08 Sep September 11, 2019 – TakeLessons Steven Cox and Privacy Anna Murray
The rule is to continue to be frugal, even when you are cash
flowing. Sometimes people forget where they came from and
what got them there.
Steven Cox is the founder and CEO of TakeLessons, an online platform matching teachers with students for online and in-person instruction in a wide variety of subjects. Steven founded the company to help people pursue their passions and interests, instead of letting their dreams take a backseat to their day jobs. TakeLessons connects over 25 million people each year, facilitating the spread of knowledge, skill acquisition, and the effectiveness of teachers seeking students. Before creating TakeLessons, Steven created and advised numerous startups and raised hundreds of millions of dollars in funding. He currently serves on the Board of Advisors for several startups, and is interested in technology and real estate businesses.
Anna P. Murray – Founder/CEO of tmg-emedia and Author of The Complete Software Project Manager: Mastering Technology from Planning to Launch and Beyond – Read interview highlights here
It’s all about referrals. We have tried a lot of different stuff,
sometimes ad campaigns work, sometimes they don’t. Our
new business comes through referrals.
Anna Murray is a technology consultant, speaker, and blogger, and the CEO of emedia, which offers strategy and consulting services, design, UI, UX, project management, programming, mobile and tablet development, QA, testing and customer support. Emedia has worked for clients including The Kellogg Corporation, Harvard Business Publishing, Time Out New York, Slate Group, IST, The American Association of Advertising Agencies, International Creative Management, Consumer Reports, and The National Institutes of Health. She is the author of several books, including The Complete Software Project Manager. She also writes articles that have appeared in Industrial Engineer, Industrial Management, Manufacturing Business Technology, Banking Exchange, Hotel Business, Non Profit Journal, SC Magazine, Information Management, Non Profit World, and New York Law Journal. Anna serves on Women’s Leadership Council, an exclusive membership of women recognized leaders in their fields; and in She Leads Tech, a program dedicated to increasing the representation of women in technology leadership roles. Anna is a double winner of the Stevie Award for Women in Business, a recipient of a Mobile Marketing Association award for mobile app development, several Kellogg top agency awards, and most recently Folio’s Top Women in Media Award.
Highlights from Steven’s Interview
I’d done a couple other startups, and typical of the entrepreneur journey, one of them blew up and was terrible, the other one blew up and did pretty well. So I was able to take a few years off, and decided to explore my creative side, and joined a rock band as a lead singer, which was a ton of fun. But during that time I was trying to figure out what I wanted to do next. And my bandmate was really struggling trying to make a living playing music. He had a master’s degree in music performance, and had studied his entire life to do something that he loved to do. I don’t know if you heard, but playing music isn’t necessarily the best way to make a living; it’s very tough to do that, so I was doing it for fun. He was doing it to try to pay the bills. And he had just found out that he and his wife had their first baby along the way, and was super struggling. So he came to us and said, “Listen, I’ve got to do something else, I can’t keep this journey going without something changing.” He was going to give up playing music, and instead go take a job as a cook at a restaurant. We started talking and I asked him if he was using the internet to find students. He told me, “No, because I don’t know how to do that. I’m a great at music, but not very good at computer stuff.” And I said, “I’ll help you.” We sat down in my spare room in Mission Beach, right here in San Diego, and we created a site and laid out a product that would help him acquire more students, so he didn’t have to take a job working at a restaurant. Instead he could live his passion, and do what he loved to do, which was teaching, playing music. And so I’m happy to report that, 10 years later, he never took that job at the restaurant, and he still teaches for us today. He’s making a living doing what he loves to do.
We help consumers connect with these talented instructors and take both online, as well as in person classes in about 300 lifelong learning subjects, everything from tutoring and languages to music, and Photoshop training as well. You can choose an instructor who will teach at their studio, and you can go over and actually learn guitar from someone in person. Or you can take online lessons, both one-on-one private, or in a group setting as well, just depending on how much time you have, and how much money that you want to spend on lessons. We try to remain extremely flexible so people can find what they’re looking for in the time frame that they’re looking for in order to get the result that they’re wanting.
