HEADQUARTERS: Las Vegas
YEAR FOUNDED: 2010
2018 REVENUE: $6 million
Shaan Patel grew up in a motel in what he describes as the "seedy part" of Las Vegas. When he was younger, he didn't understand why people would want to rent a room for only an hour, or what was in the vials scattered on the streets. Now, he's a dermatologist with an MBA from Yale, a Shark Tank veteran, and the founder of a $6 million business.
Patel is a first-generation Indian-American whose parents immigrated to the U.S. in the early 1980s. His father had worked as a pharmacist in India and wanted to live in a state that accepted his foreign degree, so he settled the family in Las Vegas. And per a family friend's suggestion, Patel's father bought a motel instead of house--that way, the family would have a roof over its head and an extra income. Patel grew up in that 23-room motel, often sharing the space with his grandparents and other Indian families his parents cared for after they made the journey to America.
The school system he attended wasn't great--many students dropped out of high school to work in the casinos or become valet drivers, Patel says. His school also didn't encourage him to practice for the SATs. So when he took the exam and didn't get the scores necessary for admission to his dream schools, he locked himself in a library and studied all summer. Patel had lofty plans of studying medicine and wanted to attend the University of Southern California. His practice paid off: He saw a 640-point increase, notching him a perfect score--and a business idea.
Patel realized he could turn his study methods for acing the SATs into a curriculum that helps students improve their scores. Today, his nine-year-old business, Prep Expert, has grown into a 30-person nationwide team that booked $6 million in revenue last year. Though managing his ambitious academic goals with his now-burgeoning business has proved challenging, Patel says he owes his success thus far to both good luck and sheer persistence.
"If you change your scores, you can change your life," says Patel, 29. "You can win scholarships, and it's important to get college paid for--the tuition debt problem is a huge thing for Americans."
Testing his hypothesis
After Patel raised his own test scores, USC awarded him admission and enough scholarships to cover tuition. Four years later, in 2010, after graduating from college and preparing for medical school--also at USC--Patel was ready to publish his SAT teachings. Unfortunately, publishers weren't interested since he didn't pack the same credentials as the other test-taking-guide authors. Patel turned his material into a course instead. His first class of about 18 students in Las Vegas averaged a 376-point increase in scores. Demand for his strategies ballooned, so he trained other instructors and launched Prep Expert.
Patel was determined to grow the company--and get through medical school at the same time. He had watched his father work as a pharmacist during the day and run a motel at night. Patel's medical school classes ran from about 8 a.m. to noon, leaving his afternoons open to make a new curricula for his growing business. Meanwhile, Prep Expert's revenue was doubling year-over-year. Patel didn't have a business background, so he enrolled in Yale's MBA program--taking him to New Haven, Connecticut, between his third and fourth years of school, when other medical students typically study something else related to their discipline, like public health.
Instead of spending Fridays with his business school classmates during recruiting sessions, he'd shuttle to the West Coast to work on Prep Expert. He also completed one semester of his MBA through online courses, so he could be closer to the company. While at Yale, he added online courses to Prep Expert's offerings. This was the game-changer for the company, says Patel, who noted that enrollment spiked 1,000 percent.
The other defining moment for the business was when Patel appeared on Shark Tank in 2016. Mark Cuban agreed to give him $250,000 for 20 percent equity in the business, which was then called 2400 Expert. To coincide with his episode's premiere, Patel opened multiple test-prep classrooms throughout the country, hiring instructors and training them on his methods. The following year, Prep Expert booked $3.5 million in revenue and launched a licensing deal with Kranse Institute, which sells the company's SAT, ACT, and GMAT video courses taught by Patel.
"Shaan was smart, the product is in a space that is critically important to families around the world," Cuban told Inc. in an email. "He is an amazing entrepreneur--he is continuously learning and improving his company."
Prep Expert is now in about a dozen locations throughout the country. Its staff of 30 manage the company's in-person and online courses, which cost $1,099 to $1,399 and regularly attract more than 10,000 students per year.
'Playing the game'
Patel completed his MBA in 2016 and earned his medical degree the following year. Despite his success, he says he still faces a big challenge in balancing it all.
"There have been times when I have come so close to really not making it," Patel says, referring to hitting his deadlines for new books, completing enough credits to finish his MBA, and getting his website ready for the Shark Tank premiere. "I've been very persistent and very lucky."
Additionally, he faces legacy competitors like Kaplan and Princeton Review, which control the majority of the test-prep market and sell books and online courses. They also offer in-person tutoring services. Prep Expert could face further difficulties as colleges and universities continue to discount the importance of standardized tests for admission. Among others, Bowdoin College, Wesleyan University, and American University have all stopped considering the SAT in recent years. And parents may be skeptical of services like his after the recent college admissions scandal--which involved several high-profile actors and business people--rocked the industry.
In an attempt to get in front of that news, Patel penned an op-ed for Fox News, claiming his company's innocence while also describing how Prep Expert shares some responsibility for the industry's becoming so overheated. He points out that as long as the SAT and other tests remain popular at universities, students will need to prepare to take them, for better or worse. "I think it's a terrible test, but at the same time, you have the play the game," he says.
Patel has taken that "terrible test" a couple dozen times and will be the first person to admit it takes some luck to get a perfect score. That and plenty of practice. He has written 15 books on test-taking and co-authored a children's book about entrepreneurship with Cuban.
"I have so much fun," Patel says. "I enjoy spending all of Saturday working on my business and not going to Millennial brunch."