research for a food truck article (still ongoing), and couldn’t resist learning more about delicious sandwiches even after Sapolsky told me they decided against a food truck because they’ve tested their concept already through catering.

Their plan instead, reported Sapolsky, is to have a lease signed on a Center City brick-and-mortar location by the time this article is posted. And by the end of the school year, Capp and Sapolsky may be ready to open the storefront. In the meantime, Sapolsky will do an independent study with OPIM (Operations and Information Management) Professor Eric K. Clemons, who has served as an advisor to Matt & Marie’s. That way, Sapolsky and Capp will also get academic credit as they tend to their kitchen, literally.

The dream is all boot-strapped at the moment, but also scalable. And that gets to why Sapolsky and Capp may have chosen the food business (besides being passionate foodies). Sapolsky noted how Matt & Marie’s menu is simple, much like many of the other restaurants that have exploded on the scene in recent years—the likes of Chipotle, Five Guys Burger and Fries, and Potbelly. Though they chose to open Matt & Marie’s first store in Philadelphia, a town with a lot of authentic Italian eateries, a lot of places don’t, Sapolsky was quick to note.

Fascinating, too, was Sapolsky’s perspective on the startup scene in general. There is a veritable buffet of Internet and tech startups on campus, and beyond.

“There’s room for people to still focus on brick and mortar,” he said.

Particularly, if they also focus on bread, meats and toppings.

It sounds like they are. Sapolsky’s favorite item on the Matt & Marie’s menu is the Roman Cavalry.

“Our chef designed all the sandwiches to balance the five flavor profiles: sweet, salty, sour, bitter and umami. This one does it really well. It has cured coppa, fennel salami, genoa, aged provolone cheese, house-made sweet pickled peppers and a spicy peperoncini aioli on our seeded Italian bread.”

Expect a taste testing of this startup as soon as possible …

Update: Matt & Marie’s has now signed a lease on a location in Center City, and they expect to open in late Spring 2014. Want to go to the soft opening event? Sign up here. 

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Wharton Business Plan Competition Series: Matthew Tanzer, Chief Commercial Officer of RightCare Solutions

BPC 15Yr - BPC Homepage - FINALBy Izzy Park WG’15

Editor’s note: This article was originally published in the Wharton Journal.

This article is a part of a special series on the Wharton Business Plan Competition (WPBC). Today, we talk to Matt Tanzer (W’02, WG’12), Chief Commercial Officer of RightCare Solutions. RightCare Solutions was started by three Wharton founders and took first place in the 2012 WBPC.

Matthew Tanzer

Matthew Tanzer (W’02,WG’12)

Wharton Journal: What was the inspiration behind starting RightCare? 

MT:  Have you ever had a family member or friend get sick, go to the hospital, and then spend the next weeks or months bouncing in and out on a seemingly endless rotation of hospital visits?  I’m no stranger to this situation either, and it was heartbreaking to see my loved ones suffer when they were readmitted mere days or weeks after their original discharge.  Every year millions of Americans become trapped in this vicious cycle, costing the healthcare system billions of dollars.   Hospitals need tools to identify these high-risk patients proactively and technology that connects providers and patients all along the care continuum.  Every patient should get the services they need to have the highest quality outcomes, and RightCare’s built software to deliver on that.

WJ: How did RightCare get its start?

MT:  In 2004, Dr. Kathy Bowles, a researcher and professor in the School of Nursing, was investigating the root causes for why older adults were being readmitted to hospitals at alarming rates.  One of the researchers on her team, Eric Heil (Eng’05, WG’12), was a senior in the School of Engineering and Applied Sciences.  In the seven years apart Kathy turned her research into a cutting-edge predictive modeling tool while Eric built a successful career in venture capital. They reunited at Penn when Eric enrolled in Wharton’s MBA Program for Executives.  Recognizing the growing need in the marketplace for software technology that helps clinicians lower readmissions, improve patient outcomes, and reduce health system costs, they formed RightCare Solutions.

WJ: What was the status of RightCare (operationally) when entering into the Wharton Business Plan Competition?

