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Posted on: 07/20/2020

Helping families make smarter financial decisions about college with Nick Ducoff of Edmit

Kruze Consulting's Founders and Friends Podcast · Helping families make smarter financial decisions about college with Nick Ducoff of Edmit

Nick Ducoff

Nick Ducoff

Co-founder and CEO - Edmit


Nick Ducoff of Edmit - Podcast Summary

Nick Ducoff of Edmit - helping families make smarter financial decisions about college, with advice about college savings, the true cost of college, and return on investment.

Nick Ducoff of Edmit - Podcast Transcript

Scott: Hey, it’s Scott Orn of Kruze Consulting, and welcome to another episode of Founders and Friends. And before we start the podcast, let’s give a quick shout out to Rippling. Rippling is the new cool payroll tool that we see a lot of startups using. Rippling is great for your traditional HR and payroll. They integrate very nicely. But guess what? They did another thing. They integrate into your IT infrastructure. They make it really easy for when you hire someone to spin up all the web services and their computer. Which sounds kind of like not a huge deal, but actually we did the study at Kruze. We spent $420 on average just getting a new employee’s computer up and running, and their web servers up and running. It’s actually a really good deal. It saves a lot of money, and the dogs are eating in the dog food. We see a lot of startups coming in to Kruze now using Rippling. Please check out rippling, a great service. We love it. I think we have a podcast of Parker Conrad. You can hear it from his own words, but we’re seeing them take market share so shout out to Rippling. And now to another awesome podcast at Kruze Consulting’s Founders and Friends. Thanks.
Singer: It’s Kruze Consulting’s Founders and Friends, with your host Scotty Orn.
Scott: Welcome to Founders and Friends podcast with Scott Orn at Kruze Consulting, and today my very special guest is Nick Ducoff of Edmit. Welcome, Nick.
Nick: Thank you. Happy to be here.
Scott: Well, maybe you can start off by retracing your career and tell everyone how you had the idea for Edmit.
Nick: Sure. I was a VC lawyer after law school. And to date me a little bit, one of the first big transactions I worked on was on the MySpace acquisition by Fox, specifically representing a client buying the non-MySpace assets from Fox’s Intermix subsidiary. It was kind of cool to play a very bit role in history, which has since been well-documented in Julia Angwin’s book, Stealing MySpace, if you haven’t read it.
Scott: That’s awesome. I didn’t know you were a lawyer before this.
Nick: Yeah, recovering. It’s been a few years. But I was always inspired by my startup clients, and in 2010, co-founded a company called Infochimps, which was an early big data cloud company, and that was acquired by CSC and it’s now their DXC, big data unit. And in 2012, I moved to Boston. I was in Austin before that with a brief stint in San Francisco. And after moving to Boston, I joined a founder collective startup called Boundless, helping put textbooks on mobile devices right after the iPad came out. And that-
Scott: I just met Brian Balfour on the podcast two weeks ago, so small world. I didn’t know you worked at Boundless.
Nick: Yeah, Brian definitely was integral in recruiting me there, for sure.
Scott: Amazing. That’s such a small world. That’s awesome. Sorry, I didn’t mean to interrupt you on Boundless.
Nick: No, no, no, that was a really fun company and a fun time. And after two years there, I took a role at Northeastern University as vice president for new ventures where I was responsible for new markets, including coding boot camps and project-based learning. A super cool and fun job working at a university. I never necessarily thought that would be the path that I took, but I’m very committed to higher education. And it was really there that I saw students were having a hard time justifying the ever-increasing cost of college. And so we started to Edmit to help families make smarter financial decisions about college. And we’ve raised money from Founder Collective, Precursor Ventures and others to help students avoid taking too much debt and ensuring they’ll be better off after college.
Scott: That’s really neat. And I didn’t realize that because your whole kind of work experience really fits in with Boundless. You’re trying to make textbooks more accessible and less expensive and things like that for students. And now you’ve gone another aspect of the higher learning pyramid, which is how to make college more affordable. There’s kind of two aspects of this, right? How to make it more affordable and then the ROI aspect of it. Maybe, I don’t know, can you break those two down for the audience?
Nick: Yeah, for sure. Edmit helps high school families make smart financial decisions about college through personalized software and advice. And the components of that are that we help families understand their costs and their specific ability to afford it. How much they’ll need to take in student loans and whether or not it’s worth it by looking at earnings outcomes by college and major. Ultimately, the whole offering helps ensure families are better off after college.
