LA Business Podcast

44. Neal Taparia, Co-Founder Of SOTA Partners

Neal Taparia
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Neal Taparia talks about his involvement with Chegg, and his early years as an entrepreneur.

Intro: [00:00:00] Welcome to the LA Business Podcast, a forum for business owners and senior executives to share the experiences about the elements that drive their success. Your host is Robert Brill, CEO of Brillmedia.co an Inc 500 company. Delivering the power of hyper-local advertising. Robert writes for Forbes, Inc. and ad trade publications.

Our goal is to bring you the stories about successes and failures of people who are making big things happen in marketing, entrepreneurship, and management.

Robert Brill: [00:00:36] So Chegg that’s very familiar. Like I feel like I’ve. Chegg  I’ve, I’ve heard of Chegg. I don’t know how or when

Neil Taparia: [00:00:45] They are a company on the Bay area.  And they started maybe 10 years ago, more than that doing textbook rentals. If you remember, as a college students thing for textbooks. So that’s how they started their business. They did textbook rentals and they ended up becoming pretty popular among students because they saved you so much money.

Robert Brill: [00:01:09] Yes, there was like a efallit, is that a thing?

Neil Taparia: [00:01:14] That is, I think that’s a online program to find digital books, like fall it, big information library company.

Robert Brill: [00:01:26] So I think we’re going to record this thing, warts and all, and before we go too far into the conversation, you know, our guest today is Neal Taparia am I pronouncing that, right?

Neil Taparia: [00:01:37] Yeah. It’s good enough.

Robert Brill: [00:01:39] Well, what’s the right way.

Neil Taparia: [00:01:41] Tap-a-ria.

Robert Brill: [00:01:42] There we go. Okay. Neil Taparia entrepreneur, and investor advisor. Currently the co founder of SOTA partners. S-O-T-A.

Neil Taparia: [00:01:53] Yeah.

Robert Brill: [00:01:54] Forbes contributor. Tell us about your involvement with, with Chegg.

Neil Taparia: [00:02:02] Sure. So I had built a company called Imagine Easy Solutions that I actually started as a high school student.

And it was started off the premise of bibliographies. Do you remember doing that back in the day when you were a student

Robert Brill: [00:02:18] Bibliography? So like citing sources.

Neil Taparia: [00:02:21] Yes. Exactly. So you might remember it, it can be a total pain in the ass. There’s all these rules and you have to follow all these structures to properly cite that information.

So back in 2001, these were like the AOL days, my buddy and I created software that just automated that whole process. So you can put in a book or website, we’d find ways to get that information. And we built these algorithms to then structure it. And create citations. So a process that could take one to two hours, we boil it down to 5 to 10 minutes.

So it was pretty game changing back then. And we call the product Easy Bib, but it was in bibliographies.

Robert Brill: [00:03:04] That’s amazing. When, was that a thing? Uh, It missed me. I grew up, well, not really. I graduated in O4. I could have totally used that. And I just didn’t know about it.

Neil Taparia: [00:03:16] Yeah. Well, these, I guess were the earlier days relatively speaking of the internet. So catching wind of these products was took a little bit more time back then than it does now, but easily to have ended up becoming a pretty ubiquitous. Product and my friend and I built a company around it from 2008 to 2016, where we ended up with a portfolio of educational products that helps with writing.

So that included citations, but I spend to grammar and plagiarism checking and research and note taking. And ultimately we are reaching about 30 million students annually. So it was a pretty large education technology platform. And we grew it to about 20 million in revenue without taking on financing.

So it was a pretty interesting journey just to take something that we conceived as high school students and grew into substantial business. And Chegg, they were undergoing a digital transformation from a textbook rental company to a company that was digital first helping students. So we were a natural fit within their company.

And that is my LinkedIn shag because we sold the business to Chegg. And I was an executive there for about three years.

Robert Brill: [00:04:31] That’s that’s amazing. So what do you think, what do you think was your, was your key like growth driver with Imagined Easy Solutions?

Neil Taparia: [00:04:46] So I think there were a few things there. One is, you know, we had created a product that we want ourselves. We were the end user for the product. So we were really focused on how do you create this extremely easy and seamless experience? That’s why we named our umbrella company Imagine Easy Solutions and we named the product Easy Bis. So students always want shortcuts.

