But after consulting a lawyer, Powell learned that his visa required him to return to Harvard this past fall. Hoffer, who dropped out a semester shy of earning a B.A. in philosophy, theorizes that "it's not bad from a publicity perspective to have this wonder boy in school who is running the company." But from a money-raising perspective, it hasn't helped. "No matter how good the idea is, it's still an idea with a 20-year-old CEO who is a college student," notes Clendenin, now a FÚxito board member. Right now, all that 20-year-old can say is, "We need money. But I try not to worry about it too much."
Like most other Internet entrepreneurs, he and Hoffer do worry about drawing traffic to their site. Live since the end of June, it has attracted far fewer user hits than hoped for. Working with Iconomy .com, a provider of E-commerce services for which Hoffer's older brother David serves as chief operating officer and general counsel, the partners struggled to get the E-commerce component of the site up in time to generate holiday sales. Still, "there's no way any broad-based E-tailer can focus on soccer the way they can," notes Roger Cameron Wood, vice-president of E-commerce and global direct marketing at Reebok International. "FÚxito's secret weapon is its focus."
Wood, who met FÚxito through Iconomy.com, says that Reebok has entered "a broad-based alliance" with the start-up. Clendenin, on leave from Harvard to launch an Internet business, is working to give FÚxito's store "a competitive advantage" by applying principles he developed while managing the supply chain at Xerox Corp. Clendenin's efforts are expected to yield prices at least 20% below FÚxito's competitors'. "We've got some buzz going," Hoffer says.
Not enough, though. Right now, FÚxito's brand-building strategy consists mainly of Powell's dragging a three-by-six-foot banner to soccer matches, and an intern who systematically defiles the purity of chat-room dialogues by planting pro-FÚxito messages. Powell envisions sponsoring tournaments and camps, building kiosks in the United States and Latin America, and parking a multimedia van at matches. "There are a lot of breathless pitches out there, but Richie's passion is not grafted on, and Daniel's intellectual gifts are enormous and obvious," says Wood. "Passion and gray matter on that level usually find a way of willing their way to success."
Which is why, last June, Wood joined FÚxito's board -- despite the circumstances of his invitation from Powell. "I called him in his dorm room, and he was definitely a little foggy," Wood recalls. "I think he was recovering from exams."
Joshua Hyatt is a senior editor at Inc.
Read the complete Start-Up Diaries series.
Executive Summary
COMPANY: FÚxito Worldwide Inc.
FOUNDERS: Richard Powell, 20, president and CEO; and Daniel M. Hoffer, 22, chief operating officer and chief technology officer
FAMILY: Both are single
CONCEPT: Create the premier E-commerce site devoted to soccer, including news, free E-mail, discussion boards, contests, auctions, and a database for recruiting
FINANCING: $300,000, mostly from three angels; seeking $8 million in venture capital
PROJECTIONS: First year, $7 million in revenues, $4.1-million net loss; second year, $18 million in revenues, $4.3-million net loss; third year, $46 million in revenues, $1 million in earnings
HURDLES: Given inexperienced management, being fleet-footed enough to raise the money needed to fulfill its aggressive plans. Better-heeled competitors, such as two-year-old Fogdog Sports, an on-line sporting-goods retailer positioned for an initial public offering, may be better equipped to establish market leadership in a fragmented industry.
PERSONAL FUNDS INVESTED: $15,000 from Powell in stock trades and liquidated assets
EQUITY HELD: Together the founders own a controlling interest.
SALARY: Zip for both
SOURCE OF IDEA: Powell's extensive experience with the target market, which came from having played soccer on national teams in his native Jamaica
BOARD OF ADVISERS: Nick Mehta, vice-president of marketing of Chipshot.com, an on-line golf retailer founded in a Harvard dorm; David Hoffer, chief operating officer and general counsel at Iconomy.com, a provider of E-commerce services; Seamus Malin, ESPN soccer analyst since 1979 and director of Harvard University's International Office, formerly a leading scorer and then an assistant coach of Harvard's soccer team; Steffan Berelowitz, founder and president of the Bit Group, a Boston-based Internet developer
WHAT THEY DREAM ABOUT: That FÚxito has been acquired -- first, at a price of exactly $170 millon, and then, in the sequel, for $250 million, says Powell
WHAT THEY'LL DO IF THIS FAILS: "If we don't succeed enough to retire, we'll do it again," Powell says. "I will be a millionaire off the Internet -- if not through this company, then through another one."
SOURCE OF INSPIRATION: Seeing Netscape Communications Corp. cofounder Marc Andreessen, 24-year-old graduate-student-turned-jillionaire, on the cover of Time magazine in 1996 "made me realize I had to accelerate my personal plan" of making $1 million by age 30, Powell says. "I had to step things up."
ROLE MODEL: Bill Gates, for "having the right mix of technical and business savvy to turn Microsoft into a global giant. Every company would like to have Microsoft's position in the marketplace."
