Alumni profit from online businesses

By Jonathan Jacobson

Making some friends at the University of Illinois can be a profitable venture. Just ask Max Levchin, a University alumnus who graduated in 1997 and went on to become a multimillionaire when he cashed in with Paypal, an online money transfer business.

Or, if you can’t get a hold of Levchin, perhaps you could try Jawed Karim, another University alumnus who co-founded YouTube.

Two weeks ago, Karim and his partners sold YouTube, their video-sharing Web site, to Google for $1.65 billion dollars. But last weekend, Levchin and Karim left Northern California for Urbana to speak at the 13th annual Association for Computing Machinery Conference.

Levchin, before beginning his speech at the Siebel Center for Computer Science, 201 N. Goodwin Ave., playfully scratched the microphone like a nightclub DJ and explained to the audience that he had been up all night fixing bugs on his new Web site,

“You should start a company right now,” he told an audience comprised mostly of computer engineers. Levchin, who is 31, started four businesses before he and some friends developed the idea for Paypal.

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“Being an entrepreneur means desperately trying to start companies,” he said.

Andrew Popp, a Winona State University student who came to the conference with the school’s computer science club, said that Levchin’s “enthusiastic personality lifts you up.”

“Instead of being scared,” Popp said, Levchin encouraged students to “get the failure over with.”

Levchin said he is currently considering expanding his own company by leasing space at the University’s Research Park, where University faculty and students would help him work on, an interactive site that allows users to create slide shows and share their content with other users.

This opportunity would allow some real-world experience working with a start-up consumer Web company, Levchin said in an interview.

“We’ve met with Max three times over the last year,” said Peter Fox, chairman of Fox Development Corporation, a real estate development firm. The Corporation has worked together with the University to bring high technology companies to Research Park, an area south of campus designed for collaborative research between companies and both students and faculty in Champaign.

He said that he expects Levchin to rent space at Research Park, but he assumes that Levchin would start out small.

“Max wants to find the kind of person to replicate the kind of abilities he has,” Fox said, adding that he believes the talent among both faculty and students in the community is large enough that the company could easily expand.

Business and pleasure

Both Levchin and Karim said that while they were in college, they found integrating their business and scholastic lives very difficult. But, unlike Levchin, who decided to enter the business world directly after college, Karim, 27, decided that he wants to be an academic who moonlights as a businessman.

“That’s sort of how I grew up,” said Karim, whose mother works as a biochemistry professor at the University of Minnesota and whose father is a chemist at 3M. “The Internet itself was an academic project.”

Karim is currently attending Stanford as a graduate student in computer science, and plans on following in the footsteps of other Stanford professors who are also billionaires from business ventures in the technology industry.

Joshi Fullop, one of Karim’s professors at the University and a current systems engineer at the National Center for Supercomputing Applications, attended his lecture and said that Karim was “one of my best students.”

“He was a natural coder and developer,” Fullop said. “A lot of people end up in the right place at the right time. You just have to know what to do with it.”

Karim, though, attributes his success to being in an academic environment and said he believes that research institutions like this University can play a large role in developing Web technology for the future.

Despite the fact that he founded the Web site without the aid of the University, Karim said the classroom can be a place to foster the creative spirit necessary for successful entrepreneurship.

Marc Snir, head of the University’s Computer Science Department, said the department tries to help students with entrepreneurship, but organizations like the Technology Entrepreneurship Center and events like the Association for Computing Machinery’s annual conference help carry the load.

“We try to help them with business plans and organizing competitions,” Snir said. “Also, the faculty are available for advice.”