• September 2010

The Education Issue: Back to School 2010

As school starts this month, entrepreneurs who are also parents are breathing a sigh of relief. It’s not easy managing a growing company while keeping your growing kids safe and entertained all summer. Read more about that here.

Because keeping all the apples in the air can be a potentially explosive situation, we focus this month on the topic of education. We agree it is mission critical to give our children the best education possible, but it is equally important for business leaders to continue their own quest for knowledge and growth.

Our columnists share their insights on how they use education to stay ahead of the curve, and offer advice on how you can, too.

Our September Entrepreneur of the Month, Blackboard Inc. CEO Michael Chasen, tells us how he got to the head of the class developing educational software applications. His DC-based firm, which develops and licenses educational software applications to more than 7,500 schools and universities around the world, projects revenues of $445.4 million in 2010.

And consider this thought from poet Robert Frost. “Education is the ability to listen to almost anything without losing your temper or your self-confidence.”

Here’s to your great education.Hope Katz Gibbs
Editor & Publisher, Be Inkandescent Magazine
Founder, Inkandescent Public Relations

Illustration (above) by Michael Gibbs, www.mglenwood.com

Education + Technology = Michael Chasen's Blackboard.com

SEPTEMBER 2010 ENTREPRENEUR OF THE MONTH

Blackboard Inc. CEO Michael Chasen

By Hope Katz Gibbs

At 38, Blackboard Inc. CEO Michael Chasen has already achieved more than he ever dreamed was possible.

His company, which develops and licenses software applications and related services to more than 7,500 colleges, universities, K-12 school districts, corporations, and government agencies in more than 60 countries, projects revenues of $445.4 million in 2010.

Total revenue for the quarter ending June 30, 2010, was $107.7 million, an increase of 17 percent over the second quarter of 2009. The company went public on Nasdaq in 2004 and by the summer of 2006 was making headlines in The New York Times.

“Chasen [pictured below left with his co-founder Matthew Pittinsky] will never be confused with the brash upstarts that defined the Internet boom of the 1990s, or Silicon Valley’s ever-growing crop of disruption-crazed entrepreneurs,” wrote Times reporter William Taylor. “”[Blackboard] may be disruptive, but they conduct themselves like diplomats.”

The making of a multimillion-dollar idea

A walk down the large white corridors of Blackboard Inc.‘s corporate headquarters near Chinatown in Washington, DC, reminds visitors that this company is about kids.

The doors of the executive offices are covered in blackboard paint so that the C-suite team can write their names in chalk.

Toys adorn many of the desks, and just off the lobby is a cafe-style coffee area featuring a glass-front fridge with bottles of free juice and soft drinks.

Although guards check IDs at the front door, it’s obvious that Michael and the directors of this growing empire have not lost sight of the fact that what they are doing is fun.

In fact, Michael still uses the desk chair that he and Matthew, his buddy from American University and partner-in-technology, stole the afternoon they quit their day jobs at KPMG. They had worked together for a year developing a computer application for the company’s technology consulting practice.

“Matthew and I decided that at 25, with enough money saved to live for a year, we’d start an e-learning business,” Michael explains today, sitting on that old torn chair in his corner office. “It made sense to us because we were just out of college and grad school and were still in touch with what college students wanted and needed from school and technology.”

A case in point was the fact that campuses nationwide were beginning to connect to the Web but had no way to put courses online. Soon after, Michael and Matthew met seven seniors from Cornell who had sold a software program to five colleges that did just that.

“We convinced them to move to DC and work with us,” adds Matthew. “For some reason, they figured that as 27-year-olds, Michael and I were the professionals in the group.” They became the founding members of Blackboard Inc.

A strategy that works

Despite the fact that nearly a dozen people were working in a tiny two-room office, Michael and Matthew were able to raise $500,000 in angel funding. It was enough to get the software out to more schools—and impress other investors. Between August 1998 and April 2001, they raised $103 million in five rounds of funding.

The competition was also heating up, as more upstarts got wind of the profitability that results when technology marries education.

“We had 30 competitors with similar products—and they were giving theirs away for free,” Michael says. “We knew that once you give away the proverbial milk for free, no one will pay for your services. So we kept charging. We rented our software for an annual subscription, then sold it for $5,000 to $7,000. When the dot-com bubble burst, we were still standing. We had $40 million in revenue and were breaking even.”

Michael and Matthew both admit that their saving grace was the fact that they had developed their idea before the boom. Plus, they say, while they were in business to make money, they truly wanted to create products and services that would benefit students from elementary school to grad school.

“I think we accomplished our mission,” Matthew says. He left the staff of the company in 2008, but remains on the board of directors. “It was fabulous to build Blackboard with Michael, and after going public the bulk of our wealth came from the stock. It made me realize that what I really wanted to do was solve a problem, not run a company.”

“Mike loves being an entrepreneur, and he’s great at it,” adds Matthew, who has a Masters of Education degree from Harvard. “But my passion has always been education, and my dream was to do research about the sociology of education, so I went off and got my Ph.D. from Teachers College, Columbia University.”

Dr. Pittinsky is now an assistant professor of sociology at Arizona State University’s School of Social and Family Dynamics. In addition to teaching classes, he is conducting a study of the sociological and economic influences on CEO compensation.

He’s also called on by Arizona State to offer advice to business students about what it takes to be a successful entrepreneur. Read his ideas in this month’s Tips for Entrepreneurs column.

The future of Blackboard Inc.

As for what’s coming next at Blackboard, Michael says he’s looking forward to more growth. In fact, Blackboard announced last month that it acquired Elluminate Inc. and Wimba Inc., two of the leading providers of synchronous learning and collaboration technology to the education markets, for $120 million.

They will form Blackboard Collaborate™, the newest standalone platform in the company’s family of education solutions.

“We will pursue greater innovation to meet the growing needs in the area of synchronous learning and collaboration, including continued support for integrations with open source applications and other commercial learning management systems,” says Michael, who also has his sights set on the virtual school market.”

“Virtual schools are the fastest growing segment in education. Due to incredible advancements in technology, we have been able to reach people worldwide that we never had access to before. Having built Blackboard Inc. to this level is a dream come true. But I truly believe we are just at the beginning of what we will accomplish.”

Click here to read Michael’s Tips for Entrepreneurs.

Blackboard Rules: Advice from Two of the Smartest Kids in the Class

By Hope Katz Gibbs

Staying true to your passion—and focusing on the big picture—is essential for Blackboard Inc. founders Michael Chasen and Matthew Pittinsky.

Of course, the 38-year-olds weren’t thinking about this when they met as undergrads at American University in the early 1990s.

They also had no idea they’d form a company that would introduce an educational product in 1998, go public in June 2004, or generate revenue of $445 million, which is the projection for this year.

They simply combined their love for technology (Michael) and education (Matthew) and gave their company that college try.

Chalk it up to destiny

Michael says: “After I had gotten an undergraduate degree in computer science at American, I decided to get an MBA at Georgetown with a specialization in accounting and planned to follow that up with a law degree. I found the college application process tedious and thought it would be easier if people could apply electronically.”

He tried to sell a computer application that did just that to Yeshiva and Georgetown universities, U.S. News and World Report, and The Princeton Review. But none of them bit.

Matthew was helping with the project (for free) while finishing his Masters of Education at Harvard. When their application wasn’t picked up, Michael applied to law school at Boston College and Matthew went to work for KPMG.

Fate intervened when Matthew’s boss, Greg Baroni, saw the computer application and knew the young men were on to something. After Michael finished his first year at law school in 1996, Baroni hired him to join his team.

Within a year, Michael and Matthew felt they had learned enough and began building the framework for Blackboard LLC. Baroni must have agreed, because he loaned them computers to get started.

Tips for entrepreneurs from Michael Chasen

Michael says the top five big leadership lessons he’s learned in the last 15 years include:

1. Focus on the big world. “Look around and see what can be improved. For me, applying to college was a hassle, and based on the fact that I’ve loved computers since I was 10, I knew that I could solve that problem using technology. So I used that passion and understanding to build a company. My team and I are still doing that today.”

