Sramana Mitra: You’ve taken seven years to build $17 million in revenue. That’s not a timeline that fits in the venture capital framework. The venture capitalists are looking to build hundred million dollar companies in seven years. This is what I’ve been really concerned about. For a long time, venture capitalists basically just decided not to invest in educational technology. Some sectors like adult education and for-profit universities got some money. But largely, educational technology was not a segment that people were willing to invest in.
Sramana: You said you funded the seed round yourself. What were the milestones and accomplishments of that seed round?
Chris Gladwin: I used not only capital but in the early rounds I was also able to use equity as a way to compensate initial employees. You can provide equity to people when you form the entity and that is the only time you can do it tax free. I did not form the actual entity for around 18 months when we did our A round. >>>
Sramana Mitra: We do a lot of business development work and customer service work. All of that is going into different mailboxes in my Apple mail, and then Bcc on to our CRM system which is getting stored in context related to the contact to whom that thread is related to. This is my workflow. It’s an immense amount of data. I dread to see what happens to that in a few years. It’s already a very expensive mail client that is full of stuff.
Sramana Mitra: I’m very interested in the business model. That’s one of the issues that we’re seeing in the Edtech industry. The business models are weak.
Katya Andresen: I agree with you. It can be really hard to monetize a social network. That is not our model. Our model is that we have consumers – parents, grandparents, uncles, and aunts. They want to pay for their kids to have access to content and to be able to safely connect around that. That’s a proven revenue stream for us. The other side of our model’s emphasis is not that we have this relationship with Smithsonian. It’s just a nice thing that allows us to develop things and offer them for free in some cases. >>>
Entrepreneurs are invited to the 224th FREE online 1M/1M roundtable mentoring session on Thursday, July 31, 2014, at 8 a.m. PDT/11 a.m. EDT/8:30 p.m. India IST.
If you are a serious entrepreneur, register to “pitch” and sell your business idea to Sramana Mitra. You’ll gain straightforward feedback, advice on next steps, and she’ll answer any of your questions. Others can register to “attend” to watch, learn, and interact through the online chat.
According to IDC, total smartphone shipment volumes are expected to reach 1.2 billion units in 2014, up 19.3% year over year and a dramatic fall from the 39.2% growth seen in 2013. However, the research firm adds that the lower growth rate for 2014 should not be interpreted as a sign that the market has come as far as it can – Apple’s entry into China is only the start of where it has yet to go.
The most exciting new development, however, is Apple’s recent deal with IBM, which empowers its enterprise mobility strategy and has added an interesting twist to the space. >>>
Sramana: What came next?
Chris Gladwin: I started Cleversafe in 2004.
Sramana: What was the core idea driving Cleversafe?
Chris Gladwin: There were two aspects. First and foremost was the market. At that time, it appeared that the demand for data storage was going to grow rapidly and that has indeed been the case. It has been growing faster than Moore’s Law. I realized that there was going to be a demand for data storage, and more and more things that were capable of creating data would be used. >>>
Peter Bauer: My concern with that approach is it’s immature right now. It will be for a while. Since it’s unreliable, it’s also difficult to predict. You don’t know how information is going to be suggested to you. You don’t know what the underlying mechanism is. It can really be a distraction in the same way that something like Siri was hailed as someone super clever that can help you with all sorts of stuff. But I think a vast majority of people have left it alone and are waiting for some future iteration where Siri may be profoundly useful. It’s just not clever enough. >>>