An American Start-Up
"We're motivated, passionate, excited, terrified, and, at many times, have absolutely no idea what we're doing."
On a warm afternoon last fall, Kyle Harrison sat at his desk picking at the blisters on his hands. The young entrepreneur incurred his wounds while moving his 18-month-old start-up into a tiny office in San Francisco's yuppified Cow Hollow neighborhood. The 6-by-30-foot space is really just a converted shed, but it does have a history of commercial use, having once housed a massage parlor. After laying green carpet and painting the walls a fresh white, Harrison and his business partner, John Lusk, squeezed two desks and three file cabinets into the cramped quarters. "It's not much, but it's relatively inexpensive, has phone and network connections, and it's conveniently located two doors down from our former strategic boardroom: Starbucks," Lusk wrote upon moving in.
Despite the office's lack of legroom, Harrison and Lusk love the new home of their company, Platinum Concepts Inc., which makes computer mice shaped like the heads of driver golf clubs. Harrison first designed their product, called the MouseDriver, on the back of a cardboard coaster while he was sitting at a bar late one evening. He shared the design with Lusk, whom he had met while both men were working on their M.B.A.'s at the Wharton School of the University of Pennsylvania. In 1999 the two native Texans started a company to build and sell the mouse, toiling at it in their two-bedroom apartment for more than a year. Working from home, Harrison, 31, and Lusk, 30, felt isolated. "Every day is a series of ups and downs, and if you're not prepared to handle the swings, the chances of surviving from a personal perspective are pretty slim," Lusk wrote in November 1999. "This part of entrepreneurship really SUCKS!!
"We'll wake up in the morning and immediately receive an order for 200 mice," he continued. "Emotions are running high, enthusiasm prevails, high fives are flying around, and then we won't receive a single phone call for the rest of the day. Depression and doubt then reign. At least we've learned to recognize when we're about to hit a valley. ... Thank goodness the Presidio Golf Course is only a five- minute drive away."
Those thoughts, among many others, have been published in Platinum's corporate newsletter, a cry-for-help house organ that's E-mailed to a select group on a sporadic basis. The MouseDriver Insider, as the newsletter is named, is filled with observations that are profoundly mundane (see end of article for links to the MouseDriver Insider). And yet, strangely enough -- within some very elite circles -- the newsletter is considered pretty much indispensable. "I haven't seen anything like it," gushes loyal reader Pankaj Kumar, assistant professor of marketing at Cornell University's Johnson Graduate School of Management. "These guys are real live-wire entrepreneurs, and they have no qualms about sharing their story with the world."
Two professors at the Wharton School have included the newsletter in their course readings. Leonard M. Lodish, the Samuel R. Harrell Professor of Marketing, insists he's found meaningful lessons about business building in the chronicle of Lusk and Harrison's start-up. "They're dealing with a lot of the issues a lot of entrepreneurs have to deal with," says Lodish, who recently coauthored a book called Entrepreneurial Marketing. "Positioning, distribution, logistics, pricing, segmentation -- the whole bit. It's the nitty-gritty of building a company." It's worth pointing out that Lodish is also an investor in Platinum, having put $20,000 behind his former students.
That crucial Ivy League connection has given the newsletter a formidable readership. The circulation may be a minuscule 200, but readers hail from top investment banks, venture-capital firms, Web incubators, and software concerns. Aside from generating buzz, the free newsletter has garnered some tangible benefits for the company. Smitten with the scrappy start-up, readers call and E-mail the founders with helpful strategic advice and with referrals for sales reps and graphic designers. One reader even tipped them off about the vacant massage parlor.
Why so many sophisticated types find this Start-Up 101 journey so uniquely compelling -- instructive, even -- is not so much a function of the world the newsletter describes as the one it inhabits. The MouseDriver makers have unwittingly cast themselves as entrepreneurial throwbacks, intriguing reminders of what starting a business used to be like way back in -- well, sometime before the dot-com era. Theirs are the stock-in-trade experiences of old-school company building: the setbacks, the serendipity, the strain. Not to mention the occasional typhoon. (Typhoon York delayed the first shipment of Platinum's product by four days. It's all detailed in the second issue of the newsletter, published on October 4, 1999.) At a time when so many entrepreneurs tout the inevitability of their success, Harrison and Lusk regale their supporters with the fear and trembling of start-up life. "What they're doing," says Insider reader John Tedesco, a former classmate who started -- and sold -- a dot-com within 15 months, "is harder than doing a dot-com was or is."
By opening up about their loneliness and isolation, the founders have garnered tangible benefits from their many admirers.
So what are they doing, exactly? That's a question Lusk and Harrison have very openly struggled to address. Often. "We're motivated, passionate, excited, terrified, and at many times have absolutely no idea what we are doing," the two men have written. "Every hour of the day is filled with constant mood swings and the question of 'What the hell are we doing?"
Their struggle to come to terms with the route they've chosen is natural, especially considering that Lusk and Harrison were the only ones among the 792 graduates of Wharton's class of 1999 to start a consumer-products company. Once the partners graduated, they launched the kind of business that their peers wouldn't even have thought of joining. After all, it wasn't as if Platinum had the potential to be the next Yahoo or Amazon; it was a modest venture that seemed tailor-made for QVC. "We have no income and no venture-capital funding," revealed Lusk, the main author of the newsletter, in his first outing as a start-up scribe. "Our inventory is being financed by [credit-card] companies with names like Chase, Citibank, First USA, and Capital One. Our office consists of a refrigerator, oven, sink, two desks, a bay window, and one very large Texas flag. The only thing that makes our seven-second commute to work interesting is avoiding the inventory of computer mice stacked in our living room."
