Building Multiple Bootstrapped Education Software Companies: Lane Rankin, CEO of Illuminate Education (Part 3)

Sramana Mitra: We are now at the point where you bought some portions of your previous company that you bought to Harcourt. You’re now ready to start off on your own in 2009. What happens next?

Lane Rankin: We started over in 2009 with some pieces of a new platform. We had started a new platform to replace the older platform that we had built in 2002. Houghton Mifflin Harcourt didn’t understand what they had, no matter how many times I explained it to them. Because they were hurting for money, they were happy to sell me back that piece. We started over that year with $150,000 in revenue and grew quickly. Today, we’ll cross $34 million in revenue in 2016 and be pushing $50 million in 2017. >>>

Learning From Mistakes: Roy Peleg, CEO of FirstImpression.io (Part 5)

Sramana Mitra: You were doing this full-time? You didn’t have a full-time or part-time job at this point?

Roy Peleg: Right. My sister was looking for a job. I decided to hire her full-time. When she went on her honeymoon, I started to look for someone to replace her and also found our first developer. A month later when it was becoming difficult to manage the developer, I found my CTO.

Sramana Mitra: Were these people taking salaries? How did you find them?

Roy Peleg: I was paying salaries out of my own pocket. I convinced the developer to take a lower salary and gradually increased during the year. He probably >>>

Building Multiple Bootstrapped Education Software Companies: Lane Rankin, CEO of Illuminate Education (Part 2)

Sramana Mitra: You financed the other company using the resources of the first company?

Lane Rankin: Correct.

Sramana Mitra: If you look at revenues and stuff, how was the first company doing? What was the trajectory of the second company?

Lane Rankin: Our turnover was around $2 million to $3 million in the first company. I sold the second company in 2007. At that point, our revenue was about $7 million.

Sramana Mitra: Let’s talk a little bit about the second company and its business. What were you doing there? >>>

Learning From Mistakes: Roy Peleg, CEO of FirstImpression.io (Part 4)

Sramana Mitra: Where I would really understand the difference is if you can tell me what you were able to do in terms of CPMs. I’ve had a blog for 10 years, so I know exactly how blog advertising and ad networks have evolved. The CPMs are real shit. If you tell me that what you did has really impacted the CPM, that would actually give me more concrete understanding of what’s going on here.

Roy Peleg: We have done a few things along the way to improve the revenue. The CPMs you could expect from AdSense at that time were around a dollar to dollar and a half.

Sramana Mitra: A dollar to dollar and a half was what AdSense was generating? >>>

Building Multiple Bootstrapped Education Software Companies: Lane Rankin, CEO of Illuminate Education (Part 1)

Lane was first a teacher, then a school and school district administrator. His background is not of a typical tech entrepreneur. However, his deep domain knowledge and relationships in the education field have propelled him to become a very successful EdTech entrepreneur. Great story!

Sramana Mitra: Let’s start at the very beginning of your entrepreneurial journey. Where are you from? Where were you born, raised, and in what kind of background?

Lane Rankin: I’m currently in California. I was born in Seattle, Washington. I have a Bachelors degree in Applied Mathematics and went on to get a Masters in Leadership. I started my first company back in 1999. >>>

Learning From Mistakes: Roy Peleg, CEO of FirstImpression.io (Part 3)

Sramana Mitra: What year are we in now?

Roy Peleg: Around 2012.

Sramana Mitra: What happens in 2012?

Roy Peleg: I left the previous startup and came up with the idea for my current company, FirstImpression.io. What actually happened is that I decided to completely quit my day job. I did some consulting along the way, but almost 100% of my time was dedicated to the startup. I listened to a lecture by another entrepreneur who found a way to monetize websites by securing the unused page that you see after you download a software. >>>

Learning From Mistakes: Roy Peleg, CEO of FirstImpression.io (Part 2)

Sramana Mitra: It is very difficult to make a success of those kinds of businesses. As you may have been following what’s happening in the online media industry, most of the companies are failing in that space.

Roy Peleg: You’re correct. I would say that revenue was secondary. There were hardly any independent computer websites back then. The next site I made money from. It was in English, so that market was bigger. We were able make a few thousand dollars a month, but it was hard.

Sramana Mitra: I would summarize your startup attempts as probably having been hard because of the business model that you chose to pursue. These business models of ad-supported media sites is not working. Let’s come to what happens after that. >>>

Learning From Mistakes: Roy Peleg, CEO of FirstImpression.io (Part 1)

FirstImpression is Roy’s fourth startup. The prior ones had all failed, and Roy candidly discusses how and why they failed. There is much to learn from failures and mistakes, possibly even more than from successes.

Sramana Mitra: Let’s start at the very beginning of your personal journey. Where are you from? Where were you born, raised, and in what kind of background?

Roy Peleg: I was born in a city north of Tel Aviv. When I was 12, my parents separated. When I was 16, I left high school and started my entrepreneur journey. At the age of 18, I joined the army. After getting out of the army, I started a career as an IT manager. >>>