MT: Kathy was awarded roughly $5M of NIH-funding to develop what is now thee core IP of our software. By the time the BPC began, we already had peer-reviewed clinical data underpinning our company.  And with the help of our Wharton classmates, who provided frank and brutal assessments of our plan during the early stages, we had a concise pitch deck. We began to line up meetings with potential investors, and had initiated negotiations with Penn on obtaining an exclusive license to commercialize Kathy’s research.

WJ: What did the team decide to do with the awarded funds?

MT:  We put the awards towards creating our website and related marketing collateral, exhibiting at conferences on healthcare quality, licensing software development tools, and a host of other activities. On top of the cash award, the in-kind legal and accounting services were huge. There’s nothing more expensive than a cheap lawyer or accountant, and the competition helped us avoid that early pitfall by pairing us up with two prestigious firms in Duane Morris and KPMG.

WJ: Did you know that you would end up working with Eric Heil (Eng’05, WG’12,) and Mrinal Bhasker (WG’12) right away?

MT:  For me, RightCare started out as nothing more than class credit. Yet, the more I learned about the havoc that readmissions wreaked on patients, their families, and the healthcare system at large, the stronger my convictions became about RightCare. How it was not only a viable business but was a challenge that I simply had to tackle. Once that belief took hold, the thought of working alongside Eric and Mrinal as professional colleagues was just icing on the cake.

WJ: How did the dynamics and responsibilities of the team stay intact when RightCare started to scale and how has it managed to stay intact?

MT:  One of the reasons our team has clicked so well since the beginning is that between the three founding management team members, our skills and experiences are incredibly diverse and complementary. Eric learned as a venture capitalist how to form companies and raise money. Mrinal had built and exited healthcare technology companies in the past, and was most recently the Chief Architect for Maryland’s Health Information Exchange. I had spent the early part of my career focusing on commercial operations and analytics, which have been critical to our company’s early growth. We trust each other, and we hope that foundational value persists as our company scales.

WJ: Tell us about RightCare’s early fundraising experience.

MT:  Just because someone is willing to invest in you doesn’t make them the best investor for you. We spent a lot of time at the outset trying to identify investors who do more than just write checks, ones who could also provide mentorship for our management team and open doors to potential customers. Fortunately, in Compass Partners and Domain Associates, we found two such investors.

WJ: On game day, what would be your most valuable advice for those pitching in the competition?

MT:  Don’t let the thought of winning or losing overshadow the fact that this competition, in and of itself, is an incredible opportunity. You get tangible, concrete feedback on your written business plan from the successful entrepreneurs who serve as judges. Wharton Communications professors help you refine your message. You pitch in a live-fire pressure situation in front of several hundred people. My advice is to savor this moment and get as much out of the process as you possibly can. And if you’re still not convinced, think about Warby Parker, Baby.com.br, and Graphene Frontiers. None won the BPC, yet all are startup phenoms doing amazing things in their respective industries.

WJ: What are some really important trends in healthcare technology right now? 

MT:  Two trends come to mind. First, health data is being collected more routinely and in more detail than ever, enabling big data and analytics techniques to become more widespread, especially on the provider side of healthcare. Second, growth in mobile technology has given rise to a variety of consumer engagement apps, telehealth programs, and remote patient monitoring devices that can connect patients to providers along the continuum of care. What gets us really excited is the potential for developing “Coordination Central” care transitions software that combines those two elements: using evidence-based data to guide the right patients to the right interventions, ultimately helping health systems improve patient care, achieve better outcomes, and lower costs.

WJ: What’s next for RightCare?       

MT:  We’re fortunate to have had two top-tier health system partners right in our backyard in Thomas Jefferson University Hospital and the University of Pennsylvania Health System, both of whom piloted and adopted our software. Having achieved robust readmission reductions at both organizations, we raised a Series B round to scale our commercialization and product development efforts, and are now in active discussions with providers all over the country. Our vision is to provide a software platform that every hospital in America can use to match patients with resources that will result in the highest quality outcomes. And with the support of Wharton and its community of professors and alumni, we’re on our way.

