The first startup, investments, developments. An educational platform that became a leading tech company of its time.
LearnBoost is an online tool that allows for efficient classroom management. It provided teachers, students, and parents with the ability to view grades, check attendance, access various reports and plans, as well as communicate and edit these and other platform entities at any time.
LearnBoost addressed the challenges faced by each participant in the educational process, complementing it with quality, convenience, and speed, giving it a significant advantage over existing competitors at that time. Many paid solutions still cannot match the level provided by this platform’s free version. Despite this, LearnBoost ceased its operations in 2019.
In this section, we will discuss how and by whom this company was created, as well as its principles and achievements.
Background and Introduction
To understand the reasons for creating and the potential profitability of this startup, it is necessary to delve into the field of public services by 2010. The largest university in America in 2010 was the University of Phoenix, which had about half a million students and earned $4.5 billion in revenue. The main distinction of the university was that a significant portion of its education was conducted online.
During those years, government institutions were undergoing a painful and expensive transition to electronic records. The goal was to create information systems for educational institutions that would allow for the following tasks:
- Admissions;
- Schedules and lesson plans;
- Attendance;
- Grades;
- Disciplinary actions;
- Student health.
In 2010, an attempt was made to standardize the education process by establishing new requirements for knowledge and assessment called the Common Core State Standards. This standard was adopted by 41 states and the District of Columbia.
To address these tasks, online systems were created to provide teachers, administrators, parents, and students with access to this data from any computer. The first companies in this market were:
- Blackboard (produced by the Washington D.C. company of the same name) Used in Russian universities: SPbU, HSE, PSU named after Pushkin, KAI, etc.
- PowerSchool (produced by Pearson Education from New Jersey, a leader in this market).
These companies took the lead in the market, but their pricing policies were extremely high, their development was slow, and their services were inconvenient (according to Rafael Corrales).
There was also at least one free application for gradebooks on the market — EngradeEngrade, created by a group of wealthy internet entrepreneurs from San Diego and had more than 250,000 users. Another inexpensive competitor was MyGradebookMyGradebook, which offered limited functionality compared to PowerSchool for $50 per year.
In 2010, LearnBoost entered this market, created by Rafael Corrales, Thianh Lu, and Guillermo Rauch.
Formation of the Company
LearnBoost was created simultaneously on two fronts — on one side was Rafael Corrales, a second-year student at Harvard Business School (HBS), and on the other side was the collaboration between Guillermo Rauch and Thian Lu. They were complete strangers, but driven by the common goal of improving the field of education.
Rafael Corrales
Rafael, like many other HBS students, was enthusiastic about starting his own startup even during his studies, and the field of education seemed most suitable for him. The story of Rafael’s startup development can be traced back to 2009 when he was in his second year of graduate school.
“I went into my second year and said I wanted to do something in the education space, at the intersection of education and technology… Essentially, I bought ‘The Four Steps to the Epiphany’ and followed all the steps outlined in the book. I sat down with 30–40 different teachers, administrators, and people who were experts in the field of education.”
By understanding the needs of the teaching staff, he developed a plan and, before approaching investors and seeking co-founders, decided to develop a prototype of the application. Rafael took loans (from HBS) and when the debt became too much, he started paying out of his own pocket. He hired two inexpensive outsourced developers recommended by an acquaintance, who developed the first prototype. The alpha version was only a minimally viable product (MVP) and only included a gradebook.
According to Rafael, the reasons for success in attracting investors were:
- The blog became an unexpected attraction point for investors. Friends and relatives of investors read his blog, which led to him meeting an investor from Bessemer.
- He was an outstanding student and had a burning desire to start his own startup. This attracted professors who were acquainted with investors.
- Connections. Networking with professors, teachers, and acquaintances. At the end of meetings, he would ask if there were people they could introduce him to, and subsequently, he would meet with them, even if these people initially seemed irrelevant (although in many cases, these people turned out to be the most valuable).
One of Rafael’s professors, Karim Lakhani, took an interest in Rafael’s endeavors, supported him, provided advice, and introduced him to his friend, Harper Reed. Reed became a mentor and angel investor at the idea stage and introduced Rafael to his friends, one of whom was Babak Nivi.
In 2010, Nivi was one of the co-founders of AngelList — a service that connects venture capitalists and angels from around the world.
These angels made a significant contribution to the development of the business. They were valuable not only as investors but also as mentors who could provide practical advice, help solve problems, and attract new investors.
