During the summer before the start of Fall-A semester, my classmates successfully found one another on Facebook. We used social media to coordinate housing, plan summer trips, buy textbooks, and organize parties.
I met Arup Banerjee on Facebook via social gaming. We were both actively involved in CityVille and Empires & Allies. Arup constantly invaded my island with digital soldiers and plundered my resources during times when I was away from my computer. “Who is this merciless generalissimo,” I pondered.
When I encountered Arup for the first time at a party in August, I grabbed him and shouted: “Stop invading me!” This was the beginning of our friendship (in real life).
On Thursday, we finally grabbed lunch at the School of Law. Arup was busy talking to his partners on the phone about workflow for his new startup. I knew that Arup had a background in entrepreneurship and took the opportunity to learn more about his past projects.
Below is a transcript of our conversation:
KEVIN: Tell me about yourself.
ARUP: I grew up in Washington DC and created my first startup when I was 14. It was a web development company with clients such as the embassy of Ecuador and a handful of nonprofit companies from DC.
KEVIN: Did you always know you wanted to be an entrepreneur?
ARUP: The funny thing is, when I was 9 or 10, I wanted to grow up to be a CEO. I had no idea what CEOs were or what they did on a day to day basis. But that’s what I wanted to be.
KEVIN: You had no idea what a CEO did?
ARUP: What 9 year old does?
KEVIN: Clearly, something must have influenced you.
ARUP: I knew at a young age that I wanted to work with technology. When I went to Duke for my undergrad, I majored in Computer Science in order to prepare myself for that industry. Then, I picked up Economics as my second major and got involved in business.
KEVIN: Computer Science and Economics: seems like a dangerous combination.
ARUP: Yeah. During this time, I raised $250K for my second startup.
KEVIN: Are you referring to Campus Destinations?
ARUP: Yes. Campus Destinations was a service that allowed students to find routes through different university campuses. Think of it as Google Maps for schools, complete with walking directions, shortcuts, and local businesses near a school.
ABOVE: The Campus Destinations website
KEVIN: Tell me about the early days of Campus Destinations.
ARUP: Overall, it was a good experience. I started the company with a partner. We ended up scaling to 40 full time and part time employees.
KEVIN: What was it like starting a business from the ground up?
ARUP: Having an idea is easy, but execution is hard. The entire project was a huge learning process. I had no idea how to set up a business. I didn’t know how to structure a proper working environment. This was before online collaboration platforms like Google Docs became popular. I had to manage a robust virtual environment for 40 people scattered around the country.
KEVIN: Why were your employees scattered around the country?
ARUP: Our model eventually scaled from software to student services. Our business model was to get students to pay $10 every semester to buy this black discount card. Our team recruited vendors for this service from across the country, so it was important to not keep all of our employees in a single location. Speaking of which, our idea was very similar to Groupon. Students logged in to our site weekly to obtain a local deal.
KEVIN: All of this was built into the Campus Destinations interface?
ARUP: Yes. We called ourselves a software and info services company. We had data on campus buildings and surrounding restaurants. We allowed students to build their class schedule and buy textbooks. We basically built services around the life of a student.
KEVIN: Universities are notoriously difficult to sell products to. Tell me about your experience.
ARUP: Universities like to purchase software, but only if other universities have all purchased the product already. That’s the dilemma. It’s a total chicken and egg scenario. Every university is skeptical of new products. A lot of schools I talked to said they didn’t feel comfortable investing in technology when they weren’t sure of the longevity of the company. I think that’s fair.
KEVIN: Why do you think they didn’t like your product?
ARUP: We were ahead of our time. When Campus Destinations launched, people were not looking for pedestrian mapping. Mobile wasn’t so big yet. Google Maps only offered driving directions. Nobody saw value in walking directions yet.
KEVIN: What happened to Campus Destinations in the end?
ARUP: It still exists. You can visit the website (www.campusdestinations.com) and check out the textbooks side of the business. Campus Destinations has turned into a holding company for mapping patents. We have several patents still going through the approval process. One just got approved last week after 5 long years of sitting in limbo.
KEVIN: And you?
ARUP: After graduation, I realized that Campus Destinations wasn’t going to scale the way I thought it was going to scale. I moved to Investment Banking for a while.
KEVIN: For how long did you work in IB?
