Coursera CEO Jeff Maggioncalda
Coursera CEO Jeff Maggioncalda joins GSV partner Julia Stiglitz for a discussion on MOOCs, online degrees, and a look under the hood at Coursera as they push the limits of digitally delivered education. Jeff shares details about his journey to Coursera, his vision for the future of education, and reflections on product market fit.
Coursera CEO Jeff Maggioncalda joins GSV partner Julia Stiglitz for a discussion on MOOCs, online degrees, and a look under the hood at Coursera as they push the limits of digitally delivered education. Jeff shares details about his journey to Coursera, his vision for the future of education, and reflections on product market fit.
Speaker 1:0:11Hi everyone and welcome to the GSB accelerate hot. My name is Julia Stiglitz and this is actually our first ever podcast, so here we go. It's fitting that our first podcast be with a company that is extremely near and dear to my heart, Coursera, which is where I spent the previous six years before joining Dsv, I couldn't be more excited to have with us today, Jeff Magna Carta. Jeff is the CEO of course era and before course era. He was the founding CEO and first employee of financial engines accompany the that he took from just an idea through a really successful IPO. He joined coursera about 18 months ago and has already had a tremendous impact here at the company. A coursera has at this point, over 36 million learners, over 150 university partners, over 1500 companies, over 40 industry partners and is really just getting started. So Jeff, thank you so much for being here today on our first podcast.
Speaker 2:1:11Well, welcome back. We miss you. I'm, if this is the only way to get you back, fine. So I'm looking forward to the podcast. So
Speaker 1:1:20started. I'd love to give our listeners out there a little, a little bit more, a sense of who you are and what your background is. So let's start just with that.
Speaker 2:1:31Well, I was born in Washington. I grew up in California, so my, my background is I think I've among people in my business school class from, from Stanford. I think I had the job, the one job longer than almost anybody else. Uh, my, my, my Undergrad at Stanford was an English and economics. I've always been a humanities kind of guy. My Dad actually told me when I was at Stanford that he would not pay for the degree if it were in English, so I got an English degree and a quantitative economics degree, sort of a joint degree. Uh, I did litigation consulting a little bit, kind of applied statistics, econometrics finance stuff for business cases. Thought that I might want to get a jd mba and realized that's not, that's not from the jde part was not for me. Went back to the business school, worked at Mckinsey briefly over the summer in San Francisco.
Speaker 2:2:21Really enjoyed that and a great, great. From a great group of people and then I was actually planning to go back full time when Joe Grundfest at the law school, Stanford and Bill Sharpe at the business school, who is, you might have heard of him, a Nobel prize winning economist Julia. Um, and they were starting a company and they asked if I would write a business plan. So that was in 1996. And so I, I wrote a business plan. I've never hired or fired anybody before. I did not know, I didn't know anything about managing or anything really a sort of learned on the job, but over 18 years I learned a lot and, and we ended up with an amazing team, a great set of investors and you know, we just kept on trying to figure out that elusive product market fit, trying to figure out who is our customer.
Speaker 2:3:10So, so we, we really had to try a lot of different things to figure out how to, how to make the business click. And it was, it was growing, but it was kind of a grind. I mean we really were working too hard. Too many. I think about it at have leverage as being how much do you get out per unit that you put in in terms of work and time and effort and complexity. It was the leverage was too low and then we finally figured out that a lot of people, you know, didn't want an online tool to manage their 401k. They just wanted someone to trust that they could hand it over to. And so we created that service and somewhat counterintuitively, even though we're a technology company, we build a call center in Phoenix and we started printing out printed reports and it turns out a lot of people wanted someone that they could talk to and they wanted something that they could hold to prove that you were doing a good job and they can hold you accountable.
Speaker 2:4:00So there was an interesting kind of product feature mix that let people feel good about letting go of their 401k and. Well, what we realized, and this is I think to me, the art of product development. It's really figuring out, you know, who's your customer and and deeply what are their unmet needs. And I think what we discovered at financial engines when things really took off is the unmet need was an ability to escape regret. So people knew that they had a responsibility and everybody was saying it's the rational thing to do. It's your responsibility. We're going to give a lot of education. You shouldn't be learning about this. You shouldn't be paying attention. You should be saving more money. They'll should, should, should, but you know what, people are like, I don't want to do this, but if I don't, I'm going to feel bad.
Speaker 2:4:49If I do, I'm gonna make a mistake and I'm going to feel bad if I hand it to someone who I shouldn't have and they screw me, I'm going to feel bad. So we came in with something that says, and, and, and the design criteria was, um, super no big deal. We say our design criteria is super no big deal. So we created a solution that said, look, your employer told you that this is a good idea. They've done the due diligence. We're independent, we're low cost. If you want to stop doing this, you can, you want us to unwind the trades you can, we'll give you the refund if you want. We made it really, really easy for people to back out and because of that they felt better going in and the company grew rapidly. We ended up when I left after 18 years, uh, was the, uh, we were the largest. We still are the largest independent registered investment advisor in America. We were at a hundred billion of assets under management when I left. I think the firm is now 150, $200,000,000,000. So it's a, it's a really big financial services firm.
Speaker 1:5:46So I love this idea of unmet needs and I'm curious as you know, taking that Lens and then taking it over to Coursera and looking at the business here for Sarah, what is the unmet need that, that you
Speaker 2:5:58are solving for here? You know, we're still trying to figure that out. I mean, I, I also think it's really important for leaders of companies, to be totally honest, it, there's the little bit of um, uh, sort of schizophrenia in this idea of, you know, am I an optimist or a pessimist? The optimist says this is a big opportunity and of course we can do it even if we don't know how the pessimist says we haven't figured it out. We don't know for sure. We've got to keep on learning and improving this opportunity and the need that global need that, that, uh, that the world has for education is, is vast. And I think it can be a bit of a trap because as people often say, you know, boiling the ocean doesn't get you very far if it, if you try to do something for everyone, it'll feel good, but you often don't get much traction.
Speaker 2:6:49And so as, as we evolve sort of what, who are we serving and what is the unmet need? It's tricky because our business model, what we have picked, what we call a three sided platform. We fundamentally believe that for our business, solving this problem will require that. We do a great job with three different stakeholders. Of course there's the learner, I mean fundamentally we say you said it before I ever got her learner's first, so we fundamentally, this is definitely about helping individuals get access to the kinds of not just education, but skills and opportunity that they need to transform their lives. So that comes first and what I like to say as learners come to Coursera to learn and prosper, not just learn. Of course we have to help them learn, but we need to help them prosper, which is to translate that learning into something that has an impact on their lives and a lot of times that turns out to be career advancement.
Speaker 2:7:44Job Opportunities. Universities come to well without university, the learner can't learn, so universities and industry partners come to Coursera to teach the world and teach. The world really comes down to two things. It's both having access to a global audience that you really can't get without affirmed light coursera. The second is a technology platform that gives you the kind of operating leverage to teach people at very low cost, and that really of course increases affordability. It increases the scale of impact that affirmed could make in addition to learners and educators. We also have employers and employers. As you know, since you built this whole business, you're the proposition to them is come to Coursera to transform your talent, to transform your talent, and so what we helped the edge, what the employers do is we say, your business needs to keep up with a fast changing world.
Speaker 2:8:41Your customers are changing in ways that you don't even understand and it's changing very rapidly and your competitors are doing things at a very fast rate. They're entering from adjacencies that you didn't expect, so you're going to have to move quickly. People call this digital transformation, but it's mostly keeping up with your customers and keeping up with your competition. The types of skills that businesses need are typically business technology, data science, especially this whole digital transformation where data are changing the way every company operates, every job performance, and so we say transform your talent. It includes skills benchmark in which we just announced to say what, first of all, how are you doing in terms of the skills that you have today and where are you behind others in your industry? We have a huge data set from all of our learners around the world to help people benchmark.
