One of the most popular features in this magazine over the years has been our Watchlist section, where we shine a spotlight on fresh, exciting ventures from Wharton alumni — from startups poised for greatness to companies on the rise. What they all have in common is entrepreneurial adventure. But the Watchlist presents just a snapshot of a much longer timeline, so we set out to catch up with some of our alumni whose ventures were once featured as “new and notable” and are now better known as something else: a billion-dollar shoe brand, transformative tech for the blind, a telemedicine unicorn, and more. Here, we get the bigger story — the highlights, low points, revelations, and next steps of some truly fascinating companies and their founders, whose journeys are still unfolding.

The Billion-Dollar “It” Sneaker

How Allbirds invented a sustainable shoe — and ran with it

If, a decade ago, you had told Joey Zwillinger WG10, bioengineer and cleantech brain, that he’d one day be running a shoe company valued at some $1.4 billion, well … “I’d have laughed,” he says. “I wasn’t exactly known for my fashion sense.” He wasn’t even a sneakerhead. But the meteoric rise of Allbirds, the company he founded with former New Zealander Tim Brown in 2016, isn’t just about the shoes — even though Time magazine has called them the most comfortable in the world; even though more than a million pairs sold in the first two years; even though Oprah’s a fan. The story of Allbirds is really about a mission— creating a better product in a sustainable way — and its founders’ unwavering commitment to that mission.

The idea started with Brown, a graphic design major who’d been obsessed with creating a simple, high-quality shoe using the breathable merino wool for which his native country is known. By the time he and Zwillinger met around 2014 — introduced by their wives, who’d been Dartmouth roommates — Brown had earned an MBA and raised nearly $120,000 on Kickstarter to fund a prototype. Zwillinger, meantime, had been mulling a change after several years in biotech. Some of his best friends from Wharton had been doing remarkable work in consumer products, he says. (Among those friends? Neil Blumenthal WG10 and Dave Gilboa WG10 of Warby Parker and Jeff Raider WG10 of men’s grooming startup Harry’s.) Zwillinger felt increasingly drawn to that world.

The two men connected, excited by what they saw as a massive opportunity for “environmental stewardship in consumer products.” They built a business plan, raised $2.7 million in seed money, and in 2016 launched their direct-to consumer concept with a single shoe. But it was a groundbreaking shoe, made from, yes, eco-friendly merino wool and biodegradable castor bean oil. It was minimalistic. Stylish. And the reviews —  from Forbes, from Wired, from A-list celebs and customer ratings — were raves.

Over the next four years, Brown and Zwillinger would tweak their product upwards of 30 times. “We’re constantly paranoid, as any good retail company doing something different has to be,” Zwillinger says. “It’s a continuous improvement mentality.” They would delve into more groundbreaking renewables, including SweetFoam, a carbon-negative polyurethane substitute they developed from sugarcane with a Brazilian plastics company, and unveil six more styles and a kids’ line (plus socks!). They’d also raise north of $100 million and go fully carbon-neutral in 2019. Today, Allbirds is greener than ever, while shipping to 19 countries, employing more than 450 people, and boasting 16 brick-and-mortar locations, with plans to open 20 more this year. And while Zwillinger won’t divulge details, stay tuned: They’re continuing to innovate and work on new products.

What he will say is that Allbirds’ growth has largely been the result of a focus on and fealty to a vision statement they created at the outset: “We were so clear about who we wanted to be, why it was worth doing, why it would make us successful. And we haven’t veered from it.” That’s meant saying no to 99 things for everyone they say yes to, he admits. “But that allowed us to launch with a single product — because we knew it was different and worthwhile. If we were wrong, it would have failed quickly.” But of course, it didn’t. “That clarity of focus still translates into everything from our internal operations to what consumers think about us.”

The Wharton network, too, has helped them connect to investors and innovators, Zwillinger says, citing professors, classmates, and the Jay H. Baker Retailing Center as part of their support system. (Zwillinger is currently on the center’s advisory board.) “Some of my best friends from Wharton have been some of my best allies in business,” he adds — including Warby Parker’s Blumenthal, who sits on the Allbirds board.

