Sramana Mitra: Ten or 12 years later, where do you stand? What percentage of your business is product versus customization services?
Shaul Kuper: In the early days it was not uncommon for a school to pay a few million dollars for customizations, and it would take a year or two to implement. Now we are down to literally weeks of implementation and in the $20,000 to $30,000 range. That is an implementation cost. Many schools don’t need any customizations whatsoever right now.
SM: What is the price of the product?
SK: We started off with a perpetual on-premise business model. We have since switched it to a cloud based SaaS offering that is based on subscription. Our typical model is a percentage of revenue – similar to how a credit card company charges a percentage to do the transaction. We charge a percentage of the transaction to run the entire system for the university.
SM: What does that amount to typically?
SK: Some are between one and two percent. Some schools range between $3 million and $35 million in tuition revenue.
SM: So this is revenue from discrete courses, from full degree programs, etc.
SK: Typically speaking, yes. Schools we deal with typically don’t charge for degree programs but for degree courses. But whatever they run through our system is what we get a percentage of.
SM: Where are you revenue-wise today?
SK: We are just under $10 million today.
SM: Have you completely self-financed the company?
SK: In 2001, when we got the deal from the University of Toronto, I realized that we weren’t going to be able to afford building everything. Payment terms were staggered in terms of deliveries. At that time I raised money from angel investors.
SM: How much?
SK: We raised $1.4 million at that time.
SM: Did you raise any more money after that?
SK: No. We have been self-financed ever since.
SM: So the angel investors are your only investors?
SK: That is correct.