Hilly, icy, Ithaca, New York, is no breeze to navigate in the winter. It's even less fun on crutches.
Andrew Grauer knows firsthand. But if Ithaca was in a kinder climate, his company, which is on track to make $10 million this year, might not exist.
As a sophomore at Ithaca's Cornell University, Grauer tore his lateral meniscus, and couldn't get to a few of his classes. Around this time, Grauer spent many evenings scheming about education start-ups with his older brother Jared, who was attending Cornell Law School at the time. He realized: Missing a class isn't a big deal--so long as a student can get notes. He thought: Why aren't those notes online?
It was out of a combination of that need, and a lifelong entrepreneurial itch that Course Hero was born. (As Jared tells it, Andrew is a natural schemer and salesman, who in grade school drafted a guide to computer game moves and sold it to classmates.) Today, six years later, Course Hero is a website of study guides, class notes, past course exams, flash cards, live tutoring services, and supplementary courses, mostly for college students.
Students at 4,500 schools and universities can pay for memberships--$39.95 a month for access to other students' notes and course materials--or choose to upload their own college-related documents to get a free pass. Course Hero's site hosts more than 7 million of these documents. It's also on track to make $10 million this year. The company is solidly positioned in a strong and growing market; Global Industry Analysts estimates the global private tutoring market will exceed $102 billion in five years.
The company born out of a dorm room stayed incubated there in Ithaca for the next two years as Andrew--per his parents' insistence--earned his bachelors degree. As it turns out, Course Hero is quite the family affair. It's been jokingly called another child of the family, by human members of the Grauer family.
Another brother, Andrew's twin, David, was studying at Princeton, and co-founded the company (as did engineer Gregor Carrigan, the only non-Grauer co-founder). The Grauer parents were early investors, are currently frequent advisers (his father, Fred, is a former chairman and CEO of Barclays Global Investors, and is currently on the board of Course Hero), and they allowed the company to essentially live and work out of their Atherton, California, basement for several months after the sons graduated.
After bootstrapping the company with $10,000 of money the three brothers pulled together, they took a friends-and-family investment of $100,000. In mid-2010, it raised a $1.5 million round of funding from YouTube co-founder Steve Chen and StubHub's co-founder Jeff Fluhr, among others.
Investor and board member Mark Feldman said he was immediately drawn to Andrew Grauer as an entrepreneur--before he even believed in the business plan for Course Hero.
"It's hard not to like someone who is so positive, enthusiastic, and energetic. He's also got an incredibly open mind about ideas," Feldman says. "He's one of those people who is not defensive. If he can hire someone smarter than him he'll do it."
Andrew Grauer, as a CEO, is a big believer in long-term thinking, and he thinks his company will only be as strong as its employees. So he interviews and hires every one. He tries to run a flat company with an open floor plan and open financials--and the company, though it is small, with 27 employees, boasts its low turn-over rate. And he's in it for the long haul.
"It takes a long time to create something really valuable," he says. "A lot of people think you can have rapid growth so fast, but I think of this as a decade of work."