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Two brothers went into business together in Nashville, Tennessee. They wanted to build something great. The two brothers were Alex and Brian Tolbert, and the business was a health insurance brokerage. They were going to set the world on fire.
Two years later, it was April 2008. The world was not on fire. Ha! Far from it. Turns out cold-calling employers about health insurance is a lot harder than they thought it would be.
After those two long years of cold-calling, Alex and Brian were still in their three-bedroom apartment, still with a “World Headquarters” sign hanging in the third bedroom. Only the sign didn’t seem as charming to them as when they first hung it.
Being a broker was more difficult than the brothers originally anticipated because their prospective customers had it so hard. Being a small employer isn’t easy, and being the HR person at a small employer is downright TOUGH.
Alex and Brian observed that sales, marketing, customer service, etc often gave employees great software tools to get things done – even at small employers. Too often, though, HR at those small employers did not. It struck them – why not? Why shouldn’t HR also be able to provide great software to employees?
Well, the first problem was that the software they had in mind didn’t exist. The second problem was that Alex and Brian knew NOTHING about building software.
Undeterred, Alex started reading about software development and came across a blog called Joel on Software written by the well-known software developer Joel Spolsky. Joel claimed building good software takes 10 years. In the words of Joel:
“Make a ten year plan. Make sure you can survive for 10 years, because [even] the software products that bring in a billion dollars a year all took that long. Don’t get too hung up on your version 1 and don’t think, for a minute, that you have any hope of reaching large markets with your first version. Good software, like wine, takes time.”
This was inspiring! If it took 10 years to build good software, surely that meant Alex and Brian could learn what they needed to know during that 10-year journey.
June - August 2008
So Alex started calling software development agencies around Nashville to see if any would be interested in building a “version 1” of the HR software they had in mind—on the cheap! Alex and Brian decided they would invest $15,000 to get the project going.
One Nashville agency suggested that Alex hire it to draw pictures of what the software would look like, with annotations describing how it should work. No actual building of any software—just drawings. Alex and Brian would pay for those drawings, and then they could bid the project out to whoever they wanted. The drawings would cost $2,500.
The brothers paid the $2,500 and got some great drawings. The bids based on those drawings came rolling in from the Nashville agencies, and the best one was $58,000! And even that bid came with a $300 cost just to talk about it.
UGH! Discouraged but not defeated, Alex declined the $300 conversation, put the drawings online, and invited software developers from around the world to bid on the project. That led to Alex “skyping” with developers in places ranging from South America to Asia, discussing the project. Video conferencing wasn’t a thing in 2008, and internet connections were often not good enough to reliably support the calls. Alex still managed to establish a bidding process and invited firms to bid on building “version 1” based on the drawings.
One firm in Jaipur, India, completely ignored Alex’s bidding process. Instead, they just started building the software. Yes, that’s right. They took the designs Alex had shared and just started building it. Bold! Every few days, they would message Alex with a link to a site where Alex could see their progress, and they would ask for feedback.
Alex’s response was always, “Yeah, I mean, it looks pretty good. But you know you don’t have the contract yet, right?” Yeah, we know, but we think we’re going to get it.
Once the Jaipur team was 80% done with the project, Alex got nervous. Price hadn’t been discussed yet. He was still seeking bids.
He asked the Jaipur team what they expected to be paid. They asked Alex what his budget was. Alex said $12,500; they said that would be fine. And just like that, BerniePortal 1.0 was launched near the end of 2008. It felt GREAT to have BerniePortal 1.0 live!
2009 - 2014
Almost immediately after BerniePortal 1.0 was up and running, Alex and Brian’s brokerage customers began using it and gave valuable feedback on how it could be better. From 2009-2014, Alex took that employer feedback and worked directly and exclusively with the team in India to continue to improve upon that first version of BerniePortal.
The 11.5-hour time difference between Nashville and India suited him perfectly—he worked as a health insurance broker in Nashville from 8 a.m.–5 p.m. and worked with the team in India late at night or in the early morning hours.
The health insurance brokerage, Bernard Benefits, grew dramatically during those years, partly on the strength of offering BerniePortal as part of the brokerage’s services package. That was how Alex and Brian were able to justify continuing to invest in the software. This was the “incubation period” for BerniePortal, as only employers who were employer clients of Bernard Benefits were able to use it. This allowed the team to focus on getting things just right before rolling it out to a wider audience.
In preparation for that, in 2014 Alex hired BerniePortal’s first developer in Nashville. He also traveled to India for the first time to meet and work with the team there in person.
In 2015, a BerniePortal competitor raised $500 million from venture capitalists. Yes, that’s right, a half-billion dollars. It had not been in business as long, did not know the customer as intimately, and was trying to destroy the health insurance brokers that HR at small employers often rely on. But still, to say this wasn’t distracting for the brothers would be completely untrue. It was a HUGE distraction! What’s more, several other companies had entered BerniePortal’s space and they also raised tens of millions of venture capital.
These companies got tons of media attention while BerniePortal got none. Not due to a lack of effort, though. Check out the great Saint Bernard we mailed to a leading HR technology journalist. Alas, it didn’t work. The guy loved the gift, but didn’t throw BerniePortal a bone.
This time period marked a very exciting time in the small employer HR technology space, and we decided to spin BerniePortal out of Bernard Benefits into its own, standalone business. This allowed it to be available to employers everywhere – the incubation period was over. And it worked! BerniePortal almost immediately began generating serious revenue on its own. For those of you counting, that is about eight years after writing the first line of code!
BerniePortal continued to experience rapid growth in 2017, and in 2018 its revenues even grew to be larger than the revenues of Bernard Benefits, which continues to be a thriving firm in its own right.
2018 marked ten years since the first line of code was written for BerniePortal. We certainly had a lot to celebrate, and we did when BerniePortal’s marketing team surprised Alex with an “It takes 10 years” party. A wonderful gesture and also a sign of how much Alex had talked with the team about Joel’s 10-year prediction during those many years when BerniePortal was not producing much revenue at all.
This was a good day. Even though Alex and Joel have never met, Alex reached out to Joel to thank him, including pictures from the party. Joel responded, incredibly gracious. What a time to be alive.
While the ten year milestone was a great achievement, there is still a lot for BerniePortal to accomplish. Since 2018, we’ve continued to work hard to celebrate and support the HR pros who keep small businesses going and growing—and in ways even beyond the new features and improvements we’re always making to BerniePortal.
In 2019, for example, we launched BernieU featuring free continuing education courses for HR that are accredited by both SHRM and HRCI.
And now in 2021, we’re excited to host our HR customers and the benefit brokers who support them at our users conference, Weekdays with Bernie, with both in-person and virtual options to network and learn best practices for helping to keep their organizations going and growing!