They want things easy. So we’re just laser focused on making a product where a student would use it and say, Oh my God, this is. So simple, so easy to use. I have to use it, but what we found accidentally is that when you just create a good product experience, people want to tell other people about it. So we were lucky to hit product market fit because we had this vision, that’s all their own problem.

And when we did that, we just foundthat a lot of people organically started talking about the product. We also found that,teachers were super influencers for us in two ways. One is when teachers adopted the product and liked it, they would tell their whole classroom about it. So you educate one teacher about it.

They would tell 20 of their students about it. They would also tell fellow teachers and librarians about it. So you kind of created a network effect that way. But the other interesting thing that happened was teachers always have websites with resource pages. And they would end up linking back to easy them.

And every time that happened, it would improve our SEO and our search engine results. And that was extremely helpful too, to get discovered in search engines. So I think all of those forces combined helped us really grow Easy Bib.

Robert Brill: [00:06:35] Play in the network effect.

Neil Taparia: [00:06:37] Exactly.

Robert Brill: [00:06:39] No marketing, no like concerted, what was there a marketing effort of any, type other than like a focus on SEO?

Neil Taparia: [00:06:49] So there was, I mean, we spent a lot of time thinking about how do you create relationships with teachers? So we would bring a lot of teachers in the full to host webinars to put out informational pieces where teachers, want to come to our website, use our resources, learn about our brand, learn about our products and then share that in the classroom.

So that was a form of content and thought leadership marketing. That was really helpful. And we emailed, god knows how many teachers and educators thousands. Regularly in fact, early on when I was just a high school student, I would just email teachers every day, come home from school. And one day I got called into the principal’s office because the teacher thought and complained that I was sending viruses around.

Which was just not the case. And if anything, it just taught me that I need to double down on the effort because I was actually reaching teachers and they were reading my emails. So that was the driver for us.

Robert Brill: [00:07:50] What’s interesting to me, Neil, is that like, and I, this, I, I can’t go into details about it, but, but, but what I can say is that what I’ve found is that when people, when people identify a thing that works too well, they often think you’re actually doing something that is nefarious.

Neil Taparia: [00:08:12] Sure.

Robert Brill: [00:08:14] It’s really interesting. Like literally see, this is an experience that is, has been proud. Like I can, I can, I can name you numerous circumstances where it’s like, no, this thing, there’s just words. And then the platform blocks it. Like I remember being on Reddit. I love, I think Reddit is a fantastic platform.

I was like, all right, I’m going to do things to grow my. Grow attention on Reddit until these like really over-aggressive moderators are like, no, you can’t do it. Even though it’s completely within the rules of the moderate of, of the board. Like I had a food blog and I was like, I’ll post food photos all day.

It’s like original content. I think it’s fascinating how there are haters, there’s so many haters. In so many plates.

Neil Taparia: [00:09:02] Yeah. You know,  with Easy Bib we had a lot of teachers initially having an allergic reaction to the product. So they thought this was a way of circumventing, how people should be writing citations and bibliographies.

But the truth was it was saving students time and it actually encouraged them to cite more. Which reduces plagiarism because you’re actually referencing everything it used in your paper when you’re in two hours during that students nationally say, well, maybe, okay. I just want to cite these sources because I’m too lazy.

That’s how students think. So it took almost 10 years for teachers to realize this does a lot of good for students and we should embrace the product. So we had this huge runway to grow because teachers actually came to the conclusion that this was a good product and a good educational product that they should use in their classrooms.

Robert Brill: [00:09:56] Yeah. I mean, it’s like, you know, it’s like with every advent of new technology, it’s like, do you, are you interested in the sadistic work of doing tedious and monotonous stuff because it’s tedious and monotonous and you have to do it as a kid, or are you actually interested in the end goal of like fighting sources.

Neil Taparia: [00:10:17] Yeah. You know, I think the lesson is, if you have that vision, you have to stick with it and there’s always going to be resisters, but over time, if it’s a good vision, you know, people will adopt it and, and see the value that it brings to the table.

