Building Multiple Bootstrapped Education Software Companies: Lane Rankin, CEO of Illuminate Education (Part 4)

Sramana Mitra: What did you learn? Was the threshold one salesperson per state? How were you calculating your expansion strategy?

Lane Rankin: Just about every time we would go and meet with the district, we would win a sale. If we have a presentation, 80% of the time we are winning the business. We were growing so fast that we literally weren’t doing any marketing. It was mostly inbound calls and information.

The problem I was having was trying to make sure that my underlying infrastructure could handle the amount of business we were bringing in. We were always right on the edge of not being able to support the customers out there. Customer support and implementation are very important to us. Those times involved 20-hour days.

Sramana Mitra: How did you get yourself to this position where there was so much inbound leads coming in? Could you talk about what you did that generated so many leads?

Lane Rankin: We had built a great reputation at the other company, but the company that we had sold to wasn’t taking care of customers very well. So we were able to go to our prior customer base. They had bought another company and there were a few other companies in the space that were bought by larger companies. We were able to get a lot of business from folks who were still using the first generation product. We were able to upsell them to a better product.

Sramana Mitra: You basically let everybody know that this is what you’re doing. You used the customer base that you had relationships with.

Lane Rankin: Right.

Sramana Mitra: How did 2012 turn out revenue-wise?

Lane Rankin: Revenue in 2012 was at $7 million.

Sramana Mitra: How about 2013?

Lane Rankin: It was about $12.5 million.

Sramana Mitra: Same strategy?

Lane Rankin: Correct, we just continued to add salespeople and add states.

Sramana Mitra: You said you were at $34 million in 2016. Has there been any other major strategic change other than pure execution? It sounds like it’s a matter of adding the capacity to service the clients. Were there any other strategic moves that is worth discussing?

Lane Rankin: In November 2014, I took a round of financing from Insight Ventures. It was a minority round. I still own the majority. The reason I did that is we were approaching $20 million in revenue. My goal has been to get the company to $100 million. I really felt like I needed external help to get me there. In the prior company, we got to $7 million when I sold.

By the time I was done with my two-year stint, we got it to $25 million. I knew I could get to that place. After that, I felt I needed some help. They’ve been really great partners and have helped us build out our infrastructure and think differently about marketing and sales. Since they’ve invested, we’ve been able to double the business in the past two years.

Sramana Mitra: The key strategic move was on the financing side. Did you sell some of your shares and give yourself some liquidity?

Lane Rankin: I did that for myself and the employees. One of my big beliefs is that it’s about us, and not about me. Anytime there are profits or liquidity, that is shared with employees as well.

Sramana Mitra: You are at $34 million in 2016 and you would like to get to $100 million in the next couple of years?

Lane Rankin: Yes. My goal is in the next five years.

Sramana Mitra: Great story. Your background is very different from the typical entrepreneur’s background but you have managed to learn whatever was needed and executed really well.

Lane Rankin: I’ve had a lot of great people around me. We’ve been able to put together an amazing team here. We’re a very mission-driven education startup. We’re focused on promoting student and educator success. That’s what drives us. That comes through in our marketing and conversations with districts. That’s why we still have a very high rate when we go out and do presentations.

Sramana Mitra: Great. Thank you for your time.

This segment is part 4 in the series : Building Multiple Bootstrapped Education Software Companies: Lane Rankin, CEO of Illuminate Education
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