>> we started realizing over we realized, man, we're on to something here. this is going to be big. >> the youthful group brings an energy, brings a creativity that's not necessarily absent in other age groups, but it's

definitely more present in ours. >> tom: in this program, we'll look at the how that energy and creativity are making their mark on business and a new breed of young entrepreneurs. >> this is a special edition of "nightly business report." "nightly business report" is made possible by: this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> tom: good evening and thank you for joining us. susie gharib is off tonight. a combination of determination and innovation is helping several young entrepreneurs turn

great ideas into successful businesses. they are shaping and changing the business landscape with new ideas and different was to execute them. tonight, we'll introduce you to some young business owners who followed their dreams and achieved their goals, even in challenging economic times. and we'll talk to one of the country's top experts in entrepreneurial innovation about what it takes to make it. we begin with a business that started completely by accident to fix accidents. >> i bumped into a girl. sh made drop my phone when i was walking. picked it up and it was smashed, didn't really know what to do with it. went online and found i had to go to the apple store. they wanted $199 to replace my phone that i bought for $199. >> reporter: so justin wetherill put his tech-savvy skills and curiosity to work and decided to fix it himself. at first he failed, but on his second attempt and with the help of his friend david reiff, he successfully fixed his iphone. >> at that point, i realized

there were probably a lot of people in the same situation that i was. >> reporter: with that, you break, i fix was born. the first office was justin's living room in this house. the 21-year-olds started taking repair orders on ebay and craigslist. justin and david made $80 for each phone repair and they were fixing up to eight phones a day. that's when they knew they'd found their niche. >> we started realizing over time that we were on to something here. this is going to be big. here we had an idea with healthy margins. it was scalable. everything was working in our favor. >> reporter: the pair took that momentum and opened their first brick and mortar store in orlando in august, 2009. unlike their online venture, customers could have their phones repaired in just a matter of minutes. still, some were surprised by what they saw. >> there was a gentleman that actually came in with his wife and said i didn't expect to see a bunch of kids working here and she said, who did you expect to see fixing your phone? >> reporter: most of the

employees are young and the atmosphere is casual. that's part of the u-break-i-fix strategy. >> we're not driven as much by profits as we are by the people. both the customers that we serve and the employees that are under us. we try to keep that the focus of the business which really makes it a comfortable environment for people to be in. >> reporter: still, the young company is making money, good money. you-break i-fix made $6 million last year, up from about half a million dollars in 2009. the company now has 18 stores, from florida to california, and there are plans for expansion. >> we're looking to grow exponentially over the next few years. i see a u-break i fix store or multiple u break i fix stores in every major city in the u.s. hopefully in the next two or three years. >> tom: as we just saw, persistence, creativity and ingenuity are some of the

essential traits that entrepreneurs need. i recently sat down with doctor carl schramm. he's president and c.e.o. of the kauffman foundation-- a private non-profit foundation dedicated to promoting entrepreneurship and improving education. i began by asking him what young entrepreneurs need to succeed. >> the idea has to be good. that's the real trick. would you bank your life, first, and then some savings and other people's money on it? that's the first thing. the second thing is we don't know the answer to the question of are entrepreneurs born or are entrepreneurs trained? the 500 fastest growing firms in the united states are started by people when they're 40 years old. very important. the question is, those people were clearly not born to the job. they grow into it. at some point they say i could do it better, faster, cheaper. can they get good counsel, good advice, a good road map that's practical when they need it?

the third thing is they have to have money. but the good news is that's not quite so important as it used to be. many companies can be started cheaper than they used to be. >> many entrepreneurs started with the third item. is that a mistake? >> that's a terrible mistake, the third point being money. to focus your business around money first is a terrible mistake. i think it's a mistake that happens in many business school competitions because essentially the writing of a business plan takes as its target a conversation with a venture capitalist so you either have a successful idea or don't whether or not a venture capitalist or an imaginary venture capitalist would put money behind the company. money is in many ways the least important of the three ingredients. the three ingredients are a great idea, a driven entrepreneur who has skills enough to pull the idea into production, and into scale. that's the critical question. the money is fungible. money will chase a good idea and

money will chase an entrepreneur who has a convincing story that he or she can make this happen. to start with money is the wrong place. >> tom: in some instances it may end with money. what are the characteristics of success? >> i think the characteristics are growth, and i would invite people to think about even the concept of what starting a new business is quite differently. >> tom: if many of the fastest growing start-ups are begun by entrepreneurs who are in their 40's, what role does failure have with young entrepreneurs? >> you don't learn anything from failure. you don't learn anything from success. if we look at people who start businesses when they're 40, we see people who worked in multiple companies -- think about this. when i left college, it was typical that a person would work in five occupations -- five jobs. they would have five employers

