Podcast Transcript

[00:01:47] Sean Steele: Welcome back to our regular listeners and to anyone joining us for the first time, we are thrilled to have you. Thank you so much for coming back each week. My guest this week is Rowan. Actually, I've never pronounced your last name, Rowan. You pronounce your last name for me in case I pronounce it poorly.

[00:02:01] Rowan Kunz: Yeah, Kunz.

[00:02:02] Sean Steele: Kunz. Okay, great. Rowan Kunz, thank you very much. Like, I've spoken to you so many times but never pronounced your last name, Founder and CEO of Art of Smart, K to 12 tutoring and study skills, business, but actually much more from what I understand, because it kind of looks like from, and you know, I've been in and around your journey for a while, and I'll explain the context for the audience, but it looks like your business is starting to sort of reposition a little around inspirational career and leadership mentoring in addition to kind of help young Aussies, I guess figure out that sort of, what am I going to do with my life when I finish school and how do I get there? Not just; okay, I really want to nail some exams, and how do I top on my scores? Is that a fair call?

[00:02:46] Rowan Kunz: Yeah, look, that's true. So, certainly for us, like that fits under both like a mentoring program that we have called the Pathfinder Program, as well as then increasing work that we do in schools where we're going into schools and supporting students, in years 10, 11, and 12 with that career and leadership component as well.

[00:03:05] Sean Steele: Cool. It's often been a missing. I mean, we've been to quite a few schools. I was actually super impressed with the last one that my boys were in, their whole year 10 career development program was like, it went for a whole year. Like their whole, you know, doing psychometrics and thinking very deeply about what they're going to do afterwards and all the subjects. I mean, that sort of stuff. Really, there was no one asking those kinds of questions. Felt like, even five years ago, feels like a mighty challenge you've taken on because I remember when I was 15 to 17, I was absolutely clueless and so very excited that people are like you in the world and supporting teenagers to have a better outcome. I guess context for our audience. We were introduced by one of my old mentors who I know is also an investor in your business. And when he's invested, I'm always curious because as you know, he is whip smart and I haven't met many sort of smarter and nicer humans than him, present company excluded, of course. But you're also one of the Founders joining our foundation cohort of the Scaleups Roadmap program where we help Founders build a stronger competitive advantage through good growth strategy, simplified execution plans and so on. So, I can't wait for you to be part of that, but, you know, lots of people listening are not only Founders, but of course parents of teens, like me, we've got plenty of Founders in and around my age who see tutoring businesses from the outside and they're floating around near there, but they actually have no idea what they look like from a Founder perspective. You know, the actual business model of tutoring and study skills and the businesses. Your business is going well, you're a successful seven figure Founder that's growing well. And so I was keen to understand today, like, unpack a bit what the business looks like, the challenges, the strengths, what you've learned so far, things you think you're going to be facing over the upcoming period. Are you happy with that as a bit of a setup for us today?

[00:04:48] Rowan Kunz: Yeah, sounds great. Happy to be here and looking forward to chatting, Sean.

[00:04:52] Sean Steele: Awesome. Well, can you start for us with the personal journey that led you to found Art of Smart? Like what was the driving force?

[00:05:02] Rowan Kunz: Yeah, so look, I was at university at the time, in high school thought I wanted to be a professional athlete. So, you know, I'd been, you know, I love football. That is the round ball version of football, just to be clear.

[00:05:15] Sean Steele: You do have to be clear in Australia, don't you?

[00:05:17] Rowan Kunz: You do, you really do. And so, you know, I had hopes to go play overseas, make it as professional and along the way realised I probably needed a bit of a plan B. And when I say I realised it was probably more like my parents really made it clear to me that I needed a plan B. You know, I had no clue. You know, like I had no clue really, because I'd been so focused on sport. And so, for me, I thought, well, you know what, I love reading John Grisham novels. I love any TV show with a lawyer in it. Like, you know, from what I can see, lawyers look like they have a great career, make lots of money, lots of job security. Great. You know, that looks like and it's high status. So, great. You know, that looks like a great pathway. And then, you know, I really liked Harry Potter and I thought Sydney Uni looked like Hogwarts.

