John Campbell, CEO of Cambium Learning Group, believes that the American education system is fundamentally flawed. Our students and teachers are not respected, taken care of, or supported, and this leads to major gaps in performance. Many students are falling behind and dropping out of school before receiving a high school diploma.
Ultimately, though, John believes in the potential of all students and teachers, so he wants to solve the issue of underperformance in the US education system. He and the team at Cambium Learning Group provide a comprehensive suite of products and services to help teachers get students back on track. Their products run the gamut, from literacy solutions to STEM offerings—they’ve even developed the leading curriculum for K–12 homeschool teachers.
And the team is seeing great success. In the past two years, John has led Cambium from $200 million to $750 million in revenues with no signs of slowing down.
So how does the Cambium team continue to create successful offerings? By finding the root cause of the issue students and teachers are facing and then developing a solution.
Take, for example, the origin story of ExploreLearning’s Reflex product.
Completing algebra is a requirement in US high schools, yet many students struggle greatly with advanced mathematics. At first glance, it might seem to an organization that developing an algebra-focused product is the way to help these students.
The Cambium team, however, took a closer look at the root cause. They realized that algebra requires an ability to recall math facts quickly. Students need to have simple addition, subtraction, multiplication, and division memorized in order to conquer algebra.
Unfortunately, many students—even at the high school level—are lacking this foundational knowledge. When students are struggling to figure out seven times six, they have no hope of being able to solve for X in a basic algebraic equation.
So John and the Cambium team didn’t develop an algebra-focused product. Instead, they created an online game to drill students on their math facts. As students gained confidence in these foundational skills, their ability to tackle algebra grew.
This is just one example of the dozens of offerings from the Cambium Learning Group’s family of companies. With its focus on addressing fundamental issues and developing solutions that are simple to use, feel fun, and work immediately, the organization is achieving its goal of bettering the US education system for students and teachers alike.
Rob Ristagno: Today’s guest believes the American education system is broken, but he and his team are on a mission to fix it for both students and teachers. With that goal in mind, this CEO has been hard at work, and it’s paid off with the organization tripling revenues in just two years. Learn the secret sauce behind this impressive growth in today’s episode of the CEO Campfire Chat.
Announcer: This is the CEO Campfire Chat with your host, Rob Ristagno. Taped in front of a live studio audience, join us to hear successful growth stories from middle-market companies, just like yours. Sponsored by the Sterling Woods Group.
Rob Ristagno: Welcome to the CEO Campfire Chat recorded live in front of a studio audience of senior executives. I’m your host, Rob Ristagno, and I have the privilege of introducing you to John Campbell, the CEO of Cambium Learning, which is an education technology company focused on the K to 12 market, and it’s backed by Veritas Capital. Prior to Cambium, John was a senior executive for Voyager Expanded Learning, ProQuest, and McGraw-Hill. Welcome, John.
John Campbell: Hello. Thanks for having me.
Rob Ristagno: Yeah, great to have you here. I just want to make sure I’m reading this right, you’ve tripled revenues from about $200 million to $750 million in just two years. Is that right?
John Campbell: That’s correct.
Rob Ristagno: That is amazing. We’re going to unpack that over the next half hour. But before we dive in, high level, what’s one piece of your secret sauce?
John Campbell: Rob, I’d love to give you one secret answer so we could all do that every year, but you might want to pick on any of these four reasons. There’s been major trends in our business. We serve K-12 teachers and students, so there’s two big trends that are going on. One is this shift from print to digital. That’s happening everywhere. You see it with Netflix and many other industries, but that shift from print to digital. And then, secondly, the shift from core to supplemental. Those two shifts are huge and impact Cambium in a positive way. The second thing is COVID. We’ll have to talk about that a little bit. How COVID, from our perspective, all it really did is take those two trends that help us, and move us four years into the future. We’re seeing the bookings that we would see four years from now and that certainly contributed a lot to our growth.
John Campbell: The third thing is, we did some big acquisitions in 2020. When you do big acquisitions, that’s going to help your top line, no question about it. I can share a little bit about those two rather large acquisitions. And then, finally, I think we’re a little different in how we serve teachers and students. I think we view American education as having a problem, and the problem is significant. We can talk about that. And the reality is, we think that teachers and students are not supported. They’re not respected. They’re not taken care of. And it needs to be addressed, and we address it, really, through three things: simplicity, certainty, and now.
