My Startup Journey: Altimeter Software
On Friday, I teased you with the question I was asked on my first day at Oklahoma Christian University (OC): “Should we sell the software we developed internally to another university?”
My answer was “The only thing worse than having zero customers is having one customer, so if that university is the only one interested in buying the software, then we shouldn’t do it.” If you aren’t following my logic, let me explain it.
OC wasn’t in the software business. The revenue from selling the software to one customer would not make meaningful difference in the overall financial performance of the university. In fact, because this software created a student experience that the university bragged about (i.e. it was a competitive differentiator), selling it to another university (i.e. a competitor) could actually hurt the university’s financial performance.
Furthermore, the effort and costs involved in getting into the software business are not small. This new business would need to help the customer get started with the software and would need to establish staffed customer support processes to provide ongoing support. It is unlikely that one customer would be willing to pay enough to cover all of the associated expenses, so it likely would be money losing for OC. Worst of all, if that one customer decided the software wasn’t for them, then OC would have made all the investments and have no ongoing revenue.
So what I proposed was that we put together a student team to explore the idea and develop a business plan if appropriate. We began recruiting for four students: one marketing, one accounting/finance, and two computer science.
Let me step back and describe this software — what it does and how it works. As with any good innovation, it addresses a real need.
Ethos
Founded in 1950, Oklahoma Christian University (OC) has just over 2,500 students. According to their website, “Oklahoma Christian University is a higher learning community that transforms lives for Christian faith, scholarship, and service.” Daily Chapel has been a valued tradition at OC since the school’s formation. Most students attend “Big Chapel” but other options include Missions Chapel, Seekers Chapel, Women’s Chapel, Great Songs Chapel, and weekly chapels for each academic college or department. Historically, students have been required to attend chapel each day, with a set number of absences allowed.
Summer Lashley, an OC alumnus, had spent a couple of years early in her career at a web startup company. That entrepreneurial spirit must have been apparent because, after she returned to campus as part of the student life team, she was asked to move into the spiritual life office and figure out how to “reboot” the university’s approach to spiritual development. Chapel has always been good, but she realized that it may not meet every student where they are in their spiritual growth. Summer observed that “Today’s students are raised with more choices and are more empowered to control their own life. This new generation was asking for more than just chapel.”
In true Lean startup mode, Summer started doing Customer Discovery. She would pull students out of chapel, both those up front and fully engaged and those in the back corner with ear buds in and hoodie pulled over. What did they like and what didn’t they like? What was missing? What was their real need? She started creating alternatives, forming small groups, and working with YouVersion to launch an OC reading plan within the popular Bible app. She gave a small group of trusted students the freedom to pursue their own spiritual development plan and to journal what they did and how it impacted them.
Summer began planning a new program for spiritual development, named Ethos, where students would be encouraged to practice spiritual disciplines in five dimensions: Community, Discipleship, Discovery, Servanthood, and Worship. But how could the university pull off such a radical redefinition of its spiritual life and how could students be encouraged to adopt the new model?
One day, Summer realized that she was increasingly using her iPhone to discover and to track important things in her life. In addition to reading from the Bible app, she was also daily using RunKeeper and the Starbucks app to track her progress towards important goals. She realized that, for today’s student, their phone is like the remote control for their life. There’s an app for everything, so why not an app for spiritual development at OC?
Summer engaged with the OC marketing and IT teams to develop beautiful iPhone and Android apps where students could find approved events, check into those events with their phone, and see how they were progressing towards their target number of events for the semester. The app connected to a back end database and a web-based administrative interface where Summer’s staff scheduled and approved events, identified at risk students, and ran reports to learn from what was working and uncover populations that weren’t being well served by the system.
The Business Plan Team
Flash forward to the business plan team. A number of students applied for the various business plan development positions and after interviewing them all we selected three seniors: Austin McRay, a marketing student specializing in professional sales, Anastasia Bubenshchikova, an accounting and international business student, and Innocent Nkubito, a computer science student. We also selected Kyle Wood, a computer science student in the 3rd year of the 5 year bachelors+masters program.
