HRExaminer Radio is a weekly show devoted to Recruiting and Recruiting Technology airing live on Friday’s at 11AM Pacific
HRExaminer Radio
Guest: Davis Bell
Episode: 109
Air Date: August 19, 2015
Davis Bell is the VP of Corporate Markets at Instructure, where he’s worked for the past several years. Prior to working on Bridge he lead the international expansion of Canvas, Instructure’s academic learning management system. Before working at Instructure, Davis worked in various roles at Imagine Learning, DIRECTV, Morgan Stanley, Bear, Stearns and USAID. Davis has degrees from Columbia University and Brigham Young University. He lives in Utah with his wife and two young children. He rides a Vespa (dangerously), plays tennis (badly) and runs (slowly).
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Begin transcript
John Sumser: Good morning, and welcome to HRExaminer Radio. I’m your host, John Sumser, and we are coming to you live again, as usual, from beautiful downtown Occidental, California, the little village of 11 hundred that was where technology got its foothold in the great state of California. Today we’re going to be talking with Davis Bell who’s the Vice President of Corporate Markets and the company called Instructure in Salt Lake City. How are you, Davis?
Davis Bell: I’m well, John. Thanks for having me on.
John Sumser: Yeah, nice to have you here. Introduce yourself, would you, please?
Davis Bell: Yeah, of course. I work for Instructure. We’re based out of Salt Lake City, and I’m sure we’ll talk a little bit more about who Instructure is and what we do. I’ve been here for a couple of years. I had the chance to help Instructure expand internationally, which was a really great ride for me, and I’ve spend about the last year or so helping us figure out how to bring better educational technology to the corporate space. Before that, I’ve kind of bounced around a little bit in my career, which I think is probably becoming a little more coming. My grandpa drove a Wonder Bread truck for 40 years and got a gold watch, and that seems to be the case less and less.
I spent a couple of years working in the non-profit and government space in international development. I actually kind of ended up in that after it occurred to me in my last semester of college that I would need gainful employment. That had literally not entered my mind until that last semester when someone asked me what I was doing when I graduated. I went to a career fair, and I was not exactly the hottest commodity. I was an international studies major, and I kind of walked from booth to booth, and the only people who would talk to me were Payless Shoe Stores who were looking for an assistant manager in Kansas. I took a pass on that opportunity, and moved to Washington, D.C. and worked for the government doing international development work, focusing primarily on Africa.
After that, I kind of felt like that wasn’t for me, and so I did what all courageous people do, and I went back to graduate school. I went to Columbia University and studied international studies again, not having learned from my first mistake. The only people who would take me from there were finance people, so I worked in investment banking for 5 or so years, then kind of randomly found my way into educational technology with a company here in Utah, which is where I’m from that was focused on kind of the K to 12 space. Then kind of heard about Instrucutre and ended up here. That’s kind of my circuitous route to working in technology.
John Sumser: The title is Vice President of Corporate Markets. What does that mean?
Davis Bell: That’s a really great question, and I’m not sure that even I understand that very well. It basically it sort of is representative of the fact that Instructure, up until about a year ago, was very focused on the academic market. Our clients were primarily colleges, universities, and K to 12 school districts, so as we expanded into a market outside of education and academic education, I think we came to think of this as corporate. Now that’s, in a way, not a great term, because we actually work with a decent amount of non-profits. We work with actually people who use our quote unquote corporate product within higher education or K to 12 or the non-profit. It’s really more kind of organizational as apposed to corporate, but it sounded fancy at the time, and we just kind of went with it.
John Sumser: Yeah, I was terribly impressed. That’s good. Good job.
Davis Bell: Thank you. Thank you, John.
John Sumser: Very, very impressive title.
Davis Bell: I made sure to tell my mom. She was impressed.
John Sumser: Well, after she thought she lost you to Washington, I’m sure she was happy.
Davis Bell: Yeah.
John Sumser: In terms of … Are you in charge of this initiative to expand into the corporate universe? Is this your baby?
