Matthew Pittinsky

How Fast?? What began as an eight-member dream team exactly two years ago, has now evolved into an outright leader in the online education industry. Blackboard Inc. now claims 90 employees and more than 250 institutional customers, including Cornell University, Georgetown University and The College of William and Mary. A private company backed by four venture capital firms, Blackboard has raised more than $16 million in capital and watched its sales bounce from several hundred thousand dollars a year to several million. And all of this before it's even out of diapers?

What propelled you to launch Blackboard?

This may sound hokey, but it's true passion. I was a teacher in Washington, D.C., and I went onto the Harvard Ed School. My mom's a teacher, my dad's a school board president, university administrator. So I've just had education in my blood. And with the Internet impacting education as an industry, I got really excited about an opportunity to build a business around the intersection of the Internet and education.

What were the guiding principles of Blackboard when you started and what benefits do you think you've reaped from keeping those principles close at hand?

I do think that our biggest strength has been the discipline with which we've executed our business plan. The big idea of Blackboard was that as the Internet impacts higher education or education broadly, schools and universities and corporate trainers will want to use the Internet to do distance learning and also to help support traditional courses with a Web component. Everybody needs a platform that they can use to help create and deliver and manage their on-line courses and to help faculty create course Web sites that they then can deliver to the students. It allows students to check their grades, take courses, access learning materials, those types of things.

We were focused on being the platform. And so we picked a specific industry within education: the higher education industry. And then we focused on one core competency, which was to provide the software platform that universities would buy from us to create their on-line courses. And now we're starting to -- since we've gotten a pretty good momentum -- think about other revenues streams that we can build on top of that platform franchise that we've built.

But up until now I think the value we've gotten off of staying focused on that has been huge. Some of our competitors started off as platform companies, and have now thrown 15 other things on top of it before they really got market share on just the platform. And they're finding themselves encumbered by a very big stack of products and services they're offering to a small segment of the market, while we are still focused on one very clear thing, and we'll continue to be very broad-based across the entire market. And so a year from now you'll find that Blackboard is at all of these institutions and is ready to start building other kinds of businesses on top of that when these other folks have lots of businesses built, but they're only at a very small segment because they didn't stay agile in the beginning by staying focused on what they're good at.

Four of the common growing pains that fast growth companies experience are generating revenue, amassing cash, maintaining growth margins, and then predicting the profitability. What stage of the game do you think you are at now, and what methods are you using to overcome these challenges?

Cash is the first. That's just a unique thing about being in the Internet industry -- that the cash and the capital that you need to grow the company, whether it's equity financing, debt, IPO, however you get it -- is readily available. I mean cash is as cheap as it's ever going to be in the markets -- private and public markets. When it comes to revenue, I think we are generating revenues pretty significantly. We made more in April than we made in half our first quarter. So we're growing very quickly on the revenue side. I would say we're really in that gross margins component, really trying to do a land grab, where the most profitable pieces of that business are going to be once we settle into an established market share. And then the next stage will be once we figure those out, implementing them to achieve profitability.

But there are other components. I think the first thing that you hit when you're a fast growing company as we've been is to know how to scale the organization in terms of people's experience and management capabilities. In other words, how to know when to fire yourself. I was a founder of the company, and I was CEO and Chairman of the company, and we brought on board a CEO. And other colleagues of mine who were the co-founders at different points headed up sales, headed up product development, headed up marketing. And in all of those areas, we've recruited people who have much more industry experience in those specific areas. And I think most fast companies will fall apart typically because the founders keep too much control in areas beyond their expertise for too long.