John Katzman founded the test-prep giant Princeton Review in 1981. After taking the company public and increasing annual sales to more than $110 million, he left Princeton Review in 2007. Since then, Katzman has launched two other education companies: 2U, which partners with universities to offer degree programs online (hear from his co-founder, Chip Paucek here) and Noodle, which offers advice to students seeking schools, tutors, and classes. He is also an angel investor. Katzman recently spoke with Inc. editor-at-large Leigh Buchanan about his early decisions and mistakes. 

When I started Princeton Review, there was one thing I did poorly and one thing I did well.

What I messed up: I did not pay enough attention to understanding my balance sheet. I did not make sure I had real-time financial information or good projections about where the company was going. Now, when I work with startups, I really question them: What are the drivers of your business? Where are you now? Where are you going to be in the next couple of quarters?

What I did well: Set the price. A lot of entrepreneurs believe they have to have both a premium product and a discount price. At the Princeton Review, we were offering a premium product and charging a premium price. That meant our margins were good enough that if we messed something up, we could fix it. If somebody needed some extra tutoring-if for whatever reason it wasn't clicking-then we could go in and provide it. We charged what we charged, and we did not apologize for that.

Previously in Inc.: John Katzman was featured in an April 1995 article about his rivalry with a competitor ("Enemies, a Love Story").