What It Takes to Be a Successful Entrepreneur

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Millionaire at 25: Jack Abraham on What It Takes to Be a Successful Entrepreneur



November 3, 2011

Jack Abraham with Milo, the company mascot

Jack Abraham, 25, is a successful entrepreneur. In 2008, he left Wharton to found Milo.com, a shopping engine that searches local store shelves in real time to find the best prices and availability for products of all kinds. In December 2010, eBay bought Milo.com for a reported $75 million. Today, Abraham still runs Milo.com, which is a unit within eBay, and he is the director of local for eBay marketplaces, which means that he develops the company’s position in integrating online and offline commerce. Abraham spoke with Knowledge@Wharton High school from his office in San Jose, Calif., about the triumphs and challenges of entrepreneurship — starting with his days at Langley High School in McLean, Va. — and what it takes to succeed.

Knowledge@Wharton High School: How long have you been interested in starting your own business?


“If you never give up, you have a 100% chance of success because eventually you’re going to get it.”
Jack Abraham: Since I was pretty young. I grew up in an entrepreneurial family and saw my parents start some cool businesses [Jack’s dad is Magid Abraham, founder of comScore, an Internet marketing research company]. I fell in love with the Internet and data and what was possible with both. I started a couple of businesses in high school and one while I was in college and then did Milo after that. I also had some failures, which is important because I could learn from them. Failures are one of the key ingredients to success. Look at Vinod Khosla [co-founder of Sun Microsystems] or even Steve Jobs [of Apple]. They had a series of failures that they were able to learn from and that ultimately helped them achieve success.

KWHS: What businesses did you start in high school?

Abraham: One was an SAT and AP prep tutoring company. The idea was that Kaplan and all these other companies charge you an arm and a leg for these classes to prepare for the SATs and APs, but the people who instruct the classes haven’t gotten into a great school themselves; they’re just going by a book. I tried to build a network of really smart tutors who might or might not have taken these classes and were willing to work with students in the Northern Virginia area. I learned the value of having a brand behind you. Part of the reason Kaplan is successful is not because it has great service; it is because they spend a gazillion dollars on advertising. Everyone knows them and thinks that they offer a high-quality service. It was a great business for high school. But it was never able to scale into a really big success.

I also started a business making custom computers. We would talk to companies and ask what most of their people would be doing on the machines, and then optimize the machines for that use and sell to them. We got some good clients, but I learned that there were so many boundaries to scaling that business. You need business development, sales, longer lead times with businesses. It was a great idea, but it didn’t catch on. It teaches you a bunch of things about the approach you take, what companies you want to start and what companies you don’t want to start.

KWHS: Why did you start Milo.com?

Abraham: I wanted to start a big, consumer-based business that solved a pain point that people were facing. There was a lot of innovation happening in web 2.0 in social and video and other segments of the web that were being reinvented. Interestingly, shopping seemed totally stagnant and stuck in a web 1.0 world. So I got to thinking about what was happening in commerce and where shopping was going. One big trend was the Internet’s ability to drive offline behavior. I had this hunch that just like the Internet was starting to influence social interaction, it was also going to influence commerce in the real world in a very real way. I thought, “What if you start using the web to drive people into the store?” It’s a win for the consumer and a win for the store because they need more sales and foot traffic.

We also discovered a really big pain point there. People loved looking at reviews, pictures and descriptions online, but they had a difficult time figuring out what was in stock right then at a store nearby, and who had the best price. The state-of-the-art at the time when we were founding Milo was literally calling from store to store to check inventory and/or driving around from store to store. In that scenario of people calling store to store, it’s literally a human looking at a computer screen and picking up the phone to talk to another human looking at a computer screen. There had to be a way programmatically to eliminate the need to do that. I left school early in 2008 to move out to the West Coast and start working on building Milo full-time. We had some early traction with five merchants, which was great in terms of validating the service.

KWHS: How did you start a business right when the recession was hitting?

Abraham: We were hunkering down for about six months on figuring out the product and distribution. And then the economy started tanking. That was a scary time to be running a business. It went from everything getting funded and high valuations and easy to raise money, to literally no one investing. Prior to this supercrash, I was fortunate enough to meet Keith Rabois, one of the early PayPal guys, an early investor in LinkedIn, Yelp and YouTube, and the COO [chief operating officer] of Squared. After two weeks of him ignoring me … I managed to get a meeting with him. Within 10 minutes of meeting me, he decided he wanted to invest. He introduced me to the co-founder of YouTube, Jawed Karim, who also decided he wanted to invest, and Kevin Hartz of Eventbrite, who also wanted to invest. I was getting very close to closing an angel round [angel investor] with them and the stock market started going down 5% a day. By the end of the week, the stock market had gone down more than 25%. This was the exact same week that Sequoia Capital, one of the best venture capital firms [in California], sent out a memo to all their portfolio companies with a big picture on the first slide of a grim reaper that said ‘RIP Good Times.’ Still, we pushed through and closed that first angel round [of financing] with Keith, Kevin and Jawed.

