Business 2.0 is reporting about JetPens a business run by three students at Stanford University. The students, Lily Kim, Shu Lindsey, and Adrian Mak had trouble finding the precision pens they liked to use, the Japanese-made ultra thin ones with tips half the width of the average ball point.

Unable to find what they wanted elsewhere they started importing their own in 2004 and turned their passion into a business, pooling $9,000 in savings to launch JetPens. They built their customer base by e-mailing fellow students and contacting artists they found on the Web.

They now sell 10,000 pens and other items every month. Among its best-sellers are a pen with a tip fine enough to write on a grain of rice, novelty erasers (some that look like packs of gum or pieces of sushi, another designed to never run out of corners), and the “popcorn” pen, with ink that puffs up on the page, a favorite with scrapbook fanatics.

Thanks to some clever tricks for keeping costs to an absolute minimum, the founders say they’ll turn their first profit this year.

Like all good startups JetPens has benefited by keeping a tight cap on operating expenses. They have built the business by bootstrapping:

• Having learned from an earlier online venture how expensive it can be to start a website, JetPens’s founders now rely on free open-source software from osCommerce to run their storefront.
• The monthly marketing budget at JetPens is just $20, all for Google ads, which bring in about $1,000 in sales. The company’s well-designed site also puts it at the top of Google’s search results for “Japanese pens.”
• JetPens did fine without a warehouse. “Adrian’s got $40,000 worth of pens in his bedroom,” quipped one founder.

It’s a great story and once again shows that by solving problems in our lives we can identify niche business opportunities.

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