Speaker 2:9:28Second then is what skills do you need to develop in your organization and what courses are needed and for whom are those skills needed? Internally. We're doing a lot of talent transformation and kind of upskilling externally. We're trying to also bring learns from around the world who had demonstrated mastery into a talent pipeline for our, our employer clients. So it's really a talent solution both internally and externally and you know, so that's, that's a, that's, that's a lot to do. And so that's my biggest concern is this is a big opportunity we're trying to do a lot. It'll be, it'll be tricky to pull it all off, but we're pretty audacious, as you know. One of our values at Coursera is boldness and so we've got a pretty bold strategy.
Speaker 1:10:11Yeah, definitely. When you first joined, he spent some time looking at coursera track strategy and really digging in and looking at the different businesses that coursera had and one of them that you were particularly attracted to and that you have put increased attention on here at Coursera is the online degrees business. What was it about online degrees that a excited you?
Speaker 2:10:35Yeah. This is sort of, I think another good example of what what good entrepreneurs have to do is you have to have feedback loops. You need to get information from multiple sources to understand the nature of a problem so that you can come up with solution, the nature of an opportunity so you can develop a strategy to go and and go after it. It's really actually pretty simple. I came in, you were on the team too. We did a lot. We call them deep dives. We went all through the business model and there's a great book business model generation that really to me, it gives a nice framework to saying like, this is what a business model is, it is a target customer, it is a value proposition and offering that solves their needs is a set of channels of how you acquire those customers.
Speaker 2:11:21It's a servicing models of how you service the models internally as the key activities and resources that you bring to bear on that is the partners that you work with is the financial revenues and costs and is your competition. So anyway, that's the framework and we stepped through every one of those. I wrote 250 questions across that business model that we as an executive team went through, you know, step by step by step so that everybody learned the nature of our business. And what became very obvious is we had a few things that nobody else really has. We had 30 million learners at the time. It was 25 million, $25 million learners from all around the world whom that's a pretty big asset. We had university partners. Now there are competitors out there like linkedin learning previously. Linda, like pluralsight, like Skillsoft, you know there's, there's youtube, there's Khan Academy.
Speaker 2:12:09Like there's a lot of content out there. You were one of the ones who told me in one of those early meetings, hey, we're worried the content generic content might become a commodity. Well, don't want to play the commodity game. So what is it about my partners that's super distinctive? Well, our partners are universities and they're not just the universities, they're the best universities in the world and they're spread around the world. So you say, well, I've got a resource that almost no one has, which is this network of universities right now they're publishing moocs and there's something special about Moocs, but moocs are a little more susceptible to that commoditization just as Moocs, but what's not very susceptible to commoditization, our degrees. So that's okay. We got, we have an asset nobody else has and what they do really well as degrees and they used to a little market size and you say, how big is the market for degrees?
Speaker 2:12:58One point $5,000,000,000,000. You're like, okay, well that's a pretty big opportunity, and then you say, what's the likelihood that, that, that, that, that, that industry could be transformed due to technology. You'll some industries, it's easier to transform others. It's harder. The provision of education is absolutely a set up nicely to be enhanced, transformed by technology. So it's, I think uber and Lyft were really smart when they said, you know, on demand transportation called a taxi. It's a big market but it's a broken product and if we just do some sort of digital view of this kind of redesign, what on demand transportation, it looks like it'll be a much bigger market. I'm looking at degrees. I'm not saying it's, I'm not saying it's broken altogether, but if you look at the student debt out there, you look at the lack of access and you look at how inconvenient it is for people to have to stop their lives, especially for masters degrees, quit their job, move their family, pay hundreds of thousands of dollars, forfeit their income.
Speaker 2:14:06That's a broken product. So I thought we got. We got partners who are really good at a massive economic opportunity and a product that is just ready to be dramatically improved by technology and so I thought this is pretty good. We should go after this. Oh by the way, we also had to you trading at 12 times forward multiple so clearly Wall Street love the idea of online degrees and two years been doing great and so they're growing really rapidly so there's a data point out there that says, Hey, this company's doing really doing really well. We should be able to do pretty well here too.
Speaker 1:14:37They're a little bit about what this redesign looks like because the online degrees aren't new to you is doing them and then there is before to you is in a whole set of online degree providers that are out there. So like why is, why is what Coursera is doing? Yeah,
Speaker 2:14:52I think there's a few things. The number one I would say is quality. When I say quality, I mean the quality of the credential. So a lot of people have spent a lot of money on for profit college degrees that just don't have a very good credential. They don't have very good credential value. They're not recognizing the job market. You pay a lot of money, you don't get much back for it. One of the reasons that people pay so much for the top universities is that those types of degrees means something in the job market. There have been a lot of online degrees out there from universities that charge a lot and don't get you very far. Our partners happen to be the best universities in the world with the highest credential value in the world. When these degrees come online and these degrees online are the same degrees as on campus, you're getting something as a credential that's extremely valuable.
Speaker 2:15:47That should have a very high roi because we're doing it online. The cost is often less than half, so it's a top quality credential at half the price, same credentialing on campus. The learning experience delivered by technology is superior, I believe, to anything out there. So you can do it on your mobile phone. You have live engagement with to a video you're actually dealing with talking with the real professors in the University of Illinois at Asu, at University of Pennsylvania, and it's, it's live two way video. I think a lot of people when they think online degree that they think it's like, no, luke is the foundation, but on top of that is the full university learning experience. Um, you can also do it on a, on the mobile, you can do simulated learning, collaborative workspaces that are, I think are much closer to the way it really is to work in the real world today.
Speaker 2:16:42So this idea that everybody works in the same room, that which is what you do on campus, which is fine if you can afford that luxury. Most people work now digitally across borders, across countries, across time zones. And so learning that way makes a ton of sense. Let's say the final thing in addition to kind of quality and affordability is just the convenience. You can start with a move for $49 and if you like it because I'd like to learn a bit more. You can then, if you want, do a specialization which is four or five moocs and that's like 75, $79 a month. That would then count towards a degree if you wanted to do that degree, so we, we call it stackability, but it's really a way to take this thing that is a degree and break it into smaller pieces. One of those pieces is a move and then let people buy the right size education at the right time and have it count towards whatever larger credential they might want.
Speaker 2:17:37So, so our, our lineup now, it started with moocs. We have degrees. That's kind of the bookend. Specializations are a set of moocs that gives you a certificate and we just announced master tracks certificates, which are degree modules. So if you don't want to get the full Mba from University of Illinois, you can buy just the digital marketing mastery track. It is the learning experience that comes from the degree. It's the same professors, same grade, same projects, and it counts as credit towards your Mba. And so breaking up these degrees into degree modules and offering those as magic tracks. I think is another type of learning product that's going to meet a lot of people's needs.
Speaker 1:18:16That struck me about degrees was the average age of individuals that are at University of Illinois that the NBA online advantageous 37 versus in person is 27, which is really. I mean it's dramatic. It's a, it's a, it's a, it's sort of shows what the opportunity is that these degrees are opening up three people.
Speaker 2:18:38It's, it's, it's incredible. We have, um, I mean, I think University of Illinois just, it's been, it's been one of our most successful programs. The MBA program on campus. There are 60 to 100 students per class, so let's just say a couple of hundred students on campus and the MBA program, we now have 1800 Mba students at University of Illinois and this is, we just had our first graduating class last December. When I say we, I mean it's really the University of Illinois graduating class supported by Coursera of course. Um, and it's been growing very rapidly obviously. So we do see that the, we do see that the learner is typically an older learner. They're often from outside the United States. There were early questions and I think there's still some concerns as to whether or not lower cost online degrees from top universities will cannibalize the on campus experience. We're not seeing that. What we're seeing is that some people want to end, can afford an on campus experience.
