NZ Business Podcast - Paul Spain
00:11:05 · Jamie Beaton
And so as far as what the offering was, I looked for inspiration as to kind of what my high school had been like. So my last year in high school, I had tutors in seven different subjects, you know, math, English, biology, chemistry, physics, French, I think the SAT as well. And I was actually usually at the top of a lot of these subjects, but I used tutoring to get through a hundred and forty hours or so of content for, say, further maths in thirty, forty hours because I had so little time that I had to be hyper efficient with my learning. And I found that a traditional school classroom of 20, 30 kids really wasn't that effective for me, because I'd covered a lot of the content kinda before. So when we launched Crimson, the idea was to take students and give them a clear game plan as to what they could do to build their profile for these schools, which would often involve, you know, a strategist, which would often be me in the early days, helping them make a plan for what activities to do when, what subjects to do, then finding them this kind of network of tutors around them to make that happen. And initially, that was all done, you know, with kind of off the shelf tech like Skype, things like this, And that was kind of how we got rolling. So I recruited the three other kids that got into Harvard that year from New Zealand. Many of my classmates across New Zealand that I did debating with things like this. And then, when I got to Harvard, I just began... I recruited all my roommates, you know, all my friends from freshman year, etcetera, and that became the initial, you know, sale of tutors that, you know, began delivering for our Crimson kids back here in New Zealand. So that was kinda how the offering evolved. As far as the price point, you know, there was reasonable market standards for what tutoring prices were. College counseling was a novel concept within New Zealand. And so I guess we thought about, you know, what our cost basis was, and then also, you know, what kind of value we were bringing to people. And I think about, for example, you know, an example, like, of our students, Lucas Lee. He was at Maclean's College. I think he, you know, he bought a Crimson program. He he probably would have gone to, like, a big four or something within, you know, New Zealand, probably on a salary of $50.60 k NZD, came through Crimson, gone to Harvard.
00:12:50 · Jamie Beaton, Paul Spain
Now he's on Wall Street earning, you know, more than a 100 k USD. And, you know, even within one year, the the earnings differential is just massive and will only grow over time. So we're bringing significant value, and there's a lot of complexity. And so, you know, that means that the price point, you know, can be significant to reflect the value. And so that that was some of the thinking that came into the initial logic. But we were always focused on making sure that students who were very talented could always access our services. So, we would have, you know, pro bono support or discounted support if people, you know, had demonstrated financial need, which is a system similar to kind of what Harvard has for their financial aid policy. So that kind of got us going, basically. [00:13:25] S1: Yeah. Yeah. That's cool. Now what's the the current scale of the business in terms of, you know, how many people do you have here in New Zealand in terms of, you know, full time staff? How many do you have elsewhere? And then how much do you draw on part time resources, whether that's, you know, tutors in in varying parts of the world or other people that you tap into?
00:13:50 · Jamie Beaton
[00:13:50] S0: So we kick this off with Shandre and I over in Albany. And then today, we've got about 400 full time staff, a Fortune 100 based here in New Zealand across a lot of different companies we have here, sheltered up in Parnell, you know, just actually a floor below the ice house where I did my internship that kinda got a lot of this rolling. So there's a bit of, nice kind of, poetry there. And then we also have thousands of mentors around the world. These mentors are often at schools like Harvard, Yale, Princeton. They're in the Rhodes community. They're in top schools like Tsinghua in China. They're, you know, from Auckland Medical School, you know, top schools in Australia, as well as great companies like Facebook and Uber and Google, things like this. So these mentors are the ones providing the service delivery to students, as well as a team of strategists, which, you know, are responsible for the students' kind of candidacy plans. So that gives you a sense of this... Of the, you know, personnel. And Crimson's now in about 20... I think we're in 27 different markets now with offices in more than 20. And each of these markets has localized teams, speak the local languages, which has been quite instrumental to our success. That's really the expansion. Key markets for us in terms of personnel would be China, would be America, would be actually Russia as well. We've got, you know, quite a lot of head count in in a lot of our different markets.
00:14:58 · Paul Spain
[00:14:58] S1: Yeah. Wow. That's that's quite a bit of growth and a lot of people that you've got to look after. So how did you how did you do that? What were the sort of the steps that have that have allowed you to do that? You You obviously had to get some, you know, some funding funding along the way. And then, you know, how do you how do you operate in terms of deciding, you know, who to get, you know, what sort of resources you need to hire, and how's that journey tracked, and and, you know, who are the other people involved in terms of, you know, board and and advisers. You're obviously a pretty, you know, pretty smart guy, Jamie, but it's always useful to tap into other people. Right? So how's that? Yeah. How's that looked?
00:15:42 · Jamie Beaton
[00:15:42] S0: Cool. Okay. So I guess for some context, first of when we started this, Feng Zhou, our third cofounder, Shan Rui, and I, we were all 18. Right? So we had no previous business experience. I think I'd actually run, like, a little party business that Kings, you know, raw material. Shan Re had done some tutoring. Feng Shu had done a bit of tutoring. That was it. So we really had to build a good team around us quickly, and we had to level up. That's actually one of Crimson's four values, level up, which really speaks about constantly learning so you're equipped for the next phase. And we think about that as cofounders that, you know, the the Jamie Chandra and Feng Zhi of 2013, you know, could not handle the Crimson of today, and probably the 2020 version of ourselves can't handle what we can become in three years, so we need to keep learning quick. So as far as each phase, I guess we think about, you know, what, you know, talent we need in in the organization. You know, a good example of this would be we'd be going from 50 to about a 150 staff. You know, at this point, you know, I was very naive. I'm still naive, but I was more naive then. And I thought, you know, HR people, you know, is this this is just like admin? I don't need this kind of layer of complexity in... Inside Crimson. So we didn't have any company values. We didn't have a lot of the classic kind of onboarding procedures you you might have. And so I was confused as why we were hiring staff, and they didn't feel the kind of deep connection to the Crimson mission that our first sort of 50 staff did. You know, I quickly realized that a lot of these staff, when they were joining Crimson, we weren't really onboarding them properly, and they weren't really seeing the values that, you know, were making us who we were. So we brought on board this, incredible Kiwi exec called, Penelope Barton. She came out of Xero and Vend as our chief people officer, and she worked with me to put... And the team to put in place a number of these values, which have, you know, really remained consistent since that day. And, you know, that really resulted in formalizing a lot of our things like performance reviews, you know, our org structure. Back then, you know, there wasn't even a single org structure grid in the company. You know, the contracts weren't even in a very consistent state.
00:17:25 · Jamie Beaton, Paul Spain
So she came and put in place all of that structure working alongside us as we kept learning about this stuff. And then, that, for example, has really helped us ramp up our scalability on the people side. So now, you know, I just got off a call last night, which was a new starter call. So, for example, whenever our new starters join, we run these calls with the cofounders walking them through the Crimson journey, our key values, you know, what we're about, our key KPIs and goals for the year to make sure everyone's singing from the same hymn sheet and really, you know, there is one Crimson across the world. So that would be an example of, you know, a key evolution on the people side, you know, pretty important for us. [00:17:56] S1: How much pain was there before you made that decision to employ chief people officer? Yeah.