Over the past few years, the education sector has become RED hot – with companies that serve it selling for eye-popping multiples. Today, most of our competitors (companies that serve the admissions market), are owned by private equity firms or public companies.
That makes Fire Engine RED “simply different” – a private, self-funded company (with a female CEO, no less!) offering boutique Search services, a design-centric CRM, and a host of other admissions-focused software products. So, as you might expect, as one of the only private companies remaining in the market, hardly a week goes by that I don’t hear from a private equity firm expressing interest in buying us. In fact, over the past five years, we’ve been approached by dozens of firms.
Recently, I’ve been asked a question by several of our clients (and even some prospective clients) – a question that no client had ever asked me since I founded Fire Engine RED in 2001. The question: “Is Fire Engine RED for sale?”
I understand why they’re asking. Believe me, I do. Over the past decade, the admissions community has repeatedly seen the companies they work with bought and sold every three to five years. And, while private equity can certainly help businesses grow when other funding isn’t available, the admissions community has almost never benefitted from it, in terms of innovation and client service. In fact, the only people who have benefitted were the company’s founders, management team, and other investors.
So, because I feel a tremendous responsibility to Fire Engine RED’s 500+ clients, and the admissions community at large, I want to assure those who may be wondering: Fire Engine RED is NOT for sale and here’s why.
I want to stay true to our vision.
When a company is sold to a private equity firm, the new owners typically re-evaluate every aspect of the business, and look for ways to maximize its value. This usually happens through cost-cutting and “templatizing” the company’s offerings.
Instead, I want to continue to reinvest in our Search service and our software business, and bring innovation to the admissions market, which has unfortunately lagged behind so many other sectors for so long. How?
- By investing heavily in data and digital services, and expanding our all-star team of senior strategists to work directly with our Search clients.
- By developing the first admissions CRM that provides users with a consumer-like software experience.
- By growing our extraordinary client care team – which offers rock-star quality implementation and support services to our clients and the students they serve – at no additional cost.
And our reinvestment strategy is clearly working for our clients AND for us. We’re getting great results for our clients, and they’re spreading the word about us. As a result, our Search service is on track to grow by more than 20 percent this year. At Fire Engine RED, we want to grow our company. We just want to do it our way and in our own timeframe.
I’m in it for the long term.
Private equity firms focus on short-term wins rather than on long-term successes because their investment horizon is typically three to five years. Quite simply, these short-term market players have no vested long-term interest.
It’s similar with public companies. They’re usually judged by their quarterly earnings, so they lose sight of the fact that long-term success depends on continually delivering results for clients.
At Fire Engine RED, we want to build lasting relationships with our clients. By remaining privately owned, we can continue to focus on what’s best for the schools we serve – not only in the short term, but in the years to come.
I don’t want investors telling us what’s right for our clients.
When a company is owned by a private equity firm, the investment firm calls the shots.
At Fire Engine RED, we’ve built our company, in large part, by listening to our clients … and they’ve never steered us wrong.
In fact, all of our products and services were developed in close collaboration with our clients. Our Email Response product was developed for Carnegie Mellon University, our Broadcast Email product for Colorado College, and our Student Search service for Saint Louis University.
Clearly, we’re listening to the right people … today, 500+ clients are using our products and services.
I don’t want investors to muck up our culture.
Our company values include simplicity, good design, client service, innovation, and most importantly, teamwork. These kinds of values typically don’t thrive in a culture that’s only focused on the bottom line.
When we hire, we hire the best; we want our team members to make a career here, not worry about layoffs, or working for a new owner, every three to five years.
Also, a private equity firm would likely insist on putting us all under one (expensive) roof, despite our success as a 100% virtual company, so they could feel more “in control.” However, centralizing our company would take away one of our biggest competitive advantages, by undermining our ability to hire the best people, no matter what their location.
I believe the best is yet to come!
I’ve worked in the admissions market for 30 years, and I love what I do! I couldn’t imagine working with a better group of people, both inside and outside of our company.
I’m determined to disrupt the status quo and bring innovation to the admissions market. And I wouldn’t dream of missing out on what’s ahead!