NZ Business Podcast - Paul Spain
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...
00:29:35 · Paul Spain, Jamie Beaton
[00:29:35] S1: Oh, I'm making so... [00:29:36] S0: So what we could provide in India, somebody in China would pay 10 times the price for, literally 10 times the price. And so, you know, it was very hard with the USD cost basis to provide services economically in India, and we didn't have the network to get into the particular schools and things like this that, you know, were very relevant to... Yep. So that that was some of the kind of reasons why it wasn't successful. But, you know, for every loss, we had, you know, four or five wins. And so, you know, that's been really exciting, and ultimately gave us the kind of competitive positioning we needed to go on to continue to grow, raise more capital, launch new units. And so looking back, that quite bold move to expand globally fast was one of our key early moves that, I guess, has been very successful.
00:30:17 · Paul Spain, Jamie Beaton
[00:30:17] S1: Now I'm, you know, very keen to see New Zealand businesses that are growing their export base and, you know, growing globally. Certainly, you've had success in in that international growth. But how have you decided where it's appropriate to send and set up a a team versus sort of operating it from here, you know, virtual offices versus physical offices. How do you, you know, juggle that mix? You know, what's what's important for you? For instance, you know, with some things, you want... You probably... Know, a lot of businesses will want to have a a local Google listing. So you have to, you know, if you don't have, you know, people in a physical office, you've gotta set up some sort of virtual office. So Yep. Yeah, people are Googling, oh, yep, there's something here, and they, you know, they they call. But, obviously, there's been, you know, a real element where you have, you know, sent people and set up those physical Yep. Locations. So have you have you figured that out? Obviously, having significant funding [00:31:20] S0: Mhmm. [00:31:20] S1: Yeah, really important to make that happen. Yeah. Otherwise, those things aren't sustainable unless you can you can be turning a a dollar very, very quickly. So Yep. Yeah, what what's been your thinking there? Yeah.
00:31:31 · Jamie Beaton
[00:31:31] S0: So there are a couple of different types of offices for Crimson. There's basically offices in which the main role of the local team is sales and marketing. Right? Building demand amongst families that can really benefit from Crimson services. And so all of the headquarter operations, the service delivery, our online platform, all the mentors, that's pretty centralized. And so the team just has to go out there and essentially onboard students and, you know, localize parts of the offering for that community. So that's that's the simplest type of office. The next one is an office which, you know, has some kind of global functions because we need that office to be a hub for our service delivery. So a good example would be, for example, The UK, where we have lots of tutors from Oxford Cambridge, you know, London School of Economics. These are other great schools in The UK, and The US too, where we have just a huge amount of mentors in The US. And so we need personnel in those teams that can actually do the supply side as well. And then the other... You know, the final level would be, like, the teams in which we, you know, have real headquarter functions such as technology. So in China, where my cofounder is currently living and I was living prior to COVID, which spun the world around a little bit, we have a full engineering team as well as, you know, service delivery personnel and then our local sales and marketing efforts as well. And so we think about, you know, first of how big is the market? Secondly, what's the talent density like for, you know, those functions like technology? And then in our case, are there good universities where we can source talent from for our mentor pool? You know, if you're, say, in the middle of Brazil, there are some good universities, but probably our mentor network. But if you're sitting in the middle of, US, man, you know, there's incredible universities there for our mentor network, and so we're gonna go hard there. Same as, for example, in China, there are great schools like Tsinghua University, we can bring our mentors for that are pretty globally relevant. So that's kinda how we think about, you know, the market.
00:33:10 · Jamie Beaton, Paul Spain
The other dynamics to think about would be, like, regulatory complexity, you know, how complicated is it to operate there, how does it affect our global kinda headquarter structures, you know, there are other considerations. But those are the primary considerations that I first talked about. [00:33:25] S1: Now finding this, you know, pool of mentors and and so on around the world, how have you gone about doing that? Yep. What are the what are the things that have worked well? Where are the things you've maybe tripped up a little bit along the way and Yeah. And learned some lessons? How's that, you know, played out?