BUSINESS IDEA | STARTUP

AI Teaching Assistant 🧑‍🏫  

An A+ idea

Available Domain: Gradeaid.ai

1. Problem/Opportunity❓

The Problem/Opportunity: Teachers work incredibly hard. They spend the whole day trying to teach a herd of children (pretty sure that’s the correct term) with non-existent attention spans about how the mitochondria is the powerhouse of the cell. And once their day is over…it isn’t, because they then have to go home and grade papers. Which can be a pretty challenging experience too.

On average teachers spend 5 hours per week grading papers. But we think they should be using AI to bring that down to 0 hours per week. Here’s how.

Market Size: The global EdTech market was valued at $252 billion in 2023

2. Solution ✅

The Idea: An AI teaching assistant which helps teachers to grade student’s papers

How it Works:

• A school signs up for the platform and assigns seats to their teaching staff

• Students submit their exams or assignments to the platform which then uses computer vision to analyze the student’s work

• The platform then generates highly specific feedback for the student, emphasising where they did well and what they need to improve on. The model can also be trained on previous grading done by the teacher so the teacher’s style is not lost

• After review by the teacher, feedback and grades can be released to students

Go-to-market: Sell directly into schools, that’s the best way to onboard multiple users at once

Business Model: Schools pay a monthly subscription fee per seat

Startup Costs: You could get pretty far here by building a wrapper around Claude or ChatGPT then building out more features over time. You ideally want to build on top of your own proprietary model over time to make the business more defensible

Competitors: Competitors are starting to emerge in this space but it’s still early doors and this market is up for grabs

3. How You’ll Get Rich 💰

Exit Strategy: Exit to a big player in the EdTech space like Anthology (Blackboard)

Exit Multiple: Current EdTech valuations are sitting around 6x - 8x revenue, so you should aim for an exit in that range

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DRUNK BUSINESS IDEA

Tattoo Playset

Are your kids looking to become the coolest kids in their class? If so then you’re in luck because we've got just the thing!

With the Little Inkmaster kit your kids can give each other temporary tattoos in an (almost) pain-free way. It’s a great way to put their creativity and artistic skills to the test too. Win-win right?

WARNING: Side effects may include temporary coolness, excessive high-fives, and rashes.

JUST THE TIP

Trend 📈: Viral Foods

Everyday it feels like new dishes and food items are trending. Take the famous cronut. Or the baked feta pasta dish which went super viral on TikTok. Or my personal favorite the “Dubai chocolate bar” that’s so in demand a woman was caught trying to smuggle 90kg of these bars into Germany. I hope they all weren’t all for her. But the big takeaway here is that there’s a huge and growing appetite from people to try interesting dishes and food products, which presents huge opportunities for entrepreneurs who want to build in this space.

Business Ideas

• Viral Virtual Restaurant: A virtual restaurant which sells trending food items prepared in ghost kitchens exclusively through delivery apps like UberEats (from edition #75)

• Foodie Scratch Map: Create a digital scratch map for foodies of different viral foods and dishes to try around the world

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THE MONEYSHOT

How a Dog Food Problem Led to a $60m Exit

Great business ideas often come from the most unlikely places.

Take this founder who, after needing dog food one evening, solved her own problem and went on to build a business she sold for $60m.

This is her story.

Leah Busque (now Leah Solivan after she remarried) helped to birth the gig economy.

She graduated from Sweet Briar College in 2001, earning a degree in Maths and Computer Science. After college she went to work for IBM as a software engineer, but Leah always had an entrepreneur’s spirit lying dormant inside her. All she needed was the right idea for it to come out. And one cold night in Boston…inspiration struck.

One cold, snowy night in Boston Leah and her husband were at home and badly needed dog food to feed their pup. But neither of them had the time to go out and buy it. Plus who wants to traipse through the snow on a cold Friday night to buy dog food?

Which got her thinking. Leah wondered if she could build a platform that would allow people to outsource everyday tasks to others in their community, for a fee of course. This was back in 2008 before the gig economy was as large as it is today. In fact Leah was one of the early pioneers of this industry.

She spent 10 weeks coding the initial website, which she called RunMyErrand.com. A year later in 2009, RunMyErrand received funding from Facebook's startup incubator, fbFund. The company was officially launched as an SMS-based service in Boston and in the early days was primarily used by college students looking for part-time work.

But while the idea was strong its execution wasn’t. So in 2010 Leah decided to completely overhaul the business. They moved their headquarters to San Francisco and changed the platform from a simple SMS service to a full-fledged online marketplace with a website and mobile app. And to go along with these big changes Leah also renamed the business too.

She rebranded it to Taskrabbit.

Soon the platform started getting some traction. Early growth was driven by focusing on product development for early adopters and relying on word-of-mouth marketing, rather than large advertising budgets.

In May 2011 the company raised $5 million in Series A funding, which helped to fuel its expansion. In July 2011, Taskrabbit launched their mobile app and at that time the company had 1,500 active taskers. By December 2011 the company was generating $4 million in business each month and raised a $17.8 million Series B. The company was a rocketship with no signs of slowing down.

In 2012 Taskrabbit raised $13m in their Series C round and with all of this capital to play with the company expanded into new cities and launched new products, including “Taskrabbit Business" which allowed businesses to hire temporary workers from Taskrabbit’s user base. All of this momentum pushed Taskrabbit’s valuation to peak at over $120m.

By January 2017, the company had 55,000 active taskers and one of their early partners became interested in acquiring the business. The platform previously partnered with Ikea so taskers could build Ikea furniture for their customers. And Ikea liked the business so much that they approached Leah with an offer to buy the company.

So in 2017 Taskrabbit was acquired by Ikea. No financial terms were disclosed, although a source close to the deal put the price tag south of $75 million, so we’re estimating it was around the $60m mark. Prior to the acquisition, Taskrabbit's last known valuation was around $40 million (down from the peak of $120 million mentioned previously). So while Leah didn’t sell at the peak, getting an exit at that scale is still an awesome achievement. And all from needing to buy dog food.

All of which goes to show that, as we keep saying at Half Baked, start by solving your own problems. In fact you should spend one day of your life tracking and noticing every single problem or pain point you identify throughout the day. Any one of those problems could be the start of your entrepreneurial journey.

And one day we could be writing about you.

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