How Sean McCleese Generates $10 Million In Revenue By Crowdsourcing Homework

by Tim Jahn on December 28, 2010

Sean McCleese was in a quantum physics class when he encountered a problem no one could figure out.  He tried Googling the problem but it was too specific a question.  So Sean created to help others stuck in the same situation.

At first, he just worked on it on the weekends with some friends.  But dedication and hard work led to profitability.  Today, Sean’s generating $5-$10 million in revenue a year.  I interviewed Sean to learn how he’s gotten to this point.

There were some technical issues with the video for this interview, so it’s an audio only interview.


Sean McCleese: I’m Sean McCleese. I am the president and founder of Student of Fortune. It’s the leading online homework help sort of resource online. One of the things that makes us different than almost any other homework help website out there is that we don’t sell like tutors time.

Basically if you go on any other like homework help website, like you say you need help with math and then there’s a list of 100 math tutors that might be online and you have to decide which one you want to pick and maybe most of them are from India for example. A lot of our competitors do that. But usually you need help with like a specific math problem; you don’t need help with all of math or all of geometry or whatever. And there’s no way to know if that specific tutor is going to know how to do your specific problem.

Well on Student of Fortune, we sell content basically. You go online and you post your specific problem and then the tutor, anyone on the site can be a tutor, answers, you know provides a step by step tutorial to how to get your answer. You can then buy that tutorial and then you know you’ve gotten exactly the help that you need to the problem that you requested. And on the other hand the tutor’s able to make more money and help more people this way because they’re not selling their time.

Once they write up this tutorial, maybe someone else needs help with the same thing and then they can just buy the tutorial as it was already written and resell that over, and over, and over. And so that works out really well for our tutors and it helps the students too because sometimes they can get help instantaneously; they don’t have to wait for someone to write up a, write up that tutorial. They don’t have to wait to find a tutor, it’s just on instantly.

Tim Jahn: That’s cool how you sort of did a twist on the traditional site.

Sean McCleese: Yeah, yeah, yeah. We sort of think of it as a reverse eBay model.

Tim Jahn: Yeah. I was reading that entrepreneur article and said you guys are doing between five and ten million dollars in revenue by in a sense crowd sourcing homework.

Sean McCleese: Yeah, yeah, yeah, I think that’s right. Yeah.

Tim Jahn: Yeah, and I don’t mean that in a bad way but how did you get to ten million dollars in revenue? I know you’re young like I am. How?

Sean McCleese: Yeah, it’s been a weird road. Like I came up with the idea my senior year of college. I went to Occidental College in Los Angeles and I was a physics major because I liked having fun. And the physics department at the school was really small. And there were like eight people in the class. And we — I was in a quantum physics class, which was the last class in the entire major. And we had homework due everyday and the professor had gone home. And there was this one problem no one could figure out how to do.

You know, I tried to go online and Google for that problem but it was way too specific. You can’t do a Google search for an equation. And so I went on like a tutoring website and I saw that there were like people online who said they were good at physics. But this was like a really particular problem. And if you’ve ever had trouble in math or science you know that like just because someone did chemistry doesn’t mean that they remember how to do a specific thing. And I was like, this is ridiculous, there is no way for me to get this problem done.

And so that was where I came up with the idea. I got together with some friends and we built a website out of school. And I think the thing that’s been weird for us is that it’s been a different experience than a lot of other entrepreneurs I’ve spoken to. We never raised any money; we didn’t even know how to raise money. We just started the website in our living room and we weren’t even sure how you’d go about meeting investors. So we all got fulltime jobs and worked nine to fulltime job and then we’d get together on the weekend and work through the weekend and just kept doing that. And all my friends at the time were like, why are you doing this? This sounds miserable.

But I believed in the idea. And after a couple of years of just working on it like crazy like we started to become pretty profitable. I think we got a good mix of features on the website, we got some loyal customers, we try to stay pretty like involved in our customers and not be like some sort of faceless corporate entity. I think that helps make our tutors and our students realize that we’re willing to work with them and try to help them out and you know, I think all those things have come together to help us be pretty successful.

