Featured Videos

Building a $10M Company Proctoring Exams Online: Don Kassner, CEO of ProctorU (Part 4)

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.

>>>

Bootstrapping a Category Leading E-commerce Company: Tony Ellison, CEO of Shoplet (Part 5)

Sramana: Tell me a bit more about merchandising. Outside of the core office supplies, what else belonged in your product portfolio?

Tony Ellison: Today, we have close to 600,000 items with a mantra of social responsibility. There is no reason why businesses should not purchase eco-friendly products, especially since the prices have dropped and the quality is very high. Since day one, our merchandising strategy has been to offer the largest selection of green products. >>>

Building a $10M Company Proctoring Exams Online: Don Kassner, CEO of ProctorU (Part 3)

Sramana Mitra: When you look at those early adopters of your technology, what strikes you as the common characteristics of these kinds of players? What were they doing that made them early adopters?

Don Kassner: They had those typical early adopter feature sets. They understood that they needed to take their online education service to another level. They were looking for unique technologies that would allow them to do that. They’re no different than most early adopters because they’re on the leading edge of what they demand within the marketplace. That has changed since that time. But in the early days, it would be schools like California Southern and Troy University who were entrepreneurial. They’re risk takers. They do different things and those were the ones that were eager to try the solution.

>>>

Bootstrapping a Category Leading E-commerce Company: Tony Ellison, CEO of Shoplet (Part 4)

Sramana: In 1996, you added more people and secured an office. Was there any difference in your distribution or customer acquisition strategies?

Tony Ellison: There was a lot of change in 1996. The biggest expansion was in terms of people and our margins started to erode because of that added expense. We also started adding other products that did not have margins as high as CD-ROMs. My vision was to concentrate on B2B customers as opposed to running a B2C business because B2B customers spent 15 times as much. We also spent a lot of effort retaining those customers instead of acquiring them. That is how the model progressed and evolved during our first three years. >>>

Building a $10M Company Proctoring Exams Online: Don Kassner, CEO of ProctorU (Part 2)

Sramana Mitra: You gave a presentation to a group of universities explaining that there’s something that you wanted to do and they resonated with that. Could you explain what that pitch was?

Don Kassner: We got up and showed what we were doing at Andrew Jackson University with this remote proctoring product that we had developed, which we were calling ProctorU. Essentially, it was a product demonstration at this particular education conference.

>>>

Bootstrapping a Category Leading E-commerce Company: Tony Ellison, CEO of Shoplet (Part 3)

Sramana: Does your business model still rely on third party logistics?

Tony Ellison: Yes, by and large. We have a lot of 3PL relationships as well as a lot of private brands. Today, we offer over 600,000 items. We are in close to 16 different major categories. We started in CD-ROMs and then moved into basic office supplies and ink and toner. Today, we also cover furniture, cleaning and break room supplies, security and safety items, and several other items.

Sramana: In 1995, you started getting orders on the Internet. You hit 100 orders a day. What revenue level did you reach that year?

Tony Ellison: We hit the low 7 figures in our first year of operations. >>>

Building a $10M Company Proctoring Exams Online: Don Kassner, CEO of ProctorU (Part 1)

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

One of the chief bottlenecks of the adoption of online education has been the lack of ability to handle testing in a secure fashion. ProctorU addresses that gap and is growing at a nice clip.

Sramana Mitra: Don, let’s start at the beginning. Tell me about yourself. Where are you from? Where were you born and in what kind of circumstances? It sounds like you have multiple co-founders, so if you could also introduce the cast of characters, that would be great.

Don Kassner: My name is Don Kassner. I’m from the San Francisco Bay Area. I studied and taught at San Jose State University where I earned my bachelor’s and master’s in Economics. In 2005, I had the opportunity to take over a small accredited correspondence college in Birmingham, Alabama called Andrew Jackson University. I moved out to Alabama to take over as President and converted the university from paper-based to wholly online. During that time, I hired a guy named Jarrod Morgan. Jarrod became the Director of Technology.

>>>

Bootstrapping a Category Leading E-commerce Company: Tony Ellison, CEO of Shoplet (Part 2)

Sramana: You decided to go to market with 1,000 of the most popular products in your market segment. Did you buy that inventory?

Tony Ellison: No, everything we did was drop shipped. We bootstrapped the business, so our only way of making things work was to partner with a distributor out of Chicago. For example, the Encarta software was really just CD-ROMs. The good thing about CD-ROMs is that you don’t need to touch them to buy them. A lot of people had PCs at that time and CD-ROMs were in high demand. There was no need for a warehousing operation, the entire business was managed from my apartment. When orders started flowing in, I realized that I needed a whole lot more than a one-bedroom apartment.

Sramana: Did you finance the startup costs out of your pocket or were there investors involved?
>>>