Mick Hagen - Zinch.com
Zinch.com is designed to help high school students showcase themselves for college admissions officers. In only a year of being live, Zinch has gained significant traction having signed on over 500 colleges to its growing online community of over 400,000 students. President and Cofounder Mick Hagen recently took a moment to talk about the story behind Zinch, its growth and his experience raising capital.
Silicon Slopes: Can you give those who aren’t familiar with Zinch a brief overview of how you are connecting students and colleges?
Mick Hagen: Colleges come to Zinch to discover. Students come to Zinch to be discovered. A Zinch profile is similar to a myspace or facebook profile except it's much more academic and professional. Students can highlight their leadership, volunteer work, academic distinctions, extra-curricular accomplishments, preferences they have in a school, family background, and much more. It's a comprehensive profile that really highlights what the student is all about. Colleges and universities come to Zinch to search, recruit, interact and reach out to students. It's a community where both sides (students and colleges) make information more transparent and visible. Conversations have become more meaningful, communication has become more personalized and recruitment has become more effective. We are kind of like an eHarmony for students and colleges. Results have been astounding. We have more than 430k students (after just over a year of being live) and more than 500 colleges currently using Zinch.
Silicon Slopes:Where did the idea or inspiration for your company come from?
Mick Hagen: My own college admissions experience. Growing up I always wanted to attend an Ivy League school. However, I was never on their radar. The way it works is colleges will buy lists of names from College Board (PSAT, AP, SAT tests) or ACT and start marketing to students who scored above an x on the test score. Well, I didn't score super well on my tests. So for years, I went undiscovered. My senior year I put together a portfolio that really showcased who I was and what I was all about. It highlighted everything. It was basically a Zinch profile on steroids. Long story short, I got into Princeton and attended there. During my first year there, I really started to piece together some of the inefficiencies and injustices with the admissions and recruitment process. The rest is history. I dropped out after my first year at Princeton, moved out to Utah, and started Zinch with Brad Hagen and Sid Krommenhoek.
Silicon Slopes: What’s the story behind the name Zinch?
Mick Hagen: Ever heard the phrase "it's a cinch" meaning it's easy? Well, we really wanted to simplify the entire college admissions process. We wanted to make it easy. So we took the word "cinch," took off the "c" and added the "z." We wanted to make it a little funky like a lot of Web 2.0 names. We got a great deal on buying the domain name and it all worked out.
Silicon Slopes: How is the company funded?
Mick Hagen: It was self-funded at first through cofounders, early employees and family. When it came time to raise additional capital there was a lot of excitement around our company. We had won the BYU E-Business Competition and Utah Entrepreneurs Challenge, had early traction with student growth and a public company had already made an offer to acquire us. As one investor put it, we were the “pretty girl at the dance." The fundraising process was smooth and we were able to raise capital from some local angel investors. Recently we closed another round with a different group of angels. We still haven't had to go the VC route. Not yet anyway.
Silicon Slopes: How many times did you have to pitch your idea? What kind of advice would you give other entrepreneurs to better prepare for raising capital?
Mick Hagen: When it came time to raise more capital after the first angel round early Fall of last year, we decided to play a little Sandhill Roulette. We went down to Silicon Valley and made the rounds on Sandhill Road meeting with some of the top VC firms in the world. We met with partners at Sequoia (funded Google, Yahoo), Greylock (funded Facebook), Sutter Hill (funded ShutterFly), Hummer Winblad (funded Omniture), Bessemer (funded Skype), DFJ (funded 4Info), Mohr Davidow (funded hi5) and others. It was crazy how fortunate we were in actually getting an ear with so many top tier firms (the Princeton connection does amazing things). Most of them were very intrigued with what we were up to and thought there was a lot of potential in Zinch. After months of meetings, due-diligence, discussions and phone calls, we were ultimately denied by all of them. They thought that the business model was a bit unproven (it was a brand new concept and we were still pre-revenue at the time), the market size was a little unknown, and we were all young dudes with little experience in Internet and education.
