Blog Archive mbaMissions Exclusive Interview with Shark Tank Contestant Shaan Patel, Founder of Prep Expert

Blog Archive mbaMission’s Exclusive Interview with Shark Tank Contestant Shaan Patel, Founder of Prep Expert Shaan Patel is an entrepreneur and a recent contestant on ABC’s Shark Tankâ€"and he is also an MBA student! Patel’s company Prep Expert (formerly 2400 Expert SAT Prep) was growing steadily when he decided to pursue a business degree  at the Yale School of Management (SOM), which left  him juggling entrepreneurship and schoolwork. We asked him how he manages it all and how he persuaded Mark Cuban to jump on board as an investor! Thank you for taking the time to talk to us. You are currently a second-year student at the SOM. Many MBAs launch businesses after graduation, but you managed to do so during your studies. How did your experience at the SOM prepare you for this endeavor? Shark Tank  Episode 716 contestant Shaan Patel (Photo via ABC) The [SOM] has been transformative in helping me to expand my venture with its focus  on entrepreneurship. Perhaps the most impactful class I took was “Management of Software Development” taught by [the school’s] director of entrepreneurship, Kyle Jensen. The class taught me the importance of Web development and design, which led me to use lean and agile methods to rapidly iterate our company’s Web site, which has resulted in hundreds of thousands of dollars in increased revenue. I am very involved in the entrepreneurship community at Yale and am currently taking “Startup Practicum”â€"a course that allows founders to work on their start-ups in a structured course for school credit. You scored a perfect 2400 on your SATs. Was this the main inspiration for 2400 Expert SAT Prep, or did you have an earlier interest in the subject? Did your perfect score come as a surprise to you? I never planned to start an SAT prep company. I originally wanted to write an SAT prep book. When I was in high school, I only scored around average on my first practice SAT. I then spent hundreds of hours in the library raising my own score to a perfect 2400. This score changed my lifeâ€"I was admitted into prestigious universities, won a quarter million dollars in scholarships, and even got to meet the president of the United States. When I was in college, I wanted to write an SAT prep book to teach other students how to prepare for the SAT the way that I did in high school. When I pitched my book proposal to over 100 literary agents and publishers, I was turned down by every single one. That’s when I decided to leverage the material I had written to start 2400 Expert. After my first class had an average SAT score improvement of 376 points, I had parents knocking down the door for more courses. Ironically, after McGraw-Hill, the world’s largest education publisher, who had already rejected my book proposal, saw what I was doing with 2400 Expert, they offered me a book deal after all. It was interesting that I got what I originally wanted after I took a completely different path. You mentioned in an email that you went from living in a motel to attending business school. Can you expand on that a little bit? Yes, I grew up in my parents’ budget motel in Las Vegas. I attended urban public schools in the worst school district in the nation with a 40% dropout rate. However, I really believe it doesn’t matter where you go to school. Instead, it’s your effort that determines your success. I ended up attending an eight-year baccalaureate/MD program at the University of Southern California [USC]. I started my business just prior to starting med school. As my company was growing while I was in medical school, I decided to go to business school to not only learn more about health care management, but also learn how to turn my company from a small business to a national test prep brand. So I took a leave of absence from medical school at USC to attend business school at Yale. I [will] finish my MBA in May and will return to USC in the fall to finish my last year of medical school. On a recent episode of Shark Tank, angel investor and billionaire Mark Cuban agreed to invest $250K in your company in exchange for a 20% equity stake. What was your strategy when approaching the Sharks? Were you surprised to see Cuban jump on board? I valued my company at $2M using net present value of discounted cash flows that I had learned in business school. Therefore, I asked for $250K in exchange for 10% equity. I did this because I knew that the Sharks typically negotiate entrepreneurs to a lower valuation, so I wanted to have a slightly higher valuation in my initial ask to leave some room for negotiation. I was surprised that Cuban gave me an offer because he initially seemed unimpressed at the beginning of my pitch. But Mark was the one Shark I wanted going into the Tank. So it worked out! What have been your biggest challenges with juggling a company and attending business school? Do the pros outweigh the possible cons? The biggest challenge of attending business school and running my business is balancing my time. There is so much that an entrepreneur has to do when running a growing company. Sometimes it’s difficult to do everything I need to because of case studies and group meetings in business school. But the amount I have learned in business school about how to build and run a multimillion-dollar company certainly outweighs these small cons. Where do you see 2400 Expert SAT Prep advancing in the next five years, and how do you believe Mark Cuban’s involvement will influence the company’s progress? In the next five years, I believe we can help one million students prep for the SAT so that they’ve improved their SAT scores an average of 300+ points, resulting in great college acceptances and scholarship awards for our students. The best part of this business is getting success emails from students such as one that I got the other day: “Thank you for writing the SAT 2400 bookâ€"it was a great help and I ended up getting in wherever I applied, including Harvard, Yale (currently in Trumbull College), and Princeton. I’m a Pakistani American from Brooklynâ€"not wealthy by any meansâ€"and couldn’t afford a private tutor, so I had to find a way to self-study, and your book really did the trick.” Mark Cuban not only has a huge brand that will help the company, but he’s already been helpful in guiding the strategic direction of the company. How would you advise current MBA students who are hoping to get their businesses off the ground during their studies? Don’t worry about failing. Too many people are risk averse and afraid to dive in. You have to fail first in order to succeed. I look at every failure as an opportunity. Every time I have been rejected by a university [Harvard Business School, Wharton, Stanford Graduate School of Business], literary agent, book publisher, licensed content partner, Shark, etc., I see it as an opportunity to tell a great underdog story later! Life would be so boring if everything came easy. Those who are afraid to fail will never succeed. Share ThisTweet News Yale University (School of Management)