Sramana Mitra: What year was that?
Shaul Kuper: In 2001 we got the deal and in 2002 we delivered the product.
SM: So by 2002 you had a reference account in education. Did you go after other education companies?
SK: Absolutely. I realized that this is what we wanted to do. We knew the product and we built it to resell it. Our next deal was with the University of California, Santa Cruz. They bought our system. About a year after that, we sold to Stanford. Having Stanford changed the game for us. I remember negotiating a deal at the time and one of the directors said to me, “If you don’t know what to do with the Stanford name, you shouldn’t be in business.” He was actually right. It made a huge difference. To this day, every time somebody asks me who my customers are, I mention Stanford. Usually when companies are small, they go for smaller companies, and then bigger and bigger companies. We did it in reverse. We went for the biggest schools we could find and went downstream after that as opposed to upstream.
SM: Typically if you can get something large, the reference account effect is much more powerful. In terms of specs of these projects, what did you find? Were they all trying to do roughly the same thing?
SK: What they wanted was very similar. We dealt with continuing education divisions for the most part, or the professional development divisions of universities. They were the ones who dealt with what today is commonly known as post-traditional students. When you look at a campus today, 35% is what was 100% at the time. They are dealing with students who are going to school to get a better job, to learn things from playability, they are doing online courses at the time, they were going part-time, etc. So they were dealing with students who weren’t 18 to 22 years old and going to school full-time, not working and no kids. Some were doing strictly non-credit, some were doing credit. Some were dealing with corporations and some were dealing with individuals. Every school, depending on the geography they are in, gets something different, but the students they were serving were very similar in nature.
SM: So you have a lot of leverage across the industry, because you had experience in the workflow and you knew what the requirements were. There was a lot of domain expertise developing in your shop.
SK: Back in 2003 and 2004 and even today when we go into schools that don’t have a system like ours, they are running 70 to 80 different separate systems to manage their business. Nothing is centralized, and everyone has these silos of information – very inefficient in most cases. There is information all over the place. At the time there were second-class citizens within the university. That has all changed today.
SM: It sounds like you were also productizing. You were building a product you could then use as you grew up through the domain. Can you talk to us about that process?
SK: That is exactly what happened. We were going to customers saying, “Here is what our product does.” They were pretty wowed. We heard from a couple of people that they had never dreamed that a system like this would exist, but also if we could do this or that as well. So we do gap analysis. We analyzed what business processes they had that perhaps we didn’t. At that point, they would either pay for that gap to be filled. Our philosophy was that we would always have one code base. Even today with 24 customers, it is still one code base. Whatever someone paid for to fill a gap, we would incorporate into the product. In some cases we would foot the bill for it, because we thought it was something that would be needed. We needed that to take hold of the marketplace. What we learned from the University of Toronto is that we could never hard-code things. When we started building things we would always make it configurable. The University of Toronto may have said they give a 15% discount for something, for example, and we would probably hard-code it 15%, as opposed to creating a discount engine that you could put in any type of discount.