With $1M, Thiel-backed Thinkful builds a one-on-one tutoring business atop its online ed peers

Want to learn how to build and design a website? Thanks to a boom in online education companies, from Codecademy and CodesSchool to LearnStreet and lynda.com, the Web is your oyster.

But despite the plethora of options — or, rather, because of it — New York-based Thinkful believes it can still make a splash with its three-month-old online learning startup.

Launched by Darrell Silver and Dan Friedman, one of the first recipients of the 20 Under 20 Thiel Fellowships, the startup combines education content already available online with one-on-one tutoring and mentorship. It opened its doors at the end of 2012 and on Tuesday said that it had raised $ 1 million in seed funding from Peter Thiel’s FF Angel, RRE Ventures, Quotidian Ventures and others. Thinkful also said it’s the first startup founded by a Thiel Fellow to receive funding from Peter Thiel.

“We launched Thinkful because we saw that the skill sets we need to be productive workers are changing so quickly,” said Friedman. “I saw this in my peers — as they discovered what work they love, there’s this huge gap in the skills that they need to get these jobs and there aren’t great ways to fill those gaps.”

For $ 750 for three months (or $ 250 a month, in case students want to move at a faster or slower pace), students on Thinkful get online access to instructional videos and other content, a cohort of students with similar goals and a personal mentor. To start, students complete a skills assessment, which helps Thinkful create a custom curriculum. Then, throughout the course, they meet with their mentor weekly, communicate with their peers and have the option to attend daily office hours, all online.

Content is a commodity; the experience makes the difference

But, interestingly, unlike most other online education companies, the startup doesn’t produce its own content. It pulls in mostly free content from across the web, from sources like Codecademy and others, but it is open to paying as well. For example, it has a partnership with CodeSchool to access the startup’s paid lessons. Instead of competing with other providers of instructional content, Freeman said his company is complementary.

“There’s just a limitation to something that’s primarily about learning in the browser and watching videos,” he said. “We have a much more deep educational experience and we consider them potentially partners.”

To Thinkful, he added, quality online content is a commodity and it’s more like the “textbook” for the course. Any given student will spend just 20 percent interacting with content (online videos, browser-based lessons or text) and the other 80 percent completing projects guided by trained Thinkful mentors, who are domain experts with field experience and, ideally, teaching or tutoring experience.

I agree that there’s no need to reinvent the wheel if good content exists and that one-on-one instruction will likely lead to better course completion and engagement rates. But I wonder how the providers of the free content will react as the startup grows. For now, Thinkful is small and new — just 30 students have enrolled, with five completing a course so far. But as the startup adds users and increases profits, its relationship with companies that create the content could be tested.

On one hand, Thinkful could say that given all the possible free content — from places like Khan Academy, Codecademy, LearnStreet and others — it is giving content providers exposure to new users. On the other hand, over time, content providers might feel entitled to a piece of the profit made from the use of their content (or something in-kind). Friedman said they don’t know how the relationships will play out long-term but emphasized that it wouldn’t change their business. And he added that the CodeSchool partnership shows that they’re willing to pay for high-quality content. Even though Thinkful only focuses on web development for now, Friedman says it has plans to expand into other subjects.