Eric Kuhn, 41, is the founder and CEO of FoundersCard, which offers networking opportunities, discounts, and perks for entrepreneurs and innovators. Since its founding at the end of 2009, FoundersCard, which is profitable, has been growing steadily--but more slowly than Kuhn might let it, since part of its value comes from its exclusivity.
How’d you get the idea for FoundersCard?
It was when I was on the roadshow for Varsity Books [his first company], which was going public, back in the Internet 1.0 days. The investment bankers were coordinating all the travel. Every night I stayed in a different city. I remember staying at amazing hotels: the Mandarin Oriental, the Four Seasons. I remember talking to [the bankers], asking, How much does this cost? It turned out they could travel in this kind of style because they received these incredible deals because of who their companies were. That struck me as odd, that it was the investment bankers--who leeched off the entrepreneurs, the value creators--that were getting these amazing benefits and rates. I thought it was the entrepreneurs and founders who should have this kind of access.
Your site touts “exclusive benefits, upgrades, and amenities from the hottest travel, lifestyle, and business brands, carefully selected to meet the needs of the entrepreneur.” What are some examples?
To give you an example, we have a relationship with Virgin Atlantic Airways. Members get elite status in the frequent flyer program, as well as discounts.
I see you also have deals with Gilt City, AT&T, Indochino Custom Suits, TaskRabbit, ZipCar... It looks like you’re trying to fully equip and accessorize the modern entrepreneur.
That’s right, it’s a little bit of everything. A lot of people love the deals we have with hotels, like the Mandarin Oriental Hotels. I remember how I used to travel: I wanted to stay in a great hotel, but I didn’t want to pay for it. I wanted to stay at the Four Seasons, but pay for the Marriott, and be treated like a king. That’s how we built the program.
What about the spirit of bootstrapping? Do founders necessarily deserve these accommodations, if their companies aren’t making money yet?
Many of our members have received venture or angel backing. It’s not like our average member is 18 years old and just came up with an idea for a company, and doesn’t have two nickels to rub together. Some very well-known companies are FoundersCard members. We don’t want to give the impression that we’re starving-artist entrepreneurs.
How many nickels do you have to rub together to be a member of FoundersCard?
I’d have to do the math. Membership is an annual fee of $495.
There’s a long history of exclusive cards: the American Express black card, for example. It looks like your card is also black?
Actually, the card is a pretty sleek metal. We wanted to do something unique and innovative. We wanted it to be one of the five things you have in your wallet. At events, people are showing them off. There’s been a fantastic response. People love the card, love the design.
How many members do you have?
We have over 5,000 members now. We’re focused on controlled, quality growth. We’re looking through everything under the lens of quality. I’m learning for the first time that more can be less.
What are the criteria for joining the club?
More than anything, demonstrating a deep connection to being an entrepreneur.
But how do you screen for that?
Most members are referred by existing members. There’s an application process. We follow up with any questions if there are any things we need to know.
What might be a red flag?
We don’t want people who want to become members because of one particular benefit. I know it sounds hokey, but we built this depending on members being active and participating. It’s a two-way street. We deeply rely on members; members have opened a lot of doors for us. One cool aspect of FoundersCard is that it occurred to me, we have so many members who are founders of these companies, why not allow them to create benefits for fellow FoundersCard members?
It’s nice to have a business where members are creating value for you.
I’ve finally figured it out after all these years!
How often do you turn applicants down?
We reject roughly 30%. We accept roughly 70%--let’s look on the positive side.
It must sting to get rejected.
I remember reading a tweet from someone who said, This is the worst day ever: I lost my wallet, and I just got rejected by FoundersCard. My first instinct was, that’s terrible, but that’s kind of part of the reality of what we’re trying to create.
Clearly someone who loses their wallet isn’t someone you want in your club.
No, some of the best entrepreneurs I know are the most absentminded people on the planet.
This interview has been condensed and edited. For more from the Fast Talk interview series, click here.