At 13, Steven Schwartz had a clear goal: he coveted the elusive Nike Kobe 7 Easter shoes. But with no financial support from his parents, he had to get creative.
Download Jetson - #1 App for Entrepreneurs & use our Business AI Tools for free!
Seizing control of the family's sole computer, young Steven delved into the world of sneaker bots—software designed to purchase limited-edition shoes faster than any human could. His passion led him to a Facebook group on the topic, where he crossed paths with Cameron Zoub, another middle schooler from Chicago. The duo quickly bonded, not just as friends but as business collaborators, launching their sneaker bot venture, Sole Sniper.
Fast forward to their mid-20s, and the pair, now joined by Jack Sharkey, have evolved into tech entrepreneurs. They co-founded Whop, a digital marketplace Schwartz likens to an "Etsy for software products."
While Whop isn't the pioneer in the software resale space, its success is undeniable. Since its inception in March 2021, the platform has seen software sales reaching up to $11.8 million monthly, as per data analyzed by CNBC Make It.
Whop's revenue model is clear-cut: they claim between 3% and 4.5% plus 40 cents from most sales, and a hefty 30% from transactions by their highlighted sellers, as stated on their website. This translates to a minimum monthly revenue of around $354,000, or an impressive annual figure exceeding $4.25 million, as estimated by Make It. While Whop acknowledged the revenue approximation, they chose to remain tight-lipped about the specifics.
Last month marked a significant milestone for Whop as they announced a whopping $17 million Series A funding round. The list of investors is as diverse as it is impressive, featuring names like hedge fund magnate Peter Thiel, NBA star James Harden, and the acclaimed musical duo, The Chainsmokers.
Reflecting on their journey, Schwartz, now 25, recalls the skepticism they faced in their younger years. "Growing up, our entrepreneurial spirit was often met with raised eyebrows. It was unconventional, especially venturing into the software domain," he shares. "But today, we're crafting a platform tailored for young, ambitious minds like we once were – the 15-year-old versions of ourselves."
However, the path to Whop's current success was neither linear nor immediate. The platform's triumph wasn't a serendipitous overnight sensation. In fact, it wasn't even the trio's inaugural foray into full-time entrepreneurship. The story of Whop is a testament to perseverance, adaptability, and the relentless pursuit of a vision.
Sneaker Bots & Business Blocks
When Steven Schwartz and Cameron Zoub launched Sole Sniper, their parents humorously speculated they were dealing drugs. After all, how else could two teenagers be earning money while seemingly glued to their computer screens all day?
In reality, the duo was knee-deep in the sneaker bot business, crafting and vending these bots at prices ranging from a mere $20 to a substantial $500 apiece. The venture was so profitable that Zoub even treated himself to a Tesla Model S with the proceeds. Recognizing his passion and the potential in software, he took the bold step of leaving high school to immerse himself in full-time software development.
Meanwhile, Schwartz took a different path, enrolling at New York University. A pivotal moment came after his freshman year when he interned at Accenture, a Fortune 500 consulting firm, in Singapore. There, he witnessed individuals shelling out sums for IT services that dwarfed any earnings he and Zoub had accumulated. Realizing that he possessed the skills these clients were paying top dollar for, an idea began to form.
Reconnecting with Zoub, the duo decided to pivot, launching an IT agency in late 2018. They onboarded Jack Sharkey, an acquaintance of Zoub's from high school, as their inaugural developer. This new venture, Schwartz recalls, provided a "far steadier income stream" compared to the unpredictable world of sneaker bots. "At the height of our success," Schwartz reminisces, "we were raking in around $100,000 monthly in revenue."
The Quest for Creative Fulfillment
While the steady income from their IT agency was undoubtedly rewarding, the trio of young software enthusiasts felt a void. The work, as Schwartz puts it, was "transactional" and lacked the creative spark they yearned for.
Over the years, Schwartz and Zoub had dabbled in numerous ventures, launching over 20 startups together. With Sharkey on board, they initiated another three. However, most of these endeavors didn't take off. Whether due to errors, dwindling interest, or lack of long-term potential, the projects were often shelved.
A turning point came in December 2020. As Schwartz was nearing the end of his college journey, a mutual acquaintance introduced them to a forum where software, reminiscent of their sneaker bot days, was being traded. Zoub, ever the entrepreneur, saw potential but was critical of the platform's design. He noticed users struggling with pricing and rampant scams. His proposal to Schwartz and Sharkey was simple: leverage their software expertise and customer acquisition know-how to refine and elevate this rudimentary marketplace.
Thus, Whop was born in March. But success wasn't instantaneous. As Schwartz stood on the cusp of graduation, the pressure for a stable income weighed on him. Doubts about Whop's viability crept in. It was Zoub, with his unwavering belief in their venture, who persuaded Schwartz to persevere, assuring him that Whop merely needed time to gain momentum. His prediction proved accurate. Within three months, Whop began making waves on Twitter, earning a reputation as a safer alternative to rival platforms.
The rising success of Whop didn't go unnoticed. Just four months post-launch, acquisition offers started pouring in. Uncertain about their next move, they sought advice from Cory Levy, an early-stage angel investor and head of the Z Fellows startup accelerator. Levy, recognizing Whop's potential, connected them with Tinder's co-founder, Justin Mateen. Mateen's advice was unequivocal: "Don't sell this. Don't be stupid."