Magoosh Unveils a Video Bible for the Newly Revised GRE
It’s the beginning of GRE season—the period from September to November when hundreds of thousands of college students and others considering applying to graduate school take the Graduate Record Exam, administered by Princeton, NJ-based Educational Testing Service (ETS). But this year’s GRE is a completely new animal. In August, ETS rolled out the biggest changes in the test’s content and scoring system in its 60-year history.
Gone, for example, are the antonym and analogy questions in the verbal reasoning portion of the test: now students have to demonstrate reading comprehension, rather than just how well they’ve memorized vocabulary words. Similarly, math problems on the quantitative reasoning portion of the test now require test-takers to supply actual numerical solutions, rather than selecting from multiple-choice answers. And that’s just the beginning. ETS says the point of the revisions is to “better reflect the kind of thinking you’ll do in graduate or business school.”
All those changes are creating a challenge for the $1 billion test prep industry, which is already in upheaval thanks to the emergence of startups taking on the traditional giants, Kaplan and the Princeton Review, with lower-cost online prep materials. Two of those startups—Grockit and Magoosh—are right here in the Bay Area, and both have been working fast to overhaul their test-prep curricula to reflect the new GRE.
Last week I caught up with the founders of Magoosh, who may be the first to market with such a curriculum. The Berkeley startup plans to announce later today that it has finished an all-new GRE curriculum built around 900 short videos and 700 practice questions, all tailored for the revised test.
“We’ve stayed closer to the market than our competitors,” says Hansoo Lee, Magoosh’s co-founder and CEO. “There really isn’t anything on the market like this for the new exam.”
I first wrote about Magoosh last summer, right after they’d won a seed capital competition organized by North Bridge Venture Partners of Waltham, MA, and San Mateo, CA. At the time the company’s video-driven study guides were focused on the GMAT business school admission test, and the startup was just getting started on materials for the GRE. Lee, who finished his MBA studies at UC Berkeley’s Haas School of Business in May, says the startup spent its first year not only developing the GRE prep modules but studying how customers use the GMAT product, in order to perfect its approach to online video lessons.
“Our early thesis was that video is the killer app in education,” says Lee. “That has been validated. In the form that we are presenting it, it isn’t a recording of somebody giving a lecture, but rather a more intimate experience of walking through a problem and a concept.”
Salman Khan’s short video lectures at Khan Academy, which are typically no longer than 10 minutes each, have been a big inspiration for Magoosh, Lee says. “We see lots of interesting features on the other [test prep] products out there, but ultimately no one who does as much to help students toward the end goal of learning the material and improving their results.”
Lee says the five-employee startup is getting “really good traction” so far this fall. Customers, who pay $129 to $199 for access the GMAT and GRE prep materials, hail from 150 countries around the world and have answered more than a million sample questions in aggregate. They’ve also racked up 10,000 hours watching video lessons.
In addition to the $50,000 in seed capital that Magoosh won in the North Bridge competition, the startup won the $10,000 second prize in the Intel+UC Berkeley Technology Entrepreneurship Challenge in November 2010, and has raised additional seed money from Lotus founder Mitch Kapor, Career Education Corporation founder Jack Larson, 3-K Financial Group president Keith Ogata, Berkeley business professor David Charron, angel investor Michael Berolzheimer, and AngelPad co-founder Richard Chen.
Alongside the new practice questions tailored to the revised GRE’s more open-ended style, Magoosh has added video lessons that help start students off at a very basic level. Bhavin Parikh, the startup’s co-founder and chief product officer, points out that many GRE takers are in their 40s and 50s and may have been out of school for decades. For them, modules on subjects as fundamental as decimals, fractions, and powers of 10 provide useful refreshers.
There’s also a new, simplified dashboard with pie charts showing which types of questions users are answering correctly, and which ones they’re having the most trouble with. “If I see that I’m getting over half of the math questions incorrect, I may want to focus on that,” says Parikh.
Lee says academic studies show that the combination of short, animated, narrated video and text-based questions turns out to be one of the most effective ways to convey test materials. “There are many studies out there showing that attention drops off after about 10 minutes—you basically don’t learn anything after that,” he says. While Kaplan and other test prep companies also offer video content, Lee says “all they’ve done is repurpose and repackage a lot their [pre-revised GRE] material and counted on their brand.” For Magoosh—the name is a play on magush, an old Persian word meaning a wise and generous teacher-the fresher material “is our way in” to a larger market, Lee says.
The great thing about the test prep business, says Lee, is that once the study materials are finished, the online tests become money machines. “We are positive net margin right now, on a unit basis,” Lee says. “But we plow that back into improving the product.” The company next plans to build up its test preparation materials for the SAT and TOEFL (Test of English as a Foreign Language) exams.
“A year from now, our goal is that when you think of the GRE, the GMAT, or the TOEFL, you will think of Magoosh,” says Lee. “A couple of years down the road, if you are studying for a professional certification exam, at that point we will have proven the model and be dominating that segment as well. It’s a billion dollar market, but it’s very segmented, and our approach is to go segment by segment.”
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