When Harvard Business School students Pat Petitti and Rob Biederman needed to create a business for a classroom competition in early 2013, they took note of the students around them who had valuable skills and knowledge to offer, but no jobs. At the same time, they realized that small businesses, which often can't afford to hire a full-time MBA or top-level consulting company, could benefit from that insight.
The pair's classroom project became the starting point for HourlyNerd, a Boston-based temporary-staffing firm that matches well-educated business consultants with companies that need them.
The MBA students started by literally knocking on the doors of hundreds of small businesses. "A lot of the businesses told us to get the hell out, but a lot of them actually felt that this was something they could really benefit from," Petitti says.
By February 2013, they had drummed up a few small projects and built a simple website on GoDaddy that cost them about $10. Biederman says he knew they could have a viable business when they received a request from the developer of an Australian prepaid mobile phone application and were able to match him with a consultant who had previously worked with Verizon. For $2,500, she'd be able to give hard-won insight that would have cost many times more from a consulting firm.
Recruiting the "nerds" was easier than finding businesses to hire them; today there are roughly 5,400 MBAs on the HourlyNerd platform. To bid on projects, consultants must come from one of the top 40 MBA programs, as ranked by U.S. News & World Report and other college lists. HourlyNerd receives 15 percent of the project fee from the hiring company, while the nerds cough up 5 percent from their end. Biederman and Petitti estimate that companies save roughly 90 percent with their service compared to hiring a consulting firm.
Angel investor Robert J. Doris, who had been a judge in the classroom challenge, approached HourlyNerd about investing in the company; he and his partners at Accanto Partners in Tiburon, Calif., ended up participating in a $750,000 seed round.
"They're tapping into a talent pool that is very motivated and very high talent--a whole population of MBA holders who, for whatever reason, don't want to be brought into a fixed organization," Doris says. "They want to have the ability to control their own hours."
HourlyNerd has since closed a $4 million Series A round led by Greylock Partners in Menlo Park, Calif., and Highland Capital Partners in London. Dallas Mavericks owner Mark Cuban is also an investor. Petitti says the funds will be spent on marketing and technology, including creating an algorithm to help find the best MBAs for each project.
Unlike many startup owners who land big cash for their ventures, Biederman and Petitti decided to finish their MBAs and graduated in May. They say they'd have been foolish to walk away from the guidance available to them at every turn. For them, Harvard was like being in a super-incubator, where coursework had a direct impact on their business and they had, as Biederman explains, "the best professors in the world giving us very detailed advice."