What does it take to be a successful entrepreneur in education? And how does one create an educational product or service that is profitable?

On this episode of School’s In, hosts Dan Schwartz and Denise Pope welcome Joy Chen, entrepreneur in residence at Stanford Graduate School of Education, to discuss entrepreneurship in education – its challenges, rewards, and impact. Chen covers several topics, including:

• Her entrepreneurial journey,  and what others can learn from her experience
• Questions entrepreneurs should ask themselves before launching a company or product
• The importance of hiring and valuing great people, and how to balance risks and rewards
• How to create an educational product or service that is both profitable and meaningful to society
• What investors look for in educational startups, and how these factors should shape entrepreneurs’ thinking

Joy Chen is an entrepreneur-in-residence at Stanford Graduate School of Education (GSE), where she collaborates with GSE professors, researchers, students, technologists, and innovators by leveraging her expertise to explore new ideas and opportunities in the education space. Previously, she worked for top consulting and Fortune 500 companies such as Ernst & Young, Verizon, and Microsoft, where she designed and developed digital learning, knowledge management, and professional development systems. To learn more about her work, visit her profile.

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The most important thing is people. There are tons of, millions of great ideas, but until the end, it will be people who can realize them.

Today, we're talking about what it really takes to be an entrepreneur in education, specifically an entrepreneur with the goal to create something that not only succeeds in business, but also makes a real positive impact.

Exactly. Dan, and we're going to be hearing from someone who's faced these challenges head on. From big risks to unexpected rewards, she has some amazing stories about navigating the ups and downs of building something meaningful. This is one journey you won't want to miss.

Welcome to School's In your ho-to podcast for cutting edge insights and learning. Each episode, we dive into the latest trends, innovations and challenges facing learners. I'm Denis Pope, Senior Lecturer at Stanford Graduate School of Education and co-founder of Challenge Success. And I'm with my co-host Dan Schwartz, Dean of the Stanford GSE and the Faculty Director of the Stanford Accelerator for Learning.

So today, we are very lucky. We have Joy Chen, who is an entrepreneur and she started her own company that we'll talk about, and then she sold it and became fabulously, unbelievably wealthy. Owns apartments in Manhattan, Hawaii. She'll correct me-

Dan, Dan.

I know Joy quite well, so she can roll with the bad humor. And then from there, she became a key investment officer for a very large educational corporation, sort of representing them internationally. And then from there, she went and got an advanced degree from USC and now she is our entrepreneur in residence.

So this is a program we started to sort of bring people who understand industry and the ability to scale ideas onto campus because a lot of students are very interested in this, that education has become. So we often think of education as a public good, but it's important to remember that schools buy most of the things they use. And so this is a way for people to get their ideas out there. So Joy, join us.

Hi, welcome.

Thank you so much for having me.

Good. Thank you, Joy. So tell us about First Leap, did you just at the age of 14 decide I'm going to start a company? How did this happen?

Well, this happened during a journey. I was kind of doing a lot of self-reflection. I chose to start a company around the time I was working for Microsoft. And actually, I have to say I have been very lucky. I always have amazing mentors and managers and bosses around me that gave me tons of great opportunities to help me to grow and to learn a lot of great things.

So when I was with Microsoft, they gave me a lot of responsibilities and opportunities to learn and to grow. And also year 2007, the year before I started my company, I was one of the very few most valuable employee for Microsoft, which is a big global award to the employees. So I was very busy for my job and I traveled all around the world.

And I remember that day after a long international trip, I came back home in Beijing. I was sitting in my backyard drinking tea and then all of a sudden I start to think about, "Oh my God, I have been so busy and what is the purpose? And do I enjoy doing this? And I know I'm capable of doing this, but is this what I really want to do for the rest of my life?" So this is kind of like awakening moment for my life.

