Aaron Rasmussen is an American entrepreneur, inventor, and game designer. As the co-founder of MasterClass, he served as both Creative Director and CTO, responsible for the company’s aesthetic, production process, and technology. The company has raised over $130 million in the capital and developed over 60 online courses led by renowned instructors, including Serena Williams, Gordon Ramsay, Malcolm Gladwell, and Natalie Portman.
Rasmussen is currently the founder and CEO of Outlier.org; a company focused on creating the world’s best online college courses. Outlier.org’s current courses include Calculus I and Introduction to Psychology, both of which are taught by a team of world-class professors, and backed by credits from the University of Pittsburgh. Students in Outlier courses earn real, transferable college credit for just $400. Outlier is reimagining higher education as a resource that is accessible, equitable, and affordable for everyone.
Rasmussen has also founded and led successful companies in the gaming, robotics, and consumer packaged goods industries. He has earned multiple awards for video games he created.
In an exclusive interview with AsiaTechDaily, Aaron says:
Each time you raise Capital, the sentiment and trends in the community are different. There’s always a little adjustment at each round to see the metrics and markets popular for VCs to focus on. Who is going against the grain, and who ignores such things. However, hands-down the hardest part was figuring out who to spend time with, whether to take introductory meetings, how and when to say no, and when to decide. There are a lot of great firms out there now, so inevitably you have to learn you can’t spend time with all of them.
I’ve seen plenty of startups with too big of a division between the marketing and product teams, so the customer may get sold one thing but receive another. It’s absolutely critical to make sure the entire experience is cohesive and accurate. And it’s important to remember that there is not enough advertising and media in the world to cover up a poorly-designed, low-quality product; build a great product first.
Read on to know more about Aaron Rasmussen and his journey.
Please tell me about your personal background, and what are you working on currently?
Aaron Rasmussen: I am an American entrepreneur, inventor, and game designer. As the cofounder of MasterClass, I have served as both Creative Director and CTO, responsible for the company’s aesthetic, production process, and technology. The company has raised over $130 million in the capital and developed over 60 online courses led by renowned instructors, including Serena Williams, Gordon Ramsay, Malcolm Gladwell, and Natalie Portman.
I am the Founder and CEO of Outlier.org; a company focused on creating the world’s best online college courses. Outlier.org’s current courses include Calculus I and Introduction to Psychology, both of which are taught by a team of world-class professors, and backed by credits from the University of Pittsburgh. Students in Outlier courses earn real, transferable college credit for just $400. Outlier is reimagining higher education as a resource that is accessible, equitable, and affordable for everyone.
What motivated you to get started with your company?
Aaron Rasmussen: The issue of accessibility to quality education became apparent to me from an early age, growing up in a large family in rural Oregon. My dad was a teacher, so education was always a part of the conversation in my family. The issue only became more evident when, down the line, I ended up being one of a select few students in my graduating class to earn a four-year degree.
After co-founding and leading the creative direction of MasterClass, I took some time off to travel, and I was struck by the fact that so many people still didn’t have access to quality education. I kept thinking about a blog post from MIT professor Woodie Flowers, describing the incredible amounts of money that students spend on college. Updating these numbers for the present day, around one million U.S. college students take Calculus I every year. On average, that course costs about $2,500 per student. So Calculus I, alone, costs college students $2.5 billion each year. And about 40% of those students fail! Not only do we spend $2.5 billion annually on one college course, but we also waste $1 billion on failed calculus courses.
With Outlier.org, our goal is to make the most effective, engaging, and affordable online college courses in the world so that we can save students billions of dollars each year—and make world-class education accessible to everyone who wants it. Our courses are not only more affordable than traditional offerings, but we carefully design them to support student success. Outlier.org courses offer cinema-quality lectures with the world’s best professors, 1-on-1 tutoring, dynamically generated practice sets and cutting-edge active learning techniques. And in the rare case that a student does not pass, we provide a full refund if they’ve done all the work, in line with our belief that students should not pay to be taught at but to learn.
What is your current main product, and (If there is any) can you share any product pivot story from founding to the current product?
Aaron Rasmussen: Outlier.org makes the most beautiful and effective online college courses in the world. With transferable credits granted by the University of Pittsburgh, we make these courses available to anybody with an internet connection for $400—one-sixth the cost of a traditional course. We currently offer Calculus I and Introduction to Psychology, and we aim to expand our course offerings this year.
How have you attracted users and grown your company from the start?
Aaron Rasmussen: The short answer: By building a unique, high-quality product for a market that is starving for innovation. In my view, we have made the most beautiful and useful Calculus I and Introduction to Psychology courses in the world. And they’re available to anyone with an internet connection! Of course, there is marketing and publicity involved, but it comes down to offering something that has never existed in the world of online education.
What’s your business model, and how have you grown your revenue? What strategy worked best?
Aaron Rasmussen: Our business model is straightforward: we offer our courses for $400 and provide a full refund if a student does all the work and does not pass.
How much money (funding) have you raised in total so far? When was the recent funding round?
Aaron Rasmussen: Outlier.org has raised $16.3 million in total funding. Our most recent funding announced in January 2020, is a $12 million Series A round led by GSV Ventures with participation by Harrison Metal, Tectonic Capital, and Jackson Square Ventures.
How many investors have you met so far, and which among them have invested in your past funding rounds? And how long does it take on average to finalize each funding round?
Aaron Rasmussen: Each time I’ve raised around has been different. It depends on the stage of your company, what your track record is, and what investors are looking for. Michael Dearing has been a long time supporter, both at Outlier from the very beginning as well as at MasterClass. Tectonic Capital came in after our seed and has also supported us in Series A round as a repeat investor.
How did you meet these investors, and which channels worked best for you?
Aaron Rasmussen: Between face-to-face interactions, marketing, and PR, we have been able to make Outlier.org’s mission widely known in the investment community. Michael Dearing, who led our seed funding, had worked with me for years during the MasterClass journey and is similarly passionate about education.
For Series A, I was blown away by the inbound response from the investment community following the launch of the company. VCs get excited when a mission they care about overlaps with a significant market opportunity.
What are the biggest challenges you’ve faced and obstacles in the process of fund-raising? If you had to start over, what would you do differently? (Your insight or advice on this would be beneficial for startups)
Aaron Rasmussen: Each time you raise Capital, the sentiment and trends in the community are different. There’s always a little adjustment at each round to see the metrics and markets popular for VCs to focus on. Who is going against the grain, and who ignores such things. However, hands-down the hardest part was figuring out who to spend time with, whether to take introductory meetings, how and when to say no, and when to decide. There are a lot of great firms out there now, so inevitably you have to learn you can’t spend time with all of them.
What are your milestones for the next round? And what are your goals for the future?
Aaron Rasmussen: Our main milestones are around maximizing student success. When our Spring 2020 semester wraps up in April, we want to make sure that we did everything to empower our students to learn, pass the course, and walk away with their transferrable credits. Beyond that, we are creating more courses and always hiring to grow our talented team.
What do most startups get wrong about marketing?
Aaron Rasmussen: One of the best descriptions I’ve ever heard is that marketing is a customer’s first interaction with the product. I’ve seen plenty of startups with too big of a division between the marketing and product teams, so the customer may get sold one thing but receive another. It’s absolutely critical to make sure the entire experience is cohesive and accurate. And it’s important to remember that there is not enough advertising and media in the world to cover up a poorly-designed, low-quality product; build a great product first.
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