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Chegg CEO Dan Rosensweig: We’re Not Disrupting Education, We’re Aligning It

Disruption starts with a customer problem or need – one that large companies within an industry have ignored, were too slow to address, or missed altogether because they weren’t paying attention to their customers.

When disruptors displace traditional industry monoliths, they raise the bar for other companies and become our new normal. Facebook, for example, has disrupted how we socialize. Netflix, how we watch TV. Uber, how we get around. And so on. It’s hard to imagine going back to the “old way” now.

But should we really describe this as “disruption” when it feels more like progress? Dan Rosensweig, CEO of the fast-growing and successful education company Chegg, doesn’t think so.

“People have said, ‘You guys are disrupting education.’ We don’t think we’re disrupting it. We think we’re aligning it with where it needs to be and where it should be,” says Rosensweig on the Outside In podcast. “We’re trying to realign the way students learn with the way they do everything else in their life.”

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Well-known in Silicon Valley, Rosensweig, the former Chief Operating Officer at Yahoo and CEO of Guitar Hero, believes technology is key to that realignment. “The education institutions and the system have not been built for the modern day student. It doesn’t seem to be adjusting at the speed in which technology would allow it. But, more importantly, in which students really require it.”

If you’ve never heard of Chegg, just ask any U.S. high school or college student – they’ll tell you about it. The publicly-traded company began as an online portal for renting textbooks. It has evolved into a purely digital destination where millions of students go to get on-demand study help, prepare for tests like the SATs, learn more about colleges, apply for internships, and more.

Chegg’s primary goal is ambitious: to help students learn more in less time and at a lower cost. As the cost of tuition, fees, room, and board at colleges and universities continues to rise, outpacing inflation, that’s more important now than ever. Today, 44 million Americans owe more than $1.45 trillion in student loan debt. To put that in perspective, that’s more than the new, all-time high of just over $1 trillion that all Americans owe to their credit card companies.

Rosensweig believes that some of the costs of education, like the marked-up price of textbooks, aren’t always for students’ benefit, but are instead designed to make money off of students. “What we’re trying to do is say, ‘These things are nuts. They don’t benefit the learner. They don’t benefit the student. How do we cut through these things and build a company that does?’”

So far, it seems the company is finding success in doing just that. Fresh off a successful Q3 2017, Rosensweig says Chegg’s growth is outpacing expectations. Subscription revenue alone – which includes services like test prep and on-demand tutoring – has grown from $25 million in 2012 to what he expects will be more than $180 million by the end of the year.

Part of that growth strategy is investing in new channels and tech that make it easier for kids to learn. Last year, Chegg acquired Imagine Easy, a company that helps students improve their writing skills. And, most recently, Chegg acquired the German-based developer of Math 42, an AI-assisted app that helps students learn and understand math in a personalized and adaptive way.

The other part of the strategy is building a student-first culture. “One of the great things about serving students is that you have to build a culture that mirrors who they are. You can’t have one that is artificial. You have to be authentic,” he says.

That starts by listening. Chegg consults an online panel of thousands of students, to get their thoughts on everything from politics to Chegg products. Everything is A/B tested with students before launch to, as Rosensweig says, “make sure that we never go live with something that doesn’t meet the quality and the needs of the student.” The company has even built an artificial dorm room in its office, complete with a one-way mirror, so employees can replicate and observe the typical on-campus experience.

Perhaps the best way Chegg listens to students is by giving them the opportunity to create the company they want to Chegg to be. Every summer, thousands of students apply to the Chegg internship program. The company accepts 30 of them – all from diverse backgrounds. Their first assignment is to review a Chegg product and answer three questions about it: “What did you love? What sucks? What would make this product better?” Rosensweig has their answers sent directly to him; at the end of the summer, the company reports back to the interns to show them how their feedback was addressed and implemented.

Rosensweig is passionate about “realigning” education. The barriers, he acknowledges, are many, but he’s up for the challenge. Because nothing could be more worthwhile.

“The culture that we’ve been able to build is a result of who we’re serving. So, we are a mission-driven company. We want to improve the outcomes of these kids’ lives,” says Rosensweig.

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