None of this is to say that they haven’t had their fair share of hurdles along the way. From navigating uncontrollable global forces like the coronavirus outbreak to the inherent difficulty of engineering quality shoes (and doing so with new materials, and scaling that process), the duo faces challenges “all the time,” Zwillinger says. Regarding the engineering, he explains that manufacturers aren’t necessarily used to “what we’re demanding of them. So I have to work in close partnership with fewer manufacturing companies, and I treat them like partners, so they in turn invest in us.”

But while those particular hurdles make their business hard, Zwillinger says, they also make it hard to compete with. When, last year, Amazon started selling woven wool sneakers with an unmistakable Allbirds vibe, Zwillinger and Brown responded with an open letter to Jeff Bezos, inviting him to “please steal our approach to sustainability.” It wasn’t just good marketing: The pair had made their SweetFoam technology public in hopes that more companies would latch onto the eco-friendly material. (More than 20 brands are currently launching with it, Zwillinger says.) This, too, comes back to mission: “We want to be an influential beacon for what companies can do.”

Speaking of other companies: Inspired by the stories he’s heard along the course of his own entrepreneurial path, Zwillinger launched a podcast, Purpose Built. The year-old collaboration with Wharton Business Radio on Sirius XM features entrepreneurs with socially conscious brands. “What we’re doing is trying to show that business can be a force for good,” Zwillinger says. “That you can create a thriving business while also contributing to society in a meaningful way.”

Brilliant Vision

For five years, Aira has been helping blind people navigate their worlds.

By the time Yuja Chang WG18 started at Wharton, the San Diego-based company he’d founded with partner Suman Kanuganti was already changing lives. Aira — named for “Artificial Intelligence and Remote Assistance” — broke new ground as a real-time navigation system for blind and visually impaired people.

The idea began in 2013 with the debut of Google glasses. Chang and Kanuganti — who met when Kanuganti hired Chang as an intern (and later a full-timer) at the software behemoth Intuit — talked themselves in circles around the market opportunities that might spring from the new technology. As a child, Chang had experienced temporary retinal detachment; in college, he’d done research on optometry. “Helping people with eye symptoms has always been with me,” he says. Meanwhile, he and Kanuganti had realized that the tools most often associated with blindness—white canes and guide dogs — didn’t reflect modern technology’s efficiency. With input from a friend who was visually impaired, they began to piece together a business that would offer real-time assistance to people through their eyewear — what they’ve called an “OnStar for the blind.”

Aira launched in 2015, connecting subscribers to agents who could help callers with anything from reading to walking across the city to executing complicated household chores and more. What they found, Chang says, is that their service not only enabled blind people to comfortably venture outside their usual circles, but also that customers were building real relationships with agents. “It was a tool to expand social life, in a way,” Chang says. That was when they knew they’d found a truly unaddressed market. By 2016, they had 1,000 paying customers and had raised $2.5 million in early-stage funding.

With the company gaining traction, Chang headed off to Wharton, hoping that East Coast living would help him better understand the lifestyles of his customer base in other parts of the country and — obviously — hoping to grow the business. While Kanuganti focused on day-to-day operations, Chang tackled the strategy and outreach. “I made a lot of impact investment connections,” he says, “and the resources I was able to leverage put us in touch with some of our investors.” That, he says, led to their next round of funding through Wharton and Penn alumni.

By 2017, Aira’s client base had doubled. The National Federation of the Blind became a strategic investor (the second time in the group’s 80-year-history that it has backed a new innovation for blind people), and the company was transitioning from its subscription-only revenue model to one that incorporated partnerships with airports, universities, Lyft and Uber, major retailers like Target, and a growing list of other entities offering free on-site Aira services. The new model was a game changer, Chang says, not just as a boost for business (although, yes — their revenue doubled), but also because those alliances bring Aira to more people in a more affordable way. At the end of the day, Chang says, “We’re there to address a social issue.”

In fact, Chang says, these days, the company is thinking about what other markets it might impact. Elderly care, perhaps? Dementia patients? In any case, they’re still focused on growing their Aira network, he says, making sure that “what we offer the blind is sophisticated at addressing their needs.”

By Design 

Democratizing — and digitizing — home decor was just the beginning for the co-founder of Havenly.

