When Rob Biederman and some Harvard Business School classmates came up with the idea for HourlyNerd, their next step was to vet the idea with their would-be customers: small businesses. The pitch: Business owners could hire an MBA from a top school to do specific research and projects for them, at a fraction of what they'd pay a big consulting firm.
The response: "We probably met with 300 businesses, and five said yes," says Biederman.
For most entrepreneurs, that might have been just the evidence they needed to try to come up with a better idea. Not Biederman, nor his two co-founders, Peter Maglathlin and Pat Petitti. Biederman's reasoning: "We're probably a bit insane. But when we were able to sell to somebody, and it went well, the feedback made us believe maybe we weren't talking to the right people before."
The trio pressed ahead, eventually raising $11 million from Highland Capital and Greylock Partners, as well as from high-profile individuals such as Mark Cuban and Intuit founder Scott Cook. HourlyNerd was initially intended for businesses that can't necessarily afford big-name consulting firms but, over time, big brand names such as GE, Microsoft, and Au Bon Pain have also used it. Today, HourlyNerd hosts more than 10,000 "nerds"--the company's term for the MBAs who contract through them.
To work as a "nerd" you must have graduated from a top 40 MBA program; many nerds also have significant work experience. HourlyNerd has 38 employees, and while it won't disclose its exact revenue, Biederman says the company's tracking for a 15 times increase over last year.
Getting there has required some shifts in the company's business model. While HourlyNerd says GE is its biggest customer, it now believes that its sweet spot is businesses with $50 million to $100 million in revenue. Those businesses have sophisticated needs and, frankly, few options. "They've been locked out from getting the best people," says Biederman. "We have the same great people, but with a low-cost delivery platform." HourlyNerd takes a 14.5 percent cut of the amount each MBA bills.
John Shegerian, CEO of Electronic Recyclers, would certainly agree with that analysis. His first encounter with HourlyNerd came in 2013, when he needed some research done on affiliate programs and the recycling industry. He initially stumbled with HourlyNerd's sign-up form, but was impressed when Maglathlin called him back and walked him through it. Shegerian got about eight responses to his project posting; the nerd he hired "overproduced and overdelivered in the timeline that he said he would meet," he says. "It's mind-boggling, the quality of the people."
Now Shegerian says he's doing eight or nine projects a year with HourlyNerd. Only one didn't work out, and in that case, he says, the company helped him reach a very reasonable agreement with the MBA he had hired.
As his company has grown, Shegerian says he's started receiving pitches from big consulting firms. The prices are so high, he says, "I have to dial 911 after I read them. Seriously, who wants to pay for that overhead? What Uber did to the black-car world these guys are doing with the consulting world."
The other benefit to working with smaller companies? They help vet the nerds for the larger companies that also use the service. HourlyNerd's platform lets customers rate and recommend nerds, so a nerd who does a great job at a great price for a small company can start moving up the ladder and getting paid more by big companies.
Marisa Goldenberg started on the HourlyNerd platform in October, having left her position as a director in the global operations group at Dell in 2009 and after dabbling in startups for a few years. Her first project for HourlyNerd was a $100, two-hour phone consultation with a small-business owner. "I loved it," she says. "I learned that I am not personally well-suited to create a business from scratch, but I get a lot of emotional fulfillment out of assisting early-stage startups."
Thanks to her corporate experience, placement on HourlyNerd's homepage, and some great reviews, Goldenberg quickly became one of the company's star nerds. Her biggest project to date is a $55,000, three-week gig for a large multinational company that needed an analysis and redesign of its financial process. Goldenberg no longer bids on small-company work, but she says she's always happy to get on the phone with former clients who have questions for her.
"This is a dream situation for me," she says. "When I get into a project, I give it my all and work really crazy hours. But I can't sustain that. My vision is I will work really hard for six weeks, then take some time off."
That's probably sounding pretty good to Biederman right now. "I'd absolutely be making a lot more money as a nerd than running the company," he says. "Hopefully one day, as we keep growing, that will no longer be true."