Sep262012

“Credibility is important when you’re asking parents to invest in education.”

Chuck Cohn
Chuck Cohn
Varsity Tutors
Founder & CEO

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Varsity Tutors is an at-home academic tutoring & test prep service with over 1,000 tutors and operations in 14 metro areas. They’re growing like crazy because they offer the highest caliber tutors at an affordable rate in the comfort of your own home.

MO: Can you talk about finding the courage to quit your high paying venture capital job that you had worked very hard to get to become a bootstrapped entrepreneur?

Chuck: I worked on the deal team at Ascension Health Ventures, a $325MM venture capital firm, for 2.5 years and loved what I did. Everyone I heard from told me that it was impossible to break into VC and was shocked that I had. I felt pretty lucky. My role was to meet with entrepreneurs and evaluate and diligence their companies and, in some cases, we’d invest (typically $7.5MM-$15MM per company). Sounds cool, right? It was, however, every night for 3.5 years I had been coming home from my day job and working another 5-7 hours on growing VT. Accounting, marketing, legal, hiring, etc. It was terribly exhausting. Every weeknight and my entire weekends were dedicated to Varsity Tutors. I was probably working another 40 hours per week on VT on top of my day job by the time I finally quit. So why did I do both if it meant killing myself? There was always one more improvement we were able to make if I didn’t quit my high paying day job and used that money – and the money VT saved by not paying me a salary – and poured it into VT. The money we saved by not paying me a salary at VT + my earnings from my VC job went toward web developers, lawyers, graphic designers, and building a team of talented area directors we could never have otherwise afforded. It probably tripled our annual growth rate by allowing me to focus our cash on the projects that needed the most resources. Initially that was projects like building systems to ensure the quality of tutors. Last August, though, as our growth continued to accelerate. We had great systems in place for ensuring we recruited and retained great tutors. And clients were referring their friends at increasing rates. Cash was no longer the limiting factor. Rather my time, or lack thereof, was slowing us down. I found myself in meetings in Boston or Chicago for my venture capital job reading emails about Varsity Tutors as entrepreneurs answered our questions about their business. People at VT were constantly waiting on me to get things done. My slow responses were causing us to miss opportunities. It wasn’t fair to the VC fund and it wasn’t fair to the incredibly talented group of 11 employees we had at the time. Once I realized that I was the bottleneck and that it wasn’t cash anymore, I realized I had to take the plunge and focus on scaling VT full time. I probably should have quit 4 to 5 months earlier but didn’t out of caution (or maybe inexperience).

MO: Did anyone think that you were crazy or were most of your friends and family supportive from the start?

Chuck: Most people were supportive. I waited 4.5 years to before doing it full time so I was the 12th employee even though I’m the CEO and owner. I waited until the point where there was no physical way I could do my day job and VT because there was always one more improvement we could make with my foregone salary and the income from my other job. I think others, though, thought I was crazy. One partner at the VC fund in particular clearly thought I was leaving an incredible career behind and warned me that I might not ever be able to go back to VC. He couldn’t imagine quitting so he figured I shouldn’t want to. I don’t think he understood the vision I had for VT.

MO: Can you share the process of developing the Varsity Tutors brand and some of the challenges you faced along the way?

Chuck: Credibility is important when you’re asking parents to invest in education. Initially we were called WashU Tutor – then Washington University in St. Louis’ legal team gave me a call and said something along the lines of “Please change your name within a week. We’d really prefer not to pursue legal action against one of our student entrepreneurs but will if you don’t change your name.” I scrapped the name and after surveying a few dozen people I knew, found that Varsity Tutors resonated with people. Building up reputations with schools took time but good work was rewarded with referrals from those schools. Making sure we asked for testimonials from our clients was important to building credibility and starting to build a brand. We’ve gone through a couple dozen iterations of designs over the years but our latest helps explain in much greater detail who we are, why we’re different and why you should care. That wasn’t apparent in the earlier versions of the site – we were more focused on “what we do” and none of the other factors that matter to customers. We’re in the process of radically redoing our branding and doing a “brand facelift” so keep your eyes peeled for what I hope will be a big step forward from the “brand creation” perspective. A brand needs to evolve and as you get more resources and that’s what we hope to do in the coming months.

MO: Can you walk me through the user experience of someone who decides to search for a tutor through Varsity Tutors?

Chuck: We allow parents and students to easily search for tutors on our site by location and subject. Unlike directory sites that have popped up recently – which are essentially well formatted Craigslists – we only have one level of tutor: great. All of our tutors are rigorously interviewed (both by phone and later in person). Clients work with our talented Directors who know the tutors personally to select the right tutor for their particular needs. While we have powerful technology and scalable systems, we also have a talented team of people that put a lot of time and money into each tutor who ultimately becomes a Varsity Tutor. Our tutors are better and that’s why people go with us.

MO: What are qualities of a great tutor? What are some questions that clients should be asking before the take hire someone?

Chuck: Amazing communication skills, ability to adapt teaching style to the needs of the individual student, and strong technical knowledge of the subject they will be tutoring are among the most important factors. We verify our tutors test scores and transcripts and run a background check. If a client finds a tutor on their own, I encourage them to do these things themselves to ensure that the tutor is who they say they are. They will also want to ask about a tutor’s familiarity with a subject and how the tutor would plan to help them improve in a particular subject. The more specific the answer, the better. Describing what makes a good tutor is the easy part – it’s a whole lot harder to have the discipline as an organization to ensure you aren’t letting anyone who isn’t really good through your processes.

MO: If you had to start again, is there anything that you would do differently?

Chuck: I would have entered the biggest cities first, not last. We waited on entering the largest cities like NYC and LA because we weren’t sure what the competition looked like. The reality is that we offer incredible tutors at a moderate rate and that value isn’t matched in any city. It’s easy to overestimate the quality of the big national companies due to the money they’ve spent on brand building. If you focus on creating a high quality product – in this case great tutors and knowledgeable directors to manage the tutoring process – consumers will see the value and be drawn to your company. There’s no reason to wait to introduce it to the big, competitive markets. If you have a good product, you’ll do well. If you don’t have a great product, you won’t do well. We have a good product and so we did just as well in the largest markets so I wish we had entered them earlier.

 

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