Sramana: When you decided you were going to sell to large enterprises and you were going to aggregate the online training providers, what did you learn in terms of demand? What were enterprises looking for?
Adam Miller: Back then, there were already competitors in the space. We assumed that as a startup we would have no chance of selling to large enterprises. We thought we could talk to people we knew at large enterprises, and because we came from the investment banking world most of the people we knew were at big finance companies in New York. We thought that they would tell us what to build so that we could sell it to the mid-market companies. We did not think we had a chance at selling to large companies.
Every two weeks Steve and I would fly to New York, meet with people we knew, and get requirements from them. We would then fly back to L.A. and build what they told us they needed. We basically had two-week development cycles. This happened over and over again. Our focus was learning what to build to enable people to use the online training content that we had.
Sramana: What kind of training are we talking about, and how did the business work?
Adam Miller: We had all types of online training. We had leadership training, sales training, service training, and industry-specific training. We had a lot of content on financial services. We had training on how to pass a Series 7 and a Series 63. We also had functional and job specific training, such as how to use Microsoft Excel or how to manage your time.
Our sales pitch at the time was our ability to provide excellent content at a price that was 60% to 70% less than what they were able to secure on their own through classroom training. Companies said that it was great, but they wanted to know what we were going to do about all the training that they had offline. Even if they used our online training, 90% of their training was still classroom based. Companies wanted to know what we were going to do to help them with that problem.
We would think about the problem and then build functionality to address the problems they asked us to address. Then companies decided that they wanted to train people based on how they were performing. They expected people to have certain competencies, and if they were lacking they needed to find a way to train them. Today we call it performance management, but back then it was just another feature. We had to develop a way to test and assess what the competencies were and determine what training they needed.
Companies then told us they wanted to train people in executive development programs, but they needed to know who the future executives were going to be. They then asked us to help them figure out what their talent pipelines were. Today that is called succession management.
Then companies started asking us about informal training. There was a lot of asset knowledge that passed from one person to the other. Back then it was called asset management, today it is called social networking. Very early on we had built a suite of talent management tools.
After doing all of this development for a year and a half, the big companies started telling us that they could use something like our product. We never thought they would seriously consider buying anything from us, and it turns out they did. By the summer of 2001 we had a significant pipeline of financial services companies in New York City who wanted to work with Cornerstone. We had no actual clients, but we had a good pipeline and we were ready to begin selling our business.