ARUP: About a year. I didn’t like it. I found a better job in Venture Capital soon after.
KEVIN: They couldn’t keep you away from startups.
ARUP: The great thing about VC is that you can use the same skillset needed for IB but have the satisfaction of impacting smaller companies. People underestimate how much growth equity really helps out the little guys.
KEVIN: If you could go back in time, what would you do differently?
ARUP: Start a different company. Ha! I’m just kidding.
ARUP: During my time in VC, I learned about the metrics that investors actually look at. With that in mind, I would conduct more research before diving in. I believe it’s important for entrepreneurs to be realistic about their business’ revenue opportunities and to convey that truthfully to investors.
KEVIN: Yes, entrepreneurs have been known to be overly optimistic about the future.
ARUP: I’d also be careful taking too much money from angel investors. Once you take money, you have an obligation to that investor to follow through on all commitments and never fail. Reputation is very important. If you fail too spectacularly, bridges may be burned with the investor community. That’s no good.
KEVIN: Is there a risk that if you’re too realistic about your product, you won’t get enough funding from investors? How do you compete against other entrepreneurs who exaggerate their prospects.
ARUP: I think times have changed. When I created Campus Destinations, Internet software was still in relatively early stages. Nowadays, there is an abundance of data online. Every dollar spent can be tracked. Most importantly, investors are simply more comfortable with Internet business models.
KEVIN: This is true.
ARUP: This means investors need to be more data-specific with their pitches today than 5 years ago. You can’t just point at a widget and say “imagine the possibilities.” At the very least, investors need to see some theoretical metrics so they know you’ve thought through the entire cycle of the product. In the end, you can definitely be realistic and honest and still get funding. In fact, the people who are overconfident about their product end up being exposed down the road.
KEVIN: What advice would you give to the undergrads across the country trying to start a business?
ARUP: Be committed. You will be very busy. When I was running Campus Destinations, I had to balance my schoolwork with daily operations of the company. I ended up giving up sleep.
KEVIN: Yes, tradeoffs.
ARUP: More than that, student entrepreneurs need to be ready to jump ship if the product takes off. To promote a startup, you need to constantly talk about it with your networks. If you aren’t 100% committed to the idea, don’t even bother getting started.
KEVIN: Other than balancing school work with business operations, what other issues do students commonly overlook?
ARUP: Recruiting the right people is fundamentally important. You have to work with people you trust. If your employees don’t buy in to your vision, you’ll end up shouldering most of the work yourself. Then, when things don’t go right, your morale drops and you give up on the product. Surround yourself with a good team.
KEVIN: Why did you decided to go to business school?
ARUP: As I mentioned earlier, I worked for a while in VC. The problem is you end up getting bitten by the entrepreneurship bug. Every day, you meet guys with really good startup ideas and think to yourself “that could be me!” I came to Haas in order to work on a new business and test some risky ideas in a relatively safe environment.
KEVIN: What has been the most surprising thing about business school?
ARUP: I’ve been most surprised by how quickly your time escapes when you get busy. It’s not a bad thing. Since your hours are limited, you have to select the right projects and clubs to involve yourself in.
KEVIN: Yet another example of having to pick and choose between great options. I sense a common theme.
ARUP: I also thought we would have fewer resources available to us in these first 8 weeks of school. I always thought the second years had all the benefits. But that was incorrect. It has been wonderful to meet with companies and speakers, talking about entrepreneurship ideas.
KEVIN: Interesting. What have you learned from these interactions?
ARUP: I’ve been learning how to let go of control. A lot of people don’t know that I’ve hired full time employees for my new project: GradeFund. I’m trusting that my employees will take care of things from afar. Classes such as Leading People have helped me learn how to incentivize and motivate my employees effectively so that I don’t need to constantly monitor them.
KEVIN: Whoa, it suddenly started to rain. Let’s go inside.
ARUP: Let’s go.
ABOVE: Arup's newest startup: GradeFund
Arup Banerjee is currently serving as Chairman for a startup called GradeFund. The goal of GradeFund is to use social technology to finance higher education while simultaneously encouraging academic success. Students upload their transcripts to the site and connect with sponsors (e.g. family members, friends, philanthropists, and corporations). Students with good grades receive money from sponsors.
You can learn more at: www.gradefund.com