The Tessitura Network concept went from a utopian idea for a user-driven technology support and development company to reality in 2001-2002.
The founders of the concept desired a company structure that would protect them from the uncertainties and high fees associated with commercial software and technology providers. All of their organizations were using other software for ticketing and fundraising prior to Tessitura and they were all consistently disappointed by product and company changes, buyouts, fee surprises, lack of continuity and other challenges.
Early license holders of Tessitura Software, including the Metropolitan Opera, which had created Tessitura Software for their own use, desired a company / services model that would provide them with essential software and technology services totally focused on their needs and the needs of arts and cultural organizations who might follow.
The Metropolitan Opera made a key decision to take an atypical approach instead of selling off their technology for an easy gain. They had invested close to $5,000,000 for a technology and service initiative that resulted in the creation of Tessitura Software. During the dot.com boom the traditional approach would have been to sell off the intellectual property for a gain and not worry about what would happen with it from there since they had the functionality that they wanted and could maintain that. However, they had seen the bad things that often happened for nonprofits as a result of supplier decisions in the traditional ticketing and fundraising software world. They decided to be an innovator and try to license the software to other arts and cultural organizations to recover some of their investment. At the same time, since their management and Board determined that it was not appropriate for them to be a software support and development company, they were fully supportive of the creation of a cooperative Network concept. They both fostered the early discussions and ultimately provided a contribution that became the initial reserve of the Tessitura Network. All members owe The Met a debt of gratitude for their forward thinking.
Stewart Pearce, currently Assistant General Manager, Operations for the Metropolitan Opera and Smeeta Sharon, formerly Executive Director of Impresario and currently a contractor for the Network, were the organizational advocates that pushed this concept forward within the Met. Joe Volpe, Metropolitan Opera General Manager at the time approved the initial Tessitura project and supported the Met involvement with the Network concept.
After an intensive, insightful and innovative multi-day facilitated brainstorming meeting of the early adopters and their designated representatives in July 2001, a desired company framework and mission was determined.
The founding organizations wanted a company structure which would be a stand alone, member-owned, technology and services, support and development company designed to meet the needs of Tessitura Software license holders. They envisioned an egalitarian cooperative initiative within which small and big firms would have the same influence. It would be an open company within which users could freely share ideas and best practices without outside influence.
It would be a company that could achieve nonprofit status and be governed by its user community. The users would become the member organizations. The Metropolitan Opera, developer of the initial Tessitura Software, endorsed the concept and they also desired support and other services from professionals for their own operations.
The founding organizations shook hands and agreed to split costs equally to fund support, development and business services while at the same time pursuing the necessary contracts, incorporation and nonprofit status to make this concept a reality.
Chuck Reif, project manager for the development of the Tessitura Software at the Met and an experienced information systems manager and a former stage manager for traveling Broadway productions, was enlisted by the founders to be the initial primary technical and support resource for this initiative. He is now Senior Vice President of the Tessitura Network responsible for technical and development areas. Jack Rubin, entrepreneur, former CFO, and a seasoned business operator of internet and traditional businesses, was contracted to manage operations and to guide the business formation and framework under which the organization would operate.
The company was formed as a result of an eighteen month gestation period during which each founding member organization was represented by counsel, the Met and Impresario relied upon counsel and leadership guidance, and the Tessitura Network retained a respected outside counsel (Thomson & Knight LLP). Countless contract and governance drafts were exchanged and reviewed and crafted and hours of conference calls were conducted. The end result was formation of a corporation on May 17, 2002 and agreements between all parties in December of 2002 regarding initial governance, affiliation and intellectual property. Due to their intimate involvement, interest and knowledge of the situation and the software, the representatives of the founding organizations became the initial Board per the governance documents along with the President of the newly formed company. Impresario, the subsidiary the Met had set up to own the Tessitura intellectual property, signed a long term agreement with the Tessitura Network under which the Network was the sole developer and service provider.
