Being an entrepreneur in the tech world is all about being able to adjust to market demand and refine your product to meet the needs of your users. This is a lesson Nate Matherson and Matt Lenhard recently (and painstakingly) learned.
We learned a ton, and in the end we did more than pivot, we killed our original business.
You may remember University of Delaware students Matherson and Lenhard from an article on Technical.ly Delaware this summer about ShopTutors, an online tutor-booking platform. When that story came out, Matherson and Lenhard were about two weeks into the Iowa Startup Accelerator, an intense 90-day business development program.
“It was a pretty crazy experience,” said Matherson of the program. “We worked for 93 days for 12 hours a day. We learned a ton, and in the end we did more than pivot, we killed our original business. It wasn’t a big enough opportunity and there wasn’t enough money to be made.”
That’s right, three weeks into the program ShopTutors was kaput. According to Matherson, he had received feedback from numerous mentors in the program saying that ShopTutors was too small in scope.
“The whole process of changing ideas was very difficult,” said Matherson. “Luckily we were able to do it very early in the program. If anything, it really taught me how to look at things from a user perspective.”
But out of the debris of one scrapped edtech company, a new one was born: Lendedu, an online marketplace for student loans and student loan financing. Matherson describes it as the common application for student loans.
Indeed, at one point over the fall it was called CommonLoan.
“Previously if you were a student looking to shop for or re-finance a loan, you needed to go to multiple lenders to see borrowing rates,” Matherson explained to Technical.ly Delaware. “Lendedu puts it all in one centralized place.”
Matherson and Lenhard focused on the Lendedu business for the remainder of the Accelerator Program, even scoring an investment from Iowa-based venture capital firm Built by Iowa by the end of the program in November.
Matherson compares the Lendedu model to LendingTree.com, in that you are matched with lenders based on an application you fill out on the site. (Like Lendedu, LendingTree also does a soft pull of your consumer credit information, which does not affect your credit score.) Matherson says it took Lenhard, who handles all technical responsibilities, two months to program the site, which is now live and running.
“The process was pretty simple,” said Jacky Watman, a college graduate who used the platform to refinance her student loans. “I saved time rather than shopping around to multiple lenders.”
We're trying to be the only place you shop for education finance.
With Lendedu still in its infancy, Matherson is working to draw more organic traffic to the site and away from competitors like SimpleTution.com and LendingTree. He says Lendedu’s use of consumer credit info allows his platform to give much more accurate estimates than his rivals. The short-term goal is to service up to 10 applications a day while developing a viable marketing plan. Most traffic to the site currently comes from a Google ad campaign that Matherson doesn’t see as sustainable.
The site also does not yet offer the option to take out a new student loan, only allowing users to re-finance a current one, although Matherson says the new loan feature will be available in January.
“Were just starting to get additional capital and amp up our marketing efforts,” said Matherson. “In a year we hope to establish a presence in education finance and build a brand. From our perspective, we’re trying to be the only place you shop for education finance.”
Matherson and Lenhard also decided not to return to UD this spring as was originally intended. Launching their second startup this year has been education enough, they say.
“The biggest takeaway is that being an entrepreneur is tough and not too much fun,” said Matherson. “But you do learn a lot in terms of building a product and testing your value proposition to see if its worthwhile.”
Knowledge is power!
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