If you want to learn French, I literally have a one of our teachers who lives a block away from the Eiffel Tower, and you can take French lessons from her as well. So you can do both online if you want or in person, everything is live, though. Rather than prerecorded content, which we all know YouTube has done very, very well, we took a different approach. And once you’re done with YouTube, or need to actually talk to someone, or want to accelerate quicker in your learning process, that’s when you come to TakeLessons.
The instructor sets the prices. We have instructors all over the nation, in the world now. They can set whatever pricing that they want, and from there, for our group class setting, you can take as many group classes as you want for $20 a month. So super, super affordable. The tradeoff is that you don’t get necessarily one-on-one private instruction. But it’s still an incredible option for a lot of people. The second group is if you want private lessons with an incredible instructor, prices range from—it’s kind of on a monthly basis—but anywhere from $100 to $300 a month. We’ve got about 54 employees here, either in San Diego or spread throughout the US, and then we have probably 7000 or 8000 instructors.
When you think about doing a startup, and I had the unique experience of being involved in a couple prior to this, so I had a playbook that I could follow that allowed me to accelerate what we were working on. But when we first started, we had an instructor who had a problem, and we thought that we could solve that problem. My next step from there was to figure out, are there more people like my bandmates that have the same sort of problem. We did quite a bit of customer research and discovery, in which we wanted to understand what their needs were and whether we could fulfill them or not. Once we did that, what we started to do is take our individualized instructors here in San Diego and onboard them one by one. There’s kind of a rule in the internet space early on in a business. Everyone talks about how you scale a business, but very early on, there’s a rule that says do things that don’t scale. And that means that you do things that you’d never do at scale. For instance, we onboarded each instructor one by one, we understood their story, we walked them through what we were building, got their feedback, and sat with them as they taught lessons to truly understand their day by day activity. That helped us get the product market fit and build products that the instructor would use, and also could acquire the customer at a reasonable price, so they could they could earn a earn a living.
At least once a week, one of our teachers will email us and say this sort of thing, “Hey, I just want to let you know that I was able to quit my boring office job, because I’m making enough money on TakeLessons now that I no longer have to work on things that I don’t want to work on. I can work on things that I’m passionate about.” And that’s truly what we live for are those moments. That’s why we started the business, and it’s really wonderful to see.
What we figured out is there are a lot of artists, coaches, tutors, etc, that are very good at what they do, whether it’s teaching a language, or tutoring or teaching music, etc. But when it comes to marketing, especially online, or finding new students or closing the sale, or handling the billing or the scheduling, it’s just not their strong suit. And so that’s what we do for our instructors here at TakeLessons. We find that the student, we actually sell this student for them. And by the time we contact our teacher, they’ve got a booked student that has already paid, ready to go, based on the schedule that’s already been set up. So it’s a wonderful opportunity for them to just immediately pick up, get new business, and again, increase the revenue.
When we first started off, we actually did pass out flyers here in San Diego to get going. Luckily, because we’ve been in business for many years, we have devoted an extreme amount of time and effort to understanding both search engine marketing, as well as search engine optimization. We’re humbling, I can say we’re very good at those sorts of activities. So if you go online, and you type in singing in your city, there’s a high probability that TakeLessons is going to appear at one of the top three searches.
We do everything from PR, which again, helps get the TakeLessons name out, we’re very good. And we spend an absurd amount of time on SEO. We also pay for ads through search engine marketing, and we’re advertising on Google and Bing and social, etc. We do some influencer marketing; we haven’t found that to be a wonderful tool for us quite yet. I think we have to do quite a bit more testing around there. We’ve also, over the years, cut deals with everyone from Amazon to Costco, and we’ve done deals with them in the past where we’ve partnered with them for them to send us students, and for us to fulfill that across the board. So a little bit of Biz Dev, some advertising, some marketing, and we get quite a bit of word of mouth advertising as well.
