Romi Singh and Koushik Roy want to take advantage of how many Internet users are switching to broadband. The market for their company, Checkspert, is anything to do with letting people look at each other over the ‘Net. That includes teaching, training, testing, interviewing job candidates, and even E-mailing audio-visual resumes. Starting with four employees in 2002, they pledge to grow the company to 30 workers by 2005.

Singh and Roy, founders of Checkspert Inc. on Village Boulevard at Princeton Forrestal Village, have big dreams. But big dreams for a technology company require big money. You can’t be "first to market" without cash — yet banks don’t loan money to visionaries in new markets.

Checkspert managed to grab a lifeline, a 3 percent Seed Capital Loan from the New Jersey Economic Development Authority, for $250,000. The company is the only recipient of an EDA Seed Capital Loan this year, but the EDA has made 23 of these loans for a total of $5.5 million in four years (www.njeda.com).

"The EDA’s Seed Capital Program and other state initiatives that support small businesses with explosive growth potential have enabled us to create jobs and spur economic development throughout New Jersey, reversing the negative trends that have plagued our nation as a whole," says State Treasurer John McCormac, who came to a demonstration of the company’s services in November.

Checkspert’s Roy says the EDA loan was his last resort. Certainly some other entrepreneurs may find themselves in this position in 2004.

How long did it take to get the loan? About 10 months. Checkspert was incubated at Singh’s previous company, Innotrex, at 650 College Road. "We were turned down for loans by PNC, Sovereign, and Commerce banks," says Roy, "because we didn’t have a customer base or receivables. We didn’t even qualify for a Small Business Administration loan." He started talking to the EDA in September, 2002.

Checkspert’s application had a detailed business plan, proof of a strong management team, an explanation of the emerging technology sector, and results of product testing. The EDA’s consultant, Leo F. Collins, evaluated the technology, the prototype, and the business plan. People at the EDA even tried out some of the E-mailed resumes.

The same night that Roy made a presentation to the EDA’s technology advisory board, he learned the loan had been approved. That was in December, 2002. The company received the paperwork in late January, 2003, moved into new offices on Village Boulevard in April, 2003, and received the check in June.

In addition to the loan Checkspert owes $250,000 for software development by Singh’s former company, an IT solutions provider that also had offices in Yardley and New Delhi. "During our Innotrex days we used to get some work done in India, but it wasn’t working out very well for us," says Roy. "With the EDA loan, now we are capable of doing it ourselves. Thanks to the EDA we have a full portfolio of products."

What does the EDA provide? Under the Seed Capital Program, the EDA can lend from $25,000 to $500,000 to businesses that need capital to bring emerging technology products to market. The limit is $250,000 for working capital and $500,000 for fixed assets, and the interest will be at below market rates.

What are the restrictions on the loan? The EDA loan does stipulate that no EDA monies should go to Innotrex. "We owe Innotrex some money for development," says Roy, "and we will pay when Checkspert is capable of paying it, not from the loan." Roy has no plans to send software development off shore, though theoretically he could, because the EDA Seed Capital Loan has no such restriction.

When will Checkspert turn a profit? "As I am approaching different investors," says Roy, "our plan shows profit after the fourth quarter of 2004, the fourth full quarter of commercial operation." Marketing and advertising promotions will start this January.

Roy has predicted there will be 26 new jobs within two years, and if this prediction holds true the company might then be eligible for another kind of state money, the Business Employment Incentive Program. It was revised in September, 2003, so that high tech companies with as few as 10 new jobs can qualify for the BEIP grants (see page 20), which return approximately half of the taxes collected on the new salaries.

Some entrepreneurs start with a cool idea and then look for a way to market it. Instead, the founders of Checkspert considered what technology was available, looked for holes in the market, and then set out to fill those holes.

Their vision was to transform old into new — to take current emerging technologies, make them simpler, more accessible, and higher quality, and use them for new high-demand products. At this point in Internet history, webcams are cheap ($12 to $15 at retail or $5 each in quantities of 15,000). And a video stream can look good on a 56K modem if the proper algorithms have been applied. For each of Checkspert’s four products, all you need is an Internet connection, a modem, and a webcam with microphone.

As for the hole in the market, terrorism and the economy have ripped it wide. People are less ready to travel, and corporations will do just about anything to cut costs.

Roy, a product manager, saw the consulting market was softening and suggested that he and Singh should develop an actual product. "I saw the train coming — broadband access getting more affordable," says Roy. In 2001 3 million people had broadband and now 14.8 million are using it at rates of $30 to $40 a month. "When you have the accessibility and affordability, you’d like to see richer content, more natural communication instead of typing things out."

The challenge was to provide a workable solution on dialup that would work excellently on broadband — and focus on the "must" activities of daily life. "We are not forcing new activities or services, only making them more accessible and affordable on the network," says Roy. "We picked the existing popular services and transform them from old to new systems. The virtual examination service is not new, for example. We converted it from being given in a classroom to being given in people’s homes. Video resumes are being sent in a cumbersome way, but now they can be sent as permission-based E-mails."