And then for the rest, next several days, I kept thinking about those questions like, "Who I want to be? What my identity should be? And what are my aspirations and what are my passions?" And it became clear to me that I have always been interested or fionate about education and empowering other people. And another thing I'm very interested in is do some business and making some money and also build my own empire, ever since I was a little girl. So naturally I made the decision to quit Microsoft and start my education company.

So this is pretty interesting, my son and I think a lot of young people come out of college with plans for how they're going to make it on their own. And now he has explored that, and then suddenly he turned into an adult. He works for a company, it's a stable institution. But yours is kind of the opposite path where you started institutionally, with all the benefits of having a large institution around you and then you went out on your own. So are you rare? Do most people... So I'm thinking-

Joy is rare. Let me just step in. Joy is rare, of course.

No, she's a prize. But no, I think we have people listening sort of thinking, do I want to take the leap into entrepreneurship? And so you took the leap from a very successful job as opposed to a lot of people who say, "I'm going to work for my garage for a few years and if it doesn't work, finally I'll go become a lawyer or something." Lawyers are good. Nothing hostile there.

Yeah, but okay. To answer your question, I also need to share another story. Actually, First Leap is not my first startup, but this is probably the startup everybody knows about. Actually way back to 1997, that year I got my bachelor's degree, and I also very lucky. I got a scholarship from Indiana University. I start to work on my PhD degree.

And at this time, I start another, actually, that's my first serious startup around 1997, 1998 because of my research was about online learning. Actually, I was one of the few people doing online learning around the 1997, 1998.

Impressive.

Because of that experience and also that opportunity, gave me a great chance to dive deep into the burgeoning world of internet. And also around that time, I realized the potential of internet advertisement.

And I started a company with some like-minded friends. The business model was very simple. We purchased some internet advertisement like banners from around that time. The large companies like DoubleClick, TwentyFourSeven. I don't know if you guys heard about them, but they are the leading advertisement companies around the world at that time. So I bought internet advertisement in bulk with very low price and we resold them to the Chinese websites in China at a very high price. And we were very profitable, by the way. And just like after running this company for one year and a half, we even got an offer to be acquired by a public Australian advertisement company because they were doing traditional kind of advertisement business. They really need to acquire someone who are kind of mature already around that time doing internet advertisement business.

But guess what? That was 1999. The internet bubble busted and that public company's stock price plummeted to merely probably 5 cents, though they didn't have the capability to buy us anymore. So that experience didn't make me a millionaire in my early twenties. But still, I learned tons of things like how to run the company and how to work with people and also develop this kind of influential leadership skills, and also how to develop partnership to make business successful.

What did you like about it? You did this, you almost succeeded, it failed, and then you decided to do it again. So what did you like about it that made you want to do it again?

Okay. I love this question. Actually, I got asked many times by many people because there are a pain and happiness, they go all together during this journey. So of course, there are so many risks and uncertainties, especially if you look at a market trend and ever-changing customer demands and also this kind of economy kind of fluctuations and also competitors. So it's so difficult to guarantee the success of any business. And also there is a huge risk coming from the financial side, which can lead to financial loss and even bankruptcy. And we have a lot of responsibilities, accountabilities, and we need to do a lot of sacrifice.

But still during this journey, I see a lot of rewards. First of all, I really think I enjoy the autonomy, control and flexibility to run my business and make decisions without the constraints coming from the traditional employment kind of structure, to be very transparent. And the second thing is when you are doing something, starting something from scratch and seeing it to succeed, you will gain that kind of unique sense of being proud of and the satisfaction. And also another thing, we generate a lot of positive impact to society. And the last least-

Sorry. By making advertisements in China? What was the positive impact? I missed it.

Number one, we do solve problems, like the real world problems. And number two, we create job opportunities, employment opportunities. And also we contribute to the economic and growth for the society. And last but not least, successful entrepreneurship, if you are lucky also, will lead to significant financial rewards. So yeah, so that's why I enjoy doing it.

It's such a good answer, Joy when he kind of called you out on the carpet there, so I appreciate that.