Robert Brill: [00:10:36] So, um, so you were at Chegg for a couple of years, for three years. And you continued their growth with integration of your, of your business. How, how was that experience going to a, another company, the acquiring company? I don’t have any experience with that and I’ve heard actually some really interesting, good things about those experiences. Like tell, tell us about like, How you found that experience when doing the acquiring company.

Neil Taparia: [00:11:02] So it is a very different experience, you know, running a scrappy, bootstrapped company. So we had grown our team to about 60 people in size. And you know, when we joined Chegg, it was a company well over a thousand people. So it was really interesting to go through that transition. We were lucky because the leadership team there trusted us a lot and gave us a lot of responsibility.

But at first, when we joined, it was really rocky, especially from a cultural point of view because. We had all these people that we hired personally, who wanted to work for us. And they had no idea who Chegg was. They weren’t really necessarily behind their mission. They did not sign up to their job to work for Chegg.

So we had a lot of people who just lost their motivation when we joined Chegg and it took six months to 12 years to recover, create a positive culture. It was something that was important to us. So that was a process of having a lot of people. I’m having tough conversations with people asking them, is this still the right place for them to be, but also, bringing in new blood that really liked shag what we were doing at Chegg as a business unit.

And over time, we were able to change that culture around. I would say to Chegg, made me a much better operator. You know, it made me really think about how to focus my business and our business resources on what’s really big enough to matter. You know, you could be doing a thousand things at once, but only a handful of those things will really move the needle on the business.

And it also taught me how to be much more numbers and metrics driven. So to give you an example, you know, we had daily forecasts on our business, so we knew where revenue should, where should be landing daily. And we built some sophisticated models around that. And I thought it was onerous at first, but what it teaches you is that if you are above plan or below plan, you start asking why and you start going to the drivers of that.

And so if you’re below plan, you know, you see different KPIs that might not be meeting your expectations. And you’re first to understand it and come up with contingency plans. So a lot of that taught me to be a much better operator, which helps me to this day.

Robert Brill: [00:13:23] The measurement of something, just drawing a light, basically just like at the very, in a very simplistic explanation, right.

Drawing a line in the sand and say, we expect to do X don’t do X, Y Y. Why is that happening? What are the factors at play?

Neil Taparia: [00:13:40] Yeah, at Chegg, they would always push you to dream big. That was one of their values. So they would say, set a goal, which they would call the Bhag. It’s a big, hairy ass goal. And that was a goal that just seemed hard to accomplish, but the whole idea was, so if you set a big goal, then you forced to go through the process of understanding, what does it take to hit that goal?

And you start asking that question. What if we did this? What if we did that? And you start assembling the plan and before you know it, you start building conviction in that plan. And even if you don’t hit that plan, you’re still going to do better. Then where you initially thought you were going to do.

And I had never operated like that. I thought it was crazy at first, but now I look back on that and I think that’s the best way one could possibly think about running a business.

Robert Brill: [00:14:34] How did you build, how did you build culture? Inside Imagine Easy Solutions.

Neil Taparia: [00:14:41] So that culture that we really tried to build a STEM from my experience and my business partner has experienced at our past jobs.

So I had a wall street job at Lehman brothers, and that was a job where you were very much a cog in a factory, and you were expected to do work and go home and work at odd hours. They didn’t really carry your care about you or your work life balance. So for us from the get go, one of our company values was simply, are you happy coming to work?

Because that was something that was obviously not present and investment banking setting, the care for your wellbeing and growth just wasn’t as obviously there. So that was really our North star. When it came to building the culture of our company, everything really would come down to. Are you happy coming to work?

Because if you’re happy, you’re committed to what you’re doing. You like your teammates, you trust them, you hold them accountable, everything stems from that. So that using that as a North star, I think helped us create a really positive work culture at imagine easy, which we then brought to Chegg.

Robert Brill: [00:15:53] So let’s talk about what you’re doing today. Do you pronounce  SOTA

Neil Taparia: [00:15:59] It’s SOTA partners. So my friend and business partner who worked with me at Imagine Easy, he’s a close friend from growing up and we worked well together. We have created this entity where we started investing in companies, but we’re entrepreneurs at heart. So we started launching some companies as well.

