STARTUP

Breaking the Rules: The Young Entrepreneur Who Squatted at AOL

Eric Simons spent two cash-strapped months living inside AOL's headquarters while trying to build his start-up. He explains how he played outside of the rules.
Advertisement

The saying "he lives at his office" has rarely been taken so seriously. For two months, 20-year-old Eric Simons worked on his start-up out of the AOL headquarters in Palo Alto, California. He also slept, ate, worked out, and bathed at AOL. 

Simons didn't have enough money for an apartment--let alone an office. But he did have access to AOL's sprawling campus. That's because Simons's company, ClassConnect, an online portal where school teachers can build and share lesson plans, was part of Imagine K12, a start-up incubator for education companies that subleases workspace within AOL. Enrollment in the incubator gave Simons a key card to the building, and he took full advantage of it. He slept on AOL's couches, exercised and showered in the company health club, and ate cereal and ramen provided for free in the AOL cafeteria.

After about two months, he was caught by senior facilities manager Eric Orr. So Simons claims. None of the AOL representatives contacted for this story--including Orr--would directly confirm or deny reports that Simons slept at the office. Alan Louie, founder of Imagine K12, did say one of his employees was recently approached by AOL to discuss the situation, and that the AOL employee acknowledged that Simons's squatting did in fact occur. David Temkin, AOL's senior vice president of mobile and mail, said, "I think he actually was sleeping here. I did not personally see him, but I have every reason to believe that that was the case."

Perhaps more interestingly, however, Simons might not have broken any rules. Louie said he was just "over the line a little bit." People are welcome to work late at AOL's offices, Louie said, and there was no set time at which employees must leave. It's also not uncommon for developers to spend the night at work, Temkin added. Inc.'s John McDermott spoke with Simons last week about his experiment in extremely frugal living, his now-funded company, and his complex relationship with AOL.

Where are you laying your head these days?
We have a house now in Palo Alto. (Laughs.) I have my own room, finally. It feels really good.

How are you able to afford that now?
[ClassConnect] raised a little bit of venture capital. We're closing in on ending our $500,000 round of funding. We've raised a good chunk of that already, and used that to get a house and furnish it.

We called AOL and no one there would confirm you actually spent those two months living there. What's the deal?
To be honest with you, I have no idea. I don't think it's necessarily bad terms, but I don't think they want this publicity.

It's interesting you say that because some have suggested that this was just a publicity stunt. What do you have to say to that?
I had no idea it was going to get published when it did. And I didn't realize it would be the focal point of the story. But it definitely did play out in our favor.

Has there been any negative feedback?
Online there's a lot of controversy about the ethics of this sort of thing. I think most people don't have enough information for a moral judgment on that. AOL goes to great lengths to promote entrepreneurship. A lot of the things people are saying are, "He was stealing food. He was stealing this." But all of those things were being willingly provided by AOL. The only questionable thing was sleeping on the couches.

Was the motivation for sleeping there strictly financial?
Somewhat. I could've packed up and gone home to Chicago. The reason I didn't want to do that was because I needed to raise money so I could get the product launched and get a good team. The easiest thing I could have done was just close up shop and end ClassConnect. I think what we're working on here is going to have a very meaningful impact on education, and that's something I'm very passionate about. So, I did whatever I had to do to get the company off the ground.

Technically, did you do something that was against AOL policy?
I'm not entirely certain. But if it wasn't a breach of contract, it was certainly a gray area.

Would you do it again?
The reason for it was definitely not for publicity. I didn't go through two months of hell because I thought it would make a great story. I really believe in what we're doing. I was willing to risk everything I had to build this product, launch it, and get traction. So, it was totally worth it. If I hadn't done that, I would've had to go back home and this company wouldn't be here right now and we wouldn't be making a meaningful impact on the way teachers do their jobs.

What did you eat while you were there?
AOL put out ramen and other snacks for anyone to take. Start-ups would also occasionally cater in food, and there'd always be leftovers. So I would usually pick those up. I was eating scraps.

What was that like?
Doing the same thing over and over again got really hard. It was one of the worst periods of my life. But I learned a lot of things I wouldn't have learned otherwise.

How long were you prepared to stay there?
After the first two to four weeks, I realized, "Wow. I'm actually getting away with this. No one really cares." I didn't want to stay there for more than a few months, so I ended up getting kicked out right when I was about to start staying at friends' places. I was going to move in with some friends the next month. I stayed at AOL as long as I could just so I could line up the next place I could stay at.

But had you not been caught, would you have stayed for another, say, four months?
God no. (Laughs.) I was always on edge and alert. It took a lot out of me. I was working all day and I didn't get a lot of sleep. It wasn't something I wanted to do, but it was literally the last option I had other than closing up shop.

Did anyone who worked in the office know what you were doing?
A few of my friends that were in Imagine K12 knew about it. I only told two guys at the time. We would kind of joke around and come up with strategies about how to go undetected.

So, you had accomplices.
(Laughs.) To an extent. Right.

What exactly did Eric Orr say to you when he woke you that morning on the couch?
I had gotten two hours of sleep, so I was half asleep. The only thing I remember vividly is that he said something along the lines of "this isn't a dorm facility" and "get out." He contacted Imagine K12 and Imagine K12 said you can't sleep up there. But they just thought I was just sleeping up there for one night.

When did Imagine K12 become aware that this was a habitual thing?
Rumors kind of started spreading around the Valley, and I think they just caught wind of it. A lot of friends of mine would go around and tell the story. The entire story broke because Highland Capital heard about my story and a CNET reporter was there. He overheard them talking about it.

Have you been surprised by the reaction?
We've been unprepared for the fallout. I went to sleep the day the article came out thinking, "OK, this is fun. Whatever." And I woke up the next day with twice as many emails, and the day after that with three times as many emails. I think it's been great for recognition, because now what we're trying to do is going to hit a large audience.

Has your business seen more users?
We were at 11,000 teachers, and we recently bumped to 15,000 after this thing got released. What we've done is build a system that allows teachers to build lessons online so they can actually take other people's lessons and use it as a springboard. So instead of spending 200 hours creating everything from scratch, we cut that number to less than half. Some teachers have even said we've cut it down to a 10- or 20-hour process per year.

What's next for you?
We're hiring on a few more people. We've got three engineers, and we're bringing on a designer. And we're going to be launching this thing at the end of July. So that's our big push right now; getting the product ready for the next school year.

Would you suggest that an aspiring entrepreneur resort to your tactics?
I wouldn't endorse doing anything illegal. But I will say that I think entrepreneurs need to be extremely scrappy. At an early stage, you have to use all the resources you can. You just have to make a judgment on your part as to how far into that gray area you will go. But it's important you do go into the gray. Because ClassConnect would not be around if we had played by the rules.

IMAGE: Courtesy Companies
Last updated: Jun 13, 2012

JOHN MCDERMOTT | Staff Writer

John McDermott is a business and culture reporter whose work has appeared in the Chicago Tribune and Playboy and on AOL.com. He recently moved from Chicago to Brooklyn, New York, to work for Inc.com.




Register on Inc.com today to get full access to:
All articles  |  Magazine archives | Livestream events | Comments
EMAIL
PASSWORD
EMAIL
FIRST NAME
LAST NAME
EMAIL
PASSWORD

Or sign up using: