My Story: From a Dot-Com Bust to Harvard
The morning after his dot-com startup went bust on Dec. 15th, 2009, Andrew Rosenthal registered for the GMAT test, determined to get an MBA. As co-founder of Happier.com, a website devoted to positive psychology, he and his partner, Doug Hensch, had burned through roughly a million in funding in less than two years. Now they had run out of cash and had to shut the business down.
Visitors to the site saw a simple message: “To Happier.com Users: Thank you for your support and participation. We have closed the site as we look for new capital and/or someone to acquire the business. Please come back to the site in a couple of weeks for an update.”
For a venture that had 50,000 users at its peak, there would be no new capital, no acquisition, and no update. It was a sobering defeat for a company based on trying to help people live happier lives. “The feelings of failure were personal,” says Rosenthal. “I had worked hard with my team to build something meaningful, and we had made a real impact with our users. As I watched it fall apart, I couldn’t help but internalize much of what occurred. It was tough to unwind my personal identity from that of the firm, which I’m sure sounds familiar to everyone who has been at the core of a failed company.”
The company had been a natural outgrowth of his undergrad studies in comparative health systems at the University of Pennsylvania. In his sophomore year at Penn, Rosenthal had begun working with Marty Seligman, the well-known psychologist who has been a pioneer in the field of positive psychology. It was Seligman who helped set Rosenthal up with investors. The company launched two years after he graduated in 2006.
On Dec. 16th, 2009, Rosenthal looked at the calendar and figured that if he was going to go for his MBA, he had all of four weeks to apply in the crucial second round. “I had bought the (GMAT study) books, but I hadn’t visited any campuses, and I realized I had just four weeks to get applications out to Harvard and Wharton. When you run a startup company, you have no time to do anything else.”
Though he barely made the second round deadlines for Harvard and Wharton, both schools accepted him. “I had never worked for a large company,” he says. “I have never had to ask for a vacation day. These are things that set me apart from some of the traditional business school students.”
What also set him apart was his desire not to use his MBA to work for a Goldman Sachs or a McKinsey, but rather to use the knowledge gained at a B-school to start yet another company. The entrepreneurial bug had bitten him, and even the failure of one startup didn’t deter him from wanting to do his own thing once again. In his first semester at Harvard Business School, Rosenthal met many other students who like him want to start businesses from scratch out of school. So with two other first-year students, Dan Rumennik and Jess Bloomgarden, he co-founded a campus group called the Startup Tribe for would-be MBA entrepreneurs (also see story on Entrepreneurship at the West Point of Capitalism).
While the focus of Harvard’s existing Entrepreneurship Club, with its 300 to 400 members, is on hosting conferences and sponsoring speakers, the Startup Tribe is about creating new enterprises. The goal of the Startup Tribe’s 60 student members is to lend each other support, encouragement and resources to create new businesses on campus. The Tribe was behind Harvard’s new $50,000 seed funding for student entrepreneurs.
Dubbed the Minimum Viable Product Fund (MVP), the program aims to give $5,000 awards to each of ten MBA teams that will be required to meet with a faculty mentor on a weekly basis, attend monthly gatherings of other MVP teams and share lessons learned from the program. Last year, about 5% of Harvard’s Class of 2010 started companies (compared to 11% at Stanford). Rosenthal would like to see a larger percentage of incoming students at Harvard interested in entrepreneurship and a larger number of Harvard MBAs begin new ventures by graduation.
Shutting down happier.com was emotionally quite difficult. We had come close to running out of money — within days — a number of times before. So I never quite believed it when our lead investor told us that things were done. Personally, I went through a roller coaster of emotion. On Dec. 15, 2009, we formally laid off all employees (including ourselves). But my co-founder Doug and I still held out hope that we’d be able to raise an outside round of funding — these types of extreme ups and downs weren’t that uncommon, and we had gone through rounds of salary reductions/raise postponements, personally floated company expenses, and all the other steps that driven entrepreneurs have been known to take when they are convinced their idea will be transformative.