So one of the first things that we looked into were automated R&D tax credits, and we didn’t think that was a good business for us to get in to, We also looked into some technology where we could create walking tours for any locality by leveraging data from Wikipedia. But most recently we started focusing on building a classic games that can help with brain training.

And so we have a site it’s called solidtaired and it’s solitaired.com that on the outside is just a solitaired site, but we’re doing a lot yeah. Behind the scenes that can link it to brain training. And we think it’s really interesting because the target markets overlap and there’s a massive opportunity in brain training.

And that has been going really well. You know, we’re getting well over 50,000 games being played a day and we’re seeing really good growth with solitare. And it’s a lot of fun because it’s in the gaming space.

Robert Brill: [00:17:24] So women 25 plus 25 to 54 would like to play games.

Neil Taparia: [00:17:30] Yes. So we get a lot of those users, but even people older than that who want a distraction. They’re looking to play games. You know, we even find in some of our surveys, a lot of people are at work and they just want a five minute distraction or break. Solitaired is a very simple game where you can just distress and relax.

Robert Brill: [00:17:50] How do you incorporate brain training into that process?

Neil Taparia: [00:17:53] So there’s a lot of studies that show that novelty helps with a lot of your spontaneous memory and thinking. So solitary interests, singly has billions of permutations and various degree levels depending on the deck. So it really helps you stay on your feet. If you don’t know you’re going to win a game or not.

So that variability is huge, but more importantly, we are researching how beating your own score or repeating the same sequence to win can help with memory as well. So we have a number of ideas that we’re exploring that linked to some concepts around brain training that we think we could tie back insolitaired.

Robert Brill: [00:18:41] What’s your monitor. So this is, this is, this is a company that you investing in. Yes.

Neil Taparia: [00:18:47] It’s a company. We launched ourselves,

Robert Brill: [00:18:49] You launch it. And how, and what’s the, like, what’s your monetization? Is it advertising or subscription?

Neil Taparia: [00:18:56] So we are experiments. I think with that right now, ads is something that we could definitely do.

And we’re testing that to see the impact, that, and user experience, but our goal. How do you make this a valuable subscription service where it is valuable enough for people want to subscribe?

Robert Brill: [00:19:15] That’s fascinating. So I imagine the implement the development and implementation of this is not particularly expensive.

And would I be right about that?

Neil Taparia: [00:19:27] It’s not incredibly expensive. It’s something that we’ve been able to create where not too much investment. But we are going to have to invest on the brain training side to make sure that everything they are delivers to the promises that we have, and that’s where we’re starting to invest more time and resources.

Robert Brill: [00:19:49] So these other solutions that are, or these other companies, so I’m seeing Impossible Foods. So you’re investing in Impossible Foods?

Neil Taparia: [00:19:56] Yes. So we are lucky to have some opportunities to deal flow, come our way. And when we see something that we think is changing the world and that we like, we’ll opportunistically, write checks from SOTA partners to be involved with.

Robert Brill: [00:20:10] That’s nice.

Neil Taparia: [00:20:11] Yeah, it’s fun.

Robert Brill: [00:20:14] So what’s the ethos for this. It looks like it’s called cultural of like, I dunno, they’re there, you can probably describe it better. Like it there’s definitely seems to be a trend here. Can you talk about like the types of companies again, that you’re investing in?

Neil Taparia: [00:20:29] Yeah. You know, the theme we tend to look at and like are the future of food and education.

So one of the companies we invested in, then it’s a friend’s company it’s called Transfer VR and they’re taking virtual reality and teaching manufacturing skills with it. But their vision is you don’t have to go to community college. You don’t have to go to college anymore. You need specific skills to land a job.

So how can you take someone who just completed high school and put them through VR training, which is scalable and then get them jobs at top manufacturers. And Transfer. VR actually has a partnership now with the state of Alabama and through their training. They’ve placed people like great companies like Lockheed Martin.

Robert Brill: [00:21:18] So, what is your involvement in like Transfer VR? I mean, I imagine you’re much more involved than just writing checks. Is that right? But I don’t, I don’t know much about how, how these situations work.

Neil Taparia: [00:21:31] Yeah. It depends, you know, there’s some, the companies where we’ll write checks and we won’t be too involved, others where we’ve taken advisory roles, you know, with Transfer VR in particular. I advise informally the company through the founders of friend who I believe in. So I’ll oftentimes, you know, chat and brainstorm with him about where his business is going, or if I can help them out in any type of way in via introductions, that’s something I try to be value add with.

