April 5, 2006

Million-dollar buddies

By Quentin Casey
qcasey@uwo.ca

Rahim Fazal wasn't your typical high school student. When most of his classmates were studying for their Grade 12 final exams, Fazal was busy negotiating the sale of his Internet company. The final price: $1.5 million.

That was in 2000. Fazal, 24, will soon graduate with an MBA from the University of Western Ontario's Richard Ivey School of Business. When he was accepted into the program two years ago, he became the youngest to enter without the required undergraduate degree.

As mentioned, Rahim Fazal isn't typical.

Fazal's business ambitions started early in his hometown of Vancouver and have always involved his best friend, Husein Kaba. The two started off with the smallest of jobs: selling hockey cards at flea markets, helping to set up computers and, one year, a topsoil delivery outfit.

"I've always been very entrepreneurial," says Fazal.

Western student and dot-com millionaire Rahim Fazal says he has always been entrepreneurial.

These small projects piqued the two boys' interest in business and would lay the foundation for much bolder plans in the future.

The first came in 1997 while the two were in high school. They worked at a company called Internet Direct, which provided web connection and hosting. While balancing the rigours of the International Baccalaureate program at school, Fazal worked nights and weekends on the business.

By 1998 their new site, MailBC.com, allowed small businesses to create basic websites and e-mail programs. Started with a $500 investment, within a year it had 25,000 customers. "Eventually it took on a life of its own," Fazal says.

The demands of the growing business meant Fazal had to carry a cellphone and pager, and was constantly being called out of class to provide customer support. "My teacher actually thought I was a drug dealer," he says.

Fazal had kept the business a secret from his parents, knowing they would force him to shut it down and concentrate solely on school. When a meeting was called with his parents and teachers to discuss his possible "drug dealing," Fazal had to pick the lesser of two evils: he pretended he was dealing. The sacrifice meant the business could survive.

By March of 2000, the upstart business had caught the eye of a California company. It offered to buy the whole operation. But the offer left the two in a bind: they had no experience dealing with a large sale and an experienced company. Fearful they would be fleeced, the two hatched a plan.

Over two weeks they visited nine Vancouver lawyers for free consultations. From all of those visits they were able to draft a full contract without paying a cent.

A week before his chemistry final Fazal sold the company for $1.5 million.

"From there things completely changed for us," he says. "It was quite a wild, wild ride. We didn't really have time to stop and think about what was happening."

Later that year the two friends raised $1 million in capital and launched a new business, Merchantpark Communications. With 10 employees under them, the two provided businesses with office productivity resources, from accounting to customer service.

On his 20th birthday, in 2002, Fazal took the company public in the U.S. But as the dot-com bubble of the 1990s burst, so did the hopes of the company achieving major success.

"For various reasons the technology was no longer viable. The tech industry was in peril," he says. "In hindsight going public was a big mistake."

With the company all but dissolved, Fazal was at a crossroad — what to do next?

After discussing the decision with a number of people, both Fazal and Kaba decided to take a step back from the business world and return to school. This was particularly important for Fazal's parents, who are both university educated.

So he enrolled in a local college. One day an instructor, who recognized Fazal from a newspaper article, approached him. "She said, 'You don't belong here.' " She was right. Sitting through basic business and computer classes was an enormous waste for someone who had built three companies.

That instructor was an Ivey grad and recommended its MBA program. It just so happened that the dean of Ivey, Carol Stephenson, would soon be in town for a talk. The instructor gave Fazal a ticket with the idea that he might get a chance to speak with her.

Dressed in his best suit, Fazal arrived at the hotel. Though feeling completely out of place, he waited for a chance to see the dean. When Stephenson made her way around the room, Fazal was introduced to her. He made a quick pitch and explained that he didn't have an undergraduate degree, but instead had a wealth of experience for someone his age. The pitch landed him a lunch meeting. "I was completely stoked," he says.

The lunch lasted two hours and covered a broad range of topics. "She realized the value of the learning I had," Fazal says. But there was a problem: they had never admitted a 21-year-old without a degree — a privilege usually reserved for mature students with vast experience.

What followed was an intense process to see if Fazal was up to the calibre of other students — who average 30 years of age and possess extensive management experience. He spoke to a class of students, was interviewed by professors and had his CV meticulously reviewed.

"It's always a concern anytime you make an exception," says Eric Morse, the director of entrepreneurship at Ivey. "(But) he's really bringing a wealth of experience … We thought (Rahim) would be a great fit.

"He's exceeded those expectations."

According to Morse, Fazal's strengths lie in his ability to simply accomplish things while others talk. "He understands what it takes to make things happen. (Rahim) is willing to go out and see if it can be done."

This year's Ivey business competition was a prime example, says Morse. Held on March 24 and 25, the annual competition set MBA students from across the country against each other in a battle of business ideas. The winning team, from Ivey, took home $25,000. Fazal served as co-chair of the event.

"This year it was really taken to a new level with Rahim's stewardship," says Morse. "He really did a tremendous job."

With only weeks left in his time at Western, Fazal relishes his choice to return to school.

"It was the best decision I could have made in my life at that point … It has completely changed my life."

Fazal says that he and Kaba, whom he still describes as his best friend, hope to re-connect in Silicon Valley in California next year. Kaba is attending school in British Columbia. When he graduates the two will launch a new tech company.

"His skills are complementary," says Fazal. "Together we make a great team. He's almost like a brother."

Through all of their endeavours, Fazal says that being young has never been a hindrance.

"In business they don't care how old you are. It's about what you can offer, what value you bring.

"In business only I am responsible for my success and my mistakes."