[00:06:02] Sean Steele: It does, doesn't it?

[00:06:04] Rowan Kunz: Yeah, it does, right? It's a bad way to make a life choice. But for me then,  my Plan B became great law school, and so I spent a lot of time training, but also working pretty hard at school to try to get the marks to get into law school. And I was really fortunate that, you know, by the end of the journey, you know, somehow managed to get the marks. I had really great support, a fantastic mentor, who was my soccer coach at the time as well, that really just provided a lot of inspiration and guidance and I got there and, you know, it was nothing like what I had expected. You know, like it was certainly not Hogwarts. I mean, Sydney is a great institution, but it’s not Hogwards.

[00:06:38] Sean Steele: A lot less magic.

[00:06:39] Rowan Kunz: Yeah, definitely. And also, you know, I had a rude awakening about a career as a lawyer, because I'd literally done no research short of watching TV shows, you know, reading some fiction books about a career as a lawyer. And my observation is, you know, since then that's not that uncommon for most young people. You know, like a lot of the time our ideas about what we want to do with our lives when we are 16, 17 and 18 are really formed by pop culture, you know, like the things that we see, the things that our friends are talking about. And you know, I was no different. But when I got there I realised; well, wait a minute, you know, , the career prospects are by no means certain as a career as a lawyer, you know, there's over 50,000 students studying law degrees across Australia at any given point in time, there's maybe 67,000 practicing solicitors. So, you know, the numbers don't quite stack up when you look at the job opportunities and the number of students studying it. And I also then had this realisation that, it wasn't the type of career…

[00:07:44] Sean Steele: Did you learn those numbers whilst you were actually doing your law degree? Like, because obviously that's not the kind of thing that you typically think about prior to going into any degree.

[00:07:50] Rowan Kunz: Yeah, not those explicit numbers, but I started realizing, wait a minute, that the level of opportunity here is not necessarily what I had been led to believe from the lack of research that I'd done. But I think also it was a mindset thing for me, which was that. I think, my observation through my experiences in law is that, you've got to be really good at finding problems, right? Because a lot of the time you're trying to like, see off problems that might happen in the future. And I just hated living in that mindset, you know, like I'm much more a person that loves, yeah, like, great, let's find a problem, but let's solve it. You know? Let's create something. Let's build something. So, for me then I ended up, not really knowing what I was going to do. Like I was in this place of just, well, I'm doing this law degree, like hopefully it'll lead to something. And I started, having some, some family friends reach out because they were athletes or musicians or artists or performers, and they were wanting to do well at school to create options for life after school, but they were also wanting to find a way to continue to do what they were passionate about. Everything around them was telling them, that was not possible. You know, that you needed to quit sport, dance, music, extracurricular, you've got to study for, for more and more hours. Like, that's the pathway to success. And the reason they'd reached out to me was that they had just looked at my experience of continuing to train and try to pursue, you know, professional sport while also somehow pursuing an academic goal. And they said; Hey, like, how did you do it? Can you provide some advice? Can you help me on the journey? And I thought; well, you know, I'm not doing anything else right now. I'm looking for an escape route to a career as a lawyer. I was like, great, you know, like I'll do my best. And you know, the early days really, it was just me sharing things that worked for me. But very quickly, I suppose, like I had sort of two experiences. One was an experience that I realised I could significantly impact another person's life. And as another young person, you don't have, there's not many things that you can do at that age where you get to have that degree of impact on someone else, and that was just addictive. You know, like it was just like this, wow, this is an incredible experience. And then, you know, secondly, alongside that was just this observation that over time it wasn’t just athletes that were coming to me, it was a year 12 student who was just struggling with the pressures of year 12 and the stresses and the anxieties and they wanted to just get through the journey in a way where they were going to maintain their wellbeing, but still maximize their options for life faster. And that made me sort of realise; hey, wait a minute, this isn't necessarily like this really niche problem where there's this small group of athletes and performers that need this support. But actually, it's a much broader need that exists. And so, you know, in my final year of my law degree, basically made a decision to not to apply for any clerkships. Because, you know, the pathway typically is, you know, you get a clerkship in your penultimate year. If you don't screw it up, you get a grad offer. You know, you're sort of great. You've got your future sort of set out. And I said; no, I'm going to burn the boat, so to speak. I'm not going to apply for any clerkship. And I had friends looking at me going, you're crazy. Like, you're going to not pursue that to start like a tutoring and mentoring business. Like, really? And yeah, I made the decision. I was like, no, like I'm going to give it a year. I'm going to see what we can do over a year and just really sort of try to create something here. And basically, had in my mind that by the end of the year, I want to see enough momentum or traction to go; great, there's something in it here, I should double down on this, and not seek a career as a lawyer or a management consultant, whatever else that might come. And so, by the end of the year, you know, we'd gone from myself, to a sort of a team of about 15 other tutors and mentors. And, you know, we just were bringing on one of our first staff in admin to support me running the business. And so, it was enough to say there's something there, you know, there's something here that's worth doubling down on and doing more. And so, you know, that was now, that's sort of coming up to 14 years ago now, so.

