Sramana Mitra: What year did you start this? When did you start offering the course around which you did the first experiment?
Farnaz Ronaghi: Mid-2012.
Sramana Mitra: You said you had 30,000 people who came together.
Farnaz Ronaghi: In the first Technology Entrepreneurship class, we had 40,000 enrolments.
Sramana Mitra: What time window are we talking? How long from the time you launched this did it take for 40,000 people to come together? How did people find out about it?
Farnaz Ronaghi: That’s a great question. It was actually very quick. In a matter of weeks, we had the 40,000 people. The instructor who was teaching the class is actually very well-known in technology entrepreneurship and entrepreneurship research. He has his own blog. He has his own followers. He just announced this class on his blog and we announced it to the larger Stanford community. That’s how we attracted users. It’s a little bit different from an average startup out there.
Sramana Mitra: All this was happening while you were still doing your Ph.D.?
Farnaz Ronaghi: The first five classes that we offered were part of my Ph.D. at Stanford. The company had not started yet. It was quite hard to do that and be out of school. It was just me with a lot of users. It was quite hard. We had to decide whether this is it or just shut the door and go home, or expand it and transform online learning in a meaningful way. On January 2013, we basically walked into our own office and started growing the team and building the company.
Sramana Mitra: Did you raise financing?
Farnaz Ronaghi: When we left Stanford, we hadn’t raised money yet, but we started talking to angel investors. We knew that there was traction and that we would be able to raise seed money. That’s what we did. We started actively raising the seed round. I think it took us a few months to close and get the money. At that point, we were looking to do a $1 million seed round. Then we started hiring engineers.
Sramana Mitra: What kind of investors did you bring in and how did you network with these investors?
Farnaz Ronaghi: The first seed fund that invested is called Ulu Ventures. It’s a small seed round from an adjunct faculty in our department at Stanford and his wife. When we were back at Stanford, these two guys liked what we were doing. They were the first people who gave us the first chunk of money. We basically tapped into that network. They were part of the network of Stanford Angels and Entrepreneurs. We talked to a few more of those angel investors.
We looked at a few of the venture capital firms as well. We looked at which ones do educational investments. We also talked to a few of those. For a venture capital firm, a seed investment means that they’re just interested to know what happens next. They’re interested to see this idea survive. We also managed to take money from a few of those venture capital firms that usually do educational investment. They thought that there was potential.
Sramana Mitra: Which ones did you take money from?
Farnaz Ronaghi: We took money from Learn Capital and Foundation Capital.
Sramana Mitra: By 2014, you said you had the seed round?
Farnaz Ronaghi: First quarter of 2013.
Sramana Mitra: Then you started hiring people. How many people did you hire?
Farnaz Ronaghi: Not many. At that point, we hired two full-time engineers and one full-time course operations specialist. Teaching in-person and online are very different. We discovered that early on working with instructors. We found out that there’s a lot of translation needed from the in-person world to the online world, which not everyone would be comfortable doing.
We actually have to be there and try to help them understand this new medium and how people interact with it. Our course operations specialist would work on that and work with instructors to build their vision on our online platform. I think we also started working with business partners. They were the first few people that we hired. After that, it was just like a regular company.