KC Entrepreneur : High Marks in School Technology
Netchemia excels in providing tracking software to school districts .
By Kate Leibsle
Entrepreneurs
Carlos Antequera,
Eric Diebold,
Graham Forman
Company Information
Netchemia
3520 W 75th St., Ste. 300
Prairie Village, KS 66208
(913) 789-0996
www.netchemia.com
Type of Business
Education software
Year Founded 2001
Employees 25
Keys to Success
“ If you feel like you’re moving too fast, you are moving at the right speed.”
Eric Diebold,
Netchemia co-founder and vice president of client services
A lot of people talk about improving the educational system in the United States. There are plans, programs and ideas introduced every day on how we can make changes. Netchemia is a company that has taken the challenge to heart and is working on the problem, rather than just talking about it.
The 9-year-old company develops software to help school districts reduce paper, eliminate redundancies and track progress of students and programs more efficiently. Its mission is to transform the way education works through technology.
amily:Calibri;mso-ascii-theme-font:major-latin;mso-hansi-theme-font:major-latin; color:windowtext">Netchemia has three products today:
1. netIEP // Tracks a district’s special education program. Special education programs are subject to many state and federal regulations, and netIEP streamlines the way districts track students and ensures they are following the applicable laws.
2. netRTI // Tracks individual education plans for struggling students. In addition to tracking student progress, it offers districts ways to measure whether tactics are working.
3. SchoolRecruiter // Tracks the hiring process in districts.
Carlos Antequera, chief executive officer and co-founder, said there is a common thread to the products.
“We provide easy management of data, which leads to better decisions and then improved student success,” he said.
School districts are notorious for their use of paper and their reluctance to change the ways they track data. All that paper doesn’t allow for good data management or efficient use of resources.
“It’s very labor intensive,” said Graham Forman, Netchemia vice president of sales. “It’s hard to get usable data. It’s a huge challenge.”
And it’s not cost-effective. The Netchemia team said the company’s products provide cost-savings for most districts.
“We have a client in Georgia that did an internal analysis and discovered it could save $84,000,” Forman said.
Antequera and Eric Diebold, vice president of client services, along with Chris Weber, chief software architect, founded Netchemia after working together at Data Systems Inc. An early client of their Internet consulting firm was the Topeka Public Schools. The reaction to Netchemia’s design and implementation of a system to streamline its special education programs was so positive, the three knew they were on to something.
“We built a customized system,” Antequera said. “At the end of the project, the managers were happy, but it wasn’t until an older teacher stood up at a meeting and said, ‘If I could figure out how to use it, the rest of you should be able to,’ that we knew it was a success.”
Democratize the Process
Building on that success, the founders realized they’d hit on a niche that needed to be filled. Their research bore that out even more definitively. The Topeka school district is large (20,000 students) in comparison to most, Antequera said. There are about 16,000 districts in the United States; only 200-300 can afford costly enterprise software. The other software programs available at the time were too expensive for small districts (such as many of the 300 in Kansas and the 500 in Missouri) to afford.
“We wanted to democratize the process,” Antequera said.
The company’s software-as-a-service (SaaS) model helps districts manage the cost of the service. With no large upfront fee, districts pay a yearly fee for access to the software. Additionally, the company’s products are all Web-based, eliminating the cost of an IT-upgrade or a need for special hardware. That also speeds up the implementation process.
“We can get clients up, going and trained in a matter of weeks,” Forman said.
Today, Netchemia works with more than 300 districts across the country. The goal is to be in 500 by the end of this year and more than 1,000 next year.
“We have a 98-99 percent retention,” Forman said. “Our business model works if we keep our customers. There can be a challenge in acquiring them, but they are very loyal.”
The company knows it has to continually work on keeping its customers happy. With no long-term contracts, it’s an ongoing challenge that Netchemia employees take seriously.
“Our vision is to serve thousands of districts with millions of students,” Forman said. “We’re putting a lot more effort into marketing and validation.”
The company also makes a point to listen to its customers. About 50 percent of product development is customer-driven, Forman said.
The company has taken advantage of opportunities to learn from others and be mentored at every turn. Antequera was a member of the 2008 class of innovators with KTEC PIPELINE and is in the Helzberg Entrepreneurial Mentoring Program.
Additionally, the company has long worked with two advisory boards: one concentrates on product development and one on helping Netchemia with its business.
The company’s advisory boards are crucial to its success, too, Antequera said.
“We’re so fortunate to have them,” he said. “We are a big believer in mentorship and exchanging ideas.”
The educators who are part of the company’s advisory boards offer a unique perspective for product development.
“They help us in tweaking concepts,” Antequera said. “We provide the overall vision (of what districts need).”
Focus, Focus, Focus
Working with the advisory boards also has allowed Netchemia to focus itself. Antequera admits it took the founding trio too much time to realize they needed to concentrate on school software.
“Until the fourth year of the business, we still had other consulting customers,” he said. “It’s a challenge of a nascent business: Why say no to paying customers? I think sometimes, though, if we had focused two years earlier on the education market, where would we be?”
Bringing Forman on board was a part of the company’s focusing efforts. His background in sales and marketing was a missing piece for the technology-driven founders.
Antequera and Diebold also wish Netchemia had focused earlier on finding the right people to fit the company culture. The company is putting more emphasis than ever on its core values and mission, and that’s reflected in its hiring process.
“Today, we’re managing the hiring process much more through our values,” Antequera said.
Paperwork Reduction Act
It doesn’t hurt Netchemia that school districts are starting to put more of a premium on data collection and improving efficiencies.
“We’re giving them tools to measure their results and to get insight from the data,” Forman said. “A lot is lost within stacks of paper. The challenge is to convince a district that’s used to running things that way to think about how they can leverage all of that information.
“It gets me excited to think that our software can deliver an improved educational experience to millions of students.”
With 16,000 school districts nationwide, it would be easy for the company to treat marketing like shooting fish in a barrel;
but history has proven that doesn’t work. Forman’s teams seek out districts with thought leaders in education.
Leaders of some districts are just too risk-averse, Antequera said, but more and more work is being conducted electronically. So, he and his team look for school districts that seem ready “to take the plunge.”
Leading by Example
Since coming on board, Forman has focused his efforts on streamlining the company’s sales efforts.
“It’s important we know our numbers,
that we have a system and are more efficient,” he said. “We’ve really become a metrics-driven organization. In a competitive marketplace, we have to find ways to accelerate what we’re doing.”
Netchemia leaders know that with a limited number of potential customers, it’s vital that its products and customer service are hitting the mark every time.
“We have to continually give customers more,” Antequera said. “It keeps us on
our toes. It’s just the nature of being a technology company.”
End Game = High Growth
Being focused, hiring smarter and continuous customer service are the hallmarks the Netchemia team thinks will take it where it wants to go. For now, it’s happy in the K-12 marketplace, although there has certainly been interest from higher education for similar products. There’s still enough room for growth in its current segment that Netchemia’s leaders aren’t looking to diversify the company’s product lines—yet. But what about down the road?
“We’re entrepreneurs; so we, by nature, are about taking risks,” Diebold said. “But will that dilute our other efforts? When you’re a small business, it doesn’t take much to get you off course.”
The company’s trajectory is up and the goal is to keep it that way.
“We want to be a high-growth company,” Forman said.
“We have a vision of being the leader in educational human capital management. We are branding ourselves and putting our stake in the ground.”
Kate Leibsle is managing editor of KC Small Business. (913) 432-6690 // This e-mail address is being protected from spambots. You need JavaScript enabled to view it
