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. >>>

Thought Leaders in Online Education: Bharat Anand, Faculty Chair, HBX at Harvard Business School (Part 6)

Sramana Mitra: I don’t buy that this is going to scale necessarily.

Bharat Anand: Yes, go ahead.

Sramana Mitra: What you’re saying, it works to a point. I don’t think it’s going to, necessarily, scale to millions of numbers – the kind of numbers with which edX is working with right now. I don’t think the model you’re talking about is going to scale at those levels because for all the factors with which you are trying to preserve quality – the price, grade, and expectation of the interaction level. I think that works like an elite conversation mode. That does not work in a mass crowd mode.

Bharat Anand: I think i disagree with that. When we think about peer conversation, obviously, you can’t have ten thousand people on the same platform asking each others questions. We’ve experimented with the right size of the cohort. Where we’ve converged to is somewhere between 300 to 500 people. >>>

Thought Leaders in Online Education: Ron Olsen, CEO of Remote Learner (Part 3)

Sramana Mitra: Any other trends that you want to highlight?

Ron Olsen: What we’re seeing from our clients is really a stronger push towards the user experience and identifying this learning solution as ours. Particularly in the corporate space, how do our training and learning solutions directly tie in to our own brand? How do we make it easy and accessible for our folks? We have a fair amount of clients where we’re building near-custom applications around the needs of specific companies and their training needs. We’re seeing a straight grab-it-off-the-shelf, and the deploy it approach just doesn’t cut it anymore.

Sramana Mitra: In the portfolio of clients that you’re serving and the kinds of scenarios that you’re discovering where you need solutions to, are there specific tools and technologies that you see the need for that is not in the market that you would encourage entrepreneurs to develop? >>>