[Interview] Amsterdam startup ProctorExam inks a partnership deal to expand into the Middle East

Based on their own disappointment with the hassle of taking online exams like RedHat Developer Certification, Daniel Haven, and Teddy Funger founded ProctorExam, a cloud-based proctoring software. The Amsterdam-based startup recently expanded to the Middle East market. It inked a deal with Strategy Directives, an organization providing learning programmes for students, teachers, HR and more in the MENA region.

Last year, we brought Dutch #startups to the Middle Eastern cities of #Doha, #Dubai & #AbuDhabi for a 3-day bootcamp & an intensive soft landing programme. This resulted in the #Amsterdam #startup @ProctorExam expanding into the region! https://t.co/vrM2Xg52uT Congrats to them! pic.twitter.com/yyz5DMoeTA

— StartupAmsterdam (@Startup_Adam) February 8, 2018

Silicon Canals talked to Teddy Funger, CTO at ProctorExam, and discussed the inspiration behind the platform, how the startup traversed through a big business pivot, a subsequent revenue increment of 400%, and the deals it recently struck with some leading brands for online proctoring.

What’s your inspiration for starting ProctorExam and how did you reach here?

Funger: “Daniel and I had some disappointing experiences with online education. In my case, I spent a month preparing for my RedHat Certified Developer Certificate.

I did all of my studying on the computer, from the comfort of my own office. I was able to keep up with my regular work while reading the material at the same time because I could switch back and forth between the two. Eventually, the time came for me to take the test. I had to take an entire day off of work, drive from San Francisco to San Jose (a two-hour drive in traffic), and sit for an hour exam.

The crazy thing was that I was all alone in this room! They had set up a few webcams so that someone could watch me over the internet. I thought “why couldn’t I have just done this at the office?”. It would have saved me four hours in the car, and my employer at least half a day of productivity.

We both recognized that this could be done differently. I met Daniel after he had started the company and taken it through Startupbootcamp. When we met, he was looking for a CTO who could help scale the technology and technical staff. I immediately connected with the idea and saw the potential. Since I’ve had experience running startups previously, as well as experience in the enterprise software world, it was a natural fit.”

The Pivot

“Since then we have tried a few different strategies: initially, we were trying to sell direct to universities, which took way too long. We’ve signed deals which have fallen through, been rejected from different RFPs, and certainly had some technical hiccups along the way, but we never lost sight of the goal. Now we’ve started selling our infrastructure to other online education and proctoring companies, and we really are beginning to take off. “

 

What are the biggest threats and challenges? Which ones are your key competitors?

Funger: “In terms of threats to our business, I wouldn’t say that there are any direct threats. Online proctoring is here to stay.

Daniel and I were just having a conversation about how we are building something that is changing the way that the world works. Once an organization starts offering online proctored exams, they will not go back to the old way of administering tests. Sure, they might continue with traditional exams in parallel, but online proctoring isn’t going anywhere and will only become a larger part of our education.

Challenges on the other hand… there are a few. One thing that we have found is that the larger and more lucrative an organization would be for us, the more likely it is that the decision maker is older and doesn’t really understand the technology or trends. Often times, they are afraid of the backlash that could come from our system being hacked, or students figuring out how to cheat on their exams. Ultimately, we have to convince them that not only is Online Proctoring as safe as a traditional exam, but it can help your institution cut costs involved with moving people, and increase your reach into markets you couldn’t access previously.”

What’s the most exciting thing about the traction in the Middle East and North Africa?

Funger: “We are extremely excited about starting out in the Middle East and North Africa. Between 2017 and 2023, the MENA Online Education Market is projected to have a CAGR of 9.8%. Most of this is due to huge government investment in education, as well as the adoption of e-learning by educational and corporate institutes.

This is really exciting because we will be there when the market takes off, and we will be helping proctoring companies on the ground to create jobs, empower organizations, and build new businesses that are in line with the local customs and language.”

How do you think ProctorExam is making a change towards the life of people?

Funger: “One of the things that I love about working at ProctorExam is that we are really the missing link of the online education industry. I get to wake up every day and build something that I know will change peoples’ lives.

