- Players: Sam Paddock (chief executive officer) and Rob Paddock (chief of education)
- Launched: 2008
- Turnover: R128 million
- What they do: Online short-courses, focusing on business, finance, marketing, design, law, systems and technology, writing and teacher education, and working with top academic institutions.
- Philosophy: If our business is growing at 100% year-on-year, we have to be growing very fast in our personal capacity, otherwise we’ll be left behind.
- Visit: www.getsmarter.co.za
We communicate the same challenge to our leadership team.
Big hairy audacious goal: To improve one million lives through online education.
GetSmarter’s exponential growth is nothing short of remarkable, but brothers Sam and Rob Paddock are quick to point out that getting one business right doesn’t mean that everything they touch turns to gold.
“We’ve had some ideas that have completely tanked, even though we still can’t figure out why they didn’t work,” they laugh, chronicling some of their greatest ‘non’ hits. First, there were the steel frame houses that Rob had seen in Australia. “I was convinced they were the next big thing,” he recalls.
“We spent so much time and effort on an idea that just wouldn’t take off. It wasn’t for lack of trying, but people weren’t interested, and we couldn’t change that.”
Learning from mistakes
There was one plus side to the whole experience: “We really know what to look for when choosing office space now; we’ve got a great understanding of construction.”
Bad idea number two was Back-up Box, which seemed like an amazing idea during the 2008 period of load shedding. “Again, we still don’t really know why it didn’t take off,” says Sam. “Theoretically, there should have been a market banging down our door to get their hands on alternative power sources, but it was a complete flop.”
They were two important lessons for the young entrepreneurs to learn. “At the time, we were both working in our father’s law firm, Paddocks,” says Sam.
“We’d joined in 2006 as equity partners, bringing tech and marketing expertise to the firm, but we were involved in multiple areas, including conveyancing, consulting, property development (the seeds for the ill-fated steel frame houses idea) and education.
“We were in our early 20s, and the success of Paddocks gave us a lot of confidence. We started thinking we were ‘serial’ entrepreneurs who could do anything. I think it’s natural for success to lead to some arrogance, but while confidence can be channelled into taking calculated risks to build something great, hubris will often just make you fall flat on your face. In our experience, serial entrepreneurship is rubbish. If you want to really build something amazing, focus on what you know, and do that really, really well.”
The art of the pivot
“Once GetSmarter was off the ground and doing well, we started thinking about other products and ideas that we could potentially add to our stable,” says Sam. “One of those was Kwiksta. The ‘Kwik’ was an acronym for ‘know what I know’, and the idea was to give teachers a DIY tool and a platform to create and sell their own
“We thought this was a really great idea,” adds Rob. “Unlike some of our previous ideas, it wasn’t a massive departure from what was working for us, which was online education. We had the platform and the knowledge around how to design a course, and we reasoned that all teachers are always looking for a way to make some extra income. We thought they’d jump at the product.”
They didn’t. Despite the sound reasoning behind the idea and the solid business model, the brothers had made one key – and as it turned out, flawed – assumption, which was that it’s easy to create content. The reality is that it’s hard, and the majority of their target market didn’t want to do it.
Finding their customer
“What was really interesting about the product was that while it didn’t suit our original target market, the corporate sector loved it. They didn’t want a DIY tool though. They wanted us to guide them and help them to build their own internal courses. We had to pivot completely, and ended up creating a bespoke and complex product, but we finally got the traction we were looking for,” says Sam.
The product gave birth to GetSmarter Business Solutions, a separate business entity with its own MD, which was rebranded Hubble Studios in 2014.
A few setbacks aside though, GetSmarter isn’t just a highly successful business, it’s been instrumental in shaping the online education landscape in South Africa. Sam and Rob might not have made all of their ideas work over the years, but their really big idea has been masterful, both in conception, and execution. Here are their top lessons.
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Do what you know (and what works)
GetSmarter wasn’t launched in a vacuum. It was the perfect culmination of passion, skill and great partnerships, coupled with a lot of hard work and dedication.