John Campbell: I can talk a little bit about what those things mean, but, really, it’s those four things that have caused us to have this growth in recent years.
Rob Ristagno: You’re an overachiever. We asked for one, you gave us four right off the bat, so we’re already off to a good start here. Let’s take these one at a time. But before we dive in, actually, for those who aren’t familiar with Cambium Learning, could you just give us a quick overview about your mission, your business model, who you serve?
John Campbell: Yeah. We serve K-12, in other words, grades K-12, all the students. And we try to help teachers and students feel supported. I just want to explain that a little bit because it sounds odd. We believe that there’s a problem in education in America, and we believe that problem is that teachers aren’t respected. All you have to do is look at their salary. Look at how they’re compensated. Look at how school boards treat them. Look how parents treat them. We believe that teachers aren’t respected. They aren’t valued. What happens? You start to have teacher shortages. You start to have teachers that are ill-equipped or ill-prepared. You start to have teachers that maybe aren’t even appropriate for that particular role. They might not have the training, the background, et cetera.
John Campbell: It’s a serious problem, and it’s impacting students. If you look at our students in America, they perform worse than students in other countries, even though we spend more. Clearly, we have a problem. And, I think, our company, as a goal, wants to serve those teachers and students; have them feel valued, have them feel supported, and put them in a position to be more successful. We have five separate business units supported by a shared services group, so we’re a little bit different than the way other companies are that bring everybody together, make it all one company. We’re five separate business units and they all have their own development, their own marketing, their own sales, their own customer support, their own value proposition.
John Campbell: We then have a shared services layer that does things that the customer doesn’t care about. Things like accounting, legal, IT, HR–things that don’t directly impact the customer–so that those business units can focus entirely on those customers and serving them. I would say, we’re in K-12. We have two unique things. We’re five business units, not one. And, secondly, we’re different in the how with the simple, the certain, and the now.
Rob Ristagno: All right. Let’s dig a little deeper into the problems in the education market that you’re facing, because that was one of your four levers, one of your four elements, ingredients, to your secret sauce here. Say a little bit more at a… There’s a lot of frustration out there. I think teachers aren’t treated the right way. Students aren’t treated the right way. Tell us a little bit more about what’s under that problem, and how Cambium Learning goes about solving it.
John Campbell: Yeah. Just really quickly, at a very high level, we see that teachers aren’t treated well. They aren’t compensated well. And so, when you start to do that, and you have school boards blaming them, and teachers getting blamed by parents, and higher and higher expectations. What we found is there’s lots of surveys that talk about how unsuccessful teachers feel. That was before COVID, so imagine the burdens they have now with COVID. And so, because of that, you’re getting teachers that are not well prepared. You’re getting situations where we have teacher shortages. And a lot of times these teacher shortages, and these ill-prepared teachers, quite honestly, impact places that are at risk already, places that are socioeconomically disadvantaged.
John Campbell: You get more and more problems, and it almost is like a flywheel and gets worse and worse. It gets more complex and more difficult to resolve.
Rob Ristagno: Vicious circle there, yeah.
John Campbell: Yeah, a vicious circle. The way we look at it is, we have to change that, and we do that by focusing on solutions that have just three elements: simplicity, certainty, and now. And what I mean by that is, simple: who cares about a simple solution? Well, what’s important about a simple solution is not just that you can use it, but it’s so simple that you want to use it. It’s so easy to use that you want to use it. That it’s a better way to do something. It feels more comfortable. I feel more confident doing it.
Rob Ristagno: What’s an example of one of your tools that’s extremely simple to use?
John Campbell: For example, Learning A-Z allows kids access to thousands and thousands of books. And the student just gets on themselves and reads the book–not difficult for the student, not difficult for the parent, not difficult for the teacher. That’s just one example. We have the same kind of thing in math fact fluency. Every student needs that math fact fluency or they cannot be successful in math. That is addition, subtraction, multiplication, division. Well, we have games where they play games to learn math fact fluency. What kid doesn’t want to play a game?