Davis Bell: Yeah, I am. We felt like it was important to have someone who … We have all these different groups who collaborate on making this happen. You have product, and you have engineering, you have customer success, sales, but they felt like it was important to kind of have one person who could kind of make sure everyone was pulling in the same direction. That’s been an interesting project for me, because, again, our company was really built initially serving the education market, so you got all these people who have, frankly, had to kind of learn a new market. They wanted someone kind of coordinating that effort.
John Sumser: I think you’ll have an interesting time. You probably don’t know that at KeyInterval, we’re a Qualtrics client, and Qualtrics is making much the same move from academic to more corporate environments. I’ll tell you they have some hard challenges with the transition between the two worldviews. Things happen differently in those two space, and customers, timelines, and demands, and understanding of what is and isn’t quality are very different between the two universes.
Davis Bell: Yeah, it’s actually been a really interesting learning experience for us [in a way 00:06:43]. I think people stereotypically kind of think, “Oh, education. Lot’s of inefficiencies and hard to find funding.” The reality of it is, at least when you’re talking about learning, educational institutions take learning very seriously, because it’s their primary business, so the funding and the timelines associated with learning in the education space are actually easier to work with. We find with a lot of corporations it’s kind of like going to the gym or eating vegetables, right? They know it’s important. They know they need to do it, but it’s not their primary business, and so as a result, sometimes the timelines slip. There’s not this hard deadline of a semester beginning, and also from a funding perspective, it varies quite a bit, as you well know. Some corporations and organizations fund it very well, and then others it can be somewhat anemic. That’s been actually kind of an interesting experience for us, and I’m sure it’s similar to what Qualtrics, who we know well, they’re just kind of down the road from us here in Utah, has experience as well.
John Sumser: Yeah, so the difference, I think, is exactly what you’re laying out. In the education universe, this stuff is a priority. This is the business in the education universe, and in the corporate universe, it’s a staff function. Staff functions are always under-funded, they’re always the first thing to get cut. The very foundations of the business would be different, because you have less certainty that the solution will stay in place and less likelihood that the people who are your customers today will be your customers tomorrow. It’ll be an interesting cultural change for the company. Can’t wait to hear more about it.
Davis Bell: Yeah, they haven’t been … Yeah, absolutely.
John Sumser: Let’s talk about Instructure. Instructure is an LMS that’s situated in the start. The original product is an education institution LMS. What does it do? What does it do?
Davis Bell: Yeah, so basically I graduated from college in 2001, and I graduate from graduate school in 2006. I caught the very tail end of this in graduate school, but when I was in college, there was a syllabus, and it was passed out, a paper syllabus that was passed out by the instructor at the beginning of the course. I remember sweating bullets at a university printer, because there was a 10 AM deadline to hand in a paper, and these were the printers that had the edges on the side that you had to tear off, right? You’d run that, and it’d be the paper would still be warm, and you’d hand it to the professor. All of that has really migrated to technology, and specifically in our case, the web. Canvas, which is our product, is really a system for managing the instruction and learning that occurs within a college, or a university, or a school. A professor, or a teacher, or an instructor will get online, and they’ll put their syllabus on there, and they communicate with their students via that system. There’s messaging, and chat, and all those kinds of things. Students will submit their assignments. They can be placed into groups. They can have discussions, and then there’s grading occurs through the system. It’s really the kind of mission critical piece of software that sits in the middle of that teaching and learning experience within an academic context.
John Sumser: Wow, so in the educational environment, your product is the heart of the interaction system? That’s interesting.
Davis Bell: Yeah, absolutely. Yeah, it’s just not … It’s sort of the equivalent of sales force for a sales team or an HRIS for an HR team. It really does. It just sits in the very middle of that process and is totally indispensable.
John Sumser: That’s fascinating. Even the fundamental status of the product is different in the corporate world. Tell me about the corporate product and why you think it’s different from other LMSs that are out there.
Davis Bell: Yeah, so let me tell you, if I may, a little bit about kind of how our company was founded, because it really bleeds into the answer to your question.