Robert Brill: [00:22:01] And when you look at, when you look at companies that you’re investing in, like.

Like, is it, is it the, the leadership? Is it the product? Like, is there one that’s more important than the other? I understand it has to fit within the sort of goals and thesis, your overarching sort of like things that you’re trying to accomplish, but like, how do you make a decision?

Neil Taparia: [00:22:22] Yeah, for me, it really comes down to the entrepreneur.

That’s the most important criteria that you just have to have the grit and willingness to learn, to figure out how to make a business succeed. Chances are your initial idea. Isn’t going to be good enough to succeed, but it’s the entrepreneur behind it who can read the tea leaves and understand what users are saying to properly navigate and iterate on the business to make it something successful and then learn how to scale that. Then of course, you know, you want to hear and see a reasonable idea, but I’ve just found that ideas are a dime a dozen. So you should obviously believe in the idea, but to me, the entrepreneur is, more important than the idea.

Robert Brill: [00:23:11] I mean, you know, the interesting thing to me is that like on my entrepreneurial journey, is that like, There are so many unexpected twists and turns.

And like, I feel like right now over the last two, three months, we’ve turned into this new, this is experience that I’m having. That’s sort of new to me that all of a sudden, a whole new world of opportunities have opened up that I would have imagined exists. I have imagined that they existed five years ago or six years ago.

But it’s, it’s interesting to me that these opportunities now are available and with an arm’s reach.

and it’s interesting because you know, the, the nature of our business, I think, is fundamentally changing today. And it’s very different than where it was a year to a year and a half ago. And. I don’t know, it’s just like an interesting fun experience to be like, Oh, there’s a whole new path available for us and opportunities that didn’t exist a couple years ago.

And you got to have the right team and staff and vision to kind of like capitalize on it. I imagine. So. Yeah.

Neil Taparia: [00:24:27] I’m with you, man makes a hundred percent sense.

Robert Brill: [00:24:31] So what is a, what is Clover Food Lab?

Neil Taparia: [00:24:34] That’s another company we invested in their boss and base a food company. And it’s actually a fast casual and retail operation.

But what we liked about it was the source, all their food locally. So they’re very much geared towards sustainability, but what happens is when you source your food locally, it’s very, very fresh. And very, very tasty and all their food is vegetarian. And when you look at environmental impact of food, being vegetarian actually is positive for the environment.

So I’m not a vegetarian myself, but I do believe reducing meat intake is a good thing for the environment, just because of all the pollution, the whole industry causes. So their goal is how do you make foods so good where you are excited to eat vegetarian food. And on top of that, it’s locally sourced. So we just really liked the thesis and the idea around it.

And they were also getting a lot of good traction in the Boston area, which is an area you wouldn’t necessarily associate with people who love their veggies.

Robert Brill: [00:25:49] Right. Yeah. I’m a foodie and I’m vegetarian food. You’d have to kind of like trick me.

Neil Taparia: [00:25:55] Yeah, exactly. So that is their goal to convince people like yourself to take a second, to look at, you know, vegetarian food.

Robert Brill: [00:26:04] How have the last few months, as the COVID pandemics swept through the United States, How has that experience affected the companies that you’re, that you’re working with? I mean, you know, from, from a food perspective, it’s hard to get people inside, to eat from a VR Technology perspective. I imagine it’s a great time to be in that space, especially when you can inform and educate people and you don’t have to leave your home and you can look silly with VR inside your own room without other people.

Neil Taparia: [00:26:36] Yeah. You hit the nail on its head with the distance learning space. And VR education has gotten a lot of attention as a result of the pandemic.

And I think has led to new business opportunities and renewed momentum for the company. The restaurant business Cloverfield food lab is obviously not doing as well as they were pre pandemic. Like all restaurants. I think they are strong business though. And they have a great chance of continuing to succeed post pandemic, even for our solitaired initiative what’s been interesting is looking at the overall games market. It has increased in size and it’s for the obvious reason isn’t that people are at home and they need distractions and they’re playing more games. So that has added some additional wind behind her back that we did not anticipate.