before they retired. now, a kid who leaves college will probably have eight employers before he or she is 30 years old. what's happening in there? these youngsters have different jobs in different industries. in different size firms, albeit established firms, some start-ups, they're much smarter people, they've learned a great deal. by the time they're 40, they will probably have -- if we look at those 40-year-old starters, the successful starters, it's very common to see three failures before the fourth one hits. so entrepreneurship is in a sense its own school and it's one of the great attributes in the united states. we don't hold it against somebody if they start a business and it fails. they start another business and it fails. i've heard venture capitalists say "i really don't back people if they haven't had a couple of failures under their belt because they don't learn

anything" and we watch that again and again. some people have a very successful start on their first business. i could name names. their second business, third business, maybe lackluster. some of them have crashed and burned. what they did the first time, it's almost like it was an accident, you what i think it says is they didn't learn anything from it. >> tom: dr. carl schramm with the kaufmann foundation, thanks very much. >> it's all about the money. >> tom: still ahead, advice on ways for entrepreneurs to get funding from someone who's been on both sides of the purse strings. our next young entrepreneur went >> tom: it's been said that america is the land of opportunity, one where dreams are made. it seems these days, many immigrants are making their business dreams come true in the u.s. a recent report from the partnership for a new american economy, found that more than 40% of fortune 500 companies were founded by immigrants or their children. many of the biggest u.s. brands apple, google, a.t.&t. , ebay, general electric, i.b.m. and mcdonald's owe their origin to a founder who was an immigrant or

the child of an immigrant. one businessman in chicago is trying to make his way to that list. diane eastabrook has his story. >> this is what i imagine... >> reporter: inside this fourth floor condominium, a fledgling business empire is blossoming. >> ...the idea is we're going to have a feature that sells other products. >> reporter: 27-year-old indian immigrant aksh gupta and his business partners are tweaking their year-and-a-half old internet company timetoplaytennis.com. the site sells unused court time at local tennis clubs and lessons to consumers. gupta wants to expand into tennis equipment sales and other services. >> for consumers it's a great way to buy, compare, and shop. >> reporter: gupta echos the sentiment of many immigrants when he says he is living the american dream. >> i vividly remember my auntie telling me the night we came. the first thing she said was this is your chance to start your life new. this is the land of opportunity. ♪ >> reporter: gupta grew up in

india where his father owned an electronics company. in 2003, at the age of 19 he came to america with his parents and younger brother. the family settled in st. louis where gupta's uncle owns a medical supply company. after graduating from college in chicago, gupta began working for his uncle. but, he knew he wanted to be his own boss. >> i knew during college i would never be working for somebody for the rest of my life. i would be working for myself. i just never knew it would come so soon. >> reporter: american business was built on the dreams of immigrants. and today, large cities still pulse with their entrepreneurial spirit. in chicago, you'll find vietnamese noodle shops and bakeries, mexican tamale stands and east asian bazaars. >> in the past, immigrants often opened businesses because they didn't have the education or skills to get jobs somewhere else. in a sense, they became entrepreneurs out of necessity. >> reporter: but, today's young immigrants are often better

educated. so, they see entrepreneurship as an opportunity says raman chadha of depaul university's coleman entrepreneurship program. >> they have the ability now to take a little bit more of a risk, than their parents could have. and, so therefore they tend to be a little bit more strategic and thoughtful as they pursue a business, as opposed to necessity for an income. >> reporter: gupta thinks being relatively new to this country helps him be bolder and less fearful of failure. >> you don't know many people who are going to say "oh, you failed." you have new friends. they want to support you. you can be a little more daring i think that's what it is. i'm never thinking about failure. >> reporter: that attitude has helped gupta take on many challenges. while expanding time to play tennis, he's also launching a companion site for other activities called play occasion.com. and he's attending graduate school. gupta says in many ways being an immigrant has helped him juggle so much at once.

