How do you take a business you started as your own personal web site, and turn it into an online powerhouse, completely bootstrapped, from the little town of Ojai, California--not exactly known as a technology town? Not too many people are aware of the success and story of Lynda.com (www.lynda.com), started by Lynda Weinman and Bruce Heavin, and how the firm's now grown to a double-digit, multimillion dollar business which is known as THE source for online training on such things as web design, graphics software, animation, video editing, and much more. To get the details--plus, to hear how the firm was hit by the Dot Com bust but used that to completely revamp its business--we talked with both Lynda and Bruce (who are married) about the story behind the firm and its success.
Tell us the story about Lynda.com, and how it all started?
Lynda Weinman:It was, in a lot of ways, a big, happy accident. I'm in my mid 50's, and when computers first came out, I was in my late 20's. I actually didn't touch a computer until I was 28. I was part of that whole generation that needed to learn computer skills. I was self taught, and it became my hobby. I really loved learning about the computer. I had an early Apple II, and was working in DOS and CPm and all of that. When the Mac came out, I saw one at a computer store and I was really captivated by the icons, and the mouse, and the graphics. I was working as an animator in the special effects industry at the time, so I bought a Mac and started to bring in graphics I'd created on it. Everyone around me I knew was intrigued, and asked me to share what I was doing. About a year later, the Postscript and desktop publishing revolution happened, and everyone wanted to learn how to do layout using computers, especially the Mac. I parlayed that hobby into consulting work, and eventually, I switched over all the time to doing teaching.
In 1989, which was about seven years into teaching myself computers and being a consultant, I got a job teaching at the Art Center College of Design. That's kind of like getting a job at Harvard--the Art Center College of Design, which is in Pasadena, is one of the most respected art colleges in the world. So, it was really being in at the beginning, being at the infancy of the computer age, and having those computer skils and being a good teacher was really how I got my career started. When I started, there weren't any computer graphics programs, so early on, when I got into it and watched it unfold, I was able to see the industry unfold.
So, that's how I got started teaching computer skills. Bruce and I met at the Art Center, and that was when I first discovered the web. AOL was just coming online, it was the beginnings of email, and the beginnings of the web. At the time, I was looking for a book to teach web design to my students, but figured out that one had never been written. So, I ended up writing that first book, and Bruce helped me with the research, and that was one way we got to know each other before we were even dating.
At the time, I got Lynda.com. Someone had written to me -- Debbie at Debbie.com, and I thought it was such a funny idea, and thought it would be great if Lynda.com was available. I just grabbed it, and it ended up as the website I used as my sandbox to teach web design with. When my book was published, it ended up being a big thing. At the time, Bruce and I were engaged, and when we got married, we decided to move to Ojai, so that he could continue on with his illustration career and I could do full time writing instead of teaching at the Art Center. At the time, the internet connections were all dial-up. We now both credit Ojai as being the catalyst for us starting a real business around the dot com. If we had both still be in Los Angeles, we'd been too busy to start a company, and wouldn't have need to start a company. It was sort of an outgrowth of what I'd been doing, allowing me to continue in the same line of work since there's wasn't much industry around in Ojai to support it.
What was the tipping point that started the firm growing?
Bruce Heavin: At the time, the book was a bestseller, and had been translated into a dozen languages. Lynda had been asked to speak all over the country and the world, but it was just becoming a big strain on the family.
Lynda Weinman: Bruce had the idea, that if people were willing to have us travel to other places, why not have them come to Ojai? We had the idea to rent out a local school over spring break, put up a website ad, and start offering classes. Someone from Vienna, Austria, came to our first class--and we were amazed. It gave us the confidence to rent space for classes and form a school. That's how we really started. Much to our amazement, the book was so successful, and it was really like a perfect storm. There were lots of perfect things about it--the Internet was really catching on, we had the de-facto book about the industry, and there were no schools--not even community colleges--that taught web design. We were the first to the market with the school, and had lots of credibility. In our first year in businss, we had $1.7 million in revenues, all on a $20,000 investment. It was just us doing everything--cleaning the floors, setting up the computers, writing the curriculum, and teaching the classes. It was going crazy. The other one, was the dot crash which happened, after 9/11, as there was just a big downturn in the economy.