Rob Ristagno: Right.
John Campbell: We’ve had kids go from crying about math, to saying, “I can’t wait to do those games,” because they don’t realize what they’re doing is becoming more proficient and more successful. The second thing I have to bring up is this certainty concept. When you’re in this COVID world, and you’re in all this chaos, and you know the teacher’s not well prepared, and the students aren’t performing well, it creates this chaos, and this uncertainty, and this fear. How do I deal with COVID? How do I do remote teaching? The reality is, what you want is certainty. You want to be sure that you’re using a solution that’s going to be effective for those kids. In other words, a solution that just plain works.
Rob Ristagno: Yeah.
John Campbell: And then, finally, this idea of… A lot of times in our industry, we talk about, “We’re going to help the kid nine months from now, 12 months from now, two years from now.” Well, that’s not the way we look at it. We look at it as, why don’t we help them today? Why don’t we make success today? Why don’t we make a little bit of progress today? We see a successful future as just a series of successful todays. Just to get back to how we’re different, I think our structure is different with five different business units that we didn’t put all together and try to make one value proposition. And then, two, with this idea of how we serve these teachers, and respect them, and make them feel valued by focusing on simple, and certain, and now.
Rob Ristagno: Yeah. Picking up a little bit on the now point. I mean, one thing, it sounds critical to be a company that can execute on the now promise, or the now principle, is it’s entrepreneurial spirit, acting like a startup. You’ve just experienced tremendous growth. You’re probably knocking on the door of a billion dollar company here. How do you keep your team engaged in that startup mode, so that it’s not a six month, back-and-forth, meetings on top of meetings to decide what to do next–that entrepreneurial, “do it now” spirit?
John Campbell: This goes back to how important I think it is to have the five business units. A lot of companies, as you get bigger, want to put everything together, and merge it, and have it all be one thing. You might say to yourself, “I could save money if I had one sales force instead of five sales forces. I could save money if I had one marketing group instead of five marketing groups. I could save money if I had one development team instead of five development teams. I could save money if I had one customer service instead of five customer service.” I looked at it the opposite way. I’m not interested in saving money. I’m interested in having more impact.
John Campbell: If your focus is having more impact, you’re not focused on saving a dime here and a dime there, you’re focused on how you can have a bigger impact in society. If you have a bigger impact in society, you know what’s going to happen? You’re going to have a great business.
Rob Ristagno: Yeah. It’s investing and for the long run. Great. Let’s dive in now a little bit. You mentioned a couple of trends, some tailwinds, in your favor: print to digital, and core to supplemental. Let’s start with print to digital. I think that’s broader than just the education space, but let’s start, specifically, within education. What are you seeing and how have you been able to be a trailblazer in this space?
John Campbell: This is a very long phenomenon. It’s happening everywhere. I always think of Netflix. At one time, that was sending CD-ROMs to everybody.
Rob Ristagno: Yeah.
John Campbell: That’s not what they do now. At one time, people bought DVDs. At one time, people only bought physical books. And so, in education, it’s no different. Not only does it change the delivery model, but it also changes your entire business, because it changes to a subscription business. In education, there’s a lot of value in moving from print to digital for a number of reasons. One is, the reality is, you have a diverse set of kids. You have this classroom of 25 or 30 kids and they’re all very different. Some are gifted and performing extremely well. Some are struggling and can’t even keep up with the lesson. Some are in the middle. So to be able to have a digital solution that could be adaptive, that could go at different speeds, that could bring in different content, that could enhance your learning, that could spend more time on your learning, could learn you in a different way, to give you different instruction in areas that you’re struggling, so you might understand that concept better.
John Campbell: There’s so many advantages to moving from print to digital in education. So we’ve been doing it for, really, a very long time. It’s not an easy transition, because it doesn’t change just your piece of item here, your delivery, but it changes your whole company. It changes your development. It changes your marketing. It changes your sales. It changes your customer service. It changes, really, everything about your company. This move from print to digital, while it helps some companies, those that have moved to digital, it hurts those that haven’t moved. In our case, where we’re 95% digital, it’s helping our company and, therefore, having us be more successful. Because districts are realizing their problem, and their problem is they have an insufficient supply of teachers that are strong. They have students that are struggling, at least, compared to internationally. And they’re realizing that and say, “How can I have my kids not fail?”
