Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart.
You know, I’ve noticed that a lot of people are complainers. Frankly, they love to read the news and complain. They’ll read an article and they’ll complain about how the republicans did this or the democrats are responsible or maybe it’s because the whole economy is going to pot or our culture is going to waste and all that stuff. They just love to complain, complain, complain. Not entrepreneurs. Entrepreneurs love to solve the problems.
That’s one of the things that’s been so exciting for me to find out on these interviews, that over and over I interview entrepreneurs who find a problem, either one that they initially have and then discover others have or they find one out in the world and they create businesses that solve them.
That’s what happened to today’s guest. He read an article. He came up with the problem that he wanted to solve. Frankly, he struggled for a bit. It wasn’t easy. It didn’t take as fast as you’d imagine, as fast as the media likes to portray entrepreneurship. But he stuck it out and he’s got this incredible business and I invited him here to talk about how he built it and bootstrapped it, no outside funding.
My guest today is Ara Bagdasarian. He is the founder of Omnilert, which started as a campus emergency notification system. If there’s an emergency, the software will allow someone from school to text all the students. That’s the way they started. Now they work with just about any industry.
This whole interview is sponsored by The Art of Charm Podcast–yeah, another podcast sponsoring Mixergy. They do interviews outside the business world. They actually asked me for an ad within the interview, not at the start. So, I’ll tell you more about them later. But if you want to check them out, go to TheArtofCharmPodcast.com.
Ara: Thanks, Andrew.
Andrew: You read an article that led to the business. What was the article about?
Ara: I did. It was an article. I was doing research on the first iteration of our concept that became the emergency notification system. But it was an article about a female student by the name of Jeanne Clery who was a student at Lehigh University. Back in 1986, there was a serial rapist on campus. Unfortunately, she was a victim of that and suffered rape and murder, ultimately.
But as you can imagine, her family was outraged. How did this happen? What could have prevented this? What can we do to prevent this from happening again in the future? And the article went on. The article was actually published in 1990. So, it was an archive article.
In 1990, the family, after working with Congress, passed the Campus Safety Act, also known as the Clery Act, which was in honor of their daughter, Jeanne Clery. What the law required was that schools must notify the campus community of a preventable crime in a timely manner. They believed that had their daughter been aware of this criminal on campus, she would have been vigilant. She would have locked her doors. She possibly would have had a different outcome.
Andrew: How would anyone have known that he was a rapist on campus?
Ara: Apparently he committed a crime prior to that and back then, in 1986 you have to keep in mind that communications is nowhere near where they are today. So, reading that article just triggered that aha moment, if you will, that we can use text messages as a way to communicate with students on a campus to keep them safe, as a way to bolster the Clery Act to communicate in a timely fashion.
Andrew: I see. So, you were seeing that this was a problem. If there was a way to communicate to her that there was a criminal on campus, she could have stayed indoors, been more alert and potentially have been safe because of this. I see the problem. How do you realize that text is going to be the solution? The leap from the problem to the solution is one that I don’t understand.
Ara: Okay, Andrew, let me take you back prior to that because there is a first chapter to that story, if you will. So, back in the early 2000s, my wife and I moved to the DC area, Northern Virginia. At that time, the real estate market was hotter than hot. We were frustrated every time we went to see a home listing. It was under contract. It was already sold or, “Sorry, you’re too late. You just missed it.” Back then, you had MLS listings which showed you all the homes that were available.
A friend of mine, my partner now, Nic Gustavsson, and I were texting one another back then. You remember back in 2002, texting on a Nokia phone or Motorola Razr was a cutting edge phone, you had to press the one key three times to get the C character. So, it was very cumbersome.
But the idea was, okay, there has to be a better way to list homes quickly so that the people that are interested have a chance to bid on it or even have a chance to view the home. And from a selling perspective, if you’ve ever sold a home, it’s a very anxiety-filled experience because you don’t know if your house is going to be on the market for a week, a month, a year and you want to sell it as soon as you can.
So, the idea, which became the first problem was the whole real estate issue. It’s something that we called HomeSync. I pitched the idea to my realtor who was selling us a house at the time. The idea was, okay, using text messaging and the web, you can prelist homes using HomeSync and send out a blast to your real estate community, your clients and they can respond or call right back and set up a viewing that night if you want to. So you could basically sell a home in an instant.
Ara: The problem was, Andrew, I thought it was a great solution. My partner did. My realtor did. But when we were trying to validate that there was a market for that, we just had one after another roadblock because nobody else really got it. Text messaging was still very new. In fact, some realtors felt that it was unethical to sell a house that quickly without having open houses and having it listed in the newspaper and the television and everything else.
Andrew: How deep into the solution did you get before you realized that realtors thought it was unethical and people weren’t ready for text messages, etc. How soon?
Ara: This was over the course of six months. What we did–this is one of the approaches that we take–we didn’t build the system yet. We basically created a mockup or a prototype of it and created the collateral. So, we would pitch it as if we had the solution called HomeSync just to gauge, “Are people willing to pay for this? Do they even find any interest?” Back then, most adults had no idea what a text message was. It just was not well-received. That’s when I was actually doing the research online and came across the article about Jeanne Clery.
Andrew: And that’s why your head was already connected to text messaging. If adults weren’t ready for text messages, college kids were open to the idea.
Ara: Precisely. At that point in time, so in 2003, the only demographic that was using text messaging at the that time was the 18-24 year old college market. It just seemed to be a much greater problem than selling homes at the time, the campus safety conundrum.
Andrew: I see. So, it’s not enough to just find a problem in the world and try to solve it, it has to be a big enough problem that people care about it and they have to be willing to be open to the solution. In your case, potential customers just weren’t open to the technology, weren’t open to the speed, weren’t open to it.
