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Issue: September/October 2010

Entrepreneur's Toolkit: Quick Study

By John Hitch

Mike Matousek arrived at the idea for his startup while still attending college. Now, two years later, FlashNotes is making test prep just a little easier at a campus near you.

In his junior year at Kent State University, Mike Matousek looked at all the empty seats in his statistics class and had an epiphany.

The former tutor and perpetually ambitious entrepreneur realized that when all those no-shows needed to study for the test, his meticulously inscribed study guide could become a marketable commodity. Instead of just selling it once, he decided to create a virtual marketplace for college students across America to buy and sell notes.
 What to Ask
Do I have an ugly baby? Arrange a focus group session, or what Cossler calls an ugly baby session, and find out if your idea looks good or bad. “As an entrepreneur, you want people to tell you that because you don’t want to waste your time,” Cossler says. He recalls when the founders of BizVeo, which develops private digital networking solutions, pitched their idea to a neighbor at the incubator. “They came in with all the bravado in the world,” Cossler says, “and left emotionally beaten.” Cossler told them to take what they learned and reshape the company. They did. Cossler now says BizVeo could be YBI’s most successful company.

Matousek, who graduated this spring, has wisely partnered himself with the right people — former University of Michigan football player Dave Petruziello and the Youngstown Business Incubator. Their combined efforts transformed the idea into FlashNotes, a website where students can sell their truth table theorems and cellular reproduction outlines to absent or inattentive classmates.

At the beginning, Matousek grinningly admits, “I didn’t know a dang thing.”

His business strategy was “fake it ’til you make it,” so he slightly (or greatly) exaggerated his business’s progress to local advertisers to receive $1,400, which he used to hire personnel to build the website prototype. 

“I kind of took some chances,” the wiry and charismatic 22-year-old says. “That’s how I learned.”

What the business and finance major lacked in experience, he more than made up for in “motivation and determination,” according to partner Petruziello, a one-time offensive lineman on the Cleveland Browns practice squad who was selling medical products a year ago.

“If he wasn’t the one to present the idea to me, I wouldn’t be doing this,” Petruziello says. By adding an experienced, older salesman preaching a patient, scaled-back approach, FlashNotes has found a winning combination.
“Dave’s more rounded,” YBI CEO Jim Cossler says. “He tries to keep Mike from chasing the next shiny object.”

Cossler knew FlashNotes, the technology incubator’s 10th portfolio company and first business-to-consumer marketer, had great potential. “There’s no cost of content,” he says.

The site isn’t unique, but FlashNotes does claim to be “the most profitable website of its kind for students.” Students provide all the content and set the prices, generally $2 to $5 per download. One seller charged $36 for a semester’s worth of U.S. Formative History notes at Kent State. Another charged $35 for a study guide, netting more than $500.

The sellers can even personalize their profile by posting their GPA and accomplishments and e-mail their classmates to notify that their notes are online. Buyers can rate the sellers like they would an eBay peddler or YouTube video.

The company processed 746 transactions through PayPal in its first month of beta-testing at select Northeast Ohio campuses last winter. The company gets a 20 percent cut.

“We’re not worried about making a bunch of money off the notes,” Petruziello says. “We want to brand FlashNotes.”

That’s what most interested Cossler. His research shows the 18- to 22-year-old college demographic is the most coveted by advertisers. “Once you capture this demographic, you can be the Amazon or eBay for this age group,” Cossler says.
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