Izzy Park picBio: Izzy Park WG’15 a Vice President of the Wharton Design Club and a regular contributor to the Wharton Journal. Before Wharton, she was part of Deloitte’s Innovation+Growth team and served in the Office of the CTO, bringing new digital products and services to market.

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5 Reasons Women Make The Best Entrepreneurs

By Emelyn Northway WG’13 and Dorie Golkin WG’13, co-founders of Of Mercer

We are women entrepreneurs. As such, we’re part of a small (but growing!) group. We’re members of the Wharton MBA class of 2013, a class with not only the highest percentage of women (45%) in Wharton history, but also the highest number of students pursuing their own startups (7.4%). Clearly, change is happening, and we’re proud to be part of it. Our startup, Of Mercer, makes affordable, stylish workwear for women. We like to think we’re helping other women succeed in business through great style.

Stereotypes about women, and women entrepreneurs, abound. We often pride ourselves on breaking out of them. But today, we’re going to embrace them, and show you why women may just make the best entrepreneurs:

Stereotype #1: Women Don’t Take Risks

We are risk averse. So how did two people who don’t take risks start a business?  We did enough testing and research to get to a point where the decision to start Of Mercer no longer felt risky. Months before our November launch, we introduced a beta line of dresses to test fit, style, color, etc. Had we produced a full-line based on our initial designs (which at the time we thought were stellar), we would be sitting on a lot of unsold inventory. By taking our time, testing our products, and analyzing our data, we better understood the preferences of our customers.

Stereotype #2: Women Take Things Personally

When a dress that we worked so hard to perfect doesn’t work out for somebody, we take it to heart.  It would be easy to try to keep our egos intact by assuming the problem was with the customer, not the dress. But that’s not going to make our product better, and it’s definitely not good customer service. Instead we accept the feedback because it enables us to constantly improve our product, and better serve our customers.

Stereotype #3: Women Stop To Ask For Directions

You can get where you’re going a whole lot faster if you stop and ask for directions. Before starting Of Mercer, neither of us had experience in fashion or retail (besides being avid consumers).  So we talked to everyone we possibly could, admitting we were novices.  Doing so gave us free reign to ask all the questions that we wanted, without judgment, and as a result, to get up to speed on the industry as fast as possible.  And the sooner you can get those “stupid” questions out of the way, the less likely you are to actually look stupid later on when someone is judging you.

Stereotype #4: Women Love To Talk

As entrepreneurs navigating a new industry, networking is our best friend, and it’s a lot easier when you like to talk.  Being willing to talk to anyone about our business (or about theirs), opens up unexpected business and learning opportunities. Being honest and up front about what we need help with, not only gives others the opportunity to help out (thank you very much, Adam Grant’s Give & Take), but also opens up communication channels to create deeper, more involved relationships.

Stereotype #5: Women Are Obsessed With Relationships

Many women report being more satisfied with their jobs when they have strong relationships with coworkers and feel liked and supported. While this applies to co-workers, it also applies to vendors, developers, and anyone else with whom you work.  We tend to view those relationships as long-term, not just as transactional.  Seeing them as people who don’t just work “for you” because you are paying them, but as part of your team, helps develop trusting working relationships.

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Okay, so we’re kidding around when we say that women make “the best” entrepreneurs. But while the percentage of Venture Capital funding going to women-led businesses has plenty of room for improvement (it was 13% in 2013), it is growing (up 20% over 2012). With the huge success of a number of recent female-founded startups—think Rent the Runway, Spanx, Birchbox—we expect this number to continue to grow, and for good reason.  According to research cited in this Forbes article, VC firms that invest in women-led businesses performed better than all men-led businesses.  Further, women-led private technology companies are more capital-efficient, achieving 35% higher return on investment.

We hope to see more and more women choosing to become entrepreneurs in the near future. And if you need some fabulous yet businesslike clothes for that VC meeting, we encourage you to check out Of Mercer.

Emelyn and Dorie - smallerBio: Dorie Golkin and Emelyn Northway, both WG’13, co-founded Of Mercer, a direct-to-consumer brand of stylish, affordable women’s workwear.  Dorie graduated from Princeton University with a degree in Civil Engineering. Prior to Wharton she was a strategy consultant at Deloitte.