Scott: The earnings outcome is fascinating. How did you assemble this data? How’d you put this together?
Nick: Yeah, so we think about our data as a kind of a three-tier pyramid with the foundational layer being government data. This is a sector where there’s a lot of regularly reported, well-maintained data from the Department of Education, the Department of Labor. We even use some data from Census and some other government departments, but that’s really our foundational layer. And then the second layer is licensed and scraped data. We work with a bunch of researchers, including on the earnings by college and major, to make sure that we have the most up-to-date data possible. And then the top of the pyramid is first-party data, so we reinforce our data by having our users contribute back into the data pool.
Scott: That’s really cool. Well, maybe give an example. You can say it better than I can. But you have a kid who’s in high school, who’s applying to a wide variety of schools and maybe looking at across a different bunch of different majors, and so how does the family… The parents might have one objective and the kid might have another objective. How do they work with Edmit to have that conversation?
Nick: Yeah, so kind of the initial conception of Edmit was TrueCar for college. When I was a lawyer, one of my clients was USAA in San Antonio and they were an early investor and partner in TrueCar. And before TrueCar, car buyers didn’t really have a good way to know how much they should pay for a car. And people would have kind of Kelley Blue Book in one hand and Consumer Reports in the other. And Kelley Blue Book would help you understand what the resell value would be, and Consumer Reports would help you understand kind of the reliability, quality of the car, but nobody’s really helping folks understand the price and then kind of putting it all together. And so that’s really what we try to do at Edmit is help folks understand, on the one hand, what are their earnings outcomes likely to be at their trajectory of that. We actually have and maintain data for kind of the first 10 years after college. It can show you not only where your earnings might start based on your college and major, but what the kind of slope of and trajectory of that might be over the first decade of your career. And then historically, you’ve been able to go to someplace like U.S. News & World Report to get a sense for the academic quality of a college, some of the things like where is it and how many students are there. But before Edmit, there was really no place to go to shop for college by cost and value, and so that’s really kind of the lens in which we look through the world. One of the things we say until we’re blue in the face is, it’s less important about where you get into college and more important what you get out of college.
Scott: Yeah, that’s really cool. I’m very familiar with TrueCar. In fact, I found my car that I bought five years ago through TrueCar, and it’s an amazing resource. That makes total sense to me. And then you’re right about like… I feel like most people historically had made decisions on colleges based on brand, like what the college brand stands for. But you said the key word, which is value. Which it’s a financial transaction, you’re buying something, so what value you get out of college is really what matters. That’s really interesting. The other thing I was thinking of when you’re talking was, my mom had been entrepreneur, so I was kind of like a business dork. I really enjoyed entrepreneurship and I understood how cool it is to start a company or work with startups. I was always kind of on that track going into undergrad, but there’s a lot of people who are making their decisions on their major. And it sounds like you can kind of show them what their financial outcomes are based on major too, right?
Nick: Totally, yeah. I mean, that’s such a big part of it. And a lot of students end up changing majors as well, but we can give you a sense for what the average earnings are at a college and then by different majors within that college, whether those students earn more or less than the average for that particular college.
Scott: Yeah. Do you see people… I saw this in my dorm and fraternity where people, they didn’t know what they want to major in so they would major in maybe a liberal art, or maybe it was the other way and they majored in computer science because they wanted to make “make a lot of money”. But there was never a distribution analysis that they could look at to be like, “Oh, the average computer science person from Berkeley makes this, the average rhetoric major makes this. What do I want to do?” They weren’t making those decisions with facts and fingers. It was more of a gut reaction.
Nick: Yeah. I mean, I think that that’s what data can bring to bear on a problem like this. That when you look at guidance counseling and how students have historically been kind of coached through this process, it’s been largely through anecdotal advice. And we can bring a lot of data, research and software to bear on the problem to help students make more well-informed decisions that lead to better outcomes.