Speaker 2:19:37A lot of people would love to get an Mba, but they just can't afford to do that and so either they get an Mba online or they don't get one at all. A lot of folks on campus, they want to have an on campus experience. Now I'm sure there's going to be some crossover, but to your point, the people doing the online Mbas is, I believe, a vast market that otherwise would be unapproachable if you didn't have a solution that meets the needs of a working person who is ascending in their career, married with kids and just not willing to quit their job and move their family. There's just think about, and there's a lot of people out there would love an Mba and are not willing to do that
Speaker 1:20:13cannibalizing the business. So it's interesting, when a moocs first launched eight back in 2012, all of the media was talking about how these were extremely disruptive, how higher education was going to look totally different in 10 years. There was only going to be 50 institutions left in the whole world that we're going to be delivering all of the education and clearly that hasn't happened, but you know, what you're talking about is very disruptive, you know, uh, University of Pennsylvania degree at $20,000 as opposed to $75,000 and the opportunity cost of leaving your job. I mean, that is sort of like classically disruptive. So how do you think about that and how do you see or how would you like to see these degrees is changing the education landscape?
Speaker 2:21:00So we don't know. I don't know what the future of education can look like exactly, but if you look at where things are trending and you think kind of first principles about the forces of nature, kind of what people want, where the world's moving. To me, it is undeniably true that moocs are going to be the backbone of higher education. Will they, will they be the only business model? No. On a standalone basis where they change everything? No, but I believe that almost every single degree is going to move online. Even degrees that don't move online are going to be built on books. When I say Moocs, that could be spock's, you know, that whether they're private or open, but this idea that, that courses are developed in a structure that fundamentally is digital is delivered digitally, like a digital flip classroom. The students learn digitally and then they come in front of the professor and they have discussions interactively, whether that's online or in campus, but the backbone of all college courses I think is going to be a combination of digital education with experiential learning in a collaborative environment.
Speaker 2:22:01It's going to be way better on digital. So yeah, so moocs are going to be huge. I also think with respect to online degrees, that the ability to acquire degree students, uh, today, most um, uh, opm online program managers, they spend over $10,000 to acquire a single degree student. Our current cost of acquisition is a very, very, very small fraction of that. And the reason is because the moocs are a gateway to online degrees. It's like a freemium model. People come from, they take a taste, they meet a professor, they learn a new topic, and then they said, you know, I'd like to actually learn more about this, but you, you draw them in by offering value, not by hard selling them. And once they learn a little bit about this and they realized this might serve my career, I want a higher value credential, they can buy that credential, but it fundamentally changes the economics of higher education because you could bring people in at very low cost and not everybody's going to get a degree, but the ability to have for some of them to say, I want to go the next step and get a degree is huge.
Speaker 2:23:06So I think moocs will end up being as transformative as people thought, just maybe not in the way that people thought.
Speaker 1:23:13Yeah. It's interesting that the conversation around disruption in some ways I think it sort of misses the point because the reality is the demand for education, both credentialed education and non credentialed education is just accelerating at at this incredible pace as, as, as there's all these new technologies that people need to stay up to speed on and be able to leverage and utilize. And so disruption sort of misses actually the, the sort of bigger trend that's going on which is the massive global need for quality advanced education. Whether it's credentialed or not.
Speaker 2:23:47I, I agree. And I, I think when the.com bust happened and a lot of people said, oh, the Internet, that was a bunch of hype. Look what happened to the Nasdaq. If you just step back and say, well hang on a second. Granted, you know, pets.com and there are a lot of companies web band a little bit before their time or maybe it was just a stupid idea, but you gotta say to yourself, no, fundamentally do you really think that the Internet's not going to change everything? Okay, you made a bunch of big bets. Some of those turned out to be wrong in the market. It would correct it and in 2000, but look at the smp five. Look at the 10 biggest companies in the world today. It's all because of the Internet, so that bet that people wrote off, oh, it was a fad.