John Campbell: As a district superintendent, they care about their kids. They don’t want parents coming to them and saying, “Why is our district stinky?” How can I have my kids be successful? The number one thing that you can make a difference for students is the teacher.
Rob Ristagno: Got you.
John Campbell: When you have a shortage of teachers, what can you do to help that student be successful? Well, one thing you can do, and it’s proven to work, is give them a tutor. If we had, say, funds for 50 million tutors, that would work great, but that doesn’t scale very well. What can we do, at scale, to give the very best content, the very best instruction to 13,500 districts and 50 million kids? The answer is, you have to go digital. That’s the only way you can scale that kind of education to 50 million kids in the United States.
Rob Ristagno: You mentioned that a lot of people have not gotten the memo, so to speak. And they’re either scared, or nervous, or they don’t know what to do. What advice would you give to someone who’s running a business in education or elsewhere?
John Campbell: It’s hard if you had a lot of success. I think success is a very poor teacher, because if you’ve had a lot of success, and you want to hold onto that success, and you will tend to do the same things you’ve always done, and try to replicate that year, over year, over year. The reality is, your environment is changing. The first suggestion I would give to somebody who is starting to realize they have to make the change is to bring in some help of people who have done it before, because a lot people have done it, at this point. It’s not new information that so many industries have to change to a digital architecture. They have to change also to a subscription model, as opposed to an episodic model.
John Campbell: I think the first thing I would do is bring in people that have gone through it before, whether that’s in your industry or in another industry. The second thing I would say is, it’s helpful if you start realizing it’s not the end product that’s changing, it’s your business, because your development is going to change. Just think about in education, it used to be that you would create a textbook, and then you wouldn’t create another one for five years. It was a very episodic development system. Now, we change our solutions every month. Every month they’re changing. Every month they’re a living organism, if you will.
John Campbell: As you can see, when you change your business model, it’s not the delivery item, it’s the whole business. You change development. You change marketing. You change sales. You change customer service. You change the whole way you do things. In sales, it used to be that you would sell to a customer, and that would be great. And then you’d come back to them in five years. Well now, the focus is the renewal. When does that renewal start? Well, it starts as soon as you sold to them. It’s a very different model in terms of sales structure. It’s a very different model in everything you do. When you go into it, and start thinking, “I have something that I think could move to a digital solution or it could move to a subscription solution,” you have to realize that’s going to be your whole business is going to change. It’s not just that end delivery element that’s changing, it’s your whole business.
Rob Ristagno: Not just the product, it’s sales and marketing. It’s operations. It’s customer experience. It’s end to end. Other questions from the audience, while we’re on this point?
Kate: Yeah. I was just going to jump in. I’m really curious to get your take, John. I work in ed tech, as well, and I think there’s an interesting discussion around tech as to how technology can be used, should be used, with regard to teaching. And I think some businesses build tech that replaces the teaching, some build tech that enhances the teaching, some build tech that delivers the teaching, and my company is on the delivery end. We’re a K-12 teletherapy solution, so we’re delivering the special education therapy through technology. I’m curious where you see the universe of Cambium products along the spectrum?
John Campbell: Yeah. Kate, I’m go glad you brought that up, because I wouldn’t want to miss that point. To me, and to Cambium, one of our core values… And the reason I mention the problem being teachers, it’s not the fault of teachers, it’s our support of teachers. My view is, teachers are critically important, and are key, and are valuable. And our goal is to support them and facilitate them, so that they can be successful. It is never to replace them. I don’t view us as ever being a pill that you take for your problem. You take that pill, and you’re all better.
John Campbell: In fact, we’ve had districts that we’ve gone to that said, “Our teachers stink, and what we’d like to do is go around the teacher.” What I’ve explained to them is, “Well, that’s not us, first of all. That’s not what we do. But, instead, wouldn’t you be better off if you built capacity in your district, and were enabling those teachers to be great teachers, so they can have the impact on kids that we all want them to have?”
