Case Study: How to Reinvent a Failing Start-up
Flocabulary burned through $50,000—and had nearly nothing to show for it. Was it time to throw in the towel?
Blake Harrison and Alex Rappaport were working the floor at the International Reading Conference in Toronto. It was spring 2007, and the two founders of the study-guide publisher Flocabulary had a lot on the line. After two years of hustling, the Brooklyn, New York–based start-up was nearly out of money. Harrison and Rappaport were desperate to close some deals.
"Wanna hear about how to teach history through hip-hop?" they beckoned across the aisles. An attendee wandered over, and Harrison and Rappaport cued up "Let Freedom Ring," one of their fact-filled rap songs, an ode to Martin Luther King Jr.'s "I Have a Dream" speech. The educator listened intently to their pitch. He picked up a copy of their book, Hip Hop U.S. History, and flipped through the pages, nodding his head in approval. Then it happened again. "You kids have a million-dollar idea here," the man told them. And then he walked away.
Harrison and Rappaport slumped into their seats. It just didn't make sense. Most of the teachers and administrators they talked to seemed genuinely interested in their product. At conferences such as this, they would listen to the pitch and rave about the concept -- but more often than not would leave Harrison and Rappaport with just $18 for one book, or worse, an earful of praise. Harrison wondered, If Flocabulary's idea was so great and the materials so impressive, why weren't people buying? When they got back to the hotel that night, the two friends had a somber conversation about whether they were cut out to run a business at all.
Flocabulary was Harrison's idea, and it had simmered in the back of his mind since he was in high school in Lexington, Massachusetts, in the late 1990s. Harrison was a good student, but he had always had a hard time remembering facts and figures. One day, it dawned on him that although schoolwork gave him trouble, he had no problem memorizing the lyrics of his favorite hip-hop artists, such as Outkast and A Tribe Called Quest. The obvious struck: If his school lessons were more like rap, retention would be a breeze.
After graduating from the University of Pennsylvania with a degree in English, Harrison befriended Rappaport, a recent Tufts music graduate. One evening, Harrison told his friend about his idea for using hip-hop to help students. Let's make a demo, Rappaport said. They wrote and recorded two songs that together defined 80 SAT vocabulary words, using lyrics like: "They don't say the word think, they say ratiocinate/ They don't render repeat, they say recapitulate." In the summer of 2004, the study-guide publisher SparkNotes showcased both songs as free, streamable MP3s on its website. People listened, and Harrison and Rappaport began to think they were onto something. They launched a website and began selling a self-published hip-hop guide to the SAT.
A few months later, Rappaport's father set the two up with John Whalen, a friend who is the founder of Cider Mill Press, a novelty book publisher in Kennebunkport, Maine. "I thought that with our design sensibilities and publishing experience, we could really make this a commercially viable product," Whalen says. The best part: Cider Mill worked with Sterling Publishers, the distribution arm of Barnes & Noble, which meant Flocabulary's books would find space in bookstores nationwide.
Within 18 months, Cider Mill published two study guides (the guides included a workbook and CD) -- the SAT book and a hip-hop U.S. history book. The books landed at nearly every Barnes & Noble. The Hip Hop Approach to SAT Vocabulary sold 10,000 copies in its first year and has since been reprinted five times. And Flocabulary received a slew of attention from media outlets, such as CNN, DailyCandy, MTV, and NPR -- even historian Howard Zinn offered praise.
As their study guides began to sell, Harrison and Rappaport found their goals were growing more ambitious. Flocabulary, they sensed, could be the basis for an education company. "We wanted to reach the kids who might never get to the SATs, whose families weren't buying books at Barnes & Noble," Rappaport says. In early 2006, with Cider Mill's blessing, the two decided to transform Flocabulary into an actual publishing business. They raised about $50,000 from friends and family and began visiting schools and attending education conferences. But their efforts yielded few results. "Teachers would say, 'This is so cool; my kids will love this!' but would buy just one book," Rappaport recalls.
One night that February, they met a Columbia Business School student who told them about the school's annual "outrageous business" competition, which recognizes start-ups with potential. They entered and won a social value award. Encouraged, they decided to participate in a program at Columbia that pairs new business owners with M.B.A. students who analyze business plans and offer advice.
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