Tim Jahn: You bring up a great point about the outside funding. I was just reading an article yesterday, the day before about the big bubble that’s happening with Angel Investing and this whole ecosystem. And I’m from Chicago so I am not involved with this in any way.

I’m not Silicon Valley so I’m completely of the mindset that your, you’re hardworking and you bootstrap a company from the get go. I’m just surprised, not surprised, I’m so happy you did it that way. But why did you do it that way? Like I said there’s — and like you said there’s so many entrepreneurs you talked to are going straight for the VC, there’s big bubble, there’s money to take. Why did you not even consider that? You got a job right away to build money to build this, why?

Sean McCleese: Well I think it was a couple things. I think firstly to be honest; we didn’t even know how to raise money. Like it’s not something that you just initially know how to do. I think early on I had a little bit of concern as to whether or not it would actually work and I didn’t feel comfortable taking out someone else’s money to try an idea out. And I think, I think just because how I was raised or whatever.

Like I didn’t want to take money if I didn’t have a clear reason to do it. And there wasn’t one. Like we had the expertise to build a website, we had the time as miserable as it was. It was also kind of fun in that sort of weird startup way. And there was just no clear reason to do it. And I’ve had a couple people since we’ve become successful, I’ve had a couple people come to me and say, “I’ve got this idea I’m working on, this is what’s happening. I’m going to meet with some Angel Investors tomorrow.” And I’m just like okay, explain to me why.

Like let’s say you get a million dollars or $500,000.00, like what are you going to do with that money? And their answer is usually, “I get an office, I’d hire some programmers, I’d hire some developers, I’m sorry, designers.” And I’m like, “Okay, can you do the programming yourself?” And the answer is usually, “Yes, but I don’t want to.” And it’s like okay, well you’ve give me a lot of reasons on why you could use money and why that would be nice if it dropped in your lap, but there’s very serious consequences with taking investor capital. And in my mind, you should only take capital when it’s really significantly going to make a difference with your business or it’s something that you have to have.

And if you’re in a situation where you have to have it, that’s not good anyways. But we were just never in that situation where it was crucial. It certainly would have helped; it would have made things go faster. I mean it took us quite a while to get that organic growth. But on the other hand, every single dollar we make is our money, we can make every decision we need to make for the business.

We don’t have investors we have to answer to. And one of the risks with taking capital is you know, you get your first bunch of money, you go for a year and a half, you haven’t made a 50 fold increase. The investors like, “Okay, we need to see your return.” So then you go and raise more money to provide liquidity for the first step, you’ve given up more of your business. The second set of people let you go for a year, year and a half. They say, “Where’s our huge return?” So you go, “It hasn’t happened yet.” And then you have to go raise more — you know it’s running around to round with investors.

That can ruin a business so many times. And at the end even if you succeed, you’re left with like 10% and what have you really bought yourself? Like maybe some fancy chairs and some office space. But like usually especially in like internet stuff, you don’t need that stuff. So that was why we made the decision that we did. And I think it was certainly harder. But now I am really really happy that we did make that decision and I highly, highly recommend that other entrepreneurs really take a good long look at whether or not they need to raise money. Because now we have investors coming to us, interested in investing with us.

Now we can be like, this deal is not perfect, we’re not interested. This deal does not provide exactly what we want, we’re not interested. We’re in such a different position than what they’re used to dealing with. Exactly, exactly. And because the money is all ours we’re also like very judicious about how we spend it. And so we don’t need investors, we’re profitable, we can run indefinitely.

And so I know like a lot of internet sites when they’re talking to people how successful they are, they talk about page views or unqieues per month or whatever. Because we’re a more traditional business, we talk about revenue. That’s our measure of business health is how much money we’re making.

And so when investors come to us, they’re like, “How’s your business doing? How many page views do you get?” We’re like, “We don’t want to talk about page views. Let’s talk about money. Let’s talk about how much money we’re making. And we’ve had a lot of investors be like, “We don’t really have a model to like judge how good an internet business is based off money.” And I’m like, “Well that’s absurd.”