John Sumser: That’s great [crosstalk 00:12:04].
Davis Bell: We were … Our founding story, which has kind of now become company lore and mythology, and everyone has a slightly different version of it, but there’s a university here in Utah, a local university, and there were two computer science graduate students. They were taking a class on entrepreneurship, and their instructor was a successful entrepreneur who’d bought and sold a company already called Mosey, which is a storage company. The assignment was to build a business plan, and fictional kind of business plan, come up with an idea, go through all the steps, and then submit it at the end of the semester, and then kind of move on with your life. They were struggling to figure out what kind of business they should fictionally start, and they were advised to look for a piece of software that was broken. They turned to each other and instantly they both thought of their learning management system that the university they were attending was using, which was universally loathed by students and instructors and administrators. They thought, “You know what? We’ll look into this, but most likely our institution just made sort of a bad decision and chose some weird provider.” Very quickly they realized that the LMS they were using was actually the market-leaning LMS , and so they thought, “Wow, there actually may be a real business here.”
They went to their instructor with this plan and said, “Hey, we actually want to make a go of this,” and they knew he had some money from a business, so they said, “Will you fund this?” He said, “I will on one condition.” That condition was he knew that these guys were developers. They were programmers, and that they were going to go lock themselves in a room, and get some pizza, and not see daylight for a couple of months, and build something. He said, “Don’t do that. Build something in PowerPoint, and take it around to a bunch of different colleges and universities, and let them kind of tear apart your idea, and let them tell you what they want from the learning management system.” They did that, and they launched Canvas in 2011. In the ensuing 5 or so years, they’ve signed up over 12 hundred client institutions with 18 million users on the platform. A smashing success by any standard.
Now to get to your question on the corporate piece of things, the whole reason we got into the business was very early on as Canvas became a little bit better known, first our clients in the university said, “Hey. We’ve signed up for Canvas to use with our students, but we’re interested in using it for our employees.” That set alarm bells off. We tried our best to convince them that was not a good idea. That was a very different use case from what Canvas was built for. After a while, people who were not our clients came to us, and these were, in some cases, large Fortune 500 companies, and they were kind of sniffing around and asking us about using Canvas for the learning and development and training of their employees. Again, we really tried to dissuade them from doing that, because we knew that it wasn’t suited to that purpose. But some people were not to be dissuaded, and they used it, and they came back to us and said, “Wow, yeah. You guys were right. This is not a good fit.”
That sort of got us thinking, and it seemed quite strange to us that people, companies with big budgets and certainly a knowledge of all the dedicated learning management systems for organizations were asking an educational LMS company about using it with their employees. We kind of looked around, and we discovered a market that was pretty unhappy with kind of the state of product and service within the industry. One of the things that caught our eye was the statistic from Brandon Hall and the Starr Conspiracy about there being a negative 34 net promoter score within learning management systems. We really pride ourselves on our net promoter score on the Canvas side, and we usually hover in the high 60s, low 70s on the positive side, so a negative 34 really caught our attention. We sort of did, again, kind of went back to our roots and went through the process that our founders went through with Canvas. We built something in PowerPoint, and we went and showed it to, depending on when you’re talking about, initially was about 30 different companies and organizations of all different kinds, and sizes, and industries, and locations, and said, “What do you think of this?” They tore it apart and we iterated on that, and iterated at that, and iterated on that.
I think that’s a very long way of coming around to answer your question, which I’ve not forgotten, I promise, that what make Bridge different, I think, from the hundreds of other learning management systems out there is A, the approach that was taken. We are expert in building easy to use software that people will actually use, and that gets adopted, and that people like to use. That comes from our approach, which is a very sort of user-focused approach. Now our product people are going to be mad at me, because there’s all these technical terms that they use around discovery and product validation, and I’m not going to try, because I always mangle them. At the end of the day, it’s about siting in a room, watching how someone tries to go about getting their work done through a piece of software, and then building something, and then getting their feedback on it in a very iterative, collaborative way.
