Steve Shapiro, CEO & Founder "Miracle-Working CEO"

Invest Alongside Boston's Top Angels in Our Syndicates: Our Investment Syndicates Page

Building a business in education is hard but Steve Shapiro has beaten the odds several times. His latest accomplishment is as CEO of FineTune Learning which is set to grade essays from 3.6 million students taking the CollegeBoard's AP Exams starting in July of 2019. Founded by brilliant Maine educator Ogden Morse, FineTune Learning is a platform using software to facilitate human grading of essays at scale.

An awesome interview with an outstanding and captivating entrepreneur.

Highlights of the interview:

• Ogden Morse’s inspired approach made possible the use of software to evaluate answers by students to open response questions.
• The first product, Literature Companion, got local traction in Maine. However, selling district by district proved daunting.
• Steve Shapiro opted to go after large businesses that already had established relationships with schools.
• The danger to Steve’s strategy is that large players can string startups along and not do any business.
• Ogden, an AP teacher heavily involved in grading the exam, teed up this process for Steve by initiating the conversation with the CollegeBoard, which happened to be the ideal partner for FineTune.
• The challenge is aligning the standards of the tens of thousands of teachers who grade the AP Exam.
• CollegeBoard is a leader in developing technology for assessing critical thinking skills; FineTune’s approach was a natural fit.
• Phase I supports teachers in preparing student for the summative exam which will happen in May 2020. The platform will be used formatively throughout the year and will likely result in students being better prepared for the exam. Helping teachers assess the progress of individual students and of the class as a whole and to remedy weak spots.
• Phase II will be scoring the exam, a massive production. 5,000,000 exams are taken in early may and need to be graded by mid-June. Challenges: (1) how do we know the exams are being scored reliably and (2) how can the scoring be reported in a coherent way to the test takers.
• Sal was surprised that FineTune is also in the classroom helping teachers assess learning.
• FineTune also has a teacher development portal with short videos from master teachers on how they teach each particular topic. Its competency based and allows teachers to earn credit for professional accreditation.
• FineTune’s pedagogical approach will be used in all 36 AP Exams including the exam in calculus
• FineTune is collaborating with a small educational publisher to deploy its platform in support of teachers in the classroom outside the context of the AP Exam.
• Steve Shapiro is not big on the “individualized student journey”; like most educators he believes there’s more value in helping students learn in collaboration with their peers.
• Tech world is fascinated with individualized learning; educators are not.
• Rubrics are a set of expectations for student learning; FineTune has pioneered the digital rubrics to empower educators to be more effective at teaching. This also empowers students to understand what is expected.
• CFA Exam and the Bar Exam are on Steve’s prospect lists.
• Sal asks for your review of the podcast.
• The future of FineTune, AI enhancement of the human workflow in education.
• FineTune is integrating existing AI resources to automate the more mundane aspects of evaluation open responses to questions.
• Steve thinks the winner is this space will be taking a hybrid approach; using AI where it can help and having humans do the more subtle aspects of the assessment.
• Example: AI can now discern if there are supporting arguments for a position but will likely always struggle to understand the voice of the writer.
• Estimates indicate that FineTune’s platform can save teachers 40 to 50% of the time they spend correcting essays. This means teachers can assign more essays. It’s a force multiplier for teachers.
• Finding your calling: as a high schooler, Steve worked at a local delicatessen that made all its food from scratch and he was captivated by the idea of running a restaurant. One of his father’s students had gone on to the hotel school at Cornell. Steve and his dad went up to Cornell and visited and he loved the hotel school.
• In the early 1980s when Steve went to the Hotel School at Cornell, entrepreneurship was not yet cool, but there was a strong entrepreneurial spirit in the hotel program.
• In those days, people coming out of an Ivy League school looked for safe careers in large companies, startups were not an option for most graduates.
• A required summer internship exposed Steve to the risks of the restaurant business and dissuaded him from that career path as an owner.
• Working in the hospitality industry instilled in Steve the importance of pleasing your customer; it now informs his approach to product management.
• Working at a large bank as a credit analyst after business school convinced Steve that banking was not for him.
• While on a hiatus from graduate school at Harvard, Steve’s wife was working for a company that taught brought in foreign students to Boston. She convinced him he could start a similar business an be really good at it with his background in hospitality.
• This idea became American Learning, Steve’s most successful venture.
• Steve emphasizes that a lot of his success was due to lucky timing; he caught the start of a wave of foreign students wanting to come to the US to study. Good timing is everything in business.
• Focused on four-week stays and for students mostly from Japan. Had so much business they could almost not accommodate all the students who wanted to come.
• Being at the right place at the right time with the right skills led to a big success.
• Two-sided market: American kids teaching English to Japanese kids created an inter-cultural experience for local youth while serving foreign students.
• American Learning generated an unexpected benefit of wonderful good-will between Americans and Japanese people, frequently bypassing negative media stereotypes.
• Loads of positive unexpected benefits from intentional decisions that achieved their aim and got an additional unplanned bonus. Social impact imperative.
• Next business was tutoring for kids in poor neighborhoods. Provided parents with formation to help parents navigate the school system for the benefit of their kids.
• Third business was a workforce training. Helping blue-collar workers to transition to white-collar jobs.
• Cornell’s hotel wine courses and beer courses; highly popular electives!
• Steve’s best job ever was being a teaching assistant to a multi-hundred student wine course. Had to manage wine sampling and (boo-hoo) deal with the left-overs!
• Steve also learned computer programming, accounting and a bunch of other practical disciplines at the Hotel School.
• Steve is a big believer in bootstrapping your business and raising money only if you really must.
• He mentioned “The Millionaire Next Door” by Thomas J. Stanley as providing the surest way to wealth.
• Steve is a member of Launchpad Venture Group (a leading angel group in Boston) and Red Bear Angels (Cornell’s angel group).
• Involved in LearnLaunch, America’s premier ed-tech accelerator in Boston.
• Steve is also a fan of “Never Eat Alone” by Keith Ferrazzi, the best book on business networking.
• If you get in the habit of helping others amazing things come back to you.
• Steve’s advice to first-time founders: really bone up on the competitive landscape to understand what your unique advantage your business can offer customers. He sees a lot of pitches in which not enough attention is given to the competitive matrix.
• Watch the Bill Gross video on startup success.
• Be sure to go into entrepreneurship for the right reasons; job avoidance is not a good reason.
• Bootstrap as much as you can; it’s easier than ever to do that. Once you have real data on your business investors will be chasing you.