Chess is all about strategy. No one knows this better than A.J. Steigman, founder of Steignet, international chess champion, and an alumnus of the Wharton MBA Program. We caught up with him to discuss how his company has evolved, how business school benefited him in the long-term, and his advice for aspiring student entrepreneurs.
You were an entrepreneur far before you came to Wharton. Can you tell us a bit more?
A.J.: I’ve always been an entrepreneur at heart. Ever since I was a kid selling lemonade at my lemonade stand, I have had an innate drive to succeed. My competitive chess background developed my pattern recognition capabilities, which helps me detect trends. Combined, these traits have always helped me identify startup opportunities.
An example of this was during the financial crisis, retail companies were getting hammered, but Nike was doing well. I realized that this was due to inelastic demand from the sneakerhead and streetwear community. Officially, my first venture was after Merrill Lynch Investment Banking when I founded one of the top Nike stores in the U.S. at the Hardrock Hotel & Casino in South FL. I was 25 years old and built that to a few million revenue-run-rate, in the first year of operations — all while in a retail recessionary environment. We had numerous celebrity clients, and it was a 3,000 square foot Grade A location. I realized the potential of the industry and decided to do an online version of the brick-and-mortar store. That is when I founded Soletron.
Soletron was a VC backed startup that I grew to the top 0.3 percent of all sites worldwide on traffic that we eventually ended up exiting to the industry leader Karmaloop, the world’s largest online street retailer at the time.
What initially drew you to Wharton?
I knew that achieving a Wharton MBA would provide me the proper education and infrastructure to maximize my skill sets and to develop into a better entrepreneur. I have always read about prominent successful Wharton entrepreneurs, and I have always been inspired by them. In fact, Soletron had Tom Austin, W’93, co-founder of AND1 Basketball on its board, and I always had an appreciation for pioneers such as himself who founded it at school.
Furthermore, I have always been inspired to go to Penn/Wharton ever since I was a child, as my mother Robin Frey is an alum (CW ’75, GED ’76). She has always been a positive influence in my life. Growing up she would tell me stories of her great experiences at Penn, and I always knew that I wanted to be a part of the community someday. Most importantly though, she always instilled in me the value of an excellent education. In my mind, the caliber of students, professors, and resources at Wharton are truly the best, and this is what drew me to apply to the institution.
At Penn, you readily immersed yourself in the entrepreneurship community attending programs, workshops, boot camps, etc. How did you utilize those resources?
The resources at Penn are unparalleled, and I am very appreciative of that. I was graciously accepted into VIP-C and then VIP-X. Both are the incubator and accelerator tracks of the Penn Wharton Entrepreneurship’s Venture Initiation Program. VIP-X gave me the proper resources to launch Steignet. We received complimentary AWS credits, free legal drafting, office space, and mentorship. Steignet was also accepted into the Detkin IP Clinic which helped my initial IP filings. Our counsel Richard Cohen, W’92, is a partner at Duane Morris and he was introduced to me through VIP-X. Richard is still our counsel and was very kind with his advice and billing flexibility to allow Steignet the opportunity to be where it is today.
Prior to attending Wharton, I researched all the prominent MBA programs and their respective real estate programs. In my mind, the Wharton Zell/Lurie real estate institution is the best in the country. They have a fantastic mentorship program where you get matched with prominent Alumni who volunteer their time to help students out. I was fortunate to be matched with two prominent Zell/Lurie mentors – Stanley Middleman and Chris Mundy who were very helpful in helping me launch Steignet. The connections, mentorship, and academic course materials of the program are unparalleled, and it was very instrumental in helping me launch Steignet.
Your latest startup Steignet is focused on the real estate market. How does one build a startup in the real estate industry?
If you are a smart individual that can detect patterns and opportunities, you don’t need to come from a real estate family or pedigree to found a startup. In fact, I would argue that a fresh perspective from someone outside the industry or asset class is what propels innovation. I took a lot of negative and incorrect feedback from “experts” that the single-family sector was not a scalable or an investable asset class. In hindsight, my conviction proved to be more accretive than conventional commercial real estate plays, and unbeknownst to me, I was shadowing the same investment thesis of the Blackstones of the world. My advice is to find your niche, always be a contrarian, and to be self-aware when an opportunity manifests itself. The rest is up to your execution and proper timing.
Steignet recently closed a successful $1.3M Seed round. Can you tell us about the experience?
It was a great outcome. We have very prominent investors in our cap stack — in fact most of our investors, and advisors, are actually Penn/ Wharton Alumni. Their involvement and participation helped to make this happen. I am very fortunate to have such prominent Penn / Wharton investors that include: Beth O’Brien, Alan Potamkin, Chris Mundy, and the Stanley Middleman family. Furthermore, I am also very appreciative that most of my initial seed backers were my WG’18 classmates. It means so much to an entrepreneur when your friends believe in you, the vision, and financially get your back by supporting your dreams.
Any advice for aspiring student entrepreneurs?
The most important advice that I can give, is to never give up and to always believe in yourself. Startup life can be very difficult mentally, and the entire company rests on how the entrepreneur deals with handling adversity. Every day there are going to be skeptics and naysayers that will tell you a myriad of reasons why your business won’t succeed. Prospective investors will try to deflate your dreams and aspirations, tell you that your valuation is too high, or that you don’t deserve it. Employees will be apprehensive about joining your startup given the risk/reward profile, and even your friends and family members will always be concerned for you and will want you to take the “easy” and “safer” corporate path. The bottom line is don’t let this negative feedback distract you from your internal convictions and dreams.
— Taylor Durham of Penn Wharton Entrepreneurship
Posted: January 7, 2020
