Scaling an Educational Services Business to $50 Million: Todd Zipper, CEO of Learning House (Part 5)

Sramana Mitra: Going from curriculum to a more broad soup-to-nuts set of services and, accordingly, raising the percentage of the royalties that you get paid is a massive strategic move.

Todd Zipper: It’s risky. I’d like to say we are in the private equity game because I’m going to be a million dollars in before I really know what I got. We like to think that the worst-case scenario is we could do with a million dollars. We haven’t really gotten there yet. Fortunately, knock on wood, all of our deals are working out in some form or fashion. The legacy deals are more deeper service type of deals. Once they start to get going, they pay off. That was the big strategic bet that we made. The second thing is I brought in a whole slew of operators and leaders. I just love my team. It’s a phenomenal group of individuals that can run the business four or five times the size that we are today.

Sramana Mitra: You’re doing this from Kentucky, right?

Todd Zipper: Correct. We have some outposts. We have a small operation in Pennsylvania. We have two other locations in Ohio and in Minneapolis around the school itself. >>>

Scaling an Educational Services Business to $50 Million: Todd Zipper, CEO of Learning House (Part 4)

Sramana Mitra: Is there a particular subject material or type of degree that you specialize in?

Todd Zipper: Good question. We are, essentially, generalists. Initially, my thesis when I saw the opportunity at Learning House was that I didn’t want to work with one particular subject area. Let’s say, teaching. That’s a big program online. Another big program online is nursing.

Sramana Mitra: Your competitors, like Hot Chalk, has a big nursing program.

Todd Zipper: Exactly. Hot Chalk is probably our biggest competitor. Our biggest client and their biggest client share the same name Concordia. Their biggest client is Concordia Portland and ours is Concordia St. Paul. We also have another Concordia at Texas. The approach that we took was when I go and meet with Presidents at universities, I want to take their entire school online. I just don’t want to do the MBA program. I also want to do a DBA because when you market business degrees, you want to have choices for people or else your cost of acquisition goes up. >>>

Scaling an Educational Services Business to $50 Million: Todd Zipper, CEO of Learning House (Part 3)

Sramana Mitra: Who are the customers? Is this something that you sell as a software solution to other education institutions who are trying to launch or run an online program or are you actually running this as an outsourced service on behalf of these educational institutions who have a brand? What is the business model?

Todd Zipper: The business model is simple. We charge a revenue share. The school charges the student $400 a credit hour, and we charge the school 15% of revenue for basic curriculum services up to 50% for the entire suite of solutions. To answer your second question, they outsource us essentially. It’s our marketing dollars. It’s very much a symbiotic relationship.

Sramana Mitra: Who provides the content and who provides the faculty?
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Scaling an Educational Services Business to $50 Million: Todd Zipper, CEO of Learning House (Part 2)

Todd Zipper: Around late 2005, one of the entrepreneurs bought a business that became what Kaplan Higher Education is today. This individual had an idea to start a marketing business focused on higher education using TV commercials. We called it LendingTree meets eHarmony. It had a matching algorithm. We went on to build a brand around matching people to potential education opportunities. I co-founded this business in 2006.

The next four years was an incredible journey because this was the boom period in the for-profit education space. Eventually, we got to working with non-profit schools. We had a couple of things that worked to our advantage. When the recession came, the TV market became completely open to our type of marketing messages and our price point because so many big advertisers came off. The second thing is we built one of the first call centres in education where we were advising students. We built that business over four years. We sold it in early 2010 to a competitor called Education Dynamics.

Sramana Mitra: How big did this business become?
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Scaling an Educational Services Business to $50 Million: Todd Zipper, CEO of Learning House (Part 1)

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

The white-labeled education services business is scaling rapidly, and institutions of all sizes are building online programs. Learning House operates in the small, regional college and university segment, and has built a nice business.

Sramana Mitra: Let’s start at the very beginning of your personal journey. Where are you from? Where were you born, raised and in what kind of background?

Todd Zipper: I was born in New York. I went to University of Pennsylvania for my undergraduate and studied History and Economics. Like many people from Penn in the mid 90s, I made my way to Wall Street – to the Equity Research Department of Solomon Brothers, which eventually became Citi Group. >>>

Bootstrapping an Education Company: Tod Browndorf, CEO of Coggno (Part 2)

Tod Browndorf: I ended up moving back to California. I went into a consulting business with a friend of mine. He was basically in high-end contingent workforce business. This is in the late 90s. We placed all sorts of different types of contingent folks inside companies. As a result, we placed instructional designers into companies that were looking to create training initiatives.

For instance, a company like Washington Mutual, which doesn’t exist anymore, might want to train their 5,000 bank tellers on something. We would find the instructional designer or course developer. We would put them all together and find someone to deliver it. We deliver these packages to these organisations. That’s how I got into what I’m doing now.

Sramana Mitra: When was this company founded?

Tod Browndorf: Coggno was founded in 2007. >>>

Bootstrapping an Education Company: Tod Browndorf, CEO of Coggno (Part 1)

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

Tod has built an interesting online education company focused on specific niche course types. Read on to learn more.

Sramana Mitra: Let’s start at the very beginning of your personal journey. Where are you from? Where were you born, raised, and in what kind of background?

Tod Browndorf: Wow! We’re really going way back. I’m originally from the east coast. I was born in South Carolina but was raised in New York and New Jersey for most of my life. I lost my father when I was 10 and a half years old. I started working very early in life. He was in the manufacturing business. I started working early through school. I travelled the world pretty extensively. I lived in Australia for quite a while. I lived in the Middle East and eventually started my career in Finance. I started off as a trader on Wall Street, then later here in San Francisco.

Sramana Mitra: What did you do for school? >>>

Thought Leaders in Online Education: Bharat Anand, Faculty Chair, HBX at Harvard Business School (Part 7)

Sramana Mitra: All right. I’m going to switch to my last question. Based on the trends you see on online learning, where do you see opportunities for entrepreneurs to start new companies?

Bharat Anand: Let me step back a bit. Technology is allowing us to create all sorts of new and interesting offerings. I wanted to focus a little bit on learners and their behaviours. What we’re seeing is that there are, at least, three kinds of things that individuals look for in online experiences. The first I’d probably describe as a question of relevance. It’s one thing to offer content. The content might be of terrific quality, but as a learner, I want to know why it’s relevant or important for me. That’s a question that I think is becoming increasingly important. It’s a trend that’s caused by the confluence of many things such as scarce time and greater competition. >>>