So, one of the things that I’m learning in this conversation–and I guess it’s something that’s come up in the past, of course it has–you want to check in with potential customers and say, “I see you have this problem. Am I right that it’s a problem? I have a solution. Does this sound like a solution that you would want?”
Ara: Exactly. You have to validate. You may have the pain personally, but do others have the same challenges or the same problems that are willing to pay for that remedy that you are willing to offer?
Andrew: Why didn’t you say, “You know what? The future is text messages. These guys just don’t know it yet. I am an evangelist. I have to tell you why the future is text messages. It’s me who is not doing a good enough job communicating. It might take me a few more months to do it, but I’ll do it.” You’re smiling.
Ara: If we didn’t get sidetracked with the campus safety, I guess we could have gone there. That’s one of the challenges of being an entrepreneur, seeing the future and living in the future and getting people to catch up with that, especially if you have something new that doesn’t exist yet. Now, if we built a better website creation tool or we built something that already gets a better blogging tool, then okay, this is a better blogging tool. Are you familiar with this?
But when you create something that doesn’t yet exist, when you create a campus emergency notification system or a new real estate marketing tool that involves sitting on your laptop in your client’s living room and blasting out a text message to 50 of your clients, that doesn’t yet exist. So, that is one of the challenges. You know, finding those visionary customers that can see that future, that’s always been one of the challenges. That was part of our higher education story as well.
Andrew: Alright. So, now you’ve got the technology. You know what the solution is. Do you go back out and validate it by talking to colleges to see if they’re open to buying?
Ara: So, we did not have the technology yet. We did the same approach. We basically created the outcome. We basically started with the end game. “Here’s a brochure.” The system was called e2Campus. So, in late 2003, we started going that direction. The first point of validation was my first call after seeing the article was to my partner Nic saying, “Hey, Nic, this is a problem that is yet to be solved and we can solve that with this technology that we’re planning on building.” He thought it was a great idea.
So, my next phone call was to the Clery family, to the Security on Campus, the organization that was formed in response to the tragedy in ’86. I spoke to Katherine Beth, who was their executive director at the time. She got it right away. She understood this e2Campus platform is a way to instantly communicate emergency information to students was a pheonomenal way that had never been done before to communicate and to really reinforce the Clery act to help further their mission of campus safety.
So, those were the first two points of validation. The third was to get an actual customer, a school to validate that this is a legitimate solution.
Andrew: And how did you do that? It’s true that you can have everyone agree that this makes sense, but schools, with their bureaucracy and their long timelines can make it all just go away.
Ara: Yeah. They certainly can. So, we created the brochures for this. We created web mockups to illustrate what it does and how it would work and how it would actually function. We were fortunate to connect with a visionary school administrator right from the very first meeting.
Andrew: How? What was your connection to a visionary school administrator?
Ara: It was a friend of ours, Peter Lester. He was helping us in the early stages. He had a connection at Anne Arundel Community College. We’re in the DC area. It was just a quick little drive over. He setup a meeting with Matt McManus, Maury Chaput, some of the school administrator safety folks. We explained what the system did. We demonstrated how it would work. We were fortunate enough that they got it.
Ara: So, they got it. They cut a purchase order soon after that. We had our first school rolled out in–
Andrew: For how much?
Ara: It was about a dollar per student per year. That’s what our pricing was at that time.
Andrew: Sorry. I interrupted you. You were saying it was for what?
Ara: Shame on you. No. It was about a dollar per student. So, for their population, I think they started off with about a 12,000 user license.
Andrew: Okay. Wow. So, you were getting $12,000 per year. That’s not enough to build out the software, right, especially in a world before Trello?
Ara: No. It wasn’t.
Andrew: I mean Twilio, excuse me.
Ara: Twilio. I was reading your background. That’s one of the things that most entrepreneurs, first time tech entrepreneurs don’t realize, the importance of partnership, of partnering with having a chief technology officer and a chief sales officer. You need both sides to operate. I worked with so many startups, so many technology people that believe that, “If I build a great technology, great app, build a website, it will sell itself.” And so, my partner, Nic Gustavsson, actually built the application.
Andrew: Okay. From scratch?
Ara: From scratch.
Andrew: Wow. So, you built it. How much does it cost back then? We’re talking about what, 2004? What did it cost to put that together?
Ara: Well, he built it. So, it was more of a–
Andrew: Just his time?
Ara: His background, just to give you a quick little snapshot, he and I met back in ’99-2000. He’s been in the mobile space for quite a while, more than probably anyone else that I’ve ever met, in the messaging space. He actually built a mobile messaging platform for the deaf population so they could interact back and forth. That actually preceded the Blackberry. So, he was already in that text messaging space, if you will. That’s why it made sense. He already had some sort of familiarity with that.
Andrew: How did you connect with him?
Ara: He was a customer of mine. I had a web development company back in the ’90s, went through the dotcom boom.
Ara: WebRESONANCE. Yes. I know it’s not a very intuitive name. But it was originally XNETIX and became webRESONANCE. It was one of those things. The same thing that we experienced with the text messaging and using that as a mass form of communication, I experienced the same thing with the web back in the 90s.
Speaking of businesses, often times I’d hear, “Hey, we’ve got a yellow pages. Why would we need a website? It’s just a fad. This web thing is going to come and go. I don’t need this.” So, once again, being an entrepreneur, living in the future and trying to bring people along has always been a challenge when you’re doing something new.
So, Nic and his company reachNET was a customer of mine. We connected instantly. We had a number of probably a half dozen projects between that and the time launched Omnilert.
Andrew: You were just trying to figure out, “What’s the next big thing for us?”