I’m not an expert at SEO. But what I know I have done is, I’ve hired experts. What I can say is our experts tell me that there is certainly a congruence is a factor with being able to both advertise as well as have SEO happen at the same time. I think that’s from the fact that if you think about it, what’s happening now is that that particular customer will see your name twice, versus once, and then the next time they do a search. So now they’ve, in essence, doubled the amount of brain space that they’ve seen your name. And I think that goes a long way in building customer trust right out of the gate. It certainly helps when it comes to kinds of tricks, etc. I don’t know that we believe too much in tricks. I think that Google is pretty smart, and they know how to disengage with folks who try to manipulate. So we tried to do a really good business, and we follow wonderful guidelines, we produce incredible content that people want to read. It’s written by people, for people. And Google seems to like that, and we’re happy that they do, but even without the sort of content that we produce, are the sorts of things that people want to read, they want to share, and they do so on a regular basis.
When we first started the business, I will say that it always takes longer and costs more than what us entrepreneurs think it’s going to, so I put in my money to start with, and funded the business. Typical entrepreneur, didn’t take a salary for two and a half years, pulled in some founders alongside of me who were kind of sick of their corporate job, and want the allure of a startup. And we built the company. I think they took a $500 a month salary over time, but it was tough at the beginning, and it did cost quite a bit of money. Since that time, we built the company, and it was growing really fast, and cut a major distribution deal, and needed to raise capital. Since that time, we did go out and raise both a round of angel capital, and then we’ve done two venture rounds. So into the company, we’ve raised a total of about $22 million over the years, and putting my capital that’s gone in. That’s gone to fund our growth, and cut the sorts of deals, and hire the sort of people that we need to in order to grow a successful company.
I think the future is really bright. And when we think about our mission, it’s truly to transform the way that we learn and connect and grow, so that we empower people as a company to live more meaningful lives. In order to do that, we think that there’s a tremendous opportunity for us to continue to expand and help. On one side of the equation, the instructor helped them make a better living doing what they love to do. But if you think about the democratization of education, and how you’re able to now learn from anyone, anything that you want, we think that there’s a giant opportunity internationally that we haven’t even tapped into yet. There’s a number of people that have been disenfranchised in different parts of the world. And we feel like we can make a tremendous difference not only here at home in the US, but also worldwide.
Cash flow is the blood of the business. And you don’t need tchotchkes you need customers and tchotchke does not equal customers. Take that money instead and spend it talking with customers, finding out what their product or their issue is, and what their problem is, and go fix that problem. As much as you can, on the best developers in the world, if you’re in the internet space, or on product development, and find something that truly is differentiated that meets their needs. I don’t think we’ve ever produced a shirt, a golf shirt with a logo on it, even now.
I think that the rule is in our space is to continue to be frugal, even when you are cash flowing. I think that sometimes people forget where they came from, and what got them there. And I think it’s very important for entrepreneurs to remember that you are, first and foremost, a fiduciary of capital, and how you think about spending that capital, and there’s a finite amount of capital. You have to make sure that you’re spending it on the resources that matter versus the dog and pony shows.
If you think back about capitalism, when we started through Keynesian economics, the entire basis of the corporation was to build shareholder wealth, period. That was the only thing that was a concern, and a straight economic model. I think what you’re seeing today is a shift in society in which corporate have to also be good corporate citizens. It’s not just enough to be able to produce revenue. It’s also about being mindful about how you produce that revenue, and whether the revenue that’s being produced is overall a positive or negative for society. If you think back about or think now about the people who are graduating college, the sorts of questions that they asked companies that they’re about to join are fundamentally different than the question that were asked 20 years ago. 20 years ago it was, “How much money am I going to make? How much time do I get off? And how quickly can I climb up the corporate ladder?” Now, the sorts of questions that you’re being asked are, “What are you doing for society? What are you giving back? How are you acquiring your products? Do you use sweatshops, overseas, etc.?” And that’s going to continue, because the level of awareness across the globe has increased overall. And I think it’s a good thing. I think that people and companies can both do well for society and do well for their shareholders. I don’t think it has to be an either/or. But if it comes right down to it, and if you’re having to decide whether you’re doing something crappy, because you’re making money, and you have to live with that, I applaud the CEOs who are willing to stand up and say, “Listen, we’re going to take a hard look at that and make sure that we’re doing good for society.” We believe that that’s the way we operate, and I think more people should do the same.
