SM: You are a public company. How has the public market received this business?
RP: Overall it has been OK. Originally it was very strong, and lately our stock has not been trading where it should be, but we are doing well compared to most companies.
SM: What is the strategy to get more entrepreneurs to start more schools under your system?
RP: That will continue to happen. We are not worried about it. A bigger concern is that not every state allows this yet.
SM: Which states can do it?
RP: California, Pennsylvania, Ohio, Arizona, Colorado, and a whole bunch of other states.
SM: Have you had interactions with the Obama administration about this?
RP: They know us.
SM: Your company could serve a lot of purposes. It addresses job creation and education problems in one go.
RP: That is one part of it. We have had very good academic results. We have a very cost-effective model, and we think it will continue to expand at great rates.
We have also done some pilots where we take our curriculum and put it in a physical classroom with teachers. We are seeing 10-20 points gain per year in student performance without changing the staffing of the school.
SM: You could insert it into public schools everywhere.
RP: Eventually we are hoping to do that, because we can really help them get better results.
SM: It seems as though there is no real difference, in terms of technology and content, between selling to new non-profits and selling to existing schools.
RP: Online schools can serve anywhere in the state whereas the brick-and-mortar would only be using it in their classrooms. They use it to replace their textbooks.
SM: If you can show a performance improvement of 10-20 points then you have a strong case.
RP: We think there is a case for it as well. That is why we have started developing that business. We agree with you.
SM: Tell me about the technology itself. Do you have personalization and skill gap analysis?
RP: A large part of this is that it has become very personalized. We try to learn how you learn and customize our delivery for individual students. Every year we get more and more of that customization. We do skill gap to learn what you do not know. We then deliver customized instruction through delivery and through teachers to fill in the skill gaps.
SM: Can you give me an example of how it works?
RP: If you are a student you would basically take an assessment, and we deliver a customized curriculum to fill in your gaps. We have a bunch of sample lessons on our website, so you can get a good feel for the K12 experience.