• 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.”

If you have built castles in the air, your work need not be lost; that is where they should be. 
Now put foundations under them.”

– Henry David Thoreau

To follow, without halt, one aim: There’s the secret of success.”

– Anna Pavlova

The quality of your life is directly related to the amount of uncertainty you can comfortably live with.”

– Tony Robbins

Great minds discuss ideas. Average minds discuss events. Small minds discuss people.”

– Eleanor Roosevelt

What is the point of having free will if one cannot occasionally spit in the eye of destiny?”

– Jim Butcher, White Night

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

You may ask me for anything you like except time.”

– Napoleon

My goal was to tell the life side of the story. We have become a nation of voyeurs that expect sensationalism, and that offends me.”

– Kathleen Jo Ryan

I don’t do very well without fear. There needs to be a part of me saying, ‘That’s going to fail,’ so I can prove myself wrong.”

– Harry Potter's Daniel Radcliffe

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

– Uli Becker, president, Reebok International

I can’t go back to yesterday—because I was a different person then.”

– Lewis Carroll

History is a relentless master. It has no present, only the past rushing into the future. To try to hold fast is to be swept aside.”

– John F. Kennedy

There’s nowhere you can be that isn’t where you’re meant to be…”

– John Lennon

Destiny is a name often given in retrospect to choices that had dramatic consequences.”

– J.K. Rowling

Patience and perseverance have a magical effect before which obstacles vanish.”

– John Quincy Adams

Confidence is the most important thing you can teach someone… if you can teach them confidence, you don’t have to teach them anything else.”

– Vin Diesel

Speaking more than one language is no longer just an asset in today’s job market; it is a requirement.”

– Tom Adams, CEO, Rosetta Stone

The fixity of a habit is generally in direct proportion to its absurdity.”

– Marcel Proust

The best hobbies are the ones that take us furthest from our primary occupation.”

– Dr. Evelyn Vogel, Dexter

He who knows he has enough is rich.”

– Tao Te Ching

Running that first shop taught me business is not financial science; it’s about trading.”

– Anita Roddick, founder, The Body Shop

Life shrinks or expands in proportion to one’s courage.”

– Anais Nin

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

Don’t judge each day by the harvest you reap, but by the seeds you plant.”

– Robert Louis Stevenson

There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction.”

– JFK

Do not say, ‘why were the former days better than these,’ for it is not from wisdom that you ask this.”

– Ecclesiastes, 7:10

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

– Thomas Edison

Anything not worth doing well is not worth doing.”

– Warren Buffett

I always maintained that the greatest obstacle in life isn’t danger, it’s boredom. The battle against it is responsible for most of the events in the world — good or ill.”

– Dr. Evelyn Vogel, Dexter

The world I believed in, back in my most innocent, uninformed, childish mind—is real.”

– Martha Beck

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

It is easier to fight for one’s principles than to live up to them.”

– Alfred Adler

The follow-your-gut mentality of the entrepreneur has the potential to take you anywhere you want to go or run you right out of business.”

– Bill Rancic, "The Apprentice"

Are you willing to help other people succeed even when it’s not a requirement of your job to be of assistance?”

– Steven Schussler

Friendship is the only cement that will hold the world together.”

– Woodrow Wilson

Success is about finding a livelihood that brings joy, self-sufficiency, and a sense of contributing.”

– Anita Roddick

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

Successful people are always looking for opportunities to help others. Unsuccessful people are always asking, ‘What’s in it for me?’”

– Brian Tracy

The real voyage of discovery consists not in seeking new lands, but in seeing with new eyes.”

– Marcel Proust

4oz tequila + 1oz TripleSec + 2oz lime juice + 1oz simple syrup (sugar=water), 1 cup crushed ice. Shake + dance around the kitchen.

– Avenida Margarita

Entrepreneurs need to search purposefully for the sources of innovation that indicate opportunities for success.”

– Peter F. Drucker

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

– Albert Einstein

If you were independently wealthy and never had to work a day in your life, would you still choose to spend your time attempting to become a successful entrepreneur?”

– Steven Schussler

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

– Johann Wolfgang von Goethe

An entrepreneur tends to bite off a little more than he can chew hoping he’ll quickly learn how to chew it.“


– Roy Ash, co-founder of Litton Industries

We are all of us born with a letter inside us, and that only if we are true to ourselves, may we be allowed to read it before we die.”

– Douglas Coupland

A great secret of success is to go through life as a man who never gets used up.”

– Albert Schweitzer

As each woman realizes her power, she transforms the world.”

– Patrice Wynne, WomanSpirit Sourcebook

We are perfectionists. We are hungry to work all the time. We are entertained by every aspect of business and we never want to stop working.”

– Suzy Welch

We are not meant to resolve all contradictions, but to live with them and rise above them.”

– William Blake

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