It all started with an empty apartment. Emily Motayed Lancaster WG16 had just moved into her first “big girl” place and wanted to decorate it. But she didn’t have a background in design, and she couldn’t afford to pay someone who did. This dilemma would be the catalyst for Havenly, an e-design business Motayed Lancaster launched with her sister, Lee Mayer, as a much-needed middle ground between hiring a traditional interior designer and going full DIY. For a flat fee (starting at $79), clients log on, upload pictures of their space, and connect with an expert who offers a virtual redesign and helps link to the furniture Havenly sells via commercial partnerships.

When the sisters launched Havenly out of Denver in 2012, it was a slow rollout. “We didn’t go big or flashy,” Motayed Lancaster says. “We got to grow outside of the trendier cities and focus on referrals and friends of friends while we built a great product.” Their strategy worked: “All of a sudden, we were getting customers. We weren’t even marketing. We didn’t have a referral program. We still had a weird, janky website — and people forgave us for it. That was a big indicator to us that we had something that made sense.”

Over the next four years, the company went from two employees to 60, was named a Poets & Quants top 100 MBA startup, and raised $13.3 million in funding. But while the investments were key, Motayed Lancaster says, it was the sense of organic growth over those years that was the most meaningful (if hard to measure) metric. “It’s actually how I evaluate businesses now for investment,” she adds. “Are people excited? Does it seem like it has staying power? Are they telling their friends?”

In retrospect, Motayed Lancaster says, even though the e-design space was flooded with competition in Havenly’s early years, their strategy — focusing on quality over flash; modifying the model based on customer feedback; slowly creating a scalable design process — gave them the staying power many competitors turned out to lack. “It’s been cool to see that the strength of our product is what helped us prevail,” she says. Last October, Havenly raised another $32 million, and these days, the company is building up its own private label in furnishings.

Motayed Lancaster, meanwhile, bowed out of Havenly’s operations a little more than a year ago to focus on a new venture she’s launching with a co-founder this spring. The company — Nurture& — aims to fill another niche in the design market: accessible, stylish nursery furniture for the modern parent. It feels like a natural next step, she says: “We started Havenly when I was 24. Now I’m 32, and all my friends are having babies. And one thing I’m able to do is see people around me and say, ‘Okay, here’s something missing in this space.’”

Face Time 

Aavrani, an Indian-inspired skin-care line, is carving a fresh niche in the beauty world.

It was a match made on Taco Tuesday, during Wharton’s preterm: Rooshy Roy WG19 and Justin Silver WG19 had just met and were chatting about Silver’s previous work with a Japanese-inspired skin-care startup, Tatcha. Roy wondered aloud why she’d never seen the traditional Indian beauty rituals she knew represented in the modern skin-care market. And voilà: The idea for Aavrani, their direct-to-consumer Indian-inspired luxury skin-care line, was born. (“Rani” means queen in Hindi. The A’s, Silver explains, represent a little bit of business savvy: The company will top every alphabetical list.)

This journey would define their entire Wharton experience: navigating the research and business planning, finding chemists and vendors, designing the website, and creating and testing the brand’s four all-natural products developed with ingredients — turmeric, almond oil, organic jojoba beads, rose hips, and more — Roy had envisioned from the start.

Roy knew in her gut that the idea was good and that she and Silver could get the line to market. “But it was only when we decided to put all our savings in a joint business account and pursue this thing in earnest,” she says, “that I started seeing how much skin care as an industry was growing.” It was both unnerving — how would they stand out against so many other brands? — and validating: “If skin care wasn’t growing as a whole, then those sorts of macroeconomic indicators would also be daunting to me.”

After 10 intensely busy, fruitful months, Aavrani launched in June of 2018. Roy, Silver, and three interns spent all summer living and breathing the business, obsessing over customer feedback and data, applying labels by hand, and storing product in the Penn Wharton Entrepreneurship offices and under Roy’s bed. In the fall, they ramped it up still more: Fundraising and scaling the business meant trips to New York several times a week, plus leveraging every possible resource Wharton had to offer. They joined Penn Wharton Entrepreneurship’s accelerator program, VIP-X; they participated in the Entrepreneurs-in-Residence program; they won the $10,000 Summer Venture Award, were finalists in the Startup Challenge, and secured three rounds of financing from the Penn Wharton Innovation Fund.

