A Prodigy’s School for Entrepreneurs
Four years ago a “secret society” of Huntsville angel investors steered 21-year-old prodigy Brandon Kruse through a deal that made him his first millions. Now he’s working to share the mentor spirit with a schoolhouse full of entrepreneurs.
Encouragement and motivation are at the heart of doing high-tech startups, says Huntsville entrepreneur Brandon Kruse.
Brandon Kruse is a 25-year-old entrepreneur who’s already made millions. So, what drives him now?
He loves fast cars, but what really ignites his passion is helping other entrepreneurs find their road to success. He’s creating a new coworking space in Huntsville to give them their chance.
“My first time, I made a lot of mistakes,” Kruse says, “but that’s how you learn.”
About four years ago, he sold his first company, Dialmaxx, a digital telecommunications service provider, to magicJack, an Internet phone provider. He won’t talk specifics, but says his company sold for millions.
Since then, he’s worked in an executive-level corporate position with magicJack. He’s worked as a consultant. He’s lived in cities from Florida to California. And he’s learned a lot from his mistakes and his mentors.
He’s been sharing his lessons learned with other entrepreneurs ever since he sold Dialmaxx. But now, he’s taking it to the next level.
Kruse paid $500,000 to Huntsville City Schools for a surplus elementary school building. He’s investing another $100,000 to create a comfortable, cheap office space and amenities for new or growing small businesses.
He says HuntsvilleWest Coworking at 3001 9th Ave. S.W. should see its first tenants move in by June.
“We’re going to put 12 companies in there, and we’re going to create mentor and protégé relationships and get them in the door and see how we can add value in technology and membership.”
For $50 to $100 a month, other entrepreneurs can sign up for a coworking space at HuntsvilleWest. That means a non-dedicated workspace with work surfaces, Internet and other office amenities.
“I’m not making money off the office space,” he says.
It’s still in development, but Kruse envisions being able to provide free legal and accounting services.
Then, there’s the mentoring factor. Kruse will be there to help. But so will other mentors.
“I’m hoping I can really sink my teeth into at least one of the 12 companies and help take it to the next level.”
When Kruse first got the offer from magicJack, what he calls a “secret society” of angel investors and mentors opened up to help him navigate the deal.
“Selling the company was awesome,” he says. “But I came out of it thinking what I could do or how I could engage these people, but be the frontrunner or person to vet people so these amazing investors and entrepreneurs can mentor a few more people.”
He says he had to learn the “mentor-protégé protocol.”
“When you have an idea and you’re trying to get money, it’s hard,” Kruse says. “There’s a vetting process. But I made myself available, not asking for cash, but for them to point me in the right direction (where) I should run as fast as I can.”
Then when the magicJack offer arrived, the doors opened up.
Huntsville Mayor Tommy Battle says Kruse is a great example of the new creative class of worker.
“His vision for the old Huntsville school campus will attract the young tinkers and makers we need to fuel the next generation of entrepreneurs,” Battle says. “Spirited innovators like to cluster with like-minded thinkers. Huntsville West is well positioned to support an ecosystem of entrepreneurs, and Huntsville is well positioned to help take them to the next level.”
Kruse hopes his project will assist local entrepreneurs and attract more from outside the region. “We can transplant people into Huntsville, giving them a place to live, eat and breathe their company for six months to grow organically or to get to a place where they are very fundable.
“People can’t put their plans to work efficiently if they need a million dollars for a commercial space. For those who subscribe to a lean startup, I’m looking to keep office cost to $5 a square foot a year.”
He’s also working to provide his tenants at HuntsvilleWest Coworking with free accounting and legal help.
“Too many people start up, borrowing money on home equity and get an office space for $3,000 a month, go there, sit down and wait for the phone to ring,” Kruse says. “It doesn’t work that way.”
For some people, starting part-time makes sense.
“Growing in a truly organic fashion is the best way to me,” he says. “There is a clear point in time when seeking capital makes sense, but if you’re not in manufacturing or designing hardware, you can do it organically with a keystone customer or sweat equity.”
He wants to see “good success stories, but through a process,” Kruse says.
How did he do it?
By age 12, Kruse had his A+ certification, demonstrating his competency as a computer technician.
At 15, he landed a job “as a coffee getter” at Digium, a Huntsville-based communications technology company. He eventually became a programmer there.
“Mark Spencer (founder of Digium) gave me the opportunity to be a rock star in the telecommunications community,” Kruse says. “I worked there several years and recognized a need large customers had for long-distance service.
“There were these big contracts for long terms, but no good rates for long distance.”
He talked it over with Spencer, who encouraged Kruse to start his own company.
“I was still in high school at the time, and he told me if it didn’t work out then I could come back and work for Digium.”
At 18, Kruse started Dialmaxx in his parents’ basement. Within 18 months, it had grown to 12 developers, including full-time developers and engineers.
“All of a sudden, out of nowhere, I was in the thick of things. It was a lot of fun, all in the basement, still finishing up high school.”
There were also depressing times when he felt alone.
His parents, Eric and Penny Kruse helped get him through.
“I heard it a lot, ‘Even if I can’t help you at what you’re doing, you’re doing a good job and I’m proud of you,’” he recalls their words. “That, my spirituality and my mentor relationships got me through those periods.”
Then, everything changed.
Kruse says he was trying to court magicJack as a customer when the company offered to buy Dialmaxx.
“I realized I was in way over my head when that 50-page document arrived,” he says. “And that’s when this amazing community of people in Huntsville just came out of the woodwork when I asked for help.”
The multimillion-dollar deal closed just before his 21st birthday.
Now, he’s a consultant, an angel investor and mentor.
He’s a consultant at HudsonAlpha Institute for Biotechnology and working to expand SkyAirtime, a telecommunications company that provides all notifications for the public school systems in Alabama.
“Now I’m getting into the field of trying to turn around failing companies with potential. I like to see if I can make it profitable and either keep it or sell it off.”
In 2014, Kruse says he acquired the assets of Geocon Consulting Services Inc., a California-based geotechnical engineering and environmental company.
“I fixed them up, because they were in bad shape,” he says. He sold it before the end of the year.
His itch is to add value to different companies. “There’s a list of companies where I sit on the board or help out, but I have no equity position and no strategy for flipping equity.”
Instead, he helps where he can with funding, the Web, technical issues and general business advice to help those business owners get to the next level.
But it’s HuntsvilleWest where he will put his experience and connections together this year. The doors will open for the coworking space this month. More than half of the 12 company spaces are secured for June and he has hopes for the commercial kitchen – maybe for a small caterer or food truck vendor.
He wants to help as many as possible get to the point of profitability or investment worthy.
Kruse hasn’t ruled out getting a college degree, and he’s definitely set his sights on having a library or other facility named after him at the University of Alabama in Huntsville.
Wendy Reeves and Dennis Keim are freelancers for Business Alabama. Both are based in Huntsville.