Andrew: For the two of you. It seems like you were a duo in search of a business idea.
Ara: Oh yeah.
Andrew: So, you knew that the future was going to be mobile. You knew that Nic was fantastic when it came to mobile. You’ve had a history of selling. You’re just looking for something for him to build and for you to sell.
Ara: Well, actually, quite frankly, that came to us in the form of a problem. So, we weren’t really looking for a solution. We weren’t looking for a business. One of the things that I think is important for your viewers and listeners is one of the key things about entrepreneurship that I think is so important is what I call a receptivity to opportunity, being receptive. What most people see as a problem, an entrepreneur sees as an opportunity.
So, the text messaging play came in the form of a real estate problem–you just can’t find homes fast enough. Because Nic and I had other businesses going on at the same time based on our own problems. We started this SEO company early on called Spider Magnet. We had limited success with that. We had customers. We had some traction. We took that and we built a whole series of websites that were SEO-based before Google changed their algorithm, I think, in 2003 and changed everything that we built up to that point. But we certainly have plenty of–we call it our lemon basket–we have plenty of projects we have queued up for the future.
Andrew: What is the lemon basket? I’m looking over your head and I see a lemon, right?
Ara: It’s based off a book Nic and I wrote called “The Lemonade Stand.” It’s really our philosophy, our approach on how we bootstrapped this business and our philosophy based on the businesses that we started in the past. So, the whole concept is about looking at problems as opportunities. Everyone looks at a lemon as a problem. That’s really the whole basis behind that. Without problems, we would have no opportunities. We’d live in utopia where there’s no such thing as a problem.
Andrew: So, you got your first customer August, 2014. How long did it take you to actually launch the product for your customer?
Ara: September, 2014.
Andrew: Wow. So, Nic is fantastic.
Ara: I don’t think he sleeps. He doesn’t.
Andrew: To this day, no sleep.
Ara: He doesn’t. He’s wide awake right now and he was up all night. But he doesn’t sleep. He started doing some preliminary work once we kind of had a sense that there was going to be some traction with that. But yeah, he built it. Back then, it was a prototype. But as you know, everyone refers to it as a minimum viable product now. But it was just the core ability to have people sign up for the system and to send out messages to thousands . . .
Andrew: You mean they’d go to a webpage, they’d enter their phone number and then they’d get alerts whenever something came up.
Ara: That’s correct.
Andrew: It’s only when a student would register that you guys would get paid or were you paid whether or not they signed up themselves?
Ara: It’s an annual platform license. So, we’re paid on an annual basis regardless. But you have the capability to send out alerts. I mentioned texts. So, texts was just one component. From the very beginning, text was always the most relevant mechanism. We call them end points. It was the most relevant end point because you’ve got your phone with you no matter where you are. Back then we were using words like, “It’s proximity independent communication. You can be anywhere,” as we’re trying to foster this whole new industry which exists today. But we also sent to email, web widgets, RSS feeds, MyAOL pages, My Google pages.
Andrew: I saw that. What was My Google? Oh, I know. My Google was their version of the like the MyYahoo system.
Andrew: Was it called iGoogle?
Ara: Back then it was called My Google. This was years before Facebook, years before Twitter, years before the iPhone. So, when you try to envision 2004, it’s almost difficult right now given all the technologies that have flourished over the past several years.
Andrew: Actually, I’m just doing a search for My Google limiting it to 2004.
Ara: I thought you still had a My Google page.
Andrew: You know what? I do remember being excited about those kinds of pages, that you can go in there and have the news exactly as you want it. This was before RSS was really big. I guess the idea is that if people were logging into Google, they were going to see their My Google page and see that there’s something going on on campus. That’s what you were trying to do.
Ara: Exactly, Andrew. That’s what we call multi-modality, which we later called Omnilerting. An alert is just one message going and an Omnilert is ubiquitous. It goes everywhere. If you’re on MyYahoo and there’s an emergency, yes, you will get an alert on your MyYahoo page in 2004 or MyAOL page, those pages were also alerted back then.
Andrew: So, we talked about how college students were really into texts. I remember being into texts in the early 2000s and late ’90s even. Still, you told our producer here at Mixergy that people just weren’t using text messaging enough. Adoption was slow.
Ara: With adults. I can’t tell you how many critical comments that I heard in the very first few years, like, “Why would anybody want to use a cell phone for anything but a phone call? What’s wrong with you? Nobody wants this. Nobody wants emergency alerts on a college campus.”
Andrew: “Why are you going to scare people with every single issue that comes up?”
Ara: Well, that became an issue later on. But back then, though, just making sense of the whole notion of a phone beeping and having a message on there was very novel to most people. In fact, for years after that, any time there was any TV show, anyone got a text message, they instantly thought, “Oh, that must be Ara and Nic because they invented text messaging.”
Andrew: “Who else would text me?”
Ara: I wish I could take credit for that.
Andrew: All right. So, in a moment, we’ll talk about what you did to increase adoption, but first I’ve got to say a word here about my sponsor, which is TheArtofCharmPodcast.com. You probably have seen them a million times if you’re in the iTunes Store. They’re a top 50 podcast consistently. Often I see them in the top ten. What they do is aim for interviews and podcast episodes that are about wisdom in many different forms–how to increase your confidence, how to get people to like and trust you, how to keep things fresh in a relationship, how to create a new relationship, how to end a relationship.
They talk about productivity, time management and they do it all with the goal of being funny and quirky and educational at the same time. Actually right here in my notes they say, “We don’t want to be stuffy college professors.” Well, I’ll tell you, I’ve seen them, the two guys behind it, AJ and Jordan. There’s nothing stuffy about them. I think Jordan wears a baseball cap 24/7.