But it also puts us in a very good bargaining position with any investor we might want, we might want to talk to because we’ve got these good metrics, we’ve got these great revenue numbers. We don’t have other inventors we need to consult with. I mean, it was a hard road but I think ultimately the right decision.

Tim Jahn: Yeah, speaking of the hard road. You were in physics class, you needed to get a problem answered and then years down the road, down this crazy road, you guys are successful now, like you said, you’re profitable.

But how did you initially get the word out about the site? I mean, if there are only eight people in your class, I’m gathering you went to a smaller school. How did you get the word out about this to the point where you’re at now?

Sean McCleese: You know, that was the slow part. You know, we — I talked to people at school about it. Although, by the time the site even launched I graduated. So that wasn’t a big help. I posted about it on various message boards, just being like, “Hey check out my website.” We bought like $20.00 a month of Google adwords. Well, I mean, it was certainly, we certainly didn’t make money off of it but it did get people to come to the site who might now have otherwise seen it.

It was just a lot of different stuff. And one of the things that was the most successful for us is we spent a lot of time and we continue to, is we spent a lot of time talking to those first couple users and getting really personally involved with them and talking to them about what would make the site better for them. And I think that made them sort of more interested in telling their friends, talking to other people.

We actually had an interesting experience early on where one of our top tutors years ago was buying Google adwords for our site to point to his tutorials because he was earning money off of those tutorial sales. And we were like, this is awesome. Like someone cares enough about our website and is like happy enough with the job that we’re doing that they’re spending their own money to buy advertising for us.

Like, yeah, that was crazy. And so those kind of experiences. Just staying involved, saying personally involved with everything. Making sure that your users know that they can contact you individually; like that goes a long way. So I think that did a lot in terms of getting us a little more sort of traction.

Tim Jahn: Yeah, it sounds like you guys are very concerned with having that personal interaction, that personal touch which I mean, that’s what I love. I was just talking to accounting, I started using them for my accounting. I called them there for support and the founder like calls me back and we’re chatting and he’s helping me. Yeah, it’s like, that’s awesome.

Sean McCleese: Cool. Yeah, I mean, one of the things that’s always bothered me about internet sites is like there’s this black hole of communication. Like don’t get me wrong, as much as I love Google, like I love them, they’re great. But if you have a problem with Google, like there is no customer service phone number. It is impossible to get help with pretty much anything even if you’re using merchant services like Google checkout.

Like there’s a black hole of communication. And that goes — that’s the case for a lot of online sites that you don’t even think about. Like and we definitely didn’t want to be that way. We wanted to be personally involved, you know make it clear that we get involved with any issue. And that’s served us really well. So —

Tim Jahn: So I’m guessing you didn’t get to five, ten million dollars of revenue without some bumps in the road. What would you say is the biggest mistake you made during that weird journey?

Sean McCleese: I don’t know, I mean, there’s never been any one critical mistake. I think a lot of it was just sort of learning about — I mean it’s different issues all the time. I mean, there were early on, there were those crises of conscience where it was like, is this actually going to work? Are we just wasting our time with this thing?

I mean there was a huge burden to work nine to five and then work on Student for Fortune all weekend. I mean, that was really difficult to make it though. And we did but I mean, that was really rough. And then, you know, we had different issues with sort of what feature do we roll out next, how do we resolve different customer complaints? Like right now there’s a lot of customers online complaining about our site because we’ve removed them from the service.

And it’s because what they’ve doing is they’ve been purchasing someone else’s tutorial and then posting it as their own. And we have no tolerance for that. We see that happening, we’re going to remove them from the service. And they said, they don’t feel as though they’ve been treated fairly. And I certain disagree with that. But one of the difficulties of running a business is like you can’t make everyone happy. How do you pick your battles? How do you make it clear to other customers that you’re behaving in a responsible way?

But then, those complaints linger. We get people asking us, “Why are there so many complaints about Student of Fortune on the online?” And it’s like at them, they’re all about this. And so it’s like you know, I think that’s been sort of a learning experience for me is some people are going to want to game your system; some people are going to behave unethically. And when you stop them from doing that, they’re going to complain. And I think I did not expect that to happen. I think I was too like believing in the good of humanity. And running a business certainly gives you some experience with less ethical people I think would be how I would phrase it.

