Like a true Internet entrepreneur, Tim Whitehorn has had to change his stripes a few times.

When he founded ServiceU.com in 1997, the software development veteran launched an Internet software consulting business, that, through 2000, specialized in selling software over the Internet as an application service provider.

“Most people just wanted to have a Web site that was sort of a brochure on the Web,” he says. “I’m not even sure the term ASP had even been coined.”

But as other Web-based companies expanded their offerings to stay afloat, ServiceU began to narrow its focus, honing its model in late 1999 to event scheduling through EventU, a software product that was the outgrowth of a project for one client.

The service struck a chord among large facilities that sought bookings for their numerous rooms. ServiceU signed up 500 customers, chiefly churches and schools, for the EventU product.

In October 2000, Whitehorn’s company raised $3.15 million in venture capital in a round led by Delta Capital Management, which contributed more than half.

But within the niche of event scheduling, ServiceU happened upon another niche that would change the company’s focus again — transaction processing.

“We realized that we needed to be able to add event registration for the customer,” Whitehorn says. “We could publish events online, but we needed to be able to collect payments online.”

And so ServiceU rolled out TransactU and invaded the realm of e-commerce infrastructure by offering a “turnkey”

Web payment system, meaning that it required no programming by the customer.

“It’s an early company, and like a lot of early companies, you start out on one path and find out there’s a different path to go,” says Don Mundie, Delta Capital’s managing partner. “They’re focused on one product offering that was not a major effort when we invested, but it appears to have a much more ready market than the event scheduling.”

Mundie says he expects ServiceU to be profitable by late 2003.

ServiceU is the third startup for Whitehorn, who is 38. A software veteran at FedEx Corp., he founded ATS Networks in 1992 and sold the company in 1996.

“I’m in a startup family and a startup business,” he says. “It’s been a very exciting few years.”

At FedEx and ATS he says he learned the value of long distance business models, where companies collect monthly service fees, which provide the revenue stream for ServiceU.

Whitehorn says the realm of online payment systems is dominated by “shopping carts” — systems that catalogue merchandise for sale — and models that are heavily dependent on credit cards as currency.

TransactU, he says, is geared toward customers who sell “intangible assets” such as registrations and bookings. It also offers features that allow buyers to pay by check while offering merchants bill presentment.

“90% of businesses don’t take credit cards, but every business has to take payments,” Whitehorn says.

Among those businesses is Bellevue Baptist Church, which plays host to as many as 20 events in a day. Using TransactU, the church sold 2,000 tickets online for its Singing Christmas Tree service.

“With TransactU, they’ve developed a nice module there either with electronic check or credit card features,” says Randy Redd, minister of church programming at Bellevue. “For things like the Singing Christmas Tree, Passion Play and conferences, it gives us enough flexibility to cater to whatever our need might be there, with a minimum of screens that the user might have to use to register.”

Whitehorn says ServiceU will continue to target small businesses and government operations that don’t have the budget to develop e-commerce applications in house, but he says he’s looking to expand the client base to parks and recreation departments, apartment complexes, schools and toll roads.

“I envision a day when a teacher tells her class that a field trip will cost $20 and can send out e-mails with the link to the payment site directly to parents,” he says. “That way, you’ve kept the money out of the kids’ hands, the teacher’s hand and a the accounts receivables clerk’s hand.”

In 1997, tech-savvy corporate veteran Tim Whitehorn saw the potential of the Web for business and was ready to implement his ideas into an enterprise.

Whitehorn, president and CEO of Memphis-based ServiceU Corp., knew all about business processes, thanks to his years in software development for FedEx Corp. and ATS, a telecommunications company. And he knew that Web-based technology could streamline many of those processes. With his own net worth on the line, he zeroed in on event scheduling, a time-intensive, often frustrating process for any organization.

Whitehorn’s vision: a turnkey event-scheduling system for organizations staffed by people with limited experience in technology. He developed prototype software and then put it to an acid test. He used the software to schedule a large event for a local church.

“Think about it,” Whitehorn says. “When a church schedules a big event, someone must check the ministers’ schedules, reserve a room, and often arrange for equipment, food, child care. The pastor may need to approve the event. It probably involves other staff members and their schedules. It may conflict with other events. Once it clears these hurdles, it needs to go on the calendar and the church needs to get the word out. Sometimes, people even need to register for the event. Coordinating something like that can take hours.