I’m a finance guy by my study. And I think I have a general internal rate of return that I’m looking for, and I think there’s multiple ways to get that. I would rather take a percentage or point less with a company doing well then to maximize something that I don’t believe in, it’s not worth my psyche to do. I think what people underestimate now is how the arms race will be for talent. And people will naturally gravitate towards companies that they believe are doing better for society. I believe that, and I think over time, you’ll start to see that change.
Best way to reach me personally, follow me on Instagram @mstevencox. For TakeLessons, just visit our site. It’s TakeLessons.com. From there, you can find group lessons; you can find private lessons. If you’re an instructor and would like to learn more about the program, you can also sign up there.
Highlights from Anna’s Interview
In the 90s, I didn’t know any better, to be honest. I didn’t come up through STEM background, although I had a good education. I was pretty quantitative. But, thing is, I started a company by accident. I was working in educational software, and at the time, I had a journalism degree, which became pretty technical. But the company that I was working for said, “This internet thing, we don’t think it’s going anywhere.” So at that time, I was managing a group of programmers, and we just went out on our own. So I wasn’t in math classes, where I felt like I was the only woman, I wasn’t in computer science classes feeling like Oh, you’re not supposed to do this. I was just doing something else. And then why not?
It’s important to see people who look like you to figure out what you want to do. You have to be able to see someone doing something and say, “Hey, maybe I could be that person.” I think it was less about why I was so special than what was happening in computer science and web technologies in the 90s, which was very discouraging to women. I mean, there’s a book out recently called Brotopia, and it talks about how, in the 90s, with the idea that I was a computer geek, and I met this person who was the archetypal thing. We think about a guy in a hoodie in a basement. That was based on some faulty research that had been done. Computer science was so new, we needed a whole new workforce to do this. So what’s the best personality to do that? A group of people came up with this Myers-Briggs test, and they typed who would be best to do that. And they came up with a guy in a basement. But turns out the research was wrong, and it’s about mass murderers are software developers.
Okay. I’m not very smart. A lot of women, the whole of us, I think, accepted. What do you think of when you think of as a computer scientist? What do you think of when you think of a web developer? And this image entered our mind, and I think a lot of people were discouraged. I happened to be not listening to that conversation, because I wasn’t in the mainstream computer science world at that time. So, I’m not gonna say that I don’t have ambition. I think I’m driven. I’m ambitious, I tend to not take no for an answer. I tend to go into new territory, like the pioneers. All of that is true. I just think that I wasn’t connected with the computer science world. I kind of came into it by accident. I think if you were a woman at that time, you might have been discouraged by things that didn’t even enter my viewfinder.
I did bootstrap it, and I also had luck. One of the things that I had, one of our first customers was a gentleman who I had been doing some work for before I started my company. He was head of promotions, which was my first big client. I loved it, I lucked into a bunch of stuff. First thing I want to acknowledge is I think a lot of people succeed, and they founded Uber or whatever, and they act like they hung the moon, and they’re geniuses. I think that we as entrepreneurs need to credit the good fortune that we have, because it’s not always about hard work. A lot of people work hard. It takes hard work, good intelligence, and also a dose of luck. So I bootstrapped it. And I also—my dad has a great saying—as a tennis player, just keep your eye on the ball, you’ve got to know what are the things to worry about, and what are the things not to worry about. If a client is being irritable, some people can spin off for days obsessing over an irritable client, and you’ve got to let that stuff go.
What’s most important, you’ve got to make sure you have happy clients, you’ve got to meet your payroll, you’ve got to control expenses. Outsourcing was a great opportunity for a person like me, because during the 90s, you also had lots more contract work available. So it was all about that, and then a little bit of nerves of steel. Someone asked me, “You guys, does making payroll keep you up at night?” My typical response to a question like that is, “I don’t know, does it keep you up at night?” Payroll is a reality, just like death is a reality, just like taxes every day. If you’re going to let that stuff keep you up at night, you’re never going to be able to start a business. You have to have that turn of character where you’re willing to walk the high wire without a net, and don’t look down.
