Preston Silverman on Building out a Marketplace in Education - at YC Edtech Night

Hello everyone. Good evening. Thanks for having me. Really excited to be here. So, I'm the founder and CEO of Raise Me. We're focused on expanding access to higher education by rethinking the way that students access scholarships and grant funding for college. We think this is really important because since the recession, over eighty percent of jobs that have been created in the US require some form of a college degree.

But at the same time, as Tim mentioned earlier, the cost of education has been rising dramatically. Millions of students and families are questioning whether it's a viable path for them and how they can afford it. One thing that we saw early on is that in the U.S., we're already awarding over a hundred billion dollars every year in scholarships and grants to help students pay for college. But historically, that money hasn't been awarded until after students are supposed to have already decided whether and where to apply to college.

And for many students, that's too late to impact their college ambitions or their application decisions. As a result, many students check out much earlier or just assume that it's not a viable path for them, even though they might be eligible for thousands of dollars in aid that could help them in their journey.

So, the basic premise behind Raise Me is, what if instead of waiting until after a student has already applied and been accepted to a college to award this aid, we enabled them to accrue it as they go throughout high school based on their individual progress and development, their unique skills and talents?

That way, we could create a more transparent and empowering system for students, giving them access to these funds earlier before they have to make these decisions, so they can be more confident pursuing their college and career goals. We just finished our third school year; we're going into our fourth school year. Last year, we awarded over a billion dollars, nearly a billion and a half dollars, in scholarships and grants through the platform to students all over the country, which we’re really excited about. A billion dollars? Congratulations! That’s awesome!

So, you've been at it three, four years, entering our fourth school year. But how long have you been at it? Five years?

Five years. So maybe take us through what you were doing before Raise Me, and then how did you come to the decision to start this, and what was that process like?

So, when I first graduated university, I worked for a strategy consulting and research firm that was a small boutique firm. It was kind of a start-up in itself, and you know one of the reasons I was attracted to that was I got to work on a lot of different industries. It was international, so I worked in a lot of different countries and got exposed to and learned a lot.

But after a few years, I felt like I wanted to have more direct impact. A lot of our work ended up being put together for a PowerPoint presentation and sent off, and I wanted to really tackle something more hands-on. I’d always been really passionate about education as a means of creating opportunity for people.

So, as I was trying to think through what was next for me, I went and taught at a high school in India. I was teaching high school juniors and seniors. So, I ended up talking to them a lot about their plans for after they graduate, going to college, paying for it, reflecting on my own experience trying to navigate that process, and had the idea for Raise Me there.

I just started doing a lot of research and trying to validate it and then applied to what was you were then calling it a 12 and moved to California for that.

So, you moved from India, I'm sorry, to California for this?

Yeah, I didn't realize that.

And so getting into the program was kind of the threshold, if you will, to get it started?

No, I mean I had already at that point committed to it, and I think regardless of whether I was admitted or not, I was going to do it, but that was the icing on the cake.

And so you're a solo founder, but at the time you weren't?

So when I applied, I thought I had a co-founder, and it was very early days. You know, you say you will admit sole founders and people without a prototype and without any users. I checked all those boxes.

And yeah, so it was very, very early. And to some degree, what you've built and willing back up the vision for Raise Me back then, is it pretty similar to what you have now or have you made any major changes in kind of the direction or vision of the company?

Yeah, I would say that overall premise is very similar. You know, this aid is awarded too late to impact a lot of students, so let's move it up in the process and make it more transparent and predictable for students.

You know, one thing I don't know if you'll recall, I was still trying to figure out was where the funds were going to come from. Out of the hundred billion that gets awarded every year, a little over fifty billion comes from colleges and universities, about ten billion comes from corporations and foundations.

So, I was trying to think through should we start with crowdsourcing? Should we start with foundations, corporate money, all that kind of thing? And it took a good, I would say, three to six months of just iterations and cycles trying to sell people and prototypes to get to a place where we landed on we should start with the higher ed institutions themselves.

Got it. So, you have a bit of a, because it's a marketplace of sorts, there's a bit of a chicken and the egg problem with getting these funds and then getting the students. How did you… was it always clear that you had to get the funds first, or could you get the students first? Like, how did you approach that? Because I know a lot of people building marketplaces run into this issue.

Yeah, that’s always very tricky. I felt if we had the funds, we'd be able to find the students. I think that's true in a broad sense for us. I think every marketplace is different.

You know, one thing we've learned over time, and we could have been more sophisticated with early on, is the importance of building density in the network. So, with us, we find building concentration in certain geographies and regions is really important and allows us to better manage the balance between students and funds.

So when did you know you had product-market fit? What was that moment? Or was there a moment, or was it a gradual awakening, if you will?

I think it was a little bit of a gradual awakening. I always had a lot of conviction around the idea that if we could build this, then students would find it very valuable. But, you know, it wasn't until, of course, we opened it up and we started to see thousands of students signing up that I felt really confident about it.

And then I would say one other thing is I don't think product-market fit necessarily is a binary thing. I think it's something you have to continue to iterate on, and you can get closer and closer to a perfect product-market fit.

Got it. Maybe take me through your fundraising story. How did that go? How long did it take? What are your thoughts reflecting back on it?

It took a very long time. I would say our first round took well over a year.