John Campbell: Very clearly, one of our core values, if you will, and this impacts, quite honestly, the acquisition we do. One of our core values is you have to believe that the teacher is critical to the education process, and the goal of your solution is to have that teacher be more successful.
Kate: I like that: How can what I build help that teacher?
Jack: John, do you develop all of your material, or do you get it from other people, or sources, as well? Is there any part that you don’t develop?
John Campbell: We develop it all ourselves. Having said that, we do use contractors. There are times when we use contractors to move on a project quicker than we could with the employee base that we have. But, by and large, we have created all of our content, and own all of our content, and all those things. That’s a number of things. History is part of it, but I also think part of it, quite honestly, is margins. I mean, owning it is a much better business model than paying 10, 15% royalty. There’s a lot of pieces into that, but to answer your question, Jack. Clearly, we develop it all, and we own it all.
Jack: Thank you.
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John: John, maybe to build on what Kate and Jack have asked, when you think about product development, is it a product, per se, or do you think about the experience of a teacher, student, in your interaction? How do you go about thinking through what is, ultimately, going to serve both constituents? Is that an alchemy, or is there a formula that you look at?
John Campbell: I think it’s a tough question, but, generally, we start… I’ll give you just a couple examples. We backup for a minute, and say, “What’s the problem we’re trying to solve?” Now, we believe that our solutions, or products, whatever way you want to phrase it, they’re getting hired to do a job. What is that job that we’re trying to get hired for? How can we be better than anything else that would be hired for that job? I’ll give you a quick example. We, in the past, noticed, through lots of research, that kids are struggling in math. If you look at it, it shows up really clearly in high school. Where, in high school, you have to graduate with an understanding of algebra. It’s a requirement throughout the country. A high percentage of kids, particularly inner city kids, but a high percentage of kids fail.
John Campbell: In fact, they drop out. In fact, many might drop out in ninth grade, or eighth grade, because they know they’re going to have to be able to do algebra, and cannot do it. You could look at that problem and say to yourself, “I got to do an algebra product.” That’s not what we did. We looked at it and said, “Well, why are they scared of algebra? Why are they failing algebra?” If you think back to algebra, I know it’s a long time ago for all us, or, at least, I’ll say myself. If you go back, a lot of times algebra has maybe seven or eight steps. Three times five is 15. Teacher is explaining how to get through that equation. Maybe it’s two equations that equal each other and you got to get the X, whatever.
John Campbell: You’re going down it, and it’s like seven steps. Seven times five. What we found is the kids don’t know their math facts. As the teacher is going down those eight steps, you’re still on seven times five. If you don’t know seven times five like that, the teacher’s now on the eighth step, and you’re like, “I’m on the second step, what now?” You lost it. You have no hope of understanding what that teacher is teaching for the entire 40 minutes.
John: You’re feeling embarrassed. You’re feeling shame. You’re feeling…
John Campbell: Exactly. You have no confidence, John, and you’ve decided, “Well, I can’t be in math.”
John Campbell: I’ve self-selected myself as being incapable in math, because you told me I need to know that like this, and I don’t, and I never will.
John: Right. I’m broken. I’m stupid.
John Campbell: Yeah, you’re stupid. And so, we had tons of kids, sixth, seventh, eighth, ninth grade, crying. Crying because they can’t do math. They go home, their parents can’t help them. They have the teacher yelling at them saying they’re stupid and they don’t try hard. When really all it is, is they never learned their math facts. We’ve developed math fact games. We call it Reflex, and the goal is to teach your math facts, so that you have them like this. Seven times five is 35. Nine times seven is 63. You go like this. If you can’t do that, you can’t do higher level math, and you will fail.
John Campbell: What we found is, that’s helpful for second grade. It’s helpful for third grade. But the reality is, it’s helpful for eighth grade. It’s helpful for ninth grade. It’s helpful for 11th grade. And I know that’s shocking and sad and upsetting, but that’s the reality of American education right now. We made those games. We made that product into games, so that you would start out with addition. You start out with then subtraction, then multiplication, then division, and you learn some things that are really helpful. One plus zero is going to be one. In fact, anything plus zero is going to be that number. You start learning the rules. You learn the rules of the game. You start learning things like nine times any number is going to add up to nine.