Scott: Walk me through how the software works. Do I log in and do I put in search for some different majors or search for different colleges and then it kind of compares everything?
Nick: Yeah. It’s funny you ask because we’re actually undergoing a pretty big UX overhaul right now, which I’m pretty excited about. But today, you give us a little bit of information, a student’s academic record, some household financial information, income, how much you’ve saved for college. And with that, we can kind of get a sense for what kind of student loans you’re going to need at different colleges. One of the things we do is we take a college’s sticker price and we create a personalized, what we call an “Edstimate”, that’s kind of our catchy trademark.
Scott: Yeah, Edstimate, TrueCar. Yeah, that’s awesome.
Nick: Exactly, exactly. That’s the number that we expect that particular student to pay after receiving financial aid from the college. And then we can back out income contributions that the student and parent make through either work study and/or what we expect a parent to be able to contribute and then anything they may have saved for college. And then anything else, that’s your loan amount. In kind of the industry parlance, it’s what your gapped. And our advice, our rule of thumb, is that you don’t take more in debt than your expected first year salary, and so this is where kind of everything starts to come together. And we show you for each college you’re considering after you’ve selected your major, or if you’re undecided, which colleges are a good financial fit for you, where you’re going to be able to repay that debt, and be better off after college, which is, again, your guiding principle of the company.
Scott: That’s super interesting. You touched on something which was the level of student aid the college gives to you, which was kind of mysterious to me. I never really knew how that worked, but it sounds like you have kind of assembled a scattering report and know maybe, I’m using West Coast schools here, but Berkeley gives you a certain amount of financial aid. Stanford might give you a lot more financial aid because the tuition is so much higher, is that a dataset you’ve assembled?
Nick: That’s exactly right. We’ve essentially reverse engineered their aid granting processes, and that’s kind of something that my partner and I had visibility into in our previous roles. My co-founder, Sabrina Manville, had a similar role as me. Right before Edmit, she was at Southern New Hampshire University and was an AVP of marketing there. And we both kind of saw this disconnect between the increasingly expensive cost of college and uneven career outcomes that students were having after graduation. And obviously, we heard a lot of people saying they couldn’t repay their student debt, and so we saw an opportunity to provide more financial education while students were in high school to prevent overborrowing. And so there were a few companies out there that were helping students manage the debt they had already accumulated, but we really kind of came in and are working with high school families to prevent taking too much debt in the first place.
Scott: That’s huge, especially, we were talking about this before I turned the microphones on, but the cost of college has gone up, even from 10 years ago when I was in business school. It’s just exponential growth here. When I was in school in undergrad even, maybe MBA, it would have been hard to borrow too much because the value prop or the price of school wasn’t so outrageously high, but overborrowing is a real problem nowadays, right?
Nick: Oh, it’s a huge problem. So many students are starting their careers with staggering amounts of student debt. And it’s so sad because so much of it is avoidable. Obviously, student debt can also be an incredible accelerant because not many families can afford to pay for college outright. And so, in order for them to achieve their dreams, it may be kind of necessary to take some amount of student debt. But what’s harmful is when you take too much. And so, we try to help families figure out kind of what that Goldilocks amount is. And for some families, that’s none. I had literally just got off the phone before this call with a customer, was doing some user testing, and he was saying for them, for he and his daughter, he was really hoping that she wasn’t going to have to take out any debt at all. And so, you can use Edmit to find colleges where you’ll receive enough aid based on what you’ve saved and what you’ll be able to contribute, again, from any income the student earns while they’re in school and any income the parent can kind of pay after paying all their other bills without having to take student debt.
Scott: Yeah. Do you guys have an option or search option where… In the California school system, it’s actually pretty popular now to do two years of junior college and then transfer to a UC because you basically avoid those two years of very high tuition. I mean, do you guys factor that kind of stuff in too?
