Mike Chasen was the speaker at the Potomac Officers Club event last week.  He talked about his experiences as the founding CEO of Blackboard, which he’s built from a 2 person partnership crammed into a tiny office in DC in 1997 to an 850 person publicly traded company with offices around the world.  Blackboard provides software that helps universities put their courses online.  Some points he stressed that stuck out at me in terms of lessons for growing start-ups:

• Focus.  He recognizes that a lot of entrepreneurs try to get started part-time, but he believes in 100% focus for start-ups.  Their original idea was to put college applications online (not courses), but he and his partner tried to do it while keeping their day jobs at KPMG, and it never got over the hump of initial resistance.  They faced the same resistance with putting courses online, but, because they were focused, they pushed through and made it work.
• Charge.  They’ve always stuck with a model of charging for software rather than giving it away for free in the hopes that their audience would grow and ad revenue would follow.  They faced pressure to “go free” in the dot com bubble, and while their decision not to makes them look smart now, he notes that the only reason they didn’t consider it was that they didn’t understand the model.
• Know your model.  One early day of fundraising involved two VC meetings.  In the first, after Mike explained that their model of long-term software licenses would create predictable revenue, the VC told him he was nuts — that everyone in DC makes money on consulting, and that they should give away the software but charge big for integration services.  A quick study, on his 2nd VC meeting that afternoon, Mike explained their model would be to give away software and charge for services, to which the VC countered that the margins on software sales were way more attractive and that services would be a bust. 
• Embrace turnover. He’s been through six heads of sales, and clarified that doing so was a natural reflection of their evolution as a company.  At each stage of their growth, Blackboard needed a different skill set to handle the specific challenges of that stage.  He also noted that they’re “right” about a hire about 50% of the time.
• Network. He credits local networking events for leading him to their first angel investor, who put up $200,000 as part of a $500k round.  They went on to raise more than $100 million. 
• Take it. He recommends raising as much money as you can in each round, even though he admits that their final round of funding (~$50 M) was hampered by their excess in the previous round.
• Pie. His ownership stake in Blackboard is down to 4%, but he points out that if he’d tried to hold on to more equity he wouldn’t have been able to grow Blackboard the way he did.  He’d rather have 4% of a big pie than 50% of nothing.

I was impressed by the story of Blackboard.  Mike started the company with only a couple of years of professional experience and grew it through some turbulent times.  For him to remain at the helm through all that change and maintain his passion and effectiveness is remarkable.