The New York Times
By Lisa Guernsey
January 4, 2009
Friday, July 11, loomed as a big day this year for Jeff Grossman, a sophomore at Carnegie Mellon. He had created a digital application for local movie listings for the iPhone. The application had been accepted for the new App Store, the online marketplace for iPhone extras like games and mapping services. Now it was the store’s opening day. He was offering his service free as a promotion, but still he wondered: Would anyone want it?
Yes, and then some. By noon, the application had been downloaded thousands of times. Positive feedback streamed in. Mr. Grossman was 18. “To go from no one using it to thousands in the first day is great,” he says. Before long, the application was popping up in the App Store’s top-50 list of downloads.
Two days later, Mr. Grossman received an e-mail message from a start-up company in California called Flixster, which has a Web site for movie buffs. They wanted to add a phone-based service. Other companies contacted him, too.
The summer turned into a head-spinning journey for Mr. Grossman, who is from Armonk, N.Y., and who started programming software in middle school. Flixster was most attentive. “They flew me out to San Francisco to meet everybody,” says Mr. Grossman. “That was pretty cool.” Negotiations took several weeks.
His big question was what his software was actually worth. He talked to his parents. He asked his friends and high school teachers. And he e-mailed his professors. Among them was Luis Von Ahn, a computer science professor, who has a start-up of his own that provides character-recognition services for companies that digitize books. Mr. Von Ahn says, “My reply was: Pricing is very hard and there is no real good way to figure it out. Here are some useful figures.” Mr. Grossman signed a contract with Flixster on Aug. 5; his app now also offers movie reviews, trailers and maps to local theaters.
Mr. Von Ahn says there is no shortage of entrepreneurial students at Carnegie Mellon, which two years ago started a program called Project Olympus to help campus-based companies. Students come to Mr. Von Ahn during his office hours to talk about business models. “One thing I recommend to them,” he says, is that if they are going to apply for a job or grad school, “it looks so much better that you started a company versus a 4.0 G.P.A.”
But starting a company requires more than a good idea and programming skills, Mr. Grossman says. “Something I didn’t expect was that a lot of it is the hassles of dealing with legal stuff and business stuff you don’t think of when you get started.”
Evidently, he is catching on.
Asked how much money he made from the sale, he said: “Both sides were happy with the deal. I don’t want to say much more than that.”