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Student's brainchild might save the forest
Sep 06, 2009 (The Record - McClatchy-Tribune Information Services via COMTEX) --
You could say 19-year-old entrepreneur Bradley Ericson has a head start on starting up.
The founder of 3SecondReceipts LLC expects to soon sell his new digital receipt system that replaces paper receipts with an online version to Drexel University in Philadelphia, where Ericson is a sophomore.
The Fair Lawn resident also is a finalist in Entrepreneur magazine's Entrepreneur of 2009 contest for college students, announced in October. The winner could get $5,000 in start-up funding coupled with a feature and a follow-up in two issues.
Ericson said that although he knew he wanted to major in business after taking college-level accounting and economics classes in high school, he realized he didn't want to sit at a desk staring at profit-and-loss statements.
He switched from plans to study economics at a different university to an entrepreneurship and marketing major at Drexel after winning a business competition running a virtual company during a trip there as a high school junior.
"When you own a business, you do everything," he said.
Ericson is making as much use as possible of the resources in the university's business school to grow his company. Those resources would make most start-up owners envious -- a business incubator, database of corporate executives willing to give feedback and direction, and contests that give winners a confidence boost.
The idea to replace paper receipts with a digital list of purchases -- similar to the paperless trend of online bill paying and banking -- occurred to him one day while buying pizza at Drexel's cafeteria as part of his first-year meal plan.
He got a receipt tallying his meals that he didn't need because freshmen have an unlimited number of meals. But receipts of some type were needed -- by the food-service management for its records, and by upper classmen who used them to keep track of their meals.
"It was pointless," he said. "All my friends would throw them away, and they would end up on the floor and on dining tables."
That was enough for Ericson to start researching how to create an online receipt Web site and the potential market for it. He found paper receipts had environmental disadvantages, including that the acid used in thermal paper receipts, the most common type, made them non-recyclable.
He found retailers spent $1.5 million yearly on paper receipts and could lose sales if customers left checkout lines while waiting for clerks to change rolls. But it was harder to define the benefits of his system to retailers, he said.
"It's more of an operational and money savings for retailers," said Ericson, "and it reduces their carbon footprint, which everybody loves."
Ericson found the school had a business-plan competition and submitted a 40-page document for 3SecondReceipts. He placed third and, using the contest, reached out to the corporate executive judges and speakers on the feasibility of the document.
It was a corporate executive with Wawa convenience stores who reviewed Ericson's plan and pointed out its fundamental flaw. His target customer -- large retailers -- probably wouldn't give him access to transaction data about their customers, which he needed to post online so consumers could review their purchases.
"No major retailer wants to give up that consumer data to someone else," said Ericson. "I would have been going down a road that may not have worked out."
He changed the plan's scope to focus instead on selling to colleges and universities. Ericson believed schools would be more likely to allow him access to student purchase data, plus 3SecondReceipts' software could use data from student identification cards, eliminating the need for Ericson to make cards for each student.
Additionally, students could access 3SecondReceipts' Web site through Drexel's online location to see how many meals were left on their meal plan and keep track of other purchases made with the card. Lastly, Ericson had a captive audience that he could sell to and then follow up for feedback.
"Realistically, the college market is going to help us prove ourselves," said Ericson.
Consumers and retailers have to use the system so it can be like the chicken and egg issue of who's going to use it first, he said, and he hopes to build demand by students so they will expect similar systems after they graduate.
While researching for the plan and the contest, Ericson reconnected with his brother Timothy, 23, a Drexel graduate, who was part of the business incubator for his own start-up company, a bicycle-sharing system in Philadelphia.
By helping him, Ericson was hired at the incubator and he now has access to its databases. In turn, his brother is helping him start 3SecondReceipts and estimate its potential profitability and pitch that to investors.
The process has taught him it's more important to expose his idea and get feedback on potential problems -- even though someone could copy it -- than spend time and money on an idea that could fail because he missed something.
"The founder always thinks it's feasible," he said, so criticisms and advice are crucial.
Another piece that fell into place for Ericson was finding his managing partner, Shishir Bankapur, a senior engineering student, who is writing 3SecondReceipts' software. He contacted Ericson after seeing a college video about the Entrepreneur Magazine contestants.
Ericson is waiting to get a final, written agreement with Drexel on the system and hopes to launch in the winter. He is pursuing other schools and is in preliminary talks with The University of Texas system, which operates nine universities, while he waits to hear the outcome of the magazine contest.
"I'm counting down the days," he said.
E-mail: fletcher@northjersey.com
To see more of The Record or to subscribe to the newspaper, go to
http://www.northjersey.com. Copyright (c) 2009, The Record, Hackensack, N.J.
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