Carolina Recchi, co-founder of EdSights, speaks Tuesday during the Entrepreneur Direct lecture series at FHSU.
By CRISTINA JANNEY
Hays Post
The co-founder of a company that created a chat bot to help colleges retain students spoke at Fort Hays State University on Tuesday.
Carolina Recchi, co-founder of EdSights, spoke to students and faculty about her company as well as she and her sister's failures and successes in launching the startup. Recchi's lecture was part of the FHSU Entrepreneur Direct lecture series.
Carolina and her sister grew up in Italy, and Carolina came to the United States to study at Babson College where she earned her degree in international business. Carolina is only five years out of college.
She initially went to work for Bloomberg, where she was selling data to universities. She soon learned she loved working with higher education clients, and this eventually lead she and her sister to strike out on their own.
Recchi's current company — EdSights — uses artificial intelligence to help students navigate their college experience. The ultimate goal is to increase student success and increase graduation rates.
Some of the schools EdSights is currently working with include Pittsburg State University, Northwestern and Baker University.
The sisters have raised a $1 million in venture capital for their company and graduated from the the Techstars accelerator program in Kansas City.
However, EdSights was not the original concept for the sisters' business. They first created an app called ClassPulse, which allowed students to give professors real-time feedback on their performance.
Recchi and her sister realized course evaluations were flawed. Students fill them out without paying attention, she said. Faculty don't have good ways of receiving real-time feedback, and it ends up penalizing both faculty and students, she said.
The Chronicle of Higher Education published a story about the app while the sisters were testing it at Georgetown. The sisters were inundated with requests for the app.
Carolina quit her job at Bloomberg to pursue ClassPulse and her sister turned down a job at Amazon., which she said was a mistake.
The company scaled quickly with as many as 200 colleges using the app, but the sisters realized they had no way of monetizing the app. Students didn't want to pay for it. Professors liked it, but not enough to pay for it. Universities did not see enough value in it to pay for it.
They realized they didn't have a business model and they needed to pivot the focus of their company.
"This is embarrassing to admit, but it keeps happening," she said. "I keep seeing founders, even second-time founders, who say I will just grow this thing and get so many users, and they'll figure out the money part later. This is like the Instagram model. You don't want to do that."
Recchi went back to her customers and asked them what problems they were facing and what they would be willing to pay for. They found universities were eager for help with student retention.
Twenty million students enroll in college every year, but only about half of them graduate in six years. Six thousand students drop out of college every day. College dropouts earn about 35 percent less than their peers and are four times more likely to default on student debt.
An average college loses $10 million annually due to student dropouts. The higher education system in North America as a whole loses about $41 billion annually because of student dropouts.
EdSights built a chat bot, a robot, that engages with students over text message. They name the bot after the school mascot. The bot can answer questions, such as 'How do I drop a class?' or 'How do I find a tutor?'.
"As we talk to students, we are doing two things. We are connecting students with helpful resources, and we are looking at the data and making suggestions to universities on which populations or demographics may need extra resources," Recchi said.
Students responded well to the chat bot. EdSights had a 95 percent opt in from students. Seventy percent of student were active engagers.
The bot helped increase retention by 7.3 percent and saved universities $1.7 million.
Recchi concluded her talk by sharing some lessons she and her sister learned in launching their startup.
"As a first-time founder, inevitably you make so many mistakes, because you don't know what you don't know and you kind of learn it in the process," Recchi said. "Work hard, you are smart enough I hope you know that.
"But there are some specific actionable things that over time will create luck for you because there is such thing is luck but you can create it for yourself."
Don't plan, prototype
"What I mean by that is don't overthink your idea because it probably is not going to be what you end up with," Recchi said. "Your idea is your starting point. Your idea is not your business. It is just an idea. Pick a business or a space that you are passionate about."
She said you can try out an idea without blowing through your 401k by using a minimum buy-in product and testing it.
"You have to be lean," she said. "You have to be able to change everything and not just jump into it and see how people respond to it."
Embrace change and pivot
"If something isn't working, ask yourself why," she said. "I see so many founders banging their head against the wall, but the wall isn't going to move."
As a startup, you are at a disadvantage at almost everything, including money and employees. However, you can do more a lot faster, she said.
"You have nothing to lose and everything to gain," Recchi said. "So if something isn't working, start from scratch, pivot, make small changes. You have to be nimble. You have to move fast, learn fast, throw thing away if they are not working. There is no real big repercussions."
Ask for help and make it easy for people to help you
Ask for something very specific. If you want to be introduced to an investor, name a specific investor. EdSights seeks introductions to specific university officials to pitch their products.
Follow up
Recchi said she is very direct with her potential investors and clients. She said she contacted one investor eight times before the investor finally agreed to invest in the company. Now that investor is one of the biggest investors in EdSights.
Listen to feedback
(But pick mentors wisely)
The Recchies are using mentors who are five to 10 years ahead of them in the growth of their companies, in their industry and successful.
Recchi said avoid mentors who want something from you. Don't pay a consultant and don't give up equity in your company for advice, she said.
Choose a co-founder wisely
Recchi was lucky because she has her sister as a co-founder, but one of the top reasons why startups don't do well is problems between founders.