Founded in 2009, PlagScan is a Cologne-based plagiarism detection service for academic institutions and businesses. The company participated in German Accelerator as part of the Class of Fall 2014 in Silicon Valley and is now consistently doubling its revenue on an annual basis. In this interview CEO and co-founder Markus Goldbach, who was trained as a neuroscientist, recounts Plagscan’s founding story and how what started as a hobby turned into a fast-growing technology company.
Everything started with the girlfriend, Angela, now wife, of my co-founder, Johannes Knabe. She’s a high school teacher. She came home one night with a stack of term papers she had to grade. She was worried that some students hadn’t done their own work. This was in 2009, and she had no way to efficiently check whether her students plagiarized someone else’s paper. At the time, checking this would require hours of manual work, just for this one set of essays. Johannes is a computer scientist, and, of course, he didn’t think that his girlfriend checking for plagiarism manually was a good idea.
So he built an application to check the papers automatically. Feed text in, and Angela immediately knew if the student had written their own paper or copied it from someone else. He posted the application to the web and let people use it for free. After a few months, he realized that this app, SeeSources.com, was taking off like wildfire. He told me about it and suggested that maybe we should start a company. I looked at the app and its growth, and thought this might be a fun thing to do. That’s how we started PlagScan. We didn’t quit our day jobs then – I was a PhD student in neuroscience, and Johannes was finishing his PhD in computer science and genetics – but we began to work on turning Johannes’s free service into a business.
We went to our first trade show, Didacta, in 2011. The business was growing, but we were still only working on it part-time. During the trade show, the German Minister of Defense, Karl-Theodor zu Guttenberg, was accused of plagiarizing his doctoral thesis and ultimately resigned his government post. Usage on our site took off. I decided then and there that it was time to dedicate all of my energy to Plagscan. Johannes had a real job as a teacher, but he was able to continue to work on Plagscan part-time, probably 20 hours per week. He was the technical brains behind our system.
Growing up in school, it always bothered me to see students cheat. I watched students expend so much energy to cover up their cheating and thought: What if they put that same effort into studying and writing their own papers? Ultimately, they would be a lot better off. They would become better writers and thinkers. Cheating seemed to be such a waste of effort. So yeah, philosophically, I was very aligned with our business, and that’s why I think I’ve been able to dedicate my energy to making it successful.
Today, we’re 15 employees. We have 1500 customers, academic institutions and businesses around the world. Approximately 40% of revenue comes from Germany, Austria, and Switzerland, and 60% is from other countries.
Our growth rate has accelerated dramatically since we participated in German Accelerator. When we joined the program, our revenue was growing at 35-40% per year. Now we’re growing at more like 80-100% per year.
We’ve learned a lot over the past few years, especially in sales and marketing, and much of what we learned I attribute to German Accelerator.
Remember that neither I nor Johannes were trained in business. We were scientists. We built great technology and a good product, but we really didn’t know how to sell or market that product. For me, the German Accelerator program was like a full-speed MBA. I learned how to research a market; talk to customers; sell; and be empathetic to customer problems.
When I got to Silicon Valley, if I had to talk to a customer, the conversation lasted a few minutes. I didn’t get much out of it. My mentors showed me how to talk to customers and learn from what they said: What terminology were they using? How did they describe their problem? In many cases, customers tell you everything you need to sell to them, but I never really listened before German Accelerator. In the program, we actually spent hours working on this technique of how to hold customer conversations.
Over the years, we developed a great lead generation machine, but our conversion wasn’t very good. I realized that inbound selling isn’t just about discovery. It’s about solving the customer’s problem. By listening to customers, understanding their search terms, analyzing their site behavior, we learned how to immediately address their key concerns, whether it’s security, accuracy, privacy, or cost. German Accelerator’s mentoring and training taught us how to align our value propositions with each customer’s needs. We now are much better at presenting the right content to customers, whether it’s on the site and in sales meetings.
In the early days, attracting venture investors was quite challenging, so we learned how to be scrappy and build our business gradually. Some founders might look down on that approach, but, guess what? We learned how to be successful growing at a moderate pace. Now we’re growing profitably at nearly 100% per year. I have a lot of confidence that we can keep this up. Is Plagscan a winning story? I don’t know the ending, but so far, I like it.