Recently we managed to catchup with Miro Kazakoff and Tom Rose, Co-Founders of Testive. During the interview Miro and Tom share their insight on their experience in an accelerator program as well as some advice on the business planning process. Testive is a recent graduate of the Techstars accelerator program and is based in Cambridge, MA.
What is Testive all about?
Testive is all about expanding people’s opportunities by helping them improve their scores on life-changing exams. Our flagship product is SAT Habit. SAT Habit combines adaptive algorithms and an engaging experience to make sure that every moment students spend with the product improves their scores as quickly as possible
How did you come up with the idea for your company?
We met at business school, and both of us were very committed to starting a company out of business school. We worked together during school on a weekly web show called The MBA Show. We knew we wanted to work together and like many business school students, we started brainstorming about growing markets.
In the end though we looked at ourselves. Tom had been an educator for his entire career and worked in test prep for many years. Miro had worked at several data oriented start-ups. Test Prep really combined our love of education, technology and data. It is a big market, with plenty of ways to improve, and we knew that we could wake up caring about it every day.
From there we started calling everyone we could find in the test prep industry. We dialed random test prep companies all over the country to interview them about how their businesses worked and what was missing in the market. We talked to about 40 people before we came up with our first product: a 30 minute test that could accurately predict your SAT Math Score.
What metrics or numbers were most important in validating the demand ? How did you get this data?
We’re not creating a market, just trying to disrupt an existing one, so proving demand was easier for us. The test prep market is $4.4B annually. If we raise students’ scores, there is existing demand. What we focus on is validating that we can build and sell something people want to use.
In SAT Habit our two core metrics right now are Activation and D1.
Activation is the percentage of people who start with the product and go on to complete registration.
D1 is the percentage of first time users who come back the next day.
We focus on both of these metrics, because the core challenge of our business is getting students to start and commit to the study process. Getting them to register and come back the next day are the key indicators of whether someone will continue to use SAT Habit.
What were some of the challenges that you faced starting a company?
We bootstrapped the company initially by doing individual test prep tutoring. It paid the bills and provided us some great user research, but it was emotionally draining and highly distracting. While we initially didn’t want to raise money, we discovered that we could move much faster if the software business was our dominant focus.
We still teach a few hours a week to stay in touch with our users, but it’s much less than we did when we needed to teach for our living.
You’re part of the Techstars accelerator program, what difference do you feel being part of an accelerator makes to your company?
For us, the Techstars program was life changing. Of course, not every accelerator is the same. As teachers and learners, we really appreciated TechStars’ focus on mentorship. The chance to engage really deeply with a few people allowed us to safely reexamine the direction in which we were headed. We took much more of a consumer turn during the program.
It also dramatically expanded the circle of people we can call when we have questions, and, of course, the structure of Demo Day at the end of the program helped us raise funding more quickly and easily than we would have been able to do on our own.
What advice would you give to an entrepreneur looking to get their company into an accelerator program?
Our main advice is to keep most of your focus on building your company. Applying to accelerators can take a lot of time. That process distracts from the important work of building your business and ultimately makes you less attractive to the programs. If you build a solid company foundation, accelerators will take notice, and you’ll find it’s a lot easier to get in.
That said, one of the key drivers of entrepreneurial success is the team. It’s hard for the leaders of accelerators to evaluate teams they don’t know. Being part of the entrepreneurial community wherever you live helps expose you to people who can vouch for you and lowers the risk for the people who run the program.
What advice would you like to give to an entrepreneur thinking about writing their first business plan?
The goal of a plan is to try to figure out the riskiest part of your business and de-risk it. We used a business canvas to breakdown business ideas very quickly and identify which part of the business we felt the most nervous about. Then, we got to work trying to de-risk that part of the business through either interviews, market research or, ideally, some kind of user test.
For one early test we said we would continue the business if we could make substantial progress with a big company partner in the next 30 days. It was an arbitrary test over an arbitrary time period, but as we’ve done more, we’ve learned to have better instincts about what is real proof and what’s a false signal.
We encourage everyone to just get started talking to the market.
How much traction did you have before joining the accelerator program?
Before joining TechStars, we had an early version of our rapid SAT predictor that we had validated through a study at a local school. We signed our first corporate partner on the day that we got into TechStars.
A massive thank you to Miro and Tom for taking the time out of their busy schedule to put down some awesome answers to our questions. We look forward to catching back up with Testive early next year to see how things have progressed. In the mean time check out their site, you can also follow them on twitter!!!!!
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