Sramana Mitra: What was the monetization model on that one? Were they monetizing well?
Blaine Vess: I don’t think they were monetizing as best as they could, but both of them were making money out of Google AdSense. Flash Card Exchange had a lifetime membership for $20 a month. If you paid, you would not see any advertising and you also got a bit of storage space if you wanted to upload images or audio to flash cards. When we bought it, we removed the premium membership because we’ve been focused on growth and getting people to love the site and the brand. Right now, we only make money on advertising. We’re eventually going to launch a premium membership where you can have the advertising removed if you pay, mainly because a lot of people have requested that feature.
Sramana Mitra: Flash card business today is not the big money maker. Your big money maker is still more the study notes business?
Blaine Vess: Correct.
Sramana Mitra: Where are you revenue-wise – 2012, 2013?
Blaine Vess: We’re now over $10 million. This year, it looks like we’ll be over $15 million.
Sramana Mitra: How many people do you have?
Blaine Vess: We are now 21 people in the Los Angeles office. We have a team of three in the Bay Area. We also have five outsourced developers in Belarus.
Sramana Mitra: The three in the Bay Area are also developers?
Blaine Vess: Yes, they’re actually working on a Math product for us. We basically want to be able to help students with their Math homework. That team is specifically focused on that project.
Sramana Mitra: So far, you’ve grown to $10 million organically by doing a little bit of a roll-up in the study notes and flash cards segment and especially by grafting together a bunch of different sites that were also founded by fellow student entrepreneurs. That business is going reasonably well. You are expecting to get to $15 million this year with that particular business model and then you’re starting to explore other products and other business models in the education space but with different kinds of objectives.
Blaine Vess: Exactly.
Sramana Mitra: There is no financing involved in all these?
Blaine Vess: No, we’re still all self-funded.
Sramana Mitra: You want to continue that way?
Blaine Vess: I don’t rule out the idea of raising money at some point if there were a much bigger expansion plan. We could be continuing the roll-up concept that you mentioned except doing some bigger acquisitions that we’ve been doing, but financing is not currently part of the plan.
Sramana Mitra: Your user base is all college students?
Blaine Vess: College and high school. We’re trying to go to the elementary. Things like flash cards can be used by students of all ages.
Sramana Mitra: But your monetized business is largely college students and maybe a little bit of high school?
Blaine Vess: Yes, that’s correct.
Sramana Mitra: Interesting. Is there anything else in the process of building this business that’s worth discussing as part of this story?
Blaine Vess: People talk a lot about the lean startup concept and I’m obviously a big believer in that. The big one that we could have done better is hiring people sooner and building out our local team. At this point, we have such a great team and we get so much done than we ever did before. It was silly that we were making over a million dollars and I still had a job. We could have been more focused at that time.
Sramana Mitra: You were doing it for the first time. You started this company as an 18-year-old so there is obviously a learning curve to all of these stories.
Blaine Vess: Certainly.
Sramana Mitra: Very interesting. We love these student entrepreneur stories and yours is certainly a very interesting one.