200 points on the SAT can make the difference between attending Harvard University and a small hometown college. 

And families are notorious for spending thousands of dollars on tutors and test prep courses to help get their kids into those Ivy League schools. 
Tom Rose wants to help, but he also wants to make test prep as effective and affordable for people of any economic background. 

The Durham-based CEO of Boston-based Testive in October added local investors Cofounders CapitalTriangle Angel PartnersDuke Angel Network and Duke Innovation Fund to an effort to raise $5 million over the next year-and-a-half to help improve college entrance test scores and level the playing field for all college-bound students. The local investors are among 93 angel funds and investors who’ve put $3.35 million into the company since 2011. 
Testive employs 25 people in Boston with plans to add 15 people in coming months, some of whom could work in Durham.

A platform unique for its algorithms and humans

What makes Testive unique from traditional test preparation courses and tutors is its combination of human coaches and computer-based training based on algorithms Rose developed at MIT to improve learning speed. 
“It keeps students focused on content that is exactly the right difficulty level for them and in the right subject matter,” says Rose. 

He compares it to lifting weights at the gym. “If the material is too easy, people get bored and disengage. If it’s too hard, people become frustrated and disengage,” he says. 

His algorithm makes sure students stay in the sweet spot of engagement and learning. There, he can mine data about each learning session to deliver to coaches certain insights—like concepts or subjects students move past quickly and others that seem to take longer to understand. Coaches also know how frequently test prep is happening and whether to congratulate on hard work or encourage them to work harder. 
So far, Testive is proving successful. 600 students have paid for the training in the last two years and they’ve improved their scores by an average 142 points, nearly three times the average increase three months of test prep typically provides according to a study by the National Association of College Admissions Counselors. 
And attrition rates are less than 5 percent. To Rose, that means the algorithm is working.
“We’re able to create an environment where you don’t quit,” he says. Testive also offers its training software and practice tests free so anyone can take advantage of the platform regardless of their ability to pay. 10 times as many students are using the free platform as the paid version, Rose says. Their score increases just aren’t has high. 

Improving test prep outcomes

Rose earned his bachelor’s degree from Duke University and worked at the Pratt School of Engineering for three years while his wife was in medical school at Duke. They moved to Boston when she was matched with a residency at a teaching hospital of Harvard Medical School. 
Conveniently enough, he was accepted into the MBA program at MIT’s Sloan School of Management, where he could dive into an idea formulated after several years as an instructor for a GMAT test preparation company called ManhattanPrep. 
As a high-priced tutor, costing a student $500 per session, much of his work was repetitive for each student, going over simple concepts that could easily be explained in a video or graphic. The high-value part of the session was the time he spent motivating and holding students accountable to the work. 
He also saw a huge market—1.6 million unique students take the ACT each year and 1.4 million the SAT. And more students are taking the tests multiple times to improve their scores. Also lucrative, is preparation for MCAT, GRE, GMAT and LSAT and even Advanced Placement exam training (future training opportunities for Testive). 
Work on Testive began when he met his co-founder, MIT lecturer Miro Kazakoff, and began intwining his knowledge of test prep with research of learning behaviors. They were accepted into TechStars Boston in 2012 and raised the first $500,000 soon after. But it took a couple years to launch the product. 
It took time to build a platform that could both train students and predict the score they’d earn if they took the test at a given moment, a helpful measure in showing improvement and motivating students. It also had to collect data and make sense of it for coaches, so they’d know when to congratulate a student on a promising streak or improved scores. 
They also had to create and curate curriculum (some comes from free sites like Khan Academy, others are licensed) and to bring on coaches to interact with students via virtual meetings on Skype or Google Hangout. Coaches are typically graduate students who work about 10 hours a week with 20 students for monthly pay of about $1,600. Today, there are 25. 

Becoming a remote CEO

Rose moved back to Durham in 2013 when his wife got a job as an oncologist at UNC. He quickly started networking in the region, bringing in serial entrepreneur David Gardner and RTP Capital as investors in January 2014. That funding helped the company begin some digital marketing activities. It also came with valuable advice, Rose says.

According to Gardner, Testive is right up his alley because like many of his investments, “it’s about creating practical value and measurable results.” Results are demonstrable, or the student gets his or her money back.

Rose also set up shop at American Underground, eventually taking his own office so he could live stream between the Boston headquarters during work hours. Rose believes his remote office fits with the company’s mission of providing virtual learning and coaching that’s equal to in-person offerings—he meets regularly with investors, his board of directors and management team virtually and admits he’s had a productivity boost in the last two years out of the office. 
“Management should be done in bursts. You shouldn’t feel watched all the time,” he says. “The team is highly creative and creative people are motivated better with autonomy.” 
Gardner admits he was skeptical that a company could be successful with its CEO 700 miles away but Rose has made it work with constant communication, two-day trips to Boston every two weeks and a solid team. 

Outweighing even that for Gardner, is his experience. “Tom is a subject matter expert,” he says. “He really understands test taking and test taking methodology.”  

Targeting enterprise education

When it came time for Testive to raise additional funds, Gardner committed his new Cofounders Capital fund, and got Triangle Angel Partners involved. The Duke Angel Network was a connection through Rose himself. It pools Duke alumni to invest in startups founded by other Duke students and alumni, and the Duke Innovation Fund typically matches a portion of the investment.
Sales are accelerating as students sign up on the platform and pay the $300-400 per month fees. Testive also licenses its algorithms to a large test prep company. 

And Gardner is helping Rose explore enterprise opportunities. The men are exploring partnerships with schools—Testive could provide training for free and have schools pay for the coaching services or the software coaches use. Gardner recently presented Rose with a spreadsheet of potential B2B partners—the result of his own research. 
“I think virtual schools and management companies for underperforming school systems will want to partner,” Gardner says. “B2B can move the needle exponentially.”

Rose is on board. It only helps him achieve a goal of reaching more students.

“Teachers can be higher-levered if they run a class using Testive software,” he says. “It can dramatically improve students score performance.”