When my wife is asked, “What does your husband do?” She always says “Ask him.” When they do ask me I reply by saying that I start or acquire companies. It’s a short conversation unless the person runs or invests in small to mid-sized companies (or wants to). Then the conversation generally segues to an oft-asked question, “Where do you get the ideas?” That is what this article is about – where the ideas come from. To answer that I will provide some detail regarding where the idea for my thirteenth startup came from, how it developed, and where it’s at now.
Most of my ideas have come from being immersed in a business or industry and becoming frustrated at what I perceive as shortfalls in either product or service quality in my daily dealings. We all from time to time think we can do things better and tend to complain, either silently or loudly, about something that falls below our expectations. That was the case when I was CEO of a small university that needed to increase enrollment so we bought leads from several marketing organizations. I had to sign a contract for a certain number of leads per month, which was okay, but I couldn’t choose the characteristics of the leads, which was not okay. But that’s the way things worked: buy leads and hope that two out of a hundred somehow ended up enrolling in our degree programs.
The calls from lead vendors came in every week and the vendors all said their leads were better than anyone else’s and would I give them a try. Sometimes I did, but it was always the same problem: the leads weren’t what I was looking for, which were people in their 30s who needed to start or finish a degree program. They were out there somewhere, but the vendors couldn’t pinpoint them for me. That bothered me and I kept saying to myself that if I were running a lead vendor I could do so much better.
In December 2010 I transferred control of the university to a venture capital-backed group, and semi-retired. But in the back of my mind, I still thought the higher education lead generation business needed to be brought into the twenty-first century by borrowing best practices from other industries. Those thoughts lay dormant until I met a gentleman with a strong background in digital marketing. He and I talked about what each perceived as unique opportunities. I mentioned the archaic state of lead generation and lead purchasing in higher education, and described the shortcomings as I saw them. He thought for a second and then asked me, “Are you familiar with programmatic exchanges?” I had no idea what he was talking about.
Programmatic exchanges are used in the advertising industry so publishers, for example, can post pages that are unsold and agencies bid on some or all of the unsold pages. Publishers fill their publication with advertisers and the advertisers get bargain prices on the page space. All this is done online in frictionless transactions. This was all new to me, but I could see what he was getting at. Instead of advertisers bidding on space in a magazine I could see college admissions departments bidding on the kind of leads they wanted. My digital expert friend and I said: “let’s do it!” And we started College Lead Exchange.
As you might imagine there’s a big gap between deciding to do something – start a company in this case – and launching the company’s product. As I didn’t want to start from scratch with technology the first thing we did was contact organizations in the advertising and investment industries about licensing or acquiring their technical platforms. We were met with a deer-in-the-headlights response. Every company we spoke with said, in essence, we’re not in the education lead business and we don’t have any interest in licensing or selling our technology. That was bad news. Now we would have to develop the technology ourselves, which would be expensive in both dollars and time. But we had no choice.
Eighteen months and about a million dollars later we had a platform that was pretty much what we wanted. The important differentiators, those that addressed issues I had identified as university CEO, were an integral part of the platform. These features included the ability of colleges to determine criteria for leads they wanted, for example, a thirty-year-old female RN interested in a bachelor’s degree in nursing that wanted to enroll in three months. The platform had to be self-serve and available 24/7. Contracts to purchase a minimum number of leads were not necessary. Automatic download of leads plus a credit line were must-haves. All this had to work seamlessly. It took time, it was expensive, and every bit necessary.
We learned that, in version one, we couldn’t offer bidding so that was tabled for v.2. And in beta testing, we quickly learned that our proprietary lead generation source provided an inadequate number of leads. I told people that it was kind of like we had decided to get into the gold business and to do so had to find a vein of gold, sink a shaft, mine and then refine the gold. But our beta testers, college admissions departments, wanted gold immediately. So we decided to source additional leads from two trusted third parties, one generating leads just for us and the other a twenty-year-old lead generation organization. Supplies of leads were now assured.
Now we had to sell colleges on using the platform. For those of you used to dealing with administrators in higher education you will understand that new things are a tough sell. New things threaten the status quo; they make people take what they perceived as risks. Many higher-ed administrators, even those in the admissions (e.g., sales) departments are wary of anything new. They think they’ve heard and seen it all, and they have up until now as very little has changed in the way they market their schools or buy leads in decades. Now we had to address the challenge of convincing the old fuddy-duddies to take a look. Some did, and they were surprised that someone had come up with something like this. Asked to rate the platform on a one-to-ten scale the worst rating was an eight. That’s where we are now after about eighteen months of developing the technology and refining the way it works.
Lastly, there is always the challenge of finding some dollars to fund a new venture and, as important, finding a few good people to make it happen. Fortunately, I have been raising money for companies I start or acquire for over forty years so that was not a problem for us. We did not seek venture capital funding. The few outside investors we have are people who have invested in other companies I started or acquired. We kept the company lean and watched every dollar. People took less than market compensation which was offset by equity or options. I have always shared ownership with those who help get a company off the ground and this startup is no different.
Now that we have what we feel is a unique platform that we expect will revolutionize the way colleges obtain prospective enrollees the next challenge is gradually rolling it out, first in our primary target market of non-elite colleges, and then all across the spectrum of the nation’s eight thousand colleges, universities, career schools, apprenticeship programs, and executive education. The real work has just begun, but the startup phase is behind us. Number thirteen is not an unlucky number for me!