How did that change things?
Bruce Heavin: One of the things we'd run into as Lynda wanted to write more books, is that the publisher denied us the ability to cover bigger topics that we wanted to. We wanted to do a book on Fireworks, and we heard no. The only way Lynda could cover these was to publish things herself. So, we started going VHS tapes, and started video publishing. Because our publisher was insistent about what we could and could not publish as a book, this was the way for us to be our own publisher.
Lynda Weinman: With the downturn due to the dot com crash, our school business died on the vine. That was our main revenue source. We were writing lots of books, and we'd also started the video publishing business. However, those were small relative to the income we got from the school. With the crash, and the school dwindling, we started to put our energy into publishing videos online. We continued to write books, and continued to do anything we could to stay alive. We actually went from 35 employees back down to 9 employees, and our revenue dropped from $3.5M a year down to $1.0M. We were just holding on for dear life to keep the company alive. But, we clawed our way back up. Because of the disruption of the economy, we re-invented ourselves. What we didn't realize, is that even though we weren't part of the venture game and dot com bust, where people were looking to flip businesses--lots of our customers were coming from that business. We didn't realize it, and didn't feel like we'd be caught up in the dot com bust, but lots of our customers were, and it affected us.
It seems like you were quite ahead of your time, in putting content up and charging for it?
Lynda Weinman: It was a good thing we didn't put all of our eggs in that basket, though we thought it was a good idea.
Bruce Heavin: Actually, it was a horrible idea, at first. When you were selling CD-ROMs and VHS tapes, and when you start offering a model where it costs less that buying a single tape to get that content online, people stopped buying our CD-ROMs and tapes. In fact, it cost so much money that Lynda asked me to talk to someone about selling off that business, because it was not doing so good. We lost money for about three years before it even broke even, and we were making what we were before, on the online version.
Lynda Weinman: What made a difference, however, even though we lost money, we had different revenue streams and it was still fine, even though we were completely self funded.
We hear that was actually a good move, and that move allowed you to now have your annual revenues are north of $50M?
Lynda Weinman: Because we're private, we don't disclose our numbers, though $37M was published last year. But yes, we're now north of $50M.
How many employees do you have now?
Lynda Weinman: We have around 140 people.
Was all that growth from the online video and tutorials, or is that also from the school and other products?
Lynda Weinman: It's absolutely the online membership service. Today, that is the bulk of our revenues. We have it divided into different areas, with an offering for individuals, another for organizations, from schools, to corporations, to the government and other large scale installations. We have a sales group which manages our enterprise sales to larger installations, and individual members are online.
What has been the driver of the growth and sales?
Bruce Heavin: The big driver of sales has been other customers telling other customers.
Lynda Weinman: Despite all of our attempts to market things--and we've gotten a little better than we used to be--the bulk of our new business is from word of mouth, and always has been.
We imagine that growing from a small, bootstrapped business, you've learned a lot. What are the big takeaways?
Lynda Weinman: We really care about our product. We put our members first, and think in every decision we make--how can we make it a better product. We know our brand really rests on our reputation. And, we've protected that, and made a good judgement in knowing what to teach, how to teach it, to make our membership more valuable than its cost. We always talk about creating indisputable value when we question an expense, and we've succeeded in doing that, over and over for our members. They feel like they're getting a great value.
Bruce Heavin: We've stuck to our guns. There's been a lot of venture money out there looking to grow the business, so that it looks good to sell. The thing is, if you think you are going to be more valuable to sell, you'll also be more valuable to own. It's like someone like Mark Zuckerberg with Facebook, making sure you're focused on making sure you're building value, insteading of just trying to sell.
Finally, what's in the future for Lynda.com?
Bruce Heavin: We are really out to make he process of learning easier for people. We have rearchitected our navigation and our platform.
Lynda Weinman: We've put lots of energy into our platform. I think we're really great at content, and we're continuing to expand our content as well. This year, we've published close to 200 courses, and next year it will be closer to 300. We're working a lot on scaling ability to publish more and more videos and really exceed our member's expectations over and over. Another area of focus is to improve our platform, so we've improved search dramatically, our navigation is dramatically improved, and lots of other tools we're going to be providing members to help them learn that will come within the next year.