Jason Schutzbank has been an entrepreneur since he was 14. He got started building websites for family friends. By 18, Schutzbank and a classmate from Emory University had founded College Tonight, a publicly traded social media company focused on connecting students at universities across the country. As College Tonight’s chief technology officer, Schutzbank balanced the stresses of student life with the pressures of being a top executive. Schutzbank and his business partner eventually sold College Tonight. Now 23, he is co-founder of Brand Knew, a firm that advises companies on how to use sites like Facebook and Twitter in their marketing and branding efforts. He recently talked to Knowledge@Wharton High School about his experiences, and offered advice to budding entrepreneurs.
An edited version of the transcript appears below.
Knowledge@Wharton High School: Could you tell me a little bit about what you’re doing now?
Jason Schutzbank: I started a company that’s called Brand Knew that does new media marketing, helping companies build out their businesses online through social media — Twitter, Facebook, all the tools that are out there, as well as complex social media developments [such as] private social networks, bid auction platforms [and] different shopping e-commerce sites, all with a social end to it.
KWHS: I understand that this is a space you have been involved in for a long time. Tell me about how you got started back in high school.
Schutzbank: I’ve been doing some form of web design development since I was 14, just building websites for my family and friends using … time Geocities, which allowed you to play around with it just like it was a [Microsoft] Word document. In high school, I took a more formal class called Multimedia Design. From that class, I got extremely interested in all forms of multimedia design and I started expanding, getting referrals from family and friends to larger clients. I started working with a public company at the time called Yawn Water, a water company out of New York [that was] expanding from there and had other projects that they were working on, such as a product called Skinny Water, which they said would suppress your appetite. I built a website for them and a couple of other clients they referred to me. It spiraled from there [to working with] different businesses and different web projects.
In college, I had seen a post on our school’s server [at] Emory University called Emory Nightlife;80% [of the students] had subscribed to this [service], which had different events that were going on in the area. I saw a post that said, “Looking for web design help for a project I’m working on,” from a senior at the time. I met with this guy and he had a plan to take this Emory Nightlife concept and bring it to other schools. I worked with him, and we built the first version of College Tonight.
College Tonight was a site where you could see what events were going on in your area, what your friends were doing [and] what percent of guys [and] girls [were going to a particular event]; it was almost a precursor to what’s now called Foursquare because we had a mobile component where you could “check in” to a venue. [The check-in feature] would tell you which of your other friends were there, as well as give you specials and deals from the business you just checked into. We didn’t have the iPhone at the time and smartphones, so text messaging wasn’t the best way to do it. We had planned to build a grander collegiate network, which we were going to call The Quad. Just like the quad is the center of college life offline, we had viewed The Quad as the center of college life online. That was comprised of an academic portion where people could work on school projects, Word documents and Power Points in real time with each other, as well as College Tonight. That was a nightlife component with the center of it being a fraternity and sorority management system where people could work on discussions, dues processing, a test bank [and] a sober driver system where we would text you who’s the driver for that night.
We ended up raising over $2 million for that project and took the company public. [I was] a 19-year-old [and] an executive for a public company and [also] dealing with [the] Sarbanes-Oxley [Act of 2002, which had new or enhanced federal standards for public company boards, management and public accounting firms] and all these public controls and auditing and legal and accounting — it was an interesting experience juggling that and my college studies. We learned a lot from being a public company and dealing with finances at an early age. From there, we used that money to [build] out our Quad concept.
We signed on Lauren Conrad from MTV’s “The Hills,” who was the largest reality [TV] star at the time, especially within our demographic, and did a number of different fashion shows across the country. It was a contest where students could actually be the models in the show…. We had a contest where people could vote for their friends to model [Conrad’s] fashion line, and it was extremely successful. In our first month of operation of the Quad product, we had over 50,000 users and were doing $100,000 in revenue. Early last year, we ended up selling our company.
KWHS: To go back a little bit to the Quad, it sounds like the business went from zero to a hundred really, really quickly. How did you — in addition to juggling classes and all of the things that a college student is dealing with — go about creating a business plan for this and figuring out what you were going to do to ramp up? What resources did you rely on to take this so far?
Schutzbank: We originally worked on the College Tonight concept [at] the end of November 2005…. This was when Facebook was expanding out of the college audience and going [mainstream], so our whole pitch was that we were going to be … a closed network where your grandma’s not on [the site] and messaging you…. We took all the money that I had made in web design development, and my business partner took all the money that he was making doing marketing and promotions for the Atlanta Braves and promoting night clubs; we pooled our money and took a chance at the dream of building our own business. Based on my experience and the team that I had in doing the web design development, we were able to build out the first version of the site with a pretty low budget.
From there, we realized that we needed a lot more money to take it to the next level and compete against this behemoth that was Facebook. We went to [our] families and friends and talked to different organizations [about] trying to put together some sort of financing. I talked to some of my professors and they were really instrumental in helping me through the nuances of that process. It was interesting because in the classes that I was taking in high school in economics, and in my first years at Emory, I was learning things that I could then take and apply to the business. [For example,] I was taking marketing class and we were talking about guerilla marketing and I called up my business partner, who was a senior at the time, and said, “[We can use this guerilla marketing thing to be able to get out there really cheaply.”