At the end of the day, we’ve built something that we think is incredibly easy to use. Then also I think we’ve had a little bit of an unfair advantage in that we were able to build our system in 2014 and 2015. Very different technological environment at that point than systems that were build 10, 20 years ago, so we’ve had the advantage of being able to build a cloud-native application, a mobile first application. I think that that is also a little bit of what’s different. I’ve given you a lot to chew on. If I haven’t put you to sleep already, then certainly let’s have a discussion about that.
John Sumser: Oh, god. No, I got to go now. I need a nap. The next question is pretty obvious. Who’s the target customer? The 7 million possible customers certainly aren’t all your customers, so who are you after?
Davis Bell: Yeah, so great question. That was kind of one of the pieces that we thought about and wrestled with quite a bit, because we became cognizant very quickly. You go and talk to a large company with 23,000 employees, they’re after something very different than the budding technology company with 300 employees. Certainly there’s some overlap, but at the end of the day, they are very different. I think I would define it this way. Number one, we’re after clients who are after a best-of-breed learning experience. There are plenty of folks who are going to make a decision based on a suite, right? They’re going to want performance, or they’re going to want succession, or they’re going to want compensation, and all these kind of talent management modules that we, frankly, don’t yet offer. We wanted people who … Look, there’s just two kind of schools of thought, right? There are advantages to both, but we built this for people who care about the experience. In many cases if it’s hey, the head of HR who’s making this decision, and they’re looking at this back-end efficiency and cost savings, because you’re using the same vendor, that’s just not going to be our target market. We’re looking for people who are saying, “I care about the learning experience. I want it to be a phenomenal experience both for the administrator as well as the learner,” then those people are our target.
Secondly, we’re looking for people who are sold on the benefits of cloud technology. We’ve heard from various people, and they tend to be concentrated in highly regulated industries who way, “Oh, I love this, but I’m going to need this. I’m going to need this,” as an on-premise kind of application. That’s just kind of not who we are. It’s not in our DNA. We believe in the benefits of the cloud, and that’s how we kind of have chosen to offer up our product. The third, in terms of industry, we want people who care about the design and the aesthetics of the experience, because we’ve put a lot of time and effort into that.
You’ll find that across different industries. Certainly some care about it a little bit more than others. We’ve found a lot of traction within technology, within media, advertising, PR, and then certainly anyone who’s using it with clients, because that’s a different kind of standard. In terms of size, we’ve started kind of in what we call the small and mid market. I think we would define that anywhere between 250 and call it 5,000 employees. That’s kind of where we’ve begun. We’ve wanted to build something that would accommodate the needs of those users.
John Sumser: That’s very ambitious. Just to recap, you’re building something for people who are interested in delivering a best-of-breed experience to the learners in their system, companies that are comfortable having their learning system in the cloud, and you are, it sounds like, targeting sort of white-collar service industries – advertising, media, that sort thing – as well as … I heard you mention something that’s probably worth digging into a little bit, companies who actually sell training as a separate category. Do you have customers in the area?
Davis Bell: Yeah, we do. Yeah, let me just clarify a couple of things. From an industry perspective, when we started this, we were very sort of hot-to-trot on segmenting the market by company size, by industry, and to be honest with you, we found company size is a pretty meaningful way to divide the market. The needs are different. The wants are different. The buying patterns are different. That’s actually proved to be meaningful. Industry has proven to be less meaningful, to be honest with you. We’re looking for people who are, again, interested in mobile, and cloud, and easy-to-use, and user design. All those kinds of things, so we have found that they don’t tend to be clustered within an industry. To the extent that you twist my arm and make me say an industry, I think technology’s one of those white-collar kind of services, human capital-intensive business tend to be those as well, but frankly, we’re across non-profit, manufacturing, automotive … I’m just kind of throwing … Healthcare, of the top of my head, higher education … We’re kind of across a lot of those, and industry hasn’t been as meaningful a way to kind of segment things.
