Ex-schools chief gets foot in door for software firm
Two years after leaving office, West Virginia schools Superintendent Steve Paine is using his connections with public school officials here and across the country to help sell a computer program.
Paine took a job this year as chief academic officer at California-based Engrade. The company sells a program to track students' grades, attendance, discipline and assignments.
Engrade, which started as a free program for teachers, has won applause from educators and contracts with large school districts, including New York City's.
With Paine's help, a paid version of Engrade has spread into a number of West Virginia counties this year.
The first West Virginia county school district to bite on Engrade is Randolph County, where Paine's son, Jonathan Paine, is the county school system's director of technology.
The son helped make sure Engrade worked well with the state Department of Education's 20-year-old student information database. The older, state-run program is considered hard to use and isn't easy to integrate with newer computer programs.
Steve Paine, Engrade CEO Zach Posner and Randolph County Superintendent Jim Phares said the father-son relationship had nothing to do with the county's decision to buy Engrade at the initial price of $2 per student.
"I think you know me well enough that any kind of family connection - I will promise you - never entered into my decision to go do business with them," the elder Paine said.
Phares is among the candidates who may become the next state schools superintendent. He said a teacher brought Engrade to his attention in fall 2011.
That's before Paine joined Engrade in January 2012. Before that, Paine spent a year as a vice president at CTB/McGraw-Hill, the New York-based test maker and education software giant.
A high school student in Sacramento founded Engrade a decade ago to help his math teacher post grades. Now, the product has 5.5 million users worldwide, including teachers, students, parents and school administrators.
Engrade lets teachers share grades and assignments with students and parents. It also helps teachers and principals keep tabs on students.
The company offers a free service and paid versions. Teachers across the country and in West Virginia have been using the free version for several years. About 24,000 West Virginians used the free version in the past month, Posner said last week.
Recently, Engrade has been looking to grow its paid services, which are designed for use by schools and school districts.
Besides being the former top education official in West Virginia, Paine is also the former president of the Council of Chief State School Officers.
"I used to work with state superintendents of schools, so that's why they hired me, primarily," Paine said.
Paine's walk through the revolving door from the public sector to private sector is not unusual.
His predecessor, former state schools Superintendent Dave Stewart, left the superintendent's office in 2005 and soon took a job with Charleston architectural firm ZMM. The firm did millions of dollars of business with the public education system during Stewart's tenure.
During Paine's tenure, the state also did millions of dollars in business with McGraw-Hill. Paine said that business was done before he ever thought about retiring.
Paine said his decision to go to McGraw-Hill happened quickly. He received a waiver from the state's Ethics Commission to seek private sector employment. Paine said he did not do business with the state while at McGraw-Hill.
Paine left McGraw-Hill after getting a good look at Engrade, which is sleek, modern and appears easy to use. The program replaces paper grade books and also helps teachers manage their classrooms. It links with other programs that offer online lessons and tests.
Paine has long been keen on the power of classroom technology.
"He basically saw what we were doing and said, 'You guys have nailed it,' " Posner said of Paine's initial interest in Engrade.
Posner said Paine suggested a key feature: at the press of a button, principals can see a list of students who are at risk of dropping out of school based on information Engrade collects about them.
Posner said enthusiastic users - not Paine - were Engrade's biggest salesmen.
"He had a recognized face, but conceptually a lot of the traction has been building up in West Virginia," Posner said.
Paine had a strategy to help get Engrade's foot in the door. To do that in West Virginia, he visited counties and the regional education service agencies, or RESAs.
Paine said his job at Engrade is to make introductions and open doors. He said he does not sell the software.
The work brings Paine into contact with numerous officials he once worked with - and supervised - as the head of the state's public school system.
"The kind of thing I would do would be to contact the RESA director or contact the superintendent and say, 'We have Engrade, would you have any interest in taking a look at us?' " Paine said.
Engrade is now being used in Randolph, Wayne, Mason and Logan counties and in parts of Kanawha, Putnam and Boone counties, among others.
Engrade has donated its software to McDowell County, where the American Federation of Teachers union is trying to spur a turnaround with public and private partnerships.
Earlier this year, Paine said he met with then state Superintendent Jorea Marple and her staff at their invitation to talk about Engrade.