Eventually, we were able to find a group in Philadelphia that was willing to put up the initial money in a private forum. My business partner, Zach [Suchin], was on “Fox and Friends,” which was a major show at the time. We received a call [from an investor as a result of that appearance who wanted] to put in $500,000, so we had initial financing to build out our site, and then had an offer to take the company public. We took that offer and raised another million — it was actually $1.7 million, that we [used to] open an office in Los Angeles. My business partner was running [the company] out of LA, but I was heading up all of the development; I was the CTO [chief technology officer] of this company, so I was handling all of the development and helping with the marketing initiatives and doing everything. [At] night, after classes, I’d work until I couldn’t stop anymore; in between classes, too. But it all worked out at the end of the day, so it was interesting.
KWHS: What was it that pushed you to want to become an entrepreneur and really take an idea that far at such a young age?
Schutzbank: I was always building things and playing around with blocks as a younger kid and trying to sell door-to-door; [I sold] water instead of lemonade to try to make more money instead of paying the cost of lemonade. As I grew up, I always had that drive in me. But with the Internet, it’s a lot easier … to enter into starting your own business. As a high school student, you can really get out there trying to achieve whatever you want, because the barriers to building up these businesses and achieving your dreams aren’t that [high] anymore.
KWHS: What were the biggest challenges that you faced in building up the site and carrying out your business plan?
Schutzbank: It was that initial balancing of handling the finances while we were trying to achieve our business plan. Raising money is a very hard process and the investors at some points would want you to go in a certain direction that you may not have envisioned, but it was the best path for them to either raise more money or justify their investment. They want you to grow, grow, grow, but we wanted to really focus on one school at a time and build it out, which we couldn’t really do, especially in the way we raised the money as a public company. Every day the public market is watching you [to see if] you make any missteps — and you’re a website, too, so they can see how you’re doing at that exact moment. There’s a lot of pressure. The way we raised money and all the regulations and requirements really took us away from achieving our straight-line vision of where we wanted to go.
KWHS: Is the site still in operation? I know you said that you sold it. How difficult was it to make that decision to sell, to get rid of your baby?
Schutzbank: It was hard. I believe it’s still in operation, but without our original vision and the team to support it, it wasn’t going to [make it] to the next level. We really needed a lot more money to do what we needed to do and we were caught up in that. The way that we raised money was very taxing and required us to do a lot more than we wanted to do. At that point, it was like our baby was stripped from us and we couldn’t control that process anymore. We felt it was best that we take all of our knowledge in what we’ve achieved in building out these complex websites, and how we were able to go from zero to 60,000 users in the period of a month, and help other companies without having to worry about the financing, the investment part.
KWHS: What would be your advice to budding entrepreneurs who are interested in launching a tech start-up?
Schutzbank: Give it a chance. Now’s the best time. You see how the economy is and how hard it is to get a job at certain companies, and if you really have a good idea, there shouldn’t be anything stopping you from achieving that. Get with the right people, use the resources that you have at school, your parents, family and friends and if you really believe in what you’re trying to do, you’ll find a way to make it work and you can set your own path instead of going down this corporate path. You can veer off a little bit and try to make something yourself.
KWHS: What are some things that you would have done differently knowing what you know now?
Schutzbank: Most of that just comes with maturity and learning as you go. But definitely, we wouldn’t have taken the money in the way that we did. We would have been more in control and not afraid to stand up to the people who put in the money, because we ended up losing the course of our vision. We had someone who was giving us marching orders, and that limits your entrepreneurial capabilities.
KWHS: It seems like a lot of young entrepreneurs or entrepreneurs in general are looking to the social media space because there’s a lot of attention paid to it, and a lot of talk about the potential that it has. What would you say are the greatest areas of potential in that space? What about the greatest myths?
Schutzbank: Social media is great because of the network effect: The ability to post something on your Facebook profile or your Twitter account, and then 200, 300 of your friends who really trust your opinion see it, and use that to promote what you’re trying to achieve. Brands can do great things [using] the capabilities of something like Twitter, which is 90% open. One of the products that we built, [which] we call Talk of the Town, basically does that. It monitors conversations that are happening on Twitter, and a brand can then reach out to [consumers], and then it’s basically a targeted conversation…. This social graph of what Facebook has, as far as the amount of friends you have and what you do on it, lends a great ability for brands and companies and services to promote themselves online.
As far as pitfalls, you just have to use it correctly, especially in that commercial case. You don’t want the brand to be in your face it has to be a two-way relationship. You have to be providing something and giving back to the user if you really want the user to do something, because people have their banner blinders on; they don’t believe what people say anymore, so you have to really market to them in the right way and use social media properly instead of [saying,] “We just have to have a social media plan.” What does that mean? You really have to sit down and strategically think about it.
Great interview! Lots of insightful knowledge!