November 10, 2022

“A Hammer in Search of a Nail” – Interview with Avela Founder and CEO Greg Bybee

Avela offers a complete student application and enrollment solution for education providers, including PK-12 schools, districts, and CMOs. Avela Enroll empowers administrators to drive enrollment, streamline operations, support families, and promote equity using research-proven approaches.

“A hammer in search of a nail.” That’s how Co-Founder/CEO Greg Bybee describes the early days at what is now Avela. The economic scholarship of co-founders Parag Pathak and Josh Angrist had exciting implications for fairly allocating resources and each had earned prestigious awards in economics—Parag, the John Bates Clark Medal, and Josh, the Nobel Prize in Economics. Greg, Parag, and Josh knew they could help social impact organizations make more equitable decisions in a “data-driven, repeatable, and algorithmic way,” but where was that help most pressingly needed?

The journey to find product-market fit would be a test of Greg and his team’s hard work and humility. Avela’s founders were confident in their IP, but they were also rigorous and deliberate as they sought out a customer with the deepest pain around equitable decision making.

Greg began by quickly testing dozens of markets. “We built a spreadsheet of hundreds of different matching markets: K-12 education, higher education, medicine, military, government permitting, civil service. We considered HR and enterprise hiring, talent mobility, and consulting placements. We looked at volunteer staffing. We even looked at missionaries,” explains Greg. He and his team started making calls and sending cold emails across dozens of verticals.

“We were selling a slide deck,” Greg jokes. As they iterated on those early mockups and returned to potential clients with a new pitch, Avela’s founders were clearheaded about those early leads’ interest. Greg and his team resisted the temptation to oversell even though they were confident in the potential for their IP. They weren’t married to solving one problem either. Staying curious and humble, listening for the strongest market pull, would eventually pay dividends.

Increasingly, they were sensing an enthusiasm from K-12 administrators, who were eager to sign up even before Avela had built the final product. “What better evidence of product-market fit is there, then someone that’s willing to pay for something that we haven’t built yet,” Greg says with a grin. Schools needed this solution “so badly that they were going to take that risk.”

What started as matchmaking software quickly evolved. “A lot of entrepreneurial guidance starts with having empathy for the user, understanding their pain points. Often the founder is that user,” Greg continues, “That’s why they built that product.” Avela, on the other hand, started with the technology and had to get to know its user. School budgets were shrinking because districts struggled to fill seats effectively. Avela could turn around declining enrollment, but school administrators were facing a host of problems on top of matching students to the right school: so many manual processes, approvals, verifications, and eligibility requirements. Avela could help there too.

Of course, there are stiff headwinds for venture-backed startups selling to the education market—could Avela deliver outsized returns with a client base notorious for red tape and slow-moving RFP processes? Would school boards that meet so infrequently be too slow to adopt? How would Avela learn, adapt, and grow quickly when school placement only happens once a year? How would they price their product when there’s an expectation not to charge social or public sectors the most the market will bear? An extremely motivated customer didn’t hurt.

K-12 administrators, in fact, were so eager to adopt Avela’s suite, they showed Greg how to navigate all of the red tape. “In some cases we actually sell to another organization, the so-called quarterback or harbormaster,” Greg explains, “Avela is the school finder and soon-to-be the common application system for all of Newark’s charter schools, but the Newark school district is not our customer.” Instead, Avela works with the New Jersey Children’s Foundation, one of many nonprofits that work alongside the school district. NJCF could move faster and didn’t have as convoluted an RFP process as the district.

The same thing happened in New Orleans, where Agenda for Children is the lead agency and purchaser. The rigorous work Avela had done to understand its customers paid off in other ways too. School districts guided Avela around obstacles. In turn, Avela stayed flexible. A district might suggest a smaller subscription to duck under an RFP limit. “You’ve got to be pretty flexible working with clients to understand their budget,” Greg explains. In one case, a client was willing to pay more up front to use earmarked funds if Avela could reduce the annual cost, which made it easier to fit Avela into their budgets. Having a desirable product, building close relationships with customers, and staying flexible made closing deals that much easier. What’s more remarkable: Avela never gave away their product. All of their customers are paying and they don’t offer a free trial.

If Avela could solve administrators’ application and enrollment headaches, Greg ventured, maybe they could help parents and families on the other side of the equation. Now, Avela offers a suite of products which streamline the application, placement, and enrollment process for districts and families. With contracts in seven major cities, Avela is cash flow positive, an early goal for Greg and Avela.

“From the very beginning, we focused on getting revenue,” explains Greg. Avela has a billion dollar idea—a one-stop-shop for all application possibilities from daycare to scholarships and everything in between. Yet, Greg has his feet firmly on the ground and his hands on the hard work of growing the business. His advice to other founders? “Focus on the metrics that drive the success of your business rather than vanity metrics like how much you’ve raised or the size of your company.” Greg admits staying grounded and moving deliberately may be “a little less sexy,” but it’s also what will steward Avela through challenging economic times.

Avela is already improving how districts and families interact in New Orleans, Newark, Seattle, Oakland, Philadelphia, Hartford, and Chicago, making the enrollment process simpler and more equitable for its users.

Key Takeaways

  • Greg and Avela worked rigorously and deliberately to find product-market fit.
  • “Land and expand.” Greg and Avela used the school finder tool in their suite to secure revenue and start building relationships with districts. Expanding afterwards was less difficult.

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