How did Mystery Science find its product-market fit?

Initially, they developed resources for science specialists, but these weren't widely adopted. They accidentally discovered their product resonated with elementary teachers who lacked science expertise and wished they could play back recorded lessons.

What does 'traction' feel like for a startup?

Traction isn't just positive feedback; it's when usage clearly demonstrates demand. For Mystery Science, this was evidenced by 15,000 sign-ups from a single Facebook ad and teachers expressing a strong desire to use their content with students.

How did Mystery Science overcome competitors like Pearson?

Instead of directly competing on curriculum, Mystery Science focused on creating a product that teachers and students genuinely loved. This organic adoption led to viral spread and teacher advocacy, helping them gain market share.

What was the biggest challenge Mystery Science faced growing?

A significant challenge was selling to schools, leading them to hire and then fire a VP of Sales. They also faced a critical cash flow crisis, having only about 60 days of runway before securing new investment.

Why did Mystery Science join Y Combinator when they were already doing well?

Despite being profitable, they joined YC to scale the team, secure further funding, and leverage the accelerator's network and mentorship. They had applied before and saw it as a way to accelerate their business growth.

What advice do you have for teachers considering starting a company?

Start by thinking about scale; you can reach far more than 60 kids a year through digital platforms. If you have a passion for explaining concepts and a desire to influence education broadly, the transition can be rewarding.

Key Moments

Keith Schacht and Doug Peltz on What Traction Feels Like - at YC Edtech Night

Y Combinator

Science & Technology4 min read29 min video

Nov 27, 2017|5,006 views|65|4

YC Y Combinator Keith Schacht Doug Peltz Geoff Ralston Edtech Tech Startup Interview

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Key Moments

TL;DR

Mystery Science founders share their journey from idea to product-market fit, emphasizing teacher-loved curriculum and organic growth.

Key Insights

Mystery Science provides interactive K-5 science curriculum for elementary teachers who often lack science specialization.

The founding story involved a shared passion for explaining science and technology, leading to a pivot from initial product ideas.

Identifying the target customer evolved from aiming for science specialists to realizing the need from general elementary teachers.

Traction was recognized not just by positive feedback, but by actual usage and organic spread, like the viral Facebook ad.

Selling to schools is challenging; Mystery Science succeeded by creating a product teachers and kids loved, leading to viral adoption.

The company experienced near-failure with limited runway but was revived by investors passionate about their vision.

Participating in Y Combinator was a strategic decision to scale the team and business, even when already profitable.

Leaving a stable teaching career to found Mystery Science was driven by a desire for greater scale and impact in science education.

THE ORIGIN OF MYSTERY SCIENCE

Mystery Science was founded by Doug Peltz, a former elementary and middle school science teacher, and Keith Schacht, an entrepreneur with prior startup experience. Their shared passion for making science engaging and understandable was the core inspiration. They noticed a significant disconnect between the fascinating nature of science and its often-boring presentation in schools, particularly for K-5 students. Recognizing that most elementary teachers are not science specialists and struggle to teach the subject, they aimed to create a solution that felt like having a 'virtual science expert' guiding the class.

THE EVOLUTION OF THE PRODUCT

Initially, Mystery Science wasn't focused on schools as the direct customer. The founders explored various product ideas, including a 'Pinterest for science teachers,' which aimed to be a resource hub. However, they discovered that while teachers found the concept interesting, they didn't use it extensively. This led to uncertainty and multiple pivots. The breakthrough came when they involved general elementary teachers, who were enthusiastic about a resource that provided ready-to-use, engaging lessons, rather than just raw materials. This shift in focus was crucial for finding product-market fit.

RECOGNIZING TRACTION AND PRODUCT-MARKET FIT

The founders recount a critical moment where Keith had to explain to Doug that positive feedback alone wasn't traction. True traction, they learned, is demonstrated by consistent usage and organic growth. An accidental discovery with elementary teachers, who expressed a desire to simply 'record everything you just did and play that back for my kids,' revealed the actual problem they were solving. This insight led them to develop a curriculum that presented evidence-based science in an engaging, lesson-like format, which resonated strongly with teachers who feared teaching science.

THE CHALLENGE OF SELLING TO SCHOOLS

Selling educational products to schools is notoriously difficult. Mystery Science faced this challenge, initially adopting a freemium model similar to consumer web businesses, aiming for viral adoption through teacher enthusiasm. They learned that teachers who loved the product became evangelists, willing to advocate for its purchase. Despite initial struggles with hiring a VP of Sales and facing a depleted company runway, they eventually secured funding by emphasizing the vision and potential impact. Their success hinged on creating something truly loved by teachers and students, bypassing traditional sales methods.

