When Palmira and Dave Buten decided in 2008 to build an online personal finance simulation, they hoped to prevent kids around the nation from making the same financial mistakes as they did as young adults.
It took six years to get the national scale they'd hoped. But this winter, they'll kick off the Budget Challenge in all 50 states, with up to 150,000 high school students learning to balance a budget, pay bills and taxes, plan for retirement and maintain a good credit score, all while in competition for college scholarships and grants for their schools.
It's happening in partnership with H&R Block, the Kansas City-based public company with 10,000 tax preparation centers around the nation. The company agreed to fund the program, making the nine-week simulation free for any teacher to use in a 9th to 12th grade classroom. Last fall, the number of students participating grew to 32,500 from 2,000 the fall semester prior.
A partner like H&R Block is the dream of any startup. The deal let Dave Buten quit his job and join his wife in the business full-time. It allows for jobs to be created. It eliminates the months-long sales cycle in the fragmented education market.
It adds new functionality to the program — participants now learn about filing taxes and see actual IRS forms from their pretend employers.
Most importantly, it helps the Butens train more young people to make the best financial decisions. And there's no barrier for teachers and schools to sign up.
But winning the support of a major corporation was no fluke. There are lessons to be learned in the steps the Butens took to be ready when the right partner came along.
First, it had to be the right company with the right mission. H&R Block already had an entrepreneurial team, creating their own personal finance education program several years ago. Its chief marketing officer and CEO were both passionate about financial literacy. And the company had a charitable bend.
The Butens annually rebuilt the website and processing engine to accommodate large numbers of students in multiple time zones making real time (though fake) transactions. So when H&R Block wanted to launch within three months of a signed contract, they were confident in the site's ability to handle 15 times the traffic.
"Something we tell ourselves a lot is you have to build your abilities for what you want to be able to do, not what you have right now," Dave Buten says.
Teachers, parents and students already liked the challenge and even paid for it. The couple spent years building a curriculum and technology platform that both engaged and educated students and saved teachers time. When H&R Block sought testimonials during due diligence, users shared what they loved about the simulation and gave suggestions to make it better. Changes were made promptly with such easy access to feedback.
"We needed to see that they had already jumped through hoops and got wrinkles out of the program so we could launch quick," says H&R Block's Chief Marketing Officer Kathy Collins.
The Butens also protected the simulation with a patent, earned after seven years of back and forth with the U.S. Patent office. Palmira Buten says the long process was worth it—the patent earned Budget Challenge legitimacy and gives it leverage in working with H&R Block and future partners.
They also negotiated a deal that ensured they'd have the resources to make the program a success. That meant fair salaries and benefits packages for the team and money for continuing to improve the technology and hiring a large enough customer support team.
Finally, the Butens worked to co-brand Budget Challenge with H&R Block instead of signing over the naming rights. If H&R ends the contract some day, the Budget Challenge name has earned national exposure too. The agreement also allowed them to continue to sell a version to parents and others who don't qualify for H&R's offering, helping to generate more revenue for the small company.
The Butens are surprised at how well the partnership has gone. But patience and preparation made them ready to handle it.
"Things take longer than you'd think or hope," Dave Buten says. "But the flip side is that the extra time helps you get ready as long as you're working on the right thing."
