How ScholarshipOwl CEO David Tabachnikov grew to $10.3M revenue and 22K customers in 2024.

scholarship owls helping large Brands like Samsung connect with college students or around the college student age he also helps 20,000 college students generate and get access to over a million dollars of scholarship Revenue that's what they paid out last year alone processing over 150,000 signups per month right now they got a robust engine we're thrilled obviously that he used founder path for some non-dilutive Capital as he's grown totally bootstrapped to over 6 million bucks of Revenue up from 3 million back in 2020 hey folks if we haven't met yet my name is Nathan ladka I launched and sold my first software company back in 2015 and went on to write a book about it which you guys made a Wall Street Journal best seller purchasing over 30,000 copies thank you so much for that after the book I launched this show and went went on to create founder path.com I raised a large fund to do non-dilutive deals with B2B software Founders so far we've invested in over 400 software Founders totaling $150 million here in 2024 we're doing three to four New Deals per week so if you're looking for Capital and don't want to give up Equity go sign up at founder path.com for free to get your offer all right let's jump into the interview hey folks my guest today is David abach nikov He is building scholarship al.com which helps connect consumer Brands to gen Z he's got over two decades in Tech including roles as R&D manager and Engineering at Google and ways and he specializes in bootstrapping companies and excels as a remote team expert he travels a he's got a passion for data matching algorithms and AI development long before it was mainstream which complement his Keen interest in gen Z and content creation David you ready to take us to the top yeah nice uh all right you gotta you have to back that statement up so you said you were in AI long before it was mainstream were you doing any sort of AI stuff at Google or ways back in the day so we did a bit at Google and ways we did it quite a bit in scholarship all as well for a few years now I mean we leverage a lot of AI to to to do efficient matching and kind of like extract intent from uh kind of our audiences in the most efficient way so we've been doing quite crazy AI algorithms in scholarship power as well now if you guys listen to my last interview with David which is all the way back in 2021 you will know that scholarship owl is helping folks so you know kids that are maybe juniors seniors in high school looking to go into college it helps you quickly apply for different scholarships but he's built a massive engine where there's tens of thousands of students doing this and then and then obviously brands on the other side I.E schools and institutions trying to meet those consumers but because David of the updated bio you gave in this in this uh podcast interview I'm going to guess maybe you're not only working with schools anymore is that accurate so actually the majority of our customers are not schools at all uh so I'm I'm GNA uh correct you on a few things first like we're talking about at this point a scholarship power has over 150,000 students um well College Bound genes basically um every month right they sign up every month yes wow so it's not only like high school students actually a lot of people who are already in college are looking for ways to you know pay for the next year or even things that are outside of tuition itself things like how do you buy you know gas money to get to campus or like buying a laptop that you need for school and all those things that are kind of School adjacent let's call it that way um and today the majority of of our customers on our B2B side like we we launched scholarship alha business about um a year and a half ago which is basically a platform that uh helps businesses PIV like private consumer uh companies name one or two so Sam Samsung is a customer of ours uh we work with better help we work with quite a few uh big companies we work with Samsung and better help yeah M girl Hill is a customer of ours um what does Samsung want from you what are they willing to pay for so Sam Samsung are looking for brand ambassadors so they're kind of recruiting brand ambassadors to promote their cell phones on campus or like among genes in general um so many companies are using um kind of our platform like the product we call scholarship campaigns which is kind of like the best of a scholar ship and an at campaign in one to do some of them do it for lead generation some of them do it as market research they generate ugc with it like we have identified kind of four different main business objectives that companies and brands are using scholarship campaigns to achieve um and so how do you charge don't tell me what Samsung specific pricing is but what do you charge Brands like Samsung to access your your student base so um the the charge is basically uh cost per application so it's a result based uh cost depending on how precise it is how Target it is and um you know like what are the actions that uh the consumers need to do in order to to apply so it kind of ranges roughly between like um dollar 20 to $30 per application depends on on various metcs and so on and part of that of that budget goes towards promoting the campaign itself and part of it goes toward a scholarship that goes to the students so kind of that that is split um and we take care of like the whole process of earning the scholarship