When Death Comes: The Extraordinary Tale Of Two Berkeley Entrepreneurs

Magoosh Co-Founder & CEO Bhavin Parikh

HANSOO WAS VISIBLY EXCITED ABOUT EDUCATION 

They strolled over to his apartment off campus and Pour-Moezzi described the idea he called Magoosh, a play on a Persian word ‘Magush,’ which refers to a wise person. The concept was to create a community of users who would help each other prepare for the GMAT exam. The forum would be similar to an existing service, BeatTheGMAT, but the interface would embed GMAT prep software. Pour-Moezzi, who had also been a Deloitte consultant before going to Haas, had been working on it with a friend from Deloitte, Vikram Shenoy, who had a master’s in computer science from the University of Southern California.

“It was people-powered test prep, a hybrid of test prep with a forum,” says Parikh. “At the apartment, Hansoo was visibly excited about education. He was passionate about it. He was on the board of an education non-profit. He came to school knowing he wanted to be an entrepreneur. He came to business school with a vision and a purpose. For me, I was interested in technology.”

They worked together over the next few months, launching a crude site in December of 2008 and buying Google AdWords to help people find it. The first iteration didn’t really take, but none of them gave up on it, either. Lee and Parikh decided to relinquish their chance at a summer internship. “For Hansoo, giving up an internship was a no-brainer,” remembers Parikh. “For me, I at least had a safety net back at Deloitte. The worst thing that could happen is we don’t pursue Magoosh, but I get this amazing experience to work on a company and I could always go back to Deloitte.”

THE IDEA OF USER-BASED TEST PREP WASN’T WORKING

The failure of the product’s early iteration got them thinking. “Between January and May of 2009, when we realized that the idea of user-based test prep wasn’t really working, we started researching why it wasn’t working,” says Parikh. “We surveyed a lot of our classmates who had taken the GMAT in the past few years. That’s when we realized that what people want are credible experts who know the test. That’s where they want to get their explanations.”

They created mockups of the product, put them in PowerPoint, and asked classmates to come and click through them as if the slides were a website. “As we got feedback,” says Parikh, “we would move the boxes around and change the language and have them click again. We kept doing this until we got to a point where people said, ‘This makes sense. I would sign up for that.’ That is when we decided to build it.” They contracted with a GMAT tutor in Vancouver to supply instructional videos on their site.

So during those summer months, they poured themselves into building the new product. Shenoy returned to India to work on it from there. With Pour-Moezzi, who chose to take an internship at Mozilla, Lee rented a place on Arch St. in Berkeley. It quickly became the first official Magoosh headquarters. They worked in the basement or on the back patio every day, engrossed in the build that was informed by a Workshop for Startups taught the previous semester by Professor David Charron.

‘WE WERE BOTH SO COMMITTED. THAT WAS EVIDENT TO US AND THE PEOPLE AROUND US’

Lee and Parikh started to click. “Hansoo and I had a really good rhythm,” says Parikh.” It was easy to communicate. We developed a close bond. We were both so committed. That was evident to us and the people around us. We had seen other classmates working on startups, and it often seemed like one was more committed to an idea or a company than the other. The one thing Hansoo and I had that was truly special was that we were both completely committed to Magoosh. From the moment we woke up to the moment we went to bed–and probably when we were asleep–we only thought about how to move the company forward. That really helped us form a great relationship. It was a top priority for the both of us.”

Out of that shared interest came a deep and profound friendship, even an interdependence on each other. “It was well beyond a business thing,” says Parikh. “We spent a lot of time together in social settings. We drank together. We ate together.” They would typically saunter over to Cesar, a tapas bar in North Berkeley where Lee would swill scotch and Parikh would down Imperial Stout. They’d block out the date on a calendar every two weeks on Thursday nights.

MAGOOSH CELEBRATES ITS FIRST PAYING CUSTOMER 

By July, they had an MVP–a minimal viable product. “It’s the minimum you could put out that might show value to customers,” adds Parikh. “The first time we put it out it was one question, one video explanation, and a box for people to enter their email address. If you like this, give us your email, and we’ll let you know when we add more. It was a quant question. And then we just started building the site in front of people’s eyes. We added a question and another question and then ten questions. And then login credentials and we got to 50 and then 100 questions. We kept improving the product to turn on payment in late August or early September of 2009. That was when we had our first paying customer. That was a big day because we had finally built something that someone was willing to pay for. We charged $29 a month.”

By the time their second year of MBA studies began, they were feeling pretty good. The big challenge, however, was whether they could grow the business to pursue it full-time after graduation in May of 2010. “At some point you start getting less excited about each incremental sale and start thinking about how is this going to sustain the business?,” Parikh recalls worrying. “How are we going to pay ourselves, cover expenses, and scale the business? It was tough to make the decision to pursue the startup. But Hansoo was definitely a driving force. ‘Let’s do it,’ he said. ‘We’ll regret it if we don’t.’”

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