About a year ago, we announced BookNook’s first fundraising round. A group of dual-bottom line investors, led by Reach Capital, bet on a company with a very rough alpha product, a handful of pilot schools, and a vision that technology could be used to make engaged, collaborative learning happen for small groups of students.

Ten months later, we are thrilled to announce the completion of our seed fundraising with an additional infusion of $2 million, jointly led by Better Ventures and the Urban Innovation Fund that included new funding from our existing VC investors and new investors Kapor Capital, Redhouse Education, and Edovate Capital.

Early stage startups are in many ways thought experiments—you set out to test a set of hypotheses about how your technology can help people and expect to learn a lot along the way.  If you’re doing things right, you spend a lot of time listening, keeping an open mind, and embracing your failures when you hear about what isn’t working.

So what did we learn in the past year?  And what are we doing about it?

Hypothesis #1: Small Groups, Big Results

What we hoped to prove: Our biggest bet—and what makes us different from everyone else in the digital reading space—is our focus on small groups as the unit of instruction.  Along with our advisor David Pearson, we believe that something special happens when students work together in groups of 4 or fewer—and there is a lot of research to back that up.

What we got right: Data from our first school year and summer pilot have shown that small groups work.  According to schools’ own assessment data, BookNook students made major improvement in reading skills over the school year.  Our summer pilot showed that during a time when students usually slide backwards, students who used BookNook actually gained ground.

What we got wrong:  We made the groups too small!  One of the biggest pieces of feedback we have gotten is that even though BookNook is scaffolded enough to be used by both teachers and non-teachers, our partners just don’t have enough grownups on site to staff a 1:4 ratio for large numbers of students.

What comes next: While we are sticking to conviction (and the research) that < 5 is the optimal group size, starting in the fall we will offer a new functionality that supports up to 1:20+ adult to student ratios.  Teachers and instructional leaders will be able to break a classroom or large group of students into smaller autonomous subgroups who will lead themselves through rigorous reading activities.

Hypothesis #2: Technology is a Better Way to Scale

What we hoped to prove:  Coming from 15 years in the nonprofit sector, what excited me most about tech was the prospect of scale.  It drove me nuts that the national nonprofit I led was meeting less than 1% of the need for its services in the US, even though we had ballooned in size.  I believe that while the direct service approach of most nonprofits can get great results, it’s almost impossible for those models to reach tens of millions of children. This is why I created BookNook.

What we got right:  In just 8 months, we were able to grow our weekly active student users from 200 to over 2,000 and to bring over 100 schools and nonprofit partners across 14 states online.  We’ve done things I could never have dreamed of as a nonprofit leader.  We work with schools in very rural parts of Kansas and Mississippi. We have gone from no presence in a school site to having students actively learning with BookNook in under 24 hours. And we have already been approached by potential partners in other countries.

What we got wrong: While we were delighted by all the growth in usage, we were embarrassed to have badly underestimated how much content our users would need. It killed us that our most active users were having to repeat books and lesson plans because they had run through everything we had in our library.  We also received many requests for content at the K-1 level, even though we initially designed BookNook for 2nd-5th grade level readers.

What comes next:  More books!  With this new funding, we are able to grow our library to a total of 600+ books by the start of the next school year.  We will also release an emerging readers program supporting students who are working on phonemic awareness and decoding skills.

Hypothesis #3: Don’t Be Free, But Don’t Be Expensive Either

What we hoped to prove: We know that these are challenging times for school budgets across the country and that our nonprofit partners have limited resources as well.  At the same time, we also believe that to use BookNook effectively, our partners need to be committed to changing how small group time works and to engaging with our training team—which means having some financial skin in the game.

What we got right: Based on the pace of our scaling and feedback from our partners and prospective partners, we think we managed to hit a ‘goldilocks’ subscription model that is substantially less expensive than what schools and nonprofits are used to paying for blended reading platforms, but that still shows that they are committed to using BookNook with fidelity.  We have consistently had fewer than 10% of our partner sites in ‘triage’ meaning that they had minimal or no usage over a period of multiple weeks.

What we got wrong: Being early stage, we tried to keep things simple and asked partners to commit to a universal per-site license that would be the same no matter what their enrollment or usage plans looked like. We quickly learned however that no school or nonprofit considers themselves ‘standard’—everyone has their unique features.  What’s more, a lot of potential partners wanted to pilot our platform with a subset of students or saw a fit for BookNook during a specific part of their day—and so naturally they didn’t like the idea of a whole building subscription.

What comes next: For the 2018-19 school year, we are rolling out a new subscription model that will allow partners to either go for the whole building option or to choose from an ‘a la carte’ menu that enables them to customize for their specific needs. We are also offering some new added services, including Professional Development and Volunteer Recruitment & Training—stay tuned for more on those!

 

With this new funding will come new chances to be wrong about things, and our growing team is committed to both following through on what we’ve learned so far with a host of changes and new features and content.  We also will continue to challenge our assumptions by truly listening to our partners and committing ourselves to working with schools and nonprofits to solve the problems that get in the way of students becoming strong, confident, and lifelong readers.