Blue Dots Partners

Philippe recently spoke to Misty Frost who has been running Career Step since May of last year. The Utah-based company offers affordable post high school online training solutions to learners that positively affect the course of their lives. Each program teaches specific skill sets in just three to twelve months so people can quickly be career ready. As college tuition has gone up 500% in the past few decades and the average student in 2017 graduated with $37,172 in debt, plus the fact that 44% of college graduates are unemployed or underemployed and 66% of adults in the U.S. do not have a college degree, Career Step provides a great path to finding a job ones enjoys.

Can you describe the fastest revenue growth situation you have ever been involved with?

The highest revenue growth company I was involved with was Instructure. The company develops and sells applications for learning, assessment and performance management. I ran marketing there for close to six years. During my tenure, the company grew from $8M through an IPO to $210 million in 2018. When I joined, the company was one year old and had 100 employees. It went public 5.5 years later with 1,200 employees and over $100M in revenue.

What about the most daunting growth challenge you faced and the actions you took?

Growth rate is all about the relationship with the capital structure. From a VC-backed company, it’s all about grow, grow, grow your revenue.  As a VC funded start up, Instructure was highly conscious of growing “the right way”.  We were highly concerned that the ready availability of funds would make it too easy to invest poorly.  In order to mitigate that risk, we developed a highly disciplined approach to taking “bets” on the business.  We created business plans for pilots that we would test at minimal investment before we would roll a product or program out.  That discipline really helped focus and kept us form throwing money at pet projects.

For a PE-backed company, it’s more about EBDITA and profitability. I always advise if you have to choose between growth and profitability, choose profitability, at least in the short term. The focus there certainly isn’t as sexy, but when market or business challenges present themselves, you find yourself in a more stable position.  So, growth depends on the capital structure.

What advice would you give to a CEO to accelerate the growth of his/her business?

Growth is a function of the service and offering and then how much capital you have to invest.  It is about understanding, at a deep level, the pain and who the customers are and why they buy. It is the ability for the business, to own a position of differentiation against “a” market. Channels problems are almost never a tactical issue. They are more about motivating the right people. The best brands are a reflection of the company’s culture.

Culture alignment is also important. All the horses must pull in the same direction. If not, growth is accidental at best. There has to be unity of direction and efforts. There has to be alignment about the market we serve, who we serve and why they should buy and who we want to be. This defines the direction. Decisions are then made (conscientiously and unconscientiously) to start reaching that goal.

Everybody wants to grow its business. It’s table stakes. The question is: what kind of growth? Why? How? At what price? Growth is a result. It’s the consequence of solving a problem. That’s how it happens.