like we have um our own kind of 512 fre entity that helps make it tax deductible I mean when was the last time you heard of a marketing campaign that actually gives you tax benefits right yeah sign me up I'm ready to go this is incredible so how many Brands like Samsung Better Health now pay you on a monthly basis to get at least one application so uh on a monthly basis we're talking about 50 Blends but on a yearly basis goes like to 400 uh because like some of them are seasonal some of them are throughout the whole year uh depends on the on the goals that the brand is trying to achieve how do you manage I mean that's a big flux though how do you as you're building a company and a remote team and I'd love to hear how many full-time employees you have today I mean how do you manage sort of hiring scaling up or down based off cash inflows from brands that are very seasonal well we don't like it doesn't change that much right I mean at the end of the day we still have a pretty stable ARR and we have two Revenue sources right we have the premium tools for the students like a subscription business on one side and the other side we have the B2B side which generates revenue from uh the bands and the companies what's the split is it 50/50 Revenue split uh um it's uh today more more of it comes from the consumers but it's quickly catching up like evening out and what do students pay to use your subscription tools so on the on the consumer side on the student side we basically offer many tools that help them um kind of highlight where the highest chance of winning a scholarship is like optimizing the application process adding a bunch of spency into that they pay $15 a month um for the usage of the of our premium uh features so like things like uh they know like an applicant count like they know exactly how many other people apply to specific scholarship so they know to invest their time where they have the highest chance of winning uh we give them a lot more um kind of tracking over the application post itself so they know that the brand on the other side actually review the application and actually you know accepted it or who who is the winner we make sure they know that there is a winner right like in the scholarship space there's quite a bit of like scams and lack of transparency and all of that so we kind of our premium product takes away all of that you know exactly what happens what are your chances you you have predictable like we make the whole process predictable transparent yeah Nathan you applied for the Samsung scholarship there are 983 other applicants the winner is going to be announced on March 25th I get an email March 25th it says congratulations or un congratulations you didn't win but here's the link to Samy's LinkedIn profile Samy won from Samsung boom go click here to apply to other scholarships exactly but more than that we actually optimize the application process itself so one of our features on the consumer side we call it kind of like the Netflix of scholarships right when you apply to a specific scholarship some scholarships require quite a lot of different like the application process maybe an essay maybe like a social media post maybe like a video submission so we analyze all of that and we find other uh scholarships that you know you can apply very quickly and easily to as well and then we can badge them together and apply you to many different scholarships at the same time um and kind of you know we basically um with triple kind of the time that it takes you to apply we kind of um bump the efficiency like to three times more right like the same you invest the same time so not only we kind of find all the scholarships that you you can apply to that are perfectly match to you and that's where AI comes in right we use a lot of matching a lot of algorithms to extract a lot of this data on So when you say there's 100 when you say there's 150,000 applicant or or consumers signing up each month could one person count multiple times if they're applying to multiple scholarships or is that unique 150 unique unque sign 150 students not 150 applications I see so how many applications are you processing in in a given month now um so so I think it's about uh I don't have the exact number but it's in the millions and it's also seasonal right maybe we should ask for total 2023 stats how many total applicants like applications through all 2023 so it is seasonal um like q1 is the highest Q4 is the lowest and I I can tell you that students in general won over a million dollars in scholarships last year wow okay over so you paid out through scholarship over a million dollars of scholarships through your programs we paid you know like the bands that are publishing scholarships paid to us a million dollars yeah uh and and then you pick winners of students and wire that out to students yes I see okay do you keep a cut or the or to the college depends on the kind of specific scholarship and so on but generally yeah we we wi out out to the to the recipient whatever is the the student directly or the college the depends on a specific and and how many students today are paying for your premium tools like applicant tracking things like that um so we have over like we have around 20,000 students now on the premium okay um and um th those are the ones that are paying on the premium side that's great so when you say AR is pretty stable are you comfortable sharing what ARR is today all in so um I can say the total revenue of last year was 6 million in