At MyTutor, our tutors (about 10,000 of you, all over the country) and our team (about 40 of us, in London) work together to make one-to-one tuition available to all, providing thousands of lessons every day. And while we know about all of the amazing work that you do as tutors, we know that much of what goes on at MyTutor might be a bit of a mystery from where you’re looking. Since you’re important stakeholders, we want to give you a rundown of the MyTutor business over three posts:
First up, here’s a bit about how we’re funded, and how it impacts your tutoring.
As you’ll know, to start and grow a business, you normally need investment (money) to i) build and keep improving your product ii) tell the world about it and build your customer base (marketing) and iii) pay your staff. (That’s a super-quick sum-up, and we’ll talk more about everything that makes MyTutor tick in our upcoming blogs).
In the world of early-stage businesses, there are a few standard stages of investment, or “investment rounds”, that most new companies follow. Here’s how they work:
Seed funding: This is when a founder (or a few co-founders, in our case) has had a business idea, built a convincing business plan and pitched the idea to investors (like on Dragon’s Den, but with more powerpoint slides). Then with a leap of faith and a handshake, a business is born.
Series A: Normally 1-3 years later, at this stage, a business has had a chance to prove itself with a great product and fast growth. This series of funding gives it the chance to improve its product and continue to grow so it has the greatest possible impact.
Series B: This stage can happen at any point after series A, but ultimately a company will look for investment at this point to help them boost their growth and push their success to the next level. That might mean they start offering a wider range of different projects, try selling to different markets, or significantly ramp up their marketing to get lots more new customers.
Rounds of investment can continue alphabetically like this for, well, as long as investors see fit to keep supporting the growth of the company. The amount of investment a business needs is linked to the size of the problem the company is going after, and how quickly it’s able to make an impact.
MyTutor was founded in 2013, then received its series A funding over 2017 and 2018. It’s still pre-profit – this means we’re putting more money into improving and growing the business than what we currently make from delivering tuition.
In the first few years, it’s normal to have more money going out than revenue coming in. The rate at which a business aims to grow depends a lot on the problem they’re tackling, and the ultimate goal they’re trying to achieve. In MyTutor’s case, we’re working towards a world where high quality one-to-one learning is stress-free for those who can afford it, and funded for those who can’t. Because our mission is so ambitious, it takes time (and investment) for a business like this to begin generating profit. Some examples of businesses that also aren’t profit-generating yet are Uber and Monzo – and they’re huge change-makers! The key with businesses like ours is to use a combination of revenue and investment to improve their product as much as possible, to maximise its impact on the world.
Now that we’ve covered how we’re funded and how we grow, in the next blog we’ll take a deep dive into the different teams at MyTutor and what they do for you. After that we’ll look at what’s on the horizon, and how we’re going to keep building a platform that works for you.