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For Profit Edu Sector – Embrace Your Innovators

September 9, 2010 8 comments

Approximately 1.5 years ago, I left the innovative company I had helped build, Education Connection. I had found a new innovative company whose mission I loved, and I wanted the experience of working with the “state university” side of the online higher education industry; so I left my comfort zone and moved across the country to Dallas, Texas. I also wanted to “prove” to myself that I could be successful without my two mentors; I felt it was time for me to “grow” on my own.

This turned out to be a necessary part of my ‘journey’ as I was able to grow, learn how to interact with a different group of executives, board members, and cultures and also afforded me to opportunity to see how different working with state universities was vs. for profit universities. I was able to ‘prove to myself’ that I could be successful without my mentors, which was good and bad. Good because it made me more confident…bad because I certainly didn’t need anymore “ego feed”.

By adding this new subset of an industry and connecting with myriads of new individuals, I was able to see one thing: I had been working for (Education Connection) the most innovative and forward thinking group in the education space.

Based on the number of consulting and job inquiries I was recieving while at the second company (post working at Education Connection), I chose to start my own company. I believed this was a way for me to work with multiple companies, multiple executives, and would provide me with an unbelievable learning experience; the ability to interact and learn from the top executives in the higher education industry.

At this juncture, I’ve worked with about ten different higher education service companies, ranging from lead generation to call centers to enrollment management companies; and multiple schools. I have learned a lot, but my biggest learning was this: The only companies that will survive the new for profit education regulations would be the ones that invested heavily and believed in their innovators. In speaking with one of the executives I enjoy working with the most, a brilliant man named John Goodwin, he made a comment I use all the time now. He said, “The companies that come out of this education congressional hearings successful will be the companies that not only listen to their innovators, but more so will be the companies that have the ability to adapt the most quickly to a changing environment.” We were going back to Darwinism.

Having worked with all of these schools and companies, there is only one company that has come forth and displayed a pro-active understanding as well as comprehensive product offering to aid the for profit schools in their quest for higher graduation rates and higher re-payback rates on their loan; that company was Education Connection.

About 5 years ago, my prior CEO and mentor Richard Capezzalli said to me, “What will happen to the for profit education industry in the next several years is going to be cataclysmic.” I vividly remember this as 1) I didn’t know the exact meaning of cataclysmic and had to run and look it up. 2) We had recently started a lead generation company, Education Connection. I thought to myself, ‘why would we have started a lead generation company if the for profit industry is going to be shaken up so badly?’

In the subsequent four years and and 11 months, I learned the reasoning behind our ‘lead generation’ company; we were building a lead gen ‘model’ to learn the best ways to market to students, but the end goal was different. We were looking for students that yielded the highest graduation rates, or net tuition revenue; not solely the lowest cost per acquisition or cost per enrollment.

So after about two years of introducing ‘innovative break through’ #1 (we were the first lead generation company) that had employed prior admissions advisors and were warm transferring leads to the for profit schools at over 10% lead to start conversions; Richard, the innovator, introduced the true reason he was confident that EdConnect could take over the industry; at first, he called it “Future Scholars” (It is now called Test Drive College).

With the goal of advising and working with students who would yield the highest graduation rate, Richard quickly went back to his days of owning and running schools. He explained to his EC management team that 2 of the main reasons students did not stay in school were 1) They were not prepared for the rigors and discipline needed for online learning and 2) Across the entirety of the ‘edu lead generation industry’, we were marketing to people who were not “academically ready”. So, logically – if we were able to find a way to ensure that the students were 1) Academically ready 2) Had the ability to experience online learning (and not just a demo, a true class), the retention and graduation rates would rise dramatically. This would not only effect graduation rates in a positive manner, but would also positively effect loan re-payback rates and minimize loan default rates. There is a direct correlation between students graduating and having a higher payback rate.

The model went live with a large test utilizing two of the large for profit universities as ‘partners’ and while it took a year to get the student retention rates back, the test was wildly successful. “What is the model?” you ask. In it’s simplest form, students take an online accredited course (they can transfer into a school) for free; hence the word, “TEST DRIVE”. In order to be one of the chosen for this free course, the student first must pass a short test (SAT questions – I believe there are 20 of them), which demonstrates the student can sustain the academic climate in a college. Once the test has been passed, the student speaks with an advisor or “gatekeeper” as we liked to call them during the testing phase; whose job is to ensure that IF the student does “adapt” and is a “fit for online learning”, they will enroll in a school post taking the free online course. The goal was to ‘weed’ students out in this free course that did not like online learning. We only worked with students who were serious and who understood the value of the degree, the financial aid process, etc.

