CHAIRMAN, THE MELT | SAN FRANCISCO, CALIFORNIA
Jon Kaplan has been an entrepreneur since high school — he ran a business managing several DJs and a printing service. A school advisor suggested he apply to Carnegie Mellon due to his academic success in math and science, and a scholarship offer cemented his decision to attend. His entrepreneurial background and strong interests in economics and statistics drew him to business school.
During his senior year, he started a technology consulting company for publications, which propelled him to a position at Condé Nast after graduation. Since then, he’s started several successful ventures, including Family Wonder and Flip Video, both of which were purchased by large businesses — SEGA and Cisco, respectively — for which he worked following the acquisition. His latest venture is the fast-casual restaurant chain The Melt, which is committed to providing healthy, responsible food.
Kaplan’s focus now is primarily philanthropic: He chairs Education Superhighway, a nonprofit organization bringing high-speed internet to classrooms all over America, and he serves on the board for the Culinary Institute of America, among other boards. He also helped create Carnegie Mellon’s Open Fields Entrepreneurs Fund to support the ventures of graduates and is working to expand the program to colleges across the country.
What is your elevator pitch?
I have a great 30-second video from Bill Clinton, who is really amazing at 30-second sound bites. I stuck the Flip in front of him and said, “What would you tell my team about the Flip?” Unfortunately, it’s only available on my Flip, which is now — like the fax machine or the 8-track player or the Apple 2E — a relic, only to be looked at with fond eyes.
To paraphrase his 30 seconds: Flip Video created the opportunity for the world to highlight injustice and celebrate heroes, to record first steps and record last words, to create a revolution around a technology that was once only for the wealthy.
How about growth?
I started a company called KidFlix that allowed parents to buy or rent VHS tapes. After a couple of years of building that business, we changed the name to Family Wonder and incorporated DVDs, video games, books, music — basically helping parents make entertainment choices for their kids. That company was sold to SEGA, and I became the CEO of SEGA Online in the United States. And, even better, the content from Family Wonder eventually became the foundation for the creation of the non-profit Common Sense Media.
After about two years, I left to start a company called Pure Digital. It was a consumer electronics company that was helping take the revolution that was happening in digital photography and bring it to mass market by allowing consumers to buy very inexpensive digital cameras. This was way before there was any kind of camera in your cell phone, and the only kind of camera that existed was a disposable camera that you could buy for around $10 at your local drug store or a very expensive SLR camera, so there was no way for the rest of the world to experience and utilize digital photography. We created a system that allowed people to buy digital cameras at a very low price and share their photography online.
Once cell phones started to allow you to capture pictures and compact digital cameras became less and less expensive, we added video functionality to our products. That was a market that again was very expensive and very clunky, like the digital SLR markets. And then we decided that we would create our own video camcorder. We invented the Flip Video camcorder, which we were fortunate enough to build into an incredibly large business, selling 7 million units by the time we sold the company to Cisco.
What were your pivotal moments?
Flip was one of Oprah’s “favorite things” in 2007. At the time, it was pretty cool to be on “The Oprah Winfrey Show.” It was definitely a pivotal moment.
Several American presidents, because of the time when we created the product, were huge fans, and were really inspirational in helping me understand just how much of a difference that product made. Meeting the president of the United States and having the president tell you that the product you created changed the world is super exciting for me.
Time magazine made it one of the most important products of the century, which is kind of a cool honor to get. I was very fortunate to be with some really interesting and important technology innovations. Bringing video to the mass market was a pretty exciting and important thing.
Peter Gabriel and his team used the Flip in a non-profit called WITNESS, started by Gabriel to highlight injustice around the world. Today the cell phone is clearly the best way to do that, but at the time, Flip was a really great way for people to help the world understand what’s actually happening and make sure that the truth is being told in certain cases. Video doesn’t lie. It wasn’t just about selling a video camcorder so that Mom could video the soccer game — although we did that, and we did it really well, and lots of moms love us for it, because they felt empowered to be able to video the soccer game. Video had been incredibly intimidating, but not anymore.
What was the “a ha!” moment?
