DC Tech Connects: The Real Rosetta Stone Legacy

It’s no surprise that Eugene Stoltzfus went back to architecture and design. He always liked to build things. He never meant to become Chairman and President of Rosetta Stone, but his brother, Allen, who filled the role died unexpectedly in 2003. It wasn’t until 21 years after the brothers helped to co-found what would become a multimillion dollar language software company, that Eugene realized its full impact. After sharing his story with DC’s Startup Grind chapter, he was greeted by Erin Daniels, CXO of DC-based mobile–centric experience agency, Apollo Matrix, and Greg Gingrich, founder/CEO of Inteliscale, a cloud management software startup, which recently nailed down a contract to move into DC’s new 1776 facility. Both James Madison University alum, Erin and Greg respectively served as graphics designer and student programmer in Rosetta Stone’s early years. They came away from February’s Startup Grind event with a new perspective on the impact of their early experience.

Following “the bit in their teeth”

Like his traditional, but progressive, Mennonite parents and strictly non-tech Amish grandparents, aunts and uncles, Eugene simply liked to build things. By age seven he was cutting and nailing two-by-fours, building play houses for his sisters, Kathie and Ruthie, with a hand saw his mother, Ruth Brunk Stoltzfus, taught him to use. “She could pound nails, too,” he adds proudly. Together, Ruth and her husband Grant, a professor at Eastern Mennonite University, raised five hardworking, intellectually curious children. The family liked listening to and building on each others’ ideas, as much as they did pounding holes in the indefensible ones.

The first insight for what would become Rosetta Stone struck Eugene’s big brother, Allen, when he tried to understand why his Russian class in Harrisonburg, Virginia, seemed to stomp the life out of the subject. He started thinking about how natural it seemed when he learned German through cultural immersion and thought about how to teach language skills more naturally using a game. As it happened, his family lived near James Madison University and their sister, Kathie, was married to Dr. John Fairfield, a JMU computer science professor focused on artificial intelligence. It was 1984, lines of DOS code flickered across big, dumb IBM PC screens the size of television sets, deeper than they were wide. Word processing hadn’t been invented yet, but John Fairfield predicted that the ability to manage words and images couldn’t be far off.

“Just because something is impossible doesn’t mean it isn’t a good idea,” says Eugene. “The first step is to believe that something that needs to be done, can be done — even if it isn’t exactly clear how.” It took about six or seven years, the idea germinated and technology evolved.

Hackers, hustlers, designers and an angel

In the summer of 1991, John told Allen that he thought he could get computers to handle the sound, text and pictures of the program he envisioned. They put it together, showed their proof of concept to Eugene by Thanksgiving and two months later, in January 1992, the three of them co-founded Fairfield Language Technologies. Their mom, widowed in 1974, was their only angel – at least, on earth. She invested $30,000 seed money earned from her own entrepreneurial ventures, which included a radio program for women about family relationships, which at one time aired in 35 states. “My brother was an economist selling real estate, my brother-in-law was an artificial intelligence computer professional, I was an architect, one sister was a lawyer, my niece was and English teacher, my nephew went to law school.

Can you imagine trying to convince venture capitalists that we could make a language learning program without a linguist? They’d have politely shown us the door.” In the end, the team tapped what Eugene likes to call “the ignorance of the non-specialist who says ‘let’s try it’ because they don’t know any better.”

By that time Eugene saw the first Rosetta Stone prototype he had an architecture degree from Virginia Polytechnic Institute and had joined an architectural firm in Washington, DC. He built on his experience designing many new things, from theatre sets as JMU’s lead carpenter to entrepreneurial enterprises from shipping to a vineyard. He looked at the prototype and joked that he could quit his job and breathe some life into the prototype’s design. Soon after, he found himself throwing out all of the stilted images from the original prototype and signing a contract to help build Rosetta Stone by delivering 18,000 photos in six months to drive the script.

Meanwhile, back at JMU, John Fairfield invited some of his students to hack code and learn as they added new features to an early version of Rosetta Stone.

Greg Gingrich, who attended JMU from 1991 to 1995, was one of several students who spent some evenings and weekends writing code on an Apple II Ci in the school’s Mac lab. “We thought it was a neat project, and they might use it with some of the foreign language classes at the school, but we never imagined it would get bigger than that,” says Greg who, coincidentally, was raised in a Mennonite home near the Shenandoahs.”

“Dr. Fairfield was one of the most interesting professors I had. Some people would say he’s quirky. He had thoughts that were unusual that went over the whole spectrum of things. He was big on AI and took us through audio/video interactive software projects that were new, cutting edge at the time. The Internet was kind of new, Web browsers were just coming out and it seemed exciting that you could put together some type of a program that you could interact with that actually had audio/video in it.”

