LearnLinc
Corporation
The
ILinc-LearnLinc
Story
Dr. Jack M. Wilson | Chairman, LearnLinc Corp.
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The Internet Tsunami
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Do you think the pace of change is accelerating?
$3.5
$3.0
Market Value of
Tech Companies
$ Trillions
Initial Development…
University Networks…
Regional Networks (NYSERNET)…
Early ISP,s…
World Wide Web…
$2.5
$2.0
1967
1981
1988
1992
1995
$1.5
$1.0
$0.5
$0.0
1970
1970s
1980
1980s
© Jack M. Wilson 1999
1990
1990s
2000
Incl. Int’l Tech Companies
Source: Securities Data Company
Page 2
Introduction
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The founding, growth and eventual acquisition of the ILINC
Corporation is a typical small example of technological
entrepreneurship.
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ILINC was founded in 1993 by a professor (the author) and
two students at Rensselaer Polytechnic Institute.
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Later the name was changed to LearnLinc to match the
name of its popular product and eventually
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LearnLinc entered a triple merger in early 2000 with Gilat
Communications and Allen Communications to form the
Mentergy Corporation (NASDAQ).
© Jack M. Wilson 1999
Page 3
The Idea. The Research
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Managing learning on networks
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Consulting with IBM, AT&T, GTE, Boeing, NeXT,
Microsoft, Intel, etc
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Joint Venture between AT&T Bell Labs and RPI
o WorldWorx product released
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New technology releases allow a better idea.
© Jack M. Wilson 1999
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The Opportunity
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Propose a significantly enhanced and advanced version to
AT&T
o AT&T declines
o But Bell Labs excited!
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Research continues in Wilson’s Lab
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Design and Manufacturing Learning Environment
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Degerhan Usluel, MBA student, BSEE, former entrepreneur
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Degerhan recruits Mark Bernstein, former CA “TopGun.”
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They want to start company and want Wilson to lead it.
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Distributed learning environment with multicast video,
application sharing, agents to control bandwidth.
o None of these had been done reliably and internet was not
ready.
© Jack M. Wilson 1999
Page 5
The Team: ILinc LearnLinc Founders
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Degerhan Usluel,
Chief Technology
Officer
Mark Bernstein, Jack Wilson
Vice President
Marketing
© Jack M. Wilson 1999
Chairman and CEO
Page 6
Exit Strategy
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Need to decide ahead of time how we wanted this to end.
o Private Company
o Public Company
• IPO or acquisition
o Life Style Company
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We all wanted to create a public company and either IPO or
Sell.
© Jack M. Wilson 1999
Page 7
Creating a Prototype
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Need a prototype to raise money.
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Need a prototype to acquire early customers.
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Need a polished pitch
© Jack M. Wilson 1999
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LearnLinc
© Jack M. Wilson 1999
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LearnLinc Instructor
© Jack M. Wilson 1999
Page 10
Funding the Enterprise
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Met with many successful entrepreneurs
o Bugle Boy, Wellfleet, Interlan, Bay Networks, Nortel, MapInfo, etc
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Went against advice
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Decided to sell vaporware.
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Success magazine called it the “Wimpy method”
o Wimpy: “I’ll gladly pay you Tuesday for a hamburger today!”
o ILinc: “I’ll gladly give you software next year for $300,000 today.”
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Against all odds (and reason): It worked!
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First Customers: IBM, AT&T, GTE, Sprint, Office Depot,
and News Corp.
© Jack M. Wilson 1999
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Building the Product
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Degerhan actually conquered the reliable multicasting
challenge and made the product work!
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Bernstein sold lots of vaporware.
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Every customer, except for one, was very satisfied.
© Jack M. Wilson 1999
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Venture Capital
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Once company was up and running, we were short of
working capital and tired of co-signing bridge loans!
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First Round: Exponential Investors and New York state
development fund.
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Board asks Wilson to leave RPI permanently.
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Instead Wilson hires a new CEO who would bring advanced
start-up experience.
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Second and Third Rounds: GeoCapital Investors, Intel, and
original investors.
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Total outside investment was less than 50% of the company.
o Very rare, but left the company short of cash compared to new
arrivals.
o We were using the old model. They used the TechBoom model.
