Some of Silicon Valley's shrewdest venture capitalists are investing in a decidedly low-tech start-up called Achieva College Prep Centers. They're hoping that Achieva will do for the college counseling industry what H&R Block did for the tax preparation business.
The timing seems right. Public high schools continue to cut counseling programs, even as the hordes of baby-boomer children face tougher competition for admission to the best colleges. Achieva's plan is to create a name-brand, one-stop service center for college counseling. Clients will go to a nearby Achieva office or -- if a high school hires the company -- get services right in the classroom. The price: $500 to $3,000 per student. "This is a rare chance to do good and do well, to help students make their lives better and to build one of the most financially successful companies of the 21st century," says Carlos Watson, Achieva's 29-year-old co-founder, president and CEO.
Watson, JD '95, thinks big. For now, Achieva is headquartered in a modest house-turned-office in downtown Palo Alto and has eight outlets dotted around California. The company also provides services to one high school in San Jose and is working on deals with a half-dozen more, mostly in California. But over the next five years, Watson plans to expand the company into a national chain with 250 offices and contracts with dozens of school districts. The ambitious blueprint squares with industry predictions. Analysts project the $250 million college-prep market -- counseling, tutoring and test prep -- will mushroom into a $1 billion business over the next few years.
Watson bankrolled the start-up in 1997 with his own savings and help from his sister, Carolyn, and Jeff Livingston, an investment banker and friend from Watson's undergraduate days at Harvard. The business quickly captured the imagination of Silicon Valley investors -- a group with personal insight into the target market. "The competition to get into even second-tier schools is skyrocketing," says Jim Katzman, MS '71, a co-founder of Tandem Computer who hired a private college counselor to advise his son and daughter in the mid-'90s. Other backers include venture capitalist Tim Draper, '80; Audrey MacLean, a high-tech investor and Stanford associate professor of engineering; Laurene Powell Jobs, MBA '91, wife of Apple Computer CEO Steve Jobs; and two of the Excite@Home founders -- Joe Kraus, '93, and Graham Spencer, '93, MS '94.
Achieva's success has spawned competition. Two national test-prep companies, Kaplan Educational Centers and Princeton Review, are expanding into college counseling services. "You have to give Carlos credit for taking an idea that's been a mom-and-pop operation and making it into a national business," says Rick Sliter, executive director of Princeton's Palo Alto branch. "Now he must execute."
To establish its name, Achieva has used an aggressive marketing campaign -- fliers, radio, regional and high school newspaper ads -- targeted at students like Maurice Hernandez. With less than a year to go before his high school graduation, the 17-year-old had done virtually nothing to prepare for the college admission process. His overworked counselor at Palo Alto's Gunn High School didn't even know his name. "I came to Achieva desperate," says Maurice's mother, Ana Hernandez. "I didn't know what to do for college preparation." For $2,000, Achieva counselors helped him narrow his college choices, craft his application essays, obtain an internship (with Achieva investor Excite@Home) and secure good recommendations early. The efforts paid off. Maurice is heading to Cornell University, a college he never would have considered without encouragement from his Achieva counselor. "I'm happy with Cornell," he says. "Achieva could have done a little more on how to choose a college, but I've recommended it to my relatives."
As Achieva goes national, the challenge will be to maintain personalized service. On the advice of some investors, the company is slowing expansion plans. To find quality counselors, Watson offers good salaries and perks such as profit sharing and bonuses. Many employees are recent Stanford and Ivy League grads.
Achieva may yet cast itself as an Internet enterprise. In the last few months, the company has beefed up a web-delivered version of its services, a route Watson never envisioned when he opened Achieva's first office in Palo Alto. But after working with about 15 students over the net, the Achieva team recognized the potential. If that translates into a better way to showcase student potential, Achieva may have found its formula.