“We deliberately developed this product for customers that we knew fell below the radar screen (of most software companies),” he says. “As a result, we tapped into enormous product development feedback, which allowed us to improve our product sometimes the same day. It gave us a real test for robustness.”

ServiceU developed its software to integrate with an organization’s Web site, creating a product flexible enough to be tailored to the changing needs of its users.

Reaction to this scheduling and resource management software, named EventU, has been immediate and positive. His current subscribers include local churches as well as several large, nationally-prominent organizations across the country. ServiceU’s software will also handle registration for an upcoming two-week event in Phoenix expected to attract over 7,000 participants.

Event coordinators find EventU intuitive and easy to use, Whitehorn says. The system requires only basic typing skills for a coordinator to name the day and time for an event, describe it, and identify and request resources. The software then steps the coordinator through a series of screens specific to the resources of the organization. Once the resources needed for the event are identified, the coordinator reviews the entire request, edits it, then submits it for staff approvals. EventU also automates the negotiation of solutions to conflicts that often surface during the approval process.

With final approval for the event, its coordinator then posts it on the organization’s Web site, indicating whether staff, a specific group, or all visitors to the site can see the posting. If the event requires reservations, attendees can register online and EventU automatically notifies the event coordinator.

ServiceU recently launched a second product, software that allows an organization to accept and process payments by credit card or check online. A natural follow-up to its event scheduling system, TransactU automates the collection of registration fees, activity fees, merchandise sales, and even donations. TransactU gives an organization a gateway for processing payments, providing access to a merchant account for credit card transactions. It also allows an organization to accept checks online, which saves the organization credit card processing fees that can range from 2% to 4.5% of the payment amount.

It’s the transaction processing capability that differentiates ServiceU from its competitors.

“There are other scheduling and resource management systems out there, but they don’t include transaction processing,” Whitehorn says. “That’s what makes us unique. We’re the recognized leader in this market.”

Whitehorn’s challenge now is to grow ServiceU’s customer base. His goal: 2,000 customers by this time next year, each paying a monthly fee to link ServiceU’s software to its Web site. He estimates that 350,000 churches nationwide are prospects for his company’s products, but he’s also targeting 125,000 schools (elementary through college) as well as other organizations that regularly enroll or register people and schedule events. Apartment complexes with Web sites are another promising target, because ServiceU can automate the monthly rent collection process.

Whitehorn has identified a cost-effective way to tap into these markets.

“We’re looking for strategic alliances with software companies that don’t have an Internet strategy, but who already sell to these customers,” he says. “We’re also developing partnerships with associations that are searching for solutions for problems common to their members.”

He acknowledges that it can sometimes take a while to close a sale in his business. Until recently, many of the organizations in his target markets had limited access to technology. Still, “the market has matured, equipment-wise, and people are increasingly comfortable with the Internet,” he says, making organizations more receptive to Web-based solutions that streamline business processes. ServiceU’s software increases staff efficiency by decreasing the time needed to schedule events, register participants, and manage associated transactions.

To support its expansion plans, ServiceU turned to local sources of funding. Delta Capital Management, a Memphis venture capital firm, joined with several individual investors to provide $3.15 million in equity financing in October 2000. Don Mundie, managing partner, says ServiceU was attractive even then, a time when tech stocks were being battered and many dot coms were failing.

“ServiceU is a software company that happens to use the Internet,” Mundie says. “It’s not into e-commerce or advertising, a business model that the market has rejected. It’s an application service provider, not a dot com or a company selling software in a box. Instead, it provides an organization with a Web-based software platform that can be customized to its particular needs. In return, ServiceU gets a continuous revenue stream (because) it’s not a one-time sale.”

Investing in a developing software company is not without its risks, Mundie cautions, but he thinks ServiceU has long-term staying power.

“There aren’t a lot of barriers to entry in this field, so there’s always the risk of technological obsolescence,” he says. “But we have confidence in the team at ServiceU. We’re confident that they will continue to develop new products, confident that they’ll continue to innovate in order to expand their revenue stream.”