Tim Jahn: Looking back at that experience, do you think there’s any way to prepare for that? I mean, can you prepare for the fact that you’re not going to make everyone happy, that people are going to try and screw your business, or game ya?

Sean McCleese: Yeah. I mean, I don’t know. I mean, I’m sure we can always do things better. There’s definitely no question about that. I think —

Tim Jahn: I mean, prior to having gone through that experience, looking back, do you think there was a way you could have prepared for that or is there no way?

Sean McCleese: No, I don’t think you can ever eliminate people who think they’re somehow going to be smarter than you are and pull one over on you and then get really morally indigent when you stop them from it. And I think no matter what kind of business you’re running; you need to be realistic about that. And I think, and I think that’s something a lot of new business owners don’t expect.

And I certainly didn’t and I think it’s one of the sad realities about running a business, you know. One of the things I read about a lot is people doing fraudulent chargeback’s, credit card chargeback’s on restaurants or on retailers where they buy something, take it home and then claim they never got it and charge back the credit card. And a lot of retailers complain on how it’s just killing their business. And it’s just like you cant doing anything about it, there’s nothing you can do about it. And it’s like, I don’t know what you do to prepare against stuff like that. And same for us, like I don’t know what we do to totally prevent this reselling tutorials issue.

Like we’ve put some technological stuff in place that makes it more difficult. But I don’t think we’ll ever be able to stop someone from doing it. And all we have to do is be reactive about it and make it clear we don’t tolerate it. And I think that’s what entrepreneurs have to do. You have to figure out what is the proper way your business is run, what sort of behaviors are you not going to like tolerate and then what behaviors a grey area for you and what behavior are you going to get involved in and try to resolve?

And if it is in that intolerable area, you’ve got to come down on it hard, you got to prevent it and you got to make it clear publicly that you’re doing that. Because, you don’t want other customers who are using your site properly to say, “Oh they’re putting up with this stuff, they don’t care, etc, etc.” We try to be pretty public about what we do which gives us a nice transparency but also allows people who feel wronged to get a forum, to air their grievances however manufactured they may be.

Tim Jahn: That’s a great point. A long those same lines, what would be one piece of advice you’d give someone who was sitting, just like you were, had an idea. What’s one piece of advice you’d give them to actually execute and turn that into a profitable business?

Sean McCleese: I just say you go to believe in it. I mean, you got to believe in it to the point of which you’re giving up all of your free time. And if you can do that, then you can make it work. If you cannot do that, I don’t think it’s going to happen. Because you can’t expect a YouTube where you sell for 500 million dollars six months down the line. You know what I mean?

You have to be prepared for three years of no profitability, three years of spending your own money for nothing. I had a friend recently email me from my old school who started a website, he’s not getting any traction, it’s been like four months. He wants to know how to fix it. I’m like, “well, here are some steps you need to take, none of it’s for sure. Just keep at it.” And he’s like, “well, if it doesn’t work in two months I’m going to sell the business.” And I was like, all right. Totally your call, but, that’s totally your call but — sorry, my computer just went to sleep. That’s totally your call but why? Why are you selling? Why are you wanting to get out so early?

And that’s what I think it comes down to is you’ve got to, you’ve got to believe in the business enough where you will work on it at all costs, you’ll put in that time, you’ll explain to your friends why your never around, you’ll work it like crazy and you’ve got to the find that fun, you’ve got to find that rewarding otherwise you’re not going to be able to do it unless you have the one in a billion idea that sells for a ton of money six months later. And you know, we still haven’t sold the business. It’s still ours; we’re still working on it day to day.

We’re profitable now which is nice. But, if we’d ever gotten tired of it or if we were just saying, “We’re just going to do this until it sells” like five years later we’d probably be feeling a little bit sad. And that’s where we’re at now. We’re not feeling sad. We’re loving it, it’s great. And so you’ve got to have that belief in it. If you’re doing something you don’t believe in, just stop, stop, save your energy.

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