© Jack M. Wilson 1999
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Fortune on ILinc:
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“Interactive Learning International Corp. (ILINC), a twoyear-old company in Troy, New York, has shown what's
possible in today's world of limited telecommunications
bandwidth. ILINC's interactive training programs can be
transmitted to users' PCs over local- and wide-area
networks, as well as high-speed communications links such as
ISDN (integrated services digital networks). A live instructor
can appear in a window on the screen and address students
in dozens of locations. He can launch video and audio clips
for all the "class" to see and hear. And at discussion time, a
student can click on a "raise hand" icon to get the floor. “
o REPORTER ASSOCIATE Alicia Hills Moore
o Copyright © 1996, Time Inc., all rights reserved.
© Jack M. Wilson 1999
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Wall Street Journal on ILinc -1998
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"It's great -- by using it, we've cut our travel expenses substantially," says Gary
Schweikhart, a spokesman for Office Depot, an office-supply company in Delray
Beach, Fla.
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Office Depot first took its corporate training sessions on-line in May 1996. It was one
of the first customers of Interactive Learning International Inc., or ILINC, a Troy,
N.Y., maker of distance-learning software. Since then, about 1,500 Office Depot
employees have completed on-line training, on everything from how to write a
business letter to how to use the company's proprietary order-taking system.
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"We were in a situation where we were doing a lot of training of trainers" in order to
have enough qualified instructors to teach employees at 629 stores and 68 sales offices
across the country, says Doug Kendig, the company's manager of training technology.
"We had to deputize a lot of people [to train employees], and you don't always get the
best results that way."
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But now Office Depot uses the ILINC software for about 20% of its training, with
classes in Florida, California and Texas using just six instructors. "I think it's
fantastic," says Jeannette Perez, who works in Office Depot's commercial credit-card
department. "It just holds my attention more, because you're interacting with the
computer."
© Jack M. Wilson 1999
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WSJ
© Jack M. Wilson 1999
Page 16
Going Public
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Rapid Growth meant much more capital needed.
Arrival of several “fast-followers” meant that we had
competitors nipping at our heels.
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Potential IPO was about $100 million.
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Acquisition was only about $50 but could create some
beneficial alliances.
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Investment Banker hired.
© Jack M. Wilson 1999
Page 17
Mentergy formed
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With help of Investment Banker and VC advisors:
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A triple reverse merger.
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Sold control of LearnLinc to GILAT Communication of
Israel and at the same time used LearnLinc to acquire Allen
Communications, John Bryce Training, and GILAT itself.
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Closed deal on February 29, 2000 for $52 million.
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Combination called Mentergy
o Value was $500 million in March
o New York, Salt Lake City, Europe, and Israel.
o Created headquarters in Atlanta
o As tech bust came they entered bankruptcy in 2002.
© Jack M. Wilson 1999
Page 18
Questions for the Student:
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Where would you place LearnLinc on the spectrum of types of
innovations? Product or process; radical or incremental;
architectural or component, competence enhancing or
destroying?
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How would you place LearnLinc on the S curve of technology?
What does this imply for its adoption?
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LearnLinc offered a low cost universal way to bring learning to
learners in a corporate training environment. Were they
operating in segment zero? If so, what was the market they
were disrupting?
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If you were advising ILINC as to how to manage its LearnLinc
product just prior to its acquisition, what would you identify as
major challenges they would need to face quickly?
© Jack M. Wilson 1999
Page 19
A New Paradigm
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View at the height of the tech boom –ca. mid 90’s
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OLD Paradigm:
Physical Capital / Resources
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NEW Paradigm:
Knowledge / Intellectual Capital
• Frank P. Quattrone
Managing Director
Head of CSFB Technology Group
Credit Suisse/First Boston
© Jack M. Wilson 1999
Page 20
Why we are running so hard
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The Internet’s pace of adoption eclipses all other technologies
that preceded it.
o Radio was in existence 38 years before 50 million people tuned in;
o TV took 13 years to reach that benchmark.
o The Internet crossed that line in 4 years, once it was opened to the
general public.
o Email, Yahoo, Google, YouTube, Facebook, Twitter,
© Jack M. Wilson 1999
Page 21
Wilson’s Favorite Laws!