total great um what's your goal for this year what are you trying to grow to so we're aiming for 10 million this year how are you gonna get there charge Brands more or sign up more more consumers no the focus is more to work with more and more companies and scale outside of the business this is great can we talk a little bit more about how you've capitalized the business and maybe touch on Founder path briefly should okay so are you bootstrapped or have you raised traditional equity no we we 100% booted uh yes I see your smile I love it I love it so you own 100% along with your team so me me and my partners own 100% of the business uh and founder path actually helped us a lot like what I'll walk you a bit to kind of the the life cycle right um every student that comes to the platform they get like a 7day free tile of the premium features right so we get our um consumer audience from many different channels it used to be quite a bit from Google but with all the changes that happen with ad networks we scale Google down and we make most of our traffic from um from affiliate networks from U all kind of promotions from different from running scholarship campaigns ourselves and so on but there's a pretty big gap between um kind of our cost of acquisition or the point of acquisition and when we um bring you know when that Revenue comes back to us essentially right and because we're trying to scale very quickly and the business is very seasonal and it's subscription business a large part of it that means that we need to pay for the traffic today that we will return part of it in a week to two weeks and another part in four months so how do you sponsor that or how do you pay that when you're um boot up company well that's exactly where founder path comes in right uh we basically uh take the money today of what we would make on that student within the next year and buy the traffic now and you know make that money throughout the next year are you comfortable sharing how much you took from fer paath um um we took from founder path uh I'm comfortable showing the kind of the last uh chunk and we're going to take another one this year uh so last time we took 300,000 um and we plan to take another 100 to 150,000 uh actually in the next few weeks are you are you comfortable talking about the deal we did together back in 2021 or you don't want to go back that far no the company has changed a lot since then I I'd rather not talk about what was then because it was a very different uh kind of profile do you remember the use of capital I understand the business has changed but do you remember or are you comfortable sharing sort of the use of Capital back in 2021 and how that helped you change or pivot the business um so we went to a pretty major restructuring back then but um I don't want to go into the the details of that too much okay great so fast forward to today you're using Capital to invest in obviously paid ad spend um you've grown the business so you're at 6 million today do you remember what Revenue was back in 2020 2021 when you first started at founder paath yeah it was it was less than three million I think or own that number okay so you've grown the business from three to six without having to give up Equity what is that like how do you think about a lot of David a lot of Founders like don't think about what their Equity is worth I mean how do you think about the sort of equity you've been able to save by using Venture debt so I want to add that it's like the growth from three to six I mean while it's white impessive in in and all of of itself what for me personally is even more impessive is that we could without taking external uh like uh you know like Equity uh funding we were able to launch a completely new product build new development teams build a sales team without any uh you know without giving out any equity for funding and that's a huge win right even if we decide eventually to maybe go you know and bring in uh uh VC funding of value now is so much higher and I in a negotiation point if we decide to go to the the VIS out at some point we're not coming from a point of weakness when we say well if we don't raise now we will die we're not there at all we come from a point of strength when we say well this is what we did with no VC funding we know we can scale it a lot more now are you as an investor going to bring us value as a strategic investor or like to your connections or your knowledge and so on because if it's just Capital we don't need you that negotiation is so much more powerful right especially like if you look at the last three years like I know a lot of entrepreneurs entrepreneurs who lost their companies or like who failed or you know or had to do a Down Round because they didn't hit their projections or whatever we never worried about any of this this is like such a amazing place to be I can feel it in your energy you're not you know you're not stressed you're building a sustainable company we obviously love that I also know David you I mean you did your research you know about the different Venture debt options not asking you obviously to throw anybody else under the bus or even name them but when you looked at all the options why did you decide to go with founder path and what did you like or dislike about the process well uh yeah so I did a lot of research I looked at I think at all the competitors um and I am comfortable showing that initially we went with the cap Chase before found paf existed I think or when it was starting