In May, 2006, a partner and I negotiated an exclusive license of a web-based software application developed by a large research university, and we formed a company that will serve the sole purpose of selling, supporting, and enhancing this product.

This case study will follow our progress, successes, failures, and lessons learned – as they occur.

As with all of my Real-Time Case Studies, I have changed a few of the specifics of the endeavor (product/company names), but I will provide a blow-by-blow account of the strategy development and tactical implementation, results, and refinements as we launch this product. For the purpose of this discussion, the licensing university will be called SmartU, and I will call the software product SmartWare.

A little background… A large research university developed a web-based software product to streamline the process of gathering and reporting on a large and constantly evolving body of information. The data housed in this application pertains to the institution itself - specifically the quality of the education that it provides.

The data sources are nearly every academic official on campus and a number of administrative staff (1,000 or more people on very large campuses).

Historically, the function that this software performs has been accomplished by a person or committee (I’ll call them Quality Officers) gathering thousands of pages of disparate documentation from faculty and staff across the campus and organizing this information in binders that will be reviewed/audited on a periodic basis (on 1-10 year cycles) by outside officials.

As obvious as it may already appear that this is a task that should be automated, our research indicates that fewer than 5% of institutions have taken steps to do so. Many of those who have automated the function developed their own tools for lack of commercial options. At present, there are very few competitors for SmartWare.

In recent years however, public pressures have forced a higher level of accountability upon colleges and universities, and we believe there is a growing recognition that the old, paper-based method of information gathering and reporting is no longer sufficient.

Several years ago, SmartU undertook to develop a software solution (SmartWare) to address its own needs. After several years of development (and use) of the software, SmartWare had performed well enough to attract the attention of neighboring institutions with the same need.

In late 2005, the SmartU Quality Officer (also the product visionary) presented SmartWare at an industry conference. The result was an apparent interest among other institutions in subscribing to SmartWare.

While it had not initially intended to develop an application that would be used outside of SmartU, the university agreed to accept subscribers, established subscription pricing based on an institution’s student enrollment (averaging $18,000/year), and began to present SmartWare to interested prospects.

By the time we had completed our research of the market for SmartWare, audited the code base, and formed the company to commercialize it, there were six active SmartWare subscribers and 14 other institutions had purchased subscriptions and were in the process of implementing SmartWare.

Our challenges (there are of course many more, but I will focus purely on those pertaining to sales and marketing):

1. To successfully finance the company through early-stage investors while building staff and infrastructure and supporting a growing SmartWare subscriber base.

2. To rapidly acquire new subscribers while there are few competitors (on a start-up budget).

3. To increase average revenue/subscriber.

This entry was posted on Sunday, November 19th, 2006 at 11:05 pm and is filed under Real-Time Case Studies. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.