The Billionaire Next Door

Have you ever wondered whether some people are just born to be entrepreneurs? Meet David Koretz, a 21-year-old businessman hoping to be a billionaire by 25.

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Twenty-one-year-old David Koretz has been thinking, eating, sleeping, and breathing business since he was a kid

Outside, it's a gray January day in Rochester, N.Y., but inside, David Koretz is on fire. He is standing on his office futon, which frequently doubles as his bed away from home, scrawling figures on a whiteboard on the wall.

As Koretz speaks he lays out the strategy behind his business, BlueTie Inc., an application service provider. BlueTie, seeking to deliver Web-based software applications to business customers, offers programs that enable users to share files, E-mail, contact lists, and calendars. In fact, BlueTie is taking dead aim at some of Microsoft's most popular products, notably Exchange Server. (The ASP market is estimated to be worth some $11 billion in the United States alone.)

There would be nothing unusual about this scene of another young and energetic Internet entrepreneur posing as dragon slayer -- except for one thing. David Koretz is all of 21 -- and BlueTie is his fourth business. Even in an age of bright young dot-com founders, Koretz is a kid who has "prodigy" stamped all over him, complete with all the attendant superlatives and baggage. With a business plan that projects that his company will reach breakeven this year and $1 billion in sales five years out, Koretz is a kid worth watching. He has already raised more than $10 million from sophisticated investors and angels, and he's savvy enough to know that just raising -- and spending -- more money won't necessarily get him where he needs to go. Two years ago Hewlett-Packard sought an equity stake in BlueTie, but Koretz turned HP down. He didn't need the money badly enough to dilute the equity. The venture arm of a major New York investment bank also has approached Koretz. It wants to put more than $100 million into the company in exchange for a 20% stake. But Koretz might pass on that deal. He and his board believe he can build more of a company with less capital.

One of those in on the ground floor is Walter Turek, vice-president of sales for Paychex, a Rochester-based company that provides payroll and human-resources services. "I find him a pretty intriguing young person," says Turek, who, along with Paychex founder and chairman Tom Golisano, has invested heavily in BlueTie. "The amazing thing about David is that no matter what you call him on, he knows exactly what he's talking about. I've gone back later and verified that. I don't know where he gains that knowledge."

One answer might be that unlike so many of his peers, who see starting companies as some kind of learned game or sport, Koretz seems to have been born with a full array of entrepreneurial genes. His first business idea emerged when he was seven, when he began selling seashells from a table set up at the foot of his driveway. David collected the shells during visits to his grandfather, who was then living in Florida. The older man, seeking to educate his grandson about business, went so far as to have his lawyer draw up a "contract" regarding a proposed partnership: the grandfather would send seashells to David, who would then sell them in Rochester; the two would split the proceeds. David dutifully read the document -- and then tore it up. "I'll get my own shells when I visit you next Christmas," he told his grandfather. "That way I can keep all the profits."

After David stiffed his grandfather, his mother said, "Someday you'll grow up to be a millionaire." David replied, "By the time I'm grown up, $1 million won't be that much money. I want to be a billionaire."

That anecdote speaks volumes about David Koretz. Upon meeting him, one is unsure whether to regard him with awe or dread. Probably a mixture of both would make sense. We admire him for his entrepreneurial precocity -- but then we also wonder if he is the living, breathing embodiment of our recently fevered economic times, which elevated success to the state religion.

For Koretz's part, he is clear about his self-image -- and secure in it. "I'm a very competitive kid. All I care about is winning, to be honest," he says. "Everything that does not further BlueTie is frivolous. I'd do anything to make sure it's successful." That pursuit comes through not just in Koretz's 90-hour workweeks but also in the very real possibility that removing his fingers from the keyboard of his ever present laptop would require surgical intervention. Koretz, meanwhile, has papered the walls of his office with pages describing -- milestone by milestone -- BlueTie's progress. Their title: "How to Change the World."

Koretz's sense of mission is on display as he heads from BlueTie to a nearby shopping center for lunch. As he maneuvers his BMW through the parking lot, he cuts off a pair of older women trying to negotiate a crosswalk. Then he guides the car to a space with a sign reading 10-Minute Parking Only.

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