Speaker 2:24:27The Internet was overhyped eyeballs, young people, which is fine, but sometimes you got to just step back to your points. They know, look at the bigger world and ask yourself, is this going to change and forget about disrupted. I agree. It's like who cares if it disrupts anything? The question is, does it serve needs in a way that weren't served before? I've, of course the Internet was going to change things. Of course ai is going to change things. Of course online education is going to fundamentally change things. We don't know exactly how, but there's a lot of markings that suggest this is going to be a very big deal and it's, and it's happening right now.
Speaker 1:25:00So. Interesting. Uh, so you mentioned the cooperation between governments and uh, and company is, can you talk about that side of the equations that you have? Universities, you have students and you have employers that you didn't as are the three parts of our strategic framework. Employers are a constituency that in higher education as often an afterthought. It as part of your vision that's really baked in, in its big throughout it. So can you talk a little bit about how you see employers as fitting into this?
Speaker 2:25:35I've obviously participated in higher ed and my wife has been a professor at Stanford, ucsfs. She has a phd, all that stuff. So I'm familiar with higher Ed. Obviously financial engines was founded by two Stanford professors and Coursera was founded by two Stanford professors kind of coincidentally. Um, but I, but I don't come from the space. And, and before I joined I was just thinking about it and you know, I've been traveling around the world and thinking about it and, and I, I, I thought that was, by the way, it's different k through 12 and Steven Different Undergrad, but at least with respect to kind of adult learning at the master's degree level and people who are in the workforce, why would you go back to school? Why do you want to keep learning? Well, certainly learning can be enjoyable and certain topics for lots of people.
Speaker 2:26:20Um, but for a lot of people it's what do I get out of this? And I remember when you and I were in Paris and we were going to one of our events and our largest customer, Axa, we, we're going to a lunch with axa and we were chatting about these kinds of things. And you said, Jeff, I used to teach at teach for America and you said we had a saying at teach for America, which is don't expect a to learn until they say two things. I want to. And I can. And that really stuck with me because I think a lot of what course or had been doing is thinking about the Icann part, kind of assuming everybody wants to and saying like, let's make the content available and they will come. And I thought, you know, that's, that's, that's definitely a fundamental part of the solution.
Speaker 2:27:03But what about the, I want to part what's in it for the learner? And before I came to courser I just kind of. I said, look, people aren't going to see a lot of people aren't going to do this unless there's something in it for them. And that's something in it could be entertainment, but much more likely it's some kind of economic opportunity. And so fundamentally at the Higher Ed level, I think that the employer actually at the undergrad level a little different. They're a land grant universities. We're kind of trying to educate citizens of the country at the elementary school level. It's of course much more about social sort of social values, collaboration, community and treating other people well. Being loved by adults and fitting into society. But at the adult level, a lot of it really is what's gonna get me more economic opportunity and help me enjoy my job, be able to do my job better.
Speaker 2:27:55So, so for me in the employer is kind of the arbiter of what kind of adult learning is going to be valuable for the most for the majority of adult learners. And so we kind of start with the employer because because they're going to reward the credentials, they're the ones who are going to need the competencies, they'll be the ones to judge whether someone out of a certain program can do a job well and it has the skills to do that job well. And so employers are, are a huge part of our equation and largely give us signals about what kind of learning is going to be valuable and ultimately be worth the time of that adult learner who says, why should I bother coming to Coursera?
Speaker 1:28:29I remember that conversation while in Paris traveled as something amazing in terms of, instead of opening up your mind to new conversations. Yeah. Possibilities. Um, so switching gears a little bit, uh, and talking about you as an entrepreneur and ceo and you are about a year and a half into this new role, um, what advice would you give other ceos making a similar trends?
Speaker 2:28:55Don't do it for the fame or glory. Don't do it for the richest. Um, I, you're talking everyone's experience is different. And my experience as a CEO started when I was 27. I had two babies. I'm a and had just graduated and I really thought it was an amazing opportunity to work with Bill Sharpe. I really admire him as, as an, as an intellect, but also as a person. I mean he is an incredibly, uh, generous human being. I'm massively brilliant and also humble and curious and warm and kind. And so just the chance to work with someone like that was amazing. When I got funding, uh, I was young, I had no experience to have the investor sat down with me. I don't know, Julie, if you're going to do this to your portfolio company Ceos, and they said, Jeff, congratulations. We're going to fund your company and you as a CEO, I don't know if they, if they actually coordinated this or not, but it, but they both said it.