2. Network the network. “When Matthew and I started the company, my goal was to shake hands with as many people in the technology and education fields as I possibly could. That’s how we met our first investor and how we eventually managed to raise millions in venture capital. I still network like crazy, but now I get invited to different kinds of events, where the CEOs are the ones in the room. Suffice it to say, I’m still determined to shake as many hands as possible.”

3. Prove your idea. “Matthew and I created a lot of software applications and shopped them around until we landed on one that we could sell. We then built a solid foundation for the company, and that’s how we got investors to take us seriously. No one is going to invest their money in an idea if you haven’t proven that it will make money.”

4. Charge for your products and services. “During the dot-com boom, there was a lot of pressure on us to give our software away for free because that is what our competitors were doing. Matthew and I and our other partners knew, however, that if we did that, we would never be able to charge for it. Human psychology just doesn’t work that way. So we never went that route, and it paid off.”

5. Be happy. “I am happy all the time. I always have been. I think I am predisposed to enjoy life. Maybe it’s because I’ve always done what I love. As a kid, I loved computers from the day my dad, an endodontist, brought home a Radio Shack TRS Model III. He thought he’d use it to track billing, but within a few months the computer was in my room and I was writing programs that I eventually sold to local businesses in my hometown of Cheshire, Conn. They paid me $25 an hour for computer consulting. It was great. It still is.”

Tips for Entrepreneurs from Matthew Pittinsky

Dr. Matthew Pittinsky says he has learned three big lessons along his route from Blackboard exec to his new role as assistant professor of sociology at Arizona State University:

1. Have a passion for solving a problem. “It was never my goal to start a multi-million-dollar company. My heart was in solving the problem of how to help colleges and universities, and K-12 institutions, work better with their students.

“Later, I wanted to prove to the people who invested in us that we could do what we said we’d do. You need to have a fire in your belly to build a company, and solving problems is what fuels me. I always tell other entrepreneurs that to be successful, they need to find what gets them fired up.”

2. Find a natural on-ramp. “A lot of people have great ideas, but to make a product or service succeed, you need capital and people to bring it to life. Mike and I got to know the education market at KPMG, and we got to network with the players in the field.

“It’s how we met the developers from Cornell we ended up partnering with in 1998. And it’s how we instinctively knew what decisions to make, even though they weren’t trendy, and where the openings were,” he says.

“It was a gradual process, and we took one step at a time and stayed the course. My advice to others is to evolve your company in stages and keep your eyes open. Timing is critical, but if you are paying attention, you’ll figure out where the openings are so you can get what you are making out into the marketplace in a natural, consistent way.”

3. Figure out what you love, and do it. “While I didn’t necessarily have an exit strategy in mind, but my heart was not in building a company. I loved the problem-solving aspects of the business, which made me a great external evangelist. I could go out there and sell our products because I truly believed they helped students and schools.”

“After we went public and we had accomplished all of our initial goals, I started thinking about what I truly wanted for my life. Teaching and doing research makes me really happy, and now I get to do that all day long. It’s wonderful.”

Nothing in the world can take the place of persistence.”

– President Calvin Coolidge

Do not be afraid of mistakes, providing you do not make the same one twice.”

– Eleanor Roosevelt

A man who strikes first admits that his ideas have given out.”

– Chinese Proverb

No one is useless in this world who lightens the burden of another.”

– Charles Dickens

If you want to be busy, keep trying to be perfect. If you want to be happy, focus on making a difference.”

– Lisa Earle McLeod

The awakening to the mystery of life is a revolutionary event; in it an old world is destroyed so that a new and better one may take its place.”

– J.J. Van Der Leeuw, The Conquest of Illusion

The great use of life is to spend it on something that will outlast it.”

– William James

If you would create something,
 you must be something.”

– Johann Wolfgang von Goethe

Pain is inevitable. Suffering is optional.”

– Dalai Lama

It is to no purpose to turn away from the real nature of the affair because the honor of its elements excites repugnance.

– Carl von Clausewitz, On War

You often meet your fate on the road you take to avoid it.”

