Darrell Sapp, Post-Gazette Dennis Ciccone, CEO of Carnegie Learning Inc., looks over construction of the company's future offices while taking a phone call. The offices will be on the 20th floor of the Frick Building. Click photo for larger image.

It was late 2004, and Carnegie Learning was performing poorly in the school of business.

Sales were low, morale even lower and the 6-year-old educational software and publishing firm had yet to follow up on its successful maiden product, "Cognitive Tutor" -- a secondary-school math curriculum that melds computer-based learning with classroom teaching and workbooks.

The Strip District-based company, lacking focus and direction, had stalled, its board of directors concluded. So the board decided to bring on new leadership, hiring one of its own, technology veteran and venture capitalist Dennis Ciccone.

In the nearly 12 months since he became chief executive officer in January, Mr. Ciccone and his staff of 65 went back to the blackboard, rethinking the firm's strategy, finding and filling holes in key areas and launching a new product -- "Bridge to Algebra."

By year-end, they say, the firm should be making money on operations again, something that was last achieved in 2003.

Darrell Sapp, Post-Gazette Dennis Ciccone, left, CEO of Carnegie Learning Inc., Mary Murrin, vice president of marketing, Joseph Goins, vice president of sales, and David Hart, chief operating officer. The ceiling is original and was hidden by a drop ceiling. The building was built in 1902. Click photo for larger image.

How did a company in the doldrums manage to alter its course in less than a year? Turns out, even in fast-paced technology firms, it takes several cracks at the equation before getting the answer right.

Indeed, Mr. Ciccone's tenure is the fourth iteration for Carnegie Learning, which evolved out of a collaboration in the 1990s between Carnegie Mellon University computer science and psychology researcher John Anderson and Bill Hadley, a former Langley High School math teacher who now serves as Carnegie Learning's chief academic officer.

Like many promising software start-ups, the company launched in 1998 wielded a solid technology minus the critical staff chemistry and commercialization know-how to turn it into a big seller, running through a litany of CEOs during its brief history.

Throughout its seven years, "the product development was fabulous, the product was there," said marketing Vice President Mary Murrin. However, the sales and marketing brawn were missing.

That's not unusual in many upstart tech firms, said Suzy Teele, a Fox Chapel-based management consultant. Software-savvy founders tend to be flush with great ideas but have little experience bringing them to the market, she said.

"The biggest challenge is that they don't put enough effort into understanding who the buyer is and why the buyer should buy their product."

Carnegie Learning's problem wasn't a lack of customers. "Cognitive Tutor," its secondary school math curricula that includes algebra and geometry, is being used in about 6 percent of the nation's school districts, staffers say.

The trick was expanding its market share beyond that level. The three CEOs who preceded Mr. Ciccone, including Dr. Hadley, who served as an interim president in 2001, were all capable, but board insiders say none seemed to combine the right strategy, market understanding and management support to turn "Cognitive Tutor" into a household name.

That's why the directors turned to Mr. Ciccone, who bought years of experience in the software and publishing arenas, most recently as a principal at venture capital firm Lycos Ventures and before that, as president of WiseWire, a local artificial intelligence software start-up that was sold to Lycos for $40 million in 1998.

Sales had slumped, Mr. Ciccone figured, for several reasons but primarily because of an emphasis on the strength of the software, not the customer -- the schools, teachers and students who had to embrace a new way of tackling math.

Dr. Hadley, he added, had been relegated to the background despite his years of experience in working with students and teachers. The company needed to start focusing less on the technology and more on aggressively landing new customers, Mr. Ciccone concluded.

His first mission was to retool the management team, shedding several top officers. "It wasn't a wholesale firing," Mr. Ciccone said of the shakeup. "We encouraged people to stay if they were doing the job well."

That first month, he recalled, was "nerve-racking" as several managers and staffers trickled out -- even some Mr. Ciccone would've liked to have held onto.

Mr. Ciccone then "interviewed" everyone in the company to identify problems and begin to develop a new plan. He talked to existing customers to home in on their needs and discover the gap a new product might fill. In this case, it was prepping middle schoolers for high school math.

Simple, obvious steps such as weekly meetings with management and then later in the week, with the entire firm, helped open communication channels, Mr. Ciccone said.

"There was confusion about what we were doing," he observed, and these easy tactics helped to quell the fears and resistance from staff.

Finally, Mr. Ciccone and his newly hired vice president of sales, Joseph Goins, focused on sales and performance.

The new product, "Bridge to Algebra," designed to teach middle school students, had to be ready by August, in time for the new school year. Mr. Goins beefed up the sales staff and set hard sales goals.

Mr. Goins said he also quashed the previous practice of allowing schools to try out the product for extended periods without a commitment to buy. "We're not a nonprofit," he said, adding that trying out the product for a month is a tack that many companies wouldn't try.

Even tiny successes were met with celebration to boost morale, Mr. Ciccone said. And both he and other board members say the new strategy has worked.

Annual sales are closing in on $11 million, Mr. Ciccone said, up 44 percent from last year. "Bridge to Algebra," introduced in August mainly to existing customers, is steadily picking up a new following, Mr. Goins added.

So many software firms have floundered because they embrace the tech mantra, "If I build it, they will come," said Ms. Teele. But the reality is that understanding the market and the competition is tantamount to success, she said, not just developing a great product.

It helps to have and nurture a great team. "At the end of the day, a software company is all about people's creativity," she said. "You're creating ideas from people's minds -- you have to value that."

CMU provost and board member Mark Kamlet believes this year's success also "can be attributed to the groundwork that had been laid" prior to Mr. Ciccone's command. For example, a recent contract to supply "Cognitive Tutor" to the Los Angeles school system was a work in progress over the course of three years.

But it was Mr. Ciccone's polishing -- assembling the right management mix, fine-tuning the company's business model, setting hard goals, reaching them, then celebrating them -- that pushed the company over the hump, board members say.

"It's like with all start-ups; part of it is making sure you have the right fit of people," Dr. Hadley said.