Nick: Yeah, so we don’t right now. We’ve heard that a good amount though. I would say it’s somewhere on our roadmap, not necessarily in the next quarter or two, but there’s a great company that we’re very, very friendly with called StraighterLine. This would be, I think, in the category of what’s called pathways, which helps students’ kind of find these on-ramps to college. Because not every student for any variety of reasons is ready to kind of go straight from high school to a four-year degree granting institution. It may start online. It may start at community college, as you mentioned. I think it’s great that there’s so much more available for different students to meet their needs so that they can ultimately achieve that bachelor’s completion, which is really the end game. It’s that a four-year degree that really adds, the data shows, as much as a million dollars or more in career lifetime earnings than those that don’t have that bachelor’s degree.
Scott: That’s really amazing. Now, another… I’m rolling through the features I wish I had when I was in college. A lot of kids go into undergrad thinking that they kind of know they’re going to go to graduate school. For example, my roommate in college, he was there to do prerequisites so that he could go to medical school someday. are you able to kind of show them what medical school is going to cost and how to think about that? Because he’s doing really well. He’s at the CDC now, my friend, but he knew that he was going to have taken a lot of debt in medical school to make his college work or make his entire education work. Does that mean sense?
Nick: Yeah. I mean, that’s awesome that he’s planning that far into the future. I think, for most students and families kind of what’s beyond college is pretty speculative. And I think there’s some concern about someone trying to over optimize. And so, few get even the basics right that we start kind of from the position of, frankly, kind of financial literacy, of helping people even understand the keywords and definitions around the college financial process. Things like the FAFSA and EFC and what these things mean and how they can impact how much financial aid. And how financial aid is even dispersed and that you have to apply every year and yada, yada. There’s so much that people don’t know. And unfortunately, nobody really takes responsibility to provide this financial education to high school students and their families. High schools, some obviously do, and more and more want to, and that’s one of the big areas that we’re growing right now, but they haven’t historically had a lot of capabilities in this area. The colleges don’t really see it as their responsibility. Lenders more and more are investing in this financial education. And we’ve partnered with a number of them who want to help ensure that families get the information they need so that they can be well-informed and make smart borrowing decisions and be better off after college.
Scott: I think that’s super cool that you’re partnering with the financial institutions. Because you’re right, they can look at the family’s financials and have a really clear view of what’s going on. I think you have a better… By working through the [inaudible 00:17:46], it’s an incredible distribution channel for Edmit because now you’re getting in front of millions and millions of people who need this data. To me, this data is so impactful and I wish I would have had this when I was a kid. You guys signed a partnership with SoFi, right?
Nick: We did. Earlier this year, we signed a partnership with SoFi. They’re providing Edmit to their millions of members. It’s a great partnership. It’s been great to learn from them as well because they’re really forward-thinking in helping ensure their members get their money right. And Edmit has a similar mission to help families make smart college financial decisions, so it’s been a good match for sure.
Scott: You’re seeing demand from other financial intuitions who see maybe the SoFi use case and want to roll it out for their user base too, right?
Nick: Yeah, so we actually have a few dozen financial institutions that have partnered with Edmit to make our software and advising available to their members, and in some cases, broader community. One of our biggest initiatives right now is bringing Edmit to high schools, and so some of our partners will provide sponsorships to high schools so that it costs them nothing to offer Edmit. We were previously reaching students and families direct-to-consumer and through our partner channels. And now, especially with this shift to digital learning because of COVID, we’re offering Edmit as a resource to high schools looking to provide more college counseling resources to their students specifically related to making smart college financial decisions.
Scott: Yeah. The high school channel’s so important. I mean, I told you a story where my high school counselor just kind of changed my life by asking me something about my admission status at Berkeley, and I would have missed out on Berkeley if he hadn’t asked me that question. That’s really amazing that you’re empowering those folks. I think the other thing, I think a lot of the counselors are oriented towards how to apply, how to get into school, what school you get into, but they’re probably not as sophisticated on the financial aspect of it, right?
