“You left your recorder on — the battery will drain,” Jake Schwartz, WG’08, Co-Founder of General Assembly, warned me as I packed up from our interview. He was concerned about my ROI. He thinks about ROI constantly, for his students, his clients and his own company. With some success. Receiving its venture capital funding in 2011, General Assembly (GA) has established itself as an education-to-employment company. Making this kind of impact does not come naturally to an entrepreneur, but GA has graduated more than 33,000 students from its long-form programs across its more than 20 physical campuses around the world and creates value for thousands of employers — it works to help companies source, assess and transform their talent. What is valuable for Wharton alumni is that Jake grew his company, by consciously looking to the frameworks he learned at Wharton.
When I first interviewed Jake for this magazine’s Autumn 2014 issue on entrepreneurs, he was confident in his model, which is based on educating coders and web developers, using skilled practitioners versus teachers. As I interviewed him for the 2016 Joseph Wharton Award for Young Leadership, he reflected on how he’s confronted scaling the company.
How have you used your Wharton education to move your firm forward?
This year, I thought back on a marketing class. It was a very complicated computer simulation on how to spend money against all these channels, and it was very abstract. Our team did terribly. The best team was an undergrad team that cynically looked at the simulation and decided that it must be run off of regression factors’ coefficients. The team members said, “We just need to reverse-engineer what those coefficients are, and then we can hack the game.” By the second week, they understood what the coefficients were and how to drive performance.
Because our company had grown to a different stage, we were revamping our marketing. I thought about how we have all these stories that we tell to our customers about why certain things work or don’t work, or how GA can help them reach their career goals better. We needed to strip away the artifice and the story lines around our business, and get to the heart of what we are trying to do and how we win.
I pulled out my old statistics software and thought that we should run this as a regression, and see what the data is actually telling us about what is driving performance and what’s not. For my team members, who are still relatively young, to see me diving in, helped them get out of that narrative stance and into the numbers stance.
What was the outcome?
We increased the size of our marketing funnel by 50% in the past four months. This meant more flow-through, and more students coming in. It was a big deal to improve our reach to the right individuals.
What other frameworks have you used?
From my class on managing people at work, I remembered that classic article, On the Folly of Rewarding A, While Hoping for B. I was able to direct my HR department toward the ideas in that article, as HR was revising the compensation structures for our sales department so that salespeople would focus on the right things. Of course, there are people who have done this before. A big part of Wharton education is knowing that these frameworks exist, and that you’re not a special snowflake. I’ve found that simplicity is the only way to effect change. Frameworks are a beautiful way of driving toward simplicity and a common understanding.
What lessons can you share from surviving growth?
We opened up 15 additional campuses around the world this year. You can’t underestimate the challenges of managing people 8,000 miles away, as well as the human resources and financial overhead when dealing with a new set of regulations and guidelines. Today, we are much more careful about what markets we go into and why. The markets we are in now have the same demographics as what we have in the United States: London, Hong Kong, Singapore, Australia and Canada. Our courses are currently taught in English. If and when we enter emerging markets or non-English-speaking markets, we will do a joint venture with partners who will allow us to scale.
Is GA in the education business?
For us, it’s an investment business. Students invest their time, energy and money with us, and they expect a return. For decades, there has been an almost willful naiveté about college education with the idea that, if students go deeply in debt now, over the next 30 years, they’ll earn a return. The way we drive consumer demand, and create an economic value proposition, is to give our students a payback period of one year — meaning the salary increase that they receive from this course, and the economic value they accrue, will be realized within the first year.
How did you scale GA?
The company doesn’t just get bigger. We had to change our economic model, value proposition and customer base. To achieve real value, not just venture value, I need to make sure I’m not fighting yesterday’s battle today. We realized that we are not just an education company, nor are we an enterprise B2B company.
We are a two-sided marketplace between potential and existing employees and employers. Our job is to offer great value propositions for both, in ways that add meaning and value. We are a talent pipeline as-a-service! The art is in connecting the pipes, in making sure that the learning matches the goals, and the goals match the needs of the companies. This understanding makes a difference in how we answer these questions: How do we sell? How do we structure? What is the next product we have to build?