[00:12:09] Sean Steele: Geez. And that is a huge punt to take fundamentally like that must have taken a lot of courage because you've just done a law degree. Everybody thinks you're … and you know, if you think. Most people want for you, of course, safety and security. And they don't want their friends or their kids or whoever kind of enter into a big world of the unknown. They're like, no, you know, play it safe. Like you've got this, why wouldn't you carry on with that? And yeah, I have a lot of friends. I remember one friend who got to the end of, I think six months out of the end of his law degree and then restarted an IT degree because he realised I just don't want this life, this is not for me. It took him a good amount of time to figure it out. What did your parents do, were they supportive? Were they freaking out? Like what was the environment in which you made this decision?

[00:12:55] Rowan Kunz: Yeah, look, I'm really fortunate. Incredibly supportive parents. So, I mean, my father had been an entrepreneur for most of his life. So, you know, he had at any point, you know, I mean, had run multiple businesses. So, that certainly had changed my sort of mindset to realise that running a business was one of a number of career pathways you could take. It wasn't this sort of weird thing that you would do if you were crazy. And it was something that was just one of a choice. And, you know, on my mother's side as well, like,  her siblings and she had people in her life and her family that also were business owners and entrepreneurs. And so, I think that certainly normalised it a lot more. And you know, certainly I think, you know, there was still some anxieties and stresses like, you know, like you've worked so hard and you know exactly there's this career set up. But I think in the end they both were really fantastic just in supporting me, trusting me to give it a go. And I think both myself and my family really had come to that point of realising, you know, and I'm still a huge believer of this, like, I think, I had this realisation that, it was a win-win proposition because even if I started the business and it didn't play out to the extent that I wanted, my belief was it was going to, at the time, make me inherently more employable relative to my peer group, just by the experiences that I was going to be exposed to at a much more accelerated rate to the experiences they were having through more traditional employment avenues. So, I think that really helped both give me and my parents, I think that degree of, at the time, confidence to be like; actually no, you know…

[00:14:37] Sean Steele: I've got my fallback here and actually it may be an even better. Yeah, that's super interesting. Wow, that's a great way to get started. And clearly when you realise later on as you become a Founder and you end up negotiating a whole bunch of things, actually, doing a law degree, it's not the worst thing to have done because it really, you know, teaches you quite a lot about negotiating and how people think and contracts and a million other things that can be useful. What is the business…

[00:15:03] Rowan Kunz: I think for me, I realised in second year it wasn't going to be what I wanted to do, but exactly. There was an appreciation of like, okay, it can teach you a lot of things. And so, you know, it really then dictated my subject choice within that law degree. You know, like what are things in the law degree that I can do that are going to be broadly applicable if I'm not practicing as a lawyer necessarily. So, yeah, I agree with that.

[00:15:25] Sean Steele: And you know, you could have halfway through because you'd kind of realised maybe this isn't for me. You could have left early and actually really compounded the risk, but you chose to finish it, which probably did a lot for you, again, having that backup and not actually really adding a whole bunch of weight and pressure because you still had a fallback. That's super interesting. So, what does the business look like today? You know, like customers, employees, that gives us a sense of the scale of what Art of Smart is doing today.

