When people think of online degree programs, for-profit schools like University of Phoenix or Devry University tend to come to mind. And rightly so. These institutions spend large sums of money on search engine keywords. One report called out the University of Phoenix for dropping $380,000 on a single day of online ads in 2012.
With these for-profit universities pulling out all stops to get students to enroll in their programs, there isn't much room left for nonprofit schools like Georgetown and Stanford to educate the public about their offerings.
Thirty-one-year-old former reality-TV star Kim Taylor, who appeared in Randi Zuckerberg's short-lived Startups: Silicon Valley, is looking to level the marketing playing field for nonprofit universities with her New York City-based startup Ranku, a discovery engine for online degrees.
Like Kayak did for travel, the Techstars alum, which Taylor co-founded with her bestie 31-year-old Cecilia Retelle, allows users to comparison shop online degrees available through nonprofit institutions.
While the site lists all universities that fit the nonprofit bill, Ranku generates revenue by charging a quarterly subscription fee for universities to access their data and traffic. It also takes a cut of every application sent to the school from Ranku.
Ranku is starting to get noticed. Not only did Techstars take an interest but Mark Cuban recently signed on to lead a $500,000 seed round with Microsoft Ventures and GSV Capital participating.
We at Entrepreneur, also think the company is pretty cool. So for the month of October, Ranku is officially Entrepreneur's Startup of the Month. With that comes bragging rights for life, along with a copy of Entrepreneur Press’s latest book: Ultimate Guide to Link Building and a digital subscription to Entrepreneur magazine.
We chatted with co-founder Taylor about starting up, raising funds and disrupting the education world. Here's an edited version of that chat:
Q: On the show Startup: Silicon Valley, you were focused on a fashion startup Shonova. Why did you decide to shut it down and focus on Ranku?
A: Ranku was a concept I had been thinking about since 2009, but at the time it was the right idea at the wrong time. In 2013, people are questioning the value of school, and the entire landscape is changing fast. I knew I had to do it right now.
As for Shonova, one of the hardest things to do in startups is course correct. With a week away from launch, I knew it wasn't where it needed to be.
Plus, it was a capital-intensive business that did require a lot of money, and I realized I needed to fundraise for Shonova. Once I go fundraise, I am all in.
Q: You had Ranku on your mind for a long time. How did you transition it from an idea to reality?
A: Cecelia was living in D.C. working for the U.S. Chamber of Commerce. She and I ended up having drinks when she was in town in San Francisco. I had built Ranku's wireframe and showed it to her. She looked at me and said, "If you ever do this, I will quit my job."
Before I decided to shut down Shonova, I did a week of soul searching, where I had meetings and calls with people I trusted and respected in the education space. Everyone said you should do this, especially Matt Wallaert, a behavioral scientist at Microsoft. He is the person that connected me with Techstars, as we actually never applied to it. They told me they will let Ranku into the program contingent on me hiring a lead developer and moving to New York in 10 days.
I called Cecilia, and she quit her job. I got an engineer friend in San Francisco to come with us for a month until we found our CTO. We moved to New York and shipped the product in 10 days.
Q: Why did you decide to raise a second round and give up equity?
A: It is not about money. We wanted to see who could add value, and I thought Mark Cuban could. He just understands so many components in business, and I wanted to have him involved. The same is true with GSV. They are investors in education companies like 2U and Coursera that we have a lot of synergy with. We are solving complex problems in our space, and I needed people that had a vested interest in us and could help us.
Q: What is your biggest challenge?
A: Educating people. A lot of these things are new and there has long been a stigma about an online degree and it is validity. Our job is to highlight the good guys in the space.
Q: What do you think your biggest asset is?
A: The domain expertise and our ability to get shit done. Our biggest strength has been executing -- from pushing our lawyers to move faster to shipping a product on time or early is something most people can't do.
Cecilia and I made a pact when we moved to New York: We were going to do two years of work in three months, take no prisoners. If we say we are going to do something it gets done -- and at warp speed.
Q: What advice do you have for other young entrepreneurs?
A: No one has the entire data set but you. You need to make your own decisions and have the ability to ignore people. Ninety percent of the advice we get is terrible, 10 percent is great and of that, five percent is game changing.