Robert Brill: [00:27:32] And how are you, are you acquiring users on the solitaired initiative?

Neil Taparia: [00:27:39] So we’ve been doing, two things. Primarily. One is, we try to partner with organizations that might want a custom solitaired game. And if this is more of a fun engagement, medium for them, so that’s been good to get the word out and then we’re trying to rank well on search engines, across keywords.

So people could find our games when they’re looking for that.

Robert Brill: [00:28:04] You know, I’m seeing a lot of advertising on Tik Tok, for calm, you know, the, the app where you can cause you know, that the person who created calm was the same as the same person who had that million dollar website back in the day.

Neil Taparia: [00:28:18] The mill, which is that the website where he sold every pixel.

Robert Brill: [00:28:25] Million pixels. Yeah, same dude.

Neil Taparia: [00:28:29] That is, I did not know. Yeah. Yeah.

Robert Brill: [00:28:34] Like I I’m, like, I kind of want to just double check that I got that. Right. But I’m quite confident that that’s the case. Cause the point is I was thinking about your, your acquisition strategy. I was like, you know, If people want brain game, people go to TiK Tok  all the time.

And I got to say, I’m a hundred percent guilty of this. There’s so many nights where after everyone’s gone to sleep and like I’m done working and the whole thing, I’m like, Tik Tok just scrolling. And what’s interesting is there’s times when I’m interested in really fun and interesting educational content, like I’ll get some really good information about how to do design work on Photoshop.

I don’t really know how to use Photoshop effectively on the very little that I know, but like, I imagine brain games would do very well for users. Even older users.

Neil Taparia: [00:29:18] We need to check that out. You know, Tik Tok is a channel that we haven’t put too much thought into, but I’ve been hearing really good, positive things about getting the word out on Tik Tok.

Robert Brill: [00:29:30] Well, and what’s interesting is their ad platform looks a lot like Facebook’s ad platform. They’re collecting a lot of data they’re set up as more or less the same. You have the campaigns, the ad groups, the ad as a creative. I can’t say that their algorithm is as strong as Facebook or as effective, but I’ve also tested it very limited on business to business, which is kind of like hard to target on Tik Tok, their tools aren’t there yet.

But I would say if I had to guess for a consumer facing product, Well, number one, the click through rates are pretty darn strong. Click through rates are like over a, you know, over a percent. And again, B2B, it could be a lot higher on Facebook point of all that is to say, I imagine that customer acquisition for solitary would actually probably be effective depending on your overall thing would be effective on Tik Tok as an ad later when people want something smarter to do with their brain than scrolling through videos.

Neil Taparia: [00:30:27] Yeah. I love that. That might be my homework after our conversation.

Robert Brill: [00:30:32] I’ll send you a video. I have a video of how to set up a tech talk campaign.

Neil Taparia: [00:30:38] Cool.

Robert Brill: [00:30:39] Well, cool. Neil Taparia.

Neil Taparia: [00:30:45] Yeah.

Robert Brill: [00:30:48] You know, I definitely want to get Neil Taparia and entrepreneur investor advisor, SOTA partners. So where can people find either you SOTA, solitary, throw out some, some contact points.

Neil Taparia: [00:31:03] So if you want to check out solitaired, that’s just solitaired.com. It’s solitare with the d.com. Play some games have some fun. And if you want to connect with me on LinkedIn is a great way to do it.

I regularly write some entrepreneurial thoughts on Forbes and you can just Google that column. And it’s a great way just to follow some of the things I’m doing, thinking about.

Robert Brill: [00:31:27] Awesome. Thank you, Neil was a pleasure talking to you today.

Neil Taparia: [00:31:30] Yeah. Likewise, man. Great talking. Thanks.

Robert Brill: [00:31:32] Thank you for listening to this episode of the LA Business Podcast.

If you like what we’re doing on this podcast, please consider subscribing on Apple or Google play, leaving a five star review and sharing with your friends. If you have any questions, comments, or recommendations for a guest you’d like to hear on this podcast, please do email me [email protected]

Thank you. Have a fantastic day.

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Credits

Audio Production – Echegoyen Productions

Creation and Marketing – BrillMedia.co, a hyperlocal advertising company.