Categorized | Shoestring Startup

API-CST Profiler – Helping Schools Learn About Themselves

You could say that the API-CST Profiler started in a dive bar called Nunu’s in the Hillcrest district of San Diego. Eric and I were talking over beer after a Toastmaster’s meeting, and after I mentioned that I was a software engineer, he asked me for advice. He was a high school administrator, had started a consulting business helping schools to understand the large volumes of test and other performance data that is collected and published about them. He had been wondering if the analysis he was doing was something that might be able to be automated, and had even contacted someone from the Small Business Innovation Research program to see if he could get a grant to hire a software engineer. The official had told him to call back in six months, and here a year later he was still without a grant and wondering if automation was possible. “That’s what I do… tell me more”, I said, and we were off.

We arranged a day when he could take time off from his day job as a High School administrator and show me the types of analyses he prepared. Before we got started, I helped him prep his living room for the presentation. We tacked several layers of sheets over the French doors to block out the light, with the sheets performing double duty as a screen for projecting the graphs. We even climbed up to the roof to drop some throw rugs over the skylights. Back inside, it was as dark as any corporate boardroom.

As he showed me the different graphs prepared, I was ticking things off in the back of my head: that makes sense, I can do that one, that one may be a little tricky. Then he showed me the databases. Large, often oddly formatted datafiles with obscure labels downloaded from a set of State of California websites. The first question, and task, would be to see if I could massage those into a more useful and manipulable format. At least I had Eric as a domain expert to explain what all of those odd acronyms and references meant.

Fast forward three weeks, and I had the data nicely parsed and loaded into a mysql database, and some initial, basic graphs working. I was racing to finish a prototype before leaving the country with my wife for three weeks. The day before our flight was scheduled to leave, I was frantically coding away and exchanging emails with Eric, making sure that he had access to the test site I had put up and that nothing obvious was breaking.

While I was gone, he was going to play with the prototype and come up with a list of potential beta testers from the administrators he knew in the local district. What I didn’t know was that he was also setting up meetings to show them the early prototype! Right as I was arriving back to California, he casually mentioned in an email: “I narrowed my beta-tester list to seven schools in San Diego Unified. I’ll be presenting to four of them tomorrow, Thursday”. Once my heart started beating again (the prototype was *not* polished at all), I realized that even in its very raw state, the feedback those administrators could give would be incredibly valuable.

The next day the reviews were in. What had initially been intended as a 30-minute meeting had turned into 2 hours, with the principals riveted by the tool and wanting more. At that point we knew we had the potential for a real business, and buckled down into the hard work of building out all of the details.

Neither of us had much extra money laying around, so it came down to us to do everything, and we tried to do it all on as small of a budget as possible. This often meant learning new skills as we went along. Our entire business is run on a single virtual server from slicehost.com, managing our website, the web application, databases, and email, all set up and managed by us. The only services we use are a third party for payment management, using chargify.com, in cooperation with a merchant banker and gateway provider. The entire cost from start to launch was around $400, with the biggest part of that going to getting the various credit card processing/bank related stuff set up.

The hassle of dealing with payment by credit card online is probably the biggest thing I wish I’d known about ahead of time. Even with a third party service like Chargify handling the problems of security and PCI compliance, getting set up to accept payments online is a delicate dance involving multiple organizations all having to approve the website and process. The process of getting approved takes a while and involves some back and forth. Had I realized this ahead of time I would have put more effort into getting it started earlier in our product development process. As it is, we were racing to try to get payment working before our targeted launch date.

The API-CST Profiler was launched as a private beta for 5 customers at the beginning of August 2010, and we launched version 1.0 on September 6th. Given our $400 startup costs, we will be cash flow positive after 1-2 sales. We have done some estimates of the market size and believe there are total potential revenues of around $1.5 million a year if we can get to 50% saturation of the available market. We believe this level of saturation is possible based on the highly enthusiastic response we have received to date, and the fact that there is no comparable product competing with us. However, given the recency of our launch we don’t yet have sales figures to validate that belief.

As the product neared completion, we have shifted into figuring out a marketing plan. Given our shoestring budget, we decided to rely upon free search traffic, direct contact, and word of mouth.

The first order of business was putting together a descriptive website with marketing and informative materials. Having a solid website provides a place to refer people to whenever they express interest, serving as a ‘home base’ for all of our marketing efforts. Filling it out with informative materials on items of interest to school administrators like increasing your API score help it to rise through the search engine ranks.

The next tactic is direct contact: due to Eric’s work in the field, he knew a number of administrators that he was able to reach out to directly. This outreach not only gained us our Beta testers, but then through referrals helped us make contact with an Area Superintendent and some educational researchers at UCSD. We are currently scheduling meetings with all of these people to present about and demonstrate the product, which we anticipate leading to both sales and further referrals via word of mouth.

The final way we are looking to spread the API-CST Profiler is via trial accounts. We have a limited version of the profiler that is available for free, and is still useful to administrators. We are mining our database for schools with particularly interesting results that are visible even with the trial account, and will be doing direct outreach to the administrators of those schools to get them to sign up for a trial account. We don’t know how many of those trials will turn into purchases, but we believe that at the very least this will ‘seed’ knowledge of the profiler in districts around the state, helping that knowledge to spread via word of mouth.

As we’re just getting started with this venture, it’s hard to project what will happen going forward a number of years. Both of us are excited about ways we can improve and expand the product to make it easier for schools to understand where they are doing well and how they can improve the places they are struggling. We are looking forward to the day when we have enough customers that the business can not only pay for itself, but be profitable enough to let us focus on it with more exclusivity, and grow the team beyond the two of us. But regardless of where things end up, it’s been a great ride so far.

Kevin Ball
Co-Founder
API-CST-Profiler.com

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