AOL squatter serves as reminder for moonlighting entrepreneurs

Entrepreneurs are being urged to be wary of using employers’ time and resources to pursue other business interests, after a young entrepreneur spent two months living at AOL before being detected.

In a bid to cut costs while building his internet start-up, Eric Simons, 20, spent two months “squatting” at AOL’s offices in California before he was uncovered.

After graduating from high school, Simons was selected as part of the inaugural class of Imagine K12, a Silicon Valley incubator focused on education.

Simons received $20,000 to work on his education-based start-up ClassConnect, which creates tools to help teachers build lesson plans, and share them with students and other teachers.

ImagineK12 is hosted by AOL, so Simons received a security badge as part of his involvement in the four-month program.

At the end of the program, the entire $20,000 had been spent. Desperate to continue his work but unable to afford rent, Simons decided to start living at the AOL building.

AOL failed to deactivate Simons’ security badge after it expired, so Simons had full access to the company’s food, gym and couches, enabling him to live there on an ongoing basis.

In this first month living at AOL, Simons spent a total of $30. He lived at the AOL offices for two months until he was finally detected by security.

After moving out, Simons secured $50,000 in venture capital funding from Ulu Ventures and Paul Sherer. He used the money to rent a house, where he continues to work on ClassConnect.

Matthew Beeche, who worked on his start-up whilst working for Pitney Bowes, says if an entrepreneur is intent on using company time to work on their venture, they need to be honest.

“I was very, very open and honest, so I guess I was lucky in the sense that I had the freedom to go and do something as long as I was meeting my targets. They were very flexible,” he says.

“I think with those types of things as well, it was a give-back situation because I would make introductions for sales staff [based on my own connections].”

“They saw that as a symbiotic relationship, which was quite good.”

“For me, it’s all about being open and transparent. If you’re open and transparent, you’d be surprised how much people give you back.”

But small business lobbyist Peter Strong told StartupSmart that entrepreneurs should never pursue other business interests by using their employers’ resources.

“Get it done in the morning or on the weekend,” said Strong, the executive director of the Council of Small Business of Australia.

Strong said if a new venture demands more time than that, the entrepreneur behind it must assess where they want the business to go.

“Either give up your job and pursue the business full-time or cut back,” he said.

“If you don’t want to lose the security of your job, you have to either sell the business or make a decision to limit the number of customers you’ve got.”

“The other option is to take someone on [to manage the business on a day-to-day basis] but make sure you’re not managing that person from your work.”