>> it makes you drive harder. it makes you work harder because you want to get your life in order again. >> reporter: diane eastabrook, "nightly business report," chicago. >> tom: our next young entrepreneur went about growing his business in an unusual way. he purposely lost money. that's right, he lost it. here to explain why he did it and where his business stands today is ben federman, c.e.o. of onesaleaday.com. >> onesaleaday.com, we off one item for a 24-hour time period, e have multiple categories, family, jewelry, a watch deal, a main section which really could be anything and everything and a wireless deal. one thing they all have in common is everything is generated 90% off retail price. once i launched the company i realized it's not just about having a great idea, i didn't always believe in -- i did always believe in what we were

doing and i knew it would succeed but it took time. it's not easy to bring traffic to the site and have customers so after about six months to a year we decided one day i kind of hit me, it lit up like a light bulb and i said tomorrow we're going to lose money intentionally. nobody is going to compete with you if you are willing to lose money. sure enough, people started talking about it. the word spread. everybody started realizing these guys really have competitive pricing. the way i figured as well was instead of paying money for the conventional advertising method with google or yahoo, i will invest in my customers and in return they'll spread the word for me. they're the folks we marketed to and with and sure enough it worked and we ended up happy, we ended up with a huge clientele and customer base and they ended up with great deals. in the last two years we have been turning a profit and with that it wasn't because we raised our prices, it was simply because we've grown to a certain point where we're able to buy

instead of 200-300 units, we can now buy 10,000 or 20,000 units and with that you get a much better deal. i stay simple and focus on what i have been focusing on the last four or five years which is continuously building the company, offering great deals to the customers, not getting caught up in myself and most importantly for myself, personally, i have committed to contribute 50% of my earnings to charity, and i have done so, thank god, until now and i will continue to do so. that's personally something that i feel is extremely important to give back to the community and it's also a social responsibility. as a young person, i'm 28 years old, i just turned 28, one of the bigger challenges as a young c.e.o. is maintaining rapid growth. before you know it you're going from a company that had one or two employees to 95 employees. so you really have to set things up properly and you have to have some sort of chain of command, i

would call it. it's important to have a good structure, and for everybody to know exactly what their job is. when you have one or two people running companies especially when one of them is the c.e.o. you multitask. you do everything yourself. but once you get to a certain point you need to start explaining to your employees what their job is specifically and what you expect from them as opposed to saying, "come on board and we'll do everything together." >> tom: ben was recently highlighted as one of entrepreneur magazine's young entrepreneurs of 2011. >> tom: once you have established your product or business, you'll need to get the word out. this can be done in a multitude of ways. as anna olson shows us, some young business people in our nation's capitol came up with an unusual way to expand their reach. >> reporter: what do this butcher shop, gourmet ketchup line and woven belt company have in common? they're all run by people under age 30 and they're all part of a new movement aimed at getting

customers to buy products from young entrepreneurs. matthew segal, who runs a nonprofit called our time, started buy young earlier this summer. >> this is about getting young americans to support young businesses, the underdog, to help them grow, and to continue to create jobs. it's truly our response to the economic crisis facing young americans. >> reporter: so far, about 50 businesses are taking part in the effort. once they sign up, companies are featured on the our time website, which offers 30% to 60% discounts on merchandise. one of the buy young businesses is smathers & branson, which makes these needlepoint belts. >> there's a lot of time and thought that goes into the quality, to the actual stitching, to the design. >> reporter: peter smathers carter cofounded the company with his college roommate, after both of them received needlepoint belts from their girlfriends. now, seven years later, their products are in 700 high-end boutiques and department stores. carter says buy young is helping spread the word to new customers. >> the sheer number of people they have on their emailing list

was incredible exposure for us, and we've had some incredible orders come in online from that. >> reporter: in fact, our time says companies are seeing as many as 200 additional sales per day, as thousands visit the buy young site. segal says people like what they're seeing and thinks the movement could result in more cause-conscious consumers. many of these products like clothing made out of recycled content or nontoxic nail polish are designed with health and social issues in mind. >> i think this will be a values-based buying movement, and i think it will be true forum and platform for economic empowerment for this generation. >> reporter: and customers can expect to see many more young entrepreneurs on the site soon. our time says it plans to add hundreds of new companies to its roster in the coming months. anna olson, "nightly business report," washington >> tom: all entrepreneurs young, old and in between need money to transform a great idea into a successful business. but how do you get it? i recently spoke with alicia morga, the founder and c.e.o. of refleta.com. she's also a former venture

capitalist turned entrepreneur. so i asked her the best way for young business people to meet venture capitalists. >> i think one of the best ways is to begin networking, and the way you do that is you go to conferences that are about entrepreneurship, or conferences in your industry, and start talking to people, and another good way is actually through your school or university. a lot of universities have entrepreneurship programs, and they invite u.c.'s to come in and participate and that's a great way to get to know them. >> what does a venture capitalist expect to hear from a young entrepreneur that has a kernel of an idea or maybe a little more? >> i think they expect to hear more than just a kernel of an idea. v.c.'s will constantly put out lots of steps that they want to see -- obstacles they want to see people overcome before they're interested in investing. you can't just have an idea. you have to have done something to execute on it and that's what

