“There are many pains in the growth journey”
A conversation with Tom Hooper, CEO & Founder of Third Space Learning
Tom, Third Space Learning (TSL) was transitioning from a start-up into a scale-up over the last years. How did the scaling journey unfold for you?
There are many pains in the growth journey. We made two mistakes during our transition: We didn’t embrace the fact that school budgets were increasingly coming under pressure. The product we sold at schools was underinvested and not able to adapt quickly enough. The second mistake was spending too much money on developing a new high-risk consumer product and hiring too many people. This was a painful period, but we learned some very important lessons. One was to exclusively focus on schools and start running a much better and more efficient business. I believe this is why we are in a very good position today, in terms of product, team, culture, growth, and the essence of what we do. It has been an extraordinary ride.
How did the pandemic affect your traction?
The demand for online learning suddenly exploded, especially for children from disadvantaged backgrounds. We were fortunate to have a very passionate, impact-focused, and well-versed team to scale and prioritise. This will even be more important in the coming two years. We need to make very important investments to improve the impact on each child we work with, the performance of each tutor on our platform, and to expand the size of our target market.
How did you evolve as a leader through this challenging journey?
In retrospect, it’s tempting to pitch for VC money and promise the world, but you put your business at great risk if you don’t have the maturity and experience to grasp the disparity between vision and reality. It’s difficult to acknowledge that your plan doesn’t work out and tell your investors. I learned to make the right decisions for the benefit of our business, our employees, and our customers. I know a lot of founders who struggle with being fit for scale because it’s easy to fall prey to the myth that you’re only a good entrepreneur and investible if you do this U.S. West Coast VC type of “blitz scaling”. A good board can help a lot in balancing risk and reward, based on the current realities of your company and market.
What was the effect of this journey on your impact?
I founded the business to build a tutoring model that can reach children in need. I focused too much on developing a consumer product, and fell into the trap of underinvesting in this impact. I was incredibly lucky that some of the core team didn’t give up on me. Today, they are part of the management team and critical to the transformation of our business. If you want to be innovative, it’s important that you quickly go through the process of experimentation, otherwise you risk going bankrupt.
What are your experiences with children’s health and performance during the pandemic?
Most children we work with are from disadvantaged backgrounds that have been badly hit by the pandemic. To give you an indication of how difficult it is for them to access tutoring from home: In January 2021, we worked with 16,000 pupils per week. When we moved our service from school to home, half of the pupils dropped out. To give them laptops would only solve part of this problem. Also, the combination of teacher absence and pupil absence constantly disrupts learning in classes. Over time, this slows down the entire class and prevents children from catching up. If you consider that pre-pandemic, 90% of the pupils who failed primary school also failed GCSE (General Certificate of Secondary Education), imagine the consequences of a 3-year disruption on socio-economic progress. It’s now a lot harder for teachers to do their jobs.
One secret sauce in your solution is working with global tutors. Have there been any pushbacks in terms of how this has been accepted in the UK?
The pandemic has accelerated existing trends in edtech such as online learning and even more. In the past, tutors have been hard to get and very expensive, which skewed the access towards the wealthy. In India and Sri Lanka, however, you have a huge population of English-speaking, well-educated, and passionate mathematicians. If you can harness this untapped potential to supplement the existing resources, you can make online tutoring accessible to 1.7 million children from deprived backgrounds. This is exactly what we do. In early 2021, we came into a very challenging situation when a newspaper condemned the government policy by attacking us. The accusations were completely false and grossly unfair, but I think we came out unscathed by projecting the truth. We reassured the Department for Education, took them through the facts and the impact that represents the reality of what we do and why we do it. With that truth, they have been supportive, and we are a learning partner in the National Tutoring Programme. I admit that it’s really upsetting to see politics trump impact. But if you default to truth, purpose, humility, and values, you should be able to come out if well. And we did.
And what is your experience with Ananda as an investor?
We have been lucky to experience an open, trusting, and honest relationship with Ananda. There is also a shared sense of purpose and that’s exactly what you want for the business as an entrepreneur. Ananda has been a very good investor for us since 2015 and retained their ambition for the purpose, which is very hard to do in challenging times. They also showed a lot of care for me and my team.
Interview by Christina Moehrle, February 2022
More about Tom
After receiving his master’s degree in philosophy and politics, Tom spent five years as an investment manager at Aberdeen Asset Management before founding Brightspark, another educational technology solution that finally inspired him to develop the idea for Third Space Learning. Tom is highly focused and a passionate entrepreneur dedicated to motivating and directing a young team and to building the company from grassroots to growth.