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CMU senior puts focus on food with 4th start-up

| Sunday, Jan. 3, 2010

Like any CEO, David Chen often had to drop what he was doing and resolve problems that arose at his company.

Thing was, Chen was 12, in the sixth grade, and what he had to drop sometimes was math or science class when he'd receive a text message from one of his technicians.

"Some of my teachers knew about it," said Chen, 21, said of his days at Marlboro Middle School in New Jersey when he was managing his second online start-up company, which operated people's Web sites before software appeared that enabled Internet users to do it themselves.

Today Chen, a Carnegie Mellon University senior, is heading his fourth Web-based company, Fooala.

Chen has been founding start-ups since he was 11. His technical and business savvy enabled him to pay almost all of the costs of a four-year education at CMU, Chen said. That's about $200,000 using 2009-10 tuition and room and board costs, according to, a Web site that covers college issues.

At 11, Chen received an offer from the company that is now New York-based Hearst Interactive to represent his Web site that reviewed the video game Starcraft. He made thousands of dollars in a year by earning 50 percent of the advertising revenue his site generated.

His newest venture, Fooala, earned its first dollar in April.

Yet Chen doesn't fit what most imagine as the stereotypical entrepreneur, say his college professors.

"People think of a high-powered, big talker kind of person when you say the word 'entrepreneur' -- somebody who could sell ice to Eskimos," said Babs Carryer, the entrepreneurship professor at CMU's Project Olympus, a lab that helps students turn their ideas into viable businesses.

"David's the polar opposite," Carryer said.

Self-effacing, without swagger and modest is how Kit Needham, senior business adviser for Project Olympus, described Chen.

"When I first met him, I was thinking, this guy has done it repeatedly and done it well," Needham said of Chen's propensity to develop successful start-ups. "He sold one business to a Silicon Valley company for six figures at age 14. He knows what he's doing."

Chen hatched the concept for Fooala while he was an exchange student in Sydney, Australia, in spring 2008.

He and four others work for Fooala, which operates a Web site,, where customers can order food for pick-up or delivery. The company earns a commission of about 5.9 percent of the total price of each order.

The company name is a combination of the words "food" and "koala," after the marsupial native to Australia, Chen said.

"It's really convenient," said Hannah Leung, 21, a CMU senior majoring in information systems who lives in Oakland. "I don't need to pick up the phone and call. I can see a full menu online, and the customer service is really good. I've been using it once or twice a week for three or four months."

Fooala also operates in Philadelphia, Washington, D.C., and Youngstown, Ohio. More than 80 restaurants participate.

Todd Eichel, 23, one of the company's co-founders, learned about Fooala during summer 2008 when he roomed with Chen in Seattle. Eichel was an intern at Boeing and Chen was an intern at Microsoft.

Eichel was drawn to Chen's resourcefulness. For example, Chen suggested he and Eichel make binders full of blank paper with spine labels of different clients, and place extra computer terminals and keyboards in the office where a potential client was coming to meet them last year.

"David was worried that the client would be put off that we were such a small company, so we staged the office to appear as though we were working in a larger company," said Eichel, who earned his master's and bachelor's degrees in information systems from CMU. "He knows how important perception is."

Chen's abilities impressed Jim Jen, director of AlphaLab, a South Side nonprofit that invests seed money in promising startup companies. Jen invested $25,000 of AlphaLab money in Fooala in exchange for a 3-percent share of the company.

"Chen had a plan and set goals," Jen said.

But, in particular, Jen liked Chen's philosophy.

"He wanted to get his product out there and learn -- not take forever and study it."

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