The money was valuable, but what was really valuable was their time. They had a ton of success with business-to-consumer web companies, and I figured there was a lot to learn from them. As a part of the round, I negotiated spending an hour with each of them every Friday where I could tell them about what was happening in the business and get the chance to learn from them. That was an amazing experience for me. Kevin is this great serial entrepreneur who gave me advice on recruiting, setting a culture and setting goals and metrics for my team, raising money, positioning to investors and getting great advisors. Jawed was the tech and product guy who figured out YouTube. Keith was great with strategy, product, all across the board. I was like a sponge. We were able to build a great team. Before long, we were able to get about one million people a month using our product. During the four-month period in 2009 when we went out [to get further financing], we were one of four early-stage consumer Internet companies that got funding. A lot of people would have thrown their hands up and quit, but we still managed to pull it off and get that round done. We grew the retailer network and a great distribution network across the web.

Big companies, everyone from Google, Microsoft, Yahoo! and eBay, started reaching out to us for partnerships. Through that process, we got to know a lot of companies very well, and eBay bought the bigger picture vision of what we were going after. We realized that there was so much more we could do if we joined forces, rather than a simple partnership. We weren’t looking at all to sell the business, but they made us an offer and we decided that was the best path for the company.

KWHS: Has it been difficult to give up some control of Milo to a bigger company?

Abraham: It’s really hard to go from a team of 25 or 30 core people to a company of 15,000. It’s a big transition. I had never worked for a big company before. Just like there is a lot of learning to be done to run a start-up company, there is also a lot of learning that needs to be done to be successful at a big company. EBay has given our team a fair amount of autonomy. We have our own house on eBay’s campus, which everyone calls the Milo House, and we’re still able to set most of our own direction. We’re plugged in at the right level of the organization. Sometimes when companies get acquired, they end up seven rungs beneath the CEO and can get lost in the shuffle. That’s when bad things can happen and companies get shut down. I have an awesome boss, Dane Glasgow, who is a brilliant guy. He dropped out of Cornell to found a company and sold it to Microsoft, and started a company after Microsoft that was bought by eBay. It’s been great having him as my mentor and boss because he understands the issues we face.

I can still be very innovative within our direct team because that is what we value. Doing things across different business units and sections of eBay as a whole is really challenging. There are a lot more people. You can’t just have an hour-long meeting and then spend the rest of the time executing. A lot of coordination, consensus building and approvals have to happen.

KWHS: What are your top three qualities of a successful entrepreneur?

Abraham: Persistence is one. The second would be resilience. Bad stuff always happens. Sometimes it’s in your control and in your domain and you can feel good about that because you can fix it. Sometimes it’s out of your control, like the macroeconomy implodes and the top newspaper sends out a [memo] to everyone in Silicon Valley saying the party is over, nobody gets funding and fire everyone. Or the initial idea didn’t work and it’s not the right time. Being able to bounce back from all those things and never give up is so important. If you never give up, you have a 100% chance of success because eventually you’re going to get it. The third thing is an attribute I’ve found in almost every successful entrepreneur I’ve met. You need the ability to sell. That doesn’t mean being a salesman. As a CEO and founder, you are always selling your ideas and your vision to your team, potential recruits, mentors, advisors, investors, partners. If you can’t sell, you are going to have a really hard time with most of the challenges you face as a founder. If you can sell, you can get a lot of people aligned on your side to a common vision that you want to execute against and galvanize a team toward doing superhuman work to get it done. Sell the idea, sell how big it can be and get great people involved in what you are doing.

KWHS: What about risk-taking?

Abraham: I think entrepreneurs take very calculated risks. They understand the potential benefits and the likelihood they’ll be able to reap them. Some people might think that entrepreneurs take crazy risks, like leaving school early to do a start-up. In my mind, it was the least possible risky thing to do. You have to be willing to put yourself outside your comfort zone and go for it.

KWHS: Where will you be in five years?

Abraham: I enjoy building products that solve pervasive, everyday problems. It’s highly likely that I’ll be doing that as an entrepreneur working on another startup.


Source: www.kwhs.wharton.upenn.edu