It was 5 o'clock on a crisp October morning, and Luke Skurman was wide awake, on edge, and restless. It wasn't the first time he had awoken that way. His company, College Prowler, was stuck in a revenue rut, and after months of mulling the problem, he felt that radical changes were needed. Skurman tossed and turned a bit more, then dragged himself out of bed and headed to a nearby Starbucks, hoping that a change of scenery and a strong cup of coffee might jump-start some creative thinking.

As Skurman sipped his coffee, he made a list of the reasons he had started College Prowler. First, he wanted to create great content about colleges and universities. He also sought to help as many people as possible make the right college choices. Finally, he wanted College Prowler to be financially successful. Looking over the list, Skurman came to a bitter conclusion: He had succeeded at the first goal but failed at the other two. The only glimmer of hope was an idea he had been pondering to change the business's revenue model. For the third time.

Skurman founded College Prowler in 2002, after graduating from Carnegie Mellon University. His idea was to create college guides written entirely by the students. "When I was in high school, I was obsessed with finding the perfect college," Skurman says. "I used every resource imaginable. But I still didn't feel like I knew what the kids were like, or anything about the food and the dorms."

So he decided to give prospective collegians the real inside skinny. Student authors would distribute surveys to their peers, who would rate their school on a variety of criteria -- including academics, dorms, and food, as well as Greek life, the drug scene, and (of course) the hotness of the girls and guys. In the spring of his senior year, Skurman wrote a business plan and a 37-page prototype for Clark University and entered Ernst & Young's Enterprise Creation Competition. He was chosen as a national finalist.

After graduation, a former professor gave Skurman and three co-founders (none of whom remain with the company) a bit of office space in a nearby biotech incubator, and two angel investors invested $5,000 each in exchange for 2 percent of the company. By September, College Prowler had produced guides to nine schools and was ready to debut its products at the National Association for College Admission Counseling trade show in Salt Lake City. Skurman and his colleagues chatted up guidance counselors and admissions officers and nailed down their first two orders. "We made $240," Skurman says, "but we felt like we had validated our idea."

College Prowler soon began attracting coverage in Publishers Weekly, The New York Times, and The Washington Post, and on CNN, all of which responded to the guides' honesty and irreverence. "Alcohol seems to be the drug of choice for most students and just about everyone knows that guy who sits in his room and smokes pot all day," according to the guide to Carnegie Mellon. "We at the University of Arizona are not 'everyday people.' We are beautiful and hot," a U of A student wrote. More good news followed. A new investor, Glen Meakem, now the co-founder of Meakem Becker Venture Capital in Sewickley, Pennsylvania, put $500,000 into the company in August 2004. The country's largest book wholesaler, Ingram, agreed to distribute College Prowler's guides, which helped get them into major bookstore chains like Barnes & Noble and Borders. Revenue hit about $500,000 in 2005. Soon, the company was publishing guidebooks for 220 colleges.

But one day Skurman came to a sobering realization: He did the math and concluded that even if he could get 1,000 retail stores to carry a rack of 60 books at $14.95 apiece -- an all but impossible goal -- College Prowler's revenue potential was still less than $1 million. So Skurman began selling ads on the books' inside covers and on the company's website. Wachovia signed on as an advertiser, with a six-figure deal that included book and Web banner ads, plus sponsorship of an online scholarship contest. The revenue needle was moving, but Skurman was still not satisfied. He decided to experiment with a subscription model. Skurman and his team digitized 50,000 pages of College Prowler's content on more than 250 schools and, in March 2007, offered it online for $39.95 per year. The site mimicked the format of the books, with student-generated ratings for a variety of campus experiences.

The company turned a small profit in 2007, but revenue stubbornly remained below $1 million, and Skurman began to second-guess the strategy. He knew he had to do something. The marketplace for college information was changing. Not only were universities beefing up their websites, but a new competitor called Unigo had launched a free student-generated site. Meanwhile, just as Skurman was preparing to renew College Prowler's contract with Wachovia in June 2008, the bank announced massive losses and layoffs. Though the bank (which was acquired by Wells Fargo late last year) would continue to advertise, the deal was scaled back. That's when he started losing sleep.

