CourseStorm is the first of five companies to be announced as a 2019 Startup to Watch. Maine Startups Insider will announce one company per week throughout the month of September. For more on how the companies were selected for the list, please visit this page.
For years, Brian Rahill and Matt James treated CourseStorm, their Orono-based startup that builds course-registration software, as a side gig.
But a few years ago, after CourseStorm started gaining traction, they decided to jump off the deep end and say goodbye to their day jobs at RainStorm, a web development company started by Rahill in 2000.
James was first, making the jump in 2015 to full-time at CourseStorm, followed by Rahill the next year. At the beginning of 2019, they would never look back again as Rahill sold RainStorm to Sozo Technologies, a web development and IT services firm based in Plainfield, Indiana.
“There is always that moment where you have to take that leap of faith and say, ‘I have something stable here that’s working, but by taking the risk, the reward could be really substantial,’” says Rahill, CourseStorm’s CEO.
That decision to jump off the deep end, so far, has paid dividends.
CoureStorm is on the verge of reaching 600 customers, double what it was last year. Those customers are located in just about every U.S. state and include educational organizations like Manchester Community College in New Hampshire, but also several other organizations that fall outside the traditional education mold, including the Museum of Modern Art in New York and a seven-hospital healthcare system.
“Last year we exceeded our plan and grew revenue by 88%,” Rahill said. “We are planning a similar revenue growth rate for this year and expect to end the year at a run-rate of 146% over 2018.”
The company generates revenue by charging the organization a small fee every time a student registers for a course.
The business model helps create loyalty among customers because it ensures the startup is only able to grow alongside them, says Jean Hammond, co-founder of LearnLaunch, a Boston-based edtech accelerator the co-founders attended in 2017, and which subsequently invested in the company.
“When we looked at the business model and thought about the informal economy for education, we thought, ‘This is pretty interesting,’” Hammond says.
To capitalize on this growth, CourseStorm closed a $1.15 million Series B funding round in February that was backed by CEI Ventures, Maine Venture Fund and LearnLaunch, That allowed the Maine company to grow from four employees to 12 within a matter of a few months. And, contrary to what some may think given the software company’s location, Rahill said a lack of talent has not been a major hindrance to the company’s growth.
“A lot of people think we’re way up here in the northern part of the state or something running a software startup. There’s not that many — that’s true. But we’re surrounded by a number of colleges and universities,” Rahill says.
Helping Grow The ‘Informal Economy For Education’
It was while working at RainStorm, which built custom websites and software for educational institutions and nonprofits, that Rahill and James learned there is a market for course-registration tools beyond traditional educational institutions like schools and universities. Organizations like museums and hospitals and nonprofits are increasingly offering classes and continuing education courses for adults to learn about a variety of things, from childbirth and CPR to welding and forklift operating.
“We’ve learned over time that there are many, many adjacent markets in education that’s happening for adults, spanning a massive range of classes,” Rahill says.
At RainStorm, they built a tool to provide existing clients an easy way to add course-registration capabilities to their websites. That tool served as the basis for CourseStorm.
“It became apparent that there was just this massive demand [for online course-registration tools],” Rahill says.
But to say that CourseStorm is only in the business of course registration is to deeply undercut the value it brings to businesses, according to James, who is CourseStorm’s head of product. That’s because the company also provides marketing automation tools, allowing organizations to, for example, send an automatic email to students and the instructor if their class is at risk of being canceled due to low enrollment.
The idea, James says, is to incentivize the students and instructor to spread the word about the class by providing them with ways to act from the email — and it works.
“The No. 1 thing that we hear from all of our customers across the board is that they’re incredibly busy, they’re short-staffed, and they have no time to learn about marketing and to really invest in that arm of their organization, which is really important for their people, their continued success and growth,” says James.
All of this serves the startup’s mission of streamlining access to education.
“Everybody thinks of education as colleges, high schools, universities, elementary schools, but there is two times more enrollment happening outside of those institutions,” James says. “And that’s because adults take classes and learn things all their lives, and we forget about that. So that to me represents a massive opportunity.”
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