One thing they skipped? “We didn’t do a single interview at Wharton except that lunch where we interviewed each other,” Silver says. It was Aavrani or bust. “We had to have blinders on,” Roy adds. “It was way too easy to focus on what other people were doing and what else was out there. We had to keep that part of our brains shut and locked in order to do what we needed to do — focus on Aavrani and make it work.”

In May, they graduated, moved to New York, and finished a $1.7 million funding round. The numbers so far look good: They’ve sold tens of thousands of products to customers in all 50 states (garnering more than 500 five-star reviews and a 35 percent repeat-customer rate) and hired five full-time employees, and they’re currently in talks with QVC, HSN, Sephora, and Ulta. This summer, they’re unveiling a major rebrand. There hasn’t been a beat of rest since the partners first dreamed up Aavrani — which is fine by them. “This is a ride,” Roy says. “Every single day, there’s something exciting.”

Support System 

Harper Wilde is changing the way women think about — and buy — their underwear.

If ever there was a business ripe for disruption, it’s the bra industry — a world where, as Jane Fisher WG17 and Jenna Kerner WG17 will tell you, women spend massive amounts of money on products they don’t love, and have a miserable time shopping for those products, too. In their second year of business school, the duo launched their direct-to-consumer brand, Harper Wilde, to change all that.

The pair started their research at Wharton, where everything from classmate feedback to in-depth analyses pointed to a market need for bras that were less about “sexiness” and more about affordable comfort. The simultaneous decline of Victoria’s Secret — which had owned some 60 percent of the estimated $6.5 billion industry as of 2017 — not only validated this finding, but also helped pave the way for a key partnership the pair would make with one of the world’s prestigious lingerie manufacturers. The market dynamics, as Fisher says, had factories willing to invest in smaller brands. And thus the Harper Wilde bra was born.

In 2017, buried in the 3,000 brassieres a factory had shipped to Fisher’s apartment, the partners launched their company with three styles. The price point at the time — $35 — was key in a market that was suddenly brimming with other disrupters. “At Wharton, we tested price sensitivity relative to other aspects of the bra,” Fisher says. “It’s a value-driven decision. You don’t want the cheapest thing from Costco, but you don’t need all the bells and whistles on the $80 ones.”

They also differentiated themselves at the outset with a seven-day try-on period — an easy way to “lower the barrier of entry” and show people how good the product was, Fisher says. The so-called “Warby Parker of bras” enjoyed 20 percent month-over-month growth in its first year. The next year was even bigger, as they introduced two more styles — both successes — putting them on the path for a 250 percent growth rate. Fisher and Kerner also welcomed a former Victoria’s Secret CEO onto their board, made strategic hires to grow their team to 10, and added a second factory for production.

The brand, too, has evolved. The women nixed the free-trial aspect of their model, which, Fisher explains, “was bringing in people who weren’t really our customers.” Instead, they doubled down on curating what they believed was the key to Harper Wilde: a resonant brand that eschews the old frills to embrace how modern women see themselves today. For example: Instead of aiming to boost a woman’s confidence via, say, red lace, Harper Wilde would do so with an embroidered quote from Ruth Bader Ginsburg.

This year, Fisher says, will be another big growth year in terms of new hires and new designs. They’re thinking bigger in other ways, too. “Our North Star is to be the go-to for all intimates,” Fisher says. “For every type of bra, every type of intimate, we want to be the brand name you think of.”

“I was good at pitching and winning. I could tell a compelling story that people got excited about, but at a certain point, I realized I had to stop going to events and competitions and just go do the business..."

Lessons Learned 

Moving on from a bright new venture is tough. But it’s also enlightening.

Thomas Cavett G18 WG19

It was a life-saving idea: Thomas Cavett G18 WG18, former Army Green Beret and medic, wanted to improve medical aid for first responders and military personnel hurt in the line of duty. His company, POWTI Innovations, would accomplish this via a device called the Point of Wounding Trauma Indicator (hence: POWTI), which used geolocation to transmit the wearer’s whereabouts to emergency responders.