[00:15:47] Rowan Kunz: Yeah, no. Great. So yeah, we started with myself. I grew up in Sydney, in the Hills districts for anyone that, you know, I’m held from that area. So, with myself doing my thing, going out to local areas. Now we're sort of incredibly fortunate. We operate across Queensland, new South Wales and Victoria. You know, we support over 3000 students every year with tutoring and mentoring. You know, we've got a team, a head office team of sort of 25. We have a teaching and tutoring team of over 600. Yes, that's sort of, yeah, where we've come from, you know, just me driving around my car supporting students in the local area. Yeah.

[00:16:28] Sean Steele: That's amazing. And so, in this, right now, it fair to say that tutoring is relatively crowded, like it's certainly not an uncontested marketplace for you, what was it like when you started? Did it seem like there were not many quality companies? Like I'm interested in how you have differentiated the business, given the environment you've had to operate in. Can you talk to me a little bit about that?

[00:16:49] Rowan Kunz: Yeah, I mean, look, what I would say is that, I mean, to some extent, tutoring has always been a fairly competitive industry. And I think one of the reasons for that is barriers to entry can be relatively low. I mean, you know, your local university student who has graduated from high school, it can put a shingle up, so to speak, right? And be like, great, you know, I'm now a tutor. I'm available and put it out throughout the network. So, you know, you've got very, very low barriers to entry and that's at an individual level, but also organisationally. And so, what we see every year is new entrants come into the market. What we also see every year is entrants leave the market.

[00:17:31] Sean Steele: Yeah.

[00:17:32] Rowan Kunz: And a lot of the time it's because, the people that are starting the organisations were like myself, you know, they're at university, they are looking for some casual work. Maybe they're entrepreneurial. And what do you know best. Well, you know, education because that's what your life experience has been. So, you start an education at tutoring business. Inevitably though, you start to think about your career and you think about, oh, I'm doing engineering, I'm doing law, I'm doing computing, and maybe the economics and the scale of the business not sufficient enough yet to make it something that you double down on. So, what I would say is back then when we started through to today, like that dynamic is quite similar in that, you get new entrants constantly, but they also don't tend to last that long. You know, there's like a three year sort of timeline and then they disappear. So, I think that's certainly been the case throughout that. In terms of how do you still differentiate within that? Because I mean, that doesn't really change. You know, you've still got to find a way to differentiate. I think the position we've taken always has been, and it's something that we've really focused on is, having a holistic approach to support for students. And so, what I mean by holistic approach is, not just focusing on great, like, we're going to help you teach the content and we're going to help you maximise your ATAR. You know, in terms of like, it's all about Marks and ATAR. And you know, if you look at the industry and you look at, certainly if you're looking at the industry for like, you know, high school tutoring support, most organisations, their focus in their messaging is around we help you come first, we help you get the top ATAR. We, you know, all our tutors are the 99 plus ATAR, like it’s very, very much focused on, we're going to help you come first. And so what we realised was that…

[00:19:16] Sean Steele: And Rowan, sorry, just before you go on, just for the benefit of our audience, for anyone who's listening overseas, which we'd absolutely have many listeners in the States and all over the place, and ATAR is essentially the sort of score that you get now used to be quite a whole bunch of different sort of language around the scores, but now I believe it's nationally, all students receive an ATAR and that's their score that they use for sort of access to university.