John Campbell: You start learning all these tricks. You start learning it really well. You feel comfortable. You’re playing games, and you’re having fun. You’re winning. You’re enjoying it. And pretty soon you’re saying, “I can’t wait to do those games.” Then pretty soon you’re saying, “You know what, I know my math facts.” And so, in 90 days, you can know your math facts, even if you don’t know them right now. We have a very clear reporting system that you can see all the math facts that student knows, all the math facts that the student doesn’t know, and they build, essentially, a mountain of math facts until they know all their math facts. And then they’re competent and able to do higher levels of mathematics.
John Campbell: I just gave that as an example, because we tend to start with the problem. And then we say, “How can we solve that, maybe, finite problem?” That’s really a small amount of what you learn in school, very small, but, boy, foundational. If you don’t know your math facts, you might as well not do math or science. You might as well just not do it. That’s what we found to be so important.
John: It’s empowering once you get over that hurdle. Then you say, “Well, I-“
John Campbell: Yeah, confidence. I mean, the biggest thing is right here, in your heart. It’s not your brain, it’s your heart. You have to feel confident in yourself in order to be able to have any chance of being successful.
Rob Ristagno: What I like about that story there, in that example, is that, while it’s education specific, I think every business should listen to that, because you, basically, went for the root cause. What is the customer’s real pain point, and what is the root cause behind the pain point? A lot of businesses forget to look for the pain point, or if they do look for the pain point, they’re looking at more of the symptoms or the high level above the surface. You went deep.
John Campbell: Yeah. I mean, we could have done an algebra product, right?
Rob Ristagno: Yeah.
John Campbell: But that really wouldn’t have answered the core issue that most students are actually having. It’s not that they’re struggling with doing eight or nine steps. They’re struggling with doing the first step.
Rob Ristagno: Steve, did you have a question?
Steve: Yeah. Who are your actual customers then? Are you selling to the school districts? Who are you guys actually selling to?
John Campbell: Yeah. We have five business units that are different. Three of the business units are similar. Three of the business units sell to school districts and, occasionally, teachers and principals. But we can work top down, bottom up. But, basically, three of the businesses sell to school districts. They can sell to principals. They can sell to teachers. That’s three of the businesses. One of the business is statewide high stakes test. We have the leading company that does the most high stakes test in this country, so they sell to states. And then we have the leader in digital home school, which is Time For Learning, so they sell to parents.
John Campbell: We have five different business units. Three of them sell to districts, primarily, one sells to states, and one sells to parents.
Steve: Great, thank you.
John: Going back to your very interesting comment, and also your response to a couple of the last ones that you operate five businesses and they’re independent. You don’t believe in the idea of looking for efficiencies. But I’m thinking about opportunities, especially for the three that you just mentioned, and also the examples you’ve given of how you look at the problem and then you try to find a way of solving it. Do you look for opportunities that are more synergistic as opposed to efficiency-focused, where you can solve a problem or set of problems by working across those three?
John Campbell: Yeah. There’s a couple things on that. There’s two different aspects to that. One is, we do share best practices. We have a lot of similar problems. How do you get to 13,500 districts? That’s a lot of districts. How do you do that? How do you market to them? How do you sell to them? How do you support them? I mean, that’s just a lot of districts, and they’re all different sizes. 100 of them are very large. And thousands of them are very small. We have some of the same challenges, so we often have summits on marketing, summits on sales, summits on development, because there’s best practices that we can do because three businesses are very similar in the world that they live in. That’s one thing that we do along those lines.
John Campbell: In terms of attacking things, it’s a little bit hard, because one does math and science, and other two do literacy. And they have different value propositions. For instance, the math and science one goes in and says, “I think all your students should be mathematicians or scientists.” The district says, “What? My kids ain’t going to be mathematicians or scientists. They stink in math and science.” Perfect, now I’m in a perfect situation to have a sales conversation with you about how we can help your kids do well in math and science. Where as a reading person is going to go in and say, “I’ve been looking at your test scores, and 33% of your kids are on grade level.” By the way, that’s actual factual for this country. “33% of your kids are on grade level. Would you like that to be a bigger number?”
