Sramana Mitra: You focused on getting to a business model. Part of the problem at the Valley right now is that people just go and build things without figuring out a business model. As a result, they have huge burn rates and no monetization model. That doesn’t create a sustainable company. That whole model is predicated upon some fluke acquisition. Otherwise, you cannot sustain that model. Your model is much more sustainable.
You said you were very conscious about the burn rate. Can you talk a little bit about how you built your team? What areas did you put in people?
Andrew Grauer: For the first four to five years, it was really a product development team. I was acting as a product manager as well as figuring out all these other parts of the business such as legal and finance. Then, we had a team of software engineers and web designers.
Sramana Mitra: How many of you were there?
Andrew Grauer: It’s been seven years. At the beginning, we built a club on campus. We weren’t even employees. We were only working on this thing that we were passionate about. There were about eight to twelve people at its peak. In terms of getting to a point, it was late 2008 when we actually got our first $150,000 in capital. We had myself and two software engineers as employees. We really focused on building that out. We were a 5-person team for another two to three years before we started scaling out the product development team, web designers, product managers, customer service, marketing, and account management team.
Sramana Mitra: What’s the size of the team today?
Andrew Grauer: The team’s about 54 people.
Sramana Mitra: How does that split out?
Andrew Grauer: It’s about half account management and half product development. When I say product development, that encompasses software engineering, web design, and product managers.
Sramana Mitra: What does account management entail?
Andrew Grauer: It really entails the process of managing student interns as well as tutors and clients.
Sramana Mitra: Part of it is customer support, another part is managing tutors, and another part for the community?
Andrew Grauer: Exactly.
Sramana Mitra: Is there anything else that is significant in your journey that we should cover before we close?
Andrew Grauer: I really think a lot about keys to success. It’s pretty scary to start working on things that you don’t have any idea how to do. I realized that 95% of the things that I’ve done, I haven’t done before. If you could just figure out what the problem is, which one to solve, who could help to accomplish this, it’s very possible. I think just doing it and getting started and setting up a structure where it’s not easy for you to say that you’re going to quit now is really powerful.
On top of that, a lot of people work extremely hard for a relatively short amount of time – a year or two years maybe. Then they burn out. They work too hard too fast. You have to figure out a way that you don’t burn out. Working 14-hour days is not sustainable. You’re not going to do very well. You have to figure out a system that is sustainable and is growing over time. The classic case of our marketplace is that naturally, day in and day out, the community is helping to grow the platform. It just takes time. Don’t burn out.
Sramana Mitra: Short way to say that is, “It’s a marathon, not a sprint.”
Andrew Grauer: I don’t mean by that to be complacent because you know you have a great long-term strategy. I don’t mean by that to be lazy.
Sramana Mitra: As you pointed out and experienced, communities don’t grow overnight. It takes time to engage people and get their attention and get them to start using your platform and engage with your offering. Markets don’t develop overnight.
Andrew Grauer: Absolutely.
Sramana Mitra: It was a pleasure talking to you. Congratulations to your success!