Can you explain exactly what your company does and what problem it solves?
Everspring is a Chicago based built-for-purpose company that was created to help universities build and run online degree programs at the master’s and bachelor’s levels. Working in partnership with university leaders, Everspring helps develop a consistent strategy for starting or expanding their online programs. Leveraging the university’s academic foundation, Everspring supplies the capital, technology, business processes and required know-how to bring multiple programs and schools within the university online. Our partners retain control of critical academic functions while Everspring handles the marketing, enrollment, onboarding, course development and student and faculty support.
Higher education is a $30 billion domestic market with a business model that hasn’t changed substantially in 500 years. It is ripe for disruption and our evolving world needs it to change so that higher education can be made accessible to everyone.
How did Everspring get started?
When I was the CEO of Higher Education at Kaplan, overseeing about 125,000 students and $2 billion in revenues, I used to meet regularly with other industry leaders. A popular topic of discussion was the likely impact on higher education if traditional universities ever got serious about creating an online offering. In late 2011 I saw an opportunity to combine the technology and business process know-how I had acquired over 18 years in for-profit education and combine those skills with the academic offerings of traditional, highly-ranked universities to help guide these universities online in a comprehensive and brand consistent manner.
Tell me about your team and approach?
Our team includes experts recognized for developing innovative online learning experiences that ensure we create an environment that makes students feel like they are part of the university. This is a business imperative because it’s far too easy for un-engaged students to drop out of an online program. Our expertise in innovative instructional design combined with a sophisticated application of data analytics allows Everspring to retain students and to identify and proactively re- engage any students who appear to be losing interest. These attributes distinguish Everspring from its competition and are critical to our success.
What are some of the specific challenges you’ve faced as the company has grown and how have you successfully addressed them?
First, this is a very complex business, requiring the development of all university functions except financial aid and faculty. We knew we had to take a world class approach, and we prioritized securing a very experienced management team. Second, we had to convince a major university to sign a 10-year contract with a startup. Third, we needed to figure out how to work with faculty to create the courses, build the technology and attract students. Thanks to an exceptional team, our success, particularly in the challenging area of creating compelling courses, has been a point of competitive differentiation. Our final, ongoing challenge is to add enough students at the right student acquisition cost so that the business will scale. So far we have four universities under contract with a fifth in the works.
Tell us about your decision to bring in an equity partner.
Ours is a bit of a unique situation. We were founded in collaboration with Accretive, a private equity firm specializing in built-for-purpose companies. One of the founding Carrick team members was a part of that team. The decision to bring on an additional equity partner is one that every successful entrepreneur faces. Our business model requires substantial capital as we partner with new universities. Carrick provided much needed capital to finance our growth. Equally important was the insight that Carrick provides in their Board member’s earlier involvement in the business model and in dealing with the complex operating issues that arise from a for-profit company partnering with not-for-profit universities in a BPO environment.
In what areas of the business did you feel you could use help or counsel?
I’ve run a number of companies over my career–this is my fourth CEO job. They last three were pure B2C models; delivering products and services to a customer. But Everspring is a hybrid of an operating company and a BPO. I’m in service with the universities but I’m also in service to the students. My partner and I had never run a BPO business per-se. We were looking for help in thinking through the nuances of the business model and the best way to finance our growth in a manner that created value for all of our stakeholders.
With are the benefits of working with a group like Carrick Capital Partners?
Carrick brings an operating view point and they want to help, but they don’t insert themselves into the details. It is exactly what you would expect from a successful operating CEO who went into private equity. Carrick’s founders have also succeeded in hiring people that approach their portfolio companies in the same way. All of the folks at Carrick have an operating mindset, and from my perspective, that engenders trust and makes for a better partnership. I trust them to be helpful and they trust me to make the right decisions and to know when to ask for help.
What’s your advice for other businesses considering private equity?
Do your research. All private equity groups are not created equal. Make sure you take the time to understand a firm’s strengths and weaknesses, whether it is expertise in a particular industry, operating model or stage of growth. Spend time with the partners, but also with the staff with whom you will also be interacting. Take the time to understand if there is a good match between what you need as a CEO and what the PE firm brings to bear. Finally, don’t underestimate the importance of culture fit. Entering into a relationship with a PE firm is a long-term commitment on both sides. Ensuring a fit up front will prevent many problems later on.