When Lynda.com burst onto the scene in early 2013 with a massive maiden financing round of $103 million, the Carpinteria-based video education startup was a complete unknown to most in the industry. And yet, the 17-year-old company had just come off a year in which it generated $100 million in revenue, up 43 percent on the year prior, and was highly profitable. Who says education can’t be lucrative?
In the time since, Lynda has made two significant acquisitions and expanded internationally, all while continuing a similar growth rate. But today, the company announced a new hire that could put the already hot business into overdrive: the addition of Andrew Wait as its first CRO.
Wait was previously President of education giant EF Englishtown and before that was SVP and GM of Ancestry.com, shepherding the company from $120 million to $400 million in revenue, and ultimately to a $575 million IPO (and later a $1.6 billion sale). In his new role at Lynda, he is charged with driving the “overall strategic direction, including accelerating subscriber growth, expanding into new markets, customer experience, marketing, and enterprise sales,” according to a company statement on the hire. Wait will report to Lynda CEO Eric Robison.
“A year ago, Lynda was this family-owned company, doing some interesting things and experiencing organic growth. The company was the darling of its space, certainly strong competence in content, and had a beloved brand. The investment certainly provided a high level of validation,” Wait says in an interview with Pando. “But despite the fact that it was growing nicely, the company had also started to hit the mid-stage blues – it was reminiscent of Ancestry. It was full of potential, but operating on infrastructure designed to get it to market – to support $30 million in revenue, not $100 million. The company definitely needed another generation of management and infrastructure ”
Lynda’s model is to sell its customers on monthly subscriptions for to access its video education contend around subjects like software, business, IT, and design. Subscribers pay $25 per month for all-you-can-eat access, with enterprise pricing available to larger buyers. The company’s list of customers includes household names like Disney, Apple, Wal Mart, Qualcomm, and seven of the eight Ivy Leagues (Brown being the odd man out).
Despite being just three weeks into his new role, Wait has already outlined a plan to morph the video darling into the lean, mean, late-stage fighting machine that its new investors are looking for. The first step will be to open the company’s first San Francisco office, allowing it to tap the region’s more experienced labor pool around engineering, design, marketing, and enterprise sales. The company’s core functions of content creation, long-tail sales, and customer support will remain in Carpinteria, the latter with support from additional domestic and international outpost offices.
It’s a similar playbook to what Wait executed at Ancestry.com, where he launched that company’s West Coast presence and eventually oversaw the bulk of its operations from an outpost in San Francisco.
“We have an extraordinary business doing things in a simple, basic kind of way. Everywhere you look there’s an opportunity to do things better by building out a bigger, more experienced team,” Wait says. “But the good news is we have everything we needs to do the job – a great balance sheet, supportive investors, and that beloved brand.”
It’s surely the kind of tough love leadership that this homegrown success needs if the company wants to full its full potential. But you could see how this approach could ruffle a few feathers back at HQ among the team that built the company to this impressive state. So much for “dance with the girl who brung ya.” Balancing this desire for progress with an appreciation of the company’s existing culture will likely be key to Wait’s long-term success.
After getting Lynda’s domestic team built out, Wait plans to focus significant energy on tackling international markets. Lynda acquired European online learning company, video2brain in early 2013 and is already developing French and German content as a result. The company’s has its sights set on Japan and other parts of Asia next, Wait says.
The final growth lever the new CRO has identified has been inorganic, aka acquisitions. In addition to video2brain, Lynda recently snapped up a collection of IT course videos from Interface Technical Training, and Wait sees an opportunity to accelerate this strategy. It certainly has the cash to do so.
“The Velocity of acquisitions haven’t met our expectations thus far, but valuations are crazy and every deal needs to make sense,” Wait says. “We’re positioning the company and developing the team to deliver a next level of growth. M&A is certainly one way that we will look to accelerate things.”
Lynda’s backers include Spectrum Equity, Meritech Capital Partners, and Accel Partners*. The recent funding round took four years of wooing to close, with founder Lynda Weinman describing it as, “an agonizing decision.” Wait is familiar with each of the investors, making him a natural choice for the newly created CRO role. Spectrum acquired Ancestry.com in 2012 and before that Meritech invested in the geneology business. Wait’s relationship with the Accel partners is more casual, but nevertheless contributed to his appointment, he acknowledges.
Lynda has maintained a relatively identical growth rate since taking on the outside investment nearly 20 months ago, according to Wait. Using by the 2011 to 2012 rate as a guide, the company should be on pace to top $200 million in revenue this year and could be knocking on $300 million in 2015. Perhaps more shocking than that stable, yet substantial growth rate, is the fact that Lynda has managed to achieve a Net Promoter Score (NPS) of “just under 70,” according to Wait, an impressive figure than indicates that its customers are both satisfied and eager to share that fact with others.
Delivering high-growth inside an already large operation is always a difficult proposition. But it can be a particularly challenging task when that organization has decades of history operating under its own supervision. Adding in outside investors has dramatically changed the playbook for Lynda, and its small-town team. One risk of Wait’s addition is that this outsider with an emphasis on driving growth at all costs, he could quite easily disrupt the magic that has made Lynda successful to this point.
It will require a delicate balancing act of instituting change, while also preserving that which makes Lynda unique. After all, it’s one of the few online education companies to come anywhere near this kind of scale. But with IPO rumors swirling since the moment Lynda announced its mega-round, there’s no doubt these are the kinds of maturations the company must navigate.
“The source of my excitement is how addressable and solvable all of the company’s challenges are,” Wait says. “There’s nothing to tell me this can’t become a giant business. The addressable market is 4X larger in the US than what I saw at Ancestry. And the quality of content is there, but we still have the ability to encase in better and better technology – collaboration tools, a gallery, sharing functionality. It’s all in process, it’s all happening.”
*Disclosure: Accel Partners is an investor in Pando.
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