Dot-Commitment
Young Entrepreneur Learns Ups and Downs of Building a Web Start-Up

By Zachary A. Goldfarb
Washington Post Staff Writer
Monday, March 3, 2008

By the time he arrived at Virginia Tech in January 2004, Fahad Hassan still was not over his first business failure. He had poured his heart into a computer support business in his final year of high school, but after a promising few months the customers dried up and the expenses ballooned.

At Virginia Tech, he didn't feel invested in classes and even got rejected as a business major. He was so stressed that he took a term off.

Then, in the summer after his junior year, inspiration struck. The Gaithersburg student pulled out a notebook -- a brown diary where he'd write personal notes and paste motivational messages -- and started to sketch a Web site.

He imagined a social networking place, featuring the friend-linked-to-friend aspects of such popular destinations as Facebook and MySpace. But his site would include calendar and contact features, and mix in course management software favored by schools and colleges.

Last year that idea became a company called Daylert, with Hassan as its 21-year-old chief executive.

Regardless of a business person's age, getting a start-up off the ground is a risky proposition. Researchers at the University of Maryland recently examined the fate of venture capital-seeking Internet companies started at the height of the technology boom in the late 1990s. Only half existed five years later.

Yet young entrepreneurs like Hassan persist, and they've become an enduring dot-com archetype. In the Washington area, two of the best-known Web start-ups -- Freewebs and Clearspring -- are led by people in their mid-20s.

Since Hassan launched his company, he's had to work tirelessly to solicit venture capital money and to manage employees who are old enough to be his parents.

Hassan "reminded me of the early days of the Internet where it was digital natives: the people who grew up with technology who saw the future," said April Young, a prominent local technology banker who has tried to help Hassan build his company. "The challenge that he and other early entrepreneurs face is: How much control are they willing to give up both financially and intellectually?"

Hassan was just 6 when he and his family left their home of Bangladesh. They arrived in the United States on a Pakistan International Airlines jet in February 1991. His father became a waiter and his mother cared for Hassan and his younger sister.

It didn't take long for Hassan to nurture an entrepreneurial sense. While attending Quince Orchard High School in Gaithersburg, he worked part-time for a software firm in Rockville, forging a bond with the owner, Bill Schafer.

His decision to create Daylert was spur of the moment, inspired by "Pay It Forward," a movie about a young boy who starts a social philanthropic movement.

"I'm not going to leave the computer until I figure something out, and I'm going to change the world now," Hassan recalled thinking immediately after watching the movie. "At the time I was not a social networking guy. I thought Facebook was a waste of time. Then I got on and I thought, 'Why not create an atmosphere where kids can get their work and answer some of their social needs?' "

Hassan set about building a prototype site. He called Schafer, who hooked him up with Bill Rubacky, who had worked at a Bethesda software firm called Epok and had experience in the Web 2.0 space. Rubacky was skeptical.

"It really didn't sound that interesting," Rubacky said. "Everybody's trying to be the next Facebook."

He nevertheless agreed to give Hassan 30 minutes of his time. The meeting lasted four hours.

Not everyone was as easily won over by Hassan's vision. Hassan later visited John Burke, a partner at venture capital firm True Ventures, which has an office in Great Falls. Hassan was searching for money, and True Ventures had backed young entrepreneurs before.

"He only saw his product from a user standpoint. There was no business model," Burke said. "My skepticism revolved around: 'How is he going to make money around this? How is he going to get professors to sign up? How is he going to get universities to switch horses midstream?' "

Hassan found a more receptive ear in Scott Birnbaum. Rubacky introduced Hassan to Birnbaum, an Epok co-founder in his late 20s who was getting his first investment fund off the ground. Birnbaum was nervous about making a mistake with his first fund. But he also saw hints of his background in Hassan's story.

"I saw an opportunity to help him navigate the difficulties of building a company," Birnbaum said. "It's a roller-coaster ride. You start out and get pumped about your idea. You do research and you realize there are probably five or 10 people out there doing the same thing."

Eventually, a business model emerged. Hassan decided to try to gain enough of a following that advertisers would find the site enticing. Birnbaum decided to take the risk, writing a check for $500,000 to fund Daylert through 2007.

But Hassan first had to graduate.

In spring 2007, when the Virginia Tech shootings occurred, Hassan was taking in nine classes to graduate as soon as possible.

He left Blacksburg on a Friday in May and moved back home that weekend.

The very next Monday, Daylert opened, borrowing space in Epok's offices. Now the hard work began: Building the site and seeing whether people would use it.

Epok contracted out six employees -- Web developers ages 29 to 55 -- to Daylert.

One afternoon last fall, the developers gathered with Hassan in a conference room at the office, divvying up tasks for building parts of the Daylert site. A test version had launched for a few hundred users at Virginia Tech, Fordham Law and Radford University.

Hassan asked the developers to build a chat function, so two users could send messages to each other. He had spotted a similar function on Facebook the night before and wanted to see it on Daylert.

"We don't need chat right now. It's not necessary," said developer Chandra Danam, 37, who wanted to focus on core features such as the calendar.

"I'd like to see chat," Hassan said. "Let's do it."

The back-and-forth continued for a few minutes. Hassan won the argument.

"You've got to have certain processes in place," developer Steve Green, 41, said in an interview. "He didn't always know what it would take to put something together. What should I expect from someone who's never done this before?"

Hassan said he's learning.

"A lot of it was impatience on my part. I wanted to catch up in terms of the product and the market share," he said. "In the early days the biggest problem was with my team. They would be telling me we need to do this and that and maybe a more experienced CEO would have understood the balancing act better."

By the early winter, Daylert had matured into a usable site. Students had their own pages, which would list their class schedules and would be viewable by their friends. Students could add other events, too. Professors could upload syllabuses, and both students and professors could keep track of who was registered for classes.

But Hassan faced two hurdles if he wanted his company to survive. He needed more capital to build and market the site so he could attract more users. But he also needed more users so he could earn advertising revenue and therefore attract more capital.

He visited venture capitalists around Washington and took a trip to Silicon Valley but came back empty-handed.

"They want to know how you're going to make them money and how quickly," he said. "It's a little frustrating that they don't really care about my vision."

Recently, Birnbaum agreed to fund Daylert a while longer as Hassan searches for a sizable investment.

Hassan travels to school after school to market the site. He said Daylert already has 3,000 users and garners 200,000 page views a month, active at about 10 schools. But he realizes that figure has to grow -- and fast.

"If we're not at 150,000 users by the end of the year, we're in trouble," Hassan said.

Universities, which have already invested time and money in competing products such as Blackboard course management software, have been hesitant to adopt a competing product.

"What really seals the deal for faculty is student demand. . . . Faculty respond to that," said Brian Britt, a Virginia Tech professor who received a presentation on Daylert from Hassan.

Hassan openly acknowledged that he wants this venture to make him a multimillionaire. But he claims -- and has long told associates -- that he has higher motives.

"Islam has a very negative vibe in the country. I want people to realize I'm a Muslim doing this," Hassan said, adding that he wants to use his potential riches to support Bangladesh.

On an evening last week, Hassan did what he most needs to do as a young chief executive: take advice from others.

He went to a Washington Capitals hockey game at Verizon Center as part of the MindShare program, which has been a local forum for established technology entrepreneurs to help start-ups. Before the game, he listened to AOL vice chairman emeritus Ted Leonsis give a talk on entrepreneurship.

Hassan sat a few rows up, one of 40 people all hoping to be in charge of the next great technology company. Most of them were 10 or more years his senior.