Speaker 2:29:54Two different dinners that were both one on one. You're probably going to get fired in the first six months, but like, look, that's just what happens. You have no experience. Give it a shot. If it doesn't work out, hey, at least you tried, but. But let's not. Let's not make any joke about this. Like you're probably gonna get fired and you know what? I really appreciate it. My, my first job as an entrepreneur, I felt just so privileged to have the chance and I just felt a, I believe in the mission be I didn't really deserve this opportunity and so I'm going to try to earn it. I'm going to try to earn it every single day and what this company, this was financial lines. I feel the exact same way about Coursera is this company needs to be successful. It deserves to be successful and I'll do my.
Speaker 2:30:44I'll do my best job to earn the right to be the leader of this company and if I'm not the right person, I should be gone and, and the board. And I'm very clear with the board about that too. So I feel like my job is to do the best job I can to help the company, have the right strategy, have the right team, and ultimately deliver on the mission of the founders. Um, there's a book by Patrick Lencioni. He was one of his first books. The table group is it, the guy has a lot of really, really clear eyed thinking about how to run a business and he has a book called the five temptations of a CEO and um, and I, it's fuzzy, but I read it early on and I was like, yeah, this guy's totally right. He said, the number one thing is people put status over results.
Speaker 2:31:32You know, ceos start thinking it's about them. They start liking being the boss. They start liking doing interviews and podcasts and they forget that it's a privilege to be in this job, to have the chance to lead a team, to build a company. And um, and, and I, I approach it with a lot of humility and I recognize after 18 years of financial engines and it turned out really, really well, but there was nothing that guaranteed that. And honestly, there's nothing that said I deserved that the team deserved it. Really smart people work really, really hard and passionately with all their conviction and belief and totally fail. It happens all the time. You don't hear about that so often. Um, but he, but to me it is a combination of trying really hard not giving up the being openminded, getting a lot of feedback and fundamentally feeling like it is. It is a privilege to have the job of entrepreneur and it's your sort of your duty to do the best you can and that it doesn't mean it's gonna work out. And, um, anyway, I, I feel really, really fortunate and I feel like a lot of people kind of mistake being an entrepreneur is like some sort of a celebrity thing and that's not what it's about for me at all.
Speaker 1:32:44I, I, you know, I, I think I really saw that in working with you during the period that I was hearing overlaps and particularly around actually product market fit where you sort of refuse to be complacent even when there is a businesses is the optics are good, where there's revenue coming in and you have customers is really big brands that you're assigning that this sort of refusal to just take it at that and refusal to sort of ride on any sort of perception of success as opposed to really making sure that, uh, that, that there is a strong foundation for our success has been one of the things that really struck me. I'm working under you.
Speaker 2:33:31Yeah. Well thank you. I'm glad. And I'm and I people talk about systems thinking and I and I, I happened to be one of those who say that that most good entrepreneurs or ceos, uh, and also executive teams, they do have a really strong bias towards systems thinking. And you say, well, what does that have do with what I just said? When, when I think about product market fit at a product level, you want to try to figure out at some people call it conscious competence. Do you know why it's working? So it's not just saying it's working. Yeah, it looks like it's working, but why is it working so that we know that there's a predictability to it, that there's a resilience to it, that the defensibility to it and when the world changes, we might understand how our system needs to change product managers, they're kind of product is the offering to customers.
Speaker 2:34:21I think to some degree ceos, my product is kind of this business model and so I'm not going to be satisfied until I kind of have, I don't know, business model fit, whatever you'd call it, but it's about looking at something as a system and not being satisfied that it's working well until not only do you see signals that look like it's working well, but you understand underneath it, why is it working well? What is the system underneath that's performing well or was not performing well? What is it about the system is not working quite right. Where are your bottlenecks? Where do you have a mismatch? I think that a lot of what product market fit is, is, is understanding not only the, the, the signals and and sort of evidence that says it's working, but having that coincide and reinforce an underlying system level map of what's really happening underneath and until I see two of those things together, I don't really buy it.
