EnTrends [ahn-trends]

Taking a Look at How Modern Entrepreneurs Work & Live!

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.

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.