Editor’s Note: ‘Tis the trendy season for trends, to reflect on 2015 and to make bold predictions about what next year may hold. This year, we asked thought leaders to share their outlooks on education, but with a twist. They have to frame their thoughts as a response to some of the finest college application essay prompts—yes, the very same ones that high school seniors are feverishly working on now!
Here’s what Aaron Skonnard, co-founder and CEO of Pluralsight, had to say.
Writing prompt: Kermit the Frog famously lamented, “It’s not easy being green.” Do you agree?
When Kermit the Frog bemoaned being green, his gloomy musings centered on how being green makes him ordinary. In one part of the song “It’s Not Easy Being Green,” Kermit observes:
It’s not easy being green
It seems you blend in with so many other ordinary things
And people tend to pass you over
‘Cause you’re not standing out like flashy sparkles in the water
Or stars in the sky.
But towards the end of the song, he sees the value in being green, because there are many beautiful green things—the spring season, powerful rivers and majestic mountains.
There are two ways to look at “being green” in business. Today, in a booming tech industry with rocketing valuations, it can be easy to view the “green” of valuations and funding as something to be jealous of. Fledgling tech companies devote precious funds giving themselves the flashy sparkle they think will help them attract VCs and avoid being ordinary—be it luxurious workplaces, insanely generous benefits or whatever else. Part of the sparkle comes when media and public hype gets introduced; three years ago, massive open online courses (MOOCs) were all the rage, and companies like Coursera and Udacity were declared to be the “giant killers” of traditional education. That never happened at the scale predicted.
Efforts to achieve status instead of substance can prove to be a downfall when not supported by a sound, sustainable business, which is perhaps why 90 percent of tech startups fail (and why MOOCs, among other ed tech innovations, never took off). With many prognosticators predicting a bursting of the tech bubble as valuations grow increasingly questionable and unstable, companies should be seeking the “green” of stable profit and growth. While not sexy, these things are ultimately more valuable: They signal a company built to last.
At Pluralsight, we’ve experienced the benefits of the low-key, unassuming brand of “green” firsthand by choosing to bootstrap for nearly 10 years before seeking investors. It was hard, but it forced to get things right because we didn’t have a fallback.
When it comes to bootstrapping, the temptation to deviate from the course can be powerful. Like all startups, Pluralsight had to deal with the usual stresses of growing our customer base and staying in the black, especially after eliminating our highly profitable in-person trainings to focus solely on the online courses we anticipated to be the future of education. But the financial pressure of having to "make it" on our own steam helped keep us focused on our most essential priorities: Democratize education and create the go-to platform for professionals looking to improve their skills. Had we taken outside funding initially, we likely would have been forced to move faster than our revenue stream really warranted and lost control of our direction.
Bootstrapping at the start makes revenue and profit a key focus, and keeps you connected to your company's financial statement. Perhaps more importantly, it keeps you focused on your mission. Our high goal of democratizing education meant prioritizing hiring the right people and improving the quality of our courses above all else. Those decisions were what lead to profitability in our early years. Only when revenues and profitability increase stably do you then green-light new opportunities, more staff, increased risk-taking, and growth acceleration. In our case, patience paid off, and we were able to raise a total of $170 million during our first two rounds of funding in 2013 and 2014—ten years after our founding—which then allowed us to open doors to new business with an already stable and established product.
So as a new company, it’s not easy being green, but that doesn’t mean it’s bad. Bootstrapping is a strategic advantage that can help you avoid the lure of empty sparkle and instead build the discipline of a company focused on the long term.