Skurman knew that College Prowler had great content. The hard part was getting people to pay for it. That morning at Starbucks, he began to think that maybe he should stop trying altogether and begin giving it away. He had been toying with the idea since attending the 2008 NACAC conference. Strolling around the show, Skurman took a close look at the exhibitors and was surprised at how many of them were in the business of selling sales leads -- that is, information about prospective students -- to colleges. His contact at Wachovia, in fact, later told him that qualified leads were the single most valuable element of the bank's relationship with College Prowler. Perhaps, Skurman thought, the company should make lead generation a primary income stream.

Changing strategy would be risky. The company would face some tough rivals, such as College Board, which sells the names of students who take the SAT to colleges. Meakem, who invested another $500,000 in College Prowler at the end of 2005 and now serves as chairman, pushed for the shift. But Skurman was worried. If lead generation didn't work and the content was free, would the value of his company be diluted?

The Decision Last October, Skurman changed College Prowler's business model. The company, which now has a staff of 11, hired new student editors to update the site's content, and Skurman began meeting with admissions staffs at colleges and universities. "Our pitch to them is that they don't want just a random list of students," Skurman says. "They want to make sure the student understands their school, that the fit will be great, and that they'll be reaching the student early in the process." That rang true to Michael Steidel, director of admissions at Carnegie Mellon. "We've got to think about more innovative ways to communicate with kids before they shoot an application out," Steidel says. But Steidel has been reluctant to pull the trigger. "Of the names I buy from College Board, only 8 percent translate into a bona fide inquiry, and that's pretty low," he says.

College Prowler's leads are different, Skurman says, because the company sells only the names of users who opt to receive information about specific colleges. But Skurman has yet to close a deal with a single school. Fortunately, he has had better luck with corporate clients looking to market to college-age consumers. Wachovia is buying leads, and Skurman recently inked a deal with the Army ROTC. The company, he says, now gets half its revenue from lead generation. The rest comes from ad and book sales.

On July 16, all of College Prowler's online information was made available for free. Page views, Skurman says, jumped 60 percent the first week and are increasing every day. The average amount of time users spend on the site has doubled. By opening up the site, Skurman hopes to fulfill his second goal: helping as many families as possible choose the right college. His third goal -- financial success -- may be more difficult. "It's going to take time to prove to colleges that we're finding great applicants who they haven't already found and that we're doing it at a competitive price," he says. "We're still figuring it out."

The Experts Weigh In

Engage the Community

Skurman needs to realize that he's building a community online. He should think of the company as having three customer bases: universities that want students; the students themselves; and nonacademic advertisers that want to reach the college demographic. He could upsell the academic market by creating high-quality video tours of schools that colleges would pay for, or he could sell face-to-face "meet-ups" with students around the country. Skurman should also do focus groups to find out other kinds of things students will pay for. Once he focuses on greater engagement, the bigger numbers and bigger ad sales will follow.

Laurel Touby
Founder, senior vice president,
New York City

Mind the Competition

I'm not very optimistic about this. College Prowler is in jeopardy of losing its reason for being. The whole idea was to have students express their opinions about their colleges. That's not such a valuable service anymore, because opinions about colleges can be found on all kinds of social media. Kids can go online and ask a question and get all kinds of responses. A new revenue line does not change the fundamental value proposition.

George Cigale
New York City

Get Better Leads

If Skurman can keep expenses low, he should be able to generate enough revenue from lead generation to turn a profit. But he needs to try to solve some specific problems for universities. He should get more information from students. For example, a qualified lead for Georgetown may be a student who says she's interested in the university, has this GPA and these SAT scores, and is interested in being a Russian major. There may also be potential for syndicating College Prowler content to other websites -- such as college application sites, financial aid sites, or test prep sites.

Kylie Sachs
Partner, Ascend Venture Group
New York City