We are creating a product that is benefiting both the students and the educational institutes. The latter are able to extend their reach to learners that they would never have been able to reach before, or wouldn’t have had space to host. The former now has access to the full breadth of education that a student who, five years ago, would have only been able to access that education by being geographically situated near the campus. Now, a lot of this seems pretty abstract, but we get thank you notes from students who just wouldn’t have been able to complete their education without ProctorExam.

To me, enabling access to education in our users’ lives is the most important thing that we are doing at ProctorExam.”

What are the major concerns of your customers (for e.g. cheating/student authentication) and how does ProctorExam address these issues?

Funger: “Initially, most of our customers are concerned with two things. Cheating, and Data Privacy.

First, they want to us to guarantee that no student will ever cheat while taking an exam with ProctorExam. Obviously, this is an unrealistic expectation. Throughout history, whenever there have been students and exams, there have been students who try to cheat on exams.

Our goal isn’t to eliminate that, but to make it safer than a traditional exam setting, while at the same time, expanding the potential pool of test candidates for our customers. We address the second issue, Data Privacy, by maintaining a very strict policy on how we store data, who we share that data with, and how long we keep the data around. All of our data is encrypted both at rest and in transit. The only way to access data through our platform is with the proper credentials, and each of our customers’ data is in silo in separate databases, so there is no risk of cross-contamination.”

Many universities and institutions (Pearson, IBM Kenexa) now offer proctored exams. How is your solution different? 

Funger: “We spent a lot of time thinking about how to differentiate ourselves as a small start-up company in a market that is well and truly saturated with Goliaths. We took a hard look at what we did well, and where we could and could not compete with the likes of Pearson Vue, IBM, etc.

One thing that anyone who has used our competitor’s products will notice is that the technology they are using is insanely outdated. I’m talking either using a native application that will only run in Windows, Flash, or some other technology invented in the 90’s. This is something that we can beat them at.

We are 100% a technology company and are constantly innovating our core product, Proctoring Infrastructure as a Service, to keep up with modern trends. Our application runs on all Operating Systems and can get around a corporate firewall without involving the IT staff.”

Importance of partnerships

“On the other hand, we realized that we don’t have the experience in terms of service that these companies do. They have huge centers of proctors at the ready, great structures to train and manage personnel, and procedures in place to manage to cheat. We just aren’t big enough to offer this. And this is where our strategy comes into play.

We aren’t actually competing with companies like Pearson or IBM, but rather, we are turning them into our customers. We can provide an amazing, up-to-date Proctoring Infrastructure technology, and they provide the service component of online proctoring. We see it as a win-win proposition.”

How do you see your partnership with Strategy Directives? What are the parallels between operating in MENA versus Amsterdam and how do you plan to capitalize on opportunities in the new region?

Funger: “I see our partnership with Strategy Directives as a validation of our business strategy. Our goal is to create partnerships all over the world with local companies. They have the know-how, understand the culture and maturity of online education in their home market, and have the trust of their local institutes.

This parallels how we work not only in Amsterdam but in the rest of the world. For example, our partner in Norway is working with the Bank of Norway, which we, as a Dutch company, would never be able to access. Every new region that we unlock with a local partner increases our business opportunities exponentially, and we are really excited to see what new downstream clients start using ProctorExam. We actually just had an exam with one hundred students from fifty different countries!

Do you plan to expand product verticals, such as video Interviewing for job candidates, non-academic online tests for jobs, graduate/undergrad admission tests such as TOEFL, IELTS, GRE, GMAT?

Funger: “We want to be the infrastructure for all Online Proctoring companies. I wouldn’t think of ProctorExam as a specific application, but more of a building block that enables all sorts of new companies and services to be built. Ultimately, I imagine the Proctoring Infrastructure as a Service being used for all sorts of exams, from candidate interviews to music recitals! The possibilities are limitless, we just need the right partners, who are ready to build something amazing.”

NB: ProctorExam raised € 500K of funding in 2016 before expanding to the UK market.