A Small Company Beats the Odds
One Developer’s Story
Greg Bardwell and his wife, Anne C. Lennon, have often feared for the future of their tiny educational software company.
"Several times, we were almost out of money," Bardwell says.
The couple started Cognitive Technologies Corp. in 1994; a year later, Bardwell quit his full-time engineering job and developed his first educational software title, Trigonometry Explorer. By late 1996, the couple decided to put their entire personal savings of $100,000 into marketing their product and still had to raise that much more from other investors to keep the company afloat.
They worked most of their waking hours in their rented townhouse, with only minimal help from part-timers and contractors.
But last year, Cognitive Technologies Corp. of Rockville, Md., finally started making money. Lennon was able to quit her job in government relations and work full-time for the company. And this year, Bardwell expects it to net a 25 percent profit on $500,000 in sales of its four math CD-ROMS for middle and high schoolers: Pre-Algebra World, Algebra World, Geometry World, and Trigonometry Explorer.
"This year, I've been happy," says Bardwell, the company's president. "We made enough money to buy a house."
Part of Bardwell's satisfaction also comes from having beaten the odds. In an industry dominated by giants, it's rare that a small company can succeed in not only developing software titles but publishing and distributing them to schools as well.
More common is the tack taken by developers such as Human Code, an Austin, Texas-based company that designs software for larger companies to publish and sell as their own. For example, Human Code did computer programming for two of the popular JumpStart titles, which are sold by Knowledge Adventure, based in Torrance, Calif.
"It's not hard for a small developer to get into the market," notes David B. Palumbo, the vice president of Human Code's learning technologies division. "It would be very difficult for a small publisher to get into the market."
A Decision To Go It on His Own
Bardwell had a chance to go Human Code's route. Sunburst Communications, a video and software company in Pleasantville, N.Y., that is known for its math software, offered to buy Trigonometry Explorer. But instead, he wanted to see if he could establish a name for his products-and his company has his own publisher.
Bardwell and Lennon started by targeting the home market in late 1996. But they soon found themselves sinking thousands of dollars into marketing without any hope of making it back.
So in the fall of 1997, they switched to the school market, where advertising tends to show results more slowly but is less expensive.
At first, Cognitive Technologies paid for catalog ads with copies of its software instead of cash. Educational Resources, an Elgin, IIl.-based software reseller, made the arrangement with the company even though "usually we never do that," says product manager Jason Fisher.
"They seemed to be out in front--early leaders in marketing to middle and high schools when most people were marketing to the elementary schools," Fisher recalls. "I reviewed the software and, as I recollect, it was of good enough quality that we decided we wanted to be partners."
Sending out free demo disks and brochures through direct mailings to schools has also helped to bring in sales. The couple believes the hours they've spent hunting down and marketing to school preview centers, where teachers go to review software, have paid off.
Bardwell and Lennon view their company as following the legacy of two others-Tom Snyder Productions (now owned by Torstar Corp.) and Inspiration Software-that started small and succeeded by painstakingly developing contacts with school people.
"The biggest reason in failing is not understanding where the money comes from that can be spent on software," says Sue Kamp, the director of the education market division of the Software & Information Industry Association in Washington.
She's seen a lot of small education technology companies come and go. Companies that succeed have focused on a niche in the school market, excelled in it, and found a way to let people know their products exist, Kamp says.
"It comes down to having a good product and having teachers hear about it," says Lennon, who, as the company's vice president, heads up its marketing efforts.
Bardwell, a former engineer at the National Aeronautics and Space Administration, says he developed his products because he wanted to help students understand math concepts well the fir t time they were taught them, which hadn't been his experience in school.
"High school math was a painful experience," Bardwell recalls. "It doesn't have to be."
Through text and graphics, his software explains math concepts and then reinforces them through graphically interesting exercises and activities.
Responding to Market Demand
Bardwell's CD-ROMS have received considerable recognition. Trigonometry Explorer, for example, earned a Top 100 Products Districts' Choice Award from Curriculum Administrator magazine in 1997 and was named one of the top 100 CD-RO~s of that year by PC Magazine. This year, an updated Trigonometry Explorer was named the best high school math software by CompuED Learning Lab in Cardiff, Calif
To stay in business, Bardwell says, he has focused on product for which he believes there is a sizeable market.
He's now developing two math tools, called MathRealm, because teachers are increasingly requesting productivity software, which enables students to create their own content and manipulate it through the use of charts and graphs or other means. He says he wouldn't create a calculus product because the market for it is too small.
"Our products are designed for the bulk of the students," he says, "where the bulk of the money is spent."
Vol. 19, Issue 04, Page 34Published in Print: September 23, 1999, as A Small Company Beats the Odds