Sramana Mitra: So the shareholders of Andrew Jackson came in as separate investors into the new entity, ProctorU?
Don Kassner: That is correct.
Sramana Mitra: So that’s how ProctorU was funded?
Don Kassner: Yes.
Sramana Mitra: Fast forward a little bit. In 2010, you have a few customers. This concept of remote proctoring to support online education is starting to mature a little bit. What happens next?
Don Kassner: It starts to take off. They look at ProctorU as a way to enable their online programs. Our typical clients in higher education are traditional schools like the University of Florida, Northwestern University and University of Arkansas who have online courses. Their concern is to make sure that those courses that they’re delivering online are comparable to what they deliver in the classroom. One of their big problems was the approach to testing.
We had been around for a few years. The concept is relatively well-proven. The entire sell changed from trying to find those creative early adopters to people who really needed us to solve a problem. That development is continuing through today. As we talk to more schools, it’s not an issue of trying to sell them on the concept of remote proctoring. It’s selling them on our service and how we differentiate from others.
Sramana Mitra: How did the business ramp between 2009 and 2011?
Don Kassner: We got very high ramp rates early on. We were going up by a factor of 5 or 10X. Right now, we’re doubling our size every year. In 2010, we had 15 employees and maybe a couple of hundred thousand in revenue. In 2011, it’s over $1 million in revenue and 50 employees. In 2012, we’re up in the 150 range and earning $4 million. Now, we’re nearing 300 employees and $10 million in revenue.
Sramana Mitra: You have so many employees because you’re basically running an outsource service, right?
Don Kassner: Yes. We have three proctoring centers in the US and are run 24/7. Of those 300 employees, about 220 are part-time proctors who work four to five hour shifts in all hours of the day. We have around 75 full-time staff in all disciplines – proctors, operations, managers, sales, accounting, administration, and human resources.
Sramana Mitra: All your proctors are in the United States?
Don Kassner: They’re all in the United States, yes.
Sramana Mitra: How many universities are you offering this service for right now?
Don Kassner: We have about 465 entities under contract. Of which, about 375 are universities. We’re starting to deal with a lot of professional testing and certification programs. So we have about 375 universities and 80 professional testing organizations.
Sramana Mitra: Can you talk about the kinds of universities and programs adopting this service?
Don Kassner: Within the U.S., the universities are the traditional universities like Florida and Arkansas.