Student Entrepreneur to $10M+ Business: Blaine Vess, CEO of StudyMode (Part 3)

Sramana Mitra: Was Chris working full time or did he take up another job?

Blaine Vess: Chris was working full time on this business. He was also doing the contract programming with me.

Sramana Mitra: You guys were doing contract programming. You had a job and Chris was doing the business?

Blaine Vess: Yes, that’s correct.

Sramana Mitra: In 2005, what was the revenue level that this business was generating?

Blaine Vess: Around $75,000.

Sramana Mitra: What happens next?

Blaine Vess: In the middle of 2005, we switched to that recurring billing subscription model which other sites in the space had done as well. That was when we really started to see things growing. There were other things going on. The site got more content and users. The brand had been around for a number of years at that point. The recurring billing model added stability to the business. We were making more money. By 2007, we made about $1.1 million. It was still just the two of us. I did start outsourcing some of the programming at that time. I was still consulting at New Line Cinema and Chris was still doing some contract programming. We really liked having the multiple income streams. We didn’t know where things were going but things were heading in the right direction.

Sramana Mitra: You said $1.1 million was the revenue?

Blaine Vess: Yes.

Sramana Mitra: How many paying subscribers did you have on the site then?

Blaine Vess: At that time, it was probably two or three thousand.

Sramana Mitra: Was that generating the $1.1 million revenue?

Blaine Vess: Yes.

Sramana Mitra: How much were you charging them?

Blaine Vess: It was $29.95 a month, which is still what we charge now.

Sramana Mitra: How were people finding out about you?

Blaine Vess: The main way, then and now, is through Google organic traffic – non-paid search. We have a lot of content. At this point, there are 1.5 million documents. It’s a lot of stuff out there for Google and students to find through search.

Sramana Mitra: When people are finding you, what are they looking for?

Blaine Vess: An example would be “UCLA Accounting 101 notes” search on Google.

Sramana Mitra: So people are searching for course notes and that’s what brings them to you?

Blaine Vess: Yes. We get very specific keywords leading to the site because we have so much content.

Sramana Mitra: That’s very interesting. That’s why you have so much organic success. You were at about two or three thousand users paying a decent subscription fee per month and you were generating a million plus in revenue in 2007. What happens next?

Blaine Vess: Todd, our third co-founder who I’ve mentioned before, and I have kept in touch over all these years. He co-founded another startup that he was leaving. So we asked him to come aboard full time and move out to LA and amazingly, he did. The main mission with him joining at that time was to help us expand internationally. We did. At that time, we launched Spanish, French, German, and Italian sites. The Spanish and French sites are now quite popular. Our Spanish is, by far, the most popular website. It gets between 1.5 to 2.5 million visitors a day depending on the time of year. Most of those users are coming from Central and South America. The French site is our second best monetized site. It’s receiving nearly all of its traffic from France.

German and Italian sites didn’t work out but we now have Brazilian and Portuguese which is quite popular. We also have Russian, Ukranian, and some smaller sites in Mandarin and Korean. Then, we have some others launching in the near future like Danish, Arabic, Japanese, and Hindi. That started in 2008. The other thing we started doing that year was acquiring competitors. Since then, we’ve acquired about 10 sites – some in the research space and some in the flash card or memorization space. We’ve also acquired a test prep website and an AP notes website.

This segment is part 3 in the series : Student Entrepreneur to $10M+ Business: Blaine Vess, CEO of StudyMode
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