“I love tech and marketing, Rob is passionate about education, and has a background teaching music, and Paddocks already had a great partnership with UCT’s Law Faculty,” says Sam, who had also been involved in designing a virtual campus while completing his degree in business science.
“It was my first introduction to online education opportunities, and the success of my dad’s online course with UCT just cemented this impression.”
Graham Paddock is one of South Africa’s top sectional title lawyers, and a collaboration with UCT allowed him to build an online course that could be accessed across the country, with only the final component involving a workshop.
“It was a very popular course, but it was also one of the most profitable activities that Paddocks was involved in,” says Sam.
“It was 2005 and there was some resistance to online learning, but the prestige of UCT as a partner made a difference. Between my dad’s industry reputation and UCT’s brand, people were willing to try it out.”
Finding the natural fit
One of the key reasons Sam and Rob had joined the business was to spearhead growth. “This meant we were constantly looking for growth opportunities,” says Rob, once more laughing about their brief foray into steel frame houses. Online courses on the other hand, were a natural fit.
“The short course had the fastest growth and the best margins, and we realised that we definitely had something worth pursuing,” says Sam. “We added a blended-learning property course in Johannesburg, which was an online short course with a workshop at the end.”
Again, the course did well, and the brothers started realising that the best opportunities are the ones closest to you.
“I had started an ecommerce wine site with a friend,” says Sam. “It was called Getwine, and it was enjoying nice, steady growth. I started thinking about how we could leverage that business and data-base, and came up with the idea of doing a short online course on wine evaluation. We approached a professor from the University of Stellenbosch, and he agreed to come on board.”
Step two was branding. It didn’t make sense to run a wine evaluation course under the Paddocks brand. “We set up in a small room in Paddocks and roped in the marketing manager to brainstorm some name ideas. We wanted to stick with the ‘get’ concept of Getwine, which led to the name GetBrains,” laughs Sam.
“My dad took about two seconds to veto it once he heard it. He convinced us it was a terrible, terrible name, and we settled on GetSmarter.”
The birth of GetSmarter
“There was a huge demand,” says Sam. “281 students signed up. It was the two of us and one sales person, who doubled up as the course co-ordinator. But we could see the potential, and we could incubate the business inside Paddocks. We did a cut and paste of the Paddocks shareholder agreement, and with four shareholders, us, our mom, Mandy Paddock, and our dad, we launched.”
They were right. The brothers soon exited from Paddocks to focus exclusively on GetSmarter, and today the business has 200 full-time employees and 60 contract teachers, many of whom are consultants with real-world practical experience.
When asked why this idea succeeded, the answer is simple: The passion for education, coupled with making a real difference, a laser focus on marketing and execution, as well as an existing relationship with UCT were all the ingredients this young, hungry and above-all bullish team needed to launch a business that would prove to be an industry game changer. “And we were doing something we understood from the ground up,” adds Sam.
Create amazing partnerships (and respect the hell out of them)
The brothers are quick to point out the integral role that working with top brands has played in the business’s success. “We’re a digital university without a brand or smart professors,” says Rob.
“The partnership with UCT has been crucial to our success, as it gave real credibility to the brand from start-up,” he adds. “We have earned the trust of the country’s leading university brands and this means a lot to working professionals who want credible validation of their skills.
“There are key individuals in academia who have actively supported us from the beginning, and it’s very important that we continue to deliver quality. What we deliver affects their reputation in their sectors as well.”
As in any partnership, it’s important to understand how each party benefits from the association, and to be able to work well with each other. “We were a lean, flexible start-up, but UCT is a 100-year-old brand. That comes with bureaucratic structures, and we knew that in order for the partnership to be a success, we needed to understand this and work with it, not against it,” says Rob.
“We’re working with their brand, and that’s so important for our own success. At the time, they didn’t want to be in this sector themselves. It worked because we weren’t competing with them; we were adding to their offering. It was the perfect model, an incredible brand and a hungry market, and we were the conduit between the two.”
