When Andie Kaplan stepped foot on the University of Pennsylvania campus to start her MBA at The Wharton School, she made an astute observation: It was a pain for international students to get cell phones in the U.S.
“It was clear that international students have unique pain points,” says Kaplan, 29, a native of Philadelphia. “They need an American phone plan ASAP but have no Social Security number, no credit history, and no easy way to avoid high monthly rates.”
So Kaplan — who enrolled in Wharton specifically to strengthen her entrepreneurial muscles — started researching. Through interviews, focus groups, and surveys in multiple languages sent to international students at Wharton and other top B-schools in the U.S., Kaplan’s observations were confirmed: Finding an affordable cell phone option as an international student in the U.S. is tougher — and pricier — than it should be.
After the market research, Kaplan did what any resourceful, smart, and entrepreneurial MBA would do. She launched a startup, along with a team of other graduate students at the University of Pennsylvania, to solve the issue. Dubbed ConnectEd, the venture uses the nation’s largest provider of 4G and LTE networks, which Kaplan says she cannot disclose, to provide cell phone plans to international students at a family plan rate. “We think of ourselves as making cell phone service more affordable for international students,” Kaplan says about ConnectEd.
EARLY INTEREST IN STARTUPS AND ENTREPRENEURSHIP
Kaplan’s entrepreneurial interest goes back to high school. “I was one of those students that was buying cookies at a local bakery and then reselling them to students during homeroom in high school,” she recalls, laughing. “You can almost say I love buying things that are under-valued and then reselling them, which is kind of what we’re doing here.”
After high school, Kaplan moved from her home in the Philadelphia suburbs to the University of Virginia where she majored in business and math. Kaplan took a job at New York City’s Bain and Company office where she worked as an associate consultant and then senior associate consultant. It was at Bain when Kaplan had another brush with entrepreneurship. She participated in Bain’s externship program and spent about six months as San Francisco Bay Area-based Everlane’s first growth extern. “I was getting to lead growth before growth was really a term,” Kaplan recalls.
It was the end of 2015 and the small retail upstart had around 40 people at its headquarters. Just 25-years-old at the time, Kaplan had a lot of responsibilities at the scrappy and nimble venture. “I was at the cross-section of engineering, of merchandising, of strategy, of operations and I was sort of doing all of the analysis and communications behind the initiatives we were doing,” Kaplan recalls. “It wasn’t entrepreneurship so to speak, but getting to see how quickly a small company could move was really exciting and something that made me want to have more and more ownership.”
It sent Kaplan further down the entrepreneurial path, which led her away from Bain. “When I left Bain, I wasn’t ready for business school because I didn’t know what I wanted to make of it,” Kaplan says. But she did know it was important for her to work at a smaller company. So she took a position as a data scientist at Squarespace’s New York City office. After about a year, Kaplan was promoted to Senior Data Scientist and Product Analytics Team Lead at Squarespace.
And soon after, Kaplan decided it was time to see if she could flesh out some ideas. A business school seemed like the best place to do just that.
THE ARGUMENT FOR FOUNDING A COMPANY IN B-SCHOOL
Leaving Squarespace was a “difficult decision” for Kaplan. But, “it was a decision ultimately around entrepreneurship,” she says.
“It was ultimately the decision of, if I want to start a company, the MBA is the perfect time to do that,” Kaplan elaborates. “The worst that could happen was I’d still graduate with my MBA from Wharton.”
So in the fall of 2018, Kaplan moved back to Philadelphia and enrolled in the full-time MBA program at Wharton. A lot of things happened at once for Kaplan. She started seeing how difficult it was for international students to get a reasonable cell phone plan. She started realizing just how valuable many of her classmates would be in her entrepreneurial journey. And she started entrepreneurship-focused classes from the get-go thanks to her degree in commerce from Virginia’s McIntire School of Commerce.
THE PAIN-POINT MOST AMERICANS NEVER EXPERIENCE
A few things also started to converge for Kaplan, who says she had worked on some coding and non-profit “side-hustles” in the past. One thing Kaplan had recently noticed was how there was no good way to split a recurring payment. “In today’s sharing economy where we’re all comfortable sharing all kinds of things, it’s easy to split a one-off payment. But there’s not an easy way to split a recurring payment,” Kaplan says.
Kaplan pocketed that idea as she got acquainted with Wharton’s campus and MBA program. “MBA programs have a high number of international students,” Kaplan observed. And during the first few weeks of classes, Kaplan says it was very common to get messages from different people asking if there were other students with openings on their family’s cell phone plans. “In the U.S., we don’t shop for cell phone plans very often. So we aren’t aware of the restrictions that often come with them,” Kaplan says.
First, now, there are pretty much just three main providers — AT&T, Verizon, and the new T-Mobile/Spring merger. “And the plans are designed for groups,” Kaplan continues explaining the difficulties for international students. “To get the best prices, you need multiple lines — typically about four — for the price they show on the website. This might work for many Americans. But you have international students coming over and they don’t have social security numbers or domestic families to signup with.”
Plus, Kaplan says, international students are faced with plans that are about two-and-a-half times more expensive than Americans able to get on family plans. “But even beyond that, without a social security number they can’t get premium features like international texting or international calling,” Kaplan points out. “I also realized how international students fell outside the business model for major carriers — they’re globally distributed, have a short sales window, and have much lower retention. I was convinced there was an opportunity for ConnectED to bridge that gap between local carriers and international students.”
PITCHING HER WAY THROUGH THE NATION’S LARGEST COVERAGE PROVIDER
After laying the research groundwork, Kaplan tapped into Wharton’s alumni network to make a connection at the nation’s largest coverage provider.
“First speaking to alumni, I later pitched my way through the organization, showing how inaccessible they currently were to the demographic and proposing a solution where we, as a leaner, digital startup, could help them access this demographic by white-labeling their services in a prepaid student-centric model,” Kaplan says. “After months of back and forth, we were approved for an elusive reseller contract.”
Kaplan and her team ran a pilot version of the product last summer and grew to “hundreds of subscribers” at more than 20 universities within the first few months of offering the product. ConnectEd was growing at a rate of 50% week-over-week by the end of the summer and “reached double digits in the percentage of the international students” they served at the incoming MBA classes at Wharton, Harvard Business School, Stanford’s Graduate School of Business, and MIT’s Sloan School of Management.
To use the product, Kaplan says students go to the website, order a free SIM card, ConnectEd will ship the card to anywhere in the world, and then users pick a plan, signup, and the phone is activated. The base plan is $22.99 per month if users signup for an annual subscription. And the unlimited plan is $33.99 — much lower than the $70 plans offered by networks like AT&T and Verizon.
‘A COMPANY FOUNDED BY STUDENTS FOR STUDENTS’
Kaplan insists the Wharton network and environment has given her and her venture a competitive advantage.
“ConnectEd is a company founded by students for students. And it’s run by students,” she points out. “A startup has such a good chance of getting off the ground when you have such a talented network of people who are volunteering their time to really help move an early-stage venture forward.”
Kaplan has no problem making some lofty comparisons when describing ConnectEd’s early growth and impact.
“I think it’s no coincidence that we, like CommonBond and SoFi, took off so quickly as there’s no better target customer for a student-founded startup than other students,” she says. “Not only do you have the benefit of continually testing and refining your offering with your target customer, but you are also selling to an audience that’s supportive and appreciative of a venture tackling the issues overlooked or ignored by traditional players.”