All those rejections made us that much more motivated and hungry. It really got us jacked up...big time. We decided to hold off on funding until we could prove some of the unknowns. We had to really go lean and mean for many months. No salaries. We all felt the pressure. We put our heads down and went to work. The next six months were absolutely fantastic in terms of student growth and revenue. The revenue was a huge step for us.
After months of proving the unproven, our company was in a great position to raise capital. We recently closed on a funding deal with some angels which included former VCs, successful entrepreneurs and other business leaders from Utah and the Bay Area. We are extremely happy with our current investors.
My advice to entrepreneurs seeking funding would be this: Figure out what it takes to become "fundable" and just do it. Learn from the rejections and get better. Be careful who you take money from. Make sure your investors share the same vision or there will be problems. We learned the hard way early on. Bootstrap the heck out of your company. That's it. Someday, I can't wait to send an email to all those VCs who rejected us with just a link to the TechCrunch article that shows how much Zinch was acquired for. Every day we prove the naysayers wrong. It's the life of an entrepreneur. And I love it.
Silicon Slopes: You’re 24, was age an issue as you tried to raise capital?
Mick Hagen: Yes. As I mentioned above, a lot of people said we were inexperienced (especially me). VCs were turned off and a little nervous to invest in us. Fortunately, many well respected business leaders and other successful entrepreneurs were willing to take the gamble on us. We certainly won't let them down.
Silicon Slopes: Can you explain your revenue model?
Mick Hagen: It's a free service for students. Colleges and Universities pay annual subscription fees to gain access. Annual fees range from $5k to $25k depending on the school, services and needs.
Silicon Slopes: How are colleges adapting to this new style of recruiting. Are they appropriately re-distributing budgeting dollars to Web recruiting from traditional recruiting channels?
Mick Hagen: Colleges are adapting quickly. We already have over 500 American universities using Zinch (including more than 50 of the top 100). They understand that today's generation of high school students are online. Colleges see the importance of engaging with students on a platform they embrace, the Web. At first it was a little difficult to get into Colleges' recruitment/marketing budgets because the Zinch method was so novel. As time has gone on, more and more schools are starting to redistribute their dollars from traditional marketing channels (direct mail and buying student names) to Zinch. Schools are recognizing that Zinch is much more cost-efficient than old methods and that it yields far greater results. We have a handful of case studies that prove it.
Silicon Slopes: Obviously you have general competitors such as Facebook and Myspace, but are their emerging companies focused on your specific niche? How does Zinch stack up?
Mick Hagen: We don't consider Myspace and Facebook to be competitors at all. Kids get on Facebook to be social. Kids get on Zinch to communicate and interact with colleges. On Facebook, kids can upload party photos and share what their favorite pizza is. On Zinch, kids can upload one of their musical performances and share what leadership experience he/she has. Though we have social elements, everything is academic and professional. On Zinch, it's about putting your best foot forward to attract colleges and universities. That stuff doesn't matter on Facebook. There is a clear distinction between Zinch and the regular Social Network. In terms of competitors, there are a few smaller sites. None with the same college and student traction. We are the clear pioneer and leader in this niche.
Silicon Slopes: Can you tell us about your overall opinion of starting a company in Utah?
Mick Hagen: It's been great. There's a lot of excitement in the area about entrepreneurship and technology and it's been a great place for our growing business. There are plenty of experienced entrepreneurs, mentors and investors, great networking events and conferences. Great deal flow including a handful of Bay Area VC firms funding Utah deals. Great technologists and sales talent. It's a lot less expensive to live here than on a coast. Overall we are very happy to have been based here in Utah. The Utah area has all the ingredients to become one of the prominent up-and-comer breeding grounds for promising start-ups and entrepreneurs. There's absolutely no shame in saying we came out of Utah—only pride.