So Challenge Success is quite an operation that you helped create. Did you choose it or did it choose you? How did you end up becoming an entrepreneur?

That is a really great question. First of all, I would never really call myself an entrepreneur so this is sort of a new thing to be called, which is kind of exciting. It definitely chose me. I was a high school English teacher. I can't even imagine years ago that I would've thought that I would be starting a nonprofit.

What happened was I did my dissertation at Stanford and was encouraged to publish it as a book. I had to wait until all the kids that I shadowed in the book graduated high school. That was part of the deal because they told us some private things and their identities are private and confidential, and they each helped me write a chapter in the book. And the head of the health center at Stanford University called me into his office and said, "We have kids here at Stanford who are struggling with stress and mental health issues and who are feeling disengaged very much like the high school kids in your book, and I think we should start an intervention."

And I was like, "I don't have the answer. This book was sort of an alarm bell of what's going on in the United States, but I study K-12 schools, I don't have the answer to the problem. I'm not a psychologist, et cetera." So he said, "Well, you don't have to do it alone, let's have a meeting." And he called all these people from psychology and academic integrity department at Stanford, all these people. And I was sure that no one was going to come. I was sure it was just going to be me and him in the room.

And it turns out 30 people showed up and said, "Hey, this is a problem that we want to help you solve." And someone said, "I know of a foundation that's kind of giving away money for a conference and I think that they'd be really interested in putting a conference on in this. Denise, do you want to go with me and meet with the foundation?" And he's like, "We need a name. What are we calling this?" And at that time, we were called Stressed Out Students, SOS, because we just made it up on the spot. And that is how Challenge Success started way back in 2003. So I did not... I was chosen by it.

Right. You were just put on the slope.

I was voluntold, right?

Yeah. Yeah. That's amazing. That's a great story.

Yeah.

I don't know how many people's PhD books turn into sort of this far-reaching enterprise that helps so many people. It's amazing.

It was pretty cool. It's pretty cool. Did you choose to be a dean?

No. Well, I mean someone... Nobody forced me. No, for my full career, if things are going well, I said I chose it. And if things are going badly, I say other people chose it.

That's good. That's a good policy.

But I do have a retirement plan that I am completely choosing and it is entrepreneurial. I want to buy a UPS store where people would come in... I'm retired and all these people come in and say, "How are you doing today, Bob? Can I get your mail? Let me wrap that package for you." And the stock never goes bad and I'd have a little bowl of candies, it would be great. So I really like this idea. Nobody believes this, but it's sort of being a bartender only better.

So then last year, I had to get a Notary Public. And so I went to the UPS store and this guy's helping me and I said, "You're doing the dream. This is the job, this is the thing I want." And I explained it to him. He said, "No, same thing. This is what I did. I retired from EdTech. I had a lot of money."

No.

Last Christmas, I bought this UPS store and he looks at me, he goes, "It's horrible. It's the worst thing I've ever done." And then he goes on and just complains for 15 minutes. I'm trying to get him just to finish so I can get out of there.

Oh, my God.

I need to choose another dream.

So I know a number of people say graduates of our learning design technology program that started their own companies, they successfully sold them and then they said, "I will never do that again." And then I know other people who just are serial startup people from solar panels, then they just say blenders or something like that. So you're kind of unique in that you went from startup around marketing and advertising to a startup about education. So are there clear differences between these two trajectories?

I think there are not big differences, even though they are in different industries. I think for me, because I started both of them, the goal always the same. I want to try something exciting and I see the potential. I want to grab the opportunity. I also want to take the risks, of course the calculated risks and also try to see if I launch my idea and see if or not my business plan can work. So to me, I can't speak for other people, but to me in my view, no big differences.

But deep down inside, do you feel like in education, you're doing a greater moral good or it's a harder industry to get into because it's so distributed?

