Bootstrapping an EdTech Venture to $6M, Ready to Scale with AI: Daniel Santos, CEO of Prepory (Part 3)

Sramana Mitra: Online’s fine. I’m not necessarily thinking that you’re already on AI in 2016–17, because that’s definitely not the time when AI was as pervasive as it is today. So, let’s go back to 2016–17. Tell me more about how the business was progressing. How many schools were you catering to in 2016–17? How were you finding them? How were you doing the sales process?

Daniel Santos: Around 2016–2017, we were servicing about seven schools. Initially, we grew our school partnerships, and even our online model, through word of mouth. The education space, especially B2B education services, is really relational. We delivered great services to our initial group of schools, and they referred us to their friends who were principals. Some assistant principals at our first schools got promoted and became principals at other schools, and they brought us in. That’s how we initially grew these partnerships.

We grew a small portion through cold emailing. We sent cold emails to schools we thought would be a good fit, went through interviews and a full sales process, and they chose to bring us on.

Sramana Mitra: And this was all in South Florida?

Daniel Santos: All in South Florida.

Sramana Mitra: How many students across these seven schools were part of the program?

Daniel Santos: Probably close to 7,000 to 9,000 across all schools.

Sramana Mitra: And then the private business was starting to kick into gear?

Daniel Santos: Around that time, we’re probably working on-on-one with about 40 students.

Sramana Mitra: You’re just starting to validate that business model.

Daniel Santos: Exactly.

Sramana Mitra: At this point, how was your revenue tracking in 2016–2017?

Daniel Santos: That’s hard to remember, but we were probably close to $300,000 or slightly below that with our seven schools.

Sramana Mitra: What year did you hit $1 million?

Daniel Santos: I’d say we likely did that in 2018.

Sramana Mitra: In 2018, you hit $1 million. You had a two-prong business—high schools and individual clients—and were moving into private schools where there’s more availability.

Daniel Santos: Exactly. In 2018, we created a much more scalable product, which really changed everything. Through our school partners, we got recommended to a client who wanted to develop an e-course geared to college admissions for a larger population. This was a fully online virtual education provider with about 13,000 students, all in virtual programming. We landed the partnership to develop the course for them.

We hired a team of instructional designers, former classroom teachers, and built an entire college admissions curriculum. We designed the course and sold it on a per-student model. Because they had such a large enrollment, it allowed us to grow with them. After the first course, we developed four courses for them and signed a three-year agreement to continue developing more. That was transformative because we went from serving 7,000 students in 2017 to close to 20,000 in a year.

We developed the course once, they enrolled students every semester, and it became an extremely scalable product. That radically changed our business.

Sramana Mitra: How much were you charging per student to license or resell your course?

Daniel Santos: About $76 per student.

Sramana Mitra: You’ve catered to 20,000 students. You have a scalable online product. What are the next strategic moves you made?

Daniel Santos: We developed three more courses. We expanded beyond college admissions and created a life management skills course for ninth graders and two English courses. Then we began to really invest in growing our college admissions counseling business.

Sramana Mitra: Aside from the course element, there’s still personalized counseling online?

Daniel Santos: Exactly. We focused on growing that part of the business.

Sramana Mitra: And again, through schools?

Daniel Santos: Not through schools. At that point, we were really focused on one-on-one counseling with families. We rebranded our company, professionalized our logo, outsourced website development, hired an SEO firm, and launched landing pages targeting specific markets. We also hired sales and marketing team members using the revenue from course sales. That’s when we really focused on growing the one-on-one programming.

This segment is part 3 in the series : Bootstrapping an EdTech Venture to $6M, Ready to Scale with AI: Daniel Santos, CEO of Prepory
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