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All Davidson, a college English
teacher, had going for her was an idea, the
passion and energy to pursue it, and a few
thousand dollars in savings. With these assets
plus good business instincts and the able
assistance of her husband, Bob, she built a
dynamic company with annual revenue exceeding
$200 million. In the process, she helped shape
an industry that has revolutionized the
learning process.
There were advantages to being
an early entrepreneur in an emerging industry.
According to Davidson, "We didn't have
the baggage of a fixed business model and
practices. We had the opportunity to make
mistakes before anyone else did and learn from
those mistakes, to try lots of
"stuff" and keep what
worked."
As it turned out, plenty of the
"stuff" worked. Davidson and
Associates' initial three products - Math
Blaster, Word Attack, and Speed Reader - were
featured on the first software bestseller list
in 1983 and remain strong sellers today. By
1996, when the Davidsons sold their company for
more than $1 billion, Davidson and Associates,
Inc. was an award-sinning leader in the fields
of educational and entertainment software, with
hundreds of successful products to its
credit.
Harnessing Excitement for Learning
Davidson's interest in
education surfaced early in childhood. At age
twelve, she began tutoring neighborhood
youngsters for seventy-five cents an hour in
the basement of her family's Indiana home.
"It was then that I experienced my first
'aha' moment, that magical moment of
understanding when a student's eyes
brighten and the face displays that special
expression, 'I get it'. I was hooked.
Getting the 'ahas' became addictive.
And it was always fascinating to me how some
people could get things one way and others
'got it' another way,: she says.
Davidson went on to earn
bachelor's and master's degrees in
communication from Purdue University and a
doctorate in American Literature at the
University of Maryland. While Bob rose through
the ranks as an executive of an engineering
company, Jan spent fifteen years teaching.
The idea of using computers as
a learning tool dawned on her in the late 1970s
as she watched her children and their friends
play computer games on an early Apple computer.
"I was struck by how excited and engaged
they were by the interactive process," she
says. "These computer games completely
captured the kids' attention - a task that
as a teacher I knew was no small feat."
This was a new "aha" experience, and
once more Davidson was hooked.
At the time, she was director
of Upward Bound, a nonprofit learning center
she founded in Palos Verdes, California. She
searched high and low for software that would
combine the thrill of computer games with the
educational content her students needed to
prepare themselves for the Scholastic Aptitude
Test. When she found nothing suitable, she
designed some simple games of her own with the
help of a programmer.
Davidson tested her creations
on her students, tweaking and revising the
games to maximize fun and learning.
"Before we knew it, parents, teachers, and
students wanted to purchase them," she
recalls.
The next step was to find a
software publisher. As it turned out, good
fortune disguised as bad luck intervened. One
Saturday in September 1982, Davidson and her
husband arrived at Tiny Naylor's, a San
Clemente, California, restaurant. They were
scheduled to meet with the head of a San Diego
publishing firm and iron out details of a deal.
Unbeknownst to them, however, the publisher had
gone to a different Tiny Naylor's
restaurant on the other side of town.
While they waited, Bob
challenged his wife's plans to turn her
software over to someone else to publish and
market. "How can you do this? It's
like giving your children up for adoption. No
one understands your mission like you do,"
he argued, reminding her that software
publishers of the day lacked her background in
education, knowledge of presentation, and
conviction in the promise of computers in
learning.
"I can be a teacher or a
software publisher - but not both," Jan
maintained.
"But what is it you want
to do?" Bob asked. When Jan replied that
she wanted to be a teacher, he persisted,
"Is that your goal, or is that your
strategy? What is it you really want to
do?"
"Help people learn,"
she replied.
"Well, won't you help
people learn with educational software?"
he urged. That day the couple left the
restaurant united in purpose and never
rescheduled the meeting with the publisher.
Years later, Jan spiced up many
speeches by recounting this anecdote and
thanking her husband for winning the argument.
Once Bob had helped her see the crucial
distinction between a goal and a strategy, she
no longer felt guilty about
"abandoning" teaching to publish
educational software.
