Nick Alexander is an impressive guy. He was accepted to Harvard Business School (HBS) straight out of undergrad (with a two-year deferral), worked on a startup through the Y Combinator accelerator program immediately after graduating, had a stint at Cisco, worked as an independent contractor, and then started his current project Freshplum with co-founder Sam Odio. Yes, this was all in the two years after graduating.
Freshplum is a service that helps online business of all sizes determine the optimal price for their products, so that “what was once considered an art is turned into a science,” as Nick told me.
The idea came when Nick was working as an independent contractor for several small businesses that were struggling with pricing their products. Nick quickly saw that these companies’ solution to pricing was simple but not necessarily effective. “They would look at their competitors prices and say ‘they’re charging this, and the other is charging that, so why don’t we go somewhere in the middle.’ They weren’t putting math or economic theory behind their decisions. Big companies like Amazon have their own system, but it’s clearly not something a smaller company can afford.”
Using his electrical and computer engineering (ECE) background, Nick built a simple system to help one of his clients optimize its prices. At one point, he told his friend, Sam, about it. Sam, who Nick had met through his first experience with the Y Combinator accelerator program, was in charge of all of Facebook’s photos and was working with a lot of big data tools – big data tools that something like a price optimization system would need to use – and Sam recognized the potential of the product.
“Sam’s the one who said that this could really be a business. After all, every company on the planet needs to do the exact same thing. And then we thought, ‘yeah that is a good idea; someone should probably do that one day. Just not us.’ It was a process of a couple months, where we’d talk about it casually,” Nick told me.
But it came down to timing: Sam was happy working at Facebook, and Nick was preparing to leave for business school. In fact, Nick was already packing to make the move from the west coast when he and Sam had a coffee chat with Paul Graham, the founder of Y Combinator. Suddenly, everything changed.
“I don’t even know how it came up with Paul,” Nick admitted. “Well, I guess the reason it came up was because Sam and I had been talking about it a lot between the two of us. I happened to have a live demo there, because I had built something that was working for someone.”
Perhaps Nick could have seen this coming, because whenever you’re talking with Paul Graham, the concept of startups is going to come up. It’s just what he does. “Once the conversation got started, it was just like a waterfall. Sam and I had been thinking about it, so we had a lot to say. Paul saw the demo and thought it was great because every Y Combinator company has this problem and they always talk to Paul about it. He told us we had to do it. And we had to do it now. That we should be a part of the next Y Combinator class that started in two weeks.”
After that, things moved quickly. Nick and Sam talked it over for a night, and then decided to do it. The idea sounded good, they were excited to be working together, and they felt confident because of Paul’s support.
The most difficult part of the decision for Nick was having to give up his spot at HBS, especially since he was so excited about the opportunity. Luckily, he didn’t have to! The dean at HBS completely understood and told Nick that he can start school when he’s ready. Everything lined up; Nick and Sam plunged into working on Freshplum.
Nick told me a little bit about his experience building and designing Freshplum. “Basically, we worked all last summer. It was me and Sam, and then we actually got our friend Michael on board to design. We started from scratch. We all know how to code, so we started building our product, our software. It was scrappy. We were just living and working in the same place, all day.”
They coded for 2-3 weeks, until they had a rough form of the product, and then recruited their first customer, through the Y Combinator network, so that someone was actually using it and giving them feedback. Gradually, the Freshplum Team brought on a couple more customers, building out the program in close collaboration with each of their initial customers. The Team wanted as much feedback as possible, to ensure that what they were building wasn’t just something they thought their customers would need, but that it was actually useful.
The way the Freshplum Team went about building their product seemed sensible and intuitive to me. Funnily enough though, the thing I was most curious about was how Freshplum got its name. What does Freshplum mean; how does it connect to the product?
Well, Nick really just hopes it evokes a positive image in your mind, so that you’ll be interested in learning more about his company. He didn’t want the name to be technical jargon, as it would be if the name described what the company does. Instead, the name is taken from a poem he read in middle school – This is Just To Say. The poem describes someone eating a delicious, sweet plum. The images in the poem stuck with Nick long enough that when he was brainstorming a name for the company, this came to mind.
I asked Nick if he had always dreamed of being an entrepreneur, since it seemed that his path to it was perhaps more straightforward than most. His answer revealed that it was a process of discovery, albeit a relatively defined one. “At first, I didn’t think of it [entrepreneurship] too much, not until college. I didn’t know what it was. But then once I switched into ECE when I was a sophomore, I kind of looked around and I saw that with the tools I was gaining, people who knew not much more than I did were starting businesses. So then it became a possibility for me. I thought, apparently this is one of the avenues to take; this sounds pretty cool… instead of trying to get a job at IBM, you could do it yourself! But before that point in college, I never considered it all. That’s why when the opportunity to do Y Combinator – the first time around, when my friend called me, and asked ‘wanna come out to Palo Alto and work on this startup?’ – it was like whoa, a dream come true! Count me in.”
Just looking at how Freshplum is doing today gives you a glimpse of Nick’s potential as an entrepreneur. While only in private alpha testing stage, the Freshplum team is up to six people, has a long list of interested customers, and recently raised 1.4 million in its first round of financing.
Freshplum will be launching to the broader community later this year.
And so, Nick’s career as an entrepreneur has begun.
Nick’s Advice to Aspiring Entrepreneurs
- Have a vision for what you want the world to look like in 10 years because of your business. That will help you keep moving forward.
- Keep things in perspective. Do you like the people you’re working with? Do you like the idea you’re working on? Think about those things when the going gets tough.
- Start now. “Starting now” played a big role in the story of Freshplum and it plays a role for every business. You can always say “we’ll do it someday” but someday just never happens unless you start now.