How Campus Tree CEO Justin Arenson grew Campus Tree to $3M revenue with a 22 person team in 2024.

hey guys recording this here on what is it Friday the 19th maybe you're seeing this on Monday at the latest but I want to let you know we are almost sold out for founder comp sorry founder 500 in Austin Texas here in about a week uh it's gonna be an amazing event 500 B2B SAS Founders I'm looking at the attendee list there's almost um there's almost 60 founders with more than six seven million bucks in ARR it's an incredible group of group there's over uh there's over a hundred over 150 with more than a million uh more than a million Revenue it's an incredible group you don't want to miss it uh grab your hotel grab your flight grab a ticket right now I'll put the link in the bio um in the description here on YouTube and I think there's only about three tickets left okay about three tickets left I'd love to see you guys there don't be bashful grab your ticket now hey folks my guest today is Justin Aronson he graduated college with a BS in business double minor in economics and computer science rode crew all four years who's competitive as hell I guess Varsity Captain for two felt a strong passion in college to help make universities a more connected Network focused place for students and so we decided to build campus tree which is what he's focused on today Justin you're ready to take us to the top let's do it all right so first off who are you selling are you selling to students or selling the universities the sales to universities the students are the end user okay so how does the cow first off selling to school like this I feel like the sales cycle is just a pain in the button and secondly even once you settle the school the school has to convince students to use the software which is another like big friction Point how do you get through both those those two friction points yeah great point so the platform the the key success of this platform comes down to students wanting to use it right um if if students aren't this is a student engagement platform it's meant to help increase retention rates for universities by having students be more connected and involved and such and so if a student isn't getting that out of the app then that's the most fundamental point that we feel about so so what we do first is to make sure that the platform itself really connects with students and once we have that a success it's much easier than to show universities that hey this is something that students really want and can really uh get benefit from and that can help with with that process in that regard the B2B analogy is sort of you're going bottoms up here so explain to me how how you get college students excited about the product you talk to a lot of people so you show a lot of friends um you know Outreach as much as possible and just get as well but Justin what what does the my audience doesn't know what the tool does what what are you selling what are you trying to get college students to use sure so the way to think about it is right now if a student is going to college we're not talking by the way about Harvard Yale the top ivy league we're talking about most schools in the country a lot of small and mid-sized schools a lot of State schools right and for those schools they don't have the same resources as the top of the line universities and uh for them for their students um you know administrators are amazing and do great work but a lot of times they're constrained with the existing technologies that they have to engage their students make sure they're having a good college experience and so what we're trying to do is kind of replace the cold email Outreach and the mass text messaging with uh with a more collaborative peer-to-peer network of um of uh of Engagement where students can share information with each each other and that sort of thing I mean I feel like I feel like I had tools like this when I was studying Virginia Tech you know they would try to get us to use this thing called like I think scholar or Scholastic or something like that and they say they'd say message other people in your major and set up a resume and then look Facebook came along because it connected found you know students on college campuses like early on so like how do you build a wish it just feels like a very difficult thing to go after how do you build a wedge here yeah so what it really came down to for us is the design um all of what we know for the market is it's very what we call administratively centered the engagement comes from the administrators to the students right and so all of the the infrastructure and the look and feel is really meant to help make it easier for an administrator but we kind of flipped the script what for us it's more we what we found is students are best engaged by other students it doesn't really matter you know who you are how well you think you understand a student but another student is much easier is much you know more capable of convincing their friends to go go to events than other people and so the design itself is very student focused very student friendly and uh and because of that it results in much more we're expecting much more engagement and much more um you know communication and activity on that sort of uh that sort of a system oh what's going on there YouTube good to see you guys now imagine this you love watching these interviews with SAS Founders but imagine if we took all of the valuation data out from over 2807 interviews I've done manually saves you a lot of time well we've done this we've built the into the beautiful interface inside of founder path check this out I'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for evaluation this year now the secret valuation is there's many different ways to value a SAS business so the reason you're going to see three or four different evaluations inside of your founder 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and ask a question that allows you to get really detailed you're on a rowing team with 20 people right campus tree comes along right you are selling to your own self on the rowing team how do you land the first unit it's a land and expand how do you land the first person on the rowing team so that then that one person convinces