and um I think the like working with founder path and I mean with you and your team was um it's it's so much more comfortable and it's kind of such a much more open communication and on top of that found paav gives a lot add of additional value like SAS open like all the things on like it doesn't feel like working with a banker right because it's not so I shouldn't start wearing a suit huh um I mean you have the purple fex suit right [Laughter] so that's awesome well no listen we're enjoying obviously supporting your growth and love how you're sort of pivoting and growing the business um what do you most ex before we wrap up with the famous 5 here how do you plan to continue to sort of AI to help more students earn more sponsor revenue and more Brands connect with the right applicants all right so um very good when we need you know to do very wide campaigns when like anybody can apply and and that's it um the thing is that on those campaigns when you have like 50,000 applicants to to a specific scholarship campaign like the chance of this like the student winning that is like one out of 50,000 right it's a chances are very small on the other hand our engine today is able to kind of Target a student down to like a specific ZIP code right so anybody can run a campaign on our platform like the you know we have local dentist office we have like a law office in Texas running a campaign to you know bring in students uh like earning a scholarship because essentially um gen Z is kind of the level that this the point where the first decisions are being made so somebody who chose the lawyer W they like in in the first year of college they're going to stay with him for 30 years I mean the value is crazy and uh what we're working constantly like our constant Chase is to improve our algorithms and matching to be as precise as possible Right like to pinpoint the the specifically the audience that you are looking at knowing uh when the person is about to go to the you know to think of a lawyer and having them apply to a scholarship at that point um so the it sounds simple but it's actually pinpointing that and and kind of detecting in on that level is extremely complicated and that's our constant Chase constant Improvement on that um we have quite a few kind of you know AI systems in place if if the brand wants to run a scholarship with an essay which we don't recommend ever don't on essay because nobody likes to review them and nobody likes to write them um we have a saying inside that the only um like BRS hate reviewing essays almost as much as students like like writing them likeing them um but the point is that we're trying to uh kind of make that process as easy for the brands to kind of review and and award the funds and all that and as easy for the student to apply as possible so for the majority we'll follow we'll follow along closely you got to come back on in a year give us an update but we're out of time today let's wrap up here with a famous Vibe number one your favorite book my favorite book um I recently read the the greatest uh the greatest CEO within and I absolutely loved it number two is there a CEO you're following or studying um can I say the big guys like I'm a big fan of what saan Adella has been doing lately yeah yeah that's good number three what's your favorite online tool for building scholarship at all my favorite online tool for building scholarship H um that might be a bit you know what I'm going I'm going to go with a simples um like I'm a huge fan of mix panel yep number four how many hours of sleep do you get every night how many hours of sleep I get uh five to six okay and situation married single kids engaged oh congratulations that's very exciting thank you all right and uh I think you had a birthday right you're 37 38 now uh I have a birthday on the 29th of April so next month uh and I'm going to be 40 okay well man engaged 40 you breaking six million Revenue bootstrap you're living the life man last thing something you wish knew when you were 20 um something I knew well I wish I knew found up be when I was 20 guys there we have it scholarship owls helping large Brands like Samsung connect with college students or around the college student age he also helps 20,000 college students generate and get access to over a million dollars of scholarship Revenue that's what they paid out last year alone processing over 150,000 signups per month right now they got a robust engine we're thrilled obviously that he used founder path for non-dilutive Capital as he's grown totally bootstrapped to over 6 million bucks of Revenue up from 3 million back in 2020 David thank you for taking us to the top thank you so much

Introduction hello everyone my guest today is david debachnikov he is building a great company that changes the way americans pay for college by leveraging data to make scholarships more accessible and transparent he's doing this at scholarshipowl.com david you're ready to take to the top yeah so scholarship is leveraging technology to increase the chances of earning private and excellent scholarships for american students and who's paying for this the students or somebody else to use the premium features of the platform the students are paying a subscription fee which is uh 15 a month um and for that basically we save a huge amount of time for them preventing them from applying to scams or finding the scholarship that match them the best way possible and how Currently serving 15000 customers many customers do you have today we