THE NEAR-COLLAPSE AND RESURGENCE

At one point, Mystery Science was critically close to running out of money, with only about 60 days of runway left and difficulty securing further investment from early backers. This period was marked by a desperate search for new investors who believed in the company's mission. They managed to raise $2 million, which provided a lifeline and allowed them to strategize about scaling their sales efforts more proactively. This near-failure experience underscored the precariousness of early-stage startups and the importance of investor conviction.

THE DECISION TO JOIN Y COMBINATOR

Despite being profitable and growing when they applied, Mystery Science chose to join Y Combinator. This decision was driven by a desire to accelerate their growth and scale the team effectively. They had applied before and been rejected, but this time they saw YC as a catalyst for reaching the next level, helping with fundraising, team scaling, and PR efforts. The program's network, mentors, and structured approach provided significant value, exceeding their expectations and reinforcing their strategic decision to participate.

THE SCIENTIST-TURNED-FOUNDER'S MOTIVATION

Doug Peltz's transition from a respected science teacher to a startup founder was motivated by a desire for greater impact. While he enjoyed teaching, he recognized the limitations of reaching only a few dozen students per year. Inspired by science communicators like Vsauce who reached millions, Doug became convinced that technology could enable him to influence science education on a much larger scale. This ambition to connect with a vast audience and fundamentally change how science is taught fueled his decision to join Keith and embrace the digital revolution.

Mentioned in This Episode

●Software & Apps

●Companies

●Organizations

●Books

●People Referenced

Key Takeaways for Edtech Startups

Practical takeaways from this episode

Do This

Focus on making something teachers and kids truly love.

Understand that product-market fit can be non-intuitive; listen to user feedback.

When selling to schools, prioritize creating value and generating word-of-mouth.

Leverage digital platforms and a freemium model to gain initial traction.

Seek mentorship and network through programs like Y Combinator.

Embrace the 'hard things' of entrepreneurship with resilience.

Avoid This

Do not assume your initial product idea is the final one; be prepared to pivot.

Do not solely rely on direct sales pitches to established curriculum providers.

Avoid underestimating the challenges of scaling and selling into the school system.

Do not stop looking for 'silver bullets' to get the word out, even if conventional advice says otherwise.

Common Questions

Mystery Science provides an interactive science curriculum for elementary teachers who often struggle to teach science effectively. The program acts like a virtual science expert, co-teaching with teachers remotely and making science more engaging for students.

Topics

Technology & Innovation Business & Entrepreneurship Product-market Fit Venture Capital Startup Founding Sales Strategy Curriculum Development Startup Accelerators Teacher Resources

Mentioned in this video

Software & Apps

Pearson

A large educational publishing company that sells science curriculum to schools, contrasted with Mystery Science's approach.

Companies

McGraw Hill

A major publisher of educational materials that was mentioned as a competitor in the science curriculum market.

Facebook

The social media company where Keith Schacht worked before leaving to start Mystery Science.

Y Combinator

A startup accelerator program that Mystery Science joined in the summer of 2017. They had applied previously and found the program valuable for growth and fundraising.

BrainPOP

A company selling educational subscriptions to schools, which served as a model for Mystery Science in terms of business viability in the education market.

Mystery Science

A company providing an interactive science curriculum for elementary teachers and students, designed to feel like a virtual science expert co-teaching the class.

A social media platform for visual discovery which was initially prototyped as a resource for science teachers by Mystery Science, but was found to be the wrong product.

Random House

A publishing company mentioned in the context of large educational publishers that sell science curriculum.

People

Doug Peltz

Co-founder of Mystery Science who previously taught elementary and middle school science for seven years. He is portrayed as the 'virtual science expert' in their curriculum.

Keith Schacht

Co-founder of Mystery Science, with a background in starting startups and working at Facebook. He convinced Doug Peltz to join him in founding Mystery Science.

Ben Horowitz

Author of 'The Hard Thing About Hard Things', a book referenced for its insights into startup challenges.

Books

The Hard Thing About Hard Things

A book by Ben Horowitz that was referenced in the context of starting a business and the challenges involved, particularly reinventing science curriculum for kids.

Media

Vsauce

A YouTube science communicator whose video 'Why do you have two nostrils?' inspired Doug Peltz to consider the scale of reach possible through digital platforms.