I decided I wanted to create more jobs for Americans. All my other companies made millions of dollars for hundreds of people, and I wanted to take my success and figure out a way to make tens of thousands of jobs. Retail was the way that I felt we could best do that, given that middle class jobs in America were becoming few and far between. I had the idea that we could create more retail jobs the way Howard Schultz has done with Starbucks.
I wanted to do the same thing, so I started a fast casual restaurant chain called The Melt. The mission of The Melt was to use technology to create jobs for Americans and provide better food for kids. We were and are probably still one of the few chains that are 100 percent all natural, similar to what Whole Foods has done in the grocery space: no high fructose corn syrup, no preservatives. Everything is the way you would make it at home. We’ve grown that business quite substantially. We now have locations in three states; we have hundreds of employees, and I’ve recently hired a CEO to run that business.
What key piece of information gets overlooked when getting started?
The ability to unequivocally move your idea regardless of what everybody else has to say makes entrepreneurs different from CEOs or other executives. They really don’t know how to take no for an answer. No matter how logical the argument against what they’re doing is, they just completely ignore it and continue to push forward even after they’ve been told “no” 50 or 100 times.
Marc Benioff will tell you he talked to 50 or 100 venture capitalists to start Salesforce, all who told him it was a terrible idea. When Pierre Omidyar started eBay, who would have thought that you could create an online auction site that would generate a trillion dollars in revenue based on selling PEZ® dispensers and other random items? Everybody thought he was nuts. Jeff Bezos was called the “biggest loser” because he decided he was going to take his online bookstore and sell hammers. Everybody thought he was crazy to diversify his offering from books to include household goods and hardware, and clearly, they were wrong. Any of these great entrepreneurs have been told no so many times, and it’s a word that is just not in their vocabularies. I think that’s something that isn’t taught; it’s something that people need to experience and understand for themselves.
My belief — and that’s why we created the [Swartz Center’s] Open Fields Entrepreneurs Fund — is that you need to give people a chance, and the way you give them a chance is you give them money. Once you give them money, they can see if they can do it. If they can do it, and they love doing it, then they’re successful. If they can’t do it, they still might be a great executive, but it’s very different than being an entrepreneur.
How did the business school help shape your companies?
The experience that CMU and Tepper create is around hard work and believing that you can change the world. They introduce you to topics and ideas that you wouldn’t necessarily get anywhere else, all with an analytical and technical slant, which is incredibly important in today’s world.
I think what Jim Swartz [MSIA ’66] is doing with his entrepreneurial efforts is going to be tremendously important to the school. Carnegie Mellon attracts entrepreneurs who are hardworking, who don’t take no for an answer, who didn’t always get everything they wanted in their lives and had to fight for it, and that’s what makes great entrepreneurs.
What skills did you have to learn to get this off the ground?
Young entrepreneurs today just really need to know that anything is possible. You just graduated from college. You’ve been eating hot dogs and baked beans for the last four years. Your risk tolerance is so much higher, and your belief that you can change the world is so much higher. That’s what will motivate you to do these crazy things.
As people get older, they have more responsibilities. They have further to fall. They have been jaded by the world. They’ve failed at many things. In some ways, they have less hope. So I’ve had to learn how to maintain the youthful hope and optimism that anything is possible and that I can make anything possible, and it’s OK that I’m going to bet the farm in order to try to achieve what I think is going to be even better than what I currently have. It’s much easier to do when you don’t have as far to fall, so learning how to do that over and over again has been an important skill.
What’s the best advice you received?
Titles don’t matter. You might really want somebody to come join your company, and they really want some title. It’s free to give it to them, usually, so give it to them. On the other side of that, when someone really needs this particular title, help them understand that it doesn’t matter. My companies didn’t have titles for the first couple of years because we wanted everyone to feel like they were as important or as involved as anyone else.
What “big ideas” would you like to pursue next?
I am focused on some of the philanthropic efforts that I’m passionate about — specifically bringing high-speed internet bandwidth to every public school in America. I’m the chairman of Education Superhighway, a non-profit that is making incredible strides in upgrading all of our public schools so that kids have access to the internet in their classrooms. We’ve got 32 million of the 40 million kids upgraded and have done that with a tremendous amount of help from the Obama administration and our government. Now, with the help of the Trump administration, we are just finishing up with the upgrades of the schools that are still not completed.