NZ Business Podcast - Paul Spain
00:09:00 · Paul Spain, Jamie Beaton
[00:09:00] S1: So as you develop the idea for for Crimson initially, what was... What did that first idea look like in terms of exactly what you're selling? Yep. What were you charging? What did that actual... That that, you know, version one or whatever you wanna call it, beta version of the business kinda [00:09:20] S0: Look like. [00:09:20] S1: Look like. Yeah. What was that picture?
00:09:22 · Jamie Beaton
[00:09:22] S0: Yeah. So I guess to answer this question for a second, think about what high school career guidance looks like. So, typically, you think about a career guidance counselor who often will know a lot about New Zealand universities, maybe a little bit about Australian universities. Typically, they're gonna recommend the universities that are, you know, most local. So if you're in Auckland, maybe Auckland University, for example. And for one of these guidance counsellors, you know, these foreign universities are quite the unknown. And so, you know, generally, they're not gonna recommend these options because it's a bit out of their comfort zone. Yet for the students that have the potential to get into these schools, this represents a truly transformative opportunity for them in their careers if they can actually get in. So I saw, first of all, this kind of opportunity wedge where there were many kids that had the talent to get in but were not applying because they didn't know, a, they could, b, how to, etcetera, and they didn't have role models that had done that. So that was sort of the observation I had. I saw other kids in my own year group at King's and other schools like Westlake, McLean's College, etcetera, that were, you know, really strong academically, but ultimately weren't successful getting into these schools because they they didn't have the right kind of profile and strategy, applying. That was my observation. I also had my cofounder, Shandre. We met on a trip to, Europe called The Hague International Model UN. Actually, we met before that at Model UN, but that was a trip we really got to know each other well. And on that trip, I was really impressed by her. She was the head girl of un... Of Albany senior. She was UNICEF youth ambassador, and she was just very charismatic and care for vulnerable communities. And she would have been an amazing candidate for US universities, but she'd never been told about it. And so she found herself in the first year of Auckland University doing health science, and she really wasn't liking it that much. You know, she enjoyed it a little bit, but, you know, she really could have been in a different environment. And, you know, her experience, with my experience together, we realized this is a real pain point. Lots of Kiwis could be going down this quite unique pathway.
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?