When I was 17 years old, I had a government class where we occasionally had to summarize news events. I think I got a B in the class, which I thought wasn't too shabby. Little did I know that if I had simply done the same thing in digital form, I could have sold the idea to Yahoo! (NASDAQ:YHOO) for $30 million. That's what Summly founder and developer Nick D'Aloisio did earlier this week, and as soon as he's done with school, he's going to be working for Yahoo!.
The acquisition was huge for D'Aloisio, and it drove home Yahoo! CEO Marissa Mayer's focus on partnering for mobile devices. Mayer has said, "Given that we do not have mobile hardware, a mobile OS, a browser, or a social network, how are we going to compete? I think that the big piece here is that it really allows us to partner." Summly is a step in that direction, as the product is focused on making news easier to consume on mobile devices. Well done, Nick.
D'Aloisio isn't the first kid to make it big online. Facebook (NASDAQ:FB) CEO Mark Zuckerberg is the face of youthful success, addressing investors while wearing his hoodie, and smiling like a kid on picture day in every company photo. In addition to being worth as much as a small nation, Zuckerberg, Mayer, and other CEOs have made a hobby of turning smart kids into rich, smart kids. Here are some other youthful millionaires, and the companies that they've helped.
The Instagram man
Last year, Facebook bought Instagram for a cool $1 billion. That set CEO and co-founder Kevin Systrom up pretty well. Systrom spent time at Google (NASDAQ:GOOGL) and the company that would become Twitter before forming Instagram. His payout last year was reported to be close to $400 million. But so far, the value that Facebook has achieve from the purchase is cloudy, at best.
Last month, Facebook's CFO David Ebersman said, "One of the services that is, I think, a quite formidable competitor is Instagram." That's an odd role for a product to play, and it's unclear on how that competition is going to drive more income for Facebook. While investors may have to wait for a while to see the final answer, Systrom has already reaped the benefits of the acquisition.
Selling the ability to sell
Nat Turner was just two years out of college when Google purchased his Invite Media online purchase platform for $70 million in 2010. The company focused on selling advertising through third-party ad exchanges. Google has upgraded the software since purchasing it, and recently started moving customers away from the Invite Media branding and over to the new brand -- DoubleClick by Google.
Apparently, Turner was happy to sell the company and move on. He's now working on his next big thing, Flatiron Health. The new company is an oncology focused data tool, which is supposed to help cancer care providers get more insight into their patients' needs and conditions. Only time will tell if it takes off.
Succeeding on their own, or not
It wouldn't be a very good story without a little cautionary tale. Groupon (NASDAQ:GRPN) founder Andrew Mason hit the big time in 2011 when Groupon went public, and he was just over 30 years old. He still owns about 7% of the company, and is worth hundreds of millions of dollars. But financial success didn't guarantee business success, and Mason proved himself to be a less-than-competent leader. In his public resignation letter, Mason said, "From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that's hovering around one quarter of our listing price, the events of the last year and a half speak for themselves. As CEO, I am accountable."
Mason's failure should act as a sobering reminder for newcomers like D'Aloisio. As an entrepreneur, you're only as good as your last idea. The other lesson might be, "If you fail, it doesn't really matter because you'll be stupidly rich anyways." Let's hope D'Aloisio learns the first lesson.
Foolish final thought
The fact is, age doesn't matter when it comes to generating great ideas. Even companies and backers that fail should be applauded for seeing that the next big thing could come from anyone. The main problem with youth is that it lacks experience. Zuckerberg is a great example of a young genius who recognized his weakness as a leader and business operator. Instead of pulling a Mason, he has surrounded himself with people like Sheryl Sandberg and David Ebersman, who know how good businesses run and have the experience to keep things moving in the right direction.
As investors, we should always be on the lookout for smart, young start-ups. But we can't be blinded by flashy toys and neat ideas. We need to be able to see past the initial premise to determine if the person behind it is a future leader or a future failure.
Fool contributor Andrew Marder has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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