prep engine final 2013 stanford e245

PrepEngine

Vaibhav AshrayPraneetRachana

Customer Interviews

This week – 8 Total – 103Next week – 7

Founder of InstaEdu COO of RevolutionPrep ex-COO of Mathnasium

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Vocabulary building software for standardized tests with features such as mnemonics, images, etymology, customized revision and progress tracking to learn vocabulary in an efficient way. Currently used by over 7000 customers!

Here is what we started with

Vai Vocabulary

Refining the UI

In Search of Pivot?

PrepEngine Motivation

PrepEngine Deep Dive

Refining Customer Segments

Business Economics

Partners

Targeting Franchises

Our E-245 Journey

Canvas Progression

Vai Vocabulary Version 1

“Mnemonics are definitely useful in remembering difficult words. Ability to classify words based on difficulty can be a very helpful feature for revisiting the words in a short time.”

– Lu , StudentCustomer Interviews

“The integration of mnemonics and images would be useful to remember the words. However, book-like interface would be better instead of the student required to click for next word each time. Captions for images should be provided.”

– Ingrid, Student

Lessons Learnt• All customer feedback seems to be focused on user-interface.

We would have to design a better user-interface for it to be appealing

• The product might be useful in terms of its features

Refining the UI

“Vocabulary affects only 150 marks out of possible 2400. To be much more useful you have to concentrate on other areas of SAT as well”

– Ryan, TutorCustomer Interviews

“Aren’t you the team who ran out of colors for customer segments?”– Steve

“The market size that you are dealing with here, might be very small” – Steve

Lessons Learnt

Teaching Team

Market Research

• Our current product has certain strengths in terms of its features. We need to leverage these strengths to pivot to a much larger market.

TAMSAM

Target$44 Mn $31 Mn $13 Mn

In Search of Pivot

“Most of the vocabulary learning takes place in the middle-school. So, integrating it into school life, possibly from KG might be useful. Language acquisition is also a possible extension of your idea”

– Dennis, Teacher

Customer Interviews

•Explored competitive landscape to find compatible entry points in the EdTech market. •Explored websites in the language learning domain to find out if vocabulary can be supplemental to those sites or vocabulary itself can be used for language learning

Lessons Learnt • Customer interviews should be primarily used to validate/invalidate hypothesis and not to define a product

Market Research

“You should have a product in mind. Do not use customer discovery to come up with your product. ”

– AnnTeaching Team

PrepEngine - Motivation

“ Ability to track progress on your vocabulary tool is great. What I’d want is to be able to track the progress of all our students similarly, not just vocabulary but everything else.”

– Taylor, Program Coordinator, Tutoring InstituteCustomer Interviews

“We spend about 15 mins with the student trying to teach them vocabulary each week and then the student is supposed to spend 2 to 3 hrs by themselves. For everything else we teach for an hour and the student spends around 4 hrs.”

– Eric, Founder, Tutoring Institute

Market ResearchExplored different companies catering to the supplemental education market, explored the landscape for products related to our idea including content providers, data analytic apps, and other tools targeted at high schools.

Lessons Learnt

• The private tutoring industry is large, fragmented with only a few startups trying to serve their needs.

• There is a need for a solution to help the tutor with tracking the student during the self study time

Our Pivot - PrepEngine

One-stop shop for test preparation. Top-of-the line content coupled with features such as self-study tracking, data analytics and content management that facilitates teaching, learning and seamless communication.

PrepEngine – Deep Dive

“Our core competency is teaching if someone can handle all the technology for us, we would be very interested.”

– David, Director, Tutoring Institute

Customer Interviews “We use multiple legacy systems to manage our students and tutors. We use Google calendar to keep track of calendars, Minute 7 to keep track of tutor time entry and billing, Solve360 for tutors to enter their session notes and manually enter student progress and Socrato for student score data analytics.”

– Aaron, Founder, Tutoring Institute

Lessons Learnt

• Validated the need for data analytics for student progress tracking

• A bigger customer pain point is the lack of an integrated CRM solution to handle various tutor/student management tasks

• Content is not the primary value proposition, and only with official content will it be something on the top of the customers mind.

Customer Segments

“You do not seem to understand your customer segments very well. You should not look at the tutoring market as a whole. You need to work on your product-market fit.”