Great question. I have to say by doing education startup, it does make me feel more fulfilled and more satisfied because it's such a meaningful thing, a career to do. I clearly can see what I have done, can change tons of people's life and open them to a universe of opportunities and possibilities.

And also, I keep wanting my students and also my friends, if you want to step into the world of education industry, it doesn't matter if you are going to work there or start your own business ideas there, be aware that education industry is very unique. It is very different from all the other industries.

You will bump into a lot of interesting kind of conflicts, whether or not we try to achieve educational goals or we run for the short-term financial profits, and all the other interesting things like policy implications can make a big difference for your education companies. So it's a very different animal. It's a very different industry and especially if you do education business, according to my experience, education business is a very slow business. So they need to have enough patience and also passion for education. Otherwise, they won't wait until the day the business becomes successful, become mature and scalable.

Okay. So that is scary. As someone who may be wants to go into education, some of our listeners who are listening. How long do you slog it out before you're going to get found? I guess there's so many that fail too. What's your advice there, Joy?

Well, it all depends. It depends on what kind of education product solution you are working on and also depends on where you are. Like geographic location makes tons of difference as well. So I can't speak specifically in how long it's going to be, but it takes some time. You need to have certain mature type of product available. And as investor, we want to hear some customer feedbacks as well to help us to make decisions to do the investment. And also, we want to see the vision of the company, where is this company going towards and how impactful this company will be.

So that's actually leads to my next question, which was I was going to say, how do you know as an investor... Which is different. Now you're on the other side. You have the money from your successes. How do you decide what to look for? I know people talk in Silicon Valley about unicorns. How do you decide what to look for?

The most important thing is people. I always say people, people, people. There are tons of millions of great ideas, but until the end, it will be people who can realize them, make big difference. So we usually go for those people. Of course they need to have great ideas, but we want to look at their history to make sure they have a good track of history and they have done something successful, meaningful. And we do some due diligence to check how those people who work with them work for them and to see if they are the true entrepreneurs we are looking for.

Joy.

Yeah.

I have a new idea for a stuffed pet that teaches foreign languages. I talk to it and then it talks back. Would you invest in me as a person? You've known me. Do you sort of say, "yeah, Dan could do this, the idea is not great, but he'll sort of clean it up" and-

Okay. I don't want to sugarcoat my answer.

No, please don't. Thank you, Joy. Thank you for saying no to that. But I will say there is, okay, you have to admit there's a little chicken and an egg because if you're an entrepreneur and you don't have a background, you're trying to break in and people like you are looking for experience and previous successes... I hear this all the time in the arts industry too. How do you break in? How do you get that experience? Someone's got to take a little risk on you the first time. Yes?

Yes, yes. It definitely takes some risks for people to... You're talking about doing the investment, right?

Yeah. So who took the risk on you, Joy, on First Leap?

On First Leap, actually we bootstrapped for two, three years.

What's that mean?

Oh wait, can you just define bootstrap for those of us not in the-

Okay, so meaning we were not looking for any funding, so we kind of become self-sufficient. I had my own money, I put in family money, and then the business was doing really well. I have to say I was very lucky. I was doing the right business at the right time in the right place, the right country, China.

So were you in your parents' garage doing this?

No. I had a villa in Beijing already by then, so I was doing it- [inaudible 00:20:10].

Other people were in the garage who were working for Joy. This is the way to do it, right? Oh, my gosh.

But anyway, so it was the right time to do that type of business in China because that was around 2008. There was a booming demand from the parents' side to send their kids to learn English. So I didn't have a big dream to be very transparent. I just want to have a profitable center. Just one center should be enough. And it was like because of all those parents, they pushed me. It's like, "Open another one close to us." Because Beijing was huge. It is huge. It's like they said, "oh, one hour and a half we came here and another one hour and a half we go back home. So if you set up a center close to where I live, I guarantee I can bring all those parents together and your center will be kind of filled up with students very soon."

