By Kirk Kardashian, January 2012
Published Jan 05, 2012
Peter Barris T’77 knows what it takes to start a new business. As the managing general partner at New Enterprise Associates, one of the largest venture capital firms in the world, he’s invested in and advised countless startups in the information technology, health care, and energy technology sectors. Beyond a great idea and the ability to execute it, Barris has learned that startups at their earliest stage need a place to work and a network of support. That’s why he has funded the Barris Incubator at Tuck, a program that offers select student-entrepreneurs guidance, access to experts and investors, and an office with phones, Internet access, and conference area.
Each term, students apply for admission into the program by presenting their business ideas to a committee of Tuck faculty members, experienced entrepreneurs, and venture capital practitioners. This past fall, the committee announced the winners of the Barris Incubator program for 2011. They consist of three teams of students who came to Tuck with the intention of starting a business, and they’re putting in long hours in the Incubator to get them off the ground.
Groupon’s meteoric rise has been extraordinary, but there’s something you may not know about the millions of daily deals it has helped retailers sell: 20 to 40 percent of them go unused. “Basically, there’s huge amounts of them sitting in sock drawers,” says Phil McDonnell T’12. He and his business partners, Fred Schwarz and Mike Cwalinski, both second-year students at Tuck, have devised a way to cash-in on those moldering money-savers. They call it CoupFlip, and it’s a website that creates a secondary market for Groupons and other similar coupons.
Say, for example, you bought a $100 Groupon for a skydiving lesson but have decided not to hurl yourself out of an airplane. Currently, there’s no efficient way to recoup some of your investment. That’s where CoupFlip comes in. It will buy that Groupon for, perhaps, $85, and then list it for sale on its website, hoping that another putative skydiver will pay $90 to save $200.
McDonnell, who majored in computer science and worked at Google, is building the algorithm that will dictate the price CoupFlip will pay the original owner of the coupon and the price of the coupon the second time around. To do this, he gets a data feed from Groupon indicating how well the deal sold as well as the locations of those sales, and then creates a dynamic model of liquidity. The market is new and volatile, “but I do believe it’s a phenomenon that’s here to stay in some form,” McDonnell says. “The big question is how it will evolve.”
The trio has just closed its first round of seed funding, garnering an investment through a Tuck connection, and the students hope to launch the first CoupFlip site for Boston in early 2012. The plan is to build up a critical mass in a particular geography before expanding to other areas. “We want to do it in one place first and get it right,” says McDonnell.
T’12s Gavin McGrath and Prasad Joglekar both mentioned the Barris Incubator in their Tuck admissions essays, but they didn’t know they’d be working together once they got to Hanover. McGrath was a strategy consultant with L.E.K Consulting and Joglekar was a software engineer at Quantcast. They struck up a friendship in Introduction to Entrepreneurship and decided to run with an idea Joglekar brought to Tuck: Ruxpin, a website that helps travelers find the right hotel with simplicity and confidence.
“It’s like Pandora for hotels,” the pair is fond of saying. By that they mean: Tell us a hotel you like, and we’ll tell you others just like it in the place you plan to visit. “We do this without any of the complications that the existing sites provide and we tell you why we recommend it,” says Joglekar.
The key is an algorithm Joglekar has built. It analyzes all the characteristics of your favorite hotel and uses Google to search for the hotels in your destination that most closely match it. It’s easy enough to do this by just comparing the amenities at different hotels. What sets Ruxpin apart, they say, is its ability to decode value. Two four-star hotels, for instance, may have rates that differ by $100 per night. Why? “You could spend hours today on Trip Advisor and other websites trying to figure that out,” Joglekar says. “We can show it to you right away. We can tell you what you’re paying for when we show you the results.” Not many people look for the cheapest hotel, they note, but the best one they can afford.
The revenue model is well established: the company would get a fee for each hotel booked via its website. The challenge now is to prove to users that it works. They’ll have their first chance to do this in a few weeks, when they launch the site to a closed group of users.
Life changed for Jeff Millman T’12 as an undergraduate at Haverford College when his friend almost died of alcohol poisoning. She had disappeared from a party and ingested a dangerous mix of alcohol and prescription medicine. Millman and a few others found her unconscious in the woods and worked with campus safety to get her to a hospital, saving her life.
Scenarios like that play out on campuses all the time, and Millman thought it was crazy that colleges weren’t more proactive in preventing them. So he started Quaker Bouncers, a student group trained to patrol parties for students who have had too much to drink. “We’re not taking a drink out of anyone’s hands,” Millman explains. “We’re not stopping the flow of alcohol or bringing in the police. It’s just folks who are there to keep a little better control of the party and make small suggestions.” Quaker Bouncers has been surprisingly effective, reducing the rate of party-related hospitalizations by 80 percent in the eight years since it was founded.
Out of that success, Millman has formed Soteer, a business that helps colleges form their own student groups with the same mission. So far, he’s helped Dartmouth create the Green Team, a group of more than 300 students trained by Millman in how to keep their colleagues from getting into trouble at parties. Since the group was formed in March of 2011, there have been no hospitalizations, reports of sexual abuse, or incidents of vandalism at monitored events, he says.
Inspired by Soter, the Greek god of safety and deliverance, Soteer is unique in that it is completely student run. “The whole secret is student ownership,” says Millman. “Without that, it’s just another tool of the administration to control the drinking culture.”
The services Soteer hopes to sell to colleges have three main components: designing a program tailored to each school; helping students get it running; and supporting the operation on a limited basis into the future. Part of this includes a software package Millman has designed to schedule students to monitor parties and report information and trends to the administration.
With two successful implementations under its belt, the next step for Soteer is clear: “Right now, it’s down to sales,” Millman says.