After winning the Lauder Institute’s Pitch-It competition early in his Wharton tenure, Cavett threw himself into getting the business going. He and a co-founder raised money, won more competitions (including Lauder’s Jacobson Global Venture Awards), hired engineers, developed prototypes, and even found a lead investor for the company’s seed round. But in the spring of Cavett’s second year at Wharton, things got dicey with his co-founder — disagreements, issues with investor relationships. They couldn’t work it out, and Cavett decided POWTI would continue without him. “I resigned two weeks before graduation,” he says. “It was incredibly depressing.”

Cavett bounced back, and he’s very happy at McKinsey these days. But his startup career isn’t done, he says: “I definitely have the bug.” Here, a few of the takeaways he’ll bring to his next venture.

Execution is everything. “While the idea is extremely valuable, if you’re unable to execute on that idea, it’s meaningless. It’s about thinking the idea is everything versus creating a business around the idea. That dissonance caused a lot of friction for me. I would have done things differently going in, in terms of deciding roles and thinking about equity. I was naive. I paid for it later.”

No one will ever work as hard as you do for your business. “As a founder, you’re invested in it — mind, body, and soul. For other people, it’s a job. So you have to manage your own expectations, especially with early hires and even other co-founders you bring on. People might not be willing to put in at the level you are, and that’s fine. But it’s an expectation thing.”

Beware the fundraising rat race. “I was good at pitching and winning. I could tell a compelling story that people got excited about, but at a certain point, I realized I had to stop going to events and competitions and just go do the business. People get caught up in the hype of being in the startup world, which is sexy and exciting.” As opposed to the actual startup work? “Yes,” Cavett says. “That part is very unsexy.”

“We made a million sales within weeks on a test...”

A Unicorn Story   

How men’s hair loss shot the direct-to-consumer health-care startup Hims into the stratosphere

Start Me Up 5

Andrew Dudum W11 and Jack Abraham

At the time they founded Hims, a company that would become one of the fastest ever to a $1 billion valuation, neither Andrew Dudum W11 nor Wharton alumnus Jack Abraham was a stranger to running a startup. Friends since their days at Penn, both men had major successes under their belts — including the prolific “startup studio” Atomic, which has launched more than 20 ventures (Hims among them) since Abraham dreamed it up and the pair co-founded it in 2013.

Still, the wild success of Hims began with a fairly simple thesis. “There’s a lot broken in health care, and a lot of room for improvement,” Abraham says. “We live in an era where nine out of 10 millennials don’t know who their doctor is. In the meantime, they press a button on their phone and a car or their food shows up at their house. It became clear that health care should adapt to the next generation, and telemedicine is an answer to that.”

The company began with that seed but grew far beyond just telemedicine: What if, Dudum and Abraham wondered, they used telemedicine to diagnosis specific conditions and then monetized the revenue from treatment? They began researching what issues might lend themselves to this sort of model, eventually landing on men’s hair loss — a condition both stigmatized and underdiagnosed, Abraham says. Dudum adds: “The historical offerings felt clinical and sterile, or their ads featured someone who was decades older. So many men felt left out of the conversation.”

To say they were onto something is an understatement. “We made a million sales within weeks on a test,” Abraham says. “We didn’t even have a full-fledged product working yet.”

Hims launched in 2017 focusing on hair-loss treatments, along with skin care and sexual wellness products, and created immediate buzz. The technological convenience of the online one-stop shop (with shipping), the youthful branding, the wink-wink marketing (for example, ED ads featuring cactus plants) — it all felt fresh to consumers and investors. In less than two years, the founders had raised roughly $197 million, had seen their idea valued at $1 billion, and had launched the Hims counterpart Hers, whose many offerings include birth control and yeast infection treatments. They’ve also continued to build, in Dudum’s words, “an incredible roster of medical experts and specialists” as their expert base, including Pat Carroll, the Hims and Hers chief medical officer, who formerly was CMO at Walgreens.

Today, Dudum is still running the company as CEO, Abraham is chairman of the board, and Hims and Hers offer upwards of 50 products treating more than a dozen conditions. Together, the two lines have, as Dudum says, “powered more than one million digital health visits”; they’re currently expanding services to all 50 states — a move that Dudum believes can profoundly impact the lives of people who live in so-called medical deserts. Later this year, the company will unveil its own pharmacy, which, he notes, will mean more help offered on Hims and Hers for even more people.

 

Published as “Start Me Up” in the Spring/Summer 2020 issue of  Wharton Magazine.