Student Entrepreneur to $10M+ in Revenue Without Dropping Out: Course Hero CEO Andrew Grauer (Part 4)

Sramana Mitra: You were doing college level courses?

Andrew Grauer: Yes, we focused on US colleges. Then, we expanded internationally as well and now we’re just starting to go into high school.

Sramana Mitra: Within those colleges, was there any bias in terms of courses?

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Student Entrepreneur to $10M+ in Revenue Without Dropping Out: Course Hero CEO Andrew Grauer (Part 3)

Sramana Mitra: That’s actually great. We love these stories of student entrepreneurs who didn’t drop out. Going back to the subscription model, how did the revenue ramp?

Andrew Grauer: It ramped really well in terms of growth rate but we were starting on a really small figure. I don’t remember the specifics. I do know that in 2010 we eventually got to a million dollars in sales. Then, we doubled every year after that. That was about $2.5 million in 2011, $5 million in 2012 and over $10 million last year. We hope to do between $15 to $20 million this year.

Sramana Mitra: Let’s get to a bit more granular detail about how you built that revenue up. Talk to me about the highlights of customer acquisition and conversion rates during the early times. It sounds like the advertising revenue was a non-event. >>>

Student Entrepreneur to $10M+ in Revenue Without Dropping Out: Course Hero CEO Andrew Grauer (Part 2)

Sramana Mitra: Explain to me the value proposition of your concept.

Andrew Grauer: The best way to understand it is to think about tutoring. The first version of this was a content version of tutoring – getting supplemental help for people to learn and succeed effectively in their specific course at their school. We really started out at Cornell and then extended to a number of other schools. We thought about it a lot like Airbnb – letting people rent space anywhere in the world that has an address and is recognizable by the Google Maps API. We wanted some thing where you can upload your educational resources and tag it to any course at any school in the world.

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Student Entrepreneur to $10M+ in Revenue Without Dropping Out: Course Hero CEO Andrew Grauer (Part 1)

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

We love student entrepreneurs who have managed to not only build successful businesses but have done so without dropping out of school. We also love entrepreneurs who have the discipline to get to a strong and sustainable monetization model early on in their evolution. Andrew Grauer scores on all fronts, and there is much to learn from this entrepreneur’s journey.

Sramana Mitra: Andrew, let’s start with your personal beginning. Tell us where you were born, raised, and in what circumstances. What’s the back story of Course Hero?

Andrew Grauer: I’m from the Bay Area of California. I grew up there my whole life. I went to college in Ithaca, New York at Cornell University. After graduating at Cornell, I came back to the Bay Area and continued working on Course Hero here.

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Thought Leaders in Online Education: Todd Hitchcock, COO of Pearson Embanet (Part 7)

Sramana Mitra: I’m going to switch gears a little bit. If you were to advise entrepreneurs who are interested in working in the domain of online education, where would you point them? Where do you see open opportunities to build businesses in?

Todd Hitchcock: There are a lot of inflection points. We know that there are a lot of pieces of the partnership that we have competency in, but there are certain pieces that we may never build a competency in if we don’t acquire a company. Therefore, we like to partner with that provider to bring them into the ecosystem. We’re very strong in our belief that we need to provide solutions but that doesn’t mean that we need to provide every single component. >>>

Thought Leaders in Online Education: Todd Hitchcock, COO of Pearson Embanet (Part 6)

Sramana Mitra: That’s only true if you’re looking at those local types of businesses. We work globally and we work on only digital entrepreneurships – IT, IT-enabled services types of businesses. That’s non-local and a lot of it is very scalable. We’re seeing a lot of interest from entrepreneurs all around the world – not just from the United States.

Todd Hitchcock: I absolutely agree. Traditionally, we work with colleges and universities to put those programs in place driven by their region. I think you’re hitting on a macro trend. There is tremendous opportunity for international entrepreneurship programs. To that end, it hasn’t been one that has been brought to us by a specific partner yet. I think you’re really catching on something that has tremendous possibility.

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Thought Leaders in Online Education: Sher Downing, Executive Director of Online Academic Services at the W.P. Carey School of Business at Arizona State University (Part 7)

Sramana Mitra: Engineering schools wanting to teach entrepreneurship is a different trend. What’s driving that trend is that engineering students and engineering graduates are the best equipped to start companies – especially when it comes to the whole IT kind of entrepreneurship which is the most prevalent form of entrepreneurship all over the world right now. These are people who can actually build stuff. It’s a lot easier to bootstrap the business and get something off the ground and launched if you can build something yourself as opposed to having to hire people to do it, which requires capital.

Sher Downing: The other part of it is that digital business is now striding across so many different things. For people to try to determine what they’re going to be and what they’re going to do when they get out of engineering school, it’s very difficult because they have the opportunity to really touch a variety of areas in any kind of business. I think what we’re seeing is students who want >>>

Thought Leaders in Online Education: Sher Downing, Executive Director of Online Academic Services at the W.P. Carey School of Business at Arizona State University (Part 6)

Sramana Mitra: You said you have students taking your program internationally. Can you talk a bit more about where and what are the trends on that front?

Sher Downing: We have two types of international students. One is those who are obviously living overseas. We also have students who travel quite a bit extensively for their work. For people who live and are based somewhere else, once we get connected with them or work out any issues in terms of where they’re located, they’re pretty much set to go throughout their program.

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