Scaling an Educational Services Business to $50 Million: Todd Zipper, CEO of Learning House (Part 6)

Sramana Mitra: You have to pick and choose the partner that you go to business with because you’re basically risk sharing. You both have to invest to get a new brand up and running.

Todd Zipper: Yes. That’s where our expertise comes in around leveraging the brand that already exists and trying to cater to what might be a new market for them. Most of the people that are going fully online, which is primarily who we are focused on, are adult learners. Adult learners are anybody from 22 to 50. The average age is 31. Catering to that student from a marketing, enrolment, and a pedagogical standpoint is different from a traditional-aged student. It’s a shift in mindset, process, and procedures. That’s why it does makes sense for a lot of these schools to outsource. Whether that becomes a permanent trend, I think it’s just too early to know that. Sramana Mitra: What I’m thinking is that these schools are outsourcing to you but they’re not really paying you on a project basis. You’re taking quite a bit of the risk. Of course, you’re also taking quite a bit of the upside. It’s like gravy on top of their existing revenues.

Todd Zipper: That’s exactly correct. If this works, they don’t get 100%. We have different sets of deals. They’re not taking a lot of risk. In many ways, we’re a change agent for the school around changing policies, and kickstarting new opportunities that they get to leverage with us.

Sramana Mitra: It’s new revenue without a lot of new investment.

Todd Zipper: Exactly.

Sramana Mitra: At the same time, you have to work with people that have enough of a brand in whatever niche that they operate in that can produce revenues. Without that, your business model doesn’t work at all.

Todd Zipper: What’s interesting is and it’s going to bear out pretty well our for us in the long term. many of our schools are schools that you have never heard of. There’s a school based in Orange County which is called Touro University. Although they’re connected to a larger Touro system, when they hired us in November of 2013, they were struggling.

They were starting to do things online. They had about a hundred students. They could not get it going because their brand didn’t resonate in the market. They had nothing to push against. They had no alumni to leverage. They had a great leadership team who were ready to implement best practices. As of Fall 2015, they had 800 students in their online programs. We can take a brand that’s actually not well-known and find where it resonates and where to focus on.

They have a strong Marriage and Family Therapy program. We also leveraged their relationships with the military. We leverage what they had and we went with it. The other point is we’re not looking to create another Southern New Hampshire. I’m sure you’ve heard of that university. They’ve become the for-profit of the non-profit. I think they have 75,000 students. There’s a bunch of those. At least with the smaller schools, we just want to do a thousand students online. For us, that’s probably about $4 million business. If you have 50 of those, you have a really nice business. That’s the frontier I’m trying to build out right now over the next several years.

Sramana Mitra: Very interesting. Thank you for your time.

This segment is part 6 in the series : Scaling an Educational Services Business to $50 Million: Todd Zipper, CEO of Learning House
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