NZ Business Podcast - Paul Spain
00:23:58 · Jamie Beaton, Paul Spain
[00:23:58] S0: Yeah. We... We've raised ballpark about 60 mil USD, so that gives you a sense of how much capital we've raised, which sounds like a lot in New Zealand. I don't think it's that much compared to Silicon Valley companies we benchmark ourselves to. And broadly speaking, I mean, we are ambitious. So with both our college admissions offering, you know, we see a massive market all around the world. Lots of very, you know, ambitious families that wanna make sure their children are equipped to succeed in a very competitive environment. That's a very big market, and so... And it's also across many geographies. So we needed to raise capital to dominate that niche across across the world. My strategy was very intentional. I didn't wanna go into America or particularly China that much in the early days. I wanted to focus on geographies that were quite uncontested, so I went into places like Russia, like Korea, like Brazil, and, you know, built up our operations there. Largely, that kind [00:24:45] S1: of foreign push has been pretty instrumental to our success. So, yeah, just sort of stopping there for a minute, how do you actually do that as a business that's operating in New Zealand? Things are a little bit different now in terms of terms of travel, but when you when you started doing that, what did it actually, you know, what did it actually look like? What were the steps? Yeah. And what was the, you know, what was the hardest thing, particularly if you're you're in a country where, you know, English isn't the first [00:25:12] S0: First thing.
00:25:12 · Jamie Beaton, Paul Spain
[00:25:12] S0: First thing. [00:25:12] S1: First language.
00:25:13 · Jamie Beaton
[00:25:13] S0: The the key thing to be is pretty opportunistic, right, about opportunities as they come up, I guess. So let me give you a funny story. So I went to Thailand for this competition called the Global Student Entrepreneurship Awards, which is like a student challenge thing that we were competing in. I was on a boat, and I sat... And I was next to this lady. I thought she was actually about my age, you know, which is kind of funny. And I got talking to her, and turns out she was about 35. She went to Harvard, did applied math and economics, same program as me. And she had recently been working in private equity, but it had some young kids and was looking for a bit of a transition. And, you know, she spoke Thai. This was in Thailand, by the way. And, immediately, I leapt on that and said, hey. Do want to expand Crimson? It's going really well in Thailand. And she became our managing director of Thailand and did an incredible job of getting that, you know, off to market. I went to Singapore to visit my Singaporean team, and I was in the cafeteria of Yale NUS, which is a Singaporean university that are partnered with Yale. I was talking to this shop New Zealander called Andy Chen, and he told me, hey. Look over there. That kid over there, he's known as a really entrepreneurial guy on campus, does a lot of the startup competitions, is really good at computer science. You might wanna chat to him. So I got speaking to him, and turns out he he was speaking fluent English, but turns out he spoke Russian. I said, oh, how do you speak Russian? He said, I'm I'm half Russian, half American. And I said, what do you feel like about launching Crimson in Russia? And then within a couple of weeks, he he had confirmed his gap year, and he had landed in Russia and was expanding us over there. So for The UK, you know, my early director, Janine Manning, one of our first investors, she was moving to The UK, and so naturally, you know, she had the mandate to start us over there. And so it's about getting the tent poles out of people that know the local markets pretty well, figuring out what's happening. And in many cases, these early entrepreneurial people figured it out pretty well, figured out playbooks that we learned from and worked with them to succeed in. And then we kind of continued to optimize and optimize this...
00:26:57 · Jamie Beaton, Paul Spain
The country manager hiring process till we got it down to quite a consistent profile. And then we were able to ramp from five, six markets to more than 20 pretty quick. I looked for inspiration from Uber, their playbook for city expansion. They have actually quite a systematic process for who they hire. [00:27:10] S1: And it's not it's not necessarily... Well, I don't know. They... All the ins and outs of their model, but it seems as though it doesn't necessarily have to involve a huge number of people actually Totally. To get a new, yeah, operations [00:27:25] S0: That's right. That's right. [00:27:26] S1: That's right. So I thing that pulled out of New Zealand was the last I I heard in terms of, you know, this... Their their, you know, boots on the ground and having an actual office here as most of that's now being run out of Australia.
00:27:38 · Jamie Beaton
[00:27:38] S0: We actually recently recruited the the very talented man that launched Uber in New Zealand and parts of Australia called AJ Tills. He's our chief marketing officer for Crimson Global Academy. He's been a real rock star on the team He which is very exciting. But... Yeah. So Uber, they they were able to go all around the world super fast, and so we looked at this model, and we really seek to replicate it. We brought up a growth operations team that was HQ ed here in New Zealand, and they were responsible for things like setting up legal entities, figuring out how on earth do you register in Russia or Thailand, things like this, you know, getting the early digital marketing going in those regions, onboarding the country managers to figure out, you know, how to engage with that market. Yep. So that that that was some of our tactics that we we used. We made some mistakes. We went into India in 2016. You know, we threw the sink at it. Not much cash, but a lot of people like Dongzhou, Ai, Shandre, we all hopped on the plane to India, brought on board this guy Adam Joseph, who I knew from Harvard. He was an Indian American guy, which turned out a bit bit of a problem because an Indian American does not know much about India sometimes. Yeah. But he's a super talented guy, you know, great friends to this day. So we went into India. I think after six months, you know, the revenue we made could hardly cover, like, our food expenses. So we pulled out of there and focused on much more exciting markets.
00:28:42 · Paul Spain, Jamie Beaton
[00:28:42] S1: I'd I'd imagine in India where there are lots and lots of people seem to end up in US universities from India, that maybe a lot of that was, you know, the models were already, you know, reasonably established, and so that would have maybe made it a harder market than than others to get into. Yeah. Were there other aspects that you thought were Yeah. You know, that you learned were the were the reasons that it was was tough there? [00:29:06] S0: I think, actually... So Crimson around the world is really known as the the premier place to go for college admissions guidance, at least now. So we're partnered with US News, the major ranking group in The US, Times Higher Education, the major group in The UK, and many of the world's top schools like GEMS, Dulwich International, USUS, as well as schools like, you know, Eton, Harrow, etcetera, we've done a lot of talks in. So we're generally premium, and we're known for the best quality. The challenge in India when we entered in 2016, some of that wasn't built yet, but also the price points locally were very compressed. [00:29:35] S1: Oh, I'm making so...