Fahad Hassan was a 21 year old Virginia Tech student who lost interest in his business degree and was not motivated by the material being covered in his classes. He watched the movie “Pay It Forward” and was inspired to start his own online business (check out our list of Top 10 Movies For Entrepreneurs for more motivation!).

He frequently used a diary to write down motivational notes and personal messages. He envisioned creating a company that would include social networking elements that Facebook and MySpace are popular for but also mix in course management software to help students with their studies.

Fahad launched his business and immediately began looking for venture capital. He received negative feedback from one of the first VC’s he approached, John Burke from True Ventures: “He only saw his product from a user standpoint. There was no business model. How is he going to make money around this? How is he going to get professors to sign up? How is he going to get universities to switch horses midstream?’”

Fahad continued on though and was able to secure $500,000 through a private investor, Scott Birnbaum, who came on board because “I saw an opportunity to help him navigate the difficulties of building a company. It’s a roller-coaster ride. You start out and get pumped about your idea. You do research and you realize there are probably five or 10 people out there doing the same thing.”
Scott’s company, Epok, gave Fahad six of its employees to build a test site. Fahad quickly got into disputes with his programmers insisting on features that were time consuming and complicated to create. According to one developer, “You’ve got to have certain processes in place. He didn’t always know what it would take to put something together. What should I expect from someone who’s never done this before?”

Fahad’s thoughts? “A lot of it was impatience on my part. I wanted to catch up in terms of the product and the market share. In the early days the biggest problem was with my team. They would be telling me we need to do this and that and maybe a more experienced CEO would have understood the balancing act better.”

Fahad’s team finally put a demo site online and got a group of students using it and filling out their profiles. He also recruited professors to post course materials and schedules. But Fahad was running out of money. If he wanted more advertisers he would need more traffic and he needed more money to expand the functionality of his site.

Fahad went to talk to a host of venture capitalists – everyone said no. “They want to know how you’re going to make them money and how quickly. It’s a little frustrating that they don’t really care about my vision.”

The good news is that Scott Birnbaum has agreed to continue to fund the company until it gets a sizable investor. The site currently has 3,000 users and gets 200,000 page views per month. In order to be successful, they are going to need to grow by leaps and bounds – and quickly. According to Fahad, “if we’re not at 150,000 users by the end of the year, we’re in trouble.”

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What do you think Fahad’s chances of success are?