Michael Chasen: Blackboard's Overnight Success In a Span of 15 Years

[youtube http://www.youtube.com/watch?v=SrkYHLadq4s?feature=player_embedded&w=550&h=360]

"This July, Startup Grind Washington DC was honored to host Michael Chasen, co-founder and former CEO of Blackboard, and now co-founder/CEO of SocialRadar at the 1776 campus.

Michael started off by talking of his humble beginnings growing up in rural Connecticut. Michael was fortunate enough to have grown up with a computer in the household, so he took it upon himself to learn how to program with ambitions of becoming president of a computer company. After spending his college days consulting for computers, Michael went off to get his MBA and entered law school, thinking those were the components of good business acumen.

When Michael met Matthew Pittinsky at American University, who got his Masters in Education at Harvard and worked at KPMG with Michael. Soon after meeting each other, they decided at the ages of 23 and 24 that they wanted to build their own company. After one year at KPMG, Michael and Matt quit their jobs in 1997 and began working on Blackboard out of a brownstone in DC.

"Do what is right for the company and do what moves the product faster, and even though you own a smaller piece, you own a larger opportunity."

Michael immediately set to work in creating the online college application process and the earliest prototype for Blackboard. Michael and Matt eventually met seven college students from Cornell during one of their education networking events who were already working in the EdTech space, and trying to figure out what they were going to post-graduation. They decided to merge with the 7 person student-run company CourseInfo, since both sides had much to offer. Although both Michael and Matt would be left with a smaller piece of the equity pie after the merger, he was certain it would leave them with a larger opportunity.

After countless denials for investment previously, it was after discovering the market fit, gaining $1 million in annual sales and expanding the product with the group from Cornell that Michael was able to raise for their first VC round; almost a year and a half after launching Blackboard and during the Dot Com bubble. When it comes to receiving funding, Michael jokingly admits it comes much easier after selling a billion dollar company, but believes if you're in the EdTech or mobile space you will have access to newer funds.

Michael remarked a bit on how a company can achieve "organic growth" through sales, which is to build up your product and sales team and constantly hit the market. When Blackboard had grown to such a considerable size, they decided together it was the right time to launch their IPO raising $77 million in 2004. Michael stated that many people think "an IPO is an end goal, but really it's another form of financing." He said that an IPO does give a company "additional benefits," like an "international presence" and other financial perks.

After a few years of being a public company, the market began to change as more competition emerged and Blackboard began to reconsider its options. Blackboard became a private company again when they were bought by Providence Equity Partners, and Michael agrees that it was the best decision for the company at the time, especially regarding the company's freedom to grow and expand into new markets.  As CEO, it was his job to represent the best interest of the shareholder and indeed it was a proposition in 2011 they could not refuse with an all cash buyout deal of $1.7 billion dollars.

Michael touched upon the future of EdTech with MOOCs and other online course offering systems fundamentally disrupting the education industry. Simply put, online education will offer cheaper education options and more accessibility to those limited by geography or finances. "Classes can be reached by people that are hours away on their cellphone.  This will cause a global disruption in education because you can lower the cost of education and bring in a whole new class of people".  As marked by his continued investment in the education space, Michael is very excited to watch the future of EdTech unfold.

Michael wrapped up the interview by touching upon his newest endeavor, SocialRadar. What SocialRadar is a mobile app that will connect you with those in the immediate area through your connections on social networks and otherwise. He aims to disrupt the social connection world by offering a whole new service that allows you to better form connections with the people around you. With upcoming integration on Google Glass, SocialRadar plans to be an entirely new networking experience.

As the interview wrapped up, Michael admitted he plans to stay in DC (since all of his stuff is here), but mostly because DC is becoming a great tech community with massive potential that Michael wants to give back to. He closed by saying DC is a wonderful place to have a startup.

Michael's final words of wisdom: "If you want to start a company, you want to build a product, or you want to make a difference, make sure you are doing something that you are passionate about.  Because being an entrepreneur takes up all of your time and then more!"

In closing, Michael's favorite superhero is none other than Spider-Man."




Written by: Cedric Craig, Community Manager