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Speaker 1: I'm Charlie pell That's a Bloomberg business flash. You're listening
Speaker 1: to taking stock with bim Box and Kathleen Hays on
Speaker 1: Bloomberg Radio. The online tutoring business. It is estimated to
Speaker 1: be worth about seven billion dollars. And here to tell
Speaker 1: us how it works is Chuck Cohne. He is the
Speaker 1: chief executive and the founder of Varsities Tutors. They are
Speaker 1: based in St. Louis, Missouri. Chuck, thanks very much for
Speaker 1: being with us. Thanks for having me on today. Give
Speaker 1: us a little idea of the market for educational technology,
Speaker 1: and maybe you can use your own tail, your own
Speaker 1: story of a one thousand dollar loan and now a
Speaker 1: Silicon Valley bat VC backed company, as a kind of
Speaker 1: a metaphor. Certainly so, the education technology in general is
Speaker 1: a highly fragmented market and there's a lot of friction.
Speaker 1: And I actually started this company, Varsity Tutors, based on
Speaker 1: my own personal frustrations with tutoring. When I was I
Speaker 1: had some really remarkable experiences. I had some very frustrating
Speaker 1: experiences with tutors, and there were times when I could
Speaker 1: have benefited from private tutoring, but I just couldn't find
Speaker 1: anybody in time. There was just too much friction and
Speaker 1: there wasn't a great way to find a high caliber
Speaker 1: individual quickly in a cost effective manner. And that that
Speaker 1: trend is indicative of a general problem in education today,
Speaker 1: and education technology is increasingly solving that, and I think
Speaker 1: within tutoring, within UM learning management systems, you're increasingly staying
Speaker 1: entrepreneurs focusing on ripping out some of the friction and
Speaker 1: inefficiency that is historically plagued education. So there you were
Speaker 1: in high school, then you went to what Washington University
Speaker 1: and you had this thousand dollar alone that you've turned
Speaker 1: into what a fifty seven million dollar company? Is that?
Speaker 1: Is that the latest figure? Yeah, so we've now raised
Speaker 1: fifty seven million dollars a day. And I started the
Speaker 1: business with a thousand dollar loan from my parents about
Speaker 1: nine years ago when I was a junior in college
Speaker 1: at Washington University in St. Louis. And initially I I
Speaker 1: was receiving help from a couple of friends who are
Speaker 1: far more academically gifted than I was in a calculust course,
Speaker 1: and I just realized that they could be incredible tutors.
Speaker 1: They had great communication skills, they had an expert level
Speaker 1: subject knowledge. There were people that you'd want to hang
Speaker 1: out with for a couple of hours a week, and
Speaker 1: that was the initial impetus for starting the business. Since then,
Speaker 1: we've added a lot of technology and over time of
Speaker 1: transition front and from what used to be a hundred
Speaker 1: percent in person tutoring platform to now at online in
Speaker 1: person business. And just this week we launched a mobile
Speaker 1: tutoring app that allows you to get on demand access
Speaker 1: to experts with live video chat. What is the most
Speaker 1: requested course or tutor that you've seen? It's definitely Calculus
Speaker 1: by a mile Calculus And how much would it cost
Speaker 1: someone to have a tutor for Calculus? So it depends
Speaker 1: on where you are in the country. Typically across the country,
Speaker 1: on average, it's about fifty five an hour. In New
Speaker 1: York City, it's a little bit more expensive, sometimes in
Speaker 1: the low seventies per hour, but that's typically about half
Speaker 1: the price of what other companies would charge for a
Speaker 1: comparable quality ton We we really differentiate ourselves of providing
Speaker 1: a high quality service at a very low cost. I
Speaker 1: think it's I want to ask you specifically about St.
Speaker 1: Louis because I've gotten to know some folks in the
Speaker 1: tech community out there going out to interview the St.
Speaker 1: Louis Fed President. Your bullock, right, has nothing to really
Speaker 1: to do directly with technology or startup, but it's interesting.
Speaker 1: I think people who aren't in the Valley right or
Speaker 1: in New York Silicon Alley, or even in Boston. They
Speaker 1: sometimes feel it's a little bit tougher to get things
Speaker 1: off the ground. And in fact, you've recently opened an
Speaker 1: office in Seattle, which has become hotter and hotter and hotter.
Speaker 1: What is your experience spend well. You know the world's
Speaker 1: becoming increasingly global, and there certainly isn't as much access
Speaker 1: to capital in St. Louis as there is in say
Speaker 1: San Francisco. But I can tell you that today, compared
Speaker 1: to when I started this company, it's become increasingly easy
Speaker 1: to get access to mentors who have done it before.
Speaker 1: I think that's one thing that San Francisco has done
Speaker 1: well for a long time, and something that St. Louis
Speaker 1: has really put a lot of energy into UH and
Speaker 1: is starting to do well. But given the increasingly global
Speaker 1: nature of the world, the fact that investors can't find
Speaker 1: promising companies on the internet with a lot of ease,
Speaker 1: it's actually quite easy um to raise money now in
Speaker 1: a city like St. Louis compared to what it was
Speaker 1: like ten years ago. So there's an incredible tech ecosystem
Speaker 1: emerging in St. Louis and Parsity tutors is excited to
Speaker 1: be headquartered here. What qualifications do you need to become
Speaker 1: a tutor for varsity tutors? So we look for people
Speaker 1: with incredible communication skills, who have deep knowledge in a
Speaker 1: particular subject. So we do full diagnostic tests to assess
Speaker 1: content knowledge for particular subject. We look for people at
Speaker 1: a high level of commitment um and history of performing
Speaker 1: it at a high level in academic so we look
Speaker 1: at their transcripts and test scores and other indicators of
Speaker 1: historical academic success. Well, it seems that your price point
Speaker 1: averaging in the fifty dollar per hour ranges, you know,
Speaker 1: compared to some places that that is seems like a
Speaker 1: very fair, very good price that would be attracted in itself.
Speaker 1: I just have to ask you, though, ask everybody this
Speaker 1: kind of question. Is in your position, what advice would
Speaker 1: you have for somebody else who has gotten idea maybe
Speaker 1: a little money to get off the ground, especially after
Speaker 1: there's a lot of competition out there. Sure, I think
Speaker 1: that the most important lesson that I've learned is about
Speaker 1: really um never giving up. And the half of it's
Speaker 1: about tenacity and the other half is about um. You know,
Speaker 1: measuring your results and constantly trying to improve against some
Speaker 1: benchmark beach set for yourself. Well, I want to thank
Speaker 1: you very much for joining us, Chuck Cohen. He is
Speaker 1: the chief executive and the founder of Varsity Tutors, based
Speaker 1: in St. Louis, Missouri. You know I could have used
Speaker 1: some of this company's help years ago. Kim Calculus, Oh gosh, yes,
Speaker 1: you know, yeah, yeah, mostly calculus, maybe little physics too, well, Chuck, Oh,
Speaker 1: and we're so happy you joined us today on taking Stock.
Speaker 1: I'm Kathleen hayesel One with pim Fox. This is Bloomberg Radio.
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