Licensing of the software also kicked into a growth mode as there was strong interest in the market for fully integrated, single database software and the nonprofit business model was a breath of fresh air. Critically, the software worked really well and had been used successfully for over three years by then. The perpetual license format that allowed an unlimited number of users was very well received in the market. By December 2002 there were 25 Tessitura Software license holders and five full time Tessitura team contractors and three Tessitura contracted consultants providing needed support, development, installation and consulting services to the license holders. As planned, each organization involved were equally sharing the operating costs. After the execution of the various agreements, most of the contractors became employees and the Network formally began its corporate life. Jack Rubin was asked by the Board to move from contractor status to the role of President. Chuck Reif was asked by the Board to be the Chief Technical Officer of the company.
Services and staff were expanded each year based on the needs of the users. The license holders / member base was doubling in size almost every year as more and more organizations of all sizes and genres recognized the value of Tessitura Software and joined. At the same time, the Tessitura Network team was growing at a pace to meet the needs of the users and services were expanded to fulfill those needs. By the end of 2004 there were sixteen full time Tessitura Team members.
Tight Support Standards were drafted by an early task force of users thus the Network provides support based on the needs of the users not on arbitrary criteria. A web-based support system was put in place in addition to support lines in each country. Since all users of Tessitura software are on the same version of the same core software, a global Network support team can all communicate with any user. Support and consulting resources were put in place locally for all regions and countries served as the base of users expanded.
Since the Met did not initially design Tessitura Software to be web-enabled, as it was the early days of the web for consumer use when they built Tessitura, the Network was responsible to “web-enable” Tessitura. A .NET application program interface (API) for the web was architected, designed and developed and provided in early 2002 to Tessitura Software users at no charge as a benefit of Tessitura Network membership. This enabled Tessitura Software license holders to conduct web transactions via their own websites. No fees were due by ticket buyers and donors to commercial for-profit companies. This was a major paradigm shift at the time and is still innovative. Traditionally, arts and cultural patrons were charged high fees for web transactions by commercial ticketing service providers and thus those name brand profit-oriented ticketing companies took in millions in fees for their shareholders and venture capital investors. The nonprofit arts and cultural organizations were thus hit by a double negative. They received no fees and their patrons were charged high fees. The Network model changed that. The API, once integrated with the organization website, enabled a secure buying path for ticket buyers, a secure donation path for online donations and memberships, secure transactions and seamless integration between the organization websites and their Tessitura enterprise database software. Importantly, any and all service and handling charges would directly benefit the nonprofit organizations instead of going to commercial companies that frequently charged exorbitant fees.
In 2002, Tessitura Software introduced a “consortium” model that allowed multiple companies to share a single database in a partitioned, privacy-protected manner. One of the organizations would be the primary license holder and the other companies became sublicense holders. This was accomplished with an extra layer of security and access to the database that meant that a customer or patron (constituent) could be affiliated with multiple arts and cultural organizations but each one would only know about their interactions with that constituent. This accelerated growth further as it added great efficiencies to operations.
The Tessitura Network added staff and key managers as member needs required. Bob Bell, formerly of the Boston Symphony, was hired to be responsible for Support and Network services. Julie Bleicher, an experienced nonprofit board and committee member, was hired as administrative manager. Gina Jackson, a veteran financial officer and accountant, was employed as controller. Don Youngberg, a highly experienced senior officer of major ticketing software companies and a trained theatre technical manager and holder of a Masters degree in the arts, was employed to be responsible for installations, consulting and education services.
The Tessitura Network team grew each year by adding experienced veterans of arts organizations, software companies and other industry database and technical gurus. There was no time to provide a training ground, therefore only experienced veterans were employed. Eight additional Tessitura Team members were brought onboard in 2005.
Besides core support, development and consulting services mandated by the Tessitura Network mission, the Tessitura Network began to provide and expand documentation and learning resources from the onset. The Network also enabled forums and fostered networking and idea sharing within the community of member organizations and their users. Annual user conferences were held every year to facilitate knowledge sharing, learning and networking. A true “community” was established even before the word community became a buzzword. Being able to share ideas with peers within a nonprofit framework is a powerful enabler of improvement and success. Annual conference attendance grew from 32 in 2002 to 550 in 2005.
