Embarrassing profitability

A six year old company with revenue of $120m and more than 10% in operating income (more than 15% EBITDA) has carefully invested capital and efficiently managed growth.  They provide innovative services and produce outstanding customer results.   The company is worth 15 times what the owners invested.  They have one problem–they are a K-12 education company.
The company has considered going public (if there was a decent IPO market) but they are worried that disclosure of what in other industries would be considered moderate profitability would invite even more criticism of their work and increased barriers to further growth.  This is one of the reasons there are almost no medium sized businesses in K-12.
The main challenge we face in US K-12 education is quality at scale.  We desperately need innovative, scalable, cost effective learning opportunities of consistently high quality.  But when a company creates them, they are blocked in a variety of ways by defenders of the status quo.
Perhaps the Department’s aggressive push for scaled solutions and the increase in entrepreneurial activity in the sector will dampen the strange phenomenon of embarrassing profitability.

Tom Vander Ark

Tom Vander Ark is the CEO of Getting Smart. He has written or co-authored more than 50 books and papers including Getting Smart, Smart Cities, Smart Parents, Better Together, The Power of Place and Difference Making. He served as a public school superintendent and the first Executive Director of Education for the Bill & Melinda Gates Foundation.

Discover the latest in learning innovations

Sign up for our weekly newsletter.


Leave a Comment

Your email address will not be published. All fields are required.