I have found that’s all about referrals. I tried a lot of different stuff, and sometimes ad campaigns work, sometimes they don’t. I have to say most of our business has come through referral, and it’s worked. My husband’s in business. He started his business 30 years ago. I started 23 years ago. And it’s amazing how networking, referrals, writing helps, writing a book helps. Having these kinds of conversations helps. But there’s no magic wand there. It’s about, people sign up to work with the owners of the company, in this case, me and my husband. We’re not selling Nike shoes. A bunch of airtime on the Super Bowl isn’t going to help me much. I suppose I could think of a of a great, 1984 style Apple commercial for the Super Bowl, but truth is, I can’t afford it.
Just to give the background, the Department of Justice has reached out to this community that’s known as ethical hackers. It’s a very tricky topic, but they engage in hacking activities for the purpose of finding vulnerabilities in all kinds of things. Software, there’s an article this morning about finding vulnerabilities. So they’re there, they let themselves loose to try to break it. But the purpose is to turn over that information to the company, the Department of Justice, the FBI, and Intel, the responsible party, “Hey, look, your system can be hacked in this way.” That’s the definition of an ethical hacker. There’s all kinds of challenges with the fact that, it’s probably true that some people who are ethical hackers at times are also not ethical hackers at other times. But the challenge here is—I often think when we talk about this topic, about that great quote from Henry Kissinger, which is, “The conventional army loses if it does not win, the gorilla wins, if he does not lose.” Hackers in general, he talked about that the hackers that are potentially going to take down our electrical grid or infiltrate our water supply. These are, by definition, guerrilla warriors. They’re out there, and they win if they don’t lose, but Department of Justice, corporations, they’re the conventional enemy, right? They have to win. So you have all these threats coming your way, in all kinds of evolving and novel ways. How do you defend against that?
It’s kind of interesting the semantics of it, the way the word has evolved.
If you go back to the original Jurassic Park movie, the little girl, I forget her name, she’s a computer nerd. And she in that movie says somebody called her geek. I forget the other phrase somebody uses. And she objects, she says, “No, I prefer to be called a hacker.” Because way back then, I forget when that movie came out, maybe ‘93 or something, the term hacker was much more generic and just meant computer nerd. Then it came to mean someone who was exploiting vulnerabilities for the purposes of, I don’t know, just making a point or profit or whatever. Now we’re trying to figure out what is an ethical hacker. But truly, it’s a very tortured space. And I’m not sure that hackers don’t trust companies and the Department of Justice, and companies don’t trust hackers. So there’s a bit of a stalemate there. Although certain people and companies are trying to overcome this, this lack of trust exists between the two camps for all the right reasons, on both sides.
I think the reason that there’s some trust issues on behalf of the computer nerds or geeks or experts, whatever you want to call them, there are individuals who have gone out and tried to exploit a vulnerability in, let’s say a component of the electrical grid, and then reported that to the authorities. The thing is, the first thing that they did, which was to exploit a vulnerability, and get into a system, a server, whatever, that’s elite. So what has happened, and what has created some bad sentiments in the hacker community, is that some people who actually found vulnerabilities and turned them over to the authorities were then prosecuted for them, because what they did was illegal. But it’s a little bit like, come on, dude, give me a break here, I’m trying to help you out. So we have difficulties in the way our laws are set up. I guess that the legal folks would say, “Well, you need to be invited to exploit a vulnerability.” And I’m not sure. If you were running a large server, and someone tapped on your door, told you you’ve got this huge vulnerability, I guess you’d be grateful.
I had an uncle who sold computer and typewriter security systems. And what he would do is he would walk into an office or a bank, and he’d go up to the security guard, and say, “Hey,” he’d find out the boss’s name, “Joe asked me to do a security check. And so I’m going to go and get some typewriters and walk out with them.” And he would do that, he’d go walk out with some typewriters, usually with the security guard helping, and then he had walked over to the boss, Joe and said, “Hey Joe, your security guard just helped me steal a whole bunch of typewriters.” And Joe’d go, “Who the hell are you? I’ve never met you.” Because the whole thing was a ruse, and that’s how we got in the door. And then he, of course, would sell the security systems to prevent it.
