Intellum is an Atlanta-based company that offers low-cost solutions for e-learning projects. CEO Chip Ramsey will answer reader questions in the comments section today (6/1/11).
“You may not have heard of us, but chances are you run into people on a daily basis that have,” says Intellum CEO Chip Ramsey (right). “You know the security guard in your building? We probably train him. Walked by a Coke machine recently? There’s a good chance we trained the guy who filled it.”
The company processes millions of student enrollments annually in over 11,000 cities and 65 countries. One day they’ll be in Palo Alto working with Facebook, the next in Atlanta with The Home Depot.
The initial idea
It was a long route to get there, though. It started back in 2000 with Ramsey’s stepfather, who worked for the Occupational Safety and Health Administration (OSHA) and spoke frequently about the difficulty and expense of complying with government regulations. “The initial idea was to build a hosted web app to simplify regulatory compliance and in the process, help employees avoid injuries,” explains Ramsey. “We’ve evolved over the years, but that’s how it started.”
The original funding plan was to raise $500k from investors, but Ramsey’s team fell short of that goal. It instead wound up raising $175k from friends and family. “I would love to drop some sanctimonious rant about how we were too good to take VC funds and were wise beyond our years regarding building a lasting business. But the truth was we did try to go the more traditional fund raising route. We spent months in bars, coffee houses, and hotel lobbies writing our business plan, meeting with whomever would see us, rewriting the business plan, and so on. We tried it all; We just failed. And despite the cursing under our breath that went on after each VC ‘didn’t get it,’ the truth is they were right to turn us down. Three twenty-five year old friends, barely out of college with little work experience and no product to sell probably aren’t the most qualified people to spend the millions of dollars our business plan called for.”
So what happened with that $175k? “We spent it all in three months and, at the end of the day, had nothing to show for it,” admits Ramsey. “The money was spent on salaries and professional services fees — fees for lawyers to draft our PPM and contracts, fees for financial experts to come up with our valuation, fees for programmers to develop software that never worked, and, my personal favorite, fees for consultants to coach us on how to raise money.”
Intellum’s home page today.
Course correction
The evaporating funds meant a change of course was needed. “For months, we had been writing a plan and basing decisions on what investors told us they wanted to see,” explains Ramsey. ”’You need more grey hair.’ Okay, we’ll hire a more experienced CEO, whose salary will burn through all our capital. ‘The mobile web is heating up. You should really have a mobile offering.’ Sure, we’ll waste a month of consulting hours on a prototype even though no one’s phone can actually display it yet. ‘If you were smart, you’d be looking for a big name insurance partner.’ Great idea, we’ll pull some strings and fly all over the place to meet with people, who don’t necessarily understand technology and already have more on their plate than they can handle.”
“We had been writing a plan and basing decisions on what investors told us they wanted to see.”
All that chasing left them living off credit card debt and peanut butter and jelly sandwiches. So the team made a decision: Stop chasing a funding event and figure out how to make money.
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