Sizable Returns

Some people can't wait to get out of school, but Matthew Pittinsky and Michael L. Chasen are doing everything they can to get into schools. Leaving their jobs at KPMG Consulting in 1997, Chasen, 31, and Pittinsky, 30, thought the Internet could enhance education and wanted to create software to make that a reality. With less than $5,000 from their own savings, they rented office space and purchased office supplies for their e-education software business, Washington, DC-based Blackboard Inc.

Within two months, Blackboard won a consulting contract to help a group of colleges and universities build systems much like what they were working to produce commercially. The company's office space consisted of 750 square feet, with Staples furniture they assembled themselves. A team of six consultants working for the client sat in one room, while four product developers in another room focused on building a prototype of the product Pittinsky and Chasen had set out to create. Cramped conditions and payroll periods where neither of them drew salaries constitute their earliest start-up memories.

Although they invested many hours in the project, Pittinsky and Chasen were consumed by the consulting contract and were never able to build their own e-education software as they had originally planned. As luck would have it, in June 1998, they found seven undergraduates from Cornell University who had built a product much like what they had envisioned.

Content Continues Below

Rather than try to beat them, however, Blackboard joined them by merging operations. "Sometimes, you don't have to do everything yourself," rationalizes Pittinsky. "Other people have great ideas, and you can combine [efforts] to get there that much quicker." The software product came to the market a year later, much faster than if Blackboard had continued to develop it inhouse.

Blackboard started growing quickly, and soon a cohort of 15 clients, including the University of Pittsburgh and Cornell University, began to provide references to other institutions, based on their satisfaction with the Blackboard e-Education Enterprise Suite products.

In a cutthroat market with 15 competitors when Blackboard entered the scene, there are now only three major players. Blackboard is one of them, with 2,700 licensees. The roster is diverse, with programs at institutions ranging from the Maricopa community colleges to Georgetown and Princeton--all using the software to build course Web sites, provide online student services such as registering and paying bills, and facilitate e-commerce on campus.

Now selling its products in 60 countries, Blackboard expects 2003 sales of more than $90 million and is currently building operations in Asia, Europe and South America.

  Page   1   |   2   |   3