But they have a show that’s highly addictive. It’s constantly, as I say, one of the most popular podcasts in the iTunes store and you can get it no matter what program you use to get podcasts. All you have to do is go to TheArtofCharmPodcast.com and sign up or just go to whatever podcast program you’re using, hit the search button and type in “The Art of Charm” and you’ll get them.
Ara, what do you do in a world where people just aren’t ready for this? What do you tackle first? Do you say, “We want everybody on campus to be using this text messaging and MyYahoo, etc.” or do you say, “We need to go out and get more colleges because if we convince the colleges to do this, the students will follow?”
Ara: Oh, you have to get more colleges. That is clearly the only way to do it. We were signing up colleges slowly. It took a while. For the first couple of years, it took a while to close new schools. But the interesting thing about the higher education market is that it is very much a community. It’s very much a peer community where people like to share information and best practices with one another.
So, that certainly helped. Getting involved in associations, attending conferences and really making–we had to introduce this. The thing is, I was speaking to an entrepreneur the other day. It’s almost like at this stage you are on a visionary expedition. Don’t try to sell someone who just doesn’t get it.
Andrew: You’re looking for visionaries.
Ara: Visionaries that can see, that are progressive, that say, “Hey, I want to be the first kid on the block with this new technology.”
Andrew: So, here’s what I don’t understand. With the first version of the business, the one you talked about earlier aimed at realtors, they weren’t fully buying it, but you weren’t out there on a mission to find the visionaries who would and to convince them. With this business, you were. I think you were right to do this.
I’m trying to draw the bigger lesson here. When do you know that if the world doesn’t get it, you have to go out there and look for the visionaries who do because they will help evangelize it and then this thing will spread and become as big as Omnilert has become? When do you know it’s going to be that and when do you know, “It’s just a lost cause to convince these people because they’re never going to go along with it and you’re going to waste your time trying to talk to people who are never going to get it?”
Ara: Well, that’s a good question, Andrew, and I wish I had a concise answer after 35 attempts, time to throw in the towel. It’s not that easy. In fact, I think HomeSync.com is still alive. It says, “Coming in 2004.” So, that’s still open. We haven’t stopped that yet.
Andrew: It’s actually working? No.
Ara: No. It’s not working.
Andrew: What’s the URL?
Ara: HomeSync. I think it’s Sync.
Andrew: And you got HomeSync.com. That’s a really good name. I think in the world now where everything is operating at home on the mobile phone, that’s a good name that you can use in the future. But it doesn’t work? It looks like it’s–oh, it looks like it’s old technology, but you’re charging $10 a month. Does it work?
Ara: I think there’s another HomeSync with a C. It’s not live. It’s just a coming soon page.
Andrew: Okay. Then I’m looking at another one. Okay, so, how do you know when it’s going to be a lost cause and when it’s worth trying to find the visionaries?
Ara: Well, it’s one of those things that now is commonly called pivoting. I know in most of the people that I have worked with over time, what you originally intend your technology to be is something that it will end up not being. You think Mark Zuckerberg started Facebook with the intention of building this worldwide global social media network? There was an initial problem that he faced that he applied.
Likewise, with Apple, that started off to sell these computer kits. It wasn’t to build home computer systems fully assembled, ready to go out of the box. So, with this, in another couple of months I probably would have decided there’s nothing here and to look at something else.
Andrew: Except was it that the first school said, “Yes, we want this,” and that was encouraging enough to continue and then after they started using it, it didn’t have mass adoption, but enough positive feedback for you to say, “This feels right and I’m going to continue because they love it enough and if I can find more of this feeling across the country, then I’ve got a business I can be proud of and make money.”
Ara: Absolutely, Andrew. And we believed in it 100 percent.
Andrew: Why? Give me a little bit of a taste of what it was like to talk to someone who was an early visionary, who, even though they weren’t making you a millionaire at the time, they were making you feel like you were on the right track? What did they say? Who’s one person who gave you such positive feedback that you said, “I want to stick with this?”
Ara: Just “thank you.” Here’s a great example. So, down in Florida, there’s a university in Florida. They were an early school because Florida is prone to hurricanes. They were an early adopter of the system. There was a rapid pit bull on the loose in the school’s quad. They used e2Campus to notify the campus community, “Stay away. There’s a rabid pit bull.” And they were thrilled. They were thrilled to be able to do that. What would they have done in the past?
Andrew: I see. And that’s something else that I’m seeing in these interviews too. I don’t want to draw this out of you if it’s not true, but my sense is that in the early days, before there is clear metrics that show that everything is okay, that you’re going to make a killing with this business. Often what happens is you get really positive feedback from people who show you that this is wanted and useful and that others might be like this out there in the world who are going to want this and appreciate it and the money will follow that passion.
Ara: Yeah. And Andrew, here’s the really cool thing about all of this. We had consistent positive feedback from those schools. What I find remarkable is that 98 percent of our customers renew every single year. Anne Arundel Community College, that very first school, is still using e2Campus even though now there are dozens and dozens of other companies offering similar type services. They still appreciate the value that the solution provides for them.
Like I said, we all truly believed in what we were doing. We all believed. This is also a very cool thing. As any entrepreneur, you have a vision and it’s really a remarkable thing. It’s one of those things that you really cherish when you see the realization of a vision. Let me turn this phone off.
Andrew: I thought that was someone burping in the background.
Andrew: I’m looking at the early website. I’ve got a screenshot of it from the mid-2000s, early 2000s, I think. “Introducing a new way to connect with your campus community. E2Campus,” trademark symbol above it, “patent pending, is a fully-managed wireless campus communication system, WCCS.” You guys invented that.