[00:19:36] Rowan Kunz: Yes, exactly right. So, it's an important thing, without a doubt in terms of options. So, I think if you zoom out and you look at just the landscape, like our perspective was, really you've got maybe 15% of students based on sort of the distribution that will score an ATAR over 90, and yet pretty much everyone in the market competes with their messaging for that 15%. You know, it's like, we help you get a 99, 98, 95, like we help you get that really high ATAR. And so, we sort of looked in that and went; first of all, great. Yes. That's a segment of the population that may be very invested in wanting extra support. They're very driven and so you can understand why a whole lot of organisations are going to have that as their target segment because it's a highly motivated group of students and families who wanting support. But equally, it's actually quite small percent of the total market of students that need support and it's fiercely fought after by so many other competitors. So, we’ve said; look we're way more interested in looking at is, one, how do we support students achieve growth, right? We're more interested in where you start and where you land, rather than necessarily you scoring a perfect high mark or score. And secondly, the way that we're going to help you do that is going to be significantly different. So, our focus is going to recognise that, at the end of the day that it’s not just the content, it’s also how you navigate all of the other things that go with the journey. Being, you know, what's your study routines to look like? You know, what's your time management, your energy management? How are you maintaining your wellbeing? You know, what actually are your study strategies in the lead up to an exam? How do manage your exam technique. Because our realisation was that we could be in a room with a student for an hour a week. Great. We could be teaching them Maths, English, Physics, Chemistry, whatever it might be. Their success though, was actually not going to be really an equation of what we did in the hour with them. It was going to be what they did in all the hours that they were by themselves without a tutor or a teacher holding their hand and how effectively they use that time. And so, for us, we realised; great, if we're going to better support students navigate in a way that’s much more healthy for them and in a way that's going to be more successful for them, we need to zoom out and look at this bigger piece. It's not just about; great, we're going to teach you the content and we're going to focus on that. We've got to look at all of these other factors that are playing a part. And so, we really doubled down on that on day one. You know, the way that we did that was we actually went out to the market and said to high school students, what are your burning questions about just navigating this high school journey that you don't really have good answers to, that you don't know what to do? And so, we took that and we created a list of, you know, 50 sort of key questions. And a lot of them were like, you know, how do I get into a good sleep routine? You know, like, how do I avoid burnout? How do I balance and manage my time more effectively? You know, how do I reduce mind blanks and stress? And so, we took all of those and we went to really the top 2% of students across Australia, and we sort of said; great, like you guys have clearly worked something out here in terms of how you navigated the journey, how you did this, how did you do it, right? And so, you know, at the time interviewed a hundred. Now since then, we've interviewed thousands and the idea was to basically build a playbook of; great, what are the strategies and the approaches that students are using that is consistently going to support other students if they were to apply it as well, be able to navigate the journey more successfully. And that led to initially, you know, writing and publishing a book, which was a key part of like our initial sort of market positioning, and one of our key early marketing strategies around going; great, like we're putting a real stake in the ground, so to speak on that our approach

[00:23:24] Sean Steele: We've analysed what works and here it is.

[00:23:27] Rowan Kunz: That's right. And grounded in a very holistic approach. And that that's really then continued to be a core part of our offering ever since then and to this day, it's still certainly over time, you know, the dynamic has shifted. Like we've been talking about wellbeing and stress and managing time for over a decade. Now, it's becoming obviously a lot more, I think of a recognised issue, but yeah, for us, we’ve been doing for 10 years. So, of course now to some extent, we do see competitors rebranding from time to time over the years and looking and borrowing some language and some words that look suspiciously like ours. But even to this day, like if you come to our site, you know, our key message on our landing page is “We help you study smart, maintain wellbeing, transform your results.” That language is very unique in the market in terms of just our focus in how we're trying to support students.

[00:24:24] Sean Steele: That's so interesting. Well, I love that you, rather than, you know, quite often I think, people can fall under the trap of going; well, we already know the answers and here are the answers. You know, we've got four of us that happen to have had a bit of success doing something and here are the answers, as opposed to actually going and doing the real research. And if you look at most businesses that have sold knowledge well, so, you know, the Verne Harnish, Jim Collins and so like they've all been grounded in a; well, we've just gone out and asked the people who are nailing it, and we've distilled that into actually something that makes a lot of sense and now we teach it to somebody else. And I love that your business was grounded in that. Can you just talk to me about scale constraints in a tutoring business? Like ultimately, you know, one of the things that we, you know, I certainly personally and other ScaleHQ advisors that we have, spend time with Founders on is, you know, most Founders are interested in unlocking scale in their business and quite often they grow up with a business model that made sense for a period of time, but then all of a sudden there's a constraint that really holds them back from being able to continue to build at the same rate as the business gets bigger. What are the big constraints for you in a tutoring business?