Speaker 2:35:10Um, I, I will say that, uh, as, as you know, we, we haven't, we haven't totally found it yet. We're finding our way though, but at, at, at financial engines there was a moment, and I remember the moment, there was literally a moment in time where the company thought I was crazy because things weren't really going well at the company and I stood up in an all hands and I said this, this company is going to be an absolute home run. This was after eight years of failed strategies and a lot of pain and suffering and in a markdown of our price from $14 a share at a $1 a share. I mean, and they're looking at like, are you just delusional? But, but the reason I said that is because we had gone out, we talked to customers, we had this idea that they wanted a turnkey service.
Speaker 2:35:54We had this idea of we had a prototype of how it would work. We weren't yet sure if we could acquire customers that low cost. We mocked up a, a, a, um, a communication from the company with JC Penney was the company that we did this with. It came from JC Penney was on their letters. It was signed by them, the product didn't exist yet, but we. We pretended as if it did. It was a painted door test on direct mail and we knew that if we got more than 10 percent return mail that this was going to be a very, very successful business. Well, the, this was the olden days. The mail would come in from the post office in these crates. It was all their business reply envelopes and we would just count these things and within a week the mail started coming back and the crates were getting bigger and bigger.
Speaker 2:36:36We hit like 20 percent. It was twice as big as we could have ever hoped and I'm like, okay, now just build the product. We know what the market wants, we know that they're willing to pay for it. We know that our employers are willing to market it this way. We, we just got to build a thing now. So it was. It was absolutely clear. So it's not that you're always dissatisfied or not believing is that you have a really clear idea of if this is true and it's consistent with my view of how the system works, that I know that we're going to be very successful. Is that anyway, that's how I kind of think about it.
Speaker 1:37:08Uh, so my final question, uh, we are sitting here in five years and what are we talking about and where, what, where is the conversation? What are the things that we're talking about?
Speaker 2:37:22I'd, I'd like to think that we are talking about a combination of how did this work so brilliantly mean. I really, I, I really hope that what we're talking about is nobody expected this. This is just beyond anybody's imagination and that will be a reflective of. And here's what, here's what I think would, would create that, is that with this platform and these stakeholders, some experiments are going to turn out to be massive, massive game changers. And I don't know exactly what those are going to be. It might be online degrees. That might be the way that moocs a connect. It might be these collaborations. It might be the way that governments get involved in facilitating businesses, transforming talent and creating hiring partnerships from learners around the world who want jobs and companies who need people with those skills. Not sure exactly, but something really hits big and it has to do with the platform because the thing about the platform is it allows experiments to be run that we're not even necessarily aware of.
Speaker 2:38:24And so we're doing some and facilitating some, but, uh, I think there's gonna be some really big breakthroughs and it'll be fun to marvel at how it happened. And then I think there'll be a lot of the conversation to this as, okay, so now do you do with this now? Now that we're here and we've got a 100 million learners and we've got these universities with that thousands of courses now we have hundreds of degrees and we have tens of thousands of businesses and it's just the way people get educated, you know, now what do we do? And then I think what it really becomes this kind of filling in the gaps, having, having better learning experiences and credentials that are right priced for all along the channel, probably more regionally specific strategies that deal with the particular languages, that particular business, the particular cultural customs, the way people get educated in different regions. So I think sort of a regional specialization of the way that this happens on a global platform will probably be a big part of it. And I, I can't help but think that for the indefinite future, this, this relationship between learning things and economic opportunity and advancing that on a global basis will remain kind of the big story.
Speaker 1:39:34That's fantastic. Thank you so much for joining me today and doing our first podcast. Um, this has really been a wonderful conversation and it was, it was wonderful to catch up with him.
Speaker 2:39:43Thanks. Thank you. Joy has been a pleasure.