Ara: Oh my gosh. Yes, we did. We invented that. We were creating and pioneering a new industry that did not exist.
Andrew: By naming it, it became more real in conversations with people, by naming it yourselves, it was your thing.
Ara: It certainly was. Yeah. This is what we do.
Andrew: You were also in the DC area. I lived in DC for a couple of years. I remember, it’s just packed with college kids, college kids and political junkies. So, you had a lot of opportunities to sell. Did you do any door-to-door sales or knocking on doors or was it all one referral to the next, going to expos and conferences, etc. Where did you get your customers?
Ara: Much of it was word of mouth based on reputation, conferences. We did direct outreach, direct sales.
Andrew: You did it. What was your process? I’m looking here at your resume. It’s bouncing back and forth between entrepreneurship and like founder of Kidco in the mid-80s. How old were you when you were founding Kidco?
Ara: Oh, boy, like eight or nine or something.
Andrew: Eight or nine–what did Kidco do?
Ara: I didn’t know that I believed in this, but the whole experience and the meaning behind brand experience, I didn’t know what it was back then. But Kidco was really a full service landscaping. This was in Buffalo. So, we had a good friend of mine who is an entrepreneur today and some kids in the neighborhood and my brothers, we started Kidco. We got Kidco hats, t-shirts at the mall so we looked like what we were doing.
Ara: We did lawn mowing, weeding gardens, shoveling snow, raking leaves, pretty much everything that you can imagine. But it wasn’t just a couple of kids that are just going to rake your lawn. It was Kidco. We actually had the uniforms and everything.
Andrew: So, I do see that here throughout your experience. You are the salesperson. You were a sales exec at Ingram Micro. You were sales manager at Vcall. So, you’re the guy who had to make those sales calls on colleges. What was your process for getting those early people to talk to you on the phone and convincing them to try a demo and then convincing them to sign up and pay you per student? What was your process?
Ara: Let’s put it this way. Just outbound cold calling was not very effective with something this new. So, what was most effective process-wise was exhibiting and attending certain tradeshows, higher education conferences and having a presence there. Most of the conferences that we attended were small. We were maybe one of five exhibitors. They were regionalized. We would attend some Virginia conferences, Maryland, DC conferences.
But that was a way for us to start the conversation with school administrators, campus safety professionals. We were not as effective on just picking up the phone and cold calling. Referrals were certainly a key factor too. So, I would say referrals, starting the conversation at the conferences were really the two key areas.
Andrew: So, you would meet someone at a conference. You’d tell them about the product. How long would it take from that intro to the sale?
Ara: I’m a closer. Maybe 24 hours.
Andrew: Oh, really? You could close that fast?
Ara: No, no. It would take a while. It would take anywhere from a month to ten months.
Andrew: Yeah. You know what? I’ve interviewed several people who have sold to colleges and it was just so tough. I remember one guy said, “I just stopped selling directly to colleges. I created software that went directly to the students and if professors wanted to interact with the students, then they could pay. But I couldn’t get the schools to pay.”
Ara: Well, Andrew, so, the sales cycle was between one and ten months but there was a period of time where it was in one to ten minutes.
Andrew: Okay. When did that happen? What happened that turned things from one to ten minutes?
Ara: So, prior to the Virginia Tech tragedy in 2007, we were probably the only mass campus notification platform available. Immediately after that, our customers who are using our e2Campus and Omnilert, campus safety advocates were on television proclaiming the need and necessity of using an e2Campus emergency notification system. “Why aren’t schools using this? This is available. You can notify the campus community in a matter of seconds.”
Andrew: Suddenly it became really clear why this would be necessary.
Ara: The pain became extremely relevant and apparent across the board. Prior to that, we started getting some traction. We signed a few major colleges. We got some media coverage in USA Today. So, we were at the point we were signing up a school. Every Friday was the new customer day.
Andrew: So, once a week, roughly?
Ara: Yeah. About once a week leading up. So, we had about, I think, about 50 colleges at that point in time. So, once that happened, it became immediately–what we offered became immediately relevant at that moment in time. It went from being a nice to have, “Well, we’ll consider this,” to a need to have, “You must have this.” People were demanding that schools have our system. So, we would get phone calls. It was a tsunami for a year and a half after that. The phones would ring nonstop. Email leads would come in.
We had a few times where we had–here’s the one-minute sales cycle–a campus police chief call and say, “Listen, our president has got a press conference in ten minutes. We need the system up and running.” “Not a problem, Sir, sign the contract.” The nice thing is that we built our business to be so scalable that we could setup a school in ten minutes if they needed to be up and running.
Andrew: Yeah. I do see that the earlier version of the site had a phone number, but it wasn’t really emphasized. You can hit the contact link and go to a form, but as you guys progressed, that phone number was top of the site, really clear.
The other thing that I’m noticing is as you guys progressed, the collection of news stories, of media coverage just grows and grows and grows. 2007 was really big for you. I’m trying to bring up a USA Today article from 2007, but their website is just not bringing it up for some reason. Maybe they’re having issues connecting. But USA Today helped cover you, other people, including the Harvard Crimson. What did you guys do to get press, to get people to start writing about this idea?
Ara: We were well-positioned before this became so relevant. Our marketing director, then Bryan Crum, did an incredible job in building an incredibly rich website. The website must have had 1,000 pages of content in there because it educated. We were on a mission. We were out here to proclaim the gospel of multi-modality and e2Campus and campus safety. So, we had to educate the market.
So, our website, e2Campus.com was just a wealth of knowledge on this new industry that was about to be born. So, it was our school speaking to the media. It was campus safety advocates speaking to the media.
