Welcome to our founder lessons series. This week, Neal Taparia, a repeat founder, shares how he founded Imagine Easy Solutions and grew the software business without investment to ~$20M.
Introduce Imagine Easy Solutions
Imagine Easy Solutions helps students automatically create citations, check for plagiarism, and improve grammar all or which saves students time and allows them to write better papers. Today, over 30M students use our products yearly, and it includes popular brands like EasyBib.com. In 2016, we sold the Imagine Easy to Chegg, a NYSE public company, that has a similar mission of helping students. We did all this without taking on any funding.
Why and how did you start your company
When my friend and I were high school students back in 2001, we dreaded writing papers with bibliographies. We found all the rules and formatting time consuming and tedious. Oftentimes, we’d delay creating citations and would forget what sources we used in our paper.
These were the early internet days. We happened to be nerdy students and were playing with building websites. We thought we could ease our pain of writing bibliographies by building a website that would format everything for you by inputting bibliographic data.
We spent two months working from each other’s houses after school building a website that did just that. We decided to call it EasyBib, because we wanted to make bibliographies easy.
When we introduced it to fellow classmates it turned out they disliked citations as much as us, and they loved using EasyBib because it would save them time when creating accurate citations. Even our high school teachers embraced it since it encouraged students to cite their sources helping them avoid plagiarism.
We did everything we could think of to promote the site, including flyering our high school bathroom and emailing as many teachers as possible about it. Everyday we would see our traffic numbers rise. We soon started to see organic, word of mouth growth. This experience woke us up to entrepreneurship, and we named our company Imagine Easy Solutions, because we wanted to create imaginative and easy to use solutions in education.
After high school, my friend and I went to different colleges. We’d continue to work on EasyBib in our spare time adding features like account management and new citation styles. During the summers, we planned internships in the same city, and would continue working on growing EasyBib after work.
After college, we wanted to work on Imagine Easy Solutions, but our parents encouraged us to get corporate jobs. In 2008 though, we left those jobs to work on the business full time.
From 2008 to 2016, we built ad and subscription services to begin generating revenue. We also rolled up the space by acquiring all our competitors, who we learned did not monetize their users as well as us. By 2016, we were doing $20M in revenue and had 60 employees. That year, we sold the business to Chegg.
What has been your biggest success factors
Early on, our naivety played a major role in our growth. As high school students, we didn’t know any better. I emailed thousands of teachers which helped drive initial usage. One day, I started reaching out to all the local newspapers in Chicago talking about how we were students helping other students. Two days later, the Chicago Tribune sent a photographer to my house, and we were featured on the front page of their business section. Our usage exploded and snowballed from there.
Adding to that growth was our approach to product. We focused on creating a product we wanted ourselves as students. In education, many products are created with the teacher in mind. We were the opposite. We wanted an intuitive experience to save students as much time as possible. Because we focused so much on creating a strong product experience, we continuously benefited from word of mouth growth. People loved EasyBib and would tell others about it.
Our ability to monetize also played a major role in our success. Early on, we brought in a friend who understood digital ad monetization. We invested in building a team and ad tech solutions where using a firehose of data, we would have ad networks compete against each other to place their ads in front of our users. We were able to achieve ad rates (called CPMs) way beyond industry averages. This allowed us to look at potential acquisition targets and give us confidence that we can acquire them and get a good return.
We used all of the $500,000 on our balance sheet in 2011 to make our first acquisition. We were nervous that we might not make payroll. It turned out to be a great move. With our ad tech solution, along with a subscription model that we layered onto the new site, we were able to make our investment back in less than a year. From that point onward, it was rinse and repeat to acquire all our competitors in the space.
What are the biggest challenges you have faced launching and running the company
While we had a strong and profitable consumer business, we funneled those profits into an enterprise business where we would sell a version of our products to schools. We built an entire team of 30 people around that business, from new sales reps to professional development support.
Each year that business would grow steadily, but we’d end up losing even more money. We didn’t have the operational discipline back then to look at metrics of the business to realize that it was failing. The sales we were making were misleading. We ended up shutting down that business prior to selling. It cost us a lot of money, time, and diverted attention.
Educating the market was another challenge. While some teachers embraced our product, others thought EasyBib was a shortcut, and would tell their students not to use the service. To address this, we hired educators on our team and worked with influencers who would tout the benefits of our product. Over time, the market for those who wanted writing technology solutions grew. Today, our products are a ubiquitous part of the writing process.
Similarly, we initially had a lot of resistance building integrations with database providers in the education space. We were unfunded and run by a young team, and could not get decision makers to take us seriously. I religiously emailed these people for years. They must have thought I was crazy. Over time we developed integrations which improved our brand credibility and growth.
Which do you think is most important: the right market, the right product, or the right team?
All of these are important, but I think there are clear dependencies. Everything depends on the right market. For example, you might have a solution for eskimos to build better igloos, but it won’t be a business if the market is not big enough, or if you can’t sell it at compelling price points.
For our newest venture Solitaired, where we are using classic games as a medium to improve mental and brain health, our immediate question was how big will the market be. Sure enough, millions of people play classic games, and brain training and mental health are huge categories.
Once you have the right market, you need the right product. While you need to solve a real problem, the product experience itself is very important. With EasyBib, we wanted to create the easiest process to create bibliographies. Our strong product experience led to a lot of word of mouth growth.
Lastly, you need a team to execute. We learned the hard way by not being quick enough to transition away from employees who were not the right fit. They held us back in retrospect. To be sure, sometimes you need the right team to execute on a product. If you’re developing an AI product, you’ll need a strong team of data scientists.
Final words for those chasing the startup dream
Fail fast. You’ll have hundreds of ideas and paths to go down. Time and money though are your enemies. Entrepreneurship is a process of trial and error, where with every error you learn more and generate new ideas. Find ways to accelerate those learnings, and understand when you need to try something new.
Follow Neal @tapneal.