Nick: Totally. Families, now more than ever, need to make every dollar count. And also navigating the complexities of the strange new world we’re living in with COVID, and we’ve actually launched a whole kind of COVID resource center on our website, and are updated daily for every college as to what their kind of plans are with respect to reopening and kind of how they’re handling aid and other factors that are changing quickly. That no guidance counselor is going to be able to maintain a database of 2000 colleges and kind of the changes that they’re making and how they’re treating financial aid. And that’s one of the things that a company like us can do and maintain and provide support for so that they can make sure that their students have the best information and can make the most well-informed decisions so they’re better off after college.
Scott: That’s so cool. You must get a lot of personal… And I’m sure other members of the team get so much personal satisfaction out of this mission.
Nick: Yeah, it’s easy to wake up in the morning. I, professionally, have been doing startups in higher education since 2012, and I love SaaS. I love business software. I’m an investor and an angel investor as well in a bunch of cool startups. But for me personally, I just love spending the bulk of my time on helping families be better off after college.
Scott: Yeah. I mean, now we’re all virtual right now, but in the office, is there letters pinned up on the wall or great case studies or from users who are just saying like, “Oh my God, Edmit, you helped me make the right choice on what college is going to do.”
Nick: Well, I love that idea, and whenever we do go back to the office, we definitely need some more office wall art. I love the idea of posting customer success stories because customer centrism is one of our core values, but that’s a good idea, Scott.
Scott: Yeah. Well, you can user me, no charge. But what are you seeing? Because the other question I was going to ask is, sometimes financial education isn’t evenly distributed across socioeconomic.
Nick: Yeah.
Scott: And my parents were middle class folks who had done a junior college but never had gone to four-year universities, so the path was kind of unknown in what we were getting into, financially was unknown for our socioeconomic group. I mean, what do you see across differences in that and maybe different racial groups? How have you tailored the Edmit solution to help folks like that?
Nick: Yeah. Thanks for asking that question, Scott. We’re fundamentally committed to promoting equity in our personal and professional lives, and we recognize that opportunity hasn’t been equally distributed and systematic forces like racism perpetuate that inequality. At Edmit, we’re committed to building a company and a product that does the work to improve diversity, equity, inclusion. We actually had a call today with kind of a friend of the firm, a woman named Cathy O’Neil. She’s the author of a book called Weapons of Math Destruction, and that book kind of looks at how unintentionally even software and algorithms can be harmful to certain populations. And one of the things we’re doing is taking a good look at our own products constantly, but especially right now, to make sure that we’re incorporating features and language that ensures that our product does improve diversity, equity, inclusion.
Scott: It’s really amazing and really important, and it’s really cool. I mean, the audience can’t see your facial expressions, but I can tell how much you love your job and how much you love what you’re doing. Well, maybe we should wrap it up here, but can you tell everyone where they can reach out, find you at Edmit and start the conversation?
Nick: Yeah, so please feel free to email me directly. My email is nick@admit.me. It’s E-D-M-I-T, and we’d love to hear from you. Also, just a little plug, please buy our book, a number one bestseller on Amazon in the education finance category. The book is Better Off After College. And we’d love to hear from you. If you’re committed and interested in helping families be better off after college, we can connect you with the right folks on our team to make sure that Edmit can be provided to high school students and families in your community.
Scott: That’s fantastic. And a little plug, if you have someone like I do in my family who’s a vice president of a high school or someone involved in administration of high school, it’s a great time to introduce them to Edmit. You’ll probably change thousands of kids’ lives by just that one introduction. So, hey, if you have friends or family in education, please direct them to Edmit to check it out. Nick, thank you so much for coming by. It’s been a real pleasure and I love what you’re doing.
Nick: Thanks, Scott.
Singer: It’s Kruze Consulting’s Founders and Friends, with your host Scotty Orn.

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