Wanting to “own every inch of the business,” Rosetta Stone’s founders tapped their savings and every credit opportunity in town, loans and mortgages, generating $150,000.

During the scriptwriting phase, they had to be really creative to afford about 14 writers, which included sisters, nieces and nephews, and get the look and feel of the images Eugene envisioned without professional photographers. They used JMU student models, but Eugene’s vision for the look and feel of the program drove him to find an affordable way to take the quality to the next level. “Never underestimate the power of the compression of fast, cheap and good,” he says. “You need all three.”

Eugene was looking for a solution and spotted a road crew with yellow hard hats digging a ditch at the center of town. From the top of a parking lot deck he shot a two-hour video of them working. That day’s video yielded 365 images that anticipate the different phases of doing, having, wearing and being. They had life. The best part was that you couldn’t recognize anyone in the shots as an individual so he didn’t need to whip out the releases he always carried in his pockets when he approached people in other public locations. In just four months, he gathered the remaining 17,635 pictures. They filled five rooms each with six rows of 4 x 8 sheets of plywood lined on both sides with photos from which scripts were written. “Our writers could remember where the photos were when they needed them in a way that we couldn’t using computers.”

By summer of 1993, Rosetta Stone was down to its last $10,000 it had a breakthrough sale to the Chesterfield School district. The following year with a flyer made by pasting up a brief mention in Mac World magazine, they attracted two salesmen who helped them turn the corner to profitability. One salesman from California, who had spent $1 million trying to develop an English language software program “couldn’t sell his own program,” says Eugene, “but he could sell ours.”

The user experience matters

Apollo Matrix CXO, Erin Daniels, who attended JMU from 1994 to 1998, knows just what he means. User experience is central to her life at the mobile-centric experience agency she is helping to build. Despite her sophisticated design programs, she often finds herself surrounded by post-it notes on her desk, walls or floor as she maps out the initial stages of more complex applications.

She got her first job after JMU at the seven or eight-year-old Rosetta Stone when it had about 30 employees, compared to the 500 housed in Harrisonburg today. She recalls riding her chrome-fendered Schwinn bike with a handlebar basket to her interview. “I remember Eugene saying, ‘We work hard around here. Are you sure you want to join us?’ I was nervous but I knew I wanted to work there.” She shared a cubicle with the photographers, working on marketing slicks, trade show displays and whatever design tasks needed attention. She remembers being asked to make a long Russian word fit onto an onscreen button while remaining legible to save programmers from coding the button to change it’s size. Looking back, she remembers the respectful give and take of the many discussions at whiteboards that swirled around her.

When she heard Eugene speak at Startup Grind about removing attachment to one’s ideas and allowing others to collaborate and expand on them a light went on. She approached him afterwards to tell him that as he was speaking she realized: “This is how I approach ideation with my teams; it’s outside the norm of big agencies, but it really works and my team members love being a part of it! I realize this approach must have been instilled in me from my early days at Rosetta Stone!” Moved, he reached out and hugged her.

“Erin has an interesting job,” he says. “It requires good people skills, graphical skills, inventiveness, tolerance and intuitiveness. I feel a lot of simpatico with anyone in the artistic service professions trying to draw out from clients their needs, desires and ideas and formulate them in a way that is technically doable and aesthetically interesting. I am sure it was in the air around her at Rosetta Stone.”

Fast, Good and Cheap

Eugene believes it was the compression of needing to create a good product quickly before their limited funding ran out that led to their best ideas.

“We built a company, we built language learning software but more than anything what that built was us as people,” he said to the room at Startup Grind. He continues to design by finding the natural beauty in his materials. Instead of embellishing with decoration, he highlights the wonder in their connections. Reflecting on the evening, he said later: “It is rewarding to think that we are part of a network, over time, getting-it-done in the tech world, connecting people.”

Greg Gingrich agrees. “There are certain personalities that you run across in life and you look back 10, 20 years later and you think “wow, that person really changed how I view the world.”

Erin agrees that people are at the heart of success. “Eugene has shown that it’s possible to disrupt a market with something he truly believes in by inspiring collaborative innovation. He brought out the best in a team and allowed them to use what was available to them to create something remarkable.”

As it’s been said in different ways throughout history, you can’t always pay people back, but you can give to future beneficiaries. If you’re part of DC’s or any vibrant startup community, this is our story.

Read Janice K. Mandel’s original article on InTheCapital.