The team’s goal was to develop a business plan by the end of the fall semester. There were three key questions that needed to be answered:
- How big is the market for a solution like this?
- What investment is required to generalize the software and make it useful for customers other than OC?
- Can we make money selling (licensing) the software?
Very early in the process the team recognized that the capabilities of the software were valuable for more than just spiritual development. The system was designed to give users credit for being in the right place at the right time and working towards a goal. That broadened the market significantly from the 100+ Christian colleges and universities in the U.S. to many more types of organizations. Austin specifically focused on three initial markets: Christian universities, large churches, and private high schools with community service requirements.
Meanwhile, Kyle and Innocent dug into the software to understand how tightly it was linked into OC’s specific databases and systems and how it could be made more configurable to easily create branded versions for others. They came to the conclusion that the architecture was sound, but rather than modifying the existing code, it would be best to rewrite it from scratch. It wouldn’t be a massive effort and doing so would better position the product for future enhancements.
The team chose to pursue a Software-as-a-Service (SaaS) model, where the company would own and operate the servers running the software and customers would pay an annual fee to access the service. The mobile app would be available for free in the iPhone App Store and Google Play market.
Ana worked with the team to build a bottoms-up, assumption-based financial model that showed that the business could be profitable. The initial interested customer that had sparked the effort remained very interested and was willing to pay up front, which could fund the launch of the business. The model showed that the business could be reasonably profitable from day one.
At the end of the fall semester the plan was complete. In early January the university approved moving forward with a plan to incubate the business on the university campus. The university would provide support services (legal, accounting, IT support) and would help with marketing and promotion. The team chose the name Altimeter to reflect the ability of the software to measure success as users rise to accomplish their goals.
We also learned about the Governor’s Cup, a statewide university business plan competition (renamed the Love’s Cup the following year) and the team decided to enter it.
In March, the first customer signed a Letter of Intent and the team was selected as a finalist in the Governor’s Cup. In April, Altimeter Software, LLC was formed, the customer signed a contract and paid for the first year of service, and Austin won “Best Pitch” award in the Governor’s Cup. The business was off to a good start!
Business Launch
Initially, Summer served as CEO and I helped her as a strategic advisor. After graduating, Austin stayed on as Sales and Marketing lead. Kyle also stayed on to lead software development. Summer and Kyle also hired four computer science students as summer interns to rewrite the software in time for the customer to launch in the Fall semester.
That was an exciting summer. The students did an amazing job. Kyle established the architecture and infrastructure, directed the overall development effort, trained the younger students, and rewrote the mobile app. The interns developed the core data engine and APIs. I pitched in by developing the administrative web interface. I wish I could say that we hit all of our deadlines, but in the end the customer was very happy with the product.
I think that summer was also very educational for Summer. She came to realize that her heart was in working 1:1 with students in their spiritual development, not running a fast-paced high tech startup. Kyle also was burned out by the experience and decided to refocus on his studies. Austin stepped up into an acting-CEO role while I officially stepped in as CTO (and Austin’s mentor). The student interns continued on and continued to impress everyone.
Austin continued to sell. Over the next few years five Christian universities came to rely on Altimeter for their spiritual development programs. One high school signed up to use the software for community service and another used it for spiritual development. Two universities used it for student engagement, and clubs and on-campus Greek organizations from different schools explored using the software to track attendance and service projects. One customer even explored using it for classroom attendance tracking. The applications of the software certainly were much broader than OC’s original focus.
Given my goal in coming to OC to create startup opportunities for students, I am most thankful for the students who actively participated in building and running Altimeter. Some students, most notably Jonathan Troyer and Connor Brewster, performed above and beyond what anyone expected of college students. In total, about a dozen students were directly impacted by the experience and many more were aware and encouraged by the new entrepreneurial focus on campus.
In the end, the business wasn’t able to attract enough customers to provide enough revenue to support full-time employees in required roles. After three years of operation, and 569,850 student check-ins to 13,420 events, we shut down the business in June 2019. We gave our customers more than six months notice and helped them transition gracefully off of the Altimeter platform.
But, Altimeter wasn’t the last business I would help launch on the OC campus. Tune in tomorrow to hear more of my startup journey.
