K12 Inc. CEO Speaks About His Company

Feb.19.08 | About: K12 Inc. (LRN)

On Februray 18, The Wall Street Transcript interviewed Ron Packard, CEO and Founder of K12 Inc. (NYSE:LRN). Key excerpts follow:

TWST: We'd like to begin with a brief historical sketch of the company and a picture of the things you are doing right now.

Mr. Packard: I founded the company back in April 2000 with the vision that with the advent of the Internet, it would be possible to deliver a world-class education to any spot on the globe. I got the idea for creating the company when I was working with my daughter on her first grade mathematics and wasn't really happy with what she was getting at her school. As an engineer and technologist, I thought I would just teach her myself. I went online and tried to find a course on what the best schools in the world were teaching in first grade math and, although I found an overwhelming number of Websites, there was nothing that stood out and said, "this is what every first grader should be taught in math." I got the idea if I built a world-class curriculum that could be accessed through the Internet, there would be great demand. That's really how K12 was started.

Today, our primary business is to provide curriculum and technology to online public schools. Currently, there are over 40,000 children enrolled in full-time online public schools that use the K12 curriculum and thousands more taking one or two K12 courses online in public schools. We also have parents who come to our Website and buy individual courses to supplement their children's brick and mortar education.

TWST: What makes your curriculum different from those of other schools?

Mr. Packard: There are a couple of things. We were able to bring together many of the nation's leading experts, including a Nobel prize winner who reviewed some of the science curriculum. We built a curriculum that would meet or exceed all of the state standards. Our curriculum is research-based, rigorous and engaging. We concentrated on the "big ideas." Let's take, for example, physics. We spent time with UCLA's physicists to figure out what were the big ideas around quantum mechanics. It's a very difficult subject. It's based on wave theory. So we took that information and determined how to make what we call "down payments" in children's minds as early as first grade so they have the foundation to understand quantum mechanics later in their education. We do this at the early grades by teaching kids about wave theory simply by, for example, conducting simple science experiments demonstrating waves in water, helping them understand the concept of waves, which is really the big idea with regard to quantum mechanics. As early as kindergarten we encourage students by saying, "Do you want to be a physicist? This is what you need to know," and we do that with all the major subjects, so that these kids are prepared to be whatever they want to be in life.

TWST: What are the main items on your agenda for the next few years?

Mr. Packard: One of the great things is, we are growing very rapidly. K12 partners with statewide online schools in 17 states and we are hoping to add to that number. We are continually working toward the goal that every child in this nation will have access to an online public school that uses K12. We recently opened a private school in Dubai. We believe there is a large international opportunity for K12. We are looking at new opportunities to open up more of these types of schools around the globe. We are also getting a lot of requests from school districts to use the curriculum in classrooms where the teachers would use K12's Internet-based lessons and all these flash animation features and videos to help teach in the classroom. Our curriculum is currently used in classrooms in several districts across the country. We now are going to start marketing our supplemental online school programs, where, let us say, your child wants to learn a foreign language in the summer. We have a foreign language program all the way from kindergarten to 12th grade, so if you wanted to teach your child Spanish in the summer, you can do a two-month course and just teach the child Spanish. Or maybe if your child is struggling with math, you can do a second grade math again in the summer. We are going to do a lot of supplemental programs and market those to families. We have a lot of growth opportunities and one of our challenges is just managing all of these growth opportunities.

TWST: Would you tell us about the culture?

Mr. Packard: It's something that's special about K12 and everybody who visits K12, whether it is a school district official, whether it is an investor, our culture is so geared around helping children. It's a remarkable thing. Recently, we had a visit from an accreditation group that accredits schools. These people visit schools all over the country, and they also now will accredit programs provided by companies. They were impressed by how focused our employees were on student achievement. People come to K12, they are usually coming there because they are incredibly excited about helping kids, and that makes it a very, very special place to work. It guides our decisions and it guides our culture. I have always believed that if you can do a great job for children, the business side will take care of itself. I gave a speech in our first year about the founder of Merck, George W. Merck, who stated that his company focuses on medicine, not profits. K12 is built around that principle. We worry about giving children the best education possible and our mission is that simple, we want to provide a world class education to as many children as possible. That is what really guides the culture, so I want to bring people in who keep that culture. I think we have done a great job at that.