Lessons Learned From a Failed Ivy League Entrepreneur

A "Case Story" By Chris Cononico
 

Chapter Thirteen

“If only we’d stop trying to be happy, we’d have a pretty good time.” – Edith Wharton

Even after the QuakerCard was up and running, I remained frustrated by our progress. Somehow, it continued to feel like a class project, rather than a “real” business. I think we believed that unless we managed a bigger company with a presence on multiple campuses, we were “pizza shop owners” and not entrepreneurs. Operating a small business on Penn’s campus didn’t seem substantial enough to qualify us as “real entrepreneurs.” In my mind, QuakerCard had to be a stepping-stone to something bigger. Unfortunately, I didn’t exactly know what that “something” would be.

As full-time students, we had to juggle our course loads with our new responsibilities managing our business. For example, we had to arrange our class schedules, so one of us would always be available to sit in the office in case customers came by. Mark, who was probably the most responsible among us, also did a lot of the operational chores like paying bills and depositing checks. I continued to recruit new merchants who didn’t yet accept the card.

George and I also spent a lot of time coming up with new marketing strategies. We learned how to use graphic design programs like Quark and PhotoShop, so we could design our own advertising campaigns. Mark, who had taken a photography class, began orchestrating photo shoots for our marketing materials. Suddenly, we began to view ourselves not just as an alternative meal plan, but also as a college marketing company.

Our marketing approach was aggressive, and freshmen were easy targets for our ad campaigns. To coincide with the brief window provided by Penn Dining for students to switch their cafeteria meal plans, we ran full-page ads in the Daily Pennsylvanian with the slogan, “The Cafeteria Wasn’t Even Cool in High School.” Underneath the title was a picture of me eating alone in the main freshmen cafeteria surrounded by empty tables and chairs. Underneath the picture, it read, “Don’t eat alone. Get the QuakerCard.”

Our marketing seemed to work. There was even an article in the Daily Pennsylvanian that directly attributed lost business at the cafeteria to the QuakerCard program. No wonder Business Services grew to dislike us so much. We were terrorizing their cafeteria business.

It was reported in the Daily Pennsylvanian on October 24, 1997 that “(Penn’s) dining services took a blow” as “students altered or cancelled their extended contracts as soon as they could.” The article went on to comment: “But some students have apparently been asking if Dining could automatically transfer the refund to a QuakerCard account – a logistical impossibility that would also mean Dining was literally giving money to a competitor.”

Our business was also impacting the University’s plans for its new PennCard program. Another article reported in the Daily Pennsylvanian on September 18, 1997, entitled “Will PennCard battle QuakerCard?” discussed the results of an informal survey done by the reporter with local QuakerCard merchants. The report follows:

“An informal Daily Pennsylvanian survey revealed that out of 12 businesses (that were surveyed) already accepting the QuakerCard, only three said that they would like to take the PennCard, while four said they wouldn’t and five said they weren’t sure.”

The article then went on to quote Ken Lee, manager of the 39th Street Hong Kong Café who said he “would consider” buying the PennCard equipment, but stressed that he won’t drop the QuakerCard because it has “increased business and already attracted some steady customers.”

We were on our way to becoming a Penn institution among students and merchants, and with our success came more sophisticated promotions. For the school’s homecoming football game, we bought promotional insurance for a new BMW convertible, which we offered to give away if randomly selected students could kick field goals at half time. Of course, the stipulation was that the students had to be QuakerCard holders.

With every new promotion, more restaurants began joining QuakerCard. Not doing so was starting to negatively impact their businesses. Restaurant owners hated it when customers placed an order and then said, “Oh, you don’t take QuakerCard?” and then walked away. Before long, merchants, who had been smug with us, began pleading with us to join the program. The power had shifted. “You want to start a restaurant in Philadelphia, first you got to stop by our offices at 3601 Locust Walk and sign up here first!” George would proclaim around the office.

George and I were constantly brainstorming ways to help the vendors. One of our best ideas was to print 10,000 full-color booklets that contained the menus of each of our merchants. We planned to call the product QuakerCard Magazine and distribute it throughout Philadelphia. The trick was to sell enough advertising space in the magazine to pay for the printing costs without charging QuakerCard merchants any fees.

I approached an array of Philadelphia merchants that were not affiliated with our program, and made them a promise – students will not only see their advertisements, but they’ll stare at them. Basically, my idea was to hide our logo throughout the magazine, and in all of the vendor advertisements. It was sort of like a grown-up “Where’s Waldo?” except whoever found all the QuakerCard logos first, won a free Spring Break trip for two people. The idea sold like hot cakes and we were flush with advertising dollars.

We were constantly coming up with new promotions, circulating flyers, and announcing new stores that accepted QuakerCard. We even expanded our services, so the QuakerCard could be used to pay for taxis with Yellow Cab Taxi Company. We reasoned that parents wouldn’t mind the small deviation from the meal plan in the name of student safety.

Wherever you walked around Penn’s campus in 1996 and 1997, you saw the QuakerCard. Virtually all of the expansion ideas for the program came from George and me. It was a way for us to justify not having to be involved in the humdrum daily operations of the card system, which we left to Mark.

Throughout this period, we lived parallel lives as full-time students and each of us remained active in our hunt for full-time jobs. We weren’t sure whether or not University Student Services could ever grow into something more substantial. Although we were excited by the prospects of self-employment, we were hesitant to dismiss other job offers. I knew that my parents had invested a lot of money in my education, and I felt guilty about turning away terrific career opportunities.

During that first year of QuakerCard, approximately 40% of the freshmen class was a cardholder. Before long, we had 80% of the restaurants in the area on the program. We had over $200,000 in sales and over $2 million in deposits from cardholders. Things were going pretty well – not to mention the residual benefits. I was beginning to feel like a local celebrity.

All the restaurant owners knew me by name. When I would try to buy a snack or lunch, they would insist that it be “on the house.” I would always refuse, but they would make a big show of it. My friends who were not involved with the company were somewhat astonished by it all. It must have looked funny to them. Every time we sat down to eat somewhere, the owner of the restaurant or the manager would stop by to say hello. In a way, it felt pretty good.
 

Copyright  2005 by Chris Cononico
All rights reserved. No part of this manuscript may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without permission in writing from the author, except by a reviewer who may quote brief passages in a review.