have today uh 15 000 paying customers and about 1.5 million users in general so can we take Monthly recurring revenue 15 times 15 000 you're doing about 220 000 a month in revenue so with some partnerships and other things um you know with some b2b partnerships as well we do a bit more than that okay got it and let me ask you why do students keep paying you after you help them get the scholarship dollars once you have a massive term problem so uh the thing is that um a common misconception the students need scholarships only when they're just applied to college but the reality is that students actually need scholarships more in the first year of college in the second year than in high school because many of the financial aid that they get is only for the first year and they can use private scholarships to pay for board for books and other things they need in college as well and there's no limit to how many scholarships you can earn throughout your whole education so it's still the majority of our users today are high school seniors but basically manual users are between the ages of 16 and 26 and when did you launch the company david what year so the company was launched in 2015 and and what did you what did you grow revenue to back in 2015 your first year 2015 it wasn't we didn't have any revenue we had we've been bootstrapped but we were trying to figure out what would be the model um 2016 uh we already scaled around almost 2 million um in revenue and what did you finish 2020 with 20 20 20 we finished with four million four million okay that's great and so what um have you bootstrapped the company today Raised you're still bootstrapped so uh until until now we never took any external funding uh only in generally this year we took revenue based funding in order to accelerate our growth and how much did you raise we took uh we got approved to 1.3 million out of which at this point we took only 300 000. okay and what do you like or dislike about revenue-based financing um i love that it's non-dilutive so basically we don't give out a part of the company in general the thing is that vc based funding comes sometimes with the strategic partners or with uh you know connections that revenue-based funding does not so that's uh that's kind of one downside and um when you take revenue-based uh financing you basically start uh from the beginning to think how you're gonna pay that so basically you're locked into using most of the revenue-based financing in order to generate gold on your existing model instead of kind of experimenting with ballistic models that might um cause faster goats talk to me about how talk to me about how you got your first 1000 customers you have 15 000 today that's a lot of customers how are you getting them um the majority of our customers are online onboarding so ppc affiliate network that we started building with and we scaled quite a bit of content uh marketing so basically we started pushing out a lot of content related to our space but how did you get your first how did you get the first 1 000 customers though so if you're looking for some story of us going to do it we didn't do that right so it's mostly online the standard ways well david i'm looking for your story so when you say standard tell me what you mean did you start with ads on day one uh so we started with a blog related to the the space and started like advertising that blog and it turned into uh where did you advertise the blog um mostly on other like platforms and smaller ones on connections like more like personal connections i don't understand what that means okay so the story is that the con our product didn't start as a sas product it started actually as uh blog and content related to the scholarship space itself so that kind of got a bit of traction and on top of that the product started being built so that's why the story is a little bit confusing in that sense but it's not like we built a sas product and then started like looking for customers for that yeah it's not david it's not confusing this is a great way to build a sas company it just is what it is it started off as content in a blog you built an email list then you launched a paid membership product it sounds like yeah how large did you grow your email list before you launched the sas product uh a few thousand it's not that big okay like under ten thousand [Music] yeah okay and what's the email with size today [Music] sorry six million six million people amazing and and what kinds of things are you doing with that list to drive additional growth um so what i mentioned before that we have additional revenue other than the sus side is different partnerships of other uh other scholarships promoting them to our platform other companies in the educational space like we work with around 40 different partners at the moment and what does the pitch sound like to them can you name a partner and explain to me how you convince them to market your product [Music] there's many different ways it's a bit uh hot on uh pick one yeah it's easy it's easy if you pick a pick a story a real story so um i mean a simple example is uh nielsen for example have um does market research to scholarships uh and we work with them to basically work with the students to um like to reach out to students to um nielsen and why does nielsen help promote your product do you pay them a commission we don't basically live initially revenue share and is that typical revenue share you just split it 50 50. we do it with other other organizations