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Moore’s Law:
CPU performance
doubles every 18 months
Bandwidth law:
Bandwidth is doubling even faster!
Metcalf’s Law:
the value of a network scales as n2 where n is the number of
persons connected.
© Jack M. Wilson 1999
Page 22
It ain’t over till it’s over
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Moore’s law, the Bandwidth Law, and Metcalf’s law remain
true and are expected to continue to be true for another 40
years at least!
These will drive faster and faster need for change.
o Companies will have to respond.
o Training is the only way!
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It ain’t over till the fat lady sings -and she isn’t even in the
hall yet!
• Jack M. Wilson: http://lallyschool.rpi.edu/Wilson/ITE.html
© Jack M. Wilson 1999
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My Three Messages:
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It’s about intellectual capital stupid!
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Intellectual capital demands continuous development.
o (fish, relatives and intellectual capital spoil after three days.)
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Computing, Communication, and Cognition will change the
process tremendously.
© Jack M. Wilson 1999
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LearnLinc
© Jack M. Wilson 1999
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LearnLinc Instructor
© Jack M. Wilson 1999
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LearnLinc Instructor
Video Window
Instructor or
Student
© Jack M. Wilson 1999
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LearnLinc Instructor
Audio Controls
© Jack M. Wilson 1999
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LearnLinc Instructor
Students
HandRaise&Response
© Jack M. Wilson 1999
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LearnLinc Instructor
Response
Summaries
© Jack M. Wilson 1999
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LearnLinc Instructor
Text Chat Area
© Jack M. Wilson 1999
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LearnLinc Instructor
Shared Work Area
© Jack M. Wilson 1999
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TestLinc
© Jack M. Wilson 1999
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Tutorial
© Jack M. Wilson 1999
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Student Results
© Jack M. Wilson 1999
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Record book
© Jack M. Wilson 1999
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NTU-Rensselaer Course
Hands-On World Wide Web
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Feb 10 & 17, 1998
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8000 participants
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500 sites
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Most successful NTU course ever
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“The future of satellite based education.”
o Lionel Baldwin, President, NTU
© Jack M. Wilson 1999
Page 37
Aetna: A Success Story
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trained more than 3,000 employees this way 1997-2000
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Employees taught via LearnLinc scored four percentage points
higher on training achievement tests than those taught the old
fashioned way.
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it's more cost-effective to bring the class to the employee,
than to get the employee to the class.
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After software costs, Aetna says it has saved $3 million dollars.
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Efficient and Effective!
© Jack M. Wilson 1999
Page 38
MCI: A Success Story

Goals
 To reduce the need for expensive training rooms.
 To train all of the company's network operations
personnel on new products at the same time.
 To educate employees as needed, without requiring them
to travel for training.

Results
o faster deployment of products and services
o estimated savings of about $1,500 per person per class,
o $2.8 million dollars in savings.
o a 237-percent return on investment in less than a year.
© Jack M. Wilson 1999
Page 39
Office Depot: A Success Story
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Michelle Sonder, technical training developer for Office
Depot :
o “Office Depot was spending about $150 per person
daily to send employees off-site for an eight hour
course.
o The cost was cut to $14 per person with LearnLinc.
o The centers were teaching them too much. We
customize our training now, so that once they are
trained, that training instantly applies to their job, and
we have shortened the amount of time contracted
experts are on site by having them address several
locations at once.
o In one case, this saved us $40,000 in one week.”
© Jack M. Wilson 1999
Page 40
Computer Associates: A great start!
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CA plans to offer online instructor-led certification courses on its
products to employees.
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Make life easier for CA and its IT professionals.
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Currently, all field engineers are flown to CA's headquarters in
New York for certification training which is both time
consuming and costly.
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With LearnLinc, IT staffers will be able to go online and
become certified in CA technology without leaving their
desks.
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CA also plans to offer the classes to customers for a fee.
© Jack M. Wilson 1999
Page 41
Thank You
Jack M. Wilson
www.learnlinc.com
518-286-7000
www.JackMWilson.com
Thank You
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