The deal announced yesterday has already been covered by Forbes magazine and is great news for fans of entrepreneurship in SA. Waking up this morning I reflected on the GetSmarter journey and briefly captured what we can all learn from their success. (In the interest of full disclosure, the UCT College of Accounting has run some great projects (LearnAccounting, UCT Board Course) with GetSmarter over the years and I am a big fan.)
GetSmarter, which started in 2008, now employs over 400 people, was entirely self-funded until last year and is a case study in the potential of SA business to be global players. How did they do it?
- Leadership – The company is led by a team, and that team was assembled and led by Sam and Rob Paddock. Simply put, these are leaders of high quality who love getting smarter themselves. They set the tone through their desire to learn and develop.
- Culture – You get the feeling that the leaders personalities are all over the GetSmarter culture. Having to rap/sing when hired, funky office space, frequent celebration events – GetSmarter is a company where people want to work.
- Big dreams – “1 million students by 2030” meant going global and acquiring new clients like MIT and Cambridge. This is a SA company not content to stay within our borders – it is fuelled by big dreams and global ambitions.
- Hiring – My impression is that GetSmarter is the first job for many of its staff. They hire young and talented people and gave them space to grow into. It obviously helped that the company was growing fast and that UCT was churning out quality grads right next door!
- Performance management – Daily stand-up meetings, 3-month KPI’s, a radical focus on results – this is a company where things get measured and everyone knows where they stand. This focus has created a meritocracy where performance is recognised.
- Patience – No doubt there were many offers before 2U arrived on the scene, but the owners waited and kept building out the business. That patience has paid off with a hefty premium (6 x Revenue) and the freedom to keep running the company the way they want to as an independent sub. It strikes me that 2U have a very similar culture and that this deal makes a lot of sense, beyond just the price received.
- Purpose – SA suffers from high unemployment and is in desperate need for education. GetSmarter stepped into that gap and plays a role in increasing the skills base of the country. This is a company that got a great exit price because they are solving a global problem with scalable solutions.
What does the future hold?
Who knows?!? If I was 2U, I would be looking to shift a lot of course administration to the team in Cape Town. They are good at it, ambitious and come at a much lower cost than would be the case in the USA. That should mean that GetSmarter will soon be hiring a lot more people and needing more office space.
On the revenue side, GetSmarter will help 2U expand into short courses (until now 2U has specialised mainly in degree’s). Having a presence in the USA, via 2U, will also help GetSmarter stay close to current clients MIT, Harvard and University of Chicago. The deal no doubt gives them greater gravitas in those key relationships.
Management of GetSmarter is staying on for at the least 2017 and 2018. There is another $20m on offer if they make certain performance targets as well as share options in 2U. Of course, they could stay on beyond 2018, but who knows what new business adventure Sam and Rob Paddock will be on come 2019. Let their example help all of us dream big about creating value and jobs in SA!