Product Testing through Play
The Davidsons' start-up
capital was $6,000 in savings that they had
earmarked for their children's college
educations. Jan wasted no time putting the
money to good use. On her birthday, February
23, 1983, the first Math Blaster software went
on the market. In less than six months, she had
arranged for the manufacture, documentation,
packaging, marketing, and distribution of her
popular learning game. With each new product,
she got better and faster at accomplishing
these essential tasks.
The company's first-year
revenues were approximately $200,000.
"Profits are the lifeblood of any
company," notes Davidson. "Every
quarter, from day one, Davidson and Associates,
Inc. has been profitable. We consistently
achieved a 30 percent margin. One of our
secrets, which few people have learned very
well in the technology business, is to be
diligent about carefully managing the expense
side of the business. You can only project
revenues, buy you can control costs."
The company matured rapidly, in
part due to Davidson's propensity for
hiring smart, talented people whose
professional objectives matched those of the
company. "Goals are fixed; strategies are
flexible," she points out, stressing that
her role as president was to make the goals
crystal clear. "We didn't rely only on
salaries, bonuses, stock options and other
benefits to get the best people. We attracted
them with opportunities to learn, develop, and
grow, and a supportive environment that would
allow them to be successful contributors not
only to our purpose of helping people learn but
to profits as well. Then we let the teams
explore, evolve, and pursue the strategies.
This required risk-taking, commitment, and
fun."
Part of the fun involved the
testing of new computer software products.
Ordinary school children, the company's
ultimate consumers, were invited to play with
each new learning game on computers set around
a brightly decorated glassed-in observation
room. "We videotaped their faces, and we
could tell by their reaction if they were
enjoying something," says Davidson. This
provided crucial business data while supplying
her with a perpetual source of fresh
"aha" moments.
Meanwhile Davidson was working
hard to create a market for and improve
distribution of educational software. She
joined the Software Publishers'
Association, serving on the board for ten years
and as president part of the time. "We
worked collaboratively to broaden our base of
customers. For example, we founded Computer
Learning Month to increase public awareness of
the benefits of computers and learning,"
she explains.
Surviving Industry Consolidation
By 1989, Davidson and
Associates' revenues approached $10
million. "It became clear that there was
an industry, and we were part of it. Our new
purpose involved into defining the right
business model," Davidson says. With more
opportunities in the offing than she could
handle as president, she recruited her husband
as the company's chairman and CEO.
Bob, an experienced and
farsighted executive, predicted that the still
immature software industry would consolidate
from more than a hundred publishers to a
handful of major companies. As a result of
these predictions the Davidsons set their
sights on ensuring that Davidson and
Associates, Inc. would survive as a major
player. The new challenge was to develop the
company into a leading multimedia studio with
multiple sources of quality products and a
strong distribution system.
To achieve this goal, the
Davidsons began to strengthen their marketing
relationships with consumer software outlets
and schools. Further, they accelerated their
development of homegrown products. They also
acquired other development centers and entered
into partnerships to form new product lines.
For example, they began manufacturing and
distributing educational software produced by
other companies, such as Simon & Schuster,
and co-producing with Fisher-Price interactive
CD ROMs for preschoolers.
In addition, the Davidsons took
the adventurous step of entering into the
entertainment side of the business by acquiring
Blizzard Software, producers of the popular
Warcraft 1,Warcraft 2 and Diablo games. In
1993, after careful soul-searching, they went
public with the company. Soon Davidson and
Associates, Inc. had 700 employees working to
create, oversee the development of, and market
up to thirty-three new titles every year.
About this time, the
company's success made it an attractive
target for larger corporations interested in
the flourishing software industry. This far,
the Davidsons had managed to stay a step ahead
of the industry consolidation that Bob had
predicted in 1989, buy they knew they could not
out race it forever. In autumn 1995, CUC
International (now Cendant Corporation), a
Connecticut-based telephone and Internet
marketing company, began courting Davidson and
Associates, Inc. and in July 1996, the
Davidsons agreed to a stock swap that enabled
CUC to acquire their company, in addition to
Sierra OnLine, Inc., another software company.
