Although he is still in the process of earning his business degree, Phil McDonnell Tu '12 has already founded two start up companies. His most recent venture, an online business called CoupFlip, emerged from collaboration with two of his peers, as well as various undergraduates and faculty at Tuck School of Business.
CoupFlip developed in conjunction with Fred Schwarz Tu '12 and Mike Cwalinski Tu '12 provides the ability to resell coupons acquired on "daily-deal" websites, such as Groupon and LivingSocial, where buyers can buy vouchers at discount prices, McDonnell, CoupFlip's CEO, said. The site caters to individuals no longer able to make use of the vouchers or experiencing "buyer's remorse."
Currently, 20 to 40 percent of all Groupon coupons go unused, while a third of the individuals who do use the coupons they buy would rather sell them, according to McDonnell.
"People buy them with all the best intentions and then they realize, Oh, I don't actually want to go sky diving, but I already bought it,'" he said.
CoupFlip differentiates itself from other, already existing businesses by buying the coupons directly from people who no longer want them. This strategy eliminates the risk to the seller that the coupon might not be sold, he said.
The service also benefits buyers of coupons by providing them with deals they might have missed, McDonnell said.
In order to determine how much money the business will offer for each deal, the site employs an algorithm that calculates how likely the coupon will be to sell, he said.
CoupFlip launched in Boston during the first week of January, enabling McDonnell and his team to focus on polishing the site and receiving customer feedback, according to McDonnell. The team plans to eventually "roll out nationally," he said.
McDonnell said Tuck's wealth of resources for students helped the business get off the ground.
"CoupFlip is in the incubator at Tuck, so we have our own office space here at Tuck, and we have a bunch of resources like alumni mentors," he said. "It gives us an opportunity to get going and accelerates us quite a bit."
The "incubator" referenced by McDonnell is Tuck's Barris Incubator Program, which gives selected entrepreneurial teams guidance as well as office space and equipment.
CoupFlip will develop in the incubator until the spring, when McDonnell plans to move to a bigger city, such as San Francisco or Boston.
McDonnell said the alumni and experts who visit Tuck have also been useful for support and advice.
"When I was in San Francisco starting a company before Tuck, you try to network to find them, but at Tuck they come to you and they want to help," he said.
Starting the business at Tuck has provided a "no-risk environment" and has enabled the team to work closely with professors, according to Cwalinski.
McDonnell said he formed the team during their Introduction to Entrepreneurship class last winter. They developed CoupFlip as a class project for the course and continued to work on the service as part of Tuck's First-Year Project in the spring.
Gregg Fairbrothers, who taught the CoupFlip team's entrepreneurship class, said the "strong team" and "scalability" of the project have contributed to its successful launch. However, McDonnell and his colleagues may face a challenge in finding a market for coupons.
"They need to find the right people and get them to part with their money," Fairbothers said.
Fairbrothers said that McDonnell's project is not an isolated success story and should be seen by other students as an inspiration to pursue entrepreneurial ventures.
In 2010, before coming to Tuck, McDonnell founded Giftly, an online business that enabled people to virtually send gift certificates.
Although he has since sold his share in Giftly, he said that starting the business was a valuable learning experience and played to his interests.
"I was really interested in how people use technology offline, like in their regular lives," McDonnell said, linking the premises behind his two start-ups.
After graduating from the University of Washington with a degree in computer science, McDonnell worked at Google for five years in a variety of positions, he said. He began at Google as part of a team that developed algorithms for personalized searches, tailoring search results for each user.
McDonnell said he decided to pursue a degree at Tuck because he felt the organizational and structural decisions he made at Google would have been better-informed by an MBA.
"My experience at Google was very technical at first but then it broadened to more organizational management roles which I didn't understand very well," McDonnell said. "I came first of all to have two years off to build a company but also so I could make myself more well-rounded."
McDonnell said he did not intend to become an entrepreneur when he was employed by Google. He said he began to see the allure of starting his own business after becoming frustrated with the bureaucracy of a large company.
Cwalinski decided to attend Tuck after working at Lockheed Martin, a global aerospace, defense, security and advanced technology company in Washington. Schwarz started his career at United Technologies Corporation after attending Syracuse University but decided to earn an MBA to develop a broader understanding of business.
Although the team does not know how successful CoupFlip will be, they are "very optimistic," McDonnell said.
"You just can't predict the future because you're making the future everyday," McDonnell said.
The three members of the CoupFlip team said they will remain dedicated to the business, describing it as a long-term project.