VideoProfile lets anyone with a webcam and a microphone make a video resume and E-mail it out. Right now, there is no cost to create the resumes, and to send them is just $1 per E-mail. Anyone may use it under the Checkspert logo (www.AVprofile.com) but some potential clients, such as law firms, want to prospect with these E-mails using their own logos.

Those who receive one of these VideoProfiles are not held hostage to a pipe-clogging streaming video nor an unwieldy attachment. All they get is an E-mail with a link to the resume, and they can choose whether to click on the link. In addition to using it for sending out resumes, it can be used for sending out personal missives, such as grandmother/grandchild visual notes, college applications, or even answers to singles ads.

This product has a lower "barrier to entry" than services that record and send recruiting interviews and looking-for-love video clips. For those services, you have to travel to a studio to make the recording. In contrast, Checkspert captures a customer’s video at low bandwidth, compresses it on the customer’s hard drive, transmits it on the Internet, stores it on the company’s secure server, and erases it from the customer’s hard drive.

With E-Proctor tests can be given over the Internet by using a real-time audio-visual monitoring system. Supposedly this method for professional exams (such as for IT certifications) and high stakes testing (such as for the Graduate Record Examination) is as secure as an examination center. It is certainly much cheaper, since proctors can monitor up to 24 students at once, depending on the bandwidth available.

In a demonstration for the state treasurer, Roy acts as the proctor over an internal network while someone poses as a test-taker. Roy shows how he can "pan" the room with the remote-controlled pan/tilt camera that sits on top of the test-taker’s computer. If the proctor sees the test-taker doing anything suspicious (looking at a book or at someplace in the room where notes might be hidden), he can pause the test.

"Why couldn’t you just hide the notes behind the camera?" asks someone. Roy demonstrates how the camera would swivel to detect that. The successful test-taker can print a certificate of achievement right there and then — and his photo will be on it. There will be no doubt about who actually took that test.

Educational Testing Service isn’t pushing and shoving to be at the head of the line for this remote proctoring technology — there are legal difficulties — but they have seen it, and so have Houghton Mifflin, DeVry, and Project Management Institute. Roy emphasizes that E-Proctor is first to the market, and that IT companies like Microsoft, Oracle, Sun, Novell, and Cisco — which conduct from 15,000 to 50,000 tests a month — can use E-Proctor to significantly reduce operating costs.

At times during this demonstration the video gets compressed better than the audio, so it precedes the audio by several seconds. But that problem was solved in the next version issued a few weeks later.

On-Line-On-Sight allows participants in a conference call or students and teachers in a distance learning situation to view each other on line and exchange information in real time. The students log in to a website, get into a classroom, activate their audio-visual feed, and start receiving the audio-visual data of that teacher, participate in electronic chat, and illustrate their work on a whiteboard.

What makes this different from other conference call services — other than its lower cost — is that participants can join in when they have access to very low bandwidth, such as a dial-up Internet connection. Based on the available bandwidth an algorithm automatically adjusts the video quality, frames per second, color or gray scales etc. Also, none of the other distance learning services on the Internet use real-time audiovisual both ways, between teachers and students. Each person participating occupies a square on the monitor, so they can all see each other. The maximum number of participants, from six to 12, is determined by the bandwidth.

Checkspert is the trademarked service for recruiting and training. Recruiters can administer online tests (using E-Proctor) at a cost of $100 per candidate. They can also interview a candidate in real-time and archive the interview to be shown later.

The best market for these online tests is Information Technology. Checkspert has tests on 11 subjects, including Oracle DBA, C++ Basic Concepts, Active Server Pages, and SQL Server Development. Most IT workers already have a webcam and microphone, Roy believes, but Checkspert can provide them at nominal cost.

The four products comprise a soup-to-nuts experience: Register for a course or be recruited for a position, take an on-line course or training in real time with audio-visual data, take an on-line secured exam, get the results in a graphical format, get a certificate with a personalized photo, and generate a video resume online and distribute it to potential clients or employers.

On a warm November day Checkspert hosted State Treasurer John McCormac and Caren Franzini, CEO of the New Jersey Economic Development Authority. Each came with an entourage of aides who stood outside the small conference room, peering in, while Roy, cucumber cool, demonstrated his products to the seated officials.

There were some rough spots in the demo, to be sure, such as a forgotten password and audio that ran a couple of seconds before the video, but these glitches were politely ignored in recognition of the uncommon potential for this technology and the extraordinary opportunity for the young company — if indeed it can claim an early market share.

"The Seed Capital Loan is a program that has been around for a while, and Checkspert is a good example of why it works," said Treasurer McCormac. "It’s a great example of the EDA and the job it has done for years."

Checkspert Inc., 125 Village Boulevard, Suite 280, Princeton 08540. Koushik Roy, vice president. 609-520-0564. Www.checkspert.com

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