SaaS Interviews with CEOs, Startups, Founders
ScholarshipOwl Breaks $4m Revenue Helping 15k Students Get Loans
26 Jan 2021
Chapter 1: What is ScholarshipOwl and how does it help students?
We have today 15,000 paying customers and about 1.5 million users in general.
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Chapter 2: How much revenue does ScholarshipOwl generate and who are its customers?
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My guest today is David Dobochnikov. He is building a great company that changes the way Americans pay for college by leveraging data to make scholarships more accessible and transparent. He's doing this at ScholarshipOwl.com. David, are you ready to take us to the top?
Yeah, so scholarship policy is leveraging technology to increase the chances of earning private and external scholarship for American students.
And who's paying for this, the students or somebody else?
To use the premium features of the platform, the students are paying a subscription fee, which is $15 a month. And for that, basically, we save a huge amount of time for them, preventing them from applying to scams or scams finding the scholarship that match them the best way possible.
And how many customers do you have today?
We have today 15,000 paying customers and about 1.5 million users in general.
So can we take $15 times 15,000, you're doing about $220,000 a month in revenue?
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Chapter 3: What challenges do students face when applying for scholarships?
4 million. Okay, that's great. And so what, have you bootstrapped the company to date? You're still bootstrapped?
So until now, we never took any external funding. Only in January this year, we took revenue-based funding in order to accelerate our growth.
And how much did you raise?
We got approved to $1.3 million, out of which at this point we took only $300,000.
Okay. And what do you like or dislike about revenue-based financing?
I love that it's non-dilutive. So basically... We don't give out parts of the company in general. The thing is that VC-based funding comes sometimes with the strategic partners or with connections that revenue-based funding does not. So that's kind of one downside. When you take revenue-based financing, you basically start from the beginning to think how you're going to repay that.
So basically, you're locked into using most of the revenue-based financing in order to generate growth on your existing model instead of kind of experimenting with more risky models that might cause faster growth.
Talk to me about how you got your first 1,000 customers. You have 15,000 today. That's a lot of customers. How are you getting them?
Um... The majority of our customers are online onboarding. So PPC, affiliate network that we started building, and we scaled quite a bit of content marketing. So basically, we started pushing out a lot of content related to our space.
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Chapter 4: How did ScholarshipOwl grow its customer base to 15,000?
It started off as content in a blog. You built an email list. Then you launched a paid membership product, it sounds like. Yeah. How large did you grow your email list before you launched the SaaS product?
A few thousand. Not that big.
Okay. Like under 10,000?
Yeah.
Okay. And what's the email list size today? That's 6 million. Sorry?
6 million.
6 million people. Amazing. And what kinds of things are you doing with that list to drive additional growth?
So what I mentioned before that we have additional revenue other than the SaaS side is different partnerships of other scholarships promoting them to our platform, other companies in the educational space. We work with around 40 different partners at the moment.
And what does the pitch sound like to them? Can you name a partner and explain to me how you convince them to market your product?
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Chapter 5: What strategies does ScholarshipOwl use for customer retention?
But FastWeb, for example, is somebody who promotes us. They have featured scholarships and things like that that we post our scholarships to.
Let's go to your team. How many people on the team?
Today, we're almost 50 people.
Five zero? And how many engineers?
Around 20.
20 engineers. And so what are they building? What is the most technical thing about this product?
I mean, first, we have two products. So far, we've talked only about the student side. We also have a scholarship app, which is the CLM for Brands and Organizations for Office Scholarships. And our product actually is very tech-intensive. I, myself, before Scholarship Hour, I was a senior engineer at Google. So I come from engineering.
And the whole process of matching and finding the scholarships and leveraging, you know, they will leverage also machine learning and AI to find the ones that you have the highest chance of winning. And there's many different ways to apply to different scholarships to...
to leverage all this huge amount of data that we already have in order to basically, instead of the student applying to hundreds of different scholarships, we want him to apply to three scholarships a week, but he has the highest chance of actually earning. Got it. So 20 engineers. Yeah, I need a lot of data and a lot of engineering for that.
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Chapter 6: How does revenue-based financing impact ScholarshipOwl's growth?
Got it. Is there any, I mean, are you okay with those margins and you're just going to keep driving new volume?
The thing is that one of the big mistakes we've done in the history of the company is basically we started scaling before we fully nailed our unit economics. And in a way we kind of woke up too late for that and we dedicated 2020 into fixing that. And we are now in a much better place than we were two years ago, but still not where we want to be.
And a large part of our roadmap this year is actually dedicated to further fixing it.
All right. Well, David, on that note, let's wrap up with the famous five. Number one, what's your favorite business book?
What's my favorite business book? Zero to Launch, I guess. What to Launch? Zero to Launch.
Zero to Launch. Number two, is there a CEO you're following or studying?
CEO I'm following or studying? I mean, from the big guys, I'd say Sundar Pichai.
At Google? Number three, what's your favorite online tool for building a business?
I'd say a mixed panel, if that could be considered that.
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