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“The digital revolution has led to micro-sizing and economies of scale that enabled us to unbundle education into short courses that are ten weeks long,” adds Sam.
“This model doesn’t work for universities. They generally aren’t focused on short courses, so it’s the perfect synergy. We’re basically a plug-in for them that generates revenue but doesn’t add to their overheads. However, we’ve had to be very conscious of two key points: First, we have to value our partners’ brands as much if not more than we value our own; and second, professors already have large workloads. We needed to add as little as possible to those.”
“We’ve developed a system which allows the appointed faculty member to inject their immense intellectual capital into the design and delivery of the course, and have full academic control, without taking too much of their time away from their on-campus responsibilities,” says Rob.
“It’s taken us many years of working closely with faculty to get the balance right, with both the faculty and GetSmarter leveraging their core competencies to deliver this innovative educational experience to students throughout Africa.”
“Ultimately it’s a relationship game,” adds Sam. “We need to create a relationship with the faculties, and they need to trust us enough to give us a chance – and then we work day and night to deliver.”
Prepare for growth (and put systems in place before you need them)
Today, GetSmarter is a far cry from where it was in 2008, launching with three people operating from a small room in Paddocks. “This is a complex space for us,” says Rob. “We have 200 full-time employees who focus on course development and delivery, technology, marketing, sales, and support functions like HR and finance. There’s a lot going on in the background.”
“We made sure we put systems-thinking in place from the beginning,” says Sam. “A danger for many businesses is that you hit the market, there’s a large demand, and then chaos ensues as you try to meet that demand.”
“This quickly leads to operational failure. This wasn’t a possibility for us — we were working with a very established brand that had its own reputation to consider, and that partnership was at the heart of the business. In addition, we needed to go out into the market and deliver consistently. Word of mouth and repeat business were particularly important because we were operating in a new, largely untested and unknown space.”
The business’s systems and technology were initially driven by Sam, who taught himself a lot of the skills needed to ensure the company was keeping up with its own growth. “It’s a fine line,” he explains.
“Ordinarily, systems and technology add a heavy overhead to the business. We found that we reduced this a bit because I was so involved, and we made the decision to invest in anything I couldn’t do myself. We focused heavily on marketing and sales, and pumped the money we made back into creating a strong back-end and systems. From the beginning we’ve been in this for the long-term, and so investing in the company’s growth just made sense. Taking tiny salaries to help achieve this was an easy choice to make.”
You have no business without great people (so make sure they’re all on board)
“We’ve learnt two big lessons over the past few years,” says Sam. “The first is that if you want buy-in from your staff, you need to be communicating with them all the time. Everyone needs to understand and embrace the business’s strategy. The second is that performance management, particularly in a growing company, keeps everyone focused.”
“We come from a very nurturing household,” adds Rob. “Our mother always encouraged us to believe that we could achieve anything we set our minds to. While this is a great entrepreneurial attitude, it caused some problems when we were dealing with non-performing employees. We were captain guilty of fuzzing the edges. We had this idea that with the right encouragement the problem would go away. It took us a while to realise that some employees can’t be coached into better performing team members. You need to be honest and clear upfront. If you’re not clear on good performance or bad, how can you expect your team to know?”
And then the brothers received invaluable advice: They were told to read Mastering the Rockefeller Habits, by Verne Harnish, and to implement the learnings from the book.
“Implementing the Gazelles system was a complete game changer for us,” says Sam. “It gave structure to employee management and staff reviews, it rewards team members who are focused and achieve results, and it gives everyone a clear framework of what’s expected of them, which in turn makes employee management objective instead of subjective.
“We’re too nice,” adds Rob. “This helped us to follow a system where everyone else knows exactly what’s expected of them – no grey areas.”
Gazelles follows a clear and regulated path. “First, you need to clarify the performance expectations of each and every role in the company. It’s important to be clear, we’ve really learnt this. The performance criteria follows a 90-day cycle and includes five priorities,” says Sam.
