NZ Business Podcast - Paul Spain
00:51:11 · Jamie Beaton
Stories like that that are so inspirational, six years going from Hamilton to Silicon Valley, that really, you know, fascinates people and I think inspires many students, which we're really happy with. But because of Crimson's fast growth, we also, you know, attract, you know, very fair, reasonable, you know, scrutiny from all these different participants. And so I remember, for example, early on, I I acquired this company, and it was, you know, for a tiny amount, and we were going through this court process. And one one of my legal team advised that we file for a suppression order. So, basically, the the court dispute, you know, just, I guess, is handled within the vicinity of the court Yeah. So there isn't media scrutiny. That sounded like a smart idea. And then I I learned what I I refer to as the Streisand effect. So what this is is Barbra Streisand had this house in, I think, Los Angeles, and she was a very private person. She didn't want, you know, her house everywhere. So this journalist took a photo of it, put it online, and she was very annoyed by this. So she basically filed to, you know, restrain that. And then because of that, there was all this coverage of her, you know, filing the claim, and so the photo of a house just went everywhere on the Internet, and you can find it easily today. Yep. So the Streisand effect is this phenomenon online where if you, you know, try and cover something in the Internet up, you know, it will just become more viral. And so I guess a key learning from that is, you know, it pays to just be, you know, open and authentic and and transparent with things, particularly if that, you know, not a big deal, and that makes it a lot easier. So that's been a really guiding principle for us in in recent times. I guess it's, you know, an important one for young entrepreneurs to know that it's actually totally fine for organizations to cover, you know, your ups and downs, challenges, etcetera. People are really, you know, open to, you know, respect the fact that it's, you know, not always good and easy, and there's sometimes disputes and challenges. So that'll that'll be an interesting learning I had, the Streisand effect.
00:52:49 · Paul Spain
[00:52:49] S1: Yeah. Yeah. That's that's fascinating. And the, you know, the reality is that, you know, every individual, every organization will have its ups ups and downs. You talked about transparency there. How much transparency do you have within the business in terms of, you know, what you share and and don't share with, you know, with your team? That seems to... There seems to be quite a lot of variation from, know, and and, obviously, you know, where you've got sort of publicly listed companies, you know, that's quite different from a reporting, you know, perspective to to private companies. Totally. You know, you've got a number of investors. There's obviously, you know, data and so on that you have to share there. But, you know, what do you what do you share in terms of objectives and and key results sort of company wide and Yeah. And and so on? What does that look like?
00:53:37 · Jamie Beaton
[00:53:37] S0: So within our team, we really believe that empowering the team to be entrepreneurs and to help build the next frontier of Crimson requires them to have a lot of visibility into what's happening so they can make good decisions, and they've got the context that we have. Because two people with different contexts can think radically different things about the same scenario. So we have a a monthly all hands call, and we have, you know, very clear company KPIs for every year and actually every half. Everything from student outcome goals to revenue metrics to cash flow targets, etcetera, that, you know, are quite transparent with, you know, all the various aspects. We then do some work to kind of explain different financial metrics so people that aren't familiar with finance can, you know, determine kind of what this means and the implications it has, and then we all rally towards those goals. So in the early days, I'd say the idea of sharing some of these goals to me seemed kinda counterintuitive, like people didn't need to know this, you know, and so I was much more guarded with it. But then now, you know, it's wonderful. You know, we share our employee engagement statistics. We, you know, share our revenue share, all the different goals, share all of our student success, which, you know, everybody's really excited about. So that would be my, you know, approach now. You've gotta be a bit careful because sometimes, know, those statistics, you know, you want them to be empowered within your team, but then you don't want, for example, your competitors to have all your different goals right. So there's a bit of a balance, but, you know, we trust the team, so we, you know, share that openly within the all hands formats, etcetera. And I think, generally, as you get bigger and bigger, you kinda have to do that. So there's a limit to how much kinda guarding you can do, particularly if you aspire to, you know, be a company of scale and significance.
00:55:04 · Paul Spain
[00:55:04] S1: Yeah. How much of a challenge was it for you to sort of, you know, get through that knowing that really any any any private information soon is is public information, right, at one point in time or another, or or it can be. So, you know, there's no guarantee, you know, that that anything, you know, you say in a, you know, particular context won't sort of, you know, end up outs... Out, you know, outside of the business. Have you have you sort of, you know, had to work in quite tight sort of nondisclosure agreements and, you know, and and processes to help with that? And, yeah, like, I mean, going from, you know, one end of the scale where it's like, okay, well, this stuff's all private and it doesn't matter to the team to, you know, where you've landed, and I'm sure there are there are variations beyond that too. Yeah. Walk us through that.
00:55:52 · Jamie Beaton
[00:55:52] S0: So I guess if you think of... I'll give you a funny example. Take Facebook. Right? So they they went through some challenges during the twenty sixteen election when there was a lot of scrutiny around, you know, their handling off, you know, Russian hacking, etcetera. Every time there was a company all hands call, whatever Zuckerberg would say would get, you know, leaked to all of the media. And so for him, basically, you know, he had to be entirely aware that whenever he spoke, that was just public information, essentially. That was the test probably he had to operate with. And so I think that, you know, as... The earlier you you can get into a state where you just assume whatever you say, you know, everyone from your, you know, your your grandmother to your customers, to your parents, to, you know, random stakeholders in the media would, you know, cover, you know, the better, I think. And, you know, we're not in a particularly sensitive industry in terms of, like, things like financial data, such that it really is that big a deal. What we really care about is student privacy. So protecting, you know, students' names and information, things like this, you know, child safety standards, which have a very high bar. So that's the area we're kinda hardcore on. But as far as other areas of our, you know, like strategy, etcetera, we, you know, we share with the team, aware, you know, aware of the fact that there's some risks involved, but we think net net, it's worth it. I think if you were like a company like Palantir or something and, you know, you have a lot of scrutiny around you and, you know, how... You know, your clients, etcetera, for various, I guess, political reasons, you know, or not, maybe you've got to be more careful in that environment, I think. Or if you're like a venture capitalist and, you know, your deal terms for a certain company have to be quite private, I think it's quite different. But for, you know, operation like us, we serve, you know, students and families and parents, and, you know, what we provide is pretty straightforward. It's it's not so much a big deal, I think.
00:57:27 · Paul Spain, Jamie Beaton
[00:57:27] S1: Yeah. Yeah. Okay. Now let's talk about the the next phase of the business because you're looking now at a at a younger audience. Tell us, you know, what this online high school looks like. [00:57:41] S0: Yeah. Sure. So [00:57:42] S1: And how the... And how it came and how it came about? How did you make that decision to adjust, you know, adjust the business or, you know, add this new area? [00:57:50] S0: So rewinding all the back to high school. Right? In high school, I did 10 a levels, and most students were three or four, which meant I had to do many subjects kinda outside of school with self study, things like this. And I thought it was quite unusual how I had to go through school where, you know, this this year I do this level of math, this year I do this level of math, and I felt quite constrained because in certain subjects I wanted to go faster. Mhmm. And so that was a personal observation I had. So when we first kicked off Crimson, I'd recommend many of my kids to extra subjects. We help them, you know, enroll in private exams, send us things like that. And so I think about that boy, Smile, that I just mentioned, or take Zhong Huang. Zhong grew up in McLean's College. He he now works for Google's Waymo team in Silicon Valley. He went to Caltech, and he took, I think, six or seven different a levels when he was in school. [00:58:31] S1: Yeah. Yeah.