[00:25:35] Rowan Kunz: Yeah, I mean, I think the biggest point is, tutors and people, you know, at the end of the day, like, you know, tutoring is, and certainly Covid and online take up has shifted that a little. I say a little, perhaps not to the extent that maybe, you know, with foretold, but I think tutoring inherently is still a very local experience. So, you know, people often love to have a tutor that graduated from their school because they're familiar with the school and the teachers and the assessments. You know, there's still a huge demand for, you know, even if you're wanting someone, and you're open to online, there's still a large demand of wanting someone local to you. You know, like maybe it's because you do prefer that face-to-face, that's your learning preference. And so I think that's probably one of the key challenges because even if you're with online, you can now maybe bring on some people that can serve a larger geographical area.

[00:26:35] Sean Steele: The demand side is still saying, yeah, but we still want local. At what percentage of the business or what percentage of the children would be delivered in some kind of a face-to-face or localized environment versus an online environment where the geographic boundaries don't exist so much.

[00:26:48] Rowan Kunz: Yeah. And that's where I think online certainly has helped, right? So, pre-covid, we were probably in a position where maybe 3% of what we were doing was online, and that was predominantly, rural, regional, international, in terms of international schools. So, you know, Covid has come along and now we would look at probably 40% of what we do is delivered online. So, you know, a significant change. And that certainly does open up sort of your ability to scale and to some extent, going back to your prior question, that does change the competitive landscape a little bit, which I think was maybe one of the key differences to when we started the business. You know, when we started the business, yeah there were few barriers to entry, but actually one of the barriers to entry was localisation, you know, being able to have team in local areas, that certainly shifted a little bit. Because as we can see that in our case, 40% of the support we now deliver is online. It still though presents the constraint for the remaining 60%, that are wanting face-to-face, they're wanting in-person support, either in their home or at a local campus. And so then it's a matter of having the right people with the right availability, with the right expertise in the right area.

[00:28:03] Sean Steele: Yeah. And therefore, actually scalability becomes almost a requirement, doesn't it? Because if you're going to like, for you to actually have the time and the resources to find those people, screen those people, attract the right ones, you actually need to have the demand from enough of the areas like you've really got a two-sided marketplace kind of going on, don't you in this model?

[00:28:22] Rowan Kunz: Yeah. I mean, in many respects, yes. You know, like precisely like you don't want to bring on team and tutors and then not have the work for them, but you sort of need to have them there because if you don't, then you're not able to support the inquiries that you're getting. So yeah, it can be quite complex in sort of navigating that. Certainly again, when you're sort of looking at it from a position of scale, as I said, online certainly has helped that, without a doubt, but still that remains, I think particularly in certain states as well and for certain year groups. So, you know, for primary school, online has probably remained at 3%, and understandably. Like, you know, for a young person who's in primary school, more often than not, they really need that in-person support, and just purely from a focus point of view. Equally, I think depending on the degree of lockdowns in states, that has also played a role in terms of people's appetite for online. So, our experiences, you know, that Queensland, they had a very different lockdown experience to New South Wales and Victoria. There's a much stronger demand remaining in Queensland for face-to-face as opposed to online, relative to New South Wales and Victoria.

[00:30:48] Sean Steele: So, it sounds like then, and you know, some industries really got hammered, some industries got hammered for the short term and then had a huge tailwind come out of Covid. Sounds like, perhaps Covid has been a good enabler, given you, for you guys in your ability to shift, get a greater blend between kind of online and face-to-face, which probably helps with the scalability. But if you think about the last five years, if you even go maybe kind of pre-Covid, what have you invested in or double down on that you think has actually really helped you get to where you are today?