As far as selling training, yeah, we do. People use Bridge for the training of their extended enterprise. Again, I think that speaks to the fact that there’s a focus on user experience, and unfortunately, we’ve discovered that in many cases people really care about the user experience of their clients to a greater extent than they do of their employees, which I think is unfortunate, but to a certain degree, reflective of a reality. We do have about a third of our clients use it for exclusively extended enterprise. A third of them use it exclusively for internal training of employees, and then a third use it for both. In other words, two thirds use it for internal, and two thirds use it for external.
John Sumser: Got it. Got it. There’s a lot to dig in there, the idea that the company is responsible for training its ecosystem starts to edge into the conversation at this point, and that’s probably a whole half hour conversation. We’re zooming through our allotted time. What should I have asked you?
Davis Bell: That’s a great question. I think we’ve covered … I love the question about what makes us different, because that’s one that we really had to think about hard. We thought if we’re just going to go and be LMS number 633 that’s going to do things in exactly the same way, then I think let’s not do this. That wasn’t our approach that made our company successful, and so I think that’s a great question. One question that I think is interesting that I think about a lot and that we as a company are thinking about a lot is where do you go from here? We’ve spent millions and millions of dollars and thousands and thousands of hours building what we think is a really phenomenal learning management system.
We think we’ve come up with new ways to kind of solve old problems with regards to learning. But where we’re spending a lot of our time and effort thinking about right now is kind of getting to the next level, which is … I’m sure you’re kind of familiar with the whole 70 20 10 model that only 10% of learning really occurs in a formal context, and a traditional learning management system really only addresses that 10, right? It’s course-based, whether that’s live training that you sign up for and track through a learning management system, or an e-learning course. We’ve got our smartest people at the company thinking really hard about, “Okay, how can a learning management system enable and facilitate and track the learning that occurs in that kind of 70 20 bucket, those informal buckets? How can we enable that?”
That’s kind of where we’re headed in the future. We want to nail the 10, that 10 bucket of formal learning really well, and we’ll continue to do that, but we do want to kind of be at the leading edge of helping organizations figure out how to facilitate and track that learning that occurs in the other buckets. That’s maybe kind of the future vision that we’re really excited about.
John Sumser: That’s fantastic, because if you look at that, the relationship to revenue is exactly not 10, hardly 20, and all 70. In the business of making an LMS relevant to the bottom line, that 70% is where the action is, so it’ll be fun to watch you go through that. Is there any final thing that you want the audience to take away from this conversation?
Davis Bell: Just that we, obviously, we’re a business. We’re selling Bridge. It’s important that we make that successful, but beyond that the approach we took in our first market was one that was incredibly collaborative with the stakeholders in that market. They helped us create a product that was really, really great, and we could not have done that without their collaboration. I would just say that to the extent that there are people out there who work in learning, and human resources, and training, and development, we’d love to hear from you, and I would invite you to help us make Bridge different and better. We get that people are pretty discontent with the market, and they kind of hold the keys to helping people like us improve it. We kind of love to geek out and nerd out on learning, and learning philosophy, and technology and it’s role in learning, and so if you’re interested in having those conversations and helping us kind of improve the state of the industry and the technology in the industry, we really would be genuinely interested in hearing from you, separate and apart from any commercial conversation.
John Sumser: That’s great. Why don’t you reintroduce yourself on the way out the door, and let people know how to get ahold of you to do that.
Davis Bell: Yeah, yeah, so my name’s Davis Bell. I’m the Vice President of Corporate Markets at Instructure. The best way to get ahold of me is my email address, which is Davis, D-A-V-I-S @instructure.com. Drop me a line. Again, we love to have conversations about how things are going. We’re in a constant kind of what we call “product validation tour”, so we always love to just hear how people use their learning systems and how they can be improved upon. We’d love to hear from you.
John Sumser: Thanks very much, Davis. This is HRExaminer Radio, and we’ve been talking with Davis Bell, who’s the VP of Corporate Markets at Instructure and is responsible for bringing their corporate LMS, Bridge, into the marketplace. It was a great conversation, Davis. Thanks again for taking the time to do it, and thanks everybody for tuning in. This has been HRExaminer Radio. Have a great day.
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