Develop product strategy

MEMORANDUM TO: The Board of Directors FROM: CEO, Tutorly DATE: October 24, 2023 SUBJECT: 12-Month Strategy: Unlocking Liquidity via Guided Matching

1. The Diagnosis: A Conversion Crisis, Not an Acquisition Crisis Tutorly has stalled at 4,000 monthly bookings, generating roughly £30,000 in monthly net revenue. While the Board has suggested deploying our £1.2m capital into paid student acquisition, the data indicates this would be a fatal mistake.

We do not have a top-of-funnel problem; we have a liquidity and matching problem. We currently have 11,000 active students on the platform, yet they generate only 4,000 bookings. Meanwhile, our tutor supply has grown 60% YoY to 6,500, leaving 70% of tutors with zero bookings a month.

Why are 11,000 active students not booking 6,500 available tutors? User research gives us the answer: students are paralyzed by the paradox of choice, citing "finding the right tutor" as their top barrier. Tutors think there aren't enough students, when in reality, bloated supply is actively hurting student conversion. Pouring £1.2m of paid marketing into a leaky bucket will only burn our 18-month runway faster.

However, our bright spot is retention: when a student books twice, their repeat rate is 64%. Our core strategic challenge is getting existing students from browsing to their second booking.

2. Our One Major Bet: "Tutorly Match" & Supply Curation Instead of buying traffic, we will invest our £1.2m in product-led conversion. We will pivot Tutorly from an open directory (like Craigslist) to a curated, algorithmically matched marketplace (like Uber).

Over the next 12 months, we will execute a three-part strategy:

• Aggressive Supply Curation: We will freeze new tutor onboarding and delist the bottom 50% of inactive/low-converting tutors. By concentrating demand among the top 2,000 tutors, we instantly improve the average quality of a student’s first lesson and keep our best tutors earning and engaged.
• The "Concierge" Matching Engine: We will replace our search bar with a diagnostic intake flow. Students will input their exam board, target grade, and learning style, and our algorithm will present only three ideal tutors.
• The "Two-Lesson" Guarantee: Because a second booking triggers a 64% repeat rate, we will subsidize the friction of trial-and-error. If a student doesn’t click with their first matched tutor, Tutorly will fund the first lesson with a replacement tutor.

3. Capital Allocation (£1.2m) * £650k (Product & Data): Hiring a dedicated squad (PM, Data Scientist, 3 Engineers) to build the matching engine, diagnostic onboarding, and a revamped tutor rating system based on student retention. * £350k (The "Second Booking" Subsidy): Financing the "First-Match Guarantee" and discounting a bundled "First Two Lessons" package to force the habit loop. * £200k (Lifecycle Marketing): Automated CRM flows (SMS/Email) to re-engage the ~7,000 dormant students currently on our platform.

4. 12-Month Success Metrics By fixing the conversion bottleneck first, we build a machine that can profitably scale paid acquisition in Year 2. By Q4 next year, this bet will deliver: 1. Bookings: Increase from 4,000 to 12,000/month (tripling net revenue to ~£90k/month). 2. Student Activation: Increase the percentage of active students reaching their 2nd booking from ~15% to 40%. 3. Marketplace Health: Reduce the "zero-booking" tutor rate from 70% to under 20% (on a curated base of 2,500 tutors).

Tutorly 12-Month Strategy: Fix Matching, Then Scale

Recommendation

Put the £1.2m behind one bet: guided matching with a first-lesson guarantee. Paid acquisition comes second, released in stages once the funnel converts.

Why not paid acquisition first

Tutor supply is up 60% and bookings only 8%, so the constraint is not volume. Seventy percent of tutors get no bookings, and students say their biggest problem is finding the right tutor. Tutors say "not enough students," but that is a symptom of poor discovery, not a shortage of demand alone.

The economics are also tight. At an average £37.50 lesson and 20% commission, we earn about £7.50 per booking. A £50 acquisition cost needs roughly seven bookings from a student just to break even. Our best evidence of retention is that 64% of students who book twice book again, but we don't yet know how many get to a second booking. Paying to send more students into a search experience they find frustrating risks buying churn.

The bet

1. Guided matching (about £600k). Replace browse-and-search with a short intake (subject, exam board, grade target, learning needs, availability, budget) that returns three ranked tutors. Add structured tutor profiles and quality signals such as response time, outcomes and reviews. Route new demand to under-booked tutors who fit well, rather than only to the top few.

2. First-lesson guarantee (about £300k). If the first lesson isn't right, the student is rematched and the lesson is free, funded by us. This targets the drop-off before the second booking, which is where the strong repeat behaviour begins.

3. Supply curation (about £100k). Stop passive tutor onboarding. Admit tutors by subject-level demand, and give inactive tutors coaching or profile support, or deprioritise them.

4. Gated acquisition reserve (£200k). Held back and released only when the gates below are met.

Gates for releasing acquisition spend

Two consecutive months of: - first-to-second booking conversion up at least 10 points from baseline; - median time to first booking under 48 hours; - modelled payback on acquisition inside 6 months.

Until then, test small paid channels only to measure cost per matched student.

Targets (month 12)

• Bookings: 4,000 → 6,000+ per month
• Tutors with at least one booking a month: 30% → 50%
• Students reaching a second booking: +10 points
• Student satisfaction after first lesson: tracked from launch

Timeline

• Months 1–2: Instrument the funnel (search → enquiry → first lesson → second lesson). Establish the baseline. Interview 30 students and 30 tutors.
• Months 3–6: Launch matching to one or two high-demand subjects, such as GCSE maths and sciences. Run against a control group.
• Months 7–9: Roll out across all subjects, and launch the guarantee if the pilot shows it pays back.
• Months 10–12: Release acquisition spend if the gates are met. Report to the board.

Risks

• Matching doesn't lift conversion. Pilots with control groups will show this by month 6, leaving 12 months of runway to change course.
• Guarantee costs exceed benefit. We cap exposure per student and monitor abuse.
• Tutor churn from curation. We prioritise communication and coaching before any deprioritisation.

Ask of the board

Approve the matching bet and the staged acquisition gate. If the board is not willing to defer scaled paid acquisition, the fallback is a capped £150k test with cost per second booking as the success measure.