Department of Education spokeswoman Liza Cordeiro said the meeting was about how the state could help counties use Engrade.
Paine said the department told Engrade to find a "beta district" where they would work through legal issues and make sure the software could be integrated with the state-run student information database, known as the West Virginia Education Information System, or WVEIS.
Randolph was the first of those beta districts.
Posner said Engrade invested company staff time and a couple hundred thousand dollars to get Engrade to work with WVEIS and WVEIS-like systems in other states.
Because of that, teachers in counties that pay for Engrade can enter information into Engrade and it will automatically be sent to WVEIS. Teachers who use the free version of the software have to enter the same information twice: once into WVEIS and once into Engrade.
Because Randolph was part of a trial run for Engrade in the state, Engrade is charging the county a discounted rate of $2 per student. Other districts are paying more - perhaps as much as $4 per student.
Posner said he found out about Paine's son being a Randolph County employee "significantly down the road" during Engrade's work with the county.
He said Jonathan Paine helped make sure Engrade worked with WVEIS, but only after Phares decided to use Engrade. In a telephone interview over the holiday weekend, Steve Paine said questions for Jonathan were best directed to Phares.
Phares said he contacted Engrade about its product in late 2011.
Phares said Engrade originally told him the company did not have anyone on the ground in West Virginia. But then Steve Paine came with Posner to a meeting in January, Phares said.
Randolph County is saving about $55,000 because of the switch to Engrade. It previously paid about $63,000 a year for another grade book program known as GradeQuick, Phares said.
Engrade is costing Randolph County about $8,000 for the first year because of the special rate it is receiving from the company. Even if the rate doubles in coming years, the county would still save tens of thousands from what it once paid for GradeQuick.
This year, Phares has aggressively challenged the state about its technology capabilities.
Phares made news in mid-October for his sharp criticism of WVEIS: he said the program should be thrown in the Kanawha River.
The state Board of Education has similar feelings. It issued a report last week that said WVEIS "looks and feels out of date." The board's report recommends replacing WVEIS - something that is surely going to be a multi-million-dollar project.
State Board of Education President Wade Linger declined to say last week if Phares' criticism of WVEIS was one of the reasons Linger wanted him to be the next state superintendent.
WVEIS is, by computer standards, an old program. It dates to the early 1990s, but it is a huge database of information that will be difficult for the state to replace.
Engrade alone could not replace WVEIS, which handles far more information than Engrade does. In the meantime, counties are looking for programs that work with WVEIS but are easier to use: In other words, if WVEIS is a pig, then Engrade is the lipstick.
But Engrade CEO Posner said his company could team up with a larger company to create a program to replace WVEIS or a WVEIS-like system in other states.
"We have had every major technology company reach out to us to do so," Posner said.
Paine said if Engrade were to contract directly with the state of West Virginia rather than with individual counties, he would not take part in those discussions even though legally there is no prohibition.
"If the state were ever interested in doing any contract work with Engrade, then I would recuse myself," Paine said.
Engrade has two chief competitors in the state: Washington, D.C.-based Blackboard's GradeQuick and West Virginia-based CityNet's Live Grades.
GradeQuick was perhaps the first such program out of the gate and dominated the West Virginia market for years. But it is now losing some market share in the state to Live Grades and Engrade.
CityNet had negotiations this year with Engrade about joining forces, but the talks did not produce an agreement.
CityNet, which mainly sells Internet service, created Live Grades several years ago in Harrison County.
Its software does not do as much as Engrade, said Jan Frenzel, the Live Grades administrator. But CityNet's program offers some of the same services as Engrade, including an online grade book and technology that lets teachers communicate easily with parents about their students' grades.
Frenzel, who has known Paine since college, praised Engrade. But she said not every teacher might need or use its other features.
She also said Paine is a "very ethical person."
CityNet decided this year to begin giving away Live Grades as Engrade began to spread into the market. CityNet used to charge schools $1,000 to $1,200 to use the software. But, as the company looked to expand its reach, Frenzel said school officials said they did not have the money to buy more software.
"It's a really good program, but West Virginia school districts don't have the money for anything - for Live Grades, for Engrade, for anything," Frenzel said.