The tests were wildly successful. The hypothesis that these students would retain and have higher graduation rates was proven (patience was certainly a virtue as it took over a year for these retention numbers to come back). The company that had been the first to see these regulations would be coming (about five years before they came), the company that quickly executed on their innovative plan, the company whose tests were successful prior to any regulatory discussion taking place – this is the company that is positioned to aid the for profits in their quest to continue to help the students who have nowhere else to go. The company that was the first to embrace their innovator was Education Connection. Will you be next?

No? What Does That Mean?

September 3, 2010 35 comments

I hate the Steven Stills (and later redone by Crosby, Stills, Nash, and Young) quote, “If you can’t be with the one you love, love the one you’re with”. Does that not say to anyone else, “it’s okay to settle”? No way, not me – not for a moment would I ever settle. What do you do when someone says, “NO”? Up to age 11 or 12, I’m sure I threw temper tantrums. That was until I figured out what the word, “manipulate” meant; and became a master of manipulation…probably until age 22 or 23. And yes, I rarely heard “no”. I began working for two phenomenal businessmen around this time who were too smart to be manipulated. They just didn’t deal with it. I learned the best way to get what I want was to 1) Be honest 2) Demonstrate my value add.

Since that time, certainly I’ve had disappointments and heard that hated word, “No” while feeling the nasty claws of rejections; but surprisingly – minimal rejections thus far when it’s come to business. Up until this week, I’ve gotten every job I’ve wanted. One may read this and think, “ugh. egomaniac”, but truly – I did nothing to get jobs except be honest and demonstrate value add. Ok, so maybe I’m a bit of a schmoozer as well and I’m sure that helps, but again – that’s part of my personality – take it or leave it. This past week, someone “left it”. They didn’t want to hire me.

Just to be clear and not sound like a ‘kvetch’, I do still have my own company, a great life, I’m working for a phenomenal start up right now, so “business life is good” and I can’t complain; but I do want to use this as a learning experience. What can I learn from being ‘turned down’?

“Elevator pitch” version of the situation; great company, great mission, great executive team, (but in my opinion) only average senior level revenue drivers. I worked with one of the executives, found her to be brilliant and knew I could learn a lot from her – so asked if I could ‘help’ the company in certain areas at no cost; all I wanted in return was to learn from the executives. I am learning and certainly have not been asked to do any work at all; but as I’m getting deeper into certain parts of the company, I like the company. I see an absurd amount of potential and the people who are driving the revenue are simply not “revenue drivers”. They’re good employees, great analysts, great operators, but they’re certainly not the type that wake up at 2 AM with an “idea” as to how to drive revenue in different ways, develop a pro forma, and execute first thing in the morning. Franky, I’m unsure if any of them have played a revenue driving GM role or have even owned and managed a P&L before. Hence, I’m frustrated. I know the roles these individuals play and I am confident I can add more value. And Yes – this is my EGO talking; but I do believe I could rev this company up. So, I told the executive I was working with that I wanted to work there. AND I told her I would work there FOR FREE. These employees make base salaries…I would work on performance only. Response? CRICKETS! I got nothing!

Initial reaction was anger (bruised ego), but after a day or two I realized the important ‘take away’ here for me is the “why”. What’s wrong with me? My track record in this particular industry is flawless. My track record in start-up companies is flawless. Certainly I’ve made hundreds of mistakes in each business, but the businesses have all still prospered and were brought to profitability.

So, I figured I had 2 options: 1) Take a good look in the mirror and put myself in this executive’s shoes. Why wouldn’t I hire me? 2) I could just ask why she didn’t respond. So, I did ask (via email) why there was no response and didn’t get a response on that either. My assumption (which I hate making assumptions) is that she is an executive in an important company with a lot of work to do; she hasn’t had time to address. That’s fine with me (although at times I do believe I’m the center of the universe), reality at age 30 is that I’m NOT!

As for Option 1, I looked in the mirror and put myself in this individual’s shoes; whew – talk about a few days of insecurity!
Was I too ego driven? Too cocky? Was I coming off as not a “team” player? Perhaps I’m too ‘honest’ about my feelings towards what the business could be doing better? Or worse; does she just think I suck? I’m not ‘corporate’ enough? I could go on and on with these thoughts I’ve been thinking all week, which will probably serve to do nothing but make me upset (again). But really, at the end of the day, I feel like there must be something significantly ‘wrong’ with me if I’m offering to work on a performance basis (free unless I perform) and someone says “NO”.

So at this juncture, I wait for option 2; I wait for a response. And while the egomaniac, immature, 11 yr old in me would like to throw a tempter tantrum and know WHY I can’t have what I want…and the 18 year old wants to say, “Your loss”….the 30 year old will continue to try to learn from this and learn how to handle the age old issue of “REJECTED”!

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