Interfolio outsources university career centers with web service

Internet Strategies for Education Markets: The Heller Report, March, 2001

Interfolio (Alexandria, VA, www.interfolio.com) has found one of those market niches that expand to an enormous space. The company provides online portfolios, and it is initially focusing on outsourcing much of the work done in a University's career center. Steve Goldenberg, founder, explains that the company manages a range of documents for a population of people who are leaving campus and who need more than a resume in hand. Letters of recommendation, transcripts, awards or certifications and examples of work are posted or scanned into an individual's online portfolio and made available to others upon that person's request.

Nearly every university has a career services department with rooms full of file cabinets and staff overwhelmed by answering every call as to whether a professor's letter of recommendation has arrived yet. Outsourcing that service provides a substantial initial market that the company has barely tapped. They currently have eleven institutional customers, eight of whom, says Goldenberg, sought out the service. That list includes the U of Virginia, Georgetown U, Notredame, Columbia U, NYU, the U of Connecticut, Lehigh U and U of Miami in Florida.

A Story of Young Entrepreneurs

Goldenberg recognized this standard university service as ripe for outsourcing because that is where he worked as an undergraduate student at Georgetown. Interfolio's business plan was a class project, and he and his co-founder, Karen Fuerherm, exhibited at their first show, a conference hosted by the Eastern Association of Colleges and Employers, two days after graduation. They had a banner and three table cloths that were dwarfed by Monster.com's massive display. That was in June of 1999. After feedback from interested conference attendees, Goldenberg built the technology for the system over the summer and launched it in September of 1999. The two 24-year olds have since hired a president with 13 years of experience in higher education, Margaret Bell. There are four full-time employees and nearly a dozen part-time employees.

The company had $125,000 in revenue last year. Income currently comes from charging individual students a $39 set-up fee that gives access to the portfolio for five years and delivery fees that range from $2 for electronic delivery to $45 for an international, overnight FedEx. They will eventually also have income from renewal fees when the five-year period has expired. Interfolio also charges institutions that wish to convert their archives to the electronic system.

Managing Growth

The company is currently focused on creating distribution partnerships that can grow their market penetration. Potential partners abound in the fragmented higher education market; higher education portals, student information system companies and e-learning platforms are all possibilities.

Goldenberg is also seeking $1 to $2 million to expand Interfolio's direct sales force and build the customer service department. The company has thus far been funded by family, friends and angels. Recognizing that the technology does not have a proprietary advantage and that web-based businesses can rapidly be duplicated, Goldenberg is betting the future of the company on customer service and strong relationships with universities. He also points out that the company already has 4,000 students who have paid to be a part of the system, and the barrier to switching is substantial. It has one competitor, www.referencenow.com, a company started by someone who attended school with Goldenberg and Fuerherm.

Cradle-to-Grave Expansion

With this healthy start, Goldenberg sees enormous opportunity to expand the portfolio technology to a cradle-to-grave service. "At the end of the day, an electronic portfolio is a tool for the individual," says Goldenberg. No matter where a person first encounters it, the portfolio ports to other institutions.

Additional opportunities within higher education include colleges outsourcing transcripts for registrars and using portfolios for admissions. One university, which Goldenberg does not yet wish to name, for example, is considering redesigning their admissions process so that the 60,000 students applying every year would have to purchase an online portfolio account. With such an investment, all applicants, whether accepted or rejected, would retain the account for use elsewhere.

Such a move would bring the product into high school markets. Goldenberg also sees opportunity to use the portfolio technology throughout the K-12 sector for individual assessment and evaluations of educational programs. He admits to only recently encountering the magnitude of the portfolio trend in K-12 schools, and he is at work learning more about it.

Markets beyond the university include e-learning platforms, distance learning vendors, corporate training departments, trade associations and professional societies wishing to identify learning needs and track performance.