Start Me Up

The other day, I headed over to one of our fine dining halls for dinner (I won’t specify which one, although it rhymes with Schmincy) and wound up chatting with an old friend and his two roommates. Conversation quickly turned to business. Between the four of us, we’ve got three start-ups. Three! For perspective, three is more than the number of rings LeBron has. Three is more than the number of times Justin Bieber has been arrested (as of the time of this writing). Three is almost one quarter of the number of people who voted in the last UC election.

And that was the fourth conversation I had that day about start-ups. The fourth! Now I’m not going to go off on some sort of stupid tangent about the number four just to boost my word count. My point, more broadly, is that everyone and his grandmother is working on some sort of start-up. I can hardly go to the bathroom without running into another entrepreneur. It’s a real problem: the greater Boston area has the fourth-highest number of start-ups per capita in the United States, and sometimes I just want to relieve myself in peace, blissfully unaware of the next Airbnb for pet Chihuahuas.

Some of these folks, mind you, are literally building the future, or at least the next generation of really cool gizmos and gadgets. One gentleman I spoke to is working on a ball that has embedded video and sensors, so policemen and first responders can scope out a potentially deadly setting without physically entering it. Another is developing a platform to teach coding to young children. These people, though, are not the only ones starting companies. Others are super-gluing step-counters to bracelets and calling it high-tech. (Yes, I made up that example, but if you run with that idea I expect royalty checks.)

But there I was, sitting in the dining hall talking about the next social networking tool for high school students. The chatter focused mostly on the user base. The app is growing by the day, I am told. It’s going viral. Huge, massive. Already in sixteen states. Haven’t I heard? Facebook will be out, done, kaput in three, four, maybe five years, and this just might help nail the coffin.

But how to monetize? There isn’t much of a successful business model for making money off social apps, unless your name is Winklevoss, in which case lawsuits work quite nicely. Advertising revenue, hosted events, and sponsored content barely amount to much more than peanuts. And that is the strategy for 90 percent of apps—there is no way to make much money except to sell for dollars on the penny. The app may be idiotic, or it may be brilliant, but it probably can’t cash in until the big sale.

And so we discussed valuations. How do investors measure the worth of a company? By taking the potential revenue? By counting the active users? By measuring the terabytes of personal user information? Regardless, I am told, my new friend’s company will be worth tens of millions, minimum. Potentially much more than that. The sky’s the limit, as long as some investor has money sloshing around to sink into a social media app for high schoolers.

But we’re past high school, and onto college, and if somebody gets really lucky, dropping out. Because the startup community here is quite a sight to behold. You could be sitting next to the next CEO of a future Fortune 500 company as you read this. Unless, of course, you are reading this alone in your room, in which case you should probably either get back to the homework you’re supposed to be doing or try to make some friends. Regardless, make a trip to Harvard’s Innovation Lab. Talk to some entrepreneurs. There are so many incredible people to meet and projects to check out.

Just don’t expect me to do the same. I’m too busy starting a company.

Jacob R. Drucker ’15, a Crimson editorial writer, is an economics concentrator in Mather House. His column appears on alternate Fridays.