everyone else to come to the rowing after party four days from now using the campus Tree app sure yeah it's a great that's a great Avenue for this so um a good way to think about it is that clubs in general rowing teams a good example of this um when it's the beginning of the school year and they're trying to recruit new students um usually what happens is there's this huge exciting Club Fair where all the hundreds of clubs come and all the new students come and you kind of hope that the right people walk by each other and that you remember your school email address that you just got last month and you know there's a lot of touch points subsequent to that where the engagement can fall off you know you got to remember to come to the first event the first intro throw that sort of thing with this sort of plot from what we're doing is we're getting these students who from the beginning in the summer before they're coming to college tell us what their interests are we can connect them with these clubs so that those clubs now at the beginning of the school year they now have a hot list of leads of students that are actively interested in event they can connect with more closely rather than you know a broader thing that I still think is a great and a fun time to do with the club fair but isn't as effective um at actually getting that that engagement to so you reach out before the new freshman come on campus the first time yeah yeah summer before so then how do you okay so now let's different role play here I'm a senior I just graduated it's like May I'm going off to college next year how do you know that I was accepted to some school how do you get my email and how do you know to contact me ahead of time yeah so we come in once the students are accepted into the platform so there's also there's lots of other expansions outside of this but it's pretty simple really our focus is on especially for the first couple years of students once they're a student with preventing them from dropping out by increasing their engagement um so so once you're in you've accepted that you're going to the school you put your deposit bound part of your onboarding process with that school is to sign up on for a platform you know but that's selling through the school though you told me that you go bottoms up you you go you you convince the student to use it first and the student sells it to the university but what you just described as a university making this required download during the orientation process yeah so the university is the one who's Distributing the platform right but okay what I mentioned that initially is that it's the student Focus that is really driving the success of this right the design and all of the relating things are are are meant to be a place for students to go to it's not as administratively centered yeah I see I see okay um and the website's not live yet so I assume you guys are still building your pre-revenue we're pre-revenue we've got an MVP but we're we're redeveloping with the funding off of a uh a new design Paradigm that we found to be a lot more effective so obviously new school year is coming up here shortly are you running active beta tests right now with new students coming in as Freshmen so I can't speak on that right now with uh with the new students um but I'll say I'm in we're in you know exciting conversations with universities about rolling out this platform later on um when did you write the first line of code for the platform or you and your your team yeah so this it's we pivoted a lot this platform started off as a college roommate matching Service uh what year back when I about three years ago now um that was the first version and from there from I knew that the root problem was um you know college engagement and connection um but it was really finding about what is the right solution for this and so over you know a series of a ton of pivots we ended up to where we are now how many people drop out you know students per capita in the U.S so in your so the Freshman Class if you're a first-time student about 26 will leave nationally on average just in that first year that high really yeah and over a six-year period usually measured over six than four because some students are delayed and such with graduating over 40 percent of those students won't graduate which is a lot of lost revenue from tuition fees housing food all of those things are millions of dollars of uh of lost Revenue that we're trying to bring back in through these retention rates well if you're in your fourth year and you can't graduate because you haven't completed something that means you have to pay for college for a whole another semester which increases revenue for the college why would that decrease Revenue if they didn't graduate there's a couple reasons um one of one of the primary reasons is retention is a pretty big focus of colleges for their standing right a colleges seem to be more attractive if they're able to get students out in a shorter time period which boosts their rating for more students and more qualified students wanting to come in um that's that's one of the primary reasons for that but I mean if every College had their way they would keep students paying fees as long as they possibly could with new programs MBA programs I mean whatever they could get it right they don't want people leaving campus at all so I guess how do you think about that yeah um you know it's an interesting point um I personally don't have much to comment on with the university side on that um but I do know from the student side of the platform that of course their priorities to save as much money as possible um and so for them there's the you know the opposite force of students wanting to graduate earlier so um yeah I don't really know I don't have much else to say on that how are you you know a startup founder you know you got to figure out how to like make ends meet while you're like trying to get your startup off the round you've been doing this now for three years you're still pre-revenue I mean how are you doing consulting on the side I mean how are you funding like basic human needs yeah so the so when we started three years ago um you know that first year and a half I would say was a lot of formulating we didn't we weren't