Big Win for the Johnson School at DFJ Venture Challenge
By Anna Bruno JGSM '10
Issue date: 9/9/09 Section: Johnson News
We have a celebrity among us. For those of you who didn't have access to the internet this summer, here's the scoop.
Keith Cowing took $250,000 all the way to the bank when he won the Draper Fisher Jurvetson (DFJ) East Coast Venture Challenge with his new venture Digiceipt. The summer's biggest payday came in the form of convertible debt financing and an exciting beginning for a business that Keith began to build while the rest of us were studying for finance quizzes.
Taking home top prize is not only a victory for Keith, but also one for the Johnson School. Entrepreneurship is an important focus at Cornell, and one that seems to be gaining momentum in an economy where consulting and banking are slumping. But that's not to say there aren't huge obstacles. After all, this isn't Silicon Valley or even Boston, and whether Cornell can establish itself among the usual suspects (Stanford, MIT, and Berkeley) is entirely dependent on people like Keith Cowing.
I had the opportunity to sit down this week with Keith and learn a bit more about Digiceipt and the man behind it. While there may be no true formula for success, Keith seems to have a pretty good handle on what it means to start a business.
The Business
An entrepreneur's ability to start and follow through with a business is undoubtedly correlated to the entrepreneur's confidence in his or her idea and business model. Keith found this confidence through the iterative process of honing his idea and building a business. He asked questions, had conversations, molded a business, remolded it, and then remolded it again. Digiceipt began with an idea-a solution to a common problem-and then became a technology. Then it was a question of feasibility, and only after these issues were addressed, could Keith consider the question of whether he could make money.
So, where is he now? According to Keith, he has six months of building the technology, and six months of selling to customers and investors ahead of him this year. Within the year, he'll raise a Series A round (which typically runs in the range of $1-6 million). And DFJ has the right to reinvest.
Digiceipt is all about, you guessed it, digitizing receipts. Gone are the days of paper receipts weighing down your wallet and lost receipts presenting a challenge for returns. But, as with any start-up worth that moniker, Digiceipt has more to it than meets the eye. Keith's vision is as much about the utility of the data-your data-both to the retailer and the consumer, as it is about the receipts themselves. In managing receipts, Digiceipt may just access the holy grail of consumer data-information about what specific people are buying. With that information, Digiceipt will be able to help consumers find deals, manage finances, and partner to potentially provide a host of other valuable services, while enabling market research on the data.
The company's software will be delivered directly to retailers, who will run it on their point of sale (POS) machines. Eventually, it will come pre-installed. Digiceipt already has a partnership in place with Microsoft for POS software, and according to Keith the company is positioned to work with other vendors as well. In the end, Keith says that partnerships are a key element to his strategy and he is seeking retailers that are partners as well as customers.
The Man behind the Business
If running a business sounds tough, imagine doing it while taking classes, participating in clubs and activities, and juggling family and friends. I asked Keith how he does it and found that it's a mixture of synchronization and prioritization. Keith is taking classes that are relevant to his business, including Cases in Venture Financing, Law for High Growth Businesses and a three-credit independent study. He also constructed a schedule of classes that meets primarily on Tuesdays and Thursdays, so he can separate "school days" from "work days." Although, in practice, we all know that the Johnson School cannot be compartmentalized. Nor can a personal life or a marriage.
One thing Keith doesn't have to worry about is recruiting this year. After spending the summer at PricewaterhouseCoopers, I asked Keith if he ever felt the pull of large organizations-if a signing bonus, high salary, and the prestige of a brand name could seduce him away from the gritty, hard work of starting a business. An entrepreneur at heart, Keith responded that he wants to build products. And regardless of whether Digiceipt hits a home run, Keith will continue to do so, whether in a start-up or in product management for a larger firm.
If you are reading this article wondering, "How can I be like Keith?" then you are one of the many aspiring entrepreneurs at the Johnson School. Keith left our conversation with a simple piece of advice for you: "Become an expert in something. Build credibility. You can burn bridges if you assume you know everything."