Emelyn graduated from Cornell University with degrees in Economics and Psychology. Prior to Wharton she worked as an analyst at Bank of America and later as an associate at Liberty Partners. They both love residing in New York but miss their go-to restaurants in Philadelphia.

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Best Time Ever To Be An Entrepreneur In India

By Anirudh Suri WG’12, founder and CEO of Findable.in

If you read my last post, “Why Is It So Hard To Start A Business in India?” then you know that there are some big challenges to starting a business, especially a tech business, in India. But as I keep saying, this is actually the best time ever to be an entrepreneur in India.

Here’s why:

  1.  The cool factor. It’s cool to be an entrepreneur in India today; “startups” have become a buzzword on most top college campuses across the country as well as among the top employers in the country. Parents (and even more importantly in the Indian context, potential wives and husbands!) are beginning to consider “startups” as a good way to begin or further a career. Three years ago, when I moved back to India, my father wasn’t exactly thrilled with the idea of “startups” but today, with all the major newspapers covering new startups every day, he’s excited too! It bodes well for the future of entrepreneurship in India.
  2.  Rapidly evolving ecosystem. The startup ecosystem is really evolving rapidly in India. When I moved back in 2011 to launch India Internet Group, an early stage venture capital fund focused on internet and mobile startups, we were amongst the first early stage funds in India, along with Blume Ventures (run by Karthik Reddy, WG’01) and Kae Capital. Today, I can’t even count the number of early stage funds, accelerators, incubators and other such programs that really help seed startups in India.
  3.  Opportunities for efficiency. India continues to offer many opportunities for successful startups to solve basic problems and make markets more efficient. Often, successful startups have managed to organize unorganized markets in India (e.g., RedBus organized the bus travel tickets market; Ola Cabs has organized the unorganized cab market; JustDial has organized the unorganized services market; MakeMyTrip has organized the air travel and hotel market). Several of these companies have also provided handsome returns to their early investors through either IPOs (Makemytrip, JustDial, Infoedge) or acquisitions (RedBus). Similarly, my own startup, Findable.in, is trying to organize the offline retail market by aggregating and bringing online the retail inventory of offline retailers.
  4.  E-commerce. Besides organizing unorganized markets, other startups (e-commerce companies, for example) are bringing greater efficiencies to the Indian market and facilitating commerce and delivery of services. E-commerce companies such as Flipkart.com and Snapdeal.com have been a boon to the Indian middle class, especially in smaller towns that haven’t seen their offline retail markets evolve in the same way that their purchasing capacity has evolved. The very Indian model of “Cash-on-Delivery” driven e-commerce in India (which Flipkart in India has become synonymous with) has brought great convenience to the consumers, albeit at sometimes a very high cost to the retailer.
  5. Mobile. India already has the second largest number of mobile phone users in the world (second only to China) with over 900 million mobile phones. At the same time, mobile internet users are increasing in India at a pace unmatched in the rest of the world. The number of mobile internet users is going to reach 185 million by June 2014. Customers who have been deprived of quality entertainment for so long (besides cricket and Bollywood, of course) are taking to mobile-based games and entertainment like fish to water. Still others are starting to search and buy everything on the go. I wouldn’t be surprised at all if more global mobile startups come out of India in the next 2-3 years.

Despite all the hurdles to success, this is a great time to be an entrepreneur in India. With huge open opportunities in travel, Software as a Service (SaaS), mobile payments, gaming, entertainment, marketplaces, and just easier and better access to information and products, the potential for impact is immense. By leveraging mobile and internet technology, entrepreneurs in India have the opportunity to transform the way Indians will lead their lives. And that’s why so many Wharton alumni, including myself, are deep in the Internet trenches of India today.

Anirudh SuriBio: Anirudh Suri WG’12, is currently the CEO of Findable.in, a location-based product search platform based in India. He is also the Founding Partner of India Internet Group, an early stage venture capital fund based in Mumbai, Delhi and New York. Previously, Anirudh worked at McKinsey& Company, Goldman Sachs, and as a policy advisor to fellow Wharton alumnus and the Hon’ble Minister of State for Communications and Technology in the Government of India, Mr. Sachin Pilot. At Wharton, Anirudh was a member of the Venture Initiation Program and the Entrepreneurship Club; organized the BizTech Conference and the Wharton India Economic Forum; and also partied a lot in Center City Philadelphia.

