Interviews at The Entrepreneur Center @NVTC

Bisnow on Business: Were there episodes in your childhood that showed you had entrepreneurial bones in your body?
Well, I always did exceptionally well in school projects that involved creativity, as opposed to actual testing and homework assignments. I often went well beyond what was required, which I needed to do to make up for not always completing my homework. Also, when Radio Shack TRS-80 computers first came out and I was in sixth grade, I actually wrote some small software applications with a friend for some local businesses.

Did you decide one day you wanted to be an entrepreneur?
Not exactly. At the end of high school, as I was preparing to go to college, I decided my goal someday was to be president of a computer company. So I thought I would therefore get an undergraduate degree in computer science, then an MBA with a concentration in accounting, then go to law school. I figured I needed to know those three big areas to run a technology company. And I actually followed that plan, up until law school where I just did my first year because we started Blackboard and it took all my time, then took off.

That was very organized of you. Is that sort of linear thinking and discipline characteristic of you?
Yes, I would say I am linear in my thinking, very analytical and goal driven.

Is that consistent with entrepreneurship? Because some would say that sounds a little “corporate.”
I don’t think that has to do with entrepreneurship, but I do think that has to do with success, basically setting a goal and doing whatever it takes to achieve it, working hard, working all the time, having the creativity to do what you have to do to hit your goal, seeing the path to get there.

Do you think entrepreneurship is inborn or can be learned?
There are definitely some people who are inherently entrepreneurial and creative, and I think you are born with that kind of drive. But through education it can be honed and perfected.

Your co-founder is back at Columbia getting his PhD in education. Are you going to finish your law degree?
I would have liked to finish it. Maybe one day.

What’s been the biggest surprise to you creating a company?
Two things: Even though back in 1997 I dreamed of creating a successful product with hundreds or thousands of clients and then building a public company, I knew the statistical chance of that was small. So everyday that I walk in, it’s unbelievable to me that we achieved this, and how lucky I am. The other surprise is how many talented people I’ve met and had the opportunity to work with along the way.

How many of your employees do you know, now that you’re bigger?
It’s an odd feeling because I do remember when I used to know everyone. I probably know a third of the organization pretty well, because I hired a lot of people, but it gets harder now that lots of people are located in the field or outside the United States.

How do you preserve your roots and entrepreneurial attitude?
I think companies make a mistake when they raise a couple million dollars and they move into fancy offices, as opposed to immediately investing it in the product and sales and marketing. To this day I’m sitting at a Staples quality desk and an old rickety chair. And we’re fortunate that we’re not just another game company or email company. We are fundamentally influencing teaching and learning around the world. Many of the people who work here are teachers or have educational backgrounds in their families. It’s very exciting to think you are doing well by doing good.

Where do you hope Blackboard will be in ten years?
It’s not really a question of where Blackboard will be as much as how important e-learning technology will be in 10 years. Five years ago many universities started using our technology as a side project. We were typically purchased by a small department. We’ve now become mission-critical at campuses, one of the top two applications students use on a daily basis, email being the other application. All their assignments are online, they register for classes online, they communicate with other students and teachers online. A huge component of teaching and learning takes place online, not only in classes two days a week. It’s an integral part of their educational experience. We don’t see that growth slowing down.

How did you meet your co-founder and start all this?
It’s a great story. Matthew Pittinsky was getting his undergraduate degree in teaching at American University when I was getting mine in computer science. In freshman year, he was running for a student senate position, and I had established a reputation around campus—well, let me be honest with you, it was 1991 and I had a laser printer. So he came and knocked on my door and asked if I would help him make some flyers to put up around campus. We became friends and ended up joining the same fraternity, Sigma Alpha Mu. We would sit around talking about different entrepreneurial opportunities. Both of us were interested in starting companies after school.