Harper Reed served as the Chief Technology Officer for Barack Obama’s presidential campaign from April 2011 until the elections in November 2012. A central component of this work was the Narwhal project, a centralized database for the campaign. Reed helped assemble a team of developers from technology companies such as Twitter, Google, Facebook, Craigslist, Quora, Orbitz, and Threadless. The program aimed to connect all the information about voters so that every collected fact would be accessible to all campaign branches. This information significantly enhanced campaigning capabilities.
Guillermo Rauch and Thian Lu
Together, they created LearnBoost, an educational platform for middle schools, a web-based software for students, parents, teachers, and class administrators in grades K-12. It included real-time collaboration tools, online gradebooks for teachers and parents with quick access to grades and student performance tracking.
Guillermo was responsible for the technical aspects, while Thian focused mainly on interface design and product design. They were based in the DogPatch Labs laboratory. Ryan Spoon, the head of DogPatch in San Francisco, wrote about them in his blog and considered their venture very promising.
DogPatch Labs was a business incubator in its best manifestation and certainly deserves attention in this section.
DogPatch Labs
At that time (2010), the San Francisco office housed about 65 entrepreneurs, and including participants from other regions and alumni, the total number was around 300. This list largely consisted of participants with experience working at Google, Yahoo, eBay, Microsoft, Zynga, Slide, Facebook, Imeem, and other IT industry leaders.
During the “training” period (6 months), startups enjoyed the following privileges:
1. Community
- Other residents were fellow entrepreneurs with extensive experience in various fields.
- People at DogPatch were not only residents but also participants in regular meetings and events.
- Some residents or visiting guests were established companies such as etherpad, cardpool, learnboost (among many others you may not have heard of).
2. Access to investors
- Investors interested in various projects came to Polaris, and Polaris itself was an investor.
- Many leading business angels visited the laboratory, making it easier to connect with them.
3. Mentoring
- DogPatch residents were not just aspiring entrepreneurs; they were specialists in their fields who could provide advice and help solve various problems.
- DogPatch did not have official mentors, and Polaris managed it in a “hands-off” manner. However, they organized events and participated as guests.
4. Events
- Meetings and themed events for residents.
- Angel evenings, demo days, or meetings with key partners and speakers (Facebook, TechCrunch, Venturebeat, Robert Scoble, Hiten Shah / KISSmetrics, etc.).
- Some of the best conferences in San Francisco.
5. Office and its location
- A large and bright workspace where residents could collaborate with each other or work late at night in silence (if no one was sleeping on the couch).
- A view of the Mission Creek channel from the window.
- Close proximity to the Caltrain depot and numerous small cafes and coffee shops.
6. Perks
- Excellent lunches in brown doggie bags.
- Free beer.
Introduction
As mentioned earlier, Ryan Spoon wrote about LearnBoost in the laboratory’s blog post about the launch of a new batch of residents, among others. Some of Rafael’s acquaintances were following the laboratory’s activities and, after reading this article, told him that this company was doing something similar to what Rafael was doing. By that time, Rafael had already attracted investments for the alpha version of his product and planned to close the round in the near future. He wrote emails to Guillermo and Thian, inviting them to meet and discuss the field of education in general. The expected 15-minute meeting to talk about education in general turned into several hours of brainstorming about what the three of them could do together.
Their collaboration bore fruit by July 2010. In the next round, they attracted four venture investors.
Business Component
Paid products, albeit inexpensive, condemn government institutions to endless bureaucracy. Raphael’s business plan consisted of attracting as many users as possible through a free tariff with basic functionality, which in turn would recommend the purchase of additional features to management and also tell their acquaintances about the service. Thus, the product, creating a viral effect, could spread proportionally. In essence, Raphael planned to use the viral marketing strategy that David Skok would formulate in the following year, 2011.
Initially, the service was only available in English and Spanish. LearnBoost quickly entered external markets and by 2011 it supported 5 languages (English, French, Spanish, Portuguese, and Dutch), by 2012–14 languages, and by 2013–21 languages. The platform also had full integration with Google Drive and Google Calendar services.
Investments
LearnBoost received its first investments from investors on the AngelList, namely from George Zachary (invested in Twitter) and Jeff Fagnan (invested in Songbird). George later introduced other members of the list to this startup, who also invested: Bill Lee (investor in Tesla Motors), James Hong (investor in Slide), Othman Laraki (founder of Mixer Labs). There were also investments from individuals who were not members of this list — RRE (investor in Venmo) and Bessemer (investor in Postini).
In July 2010, the company received investments of $975,000 from Bessemer Venture Partners, Charles River Ventures, RRE Ventures, and Atlas Venture. In May 2011, the company raised $1.9 million.
The next time the company will appear in the news of the big market will be in 2013, but before that, Guillermo had another startup in his life — CloudUp, which he and his team actively worked on for the past year.