And we did that. For the second year, we opened three centers. And long story short, we have 60 centers nationwide. But all I have to say is right time doing the right thing with the right business idea with a great group of people, then it's easy for you to become successful

And then you, do you sell the company. Is that what happens? Because you're not still doing First Leap, are you?

No, no, no. I sold it 2015. And once again, that was a great time to sell the company. And also, I sold company to the largest education company, a public company globally around that time called TAL Education Group. And so for me, it's like an exit, financial return definitely is important. I also want to make sure after I sold my company, I'm selling not only the IPs, the products, but also my team to the new company. I want to make sure the new company can take good care of my people. And TAL is truly a great company. It's a big company. Also, it has enough resources and network to help First Leap to grow. And also, it has tons of opportunities for my employees to have better career path within that huge organization. So that's 2015 I sold my company.

Just to clarify for the listeners, First Leap does what exactly?

Okay. So First Leap teach kids English. Very simple. And we had training centers. It was a little bit before EdTech took off, so it was still a very brick-and-mortar kind of traditional business model. But we try to incorporate some technology pieces into the teaching experience. Like we used a white board. We also use Wii. I don't know if you know that. We teach kids English about sports by playing those tennis, basketball, by using Wii.

It's an online tennis, online basketball. And you would teach them the sports words and that's how they had fun and were learning English? It's a great idea.

Yeah. The students were still in the classroom, but it's online, kind of like a video game and doing sports and at the same time learning English. Yeah.

It sounds like you need a mix of luck, right? There is some luck. You kept saying right time, right place, whatever. Courage, stamina, and the great idea. And maybe convincing someone to take a risk on you or gathering enough experience. Yeah?

Yes. It's all of that.

So you're not doing it now. Do you miss the juice from starting your own company? Is everything else boring compared to that? Or you just sit on your villa and have fine wine?

He's really harping on this villa stuff, Joy.

No, no. But what happens? You've succeeded, you've done it and it must be incredibly thrilling. Like you said, joy and pain. But then what? Nothing can live up to that experience.

Well, at least I have that experience. So I have had those good memories. And also have to say, I do think I have entrepreneurial spirit, but I also see a lot of people, they have entrepreneurial spirits as well, but doesn't necessarily mean they need to go out and start their business, start their company. Those people can also work for organizations, existing organizations. And I do think they can play a very significant role to inject energy to revitalize especially large existing organizations by driving innovations from within. They can also lead organizations through significant transformations to help organizations to keep evolving in this ever-changing world and to maintain their competitive advantage.

But back to your question, I'm happy doing either way, working for someone and also maybe thinking about some better ideas to start something new.

Okay, last question. You just choose A or B. So you started a company. You also wrote a thesis as part of your graduate degree. Which one did you like more? Which one was more satisfying?

Can I say A and a B?

I knew it. I knew it.

See? See? That's a great answer, Joy, and a great place to end. Thank you so much for being here. We learned so much about your entrepreneurial spirit. I feel like you and I should go to Vegas together because you've also had a lot of luck.

Joy, as always, it is great to see you. Thank you so much. This was a great interview.

Yes, and thank you all for joining this episode of School's In. Be sure to subscribe to the show on Spotify, Apple Podcasts, or wherever you tune in. I'm Denise Pope.

And I'm Dan Schwartz signing off for this season. So Denise, Dr. Denise-sustained-through-change-Pope. This is the end of the season.

I know. Dan, I'm going to miss hearing your dulcet tones.

My dulcet tones.

I am going to miss this. I am very excited though because we have a really cool season two being planned with even more exciting guests, if you can believe it, and lots more topics to dig into.

It's pretty amazing. I still have no idea who's out there listening to us, but whoever you are, all 12 of you, thank you.

Dan, there are more than 12.

Okay.

I can tell you there's more than 12.

Well, I want to thank you, Denise. This is a great joy putting on this show

Right back at you, Dan Schwartz, right back at you.