When did you figure something out to pursue?
Right after college, I applied to several MBA programs, and he applied to masters in education programs. We both applied to so many colleges and graduate schools, we came up with the idea that this would be a lot easier if you filled out applications electronically. So we actually developed software that would let you fill out your information once and print out multiple school applications. When the Internet arrived, we modified that so you could apply online. We actually showed that to US News and World Report, Princeton Review, and several universities, all of which said no one would ever accept college applications online. So that was the end of our first initiative.

And then?
Matthew graduated from Harvard with his masters in education and went to work for KPMG Peat Marwick in their higher ed consulting group. I was finishing up my MBA and applying to law school. At the end of my first year of law school, Matt had shown his boss at KPMG the technology we developed for online applications, and his boss said, “Hey, I’m building out a technology group, I’d love to meet this gentleman.” So we met and he actually offered me a job. I decided to put law school on hold for a year to make some money to help pay for it. I joined the higher ed technology consulting group at KPMG, and we were working with colleges doing enterprise software installations. What we noticed was that schools were investing millions of dollars in the hardware infrastructure on campus, connecting every desk to the Internet, yet there was no software that made that useful for learning. So we decided to leave KPMG – after one year for me and two for Matthew – to design software to let institutions put their courses online. We rented a small two-room office in a brownstone one block from KPMG near 20th and M, because we would walk around there during our lunch break looking for a place to rent.

Did you create a formal business plan?
We had many different drafts of many business plans.

How were you funded at first?
Very early on we saw there was an opportunity. A group of universities had formed something called Instructional Management Systems to try to create some standards for online learning. Since we had come out of the consulting group for KPMG, we had some expertise in consulting, so we applied for and won that contract, and we did some light consulting that helped us pay some of the bills. Otherwise, we were just scraping by.

Who did you pitch your plan to?
We came across a group called Netpreneurs which had just started, which was connecting entrepreneurs to potential investors, and we started going to meetings. There’d be a breakfast almost every other week at 6 AM. They’d have a speaker and then and you’d have a chance to mingle. It’s very hard to get up that early after working late at night, but that networking was just key. We also signed up for every business plan competition we could, just to get our story out there. Eventually at one of the competitions, one of the judges said that he knew someone, who was friends with a guy, who knew someone that had recently sold their company, and had some extra money, and that his partner was interested in investing in something educational…maybe. [laughs]

Pretty tenuous.
Yes, this sort of thing happened a lot, but this one time it panned out, and we met Ching-Ho Fung, who became our angel investor. We then raised a little bit more from some other angel investors, and we continued to focus on developing our product, brought it to market, and got about 10 schools using it. We kept going to competitions and setting up lots of one-on-one meetings and telling our story. And then Novak Biddle locally said they’d be interested in investing, and others followed.

Did you decide to go public because the vc’s wanted to exit?
No, we didn’t have any pressure. It was really just the maturity level of the company. A lot of our clients want to know that the company they’re working with is sound financially, that it’s going to be here for the long run. Being a public company helps provide that assurance. Also, when we got to a certain size, we wanted to take advantage of having a public currency to raise additional capital for M&A opportunities.

What top lesson have you distilled about being an entrepreneur you’d tell others?
The number one lesson is that you have to do it full time. The truth is that if Matthew and I had done that online college application business and dedicated full time to it, I believe that would have succeeded as well. Whatever your idea, if you think it’s a great idea, you have to devote full time to it. You can’t do it on the side. I think that’s the difference between companies that get off the ground and those that don’t.

At what point should you realize it’s not a good idea?
It differs for each company. You have to set your own milestones, and if you achieve them, set the next milestones and keep going. Maybe it’s getting a client the first year or getting financing the second. If you don’t meet that, you have to be ready to move on.

Are you more of a nimble change-course guy, or a stay the course guy?
I think those are two extremes. I think any CEO needs to be able to analyze the market every day, stop on a dime and turn the giant ship that makes up your company. But at the same time, you’ve got to have convictions in your strategy because sometimes it just takes a longer amount of investment and time to see the fruits of your efforts. You’ve got to be capable of both.