Year after you started?

A year after we started the company, and you just bootstrapped until then?

Yeah, I had saved a little money from my previous job and so used that. You guys were only giving out like twelve thousand dollars at the time, you know that was pretty… had to be pretty scrappy in there.

Your experience in India came in handy?

Yeah, exactly. I thought about moving back. And then we… I think one thing we tapped into that you can do in the education space is a little more grant funding. So we applied for some competitions. We were fortunate to win a grant that was sponsored by the Gates Foundation that was a hundred thousand dollars, and that made a really big difference for us in terms of being able to hire our first employee as well.

But yeah, so eventually we kind of stopped fundraising after a while because I was like we're getting no traction here. We need to get a little more traction on the product, get more partners on board, have some more proof points before we're ready to go back out again.

And then when we did that, we had the platform actually live and was working, and we were starting to get students signed up. So that gave, I think, the investors a lot more confidence, and we went back to a lot of people that had told us no before. But once they saw that, I guess they had liked the idea, but once they saw the little bit of traction, they were more confident about coming on board.

And how is it to raise money as an ed-tech company in Silicon Valley? Did… I've only raised money as a tech company, but did you feel labeled, if you will? Or did you not notice it?

Oh, I did. And at the time, MOOCs were like all anyone could talk about in ed-tech. So there, we got a lot of pushback in particular around what college isn't going to be around in three years, so you guys are wasting your time.

And, you know, I think people have come around on that, but that was certainly a challenging dynamic. We were really fortunate to find investors that saw the potential opportunity as a business, but were also very mission-driven and just passionate about what we were doing as well.

Got it. So how many employees do you have now?

Fifty.

Fifty? Wow! And how many rounds of funding?

Two and a half.

Two and a half? So, explain the technicality. We raised a convertible note, and we converted that into our seed round when we got our first institutional investor, and then we raised a Series A last year.

So maybe help because a lot of the folks here are just starting out their companies, and being CEO of kind of pre-seed, seed is very different than what you're doing today, I imagine. Can you compare the two and maybe focus on the early days and what was hard about it, and what was surprising about it, looking back?

Yeah, I think the early days was, I would say, much more tactical. Your tactics are kind of everything; they are the strategy at that point. So it was really rolling up my sleeves in terms of doing tons of customer interviews, user research, prototyping, you know that type of work, which I loved and was really exciting.

A lot of hands-on selling as well, going out and pitching colleges and universities, pitching teachers as well, that accounted for probably 80% of my time when I wasn't fundraising.

And how that's evolved, I would say, is now less hands-on. I would say major jobs are setting the vision and strategy; and goals for their organization, making sure we're all aligned around a North Star of what we're trying to achieve.

And then second is recruiting. I spend a lot of time building out our team and making sure we have the right people on the bus. One thing I feel I've learned is everything comes down to your team at the end of the day. If you have the right team, you'll be able to overcome the challenges that come your way and figure out a lot, and you'll be a lot more resilient.

And then third, I guess, is the same as your responsibility is making sure you have the money in the bank. So, you know, fundraising hasn't gone away.

Yeah, so on this journey, what has been the biggest learning or surprise to you personally, like in terms of what you were expecting it to be and what it's turned out to be? Any advice for folks in the audience? And on, you know, if you... what do you wish you knew then that you knew now?

Oh, that's a great question. In many ways, I feel like if we were going to do it over again, I could… we could probably get to where we are today in half the time.

But what's the case? I made so many mistakes. I would say one of the most important things is just to have patience and resilience. You know, the name of the game in a lot of ways early on is just survival.

If you have a lot of patience and resilience, you're going to figure things out, and you're going to iterate as you need to. There can oftentimes be, I think, a misconception that if it doesn't feel like you're on a rocket ship on day one or day ten, then you're not on the right track.

And a lot of people, you know, there's this fail-fast mentality, and I think it is important to very quickly identify what’s not working. But that doesn't mean you should like throw in the towel on the entire company.

Yeah, great! Maybe change tactics and get out of the other company for a second. What do you think, other than maybe financial aid, what's the biggest barrier facing students today?

Oh, I think that's a big one! To completing college... to completing college, you know, outside of financial aid, I think guidance and mentorship is really lacking for a lot of students in high schools across the country.

There can oftentimes be one counselor for every six hundred students, and they're trying to make this really important decision about what's the next step in their life after high school. And they get 20 minutes with a counselor, and that's particularly challenging for students that might be first in their family to go to college or are from a low-income community.

And so I’d like to see us figure out a way to support students better in terms of mentorship and guidance as they're trying to navigate these difficult decisions. I think we could do a lot better job linking education with career opportunities as well and making sure we're focused on the skills that students need to develop.

You know, a lot of education is still centered around the content or knowledge, and I think it's more important that students are developing the fundamental skills that they need to be successful because the content they're going to need is changing and evolving so rapidly.

So last question, five years, where do you hope to be five years from now? Where's Raise Me five years from now?

Well, you know, we plan to be a platform that every student in the U.S. and hopefully some students out of the U.S. by then are leveraging in their college and career journey. We can support them not just with financial aid, but really many of the pivotal decisions that they need to make as they're navigating this critical piece of their lives from early high school to and through college.

Cool! Thanks very much. Thanks for sharing.

Thank you! [Applause]