for example uh ones that promote our site like we have the two-sided some companies promote us and some companies we come out as well so nielsen is an example that we promote but fastback for example is somebody who promotes us that they have you know um featured scholarships and things like that that we post our scholarships though let's go to your team how many people on the team today were almost 50 people five zero and how many engineers well 20 20 engineers and so what are they building what what is the most technical thing about this product i mean first we have two products we so far we've talked only about the student side we also have uh scholarship.app which is the uh crm for brands and organizations to offer scholarships and our product actually is very tech intensive i myself i'm before scholarship power was a senior engineer at google so i come from engineering and the whole process of matching and finding the scholarships and leveraging you know they will leverage also machine learning and ai to find the ones that you have the highest chance of winning uh and there's many different ways to apply to different scholarships to uh you know to leverage all this huge amount of data that we already have in order to um basically instead of the student applying to hundreds of different scholarships we wanted to apply to three scholarships a week but he that he has the highest chance of actually earning got it so 20 engineers in order to do that yeah i need a lot of data and a lot of engineering for us how many sales employees do you have of any we have marketing in sales we don't have any uh we don't do uh enterprise sales or anything like that today so okay so no sales reps how many folks on the marketing team eight people eight yeah eight people okay and does that include like the content writers the people managing the email list these sorts of things email us list yes content writer will work mostly with external content like uh freelancers that we work with for for a long while but social media email content brand awareness and planning um all those kind of like product side of the marketing as well and talk to me about churn i imagine with consumers like this churn can sometimes maybe get high what is your turn annually so our monthly channel at the moment is about 12 percent um so yeah it's pretty high um a large part of that is because our business is extremely seasonal as well um you know like not the students do not have all the time in the year to apply to scholarships and all that and it's based labor intensive work for them even with uh with the tools but we provide them to make it easier so the majority of our challenges and david you mentioned your land you're Customer acquisition cost spending on ppc ads what does it cost you to get a new 15 a month customer um it cost me today um sixty dollars got it so that's what a four or four or five month payback period yeah how do you make that work because your customers are only staying for six or seven months so there's only two or three months of margin there for you to make money they stay seven to eight months in most cases and okay same same question though there's only three or four months there for you to make margin on so we're doing the scale got it is there any i mean are you okay with those margins and you're just going to keep driving new volume the thing is that one of the big mistakes we've done in the history of the company is basically we started scaling before we fully nailed our unit economics and in a way we kind of woke up too late for that and we dedicated 2020 into fixing that and we are now in a much better place than we were two years ago but still not well we want to be and a large part of our roadmap this year is actually dedicated to father fixing it right well david on that note let's wrap up with the famous five number one what's your favorite business book what's my favorite uh business book um [Music] i guess what to launch zero to lunch zero to launch number two is there a ceo you're following or studying um i mean from the big guys let's say somebody shy uh no google uh number three what's your favorite online tool for building a business um let's say mix panel if that's if that could be considered that of course number three how many or four how many hours of sleep to get every night many hours of sleep uh i'd say an average of uh five okay and what's your situation married single kids um living with a girlfriend no kids okay and how old are you [Music] 36 last question david what's something you wish you knew when you were 20 um i wish i knew how to monetize my site projects when i was 20. i was so involved in engineering and i never knew how to sell what i was building guys scholarshipowl.com doing 4 million in revenue this year from 15 000 students paying 15 bucks a month to identify scholarship opportunities at scale this is very much a tech play they've got 20 people on the team of 50. they've done this all bootstrapped which is great uh scaling nicely obviously there's churn here because it's students but they're okay with that because unit economics worked nicely as they looked you to scale using content ppc and their six million person email list david thanks for taking us to the top thank you very much one more thing before you go we have a brand new show every thursday at 1 pm 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 arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for 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