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"These colleges are ranked the top in the country, and it's surprising to me that they can't send out a simple email."
Customer service is one area where small businesses can beat big-box competitors
Entrepreneur: Thomas Foley, 25
Funding: $1 million from venture capitalist Tim Draper, family, and friends
Foley is building a site that would make it easier for private companies to raise funding online. Due to launch later this year, XChange will let investors pour money into specific companies or invest in index funds—say, for specific industries. The company plans to make money on transaction fees and by selling premium features.
Lessons leaned: "You find ways to keep costs down," Foley says. "Instead of buying things for cash, you give equity. Instead of buying all new computer systems, you might buy used systems. You find ways to stretch your dollars."