– Steve

Teaching Team

Market Research Estimated number and size of tutoring institutes across US using Yelp and other tutor-student connecting platforms (Wyzant, Tutorspree)

Lessons Learnt

• Our customers can be classified into 3 segments1. 50 Franchises (average number of students : 5000)2. 3000 Mid-size Tutoring Institutes (average number of

students : 200)3. 100,000 Individual Tutors (average number of students : 5)

• Value proposition & Revenue model varies for each segment

Customer Interviews Based on our interviews, we realized that the needs of the tutoring institute differ based on the number of students they cater to.

Business Economics – Revenue Model

“Per student charges do not make much sense since the tenure of a student is widely variable. We would be willing to pay $3-5 per test report”

– Aaron, Founder, Tutoring InstituteCustomer Interviews

“Per report model discourages me from getting more reports. I would be willing to pay $20/student”

- Anthony, Individual tutor

Lessons Learnt

• Pricing numbers are in the correct range for mid-size tutoring institutes and individual tutors.

• The revenue model needs to cater separately to each customer segment

“A variable subscription fee, based on range of students is a much more simpler way to charge us”

- Mark, Founder, Tutoring Institute

Business Economics – CAC

“There are very few industries where Inside sales is not effective. It is much more cost effective to use inside sales”

- COO of Sales as a Service CompanyCustomer Interviews

“Direct and inside sales together is a rare combination in a startup”– Ann

Lessons Learnt

Certain customer acquisition techniques work for certain customer segments

• Franchises: Direct Sales• Mid-Range: Inside Sales• Individual tutors: Online Advertising

Mid-range tutoring institute will be our initial focus followed later by Franchises and Individual Tutors

Teaching Team

Market ResearchCalculated the sales cost for Direct, Inside and online (LinkedIn and Google

AdWords) sales for different customer segments taking into account the

complete CTC of sales team and conversion rates.

Partners

Customer Interviews

Market Research

• “Inventory Management Startup Stitch Labs Integrates With Quickbooks Killer Xero To Simplify Accounting”

- www.techcrunch.com• Tutoring associations have partnered with companies providing

technical services to tutors / tutoring institutes- Nation Tutoring Association

Lessons Learnt

• Counselors can be gateways to tutors and mid-size tutoring institutes

• Tutoring Associations can certify our products providing credibility to the tutors

• Strategic Alliance with new company like Xero can help to make complete product offering to customers

• Partnership with content suppliers can be useful to provide content to the individual tutors

“Our choice of which tutor to hire for our son was primarily based on what his counselor suggested”

- Jon, Parent

Franchises

“We have a custom-built CRM platform that we have developed over years using Salesforce as the backend. The only motivation for us to shift to your system would be an appealing pricing structure.”

- Whitney, Former COO, FranchiseCustomer Interviews

A big thank you to Michael Borrus and Jim Greer for using their LinkedIn contacts to connect us with key decision makers from this segment. We have an interview with CTO of PrepMe

Lessons Learnt

• It’s a much harder task to reach out to key decision makers from Big Franchises

• Use Stanford Alums in these Franchises and Network Solutions tool to get the key contacts in these companies

• Franchises may also need our product, but this segment needs further verification. We have 3 interviews scheduled this week

Mentor Help

We have invested considerable engineering resources to develop our platform. However, I strongly feel that there is a need for such a solution in the existing market. Another big franchise approached us for licensing our CRM Platform.

- Claire, COO, Franchise

Mnemonic / Pictures

Quizzes

Games

Classification of words by frequency

Difficulty level based and rapid revision

On the go learning

Online forum and social learning

Advertising on LinkedIn

Direct sales team

Online forums / blog / product update

Product testimonials & referrals

Individual US SAT students

International SAT Students

US GRE students

International GRE students

Students taking other tests

Professionals Parents

Institutional High Schools

Tutoring centers

Book publishers

High Schools

Tutoring Institutes

Book Publishers

Sales to publishing houses, high schools, tutoring institutes

Content generation & refinement

Adopting innovative learning strategies

1. AWS

2. Web/Mobile developers, Linguist

3. High quality Images and Mnemonics

Content acquisition & licensing

Website / App development

Website infrastructure - AWS IAAS

Marketing and Sales

B2B:

