Helping Failing High School Students Pass: Revolution Prep Founders Ramit Varma and Jake Neuberg (Part 1)

Revolution Prep was founded 2002 by Ramit Varma and Jake Neuberg, who met at UCLA’s Anderson School of Management. Founded in 2002, Revolution has become the largest provider of SAT prep courses and tutoring in California and one of the largest providers nationwide, with students in 12 states. Building on the success of its SAT program, Revolution’s products and services now address a wide range of academic areas, including ACT, GRE, high-stakes No Child Left Behind testing, and online education.

SM: Ramit, to start, tell me about who you and Jake are as entrepreneurs. Where do your stories begin?

RV: I am from Maryland and I went to the University of Maryland, where I studied electrical engineering. While I was in college I started teaching for the Princeton Review, and I discovered that I really loved teaching.When I graduated, I went to work at Citibank and Deloitte before landing in business school. I always had a passion for teaching in the back of my mind.

Jake had something similar. He had gone through college and had come to LA to work as a stand-up comic. While working as a stand-up comic, he started teaching classes for Kaplan before he went to business school.

We met very early at business school at UCLA. We started talking about our experiences, and we discovered that we really enjoyed the interaction with kids and we really enjoyed teaching. We also both experienced similar frustrations with our previous teaching positions. Over the two years of business school, as we thought about what we wanted to do with our lives, we came to the conclusion that we wanted to do something entrepreneurial.

We graduated from business school in 2002, and at the time entrepreneurship was very en vogue. When we looked around, all of our classmates were saying that they were going to start something but that they were waiting for that ‘killer idea’ to hit them. Jake and I realized that our bolt of lightning was to start an SAT company. We had no discernible product advantage and a very sure market with two gigantic competitors. It was not the best business school case for success.

When we started the company, we both felt very strongly that we could put together a business that was smarter. I had a background in systems integration and Deloitte, and we both had really focused on entrepreneurship and operations classes. We felt that if we were intelligent with the way that we used technology, the back-end systems to run the company, and the front-end student interaction systems, we could really push the envelope for the student experience and do it in a very efficient way to bring the price down.

We also felt very strongly that we wanted to start a business that had a strong social mission. Kaplan’s and Princeton Review’s courses at the time were $1,000, so we priced ours at $500. Even at that point we felt that it was a lot of money, so we decided that any student who could not afford to pay for the course could take it at a steeply discounted price. That is something to which we have stayed true for the past seven years.

SM: Other than price, what was your value proposition?

RV: We have four separate business lines today. The two lines that we started right out of the gate were group classes and private tutoring. Group classes offered a better course than our major competitors at half the price. We have very deep online resources available to our students, including all of their score reports and detailed analysis. Every essay they take is hand-graded by somebody, and they can see comments on their essay. We have strong technological resources. We pay our teachers twice what our competitors pay their teachers when they start; thus, we tend to get a better group of instructors. The consistency and quality of the instructor is one of the biggest determinants of the course quality.

Jake and I developed the materials. After that, we put a curriculum team together to continue developing the curriculum. We have several proprietary strategies and techniques that we have developed on our own. We also have a big focus on long-term skills and analytic thinking. That is a departure from traditional test prep courses which focus on the tricks and traps of taking a test. Instead of teaching tricks, we get students used to the analytic process.

This segment is part 1 in the series : Helping Failing High School Students Pass: Revolution Prep Founders Ramit Varma and Jake Neuberg
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