[00:31:21] Rowan Kunz: Yeah, so I was thinking about this and really we have three Cs that I would sort of reflect on that have been key for us. So, Content, Curriculum and Campuses. So, to start with, for us, you know, over the last five years, you know, we've really invested a lot in content marketing. So, creating. Incredible guides and resources for students from like the study skill, like how to study for a subject through to, maybe practice questions and how to actually like navigate exams through to, interviewing students at all of Australia's top universities to find out their experiences in specific degrees through to going out and interviewing career professionals to find out what it's actually like to be a lawyer, an engineer, or a doctor, whatever it might be. We've spent really, the last five years making significant investments into content, and that's been really sort of key I think for us in, you know, one,  just really, I think building a really sort of strong brand in the market. I think when you think about that competitive landscape again, I think brand at the end of the day like becomes quite important, particularly as students get into senior years and parents and families start to think about; well, who are we going to trust to help my kid go through what is an important time, because if we've got the wrong person here, it may influence the results and the options that my child has for life after school. So, brand and trust becomes quite important. So, I think that's been really key for us, just in building significant trust and brand in the marketplace. And in turn, that also has helped us really as a flywheel, I think just enable us to recruit, you know, because so many people as a student know about us and have a positive experience with us as a student in using maybe a guide or an article or a video, that then later on when they're looking maybe to do some tutoring while they are at uni, the Little Green Leaf, that's a recognisable sort of symbol for them to go, oh yeah, I know those guys. I trust those guys, I'll jump on. So, for certainly content, is probably been one of the sort of first key leaders. I'd say that second one…

[00:33:34] Sean Steele: And actually, just one thing to draw on there. I think for those people listening, many people probably think about content as fundamentally just a customer acquisition enabler. But I think what you've just highlighted is actually, and given the environment that you've talked about is super important because if you think about things that you can double down on that in three to five years, give you a competitive advantage, if you imagine being a new upstart coming into a market where you're now competing against Rowan and Art of Smart, and you look at the amount of resources that they have, and if it's really high quality content, therefore it's taken time and cost to curate and it's really well laid out, and you go; how am I ever going to compete with that? Like, these guys have clearly got scale. I'm never going to be, you know, it actually creates a really strong competitive position, not just a good enabler for customer acquisition. And by the way, your content is excellent because last night my son, who's in year 12, and who's finding maths method methods quite challenging. I actually gave him the link to your landing page and I sent him examples of practice questions and things for his external assessments. And I was like, get on this page. You know, we're having a conversation this Sunday. I was like, I want you to have read everything that's on here before we have this conversation about your plan for the next three months. So, it's definitely good. So, sorry, that was your number, one pillar. 

[00:34:55] Rowan Kunz: Yeah, and I think what you've just shared applies really nicely to pillar two for us, which has been like Curriculum. And when I say curriculum, what I mean is one of the things that we did is, we made a decision to invest in building significant tutoring resources to support our tutors and our students with the subjects and the mentoring that we were going to be providing them with. And so, you know, what that's looked like has mean, you know, building out a resource design team of amazing teachers and tutors that have been looking at each state-based curriculum, and going; great, what do we need to create here to really support, both, tutors in delivering high quality sessions? And that’s truly key, because when you've got scale, how do you ensure over 600+ teachers, how do you ensure that actually, the person that's out there working with the student is going to deliver at a minimum standard. And so, for us it was going; great, let's build these really comprehensive that curriculum outcome and dot point, by dot point, we're going to be sharing like the key things that students need to be knowing and having practice questions graded by difficulty and mock exams and all of the things that you would really need to get support and all of the things that if you were to go to the local sort of tutor around the corner, they're not going to have.

[00:35:19] Sean Steele: I was just about to draw that out because actually my experience was, we had some tutors. I remember when my son was doing, you know, sort of advanced math in like year 10 and we, off a different platform had some tutors who pretty much came in, and from my perspective, did his work for him. And I reckon he learned absolutely zero. His study skills didn't improve one iota. It was like all of a sudden, I've got a feeding source and when that feeding source goes away, I've got nothing. And I just thought, like they know stuff and they can help him solve the problem, but can they actually explain it? Can they help him come to his own understandings? Are they helping him think about how he actually does the stuff. And it was a, that's chalk and cheese and so, geez, I sound like an Art of Smart salesperson. This is bad. But, you know, having had personal experience, I think this stuff's actually super important. And again, it's building something that is hard to replicate. So, these are things that don't deliver immediate impact. Like you all of a sudden don't start investing in things like these resources and your revenue goes through the roof. Like it's actually a real cost and it's a heavy cost, but over a…

[00:37:19] Rowan Kunz: I would say, we've spent probably close to a million dollars, you know, investing in it, so like, yeah. Significant cost...

[00:37:29] Sean Steele: And customers at the face of it also, when they've had no experience of a business, they don