Here’s my other favorite one. Go into a liquor store. I sell credit card processing, I have a friend who sells credit card processing and check processing. He would go into a liquor store or have his friend go and pick out 30 or 40 bottles of the best liquor for a huge party, let the attendant ring it up, run up a $2,000 tab and get out a check. And the place goes, “Oh, I’m sorry. We don’t take checks.” He’s like, “Oh, I don’t have any other way I’ve gotta go, I’m sorry. This is the only way I can pay. And then he leaves. Then two or three days later, he walks in and says, “Hey, I have check processing if you ever lost a big customer because you couldn’t process checks.”
I am so grateful for the tech world. I think it is a great career. It’s a great career, especially for a woman. And I think also that running your own business is a great career for a woman, I think many women are intimidated, and they see the entrepreneurial space is something that men do. Men can more easily get financing, other things. But in our world today, we still have a problem with women leaving the technology workforce. Most of that has to do with workplace flexibility. Women are still made childbearing, caretakers of the home. So the flexibility of being in technology is, you can telecommute, can do all kinds of things. The income that you make is great income, and finally, the prestige that you can achieve if you’re ambitious, all of that makes a great package.
Being a woman in charge is a terrific career choice. I often say that to young women who come and watch me give talks. Every woman who’s been in business for any amount of time knows that you’re going to encounter certain barriers, it’ll probably have to do with sexism. I’m the boss lady. I run meetings, I run my company, I run different things, and I don’t encounter people who might put a barrier in my way, because if there are, they aren’t there. All of those things make both entrepreneurship and a technology career a terrific choice for young women. If you’re of that turn of mind, and you’re temperamentally attuned to being able to be an entrepreneur and start your own thing, it’s so much better.
I would guess, in the book, there’s a bunch of stuff that would be reminders for women in tech, as opposed to teaching her. I decided a few years ago, I’ve run big projects for most of my career, 23 years, and because of the scale that you’re talking about, I often joke that my typical client, I’m dealing with 11 vendors in five time zones. I’ve read a lot about project management, I’ve been to seminars, I hire people with TMP certifications all the time, and I felt like there was a missing piece. And that had to do with just telling the truth, the practicalities of how to manage a massive project, because despite all of the literature, and training, etc, 30% of software projects are cancelled altogether. Some huge other percentage, 45% to 55% are over budget and miss their timeline. Why is this? I think it’s a lack of practical advice. Living in a real world, we’ve got all kinds of techniques, but in my book I talk about, what this looks like in the real world. Things like programmers that they’re going to estimate, but most of them are overoptimistic. Other things that I talked about are how businesses are way too optimistic. The business stakeholders are way too optimistic at the start, everybody’s having meetings and talking about their dreaming dreams of how this website or technology product is going to transform their business. And then the dreams never meet reality, and you don’t get out of the dreamy dream stage to get down to specifications. However, it is a really good big idea, but nobody’s really good at generating the list of detailed specifications. Somehow you have to move from one to the other. There’s a phenomenon, I call it the trough of fun, which is fear, uncertainty and doubt. That happens exactly at the two thirds mark of every project. There’s a lot of practical knowledge about how to successfully run these large scale projects.
And also, as you might be able to tell, I have a bit of a sense of humor. One of my reviewers said it’s a technology book that reads like a novel. I’m not sure that that’s true, but I’ll take the compliment. I hope I’m not the villain, but I’m not the heroine. A lot of times having a successful software project rollout has to do with being very honest with your client and your team at the start. So talk about me being the villain, the first thing I do when I walk into a technology project, is to give everybody a dose of cold water and tell them all of the things that could happen, just bring everybody down to earth about what we’re undertaking, because what happens in software projects is at the beginning, everybody’s super optimistic and dreaming, they’re dreaming dreams and everything else. And at the end—you may have been a part of some of these projects—everybody is falling down in despair. One of the most important things is to be the villain up front and say, “Look guys, this is what tends to happen,” and it has the effect of inoculating people against the desperate, fearful, tragic emotions they’re going to have when things start to go wrong, as they do in technology.
I am Anna P. Marie. Put the P in there, it’s a lot easier to Google Anna P. Marie. You can find me an Amazon. You can find me at tmg-emedia.com.