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Identifying Customer Pain Through Consulting Services: Tealium Co-Founder & President, Ali Behnam (Part 4)

Sramana Mitra: How long did it take you to get the product to market?

Ali Behnam: Probably about a year. We had an early version of the product that we released in January 2011 but didn’t do everything we wanted it to do. Another six months later in July of 2011, we finally launched Tealium IQ which is the basis of the product that we’re still selling today. If you take the development from beginning all the way to the launch of Tealium IQ, we’re talking about a little less than a year.

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Thought Leaders in Online Education: Todd Hitchcock, COO of Pearson Embanet (Part 6)

Sramana Mitra: That’s only true if you’re looking at those local types of businesses. We work globally and we work on only digital entrepreneurships – IT, IT-enabled services types of businesses. That’s non-local and a lot of it is very scalable. We’re seeing a lot of interest from entrepreneurs all around the world – not just from the United States.

Todd Hitchcock: I absolutely agree. Traditionally, we work with colleges and universities to put those programs in place driven by their region. I think you’re hitting on a macro trend. There is tremendous opportunity for international entrepreneurship programs. To that end, it hasn’t been one that has been brought to us by a specific partner yet. I think you’re really catching on something that has tremendous possibility.

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Identifying Customer Pain Through Consulting Services: Tealium Co-Founder & President, Ali Behnam (Part 3)

Sramana Mitra: You wanted to make the switch to a product company with a hypothesis that this is what you think is needed in the market. You wanted to switch off your consulting business and turn it into a product company in 2011?

Ali Behnam: A big part of the product that we had built was taking all the different use cases that we were solving for our customers. Different customers have different use cases. Through our engagement with various customers, we had seen a lot of different use cases that we needed to satisfy for our product to function properly. We wanted to make sure that the first iteration of the product could actually satisfy a lot of those use cases because those were the common problems that we were seeing among many customers – not just the ones that we were consulting. Thanks to our consulting background, we were able to see so many problems that prospects face and we ended up building up a product that could satisfy those use cases. >>>

Thought Leaders in Online Education: Todd Hitchcock, COO of Pearson Embanet (Part 5)

Sramana Mitra: In what kinds of disciplines are you seeing the maximum online adoption? Is it engineering, nursing, or business?

Todd Hitchcock: Traditionally, there has been a lot of growth in business and engineering. We see a tremendous amount of growth in healthcare professions. We see growth in degree programs that are associated directly with professions rather than traditional academic degrees – that may lead more to someone to move to pursue their PhD or more of an academic path. I see less growth in those currently than we do in degrees that are more aligned with what we consider professional degrees.

Sramana Mitra: I think one of the big drivers of online education especially for universities is that people are doing them in tandem with a job. Often, they’re enhancing their skills and trying to improve their career. You have to be professionally oriented.

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Building a Pre-IPO Company Over 10 Years: Centrify CEO Tom Kemp (Part 7)

Sramana: How did the business ramp from 2004 onwards?

Tom Kemp: The ramp has been really good. We formed the company in 2004 and we did not ship product until 2005. We did over $1 million in our first calendar year. The next year we grew to $3 million. In 2007, we grew it to $10 million. Then the recession hit in 2008 and 2009, and we were able to grow but just slightly. Since 2010, we have grown from the teens to over $50 million last year.

Sramana: What kind of capital has it taken to get to this run rate?

Tom Kemp: It has taken us $50 million which we raised over 4 rounds during our 10 years of company history. It has also taken human capital. We value our reputation and we work very hard to treat people properly and run our business above reproach. >>>

Identifying Customer Pain Through Consulting Services: Tealium Co-Founder & President, Ali Behnam (Part 2)

Ali Behnam: Early on as we got engaged in our analytics practice, we realized that there is a big need for help with tagging. A lot of customers were unsatisfied with their analytics implementation. The number one cause of that dissatisfaction was the fact that their implementation was not done in a proper way and that has to do with tagging. Tagging is basically putting a piece of code on a website that allows you to capture the right data and send that data to the analytics solution. A lot of customers had challenges associated with that. We realized that there is a big need for streamlining the tagging work that customers need to do.

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Thought Leaders in Online Education: Todd Hitchcock, COO of Pearson Embanet (Part 4)

Sramana Mitra: In these cases, are the universities providing the content and you’re providing the delivery framework? Are you also providing content?

Todd Hitchcock: I’ll walk you through the component. After we’ve done the market assessment, we engage with the university and talk about all of the services that need to be in place in order for them to power a very high quality online program. One of the components we start with is marketing the program. It’s not a matter of putting billboards out. It’s a matter of getting to understand who the partner is, what their value proposition is, what their differentiators are so our team can fully understand what it means to be a student at any one of our partner institutions. >>>

Building a Pre-IPO Company Over 10 Years: Centrify CEO Tom Kemp (Part 6)

Sramana: What is your algorithm for determining how big your TAM is? When you explore a new product idea, how large does the TAM have to be for that product to make it viable?

Tom Kemp: People get lulled into repeating what analysts or others say about the market. If an analyst says there is a $3 billion market ,you are probably not going to address the entirety of that market in the next three or four releases.

At the end of the day, you still want to know what the size of the market could be. Our algorithm works from the bottom up. We look at a potential product and ask ourselves what we can reasonably expect to sell based on existing customers and our sales capacity. We model it out. We rely on a bottom up approach to figure out what people would be willing to buy. We try very hard to be reasonable with customer adoption rates.

At the end of the day we want to make sure that we also step back and get the big picture. We want to know that we are on a path that leads to something big. We follow an ‘art and hunch’ methodology. We ascribe to a bottom up methodology over a top down methodology, but we don’t completely ignore the top down approach. >>>