Through the Insider, folks securely tucked away in plush offices at Goldman Sachs and Lehman Brothers eagerly follow Platinum's development. "I have married friends who live the single life vicariously through me," says Lusk, "and now I also have friends at big companies who live the start-up life vicariously through me." Jose Bayardo, a longtime friend of Lusk's who is an investment banker at Chase H&Q in San Francisco, is fascinated by "what they tried and how they tried it," he says. "They've had the typical entrepreneurial process of knocking down doors and bouncing around. I always liked it when they had an inventory count of how many mice they had in their apartment. They usually included some snide comment about how they were overwhelmed with mice."
Indeed, the newsletter's self-effacing tone explains one advantage that the MouseDriver guys have over their well-appointed peers: they're actually having fun. "I love that they're willing to laugh at themselves and their own stupidity," says Kumar, who has even sent the Insider to Cornell's academic student clubs. One of his favorite passages appeared in the newsletter last August: "John is thinking of dying his hair Platinum blond! We're not talking about the casual highlight here...we're talking jet white."
The newsletter went on to rationalize the change by saying that Lusk was contemplating the dye job "to continue to bring much-needed awareness to the company." But then Insider readers learned the real reason for Lusk's flight of follicle fancy. "It's absolutely amazing the things you'll do to 'change your environment' when your creativity and motivation are stifled in such a lackluster setting," Lusk wrote.
Kumar sees educational value in what might look to others like a cheap, attention-getting stunt. "Something like that teaches my students the importance of creativity," he explains. "And a big part of new-product innovation and new-product marketing is creativity -- doing anything that works." As it turned out, Harrison eventually went platinum, whereas Lusk settled for blond highlights. It seems that their hair coloring, like their company, is an ever changing project.
The newsletter's quirky charm is undeniable, but to understand the essence of the Insider's appeal, it's important to know this: even other entrepreneurs seem to delight in the simple pleasure of the MouseDriver Insider.
Tedesco, who says he loves the newsletter, cofounded a company at exactly the same time that Lusk and Harrison did. The difference: his was a dot-com, with all the trajectory that that once implied. Shortly after moving to Pasadena, Calif., to launch PayMyBills.com, in July 1999, Tedesco landed $250,000 from the then-high-flying incubator Idealab. Within weeks of incorporation Tedesco was hiring employees by the dozen and buying ad space as if his company were selling cola. "The minute I moved to San Francisco, PayMyBills began advertising on the sides of buses and with billboards," recalls Harrison, who had turned down Tedesco's offer of a job at the dot-com. "That really made me question my choice -- but MouseDriver was my idea, so I had pride of ownership."
But in an odd reversal of roles, Tedesco now seems to feel somewhat envious. In August he merged his start-up with a competitor based in New Jersey. Since then he's been relegated to the second-banana position of "chief strategy officer" at the company, Paytrust, whose center of gravity is 2,400 miles away. "Each entrepreneurial experience is individual, and I wouldn't trade mine for the world." But reflecting on the adventures of his former classmates, he adds, "they have had the opportunity to do everything themselves and develop their skills across the board."
Tedesco, like many Insider readers, says that his favorite element of the newsletter is the Mood Meter -- a note at the end of each newsletter that describes the prevailing emotion of the MouseDriver partners. A sampling:
October 4, 1999: "An emotional roller coaster."
May 5, 2000: "Remember the last scene in The Breakfast Club when Judd Nelson is walking through the football field? He opens his hand, sees the diamond earring that Molly Ringwald gave him, and raises his fist in triumph .... That's kinda how we feel."
August 11, 2000: "Let's be honest here. We've put in the work, we've paid ourselves three times in the last 13 months, we've solidified distribution, and the holiday season is just around the corner. We're ready (and very anxious) to bank some serious cash!!"
Read the Mood Meters side by side, and you can't help seeing the company-building experience as an unyielding, unglamorous, emotion-scrambling struggle -- not at all the bloodless quick-hit event that has been portrayed in recent times. In fact, the lore contained in the newsletter -- like the time a sales rep gave a customer the wrong toll-free number, sending her to a phone-sex line -- is enough to make dot-commers realize what they missed by not experiencing the real-time version of entrepreneurship. "We were funded and grew to more than 100 people in six months, so obviously PayMyBills was a different entrepreneurial task than MouseDriver," says Tedesco. "They are more like classic entrepreneurs, working out of their apartment."
Who knows? Such classic entrepreneurs may soon be making a comeback, what with the downturn in dot-com fortunes. Of late, spurred by the newsletter's growing popularity, Lusk and Harrison have been fielding more and more offers to speak to college students and inventors' associations about what they've been through. Lusk seems particularly keen on scouring the countryside for grassroots entrepreneurs and digging up products just like the MouseDriver -- which, by the way, brought in $600,000 in revenues last year. (The mice are sold at all 214 Brookstone stores, as well as through country clubs and gift shops and online.) This year Lusk and Harrison are projecting sales of more than $1 million.
Not that they're sure they'll hit that target. As the partners will be the first to admit, and to publicize in the pages of the Insider, there's no telling what might get in their way. Or as Lusk himself once put it -- in his inimitably plain style: "We've been through all sorts of different emotions over the past 15 months. We're not really sure what the mood is this time. If anything, it's impatient and unknowing." In other words, it's exactly the messy kind of experience they hoped it would be.
Mike Hofman is a staff writer at Inc.
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