v.c.'s are looking for. >> tom: do you want a business plan ready to go and ready to put in front of a venture capitalist? >> there are different schools of thought about that. some people say they want a business plan, because that means the entrepreneur has thought through the issues but a lot of businesses in silicon valley get started on a pitch, a powerpoint that lays out the problem and how you're going to solve it. >> tom: now that you are an entrepreneur, is it appropriate to come out and ask for the funding? >> i wouldn't do that. because i don't think that's actually just, a, a good negotiating tactic. >> tom: you sat across from a number of entrepreneurs when you were a associate with a venture capital firm. now that you are on the other side of the table, what do you wish you would have done differently? >> i really wish i had been more empathetic toward entrepreneurs and at least gone out of my way to acknowledge the effort that's

required to even just get there and be in front of the v.c. and have a meeting. it's a tough thing to do even just to get there, then once you're in the meeting and you are in an entrepreneur, it's like holding a baby up in the middle of the store and have everybody yell insults at it, it's not easy so i wish i had been more empathetic towards entrepreneurs. >> tom: for an entrepreneur, what kind of steps should they go through in terms of judging a venture capitalist, whether or not they're appropriate for the view of a company? >> you have to spend time with them, build a relationship, spend time working on that relationship before you accept investment which can be hard. when entrepreneurs need money, they need it right away. but if you take a little time to go do something together, to figure out how this person operates outside of that v.c. firm or that conference room or even pitching, you will have a better sense of the individual and whether or not that's going to work for you. >> tom: you spent a few years on the venture capital side as an associate listening to pitches.

poking holes in some business plans and perhaps growing more empathetic than when you began that career. how has that changed the way you have approached investors now as an entrepreneur? >> one of the things that i'm very careful to do when i'm meeting with v.c.'s is to get to the point quickly. they're busy people and they're seeing a lot of people in a short amount of time and they want you to get to the point. >> tom: is this essentially the elevator pitch? >> probably a little bit more than the elevator pitch because you have -- usually when you go to meet with a v.c. you get about 45 minutes, but you really want your presentation to be done in 15 minutes and have the rest of the time to talk and for them to ask any questions that might occur to them. >> tom: as you sat as a source for funding for entrepreneurs, what common mistakes did you encounter from entrepreneurs as a venture capitalist? >> i think the number one mistake was my previous point about getting to the point. they would come in and they would spend forever talking

about the market and how they were going to dominate the market, and never even talk about what portion of the market was theirs. they would pick the biggest market and then they would spend a long time before they actually said, "ok, this is what we're building and this is the problem we're solving and this is how we're going to make you money." failing to get to how you're going to get a return for the v.c., i think, is a problem as well. >> tom: alicia morgan, cofounder and c.e.o. of refully ta.com and a former venture capitalist. >> tom: good idea, check. funding, check. the next part is actually building your business. here with some advice for young entrepreneurs is journalist jane porter. >> reporter: starting your own business is tough enough, but when you're young, you've got lack of experience working against you. focus on building your credibility, and your age won't matter. first off, make sure your business has a laser focus. you might be tempted to offer a handful of products or services,

but finding a niche in the market will set your business apart. you want to be the best in the industry at what you do rather than good at a range of things. once you're specialized, build your credibility online. it's cheap, easy and very effective. make sure your website is professional-looking, start a blog, and use social media sites like facebook to generate interest. but don't underestimate how relevant it is to meet people in person. reach out to industry leaders, meet them for coffee or network with them at events. that face-time is extremely important. after securing your first clients, remember: these people will be recommending your business, so treat them like gold. tempting as it may be to make lofty promises to your clients, you always want to under-promise and over-deliver. forget about your age, just focus on what you do best. i'm jane porter.

>> tom: to learn more about young entrepreneurs, go to our website at nbr on pbs.org. you can get to know some innovative young business people on their way to financial success. we're also on twitter. follow us @bizrpt, or my personal feed, @hudsonnbr. to comment on our young entrepreneurs programs or take part in our online conversation. friend us on facebook at bizrpt. >> tom: that's "nightly business report" for monday, september 5. i'm tom hudson. thank you so much for joining us. we hope to see all of you again tomorrow night. that wraps up this special edition of "nightly business report." i'm tom hudson. good night, good luck and thanks for watching! this program is made possible by contributions to your pbs station from viewers like you. thank you.

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