John Campbell: That’s a whole different value proposition. But to get to the core of your question, how do we synergize and value the fact that we have these five business units? Well, one of them is an assessment company. If we can get that assessment company to help these content businesses have better assessment, the goal and this is something that is part of the future of Cambium, what we can do is, in the beginning of the year, understand better, with better assessment, where that student is, and so we can be diagnostic and then we can be prescriptive with our content solutions.
John Campbell: Where we’re going and where we’re trying to go is leverage that we have the world class summit of assessment company and, instead, not use that just for the end of year assessment, which is still valuable, but use it in the beginning of the year. So that you can get an increased understanding of those students, so when they take that high stakes test at the end of the year, they do better, because we know where they’re at. We know the challenges that they have, and we know what they need to be more successful when March or April comes and they take that high stakes summit of tests that everybody’s scared of. Instead, let’s prepare them and help them to do well.
John: That makes sense, thanks.
Kate: I have a question. What would you say is the most innovative thing you guys are doing that other folks in this space aren’t thinking about?
John Campbell: Boy, that’s a hard one. Innovative is a term that makes this hard, because is it innovative to have state-of-the-art technology that helps them to learn things? Because, if we’re talking about state-of-the-art and best of degree technology, I think of Gizmos, where you can learn something that you didn’t know in a matter of 20 minutes and get that ah-ha moment. What’s most interesting about that is it’s not just the student getting ah-ha moment. What we found is it’s often the teacher getting the ah-ha moment. I’ll give you an example. I went into a classroom, actually, it was all math teachers. I said, “This is a graph on here of rate and time. It is graphing me.” I had something on me that was graphing me on the chart. I said, “What happens on the chart if I walk backwards?” And this is a classroom of all math teachers. They didn’t know, but they’re teaching our kids? You know what I mean?
John Campbell: I think what’s most innovative is when we can help teachers know their content so much better. That they become master teachers and can help our kids be successful. That, to me, is innovative, and that can be done a lot of different ways. But just to give you an example of the Gizmos, they teach things that you cannot teach normally. Can you teach a plant growing? Not without a simulation. Can you teach how the waves of the ocean are impacted by the moon? What are you going to do, go outside and look at it? I mean, these things aren’t conveyed very well in a textbook. They can only be conveyed well by simulation.
John Campbell: When I think of the word, innovative, I think of the 400 Gizmos that we teach that you just can’t teach at your desk.
Rob Ristagno: Let’s shift gears a little bit now. I think this is super helpful in understanding how you’ve been able to grow the business organically. It sounds like you’ve really been on top of trends in the industry, on top of customer needs, and thinking about how to best apply technology and digital things to formerly analog vehicles in business models. Let’s talk though about your inorganic growth strategies, growing through acquisitions. You said that was one of the four ingredients to your secret sauce. Just walk us through recent acquisitions, the thinking behind them, and what your overall acquisition strategy is.
John Campbell: Let’s start just very high level, and I’ll try to quickly. First of all, you have to have a plan. It has to make sense, so that when you get opportunity either that you’re searching for, or that come in by themselves, you have a way to understand whether they are of interest to you or not. Obviously, we’re K-12, so it has to have a strategic fit. But I have a series of filters that also tell us whether it makes sense for us. There’s the core values I talked about, things like the importance of a teacher. Things that we believe every student has untapped potential. There’s core values that have to exist for an opportunity to make sense. It has to be K-12. It has to be digital. It has to be growing. It has to be profitable.
John Campbell: All these things I’m saying because they’ll come to you and say, “With you, I’ll be profitable.” Well, I have enough humility to believe that we’re not going to do miracles. We’re going to take a great solution and give it more reach, more scale, but I’m not sure that I can change the basic dynamics if it’s not of interest to the marketplace. It already has to be, at least, a million dollars in sales. It already has to be growing. It already has to be profitable. And it also has to have, what I call, the special sauce. The special sauce is just very simply, help me understand why it does the job it’s asked to do better than anybody else? If I understand that, and it’s compelling, then I believe we can be very, very successful with it.
