May 6th, 2009
How Two Fraternity Brothers Are Defying the Recession by Starting, Growing, and Selling Their Own Business
Today’s headlines are ridden with warnings of the impending doom of the American economy. Layoffs, dividend cuts, and even bankruptcy have become the norm for businesses around the country. Despite this difficult climate, a handful of college students ignored the crumbling markets and engaged in an activity that is at the heart of economic growth: they started their own business.
It is not uncommon to hear of an enterprising college student starting a simple business such as babysitting, a laundry service, or tutoring. But the project started by Jake Klinvex and Dan Kervick is not your typical Sunday afternoon carwash. No, these Villanova University students thought outside the box and created a web-based concept that provides a much needed tool to businesses.
Their idea is called “Persontation” (www.persontation.com). It is a video communication system that brings the internet, Microsoft Office, and webcams to the same interface. With an account and unique domain name, a company can use Persontation to create custom video productions complete with accompanying graphs, charts, text, or images. Persontation works seamlessly with all Office applications as well as Adobe software.
Persontation had a classic beginning in the sophomore dorms of Klinvex and Kervick. In less than two years their staff has grown to 15 employees, including subcontracted software developers in Pakistan. The successful concept and subsequent growth of Persontation has not gone unnoticed. The founders are currently finalizing the sale of their startup to a local financial services software company, eMoney Advisor. After being acquired, Klinvex and Kervick plan to continue operations as a subsidiary of eMoney Advisor. Being a part of a larger, more established organization will give these entrepreneurs the additional resources they need to increase their sales, improve their customer service, and explore new areas of development.
Kervick describes that the most difficult hurdle to starting Persontation was securing financing for the operations of the company in the midst of a global financial crisis, tightening credit markets, and decreasing risk tolerance. The costs to create this service totaled approximately $100,000. This includes software development, travel costs, and printed materials. Despite the daunting price tag, the founders’ status as students helped to remove personal compensation from the equation and allowed them to contribute the necessary time to build their project while keeping expenses low. Startup capital was provided primarily from personal savings of the founders and a few friends.
Selling their idea was another challenge. Their concept needed to be marketed to potential investors, clients, and any firm that would have an interest in acquiring Persontation. Kervick found that the youth of Persontation’s team was an unexpected asset in the sales process. The clients perceived that younger generations are by definition technologically savvy and therefore their idea would be feasible. Kervick anticipates 2009 revenues at roughly $2.8 million. The success of Persontation in obtaining clients and being acquired by eMoney clearly demonstrates their technical skills and ability to sell their service.
Understanding that youth was not enough of an advantage to get a new online service started, Persontation’s management team approached James Danko, the Dean of Villanova’s School of Business, who was impressed with their work. Dean Danko then referred Persontation to VSB alumnus Edmond Walters, founder and CEO of eMoney Advisor. Leveraging what little capital was available and using priceless resources such as Dean Danko, Klinvex and Kervick propelled their innovative idea to new heights.
Through this unique experience, Dan Kervick has learned that “Small businesses are the lifeblood of the economy.” According to Kervick, the way to stimulate the economy is to reduce taxes on small businesses and provide incentives and safety nets to those taking appropriate risks, such as entrepreneurs. “To actually create wealth and shake a recession, the federal government should not disproportionately benefit those who work less and who are less likely to take risks and create jobs for others,” explains Kervick. As a successful entrepreneur, Kervick is thankful that this country and its economic structure are still favorable towards small businesses. However, he is worried by the potential deterrent to entrepreneurs that increased taxes would present.
Persontation and its management recognize that they are very blessed to have enjoyed their level of success. Because of this they recognize their duty to provide assistance to those who are not as fortunate. Persontation is committed to assisting philanthropic organization that it views as having a “strong purpose.” They screen potential groups, donate a Persontation account to the top organizations, and feature them in a Philanthropy section of their website. One of the supported philanthropies, Bread for Bread, collects donations from restaurant patrons when they receive complimentary bread in order to support local food banks.
Persontation also reaches out to several student groups at Villanova that are seeking to start their own businesses. Some of these groups are affiliated with the fraternity Sigma Phi Epsilon and the business ideas being worked on include a political website and a Greek community website. Kervick and Klinvex realize the contribution that others have made in their venture and in turn seek to encourage and inspire other potential entrepreneurs.
In light of current events, many Americans can take courage from the story of Kervick, Klinvex, and Persontation. Despite their environment, two college students demonstrated remarkable vision by pooling their talent and resources and bringing an idea to life. Enabling its clients to personify their projects, Persontation may be the future in presentation methods and could someday be a name as common as PowerPoint.