The Davidsons' share of the deal was valued
at $1.15 billion.
"A lot of companies are
ending up in places they didn't necessarily
want to be," Bob said at the time.
"This merger puts us in a position to
control our own destiny."
Unfortunately, the
Davidsons' destiny didn't run parallel
to that of CUC International for long. A few
months after the acquisition, "differences
of opinion" with new owners regarding
goals and values prompted the couple to resign
from the board and leave the company. They
remained busy, however, having established the
Davidson Foundation and the Davidson Group to
handle substantial philanthropic and investment
activities involving ecucation and
technology.
A New Focus on Philanthropy
Jan's work continued to be
her main hobby. "I'm dividing my time
between philanthropy and helping to develop new
education-related businesses," she
explains. "Our role is advising. It's
pretty exciting."
One of these companies, called
Neurosmith, is combining advanced computer chip
technology with the latest research in
neuroscience to create a set of forty-one
"smart toys" for kids from birth to
age five. Another, called Brilliant Beginnings,
is developing products for parents and day care
providers that focus on the cognitive
development of very young children.
Among her philanthropic
efforts, Davidson serves as director of the Los
Angeles County Educational Foundation, as a
regent of the Board of Pepperdine University,
as a fellow of the Claremont Graduate
University, on the FCC and the DOE task force
to implement the integration of technology and
telecommunications in the nation's schools
and libraries, and on the advisory board for
the president's "America Reads
Challenge."
The philanthropic activity that
Jan feels most passionate about is nurturing
and serving the special needs of profoundly
gifted young people. In 1999, she and Bob
formed the Davidson Institute for Talent
Development (www.davidson-institute.org) to
provide individualized educational and
developmental programs for these children.
"Although gifted children are one of
society's greatest assets, little is being
done to support these young learners," Jan
notes. "And the research is clear that
exceptional learners both below and above the
mean require individualized, special provisions
to meet their unique educational needs."
In addition to the Davidson Young Scholars
Program and Davidson Fellows Awards, the
Institute will be launching a Virtual Learning
Community for profoundly gifted young people.
"Technology is a perfect way to allow
these children to learn at their own pace, in
their own style, and an opportunity to connect
with each other as well," she says. Thus,
in philanthropy as well as business, Davidson
continues to use technology to facilitate
learning.
Davidson is nationally
recognized for her contributions to education.
In addition to numerous other awards, she has
been recognized as Woman Entrepreneur of the
Year, awarded the American Academy of
Achievement's Golden Plate of Excellence
and the EDNET hero Award for Significant Impact
on Technology Hall of Fame. Moreover, she has
received an Honorary Doctorate of Education
from Purdue University.
Davidson has distilled her
experiences into some crisp and cogent advice
for the educator with a marketable idea and an
entrepreneurial bent. Ever the teacher, she
sprinkles her comments with quotes, such as a
favorite by F. Scott Fitzgerald: "The test
of a first-rate intelligence is the ability to
hold two opposed ideas in the mind at the same
time, and still retain the ability to
function."
"This applies to
business," Davidson notes. Examples of
seemingly opposed ideas that she has come to
consider essential include: having a fixed goal
while pursuing flexible strategies,
establishing a clear sense of direction while
encouraging experimentation and risk-taking,
setting well-defined areas of responsibility
while allowing operational autonomy, investing
in the long term while demanding short-term
performance, and focusing on purpose as well as
profits.
Davidson continues to think
ahead of the curve. "Teachers have been
drilled into believing there is no other
strategy," she says, noting that they must
learn to think differently if they are to
pursue their passion in a world bursting with
opportunities.
"We can anticipate that
learners who get their morning news on the
Internet, customized to their interests and
needs, in a format that best serves them are
likely to expect a curriculum customized to
their learning needs and objectives,"
Davidson explains. "Are they going to
understand why they have no choice and must
learn according to a standardized,
one-size-fits-all curriculum? As our students
needs and expectations change, we must change
our educational practices to accommodate
them."
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