– Goldie Hawn

‎Excellence is to do a common thing in an uncommon way.”

– Booker T. Washington

He who wants to tear down a house must be prepared to rebuild it.”

– African Proverb

Remove those ‘I want you to like me’ stickers from your forehead
and, instead, place them where they truly will do the most good—on your mirror.”

– Susan Jeffers

If my mind can conceive it, and my heart can believe it, I know I can achieve it.”

– Jesse Jackson

How do you stay resilient? It’s about momentum. Like riding a bicycle. If you stop you fall over. So I keep pedaling.”

– Diane Lane

If we all did the things we are capable of doing, we would literally astound ourselves.”

– Thomas Edison

Only those who will risk going too far can possibly find out how far one can go.”

– T.S. Eliot

Our deepest wishes are whispers of our authentic selves. We must learn to respect them. We must learn to listen.”

– Sarah Ban Breathnach

Tolerance and patience should not be read as signs of weakness. They are signs of strength.”

– The Dalai Lama

The music is all around us. All you have to do is listen.”

– August Rush

There is little success where there is little laughter.”

– Andrew Carnegie

You take your life in your own hands, and what happens?
 A terrible thing: no one to blame.”

– Erica Jong

My job is my hobby. I come to work to play.”

– Uli Becker, president, Reebok International

When we speak we are afraid our words will not be heard or welcomed. But when we are silent, we are still afraid. So it is better to speak.”

– Audre Lorde

A warrior cannot complain or regret anything. His life is an endless challenge, and challenges cannot possibly be good or bad. Challenges are simply challenges.”

– Carlos Castaneda

Why am I whispering when I have something to say?”

– Eve Ensler

I have spent a good part of my life convincing people that a blank sheet of paper is the greatest opportunity in the world, and not frightening at all.”

– Marty Skler, executive vp, Walt Disney Imagineering

I find out what the world needs, then I proceed to invent.”

– Thomas Edison

Ambition is the germ from which all growth of nobleness proceeds.”

– Thomas Dunn

Normal day, let me be aware of the treasure you are. 
Let me not pass you by in quest of some rare and perfect tomorrow.”

– Mary Jean Irion

There is only one success – to be able to spend your life in your own way.”

– Christopher Morley

As your desire is, so is your will. As your will is, so is your deed. As your deed is, so is your destiny.”

– Brihadaranyaka Upanishad

Treat the attainment of happiness in the same way an entrepreneur would approach building a business — with a vision, plan, goals, and a systematic approach.”

– Ted Leonsis

My task is really not to change myself but to become familiar with who I am.”

– Maureen Cook

Opportunity is missed by most people because it is dressed in overalls and looks like work.”

– Thomas Edison

When a dog runs at you, whistle for him.”

– Henry David Thoreau

Letting go of expectations is a ticket to peace. It allows us to ride over every crisis—small or large—like a beach ball on water.”

– Martha Beck

Try not to become a man of success but rather to become a man of value.”

– Albert Einstein

Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do.”

– Mark Twain

Nothing is a mistake. There’s no win and no fail. There’s only make.”

– Corita Kent

Success is the necessary misfortune of life, but it is only to the very unfortunate that it comes early.”

– Anthony Trollope

Of course there is no formula for success except perhaps an unconditional acceptance of life and what it brings.”

– Arthur Rubinstein

I will pay more for the ability to deal with people than any other ability under the sun.”

– John D. Rockefeller

Hope sees the invisible, feels the intangible, and achieves the impossible.”

– Helen Keller

Never cut what you can untie.”

– Joseph Joubert

Once you find something you love to do, be the best at doing it.”

– Debbi Fields, Mrs. Fields Cookies

Let yourself be silently drawn by the strange pull of what you really love.”

– Jalaluddin Rumi

Pretend that every single person you meet has a sign around his or her neck that says, ‘Make Me Feel Important.’ Not only will you succeed in sales, you will succeed in life.”

– Mary Kay Ash

You’ve got to be willing to crash and burn. If you’re afraid of failing, you won’t get very far.”

– Steve Jobs

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