How We Built & Scaled Our Learning Platform SaaS To More Than 1,000 Customers

David Kofoed Wind and Simon Lind

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Published: October 21st, 2022

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David Kofoed Wind and Simon Lind

Founder, Eduflow

Founders

Employees

Eduflow

eduflow.com

from Copenhagen, Denmark

started May 2015

Founders

Employees

Discover what tools David recommends to grow your business!

Discover what books David recommends to grow your business!

Rework Jason Fried

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My name is David, and I am the co-founder and CEO of Eduflow. Eduflow is a platform for building and running any kind of online learning experience. Our customers use Eduflow to facilitate things like onboarding, sales training, leadership training, and other forms of courses.

We originally went down the venture route, raised money, and joined Y Combinator. Today, we are a profitable team of 12, with a calm and growing business.

What's your backstory and how did you come up with the idea?

I was always interested in computers, and I learned programming at a young age. I always thought I would become a game developer, so I started university studying computer science. Later, I realized that I liked mathematics more, and I ended up in a Ph.D. program researching machine learning. During this Ph.D., I got a chance to teach my course on data science.

The course got a lot more popular than I anticipated - I had 150 students instead of the 30 I had expected - and that meant that I had to spend around 40 hours per week grading papers. Nobody would benefit from that, so I decided to build a system for my students to grade each other. I called this tool Peergrade and started work on it as a side project. My supervisor heard about it, and he convinced me to sell a license to our department. I got $2,000 for a license to two courses (my own and my supervisor's), and now I had to deliver something by the start of the semester.

I called up my old high school classmate Malthe and convinced him to join me in building this. Alongside, he was hired as my teaching assistant, so we taught the course together while building the first version of Peergrade. Each week we would push updates, and we would get instant feedback from all of our students (who were very harsh critics).

The more time you are in the market, the more time you are exposed to potentially lucky opportunities.

Take us through the process of designing, prototyping, and manufacturing your first product.

When we built the first version of Peergrade, we were lucky to be our first customer. This meant that we could more or less just ask ourselves which features were important, and then go and build them. For most of the company’s history, this guided the product roadmap.

The other influence on the product was our interactions with students. On the first day of my course, I remember telling the students that we were going to do a peer review. Many of them immediately raised their hands and said “No way, we don’t want that”. When I asked them why they mentioned that they didn’t trust their peers to be qualified reviewers. On the spot, I came up with a feature idea where I would allow them to flag feedback they didn’t agree with, and then I would redo that feedback. They found that to be a fair compromise, and we went back and built that feature into Peergrade.

For the first 6 months of the business, we were just two co-founders with backgrounds in math and physics, so while the product worked, it was not very nice to look at. We went ahead and found our last co-founder who was a digital designer, and he got to work redesigning every interface.

Early interface design for Peergrade

Me (in the white shirt) and some of my students while running the course

Working on Peergrade during YC

Describe the process of launching the business.

After launching Peergrade with the first couple of courses, we started going to other universities to get more users. For years, the main growth strategy was simply cold emailing professors, going to their offices, pitching Peergrade, and then (very) slowly moving that toward a bigger license. After a while, we launched a freemium version and started to see some traction in the school sector too.

Around 2017, when we were in Y Combinator we started to see some early traction from corporate customers. We got Google as one of our first corporate customers, and this started pushing us towards exploring that market a bit more. We raised a seed round after YC of $1.5M and got the team to about 12 people - mostly technical. Then we started pushing, to see if we could get Peergrade to grow faster, but there were a lot of challenges.

The biggest challenge with growing Peergrade was that the market demand for peer review software was just not very big. So while we won most bids we were involved in, there were just not enough of them to satisfy our appetite. Additionally, the customers we had kept asking for more features, but it was hard to add more on top of Peergrade without complicating the product.

In early 2019, we decided to start over, and build a brand-new product. The original idea was to rebuild Peergrade in a more modular way, but over time this morphed into a completely new product - now Eduflow. We wanted to get a new tech stack, but more importantly, we wanted to build a product that solved other problems than just peer review. At this point, we had a team of 10, money in the bank, and happy customers, so we decided to risk it all to build a product we were more passionate about, and with more potential.

Since launch, what has worked to attract and retain customers?