John Campbell: And so, we’ve done a number of acquisitions lately. I’ve done acquisitions for the last 17 years, but we’ve done two in 2020. One was the assessment company, because we saw, as I talked about, the power of having content businesses with an end of year assessment company. So you can do, not only diagnosis, but prescription and have those students do better in that same summit of tests. That’s powerful. That’s one acquisition we did in the beginning of 2020. And then, more recently, we did the Rosetta Stone acquisition, which is a little bit complicated because everybody hears Rosetta Stone, they know about, maybe, the yellow boxes at the airport teaching that consumer ability to learn languages. But it’s actually two companies. It was Lexia Learning, which is a very strong literacy company that does K-12 literacy in grades K to five. It’s more of a core solution, and then grades five to 12 it’s more of an intervention solution to help those kids that didn’t really get all they needed to get when they were going through K-5. Very powerful.
John Campbell: And so, when I got that company, I said, “Yeah, I can make use of both of those companies.” We bought it, and it was great. And then the day after I bought it, a company came and said, “Can we buy Rosetta Stone Languages?” My reaction is, “Well, I wasn’t planning to sell it, but I’ll certainly consider it,” because the real driver of that acquisition was to get Lexia. Because I believe I can do great things combining Lexia Learning with what I have, which is Voyager Sopris Learning, another literacy company, combining those two together. They’re complementary and they strengthen each other, and they both focus on the science of reading to help students in the areas that they struggle in.
John Campbell: I’m pretty excited about how that’s turned out. They’re growing quickly. They’ve grown quickly without us. They’re growing even more quickly with us. And so, that’s been very exciting. But it gives you a perception of how I view these acquisition models. They have to fit. They have to solve a problem. They have to be growing. They have to be of size. They have to be K-12.
Rob Ristagno: Got you. You’re not a turnaround shop. They have to…
John Campbell: No, we’re not a turnaround shop.
Rob Ristagno: Got you. Excellent.
Brent: In your ownership structure and knowing, at some point, you’ll need to have a liquidity event, how do you balance between inquisitive growth and organic growth? How do you look at those two and really manage those two together?
John Campbell: Yeah. I wish I had a more pleasing answer for you than I have, because what we really do is a mix, and we really focus on growing both. The discussion I’ve had with Veritas Capital is, “What is it that you want?” What they want, besides making money, obviously, is to have more impact. They want to have a bigger impact in society. Well, that relates well to me because I want to have a bigger impact in society. I honestly don’t spend a lot of time with any metric of is this going to pay off before we have an exit, or should we do organic, or should we do acquisition? On the contrary, Veritas wants to do both, and wants me to do, or our team to do as much as we possibly can on both to try to have a bigger impact on society.
John Campbell: I actually spend most of my time on the organic side. And then businesses sometimes will say, “John, I could really use X. If I had X, I could have a more successful business.” Then I might start looking from an acquisition standpoint in terms of it becomes a make or buy decision. Is there a way that I can solve that problem of having that business unit being more successful with an acquisition? That what we’ve done with tuck-in acquisitions over the years. Or is it something that we build ourselves with, obviously, operational risk and time?
Brent: Yep. All right. Great, thank you.
Rob Ristagno: Excellent, John. Thanks. This has been super helpful. I learned a lot. I think we all have. Great dialog. How can we repay you? What can we do to help you out? How can the audience help you?
John Campbell: Yeah. The biggest thing is we’re all in the sphere of influence. We have all sorts of people we talk to, all sorts of people we interact with, and the biggest thing, really, that I want out of this conversation is that all of you help me share with people that Cambium Learning is a pretty impressive company that has best of breed solutions and they really care about teachers and students, and helping them feeling supported, and helping them make a difference. And so, when you run into districts, and teachers, and parents, and families that are having educational problems, you can mention, “I had this interaction with Cambium Learning, and that’s a place to turn when teachers and parents and students need help.”
Rob Ristagno: All right. Thank you, John, and thank you, everyone in the audience. This has been the CEO Campfire Chat with your host, Rob Ristagno. To listen to more episodes, sign up for bonus content or to take a two-minute business growth assessment visit ceocampfirechat.com. See you next time around the fire.
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