Licensing to High Schools /Tutoring centers

Partner with publishers

B2C:

Sell directly to students

Key Activities Value Propositions Customer Relationships Customer SegmentsKey Partners

Cost Structure Revenue Streams

ChannelsKey Resources

VaiVocabulary Canvas

Android/iOS App Store

Website

CDs accompanying books

Amazon Web Store

Prep material, quizzes , tests

Add/modify content

Data analytics engine

Communication platform

Mobile app for content, analytics & platform

Student undersurveillance


Direct sales team

Advertising through tutoring associations

Pitting institutes against each other

Scaling ability to expand

1. Android/iOS App Store

2. Website

Tutoring institutes

Tutors

Students

Parents

Direct Sales to tutoring institutes

Data management

Digitization of additional material specific to atutor

1. AWS



4. Analytics Engine to generate progress reports




Marketing and Sales




PrepEngine Canvas - Original

Online platforms connecting students-tutors

Counselors

Monthly subscription for platform

Lead Generation

Freemium model: Free platform. Students pay for content


CounselorsData analytics engine




Direct sales team





2. Website

Tutoring institutes

Tutors

Students

Parents


Data management


1. AWS







Marketing and Sales






PrepEngine Canvas

Lead Generation

Adaptive Learning

Tutor training

1-click report

Reminders for payments

Prep material, quizzes , tests

Add/modify content



Counselors





Adaptive Learning

Tutor training

1-click report


Prep material, quizzes, tests

Add/modify content


Direct sales team





2. Website

Students

Parents


Data management


1. AWS







Marketing and Sales






PrepEngine Canvas

Lead Generation

Franchise

Mid-size Tutoring institutes

Individual Tutors

Tutoring institutes

Tutors

Franchise


Individual Tutors

Students

ParentsData analytics engine




Adaptive Learning

Tutor training

1-click report



Add/modify content


Direct sales team





2. Website


Data management


1. AWS







Marketing and Sales






PrepEngine Canvas

Lead Generation


Counselors

Tutoring Associations

Content Suppliers

Accounting software companies like Intuit (Quickbooks) / Xero


Content Suppliers



CounselorsFranchise


Individual Tutors

Students





Adaptive Learning

Tutor training

1-click report



Add/modify content


2. Website


Data management


1. AWS







Marketing and Sales






PrepEngine Canvas

Lead Generation

Ads on LinkedIn

Direct sales team




& Google


Counselors


Content Suppliers


Franchise


Individual Tutors

Students





Adaptive Learning

Tutor training

1-click report



Add/modify content


2. Website


Data management


1. AWS







Marketing and Sales





PrepEngine Canvas

Lead Generation


- Regular- Gold- Platinum

Per test report based

Per student / year

Ads on LinkedIn & Google

Direct sales team







Adaptive Learning

Tutor training

1-click report



Add/modify content

Ads on LinkedIn & Google

Direct sales team





2. Website


Data management


1. AWS







Marketing and Sales




PrepEngine v2 Canvas


Counselors

Students

Parents

Franchise


Individual Tutors


Content Suppliers



- Regular- Gold- Platinum

Per test report based

Per student / year

Other learnings from the Educational market

Supplemental Educational Market(Platform / content / analytics technology)

For schools For private tutoring

• Large number of players in the market

• Not too many people are targeting this segment

• Referrals extremely important

An analogy with the Healthcare market

Physician: Teacher/Tutor

Patient: Student

Insurance Company: Parent

Big Picture

Top Countries: Brazil, China, France, Germany, India, Japan, Russia, UK, US

Despite the differences in tutoring markets across countries, our product is scalable with a few modifications

USGlobal

$5 Bn Market

$33 Mn Revenue

$54 Bn Market

~$330 Mn Revenue

PrepEngine

Thank you!Teaching Team:Prof. Steve BlankJon FeiberAnn Muira-Ko

Rick BarberStephanie Glass

Our Mentors:Michael BorrusJim Greer

We will miss E245!

prep engine final 2013 stanford e245

Education

tutoring market

productmarket fit

theedtech market

vocabulary learning

customer feedback

customer segmentsyou

idea market research

student progresstracking