By far the biggest channel for new users on Eduflow is word of mouth. Around 50% of the instructors signing up for Eduflow today come from recommendations or invitations. While this is extremely powerful, it is also very hard to scale, control and measure. Currently, we don’t offer any real affiliate deals, but that is something we are considering to accelerate this even further.

For more planned marketing activities, we advertise on some software aggregators like the eLearning industry and Capterra. This drives traffic with high buying intent, and generally, the LTV of our customers makes it a feasible traffic channel.

We also write content on our blog focused on SEO. This comes in a variety of forms, including course templates, top-of-funnel posts about pedagogical strategies, and different listicles. Google drives around 10k people to our blog monthly for free.

The final part of our marketing stack is our courses on Eduflow Academy. Here we teach people about instructional design, course building, and pedagogy. The courses are free and run in Eduflow, so the participants can get a good idea about how nice Eduflow is while taking the courses.

How are you doing today and what does the future look like?

Today Eduflow is a “profitable” team of 11 full-time people. Our business is a great example of a proper software business, so in theory, the whole company could probably be run by just our CTO (he can do the taxes, and he can restart the server). This also means that our margins are super high, and that profit is essentially a choice - where we currently choose to invest everything into growth.

While the company is 7 years old, the Eduflow product only just turned 3. And where Peergrade was in a very new market, Eduflow is competing in a market that is blood red with hundreds of competitors. This can be a challenge because the minimum expectations from customers are high, but it allows us to out-product the others without having to drum up demand from nothing.

The team is very product-focused, with 8 people working on design and engineering, and 3 people (including me) doing marketing, sales, finances, customer service, etc. This setup requires everyone to wear multiple hats and to find ways to automate and optimize everything.

Through starting the business, have you learned anything particularly helpful or advantageous?

One of the things I learned throughout this business is to pick a market/product where your team and skills can give you an advantage. We are a great product team, but only a mediocre sales organization. So for us, it is better to be in a market where there is existing demand, and then just build a better offering. Instead of trying to change yourself and your team, it is sometimes easier to just pick the right market for your competencies.

Multiple times throughout the business, we have hired a sales team too early. We kept convincing ourselves that we should scale the sales operation to grow faster - but the size of the sales org was not the actual bottleneck. Today, we are in a position where we have more demos than we can take, and that is the first time where I feel like growing the sales team makes sense. It can just be intoxicating to start scaling and hiring when you get some VC funding.

What platform/tools do you use for your business?

We use over 50 products to run Eduflow, and probably closer to 100. We rely on a lot of standard tools like Notion, Slack, Hubspot, Trello and Intercom.

In the less well-known category, I like Tella which is a Loom competitor that works fully in the browser. For email sending, we recently switched from Mailchimp to Mailjet, which has been a lot nicer to work with.

What have been the most influential books, podcasts, or other resources?

One of the most important books for me has been the book Rework by David Heinemeier Hansson and Jason Fried. The book is simple, to the point, and just resonated a lot with me when I first read it. It outlines a no-bullshit way to run a company, which matches exactly how we try to run our business.

I listen to a lot of podcasts, but the frequent ones right now are “Out of Beta”, “My First Million”, “Indie Bites” and “All In”. These podcasts approach the business building from different angles, and especially the first three are podcasts that give concrete examples and ideas that I can use myself.

Advice for other entrepreneurs who want to get started or are just starting out?

One of the things I have learned through running this business is that things can take a long time. The most important thing is not dying, and to keep growing (even if slowly). If you do that, then you will eventually get through. The more time you are in the market, the more time you are exposed to potentially lucky opportunities. For us, one of the big ones was landing Google as a customer. We never hunted for that deal - it simply came inbound one day.

I also think many people tend to outsource sales too early. Selling is (for most people) quite uncomfortable, and when it doesn’t work, there is a tendency to think that a better salesperson would solve the problem. Generally, that is not the case. While sales is a skill you can learn, founders have a lot of unfair advantages. As the founder, people respect you a lot. You know everything about the product, and you have the final authority to make a custom offer in the middle of a sales discussion.

Are you looking to hire for certain positions right now?

We generally only try to hire when it hurts, and right now things are not hurting too much. The only position we are considering for right now is an account executive based in the US. We get 60+ inbound demo bookings per month, and most of these are from people based in the US. Since most of the team lives in Europe, it would be nice to have someone in the US time zones to take these demos.

Where can we go to learn more?

If you have any questions or comments, drop a comment below!