Sramana: Shortly after resigning from your cushy job and becoming CEO, you found that the $1.4 million business dwindled to $200,000 with the loss of a single client. What did you do next?
Tony Pfister: The first thing I did was question my decision. The next thing I did was refocus. I treated it as if I was starting a new business. A significant key was that we actually had a successful business model in place, we just lost a major client on that model. That model was the online bookstore model.
Sramana: What exactly is the online bookstore model? How did you differentiate from companies like Amazon?
Tony Pfister: Amazon was a B2C bookstore model, and we offered a B2B bookstore model. Amazon relies on individual customers who come to their website to buy products. We work with institutions as a whole. A school will use our process and system to adopt a full curriculum for the school. They use us to manage not only the adoption but the distribution to all the students.
Sramana: Were you primarily dealing in physical books?
Tony Pfister: At that time we were.
Sramana: So if a school wanted to sell a book for a certain course, then you could manage the whole process?
Tony Pfister: Yes, but we did it for the entire institution. Each school would have its own custom storefront and administrators have access to back-end CMS tools. That allowed the administrators to create custom content.
Sramana: What was the significance of the custom content?
Tony Pfister: It let them control the appearance of their websites. We were the platform that powered the virtual bookstore for the school. That is what we were doing for our first major client, and although they left it had proven to be a good model.
Sramana: Even though you lost the client, you felt that it had validated the model and it was still worth pursuing. Is that a fair statement?
Tony Pfister: Yes. When we lost our major client, I had to decide what markets we needed to focus on. That is when we stopped focusing on higher education and focused instead on K-12 independent schools. That is the market we felt was underserved at the time. Nobody was paying attention to them at all. Those schools operate very similar to a college or university, they just operate on a much, much smaller scale. They had the same goals and infrastructure. They also had a common desire to avoid operating a brick-and-mortar bookstore on campus. We started focusing on selling our solution to independent schools, and that is where we have grown. Today that is what we do exclusively. We have shed all of our higher education clients and focus entirely on K-12 independent schools.