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Why Is It So Hard To Start A Business in India?

By Anirudh Suri WG’12, founder and CEO of Findable.in

I’ve been in the startup trenches in India for the last three years. I’m currently the CEO of Findable.in, a location-based product search platform based in India, and I’m also the Founding Partner of India Internet Group, an early stage venture capital fund based in Mumbai, Delhi and New York. I think this is the best time ever to be an entrepreneur in India. However, it’s also an incredibly difficult journey.

In this post, I explain what makes starting a business in India so hard. But don’t be discouraged! My next post will explain why this is actually such a great time to be an entrepreneur in India.

An Incredibly Difficult Journey…

  1. Poor labor market. It’s tough to hire great people in India to work at startups. This is changing, but many smart folks don’t want to join your startup for a low salary, especially since people worry that equity or options won’t pay off in the long run. As a result, the top layer in Indian startups is world-class, but then you see a big dip in the middle and lower levels. While some of the startup founders in India are as motivated and talented as their counterparts in the U.S., motivating employees is much harder in India than it is in the U.S. This hurts the startup’s productivity levels as well as its ability to innovate and scale.
  2. Red tape. India has an incredible way of bogging you down with procedural, compliance and other such issues. As a CEO, I am spending way more time dealing with accounting, legal, and corporate compliance-related issues than I expected. At least twice a week, I have to sit down with our Chartered Accountant or our lawyers or the Company Secretary to ensure that we have met the TDS (Tax Deducted at Source) requirements, completed our compliance with the RoC (Registrar of Companies), etc. Combine that with the time spent motivating un-motivated employees, and some weeks, you have no idea where your week went!
  3. Lack of quality mentors. The quantity and quality of mentors in India (with the possible exception of Bangalore) is not quite up to the level of what you would find in Silicon Valley or other startup hubs such as New York, Philly or Boston.  Not entire surprising, since tech entrepreneurship is still in its infancy in India. The oldest successful tech startup founders are probably 10 years old in the industry, but really the bulk of the companies have been founded since 2008. The founders of these companies will likely become, in a few years, the kind of investors and mentors that Silicon Valley boasts of. Already, some successful entrepreneurs – the likes of Naveen Tiwari (InMobi), Kunal Bahl (Snapdeal, WG’06), Amar Goel (Komli), K. Ganesh (Tutorvista), Sanjeev Bikchandani (Infoedge, Naukri.com) – are starting to become active investors and mentors. India could use a lot more such mentors and investors.
  4. Slow consumer traction. The Indian internet consumer is also just learning how to consume the internet, or mobile apps for that matter. This means that customer traction is often very slow, and requires a lot of customer education. For example, OLX and Quikr – two prominent classified sites in India – as well as eBay have had to spend a lot of time, effort and money in educating the Indian consumer on how to sell old products online. Similarly, for my first startup, EkSMS.com, it took us a long time to educate restaurants and bars on using the SMS or web platforms for their marketing. The Indian consumer hasn’t quite displayed the same kind of early adopter characteristics as users in California might have.
  5. Problems getting paid. Moreover, the Indian consumer (or the Indian small business) is not very willing to shell out cash quite yet, so recurring credit card subscription businesses (the likes of Netflix, etc.) as well as others that require consumers or small businesses to pay are very hard to build here. With EkSMS.com and Findable.in, we have often had to run after our customers to get longstanding bills cleared. This also requires Indian startups to be even more frugal in their initial stages than their Silicon Valley counterparts.

These challenges are very real, and any entrepreneur interested in starting a company in India should be aware of them. However, I can’t say enough times that this is truly the best time to be an entrepreneur in India. Stay tuned for my next post, when I explain exactly why.

