Entrepreneurs Jake Neuberg, M.B.A. ‘02 and Ramit Varma, M.B.A. ‘02 met as classmates at the UCLA Anderson School of Management. The future business partners shared a passion for education, a desire to create positive change and a willingness to take chances to achieve their goals. After graduation they co-founded Revolution Prep, a tutoring and test-preparation company. Deciding to start a business in a field already dominated by well-established competitors was not without risks. Neuberg says, “You can make an argument that going head-to-head with well-funded, publicly traded companies was an example of what not to do. We couldn’t beat them at their own game, but we asked how we could be more innovative to better serve the customer.”

When they graduated from UCLA in 2002, email use wasn’t yet the norm, e-learning was a new concept and fewer than 10 percent of American households had high speed internet access. In class they discussed the timeline for the rollout of broadband technology. Neuberg and Varma agreed that widespread home broadband was inevitable, and built a business that was poised to capitalize on the technology to transform the industry.

Innovation requires experimentation, and the partners have experienced their share of missteps along the path to success. Varma says, “We’ll try 10 new things, keep doing the one that works and stop doing the 9 that don’t, then we try 10 more. If you’re right once, and you’re okay with failing the rest, then you’re making progress.” Now with 14 years of experience helping students excel in school and on tests, and as the leading national provider of online tutoring for students in middle and high school, they continue to push the envelope.

When they met at UCLA, Neuberg and Varma built a friendship based on mutual respect. Neuberg had worked in finance after studying economics at UC Berkeley. He left his job in finance and, without a concrete plan, tutored to pay the bills, something he’d done on and off since high school. Varma had studied electrical engineering at the University of Maryland, worked as a tutor and went to work for a bank after graduation. He came to Los Angeles for graduate school, but planned to return to New York and banking. At UCLA, plans changed, he says, “Through the exploration in business school I got excited about the idea of being an entrepreneur and creating something with real value.”

While building Revolution Prep, the partners were guided by what they had learned at UCLA. Varma says, “We sketched out what our business could look like, and our long term vision.” Neuberg agrees, “We really liked learning and we wanted to help students to like school and not be afraid to take on challenges.” Neuberg and Varma credit UCLA’s core programs in accounting, finance, and marketing with giving them a well-rounded foundation. In particular, Professor Emeritus Eric Flamholtz’s book “Growing Pains” helped them understand how to build their business structure. Their ideas about entrepreneurship and venture initiation were influenced by the work of Senior Associate Dean and Professor Alfred E. Osborne, Jr.

Growth mindset, an idea from Carol Dweck’s research at Stanford, also made a big impression. Dweck’s book, “Mindset: The New Psychology of Success” explains how a person’s beliefs about their intelligence influences how they learn. A person with a “fixed mindset” believes their intelligence can’t change and hesitates to try things if they think they may fail. Varma explains, “You see it with a student who’s afraid to start an essay, or a math problem. There’s a fear to fail at even the little things.” In contrast, a person with a “growth mindset” sees failure not as display of weakness, but as an opportunity for growth.

Neuberg says, “The ugly underbelly of innovation is failure. Many of the things you try to do differently are wrong, and you have to be OK with that. It’s growth mindset, just go for it.” All Revolution Prep employees, from tutors to accounting, read “Mindset.” Tutors are trained to help students develop a growth mindset.

The pair says a growth mindset can be encouraged in students early on by focusing on the basics: reading for pleasure, both fiction and nonfiction; doing well in math, since math concepts build on each other from year to year; and developing good study habits, critical thinking and passion for learning. Establishing these habits will help kids improve their grades and lead to a better school experience.

As Revolution Prep grew from two guys working from an apartment, to multiple offices employing more than 200 full-time employees, the pair followed the development of in-home broadband. About four years ago they decided that, in addition to traditional tutoring, the time was right to begin to implement online tutoring and test preparation sessions, either one-on-one or in groups. Tutors and students connect via webcams on a Skype-like platform with a shared whiteboard which they can both access.

As Neuberg explains, “It’s still face to face, it’s engaging. Our data shows it can be even more engaging than someone coming to your home.” Connecting via technology means tutors are not limited by geography, and are able to work with students anywhere. Neuberg and Varma believe this lets them hire the best tutors full-time, and give them more training. Students have adapted easily to the online learning environment, and while some parents have been reluctant, the partners say they are quickly swayed by the benefits, including less time spent in the car.

Neuberg and Varma believe technology will help them fulfill their mission to create high quality products which they can offer at lower prices. While they will continue to provide expensive specialty programs to those who can afford them, they also want to serve those who can’t. Revolution Prep is committed to not turning students away due to financial need. Neuberg says, “Part of our culture is asking ourselves how we can make products affordable for families.”

Revolution Prep’s innovative use of technology resulted in rapid growth, the company is growing yearly at over 50 percent. This means the pair is always looking for talented, enthusiastic employees. They say, “We’re always hiring, looking for tutors who are passionate about teaching, and we’re also looking for people in sales all over the country.”

Once or twice a year Neuberg and Varma return to UCLA to share their stories with current Anderson School students. This spring they were keynote speakers at CrEAte, a UCLA entrepreneurship conference. Varma says, “In business school they teach that you shouldn’t have 50/50 partners because you could have total gridlock, but we believe it’s one of our strengths. It makes us stay engaged until we come to a resolution we’re both happy with.” Neuberg sums it up, “People love to hear our stories of pain and suffering because they know it’s going to turn out well, but when you’re going through it, you don’t know that. We’re optimists who are OK with rejection.”

Their advice to UCLA students thinking about becoming entrepreneurs is to decide how comfortable they are with change. Varma says, “Growing a business can be really cool if you’re suited to it, it can be a complete, miserable disaster if you’re not. It’s not for everyone. Ultimately, we see ourselves as fortunate that we get to help kids go from “I’m not smart” to “I can do this stuff.”