EnTrends

Swiss-born Thomas Knobel is one
example of a new breed of young
entrepreneurs that are making it big
while still in college. Knobel came to
the U.S. in 1994 and is currently a
senior at Babson College in
Massachusetts. He has managed to
launch and run a company that allows
consumers to purchase pre-paid
phone cards over the Internet.

Knobel's current company is not his
first entrepreneurial endeavor. He
started his first small business at the
age of seven, and at the age of fifteen,
he incorporated his own computer
business in Switzerland. However,
Knobel had no prior experience with
managing people or doing business in
the U.S.

Because Knobel has family back in
Switzerland, he found himself in need
of an inexpensive way to call home
once he came to the U.S. He began
doing research in 1997 and found a
great deal of price differences among
pre-paid long distance service
providers. Knobel thought that if he
could purchase and activate P.I.N.
numbers from one carrier and sell
them at a median price to consumers,
then he would still make a profit.

Knobel launched Nobel, Ltd. in
1998. In March of 1999, he
established a website and began
accepting credit card payments for
phone cards. The company is unique
in that Knobel and some of his
colleagues at Babson developed their
own in-house software that
automatically delivers P.I.N. numbers
to customers.

Knobel's company goes through a
very complex process when
developing its pre-paid cards. He
says a lot of knowledge in the industry
is required. One must know different
wholesale rates, buy rates, and then
be creative in how charges are
deducted from the cards. A company
has to decide whether it has a
maintenance fee, one or two minute
rounding, and whether or not to have
a connection fee. Knobel's company
then negotiates rates with carriers that
have their own "switch."

Knobel's company has formed close
partnerships with phone service
carriers that purchase rates from other

underlying carriers that have direct
connections into different countries.
Some of the carriers are well known
such as AT&T and MCI, but others are
smaller, private companies.

At the end of the 1999, Knobel's
company had almost $200,000 in sales.
A wholesale division was launched in
July of 2000 to print and distribute phone
cards all over the United States. By the
end of the year, the company had
established itself as one of the leaders in
Internet pre-paid phone cards, bringing
in sales of over $2,000,000

One of the challenges Knobel has faced
is that credit card companies put a limit
on the number of on-line transactions a
merchant account can process each
month.

In 1999, the company had reached its
limit. It took five months to have an
increase approved, and the company
could not expand until the approval went
through.

Knobel has a team of sixteen people
working with him, three of which are
college friends. One of the partners is
Knobel's best friend from boarding
school in Connecticut. He is currently a
junior at MIT. The third was brought
aboard to help with web design.

Knobel moved his company into its first
office space in 1999. In February of
2001, the company moved into an office
in Newton, Massachusetts. Knobel says
that in three months, they have already
outgrown the 3,000 square foot space.

When asked how he manages to balance
school and a company, Knobel says it
hasn't been that challenging this past
semester. He only has one class on
Tuesdays and Thursdays. He works
between eighty and one hundred hours
per week. He usually does not come into
the office until 10 A.M., but he can stay
as late as 2 or 3 A.M. A big part of
Knobel's day consists of being a project

Knobel says that he likes the
independence that comes with being
an entrepreneur. He feels a great
sense of freedom that is only limited
by his responsibilities. He also enjoys
the constant action and challenges
that come with owning his own
company. "It is very rewarding to see
the growth of the company and being
in charge of making decisions that will
affect the members of the company."

In his free time, Knobel enjoys being
with his girlfriend. He says that he
probably does not spend enough time
with her as she would like, but she is
definitely what he gravitates to for
support.

This summer, he would like to learn
to fly and receive a pilot's license.
When it comes to sports, he enjoys
playing squash, soccer, and tennis.
He also enjoys traveling, but does not
have much time to do it for pleasure.
He has five or six trips planned for
business after he graduates this May.

Knobel says that he affords himself
nothing financially and lives very
frugally. Because he is on foreign
status, he cannot pay himself from the
company until he graduates from
school. When he graduates, he will
have financial independence. When
that time comes, he would like to buy
himself a nice car and hire someone
to clean his apartment and do his
laundry, both things he dislikes.

As for advice Knobel would give to
other entrepreneurs starting out, he
says, "You must first figure out
whether or not being and
entrepreneur is what you want to do.
Someone has to know by heart
whether or not they want to do it
There are certain characteristics you
must posses. You have to be willing
to work long hours and have tenacity.
Once you have established that you
do want to become an entrepreneur,
the number one rule is never giving
up."

One of Knobel's future goals is to
become a leader in the wholesale and
distribution market, which is a 5
billion dollar industry. He is also in the
process of establishing his own
service carrier.