Anirudh SuriBio: Anirudh Suri WG’12, is currently the CEO of Findable.in, a location-based product search platform based in India. He is also the Founding Partner of India Internet Group, an early stage venture capital fund based in Mumbai, Delhi and New York. Previously, Anirudh worked at McKinsey& Company, Goldman Sachs, and as a policy advisor to fellow Wharton alumnus and the Hon’ble Minister of State for Communications and Technology in the Government of India, Mr. Sachin Pilot. At Wharton, Anirudh was a member of the Venture Initiation Program and the Entrepreneurship Club; organized the BizTech Conference and the Wharton India Economic Forum; and also partied a lot in Center City Philadelphia.

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Take Some Risks To Change The World

By Davis Smith, Wharton MBA’11, Arts & Sciences MA’11, co-founder of Baby.com.br and Dinda.com.br

In June 2013, I met with a group of Lauder students on a rooftop in Rio de Janeiro with a stunning view of Botafogo Bay and Sugar Loaf Mountain. After encouraging the students to look beyond traditional job opportunities and take risks that would allow them to “change the world,” one of the students asked me if I felt I had changed the world with my businesses that sold pool tables and baby products. The question was sincere, but it stung. Unbeknownst to him, I had been asking myself the same question in the previous months and had already decided I was going to make a change, but this student’s question increased my sense of urgency to take my own advice.

While I was at business school at Wharton, my cousin and I closed a $4.3 million round with a PowerPoint and a killer domain, nothing more. Brazil was hot, and we knew it. It wasn’t by coincidence that we chose Brazil or the baby market. We spent our first year in school coming up with 60 business ideas, which was facilitated by my involvement in the Venture Initiation Program. During the summer, I was fortunate enough to receive a Wharton Venture Award, which allowed us to rigorously research, vet and test our plans. By the end of the summer, we had narrowed the 60 to 1 and knew that we had a game-changing idea.

Just two years earlier, my friends, family and neighbors thought I was crazy. My cousin and I had started PoolTables.com out of undergrad, and had grown it into the largest retailer of pool tables in the US. When we told people we were going back to school, nobody understood. Life was good, but we believed MBAs would give us the knowledge and networks needed to build something truly meaningful. We sold our business, essentially burning the ships. It had seemed reckless, but now appeared brilliant.

Within eighteen months of the Baby.com.br launch, we had raised $40 million and built a business that had become a household name in Brazil, especially among young families. Our team consisted of one of Brazil’s biggest celebrities and many of the most seasoned e-commerce professionals in the country.

For all the company’s successes, it wasn’t always smooth sailing. We were battling fierce competitors, Brazil was incredibly difficult to navigate, margins were slim and our business was extremely capital intensive. Despite these challenges, we found ways to push the business forward. We launched Dinda.com.br and continued to see our businesses grow beyond what we’d ever hoped. It was every entrepreneur’s dream-come-true. However, after three years of working on the business, I unexpectedly began feeling it might be time for a change.

Once again, the comments of old began: You’re crazy to leave your company now! Just as before, people didn’t (don’t) understand the timing. I admit that stepping away was probably the hardest decision I’ve ever made. My decision to leave was based on two major factors that I couldn’t work around:

First, I was unhappy with our founding dynamics. My cousin and I had worked together for years, building some amazing businesses. There are partnerships that work well; in fact, ours had worked for a decade, but running a business as Co-CEOs was taxing. Ultimately, as many founding relationships do, our friendship began to sour. Trying to salvage our relationship became more important to me than power, control or money. I felt strongly that it was time for us to part ways as business partners.

Second, I wanted to make a bigger difference with my work. My reason for becoming an entrepreneur in the first place was to have a positive impact on the less fortunate. My co-founder, family and friends knew this. It has always been my life’s passion, largely driven by the fifteen years I’ve lived in the developing world (nearly half my life). Around this time, that desire to do good began to burn deeper than ever before.

Just four months after meeting with those Wharton students in Rio de Janeiro, I left my day-to-day role at Baby.com.br/Dinda.com.br and moved back to the US to begin my next adventure. Cotopaxi will be launching in Spring 2014.

1. Davis headshot - smilingBio: Davis Smith is a serial entrepreneur, a graduate of the Wharton School and Lauder Institute’s Class of 2011. He is the founder and CEO of Cotopaxi.

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