Friends Turn Hobby Into Innovative Business
What started as two friends sharing a hobby has become a growing Web business for 15-year-olds Siddharth Jain and Andrew Waage.
The two boys, friends and computer buffs since third grade, pooled $70 to start Electronixkits.com--a site that specializes in selling inexpensive kits, from simple radios for the electronically-challenged to more complex audio amplifiers. Most cost under $20. And for techies who know their way around a circuit board, there are pricier custom kits, such as a gizmo that makes the front door appear to talk.
“I developed an interest in building electronics,” said Siddharth, whose workshop is a bench in his Woodland Hills bedroom wedged between drum sets and a closet. “I looked for kits in stores and on the Internet but there weren’t very many. I thought others might like them.”
Andrew, who likes business and computers, designed the Web site, teaching himself HTML by trial and error “tinkering” he said. “It’s more fun than using a book.”
Now he updates the client database and targets customer interests from a computer in his West Hills home. Free schematic blueprints are offered to Web site visitors in exchange for personal information to generate more clients. Additional revenue comes from banner advertising agreements with other sites such as Yahoo!, which pays a few cents for each Web surfer who clicks over from Electronixkits’ site.
At first they offered ready-made kits purchased at wholesale but the profit margin was too slim. They began buying parts and developing the kits themselves.
Andrew said the site was amateurish to begin with, like a lot of hobbyist sites on the Net. He studied successful Web sites to get ideas and gradually honed it.
The redesign paid off in more business.
“We got a lot of requests and increased our profit. It was a big improvement,” Siddharth said.
But Siddharth’s idea to offer customized kits may be the fledgling company’s strongest suit. The custom kits division, launched four months ago, has grossed $700 for the two boys, who start high school in the fall.
Hemal Patel, 19, of Bloomfield Circle, Mich., wanted to control a remote hobby car from his computer. He e-mailed his special request to Electronixkits. Siddharth bought a remote control car, redesigned the transmitter to interface with the printer port and developed software to input directions for manipulating the car.
He spent about $40 on parts and sold the kit for $150. Patel, who probably had no idea he was dealing with other teenagers, said he was happy with his new toy and would definitely buy something else.
“The product is very well done and not that expensive,” he said. “They were very helpful . . . and willing to help for free.”
Siddharth noted that the partners never volunteer their ages to customers.
“People might not trust us,” he said.
Another disadvantage for the very young businessmen is capital. But the beauty of their business is low overhead.
“We don’t have any inventory,” said Siddharth. “When we get an order, we go out and buy the parts.”
They don’t factor the time they spend on business activities.
“We’re having fun,” said Andrew.
But he admits they might make more money bagging groceries.
“I would make a little bit more, because it’s a constant rate,” he said. “You’re sure to get a certain amount. With the Web site you have to have customers.”
But the business offers an important learning experience. Andrew plans to study electronics and computer science, and eventually earn an MBA. Siddharth hopes to have a career in computer science and electrical engineering like his father, Rajeev Jain, a professor of engineering at UCLA.
Andrew and Siddharth both come from families where education and learning is highly valued. Although Andrew said his mother, Jeannie Waage, a computer programmer, worries that he doesn’t get enough sleep, both families have been very supportive.
“I’m very proud of both my children,” said Mark Waage, a financial analyst and the father of Andrew and Anna, 16, a straight A student.
Siddharth’s mother, Renu Jain, an artist, said she is amazed her oldest son manages to do so much. The family also has a 9-year-old named Guatam. “That’s what impresses me the most,” she said. “When he’s studying, he always has the Indian drums in his lap.”
Both Siddharth and Andrew manage to squeeze several hours of violin practice into their full schedules, too. They organized a string quartet last year and perform at local hospitals as a community service.
They credit their parents for their success and a Junior Achievement-sponsored program for much of their business acumen. Junior Achievement, a nonprofit organization, sends volunteer consultants into schools to teach youth the basics of business and the value of free enterprise.
Marvin Radner, a retired food chemist and entrepreneur, taught the semester-long course to an eighth-grade class at Portola Middle School’s highly gifted magnet in Tarzana. In a sea of gifted students, Radner said Siddharth and Andrew stood out.
“There is something special about them,” Radner said. “They are gentlemen and well-spoken,” he said. “They never raised their hands. But they always knew the answer.”
Instead they peppered him with questions about his own business experience: What mistakes had he made? What did he learn from those mistakes?
When Ernst & Young came to Junior Achievement looking for recommendations for its annual Los Angeles Rising Star award, Radner remembered his former students. He still had the Electronixkits.com business cards they’d handed to him on the playground during the school year.
But the future of Electronixkits.com is uncertain. This fall, Andrew will enroll at El Camino Real High, and Siddharth at Harvard-Westlake.
“School comes first,” Andrew said. In the meantime, an order had just come in for a solar-powered car kit. He had to go.
