A real test for young entrepreneur

December 7, 2005

BY SANDRA GUY SUN-TIMES COLUMNIST

Karan Goel recently won a national contest in entrepreneurship, but he is the first to say it's no easy road.

Goel, a 22-year-old who will earn his MBA in June from the University of Chicago, saw his first ventures dissolve, beginning in the seventh grade, when he bought chewing gum at wholesale at Sam's Club, and resold it at school for a markup.

The next year, he and his friends started a teen-oriented Web site with money from their parents.

The venture faded away, but Goel refused to give up, and by 10th grade, he and his friends had started five student clubs based on a venture to sell pizza for $1.50 a slice. The pizza-selling venture was successful.

Goel learned from his experiences in high school and by listening to his peers' complaints when he started his latest entrepreneurial effort.

"I knew a lot of kids were disappointed with the test preparation for the SAT and the ACT," Goel said of the college-entrance exams. "They had to wake up at 8 o'clock on a Saturday to go to a class across town."

That led Goel to start developing a Web-based test-preparation service called PrepMe.com. The process took more than three years before it launched last January.

Goel, a native of New Delhi, recruited one of his top academic rivals from his high school days to start the company. The co-founder, Avichal Garg, designed PrepMe.com's technology.

Lesson No. 1: Get advice from people smarter than you, said Goel, who captained his private school's academic team, but lost in competition to Garg, who attended a public school.

"I was so in awe of [Garg]. He singlehandedly beat my entire team," Goel said.

Goel also got help from Joe Jewell, author of the only SAT test-preparation book popular among students, titled Up Your Score. Jewell, a Rhodes Scholar at Oxford, led development of PrepMe.com's curricula.

Jewell holds undergraduate and master's degrees in aeronautical engineering, leading Goel to say, "You don't have to be a rocket scientist to ace the SAT, but it helps if your tutor is."

PrepMe.com hires students from Stanford and the University of Chicago who got perfect or near-perfect scores on the SAT to write the curricula that helps high-schoolers do better on the test.

Here's how it works: Students go to PrepMe.com and take a diagnostic test to determine a baseline score. Each time the student takes a test online, his or her progress is tracked. For $499.99, a student gets practice tests, customized tests to help strengthen weak areas, essay-writing coaching and e-mail and instant-message tutoring from the Chicago and Stanford students.

The tutors help students work through difficult questions, analyze student results to help set up lesson plans, and often rewrite student essay portions of the test to show students what a perfect-scoring essay might look like.

Tutoring by telephone costs $70 an hour. After students take the SAT, they can enter their scores at PrepMe.com and get an analysis of the ways in which PrepMe.com helped them.

So far, 100 students have signed up for the SAT test preparation service.

Jake Liscow, 17, a senior at Princeton High School in Cincinnati, raised his test score by 110 points after using PrepMe.com for three weeks.

"No matter what question you have, there is a resource to answer it," Liscow said.

Goel has managed to keep the site in business by running it on the cheap: He pays himself no salary, uses technology wherever possible, and seeks advice from gurus such as Robert Nagel, former president of delivery systems for Skokie-based online grocer Peapod, and Jean-Pierre Dube, associate professor of marketing at Chicago's Graduate School of Business.

For startup funds, Goel made a deal with his parents, both doctors. If he won one-third of his tuition in merit scholarships, they would match the scholarship amount in money that he could spend as he wanted. The plan worked.

Goel got his first national recognition last year, when he was named the U.S. Small Business Administration's Young Entrepreneur of the Year.

With his latest venture, Goel realizes that he's competing with major players such as Kaplan and Princeton Review. But his work paid off in May, when Goel won Chicago's Graduate School of Business' competition for business plans.

The award came with a $20,000 prize and free office space for a year in the university's business school.

He built upon that achievement last month, when he won Fortune Small Business magazine's small business plan contest, and a $35,000 award.

The real test starts in March, when Goel starts work on PrepMe.com full-time.

"I assume it will take 80 to 100 hours a week, whatever it takes" to make the site successful, he said. Spoken as a true entrepreneur.