Many students dream of running their own companies after earning their college diplomas, but few actually end up attaining that goal. Three local entrepreneurs, two of whom are Boston University students, made their dream a reality while still undergraduates.
College of Communication junior Mikhail Ledvich and College of Engineering junior Mikhail Gurevich and Gurevich’s cousin Greg Gurevich, a Lehigh University senior, got the chance of a lifetime last March when Y Combinator picked them to receive funding to start their own company. Y Combinator is a Massachusetts venture capital firm specializing in early stage startups.
Last semester, the group whipped together an application in merely three hours after realizing the deadline to apply for funding was the following day.
The three designed ClickFacts, an online advertising fraud protection company. It is designed to create software to combat the growing problem of click fraud in online advertising. Ledvich said fraudulent clickers can quickly drain a company’s advertisement budget, boost the placement of their own ads or increase revenue for themselves.
Click fraud occurs when a person or computer program clicks on a competitor’s advertisements multiple times in order to waste the competing company’s budget, or clicks on its own advertisement to increase revenue.
Y Combinator chose ClickFacts along with eight other companies from a pool of more than 230 applicants to receiving funding.
“It validated our idea,” Gurevich said. “We were able to go from an idea to a business.”
Click fraud is the term used to describe fraudulent clicks in online advertising, according to the ClickFacts website. Many of the advertisements seen on websites operate on a pay-per-click model. A website agrees to show advertisements, and in return gets paid a certain amount of money every time a person clicks on the ad.
“We monitor advertisers’ websites for suspicious traffic patterns and fraud,” Ledvich said.
Since many advertising companies pay websites to show their ads based on a pay-per-click model, Ledvich said click fraud culprits can tamper with the amount of money an advertising company pays for ad exposure on the web, as well as the amount a website earns from its advertising clients.
Ledvich said the trio came up with the idea for ClickFacts after evaluating their own experiences with online advertising. He said they faced the problem of low return investment, or paying a lot for their advertising and seeing few results, and thought click fraud could be a key problem for other online advertisers.
“THE PROBLEM IS BIGGER THAN WE THOUGHT”
ClickFacts opened its doors for business in May of 2005 out of the group’s home in Boston. Since then, Mikhail Gurevich said business has been on a constant progressive streak as ClickFacts expands its client base and begins to attract more investors. The company has clients from around the world, including cities in the US, India, China and Australia.
“We have found a lot of clients that have the problem and are interested,” Gurevich said. “Business was so successful that a number of capital investment companies approached us to invest in the company and a solution to the growing problem of click fraud.”
The company has maintained success due to efficient financial planning, Ledvich said. ClickFacts was established on the seed funding from Y-Combinator, and with proper budgeting of those finances and the money received from clients, the company continues to run successfully, he said.
While money has not yet posed a problem for the trio, Ledvich said their biggest challenge was realizing the extent of click fraud in online advertising. The team knew online advertising fraud protection would attract attention and hoped people would come to them for help. But after time, they found they immensely underestimated the problem. “We found out the problem is bigger than we thought,” Mikhail Gurevich said. “We also learned that companies such as Kanoodle, Google and Yahoo all have the problem, but to different degrees.”
Ledvich said ClickFacts has already helped many of its clients retrieve funding spent on fraudulent traffic. For example, they found 10 percent of one of their client’s half-million dollar advertising expenses was caused by click fraud. After ClickFacts discovered the counterfeit activity in his advertising, Google refunded a portion of the money to the client. Another challenge for ClickFacts was the initial phase of gaining client trust, Ledvich said.
“Many people don’t want to deal with a start-up,” he said. “They are afraid that new companies are unreliable and might leave them paying without service.”
However, ClickFacts quickly solved this problem by establishing a reliable reputation for themselves, Ledvich said. As they became better known, he said the company gained more credibility and popularity among interested advertisers.
Ledvich also added that the press attention the company received, such as mentions in The Wall Street Journal, The Patriot Ledger and various local Connecticut papers, played an important role in confirming their authority.
STAYING A CLICK AHEAD
Perhaps the greatest challenge for the trio is managing the rigor of college classes with the demands of running a business. Mikhail Gurevich said the secret to handling both is careful time management.
“We take care of business aspects in the morning, such as making phone calls, answering emails and having board meetings,” he said. “Then we schedule our classes for the afternoon and save time for our homework at night. It’s long, hard hours, but it’s the only way to get it all done.”
Although the difficulty of their work has not decreased, the number of hours necessary for work has decreased since the start-up phase, making it easier to coordinate business and college life, Ledvich said. And now that the core development of the company is completed, they dedicate between 10 and 12 hours a week to ClickFacts.
Mikhail Gurevich said one challenge the team does not find itself facing is any stiff competition. While other companies try to solve the problem of click fraud, the systems they use are not as up-to-date with identifying current forms of click fraud and the changes that occur over time in traffic patterns, he said. ClickFacts differs in its design in order to detect evolving patterns of fraudulent traffic, making it stand out among the other businesses.
ClickFacts is not the students’ first attempt at business, and like most aspiring entrepreneurs, they faced failure before tasting the sweetness of success. After starting a few failed businesses, including laptop protection, book exchanging, life guarding and website hosting, Mikhail Gurevich said the team was prepared to triumph with ClickFacts.
“We were armed with a few previous failures that we learned from, making us more knowledgeable this time around,” he said.
For now, the ClickFacts staff is comprised of only the three students who each have his own responsibility for business operation. Ledvich deals with business development and clients and Mikhail and Greg Gurevich handle development and production, such as working on the programs and managing projects.
Ledvich also said the company likes to acknowledge BU Chabad Rabbi Posner as an honorary fourth member, calling him the “spiritual advisor” for the team.
“Whenever we need advice, we turn to him,” he said.
Although the Gurevichs and Ledvich are running ClickFacts as a trio for now, Ledvich said they are always looking for help and suggestions and would be willing to take on interested new members with insightful propositions.
“We are open to all potential partnerships, suggestions and opportunities,” he said.
With the success of ClickFacts, it may seem as though the students have accomplished everything in their early 20s. But the road does not end here for the students, as each have ambitions for after graduation.
While Ledvich said he is unsure of exactly what type of work he will pursue, he knows he wants to be self-employed. Mikhail Gurevich has his sights set on law school after completing his double major in electrical engineering and finance, and Greg wants to pursue a career in automated stock trading.
Even with plans for the future in mind, the three said they intend to keep ClickFacts up and running for as long as it remains successful and online click fraud continues to plague advertisers.
“As long as there is a problem, we will be the solution,” Ledvich said.