Network staff grew from 2 in 2001 to 48 in 2009. License and sublicense holders grew from 7 in 2001 to over 275 in early 2009. Countries served grew from one in 2001 (United States) to six in 2008 (Australia, Canada, Ireland, New Zealand, United Kingdom, USA). The Network had gone global. Expansion took place into the Museum sector and Tessitura Software is now in use at theatres, performing arts centers, museums, festivals, ballets and dance companies, symphony orchestras, operas, arts / cultural consortiums, universities and colleges and other sectors. Products and services were added based on the needs and desires of the users. Annual Network Conference attendance grew further to over 1000 in 2008 and the Conferences became learning, best practice sharing and networking events that have been called the best in the industry. Tessitura Software releases came out on schedule every year and web capabilities were also expanded with each release. Many license holders grew from 10% to 20% online revenue to well over 50% online revenue and the web became their primary marketing and transaction channel. Tessitura Network products and services continue to expand yearly.
Tessitura users, while sharing ideas and insights from the beginning, expanded their interactions in powerful and helpful ways:
- Multiple Network community list serves / forums are active 24x7 with topics ranging from Tessitura usage to operations to new media and thousands of other topics.
- Networking and knowledge sharing at Conferences is incredibly extensive.
- Local, regional and country-wide user groups were formed by users and continue to grow.
- Webinars are conducted live and include topics in all areas and extensive Q&A. They are also available to users via recordings.
- E-learning programs were introduced for self-paced instruction.
- User-developed custom reports are contributed and shared with the Network members.
- Enhancement ideas are contributed, analyzed and voted on by users to help set priorities.
- Additional products and services are introduced based on the needs of the users. They are provided either at no cost or very fair fee levels since there is not a profit motive within the Network co-op business concept.
At the same time that the Network scope and services increased, membership fees did not. For the first several years of Network operations annual membership dues declined each year. Rebates were even issued. As of 2009 there has never been a dues increase to members by the Network.
The financial position of the Network has been maintained in a proven and fiscally sound manner. An outside audit is conducted to certify the financials each year and an audit committee of the board selects the auditor and monitors financials. A financial surplus has also been achieved every year. Information is provided to member organizations. The Network concept is highly transparent. A considerable reserve has been established by the board for future technology initiatives and contingencies. There is no outside bank debt or loans. The business model has been self-sustaining. Sponsorships have aided the Network every year to keep annual conference fees at affordable levels. The conferences are designed to break-even. In 2009 a formal Network fundraising program is being established.
It has been an exciting and thriving history of successful operations and milestones for the Network thus far. The future brings even more opportunities. In 2006 the Tessitura Network Board of Directors began investigating how it might build a next generation version of Tessitura in order to meet the long-term business needs of our members. After much consideration, the Network Board recommended and approved a plan to re-architect the Tessitura application, using a more service-based design to allow for easier integration with other technologies and more loosely coupled parts to aid in future upgrades and enhancements. In 2009 a major new milestone was reached. A very long term and far reaching new set of intellectual property agreements have been executed that enable the Tessitura Network board to put this future oriented technology initiative for Tessitura into high gear. The Mission Statement of Tessitura Network says in part that the Network exists to “keep the software functionality at the forefront of the industry”. This project will help fulfill that mission in ways even beyond the yearly upgrades to Tessitura Software that have been put in place since inception. Due to the nature of the perpetual licenses all users will receive new generations, when ready, at no charge.
In summary, the Tessitura Network concept eliminates the distrust and friction that exists in most vendor / customer relationships. This is not a typical vendor relationship. It is a cooperative of users who formed a company to meet their needs, hired and retained professional staff and have products, services and support the lead the industry and they do so in an open community concept and knowledge sharing manner.