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“These priorities are evaluated every three months and aligned to the company’s six core values. Because the priorities are in black and white and agreed on upfront, managers can have honest discussions with their team members and credible reviews. Each review is rated on competence and attitude.”
“We never, ever push the reviews out,” adds Rob. “They’re time consuming, but they’re non-negotiable. Take the time to complete them properly, it’s worth it. A top-performing team is the most valuable asset your business has.”
“Two years ago we had a massive spike in growth which has continued, year-on-year. We’ve built a team of people that’s 200-strong. This system keeps our priorities aligned across departments as well. Monthly inter-departmental meetings allow everyone to see which priorities affect whom, how we can support each other and where the bottlenecks lie,” says Sam.
“If you know your KPIs and everyone else’s you can get a heartbeat of the business. This is as important for us as it is for all of our managers and employees.
“We’re very good at execution. That’s at the heart of our success, and through our growth spikes, this methodology helps us solve more of the right problems. Instead of putting out fires, everyone knows where they stand; we will navigate the next few years of growth well because of this.”
“We’re two people, we can’t touch everyone,” agrees Rob. “The way our management and team think and behave affects our business, brand and the way we operate and are perceived in the market. This helps everyone know exactly what’s expected of them. However, culture lives, and that’s a core responsibility of ours. It comes from us and how we behave and engage.”
Without sales there’s no revenue (so make this a core focus)
“We’ve always been very focused on student recruitment and marketing,” says Sam. “Start-ups often ignore this element because they see it as a cost that the business can’t afford until revenue grows. We always looked at it as the only way to grow revenue, and kept everything else as lean as possible to make it work.”
This doesn’t mean the brothers splashed cash on marketing – they were careful and strategic in how they approached their sales strategy – they were still a bootstrapped start-up after all.
“Step one is paying attention to what’s happening around you. We were one of the first companies to start advertising on Facebook. We understood that great marketing led to student recruitment, and we re-invested everything into the business, drawing tiny salaries,” says Sam.
Another strategy was email marketing. “We’ve always been very high-touch. We work hard. We contact you. We keep in touch and we keep returning to our database. Sales don’t happen by accident. We keep adding courses so that students return and build on their own competencies and skills, but we’ve also become the go-to brand for short online courses in marketing, finance and business, and that’s because of strategic marketing campaigns – people know who we are. And then we keep getting in touch, reminding you who we are, and what’s on offer.” It’s clearly a strategy that’s working.
Gazelles in action
- Every team member has a PDS document that includes their promise agreement (title, job purpose, responsibilities, annual priorities, core competencies and strengths), with the company values and behaviours review (linked to the company’s six values and personal behaviour that aligns with these values), quarterly priorities and professional development details.
- The quarterly evaluation is conducted by line managers and is done according to a four-point colour scale. Super green is way ahead, green is on track, yellow is behind and red is badly behind.
- The quarterly review: Includes a review of the individual’s role (has it changed, expanded, shrunk), a review of their alignment with the company’s values and behaviours, a review of how they performed on their quarterly priorities (operational), and a review of their progress against their learning objectives. As part of the review, each person receives a review from their peers which is included in the quarterly meeting. The team member’s prior review is included to ensure continuity between reviews and to identify trends. Managers also ask reports how they can support them better, and do better in their roles. Because priorities can change based on changes in the business, teams are prompted to review their priorities half way through each quarter to ensure any changes are reflected in their PDS documents, which means they are set up for a high-quality review at the end of the quarter.
- Weekly meetings: Each person has a one hour meeting with their direct line manager. This follows a structured agenda in which priorities are reviewed according to the green to red colour scale. This ensures managers and team members know if anyone is falling behind, and course corrections can take place before the quarterly review.
- Daily stand-up meetings: These are a few minutes, and allow each team member to share their wins and ‘stucks’ from the previous day, and priorities for the day ahead.
- Management meetings take place quarterly (two-day strategy sessions) and monthly (five-hour leadership meetings to ensure priorities are aligned across departments).