This 19-year-old just dropped out of Wharton to sleep on an air mattress and build a new startup

Wesley Zhao

When we introduced you to Wesley Zhao back in April, he was just a fresh-faced 18-year-old kid kicking around a new Twitter application with his high school buddy Ajay Mehta. At the time, we were extremely impressed with the smarts and entrepreneurial energy of both Zhao and Mehta, and a bit disappointed when the rising stars from Interlake High School in Bellevue decided to flee to Silicon Valley to pursue their startup dreams.

But, here’s the update: Zhao and Mehta are back in the Seattle area. And the entrepreneurial duo, along with colleagues Dan Shipper and Jesse Beyroutey, who turned 22 today is the elder statesman of the team, just launched a new startup called AvantCard that’s looking to transform the way people give gift cards.

Zhao, now 19, is so serious about the project that he just withdrew from his second year at The Wharton School at The University of Pennsylvania where he was studying finance and computer science. (Mehta plans to study in London next term, while Shipper is heading back to school until the project advances further).

“Doing something entrepreneurial at this age can be advantageous since you have less of a downside,” Zhao tells GeekWire. “No matter what happens, the worst case scenario is that I go back to school with a lot of experience and a lot of lessons learned.”

Ajay Mehta

Zhao certainly is embracing the startup lifestyle. He’s been sleeping on an air mattress in a spare room at Mehta’s parents house in Bellevue, which also serves as the company’s worldwide headquarters.

“My back is fine. I actually don’t mind the floor,” said Zhao when asked about his sleeping set up. “It might be because I am young, or because I am stupid, but I don’t mind at all. I just need a place to stay and a place to set up my monitor and I am happy.”

The sleeping arrangements could change on August 28th when Zhao’s co-founder heads overseas, though Mehta’s parents have graciously invited the young entrepreneur to stay put in the makeshift office. Zhao said he’s considered it since the company is currently thinking about taking on some interns who currently live in Bellevue.

Asked what the profile of an intern looks like for a company run by 19-year-olds, Zhao notes that it is “someone who is 17 or 18 years old.”

“We definitely need help wherever we can find it. The only thing is that we need to make sure we get the right kind of help. We don’t want someone who doesn’t necessarily provide value,” he said.

Zhao and Mehta — who had applied for the Y Combinator technology incubator program — actually spent a few weeks in Silicon Valley where they were introduced to the fast-paced world of high-tech startups. Even though they found a sweet deal renting a space in San Jose mansion, the drain on the business was just too much.

“After a month of being down there, we realized that at this early of a stage, the money that we were spending to live down there wasn’t necessarily worth the benefits of being in that community versus being in the Seattle startup community,” said Zhao, whose family lives in Sammamish.

So, they packed their bags and relocated to Mehta’s home, choosing between the basement, garage and spare room for the office space.

AvantCard faces a strong line-up of rivals, including Seattle’s own Tango Card (profiled on GeekWire in June) and Plastic Jungle. Zhao admits that they are trying to solve a similar problem, which is that people often provide gift cards that never get used.

“TangoCard seems to be offering a card to replace the American Express/MasterCard open loop cards, but without the fee and in a web 2.0 fashion,” explains Zhao. “That’s great and we think their product is awesome. We are looking to play towards the much more popular existing user behavior of buying a regular store branded gift card, and making that better.”

With AvantCard, Zhao notes that recipient can log into the site and exchange it for gift cards at more than 80 retailers such as Apple, Target and Macy’s. Incorporating the flexibility of the AvantCard costs $3 for those cards under $50 in value and $5 for those with more than $50 in value.

The company, which is considering going out on the financing trail in the coming weeks, already has some top-notch advisers. They include Zillow CEO Spencer Rascoff; ePinions founder Nirav Tolia and Wharton professor Kartik Hosanagar.

Those advisers are adding credibility to a team whose average age stands at just 20 years old.

“We’ve realized, since we started, that age can be a barrier,” said Zhao. “And the way that we sort of tackled that is by surrounding ourselves with really smart and experienced people.”

John Cook is co-founder of GeekWire. Follow on Twitter: @geekwirenews and Facebook.

  • http://twitter.com/spencerrascoff Spencer Rascoff

    Congratulations to Ajay, one of the most passionate entrepreneurs I’ve had the pleasure of meeting. Ajay worked for us at Zillow for two summers in high school, and it was apparent even then that he was going to do great things in the technology space.

  • http://www.facebook.com/michael.a.tom Michael Andrew Tom

    Congrats guys!  Keep up the hustle :)  Looking forward to seeing where this goes

  • Alvin Solbert

    This is sad explotation by monied men. The dialogue goes like this, “drop out of school, forget all your hard work to get to a good school to start with, and we will make you rich”. Oh, and did we forget to tell you that whatever money you make we will get a nice multiple for our selves. Shame on you Spencer Rascoff, your greed and hubris in taking advantage of talented young men that need an education first is deplorable and a disgrace to the Seattle tech community. In another life you would have been the carnival king, luring the young away from family and community to the sole benefit of your pocket.

    • http://ajayumehta.com Ajay Mehta

      Hi Alvin,

      Thanks for the comment! I appreciate your concern, but I just want to address that in no way are we forgoing our overall education in order to pursue startups, and no advisor or friend of ours (including Spencer) has at all recommended any paths or advice that we haven’t proposed/thought through fully with the help of our personal friends and family.

      As the article states, I’m remaining in school for the time being while still remaining active in our new company and the startup scene at-large. Wesley is planning to only take a year off at this point, and taking time off in college is quite common and not at all a sign of a disregard for education — in fact, he will likely gain more from his education when he returns having spent a year building a company and product.

      I do appreciate you looking out for us, but I just want to reiterate that Spencer is an amazing, hardworking entrepreneur and a kind, helpful person. His advice is invaluable and he’s 100% on our side, with no personal financial interest in our success. I hope you can retract your views on him, as he deserves only praise for his consistent care and advice as a mentor to young tech startups and entrepreneurs in the Seattle area. We need much more like him, definitely not less.

  • guest

    I guess this is the technology equivalent of the baseball player passing up the scholarship to give the big leagues a whirl.

    I’d rather see them in school.

  • Bob Crimmins

    Congratulations, guys.  Great to hear that you came back to Seattle to forge your startup.  Forget the naysayers… and the sycophants.  But listen hard to the folks who have already been to where you’re headed. 

    Good luck!

  • Ken Glass

    I have met the founders…they are really focused and smart.  Good luck guys!

  • Sasha P

    How does this AvantCard business model work? Are they just reselling the traded-in cards on eBay and buying new ones to send the buyer? I’m curious.

  • Sasha P

    How does this AvantCard business model work? Are they just reselling the traded-in cards on eBay and buying new ones to send the buyer? I’m curious.