Williams certainly figured out how to strut his stuff. Today, at 29, he is the chief executive officer of Questia Media, an online shortcut for other working-class kids who aspire to a first-rate education. With the help of Rod Canion, Questia’s board chairman and a cofounder of Compaq Computer, Williams has raised $151 million and launched what they call the world’s largest online library of books. It allows subscribers to search tens of thousands of scholarly books and articles for term-paper materials and automatically sets up the necessary footnotes and bibliography. For $19.95 a month, even the most isolated student gets access to the deep academic resources that in the world of bricks and mortar mark a top school.
If this had been just another dot-com in search of a business model, Williams might now be back in New York, pursuing the law career he put on hold. But he had impressive backing: among his directors are Kenneth Lay, chairman of Enron, and Terry Crane, vice president of education projects at AOL. More important, he had a pricing model that held out the prospect of steady revenues from repeat business. Questia is still growing, an occurrence full of lessons for those who want the Internet to prosper.
Successful entrepreneurs often recommend ignoring even the most sensible advice when it doesn’t feel right. That is what Williams did when he started Questia. He had transferred to Rice University and then got a law degree at Harvard, but researching cases was not his idea of fun. The notion of an online university library kept nagging at him. In 1998, four days after he graduated from law school, he tossed his luggage into his much-traveled Acura and drove to Houston. He thought the entrepreneurial climate in Texas and his Rice connections would yield the most capital for his venture.
He stayed in his car the first few nights, changing locations because the Houston police did not like to see an unshaven twentysomething running his engine in the McDonald’s lot to keep the AC going. Every night, dinner was spaghetti with a little butter and salt. After two weeks he found an apartment for $300 a month and furnished it with a white plastic chair from Kmart. There he sat, working the phone and his laptop, rolling off to sleep on the floor.
He pitched would-be investors nearly every day, got feedback and continually rewrote the business plan. Give it up, Williams was told. The publishers won’t give you the rights. Users won’t pay for anything on the Net. Go get a real job. After nine exhausting months of not listening to experts, he made a presentation to an investor group that included Canion. Within a month Canion was onboard.
In January, Questia launched its service with 35,000 books and articles. Today the number is more than 65,000, and growing. The dot-com collapse did not kill Questia, but Williams had to slow the rate at which he could purchase rights and plug words into his system. He also laid off half of Questia’s 280 employees.
Williams says he will survive because he has a pure online product. He has no inventory to worry about. The documents go to the customer online, a page at a time. He plans to use profits, not new investment, to grow. Going public is still some way off. The company has not yet disclosed how many subscribers it has, which analysts say is the key statistic. “In a purely conceptual way, it is a very appealing venture,’’ says Dan O’Brien, a senior analyst with Forrester Research.
Williams promises to achieve positive cash flow by next year. He says he doesn’t see how he can lose. Colleges are happy to see student papers improve. And publishers get a share of Questia’s revenue per page. “There is nothing like this online,” he says. “This is not a fad.”
Demographers and university adminis-trators say college and graduate-school enrollments will continue to increase, particularly if the economy remains weak. For their $20 a month, students can go as deep into Williams’s Web site as they want, no matter where they go to college, no matter what their parents did for a living, no matter who thinks they have no chance for success.