And if you're not looking to start something, but just seeking a job, maybe Keith will hire you. He's currently in the market for engineers, and someday soon he'll need to ramp up sales and business development.
Keith Cowing took $250,000 all the way to the bank when he won the Draper Fisher Jurvetson (DFJ) East Coast Venture Challenge with his new venture Digiceipt. The summer's biggest payday came in the form of convertible debt financing and an exciting beginning for a business that Keith began to build while the rest of us were studying for finance quizzes.
Taking home top prize is not only a victory for Keith, but also one for the Johnson School. Entrepreneurship is an important focus at Cornell, and one that seems to be gaining momentum in an economy where consulting and banking are slumping. But that's not to say there aren't huge obstacles. After all, this isn't Silicon Valley or even Boston, and whether Cornell can establish itself among the usual suspects (Stanford, MIT, and Berkeley) is entirely dependent on people like Keith Cowing.
I had the opportunity to sit down this week with Keith and learn a bit more about Digiceipt and the man behind it. While there may be no true formula for success, Keith seems to have a pretty good handle on what it means to start a business.
The Business
An entrepreneur's ability to start and follow through with a business is undoubtedly correlated to the entrepreneur's confidence in his or her idea and business model. Keith found this confidence through the iterative process of honing his idea and building a business. He asked questions, had conversations, molded a business, remolded it, and then remolded it again. Digiceipt began with an idea-a solution to a common problem-and then became a technology. Then it was a question of feasibility, and only after these issues were addressed, could Keith consider the question of whether he could make money.
So, where is he now? According to Keith, he has six months of building the technology, and six months of selling to customers and investors ahead of him this year. Within the year, he'll raise a Series A round (which typically runs in the range of $1-6 million). And DFJ has the right to reinvest.
Digiceipt is all about, you guessed it, digitizing receipts. Gone are the days of paper receipts weighing down your wallet and lost receipts presenting a challenge for returns. But, as with any start-up worth that moniker, Digiceipt has more to it than meets the eye. Keith's vision is as much about the utility of the data-your data-both to the retailer and the consumer, as it is about the receipts themselves. In managing receipts, Digiceipt may just access the holy grail of consumer data-information about what specific people are buying. With that information, Digiceipt will be able to help consumers find deals, manage finances, and partner to potentially provide a host of other valuable services, while enabling market research on the data.
The company's software will be delivered directly to retailers, who will run it on their point of sale (POS) machines. Eventually, it will come pre-installed. Digiceipt already has a partnership in place with Microsoft for POS software, and according to Keith the company is positioned to work with other vendors as well. In the end, Keith says that partnerships are a key element to his strategy and he is seeking retailers that are partners as well as customers.
The Man behind the Business
If running a business sounds tough, imagine doing it while taking classes, participating in clubs and activities, and juggling family and friends. I asked Keith how he does it and found that it's a mixture of synchronization and prioritization. Keith is taking classes that are relevant to his business, including Cases in Venture Financing, Law for High Growth Businesses and a three-credit independent study. He also constructed a schedule of classes that meets primarily on Tuesdays and Thursdays, so he can separate "school days" from "work days." Although, in practice, we all know that the Johnson School cannot be compartmentalized. Nor can a personal life or a marriage.
One thing Keith doesn't have to worry about is recruiting this year. After spending the summer at PricewaterhouseCoopers, I asked Keith if he ever felt the pull of large organizations-if a signing bonus, high salary, and the prestige of a brand name could seduce him away from the gritty, hard work of starting a business. An entrepreneur at heart, Keith responded that he wants to build products. And regardless of whether Digiceipt hits a home run, Keith will continue to do so, whether in a start-up or in product management for a larger firm.
If you are reading this article wondering, "How can I be like Keith?" then you are one of the many aspiring entrepreneurs at the Johnson School. Keith left our conversation with a simple piece of advice for you: "Become an expert in something. Build credibility. You can burn bridges if you assume you know everything."
And if you're not looking to start something, but just seeking a job, maybe Keith will hire you. He's currently in the market for engineers, and someday soon he'll need to ramp up sales and business development.
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