Scott Bublitz, Ph.D., was never able to commercialize the product that he’d created while completing his dissertation. But entrepreneurs don’t give up easily. Neither did Bublitz. Now his second company, Exam Design, is being acquired by Pearson VUE, one of the largest certification and testing companies in the global market. We broke this news on March 6th – but here’s the full story on how the deal occurred.
In October 2007, Bublitz founded Exam Design, Inc, to address a need that he perceived in the market. Believing that high-quality professional certification exams could be created, edited and deployed using a web-based software application, Bublitz set out to build a solution and sign up customers.
It took 18 months to land a whale – in December 2008, Bublitz submitted a proposal in response to an RFP released by the American Board of Radiology. The RFP was quite comprehensive, and Exam Design’s software addressed “only 50-60% of the RFP,” said Bublitz.
It was decision time, said Bublitz. “We made a business decision … we’d go in and tailor the software specifically to the RFP.” When submitting the RFP, Bublitz was honest about the current capacity of the company’s software, yet offered the remaining features on a delivery timeframe that made sense to the American Board of Radiology. “In doing so, we competed to be finalists,” said Bublitz. The next step: presenting to the Board of Directors in January of 2009.
Bublitz received a call in late February – the American Board of Radiology had elected to choose Exam Design.
Within two months – by the end of April 2009, two other major medical boards became Exam Design clients. Bublitz signed on the American Board of Anesthesiology and the American Board of Surgery.
At this point, Bublitz and his team took a step back. Their first three major customers represented major medical certification boards. The company decided to specialize in providing their solution to these groups.
Of the 22 medical specialties that have board certification exams, 8 are now clients of Exam Design, said Bublitz.
The secrets to success
There were 3 key aspects in deploying the software solution, said Bublitz.
1. At the time, Exam Design only supported one version of its software. In order to stay lean, Bublitz decided to only run a single version of the company’s software product. As the company grew, more development time was placed in building “a sophisticated dashboard that allowed customers to enable which features they wanted to use,” said Bublitz.
2. Take requests from their clients and their potential clients. “We built in every feature that a customer wanted,” said Bublitz, “but we made each customer pay for it in advance.” This enabled the company to gain the capital it needed – in advance – to customize the solution for the new client and build the structure of the dashboard. “Because we did it this way,” said Bublitz, “it allowed us to attract the attention of potential customers in other verticals.”
3. Be really, really, really efficient with marketing budget. “We really didn’t do a lot of marketing,” said Bublitz, “instead, we elected to go to trade shows.” In the first two years, said Bublitz, “the majority of our customers came from one trade show – the Association of Test Publishers (ATP) Conference.” It was at this trade show that Exam Design attracted the attention of both Microsoft and Google – in the same 24-hour period. “This was the first interaction we’d had with folks in the IT space,” said Bublitz. Both companies conducted a demonstration with Exam Design – and Exam Design signed Google as their first IT-industry customer.
After Bublitz signed up Google, the IT vertical opened up. In the following year, Exam Design signed deals with Cisco and CompTIA. The vertical was established.
On a shoestring budget
Bublitz built his company without taking a dime of investor capital. To get the company off the ground, “I didn’t take a salary for the first 18 months,” said Bublitz. For the first three years, Bublitz was the lowest paid employee in the company.
“Every single dollar I received from a customer went directly back into the software,” said Bublitz.
At one point, Bublitz did try to take out a loan. He asked 8 different banks for $150,000, and each bank asked Bublitz to demonstrate $150,000 in liquid assets that the company owned.
Bublitz, though frustrated at the experience with the banks, now reflects on the experience which forced the company to grow organically. “It caused us to grow a little bit slower,” said Bublitz, “and though I believe I could have accelerated our growth with more capital, growing it organically allowed us to control the quality of the software.” Luckily, there wasn’t much of a growing pain, said Bublitz, “so it was nice in that respect.”
Started at CED
Bublitz completed CED’s FastTrac® TechVenture™ class in 2005 while trying to commercialize a product that resulted from his dissertation. The company never ended up getting off the ground, but the entrepreneurial bug had bit.
“Because I had such a good experience with the first attempt, and I was interested in strategic business planning for Exam Design,” said Bublitz, he enrolled and completed CED’s FastTrac® TechVenture™ class in 2011.
It was in this class that Bublitz was paired with a team that helped him complete important strategic planning and conduct a forecasting study. “FastTrac® definitely helped getting me ready for an acquisition,” said Bublitz.
Bublitz also met Elaine Bolle, an angel investor and advisor for the FastTrac® TechVenture™, during the program. Bolle would later become an advisor to him and the company, and help guide Bublitz on the acquisition deal with Pearson VUE.
"The story of Scott and Exam Design is a huge success story, a huge success for FastTrac® and a huge success for CED," said Bolle. "A success because Scott learned fast, and also built relationships that prepared the company for a future exit. Scott took advantage of all of those aspects of the course."
Bolle shared a few specific takeaways that Bublitz learned during the course. "What happened in class is that Scott learned how to grow by completing the course work and interacting with his peers and action group," said Bolle. "Secondarily, and importantly, Scott learned how to ask for help, and how to go about getting that help."
When it came time to consider the acquisition bid, Bublitz quickly asked for help, knowing that negotiating a deal without prior experience in doing so could be risky.
Bolle praised Bublitz’s actions in creating an advisory group for the company. "Scott was also able to structure an advisory arrangement for the company that made sense for all parties," said Bolle. "It's a complex relationship, and Scott created an environment that was a win for all parties involved in providing strategic advice."
“Elaine helped negotiate the deal with me,” said Bublitz. “And I think, at the end of the day, the experience and connections I got from CED were instrumental in getting this deal to close.”
CED is currently accepting applications for the Spring 2013 class of FastTrac® Tech Venture™. Will you be the next FastTrac® success story? Apply before March 15, 2013 to be considered for this 10-week business planning course.