spending much money it was and it was just me really at the time um with a couple friends I was working on at the beginning and um there was very minimal expenses when I was getting closer to graduating that's when we really started to stop the ball up and so far it's all been I've personally been funding it it's all coming out of my pocket so you do you own 100 of the business then oh 95 um we've got some we've got advisors that are coming in um and we've got a team of uh of some great people that are also working for us well I like that you're betting on yourself holding 95 instead of giving away you know 80 to someone else to like try and help you out I love that that's bullish thank you yeah um we're gonna be having to uh to raise money um but uh so it won't be 95 then but hoping to maintain as much as possible of course well you mentioned the Catalyst you said earlier because you mentioned you're redoing the designer some of the design Paradigm or something that you found you and you said you you use the words using funding um so did you already raise like a very small Angel round or something no we haven't raised yet um by that I meant that the the funding round that we'll be doing um a large part of that is going towards bringing on a development team I see I see how do you I mean right now obviously markets are compressed right how do you I mean and your pre-revenue right so it's really tricky I mean how do you tell a story that allows you to attract capital in a market like today it really comes down to the problem being so severe for a lot of these schools um you know I can't give any specific names of universities right now but um there are multiple schools that are in deficit um or or you know just losing millions of dollars let's agree on that though Justin let's agree let's agree let's say the whole world agrees on that colleges like aren't deficit and there's a major problem let's agree the second part of the story though is is founder product fit so like why are you the guy that's gonna like win the space and go get you know 30 universities in the first three months on your platform we've recognized the right approach for this right it's it's one of those things where the market is currently the comp the competition is based off of that older administrative model that I mentioned where the Outreach is coming from the administrators to the students we've found that like through all of our research and and and so forth the right approach is really to go through the students for the student engagement and so coming I'm I was a student right I was I was pretty involved myself um and so I experienced firsthand um you know a lot of these problems that uh with some friends or people that I knew who weren't engaged that that can result in dropouts and and so forth the other big piece I would mention too about the product that is a that's a huge sell on the investment side um is data that we're collecting um there's what because of our approach to student engagement we're able to get a lot more granular with um you know what we what we can understand about Student Activity and what's driving increasing engagement what's not working so forth and uh so far on the market um you know we're the only people who are able to do this um I can't talk too much about that in this space right now um but uh but that's a huge sell for you but like how do you know that I mean you don't you talked you just said earlier like you're talking to colleges about using it in the future you're talking in the future tense so like I mean you say you've like shown improving you can do this but like you you haven't been able to say like we're already live at 10 colleges and they've signed up 5 000 students which is fine by the way that's not a hit I'm just saying like you can't say that you've proven it but then but you don't have anything live yet you know what I mean so yeah here's here's kind of the way I would think about it um if you're at University right now usually the information you're able to collect are basic student demographics right um and uh and sometimes you can get head counts of students going to events right because our platform um is really ingrained into the students activity right we're knowing what type of students are going to what type of events um and because we know you know just across different demographics how effective things are and changes over time we're able to provide it and like a new layer of uh of information that if you're using the old design Paradigm you're you can't collect it um so it's it's coming fundamentally from the difference in approach all right we're rooting for you man wrap up here quick Famous Five number one favorite book um I'd say uh extreme ownership jocka willink number two is our CEO you're following or studying I've been looking at you recently congrats on the raise by the way ah thanks man we zero Equity to raise 135 million bucks in debt just want to point that out I hate dilution number no it was other deal terms but yeah I know I appreciate that um number two is there a CEO sorry uh number three what's your favorite online tool for building campus tree um Trello simple that's a good one number four how many hours of sleep do you get every night uh probably average around six and a half seven okay good stuff and situation why you think you just graduated it's probably easy one for you but married single kids uh significant other okay no kids though no kids no all right and how old are you uh 22 22. last question something you wish you knew two years ago when you were 20. um don't be afraid to Pivot and uh talk to customers early all right guys there you have it campus tree dot live hoping to help students get a better college experience which in turn helps the college with retention it's a major problem 26 of freshmen don't graduate he wants to solve this just came out of college understands the problem we'll see what happens Justin thanks for taking us to the top thanks so much have a good one one more thing before you go we have a brand new show every Thursday at 1pm Central it's called Shark Tank for SAS we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back-end dashboards their expenses their revenue our 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