Andrew: Did you coordinate that? You guys, I’ve connected with you because of a PR person or a media person. So, you guys are media savvy. Were you then, in 2007, savvy enough to say, “Look, this is showing an example of the problem we’re trying to solve. We have to get the word out there.” Did you take that story out?
Ara: No, we did not. In fact, we almost had the contrary response. We felt that we did not want to exploit the situation, if you will. In fact, we were quite on the contrary. We had a number of interviews during that time period. The whole story obviously perpetuated and the arrows were leading back to e2Campus and our solution.
For example, when Wolf Blitzer is doing a live demonstrated of your system with his cellphone on national news in primetime, it’s going to perpetuate. When you’re on the front page of the Wall Street Journey, that tends to perpetuate even more. But we deliberately did not want to be a part of the story. This is not about us. This is not about what we could have done to help prevent this from happening. Believe me, we had quite a bit of media trying to pry that out of us. But we did not want to be–
Andrew: But look at the change that happened all of a sudden. I’m looking at an article on USA Today that finally came up on my screen from April 24th, 2007 about how Penn State is happy with their service and Florida State University is asking state legislature for $1.5 million so that they could buy new emergency alert systems.
Nic is referenced here. At the time, he says that you guys had 34 campuses but more than 500 colleges have started contacting you about setting up text messaging systems. So, we’re talking about 150 times–no, wait, we’re talking about 15 times the number of people who signed up. That’s phenomenal all of a sudden.
Ara: It certainly was. But like I said, we already had the infrastructure in place to be able to handle that and to service that type of volume.
Andrew: And let’s look at this. You guys launched 2004. It’s not until 2007 that you start to take off. In those roughly two and a half, three years, were there periods where you said, “You know what? What am I doing here? I’ve got to get out of this business. It’s not working. It’s just too slow.”
Andrew: No. You just knew it.
Ara: We just knew it.
Andrew: Is it because you had a day job until 2007?
Ara: I did. My partner, Nic, did not. I think he was down to his last $100 from his 401(k). He was full time before I came on full time. It was around that time. But yeah, that’s the thing. I mentioned Peter Lester, he was helping us with sales. He’s the one who lined up the Anne Arundel deal. He was really working full time as well.
But we believed in what we were doing and we believed that this would one day be a new standard in campus safety. It did. Unfortunately, it took the tragedy at Tech to really put the spotlight on what we did. The thing is, we were doing this for years and years and years and years before and a number of schools did get it before. Now it’s pretty much required in most states to have a system. Now there are systems, but then it was the system.
Andrew: I get it. You told our producer too that, like you said here, by then you already had a scalable system in place that could accommodate that kind of growth. Then you said is it like Salesforce or do you mean that you actually included Salesforce in your system?
Ara: We used Salesforce to do the web form lead processing and assignments and all that. We had I think it’s called Grasshopper, the telephone system to field the calls, get them routed properly. And then the system setup time, the nice thing, I think the brilliance and the design of our system, which is still very much the way it is, is very clean, very simple, very easy to use, is that 19 out of 20 school administrators did not require training. They received their account information, logged on and were able to start using the system right away.
So, that certainly helped. The simplicity of the product certainly helped part of that scalability as well. So, when you’re setting up 20, 30 new customers a day on an enterprise system, you have to be able to do that efficiently.
Andrew: Something else that stood out for me in that USA Today article is they started referencing the company. They started calling the company Omnilert. By then, you’d expanded beyond e2Campus. You also noticed that there was another problem a couple of years before where soccer games were getting rained out.
Andrew: How did you come to that realization and what did you do about it?
Ara: Well, Andrew, it’s about embracing the problems. So, this was 2005. That was soon after we launched e2Campus. So, I was coaching my son’s youth soccer team. I think it was like 6 and 7-year-olds at the time. When I went out to the field, I called a hotline to see if the games were on or what. The line was busy. The line was busy. So, I’m like, “To heck with it.” I went out to the field. Then of course parents were yelling at me, like, “What’s going on here? What’s going on with the games?” It was drizzling. It was between on and off.
So, I’m like, “You know what? There’s got to be a better way to get the word out,” instead of just having a hotline which is basically an answering machine for parents to call in because at that point, that was the only way to find out, through the cancellation hotline. So, I spoke to the league administrator at the time, Sharon Wells, and I said, “Hey, you know what? Sharon, we just invented this alerting system that will allow people, parents to sign up to the system on your website, on the soccer website and you can just enter one message and bam, it will text everybody in a manner of seconds about game cancellations.”
Andrew: And was she into it?
Ara: I struck into a visionary. By the way, she’s an entrepreneur now too. She’s starting a new business at the George Mason Enterprise Center in the incubator. But she was a visionary. She got it. I’m telling you. This sounds a little exaggerated. But I think they added it to their website, sent out an email blast and within a week or so, there were 5,000 parents signed up for the service.
Andrew: And she was willing to pay for it?
Ara: It was a free service at the time. It was my personal remedy. It was like, “Listen, I can’t take this anymore. These parents are just really upset.” They were using e2Campus. They weren’t using RainedOut. So, there wasn’t even a RainedOut at that point in time.
Andrew: But it was enough to show, “Hey, you know what? There’s something here. Parents will sign up if we do this. We have a case study now that we can take out to others.” Who would you take it out to?
Ara: Well, here’s the thing, Andrew. So, we didn’t even take it out. Like I said, this was just a specific remedy to a pain that I experienced and that she experienced too. So, she spoke to her peers like, “Hey, what is this? What is this text message I got about the soccer practice? How do we get this for parks and rec? How do we get this for our football team?” Then we started getting inquiries.
So, I think between six months to a year we decided to spin it off as its own brand. Then we gave birth to RainedOut. It really grew completely organically, virally. It’s been a service that we’ve had. We put some resources into it a few years ago. We did a few soccer conventions, tradeshows. But that has just grown tremendously.
Andrew: And there’s money in that? Soccer coaches are willing to spend money on it?
Ara: So, it’s basically a very, very, very ultra-light version of Omnilert. So, it can only do a few things. It’s more consumer-driven. But it’s actually based on a sponsorship-based model.
Andrew: Ah, I see.
Ara: So, we have something we call AdSpan. It’s almost like AdWords for mobile ad insertion. So, if Mixergy wants to sponsor the local soccer team or softball team, you go to RainedOut, you go to the soccer team and you say, “Hey, I want to sponsor this.” So, every time an alert goes out, it’s sponsored by Mixergy.
Andrew: I see. And it’s five cents per message that I would pay.
Ara: Exactly. Quite frankly, it’s the only opportunity that you would have as a non-Fortune 500 company that has access to ad agencies that can do major campaigns–
Andrew: It just doesn’t seem like a big part of your business though from what I can tell, right?
Ara: It’s not. It’s something that we have. It was born out of necessity. It continues to grow. But we don’t really focus many of our resources on RainedOut.
Andrew: I don’t want to embarrass you but I can tell when I go to the advertising page, the images are broken. The pricing for ads.
Ara: Oh, really?
Ara: Oh, okay. I’ll have to look at that.
Andrew: When I look at where your traffic is coming form for Omnilert, it looks like e2Campus is the number one source of traffic, 35 percent, at least according to SimilarWeb, which I really like. So, what we’re seeing is that it’s still the campus business that’s really big for you.
Ara: And we call it our cause-based brand. Omnilert is fantastic in the corporate. We have all sizes of corporations, nonprofits, governments, etc. But e2Campus is where we started. That’s the unique thing about our whole position. We started from a very different place 11 years ago based on that article about Jeanne Clery and the desire to solve that problem, if you will, of campus safety communications.
It’s amazing. We have such a great community of colleges, not community colleges but a community of colleges that use our–many community colleges too–that use our service, that share best practices with one another, that are always willing to help advance the whole cause of campus safety. That’s what it’s all about. That’s why we’re very passionate about that.
Andrew: I’m about to ask you what your revenue is. I see it here on my screen and I also see a note here that says that you told us so that when we’re checking out the company, but you also would rather not say it. So, let me ask you this, do you feel comfortable saying whether it’s over $3 million?
Ara: I mean, that’s probably the extent of it.
Andrew: You’re saying you do feel comfortable saying that, but that’s the extent of what you feel comfortable saying.
Andrew: Are you profitable?
Ara: We are profitable.
Andrew: I notice you didn’t take any outside funding. You mentioned that in the pre-interview that we did here at Mixergy. Why not?
Ara: Well, we took the approach to bootstrap this from the very beginning and what we call funding the business through sales. So, we do have funding from our customers as investors, obviously. Our model is that it is recurring revenue. It’s an annual license-based model. But we wanted to maintain the control over the vision. We’ve made some bold moves over the years that, quite frankly, many investors probably wouldn’t understand. That seems to be a trend that we have.
Andrew: For example?
Ara: For example, we just launched a brand new app called Scenario Launcher which is really cool. What this allows you to do is imagine if you are a campus administrator. You’re informed that, “We need to lockdown campus because there’s a suspected student with a gun on campus.” This happened not too long ago. It happens almost every day in some places. But typically it’s a false alarm.
But what Scenario Launcher allows you to do is from a native iPhone or Android app, select a scenario and it triggers a series of actions. For example, it will update your website with a central message. It will send a text message to students. It will call parents. It will initiate a desktop alert on all the campus televisions, and desktops. It will send a tweet about the lockdown, “More information to follow.” It will post to Facebook. The things that you can do–it will trigger the public address system.
Andrew: I see it right here.
Ara: Scenario Launcher. So, that happens all at once. We have always been focused on the customer’s pain and building a solution for that rather than, “Let’s focus on what other people are doing and let’s replicate what they’re doing so we can have a feature war.” So, they have this. Let’s do this. We’ve always been completely focused. That’s one of the biggest things about the company. Empathy is in our DNA.
Andrew: How? How can you figure out what problems colleges have when you’re so different from colleges? Your culture is different from colleges. You haven’t been to college in a few years. How can you get really clear about what their problems are so you can solve them?
Ara: Okay, Andrew. We have dedicated account managers for higher education that all they do is work with schools every single day. So, they’re basically part of their team. So, we actually have direct engagement with schools. So, we’re constantly involved in the discussions. We’re constantly involved in the associations, the education trade organizations. It’s part of our passion.
This week, we’re starting something that’s called OT Lab, which is Omnilert Thought Leadership advisory board, which is a select group of customers that are gathered on a quarterly conference call to discuss the challenges that they have and discuss solutions for them.
Andrew: I see. So, they get on a call with you. This is really interesting. They tell you what their problems are, what they’re going through. You try to solve it there. How do you not commit to doing too much when people are telling you their problems?
Ara: Well, we take it in.
Andrew: You’re not trying to solve it on the call, you’re just trying to really understand. You’re giving them a forum to tell you what they’re going through with an understanding that you can’t be Superman and solve everything, but you do want to hear it all.
Ara: Exactly. That’s the thing. Like I said, we’re empathetic. It’s funny. I mentioned our dedicated account managers. One of our account managers, she’s got such a relationship with her customers. If you stop by where we are at a tradeshow, she’s just getting hugs by every single customer that walks by. It’s not uncommon to find her walking in a parade in one of the cities that she’s visiting customers in.
It’s that kind of relationship that we have that’s just beyond a vendor customer type relationship. Higher education is unique in that. It’s very much a community. It is a community. We’re trying to foster more of that. We’re trying to foster a community that is geared around the challenges and solutions around emergency communications.
Andrew: That’s really helpful to know. I think I should do some kind of council like that for Mixergy. I do feel sometimes that I’m out of touch with the problems that people have. I’m doing an event that, by the time this interview will be up, will have been finished. I spoke with someone about it and I said, “You know, I’m noticing that people want to get together with other people at the event so I’m going to have some space before and after for us to drink and talk. I just didn’t realize that was an issue.” He said, “Come on, Andrew, you should have.”
I thought maybe I should have, but at this point, I’m connected with so many people that I just lost touch with the need to connect. It doesn’t seem like a problem I have. It seems like most people would want to be–I guess because I’m thinking I would want to be a little more private and have a little more space, so I’m assuming everyone else does. That’s why I asked that question.
Ara: Well, Andrew, I’m honored to be the first invitation for your Mixergy Thought Leadership Advisory Board. Thanks.
Andrew: I feel like, actually, tell me if I’m wrong. First of all, I’d love to have you as an advisor in any way, but it sounds like what I’m learning from you is get your customers together on an advisory board to tell you what problems they’re having so that you could learn from them and figure out how to then solve the problems. Don’t try to solve it on the call. I thought you were saying get my customers on a call. But you’re also saying I should get people who are advanced entrepreneurs to be on a call with me to just talk about issues too. Am I right?
Ara: Exactly. It’s not only in the instance of the Omnilert Thought Leadership Advisory Board or OT Lab, it’s not really about, “Hey, what features do you want to see? Let’s talk about features.” It’s about the problems and challenges. Part of that can be our educational resources. Maybe we need to have user groups or have a podcast series that discusses some of the best practices or other things. We’re publishing a magazine, the Journal of Omnilerting, which is really geared to share ideas amongst our customers and best practices.
But yeah, what are your challenges? Otherwise then it’s a sales call. “Hey, tell me what you want and I’ll give it to you. How does that sound?” You have to be genuinely empathetic and leave it at that and then come back and say, “Here’s what we came up with, Andrew. You had these challenges that you discussed on our last call. Here’s what we came up with that we think that you will appreciate based on your feedback.”
Andrew: I want to read two things here and then ask you one final very important question. These two things are actually reviews in the iTunes Store for Mixergy. One is from El Mac Gato, who says, “Andrew’s interviews are like mental cocaine. I dare you to listen to only one. It can’t be done. Once you listen to the first, you’ll be back for more.”
And here’s the part that I think he gets, “Andrew’s interview style is half grand inquisitor,” which is a little much, but okay, “And half excited schoolboy.” And I definitely see both of those sides, even if I wouldn’t express it like El Mac Gato. He says, “They’re thorough and energetic,” and yes, I do like to be both of those, “And I personally learn so much from people who have made and lost millions on his show. Aces 10, Andrew.”
And then I also see another one from Achilles, who says, “I’m glad that you started making an audio podcast. Now I can listen while I’m driving. I love the interviews. Keep them coming.” Now, Achilles and anyone else who’s out there listening, I’ve been doing podcasting since basically day one of Mixergy, but I’ve been doing a horrible job of telling people to go and sign up for the podcast and telling and asking people to please review and rate Mixergy.
The more you do in those iTunes Stores and whatever other store, the more people will get to see that we’re offering a free podcast with every single new interview available as soon as we publish. You make it available for other people and you make it easier for them to find us.
So, I’m really going to ask you guys–and I hate asking people for stuff, but I have to because it’s important for getting the word out–please, go into the iTunes Store, rate and review Mixergy and the more you do, the easier it is for people like Achilles to find Mixergy’s podcast faster and not just assume that we’re not out there. So, Achilles and El Mac Gato, thank you.
My final question is this. You’ve done it. You’ve worked so hard. What’s the best part of having gone through all this? What’s the part that kid who started Kidco back in 1981 would look back on and say, “I’m so proud of you, Adult Me, for having done?”
Ara: I would say sticking with it. I would say realizing having the true actualization of a vision when many people thought that that vision was too foggy and short-sighted, if you will. I was going to mention I think the true actual realization of the vision–so, when you’re looking back at the old e2Campus, I’m not sure if it was in there, but our vision was one day this will become the new standard in campus safety, right?
So, I think in 2003–you can look this up online–I believe it was Readers Digest that listed their top ten campuses or they have a campus guide. One of their ten criteria that they had in that guide was does the school have an emergency notification system, and there you go. The new standard has been established.
Andrew: The new standard. Wow. What a way to embed yourself into the world of your customers, to be that solution that allows them to get students and to get them to feel comfortable. I can’t believe I never heard your story before. I’m so lucky that you agreed to do an interview and that your team made it easy for us to do it. The website, for anyone who wants to go check it out, is Omnilert.com. Let me make sure that I see anything here that we should–Omnilert.com.
And I also think that you should check out any Amazon bookstore, any other bookstore, a book called “The Lemonade Stand: What Every Entrepreneur Should Know to Succeed in Starting and Running Any Business.” It’s authored by Ara and Nic. I love when real entrepreneurs put down their ideas about business instead of just some consultant who’s pontificating–real guys who have really gone through it. Congratulations on all of your success. It’s great to have you on here.
Ara: Thanks, Andrew. I appreciate the fact that you are doing this podcast series. It is invaluable insight for entrepreneurs.
Andrew: Thank you.
Ara: Kudos to you.
Andrew: I love doing it and I love getting to meet you. Thank you all for being a part of Mixergy. Bye everyone.