NZ Business Podcast - Paul Spain
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?
00:33:42 · Jamie Beaton
[00:33:42] S0: Totally. So I guess at the beginning of Crimson, as I mentioned before, I brought on board a lot of people that I really respected from high school that were just rock star academics that I really respected and looked up to. I also brought aboard many of my my own tutors. So for example, I had this legendary math tutor called John Zhang. He helped me, you know, now further maths and university math and stuff. And we brought on board in the early days to tutor other students. I think of Steve Walker, was my head of department at King's. And, you know, a lot of these schools, there's a big variability in teacher quality, but particularly Steve. I was amazed by him. Went to Cambridge University, was my tutor, helped me score top in the world in English literature, you know, great mentor of mine, brought on board a lot of those people as well. So I first of all hoarded kind of all the talent that I knew in New Zealand. And then when I got to Harvard, you know, really went on a bit of a recruiting spree. At one point, you know, all my roommates were working for Crimson, Two of them were doing video work. The other rest were doing tutoring. I would join different student clubs and then indirectly recruit people on campus. And it was definitely buzz building because we were raising capital, growing quick, and so a lot of people would be hitting me up for these different tutoring opportunities. We had tutors on campus that were, you know, paying for, you know, significant amounts of their expenses doing this tutoring online through Crimson. They were telling their friends the word was spreading. So given that Harvard's not a very big community, we were quickly able to get, you know, hundreds of people on the platform across Harvard. And because Harvard has a certain, you know, reputation, when we had that brand as having a lot of these kids from Harvard that were having a great time on our platform, other kids from other schools then got quite interested. And so, we would then set up campus ambassadors at Yale, Princeton, the other top schools, and then start getting those kids coming on board. We'd put up, you know, tutor recruitment websites and stuff, and we'd get lots of organic applications. Then we also had the incredible source of our students who would then graduate, get into university, then become our mentors.
00:35:24 · Jamie Beaton
And I love that because we train these students in our philosophy and our, you know, you know, different tactics for how they can be really effective students. And so they go through it. You know, they have this amazing outcome getting into a great university, so they really love Crimson, and they go become a mentor, and they can really inspire the next generation. There are a couple of different ways we we got that pull. We we learned pretty early on that, you know, building a really strong organic brand, these skills is important. So, you know, I I personally went to Harvard, and then I went to Stanford, I went to Oxford, and I'm Yale. And in each of these communities, you know, I personally go out and build a lot of relationships to get to get that flywheel moving, and then it, you know, sustains and sustains. So we learned early on that, like, paid acquisition of tutors, etcetera, is is not a good strategy for us. That's what companies like, for example, VIPKid in China has to do. They've got to pump lots of money online marketing to try and recruit, like, English tutors. And... But for us, because we're trying to recruit these premier people from these great institutions, the word-of-mouth virality is is very important. And then we really care about their experience, so building good technology that it makes it, you know, easy and efficient for them to work, giving them students they're gonna love. We've got a tutor student compatibility algorithm we use, which is part of my PhD work, to match students and tutors effectively. Things like that make sure that, you know, when somebody logs in line from MIT, they have a rocking time, and they tell their friends, and the thing keeps moving. So that will be a couple of tactics on the recruitment side. Now recently, we've had to evolve because of the Crimson Global Academy, where we have to recruit not only tutors, but also more and more teachers. And so, we started by, you know, bringing on board the the the biggest heavyweight we could in New Zealand, which was John Morris. He was the head of Auckland Grammar School for, you know, more than twenty years. He's been a teacher for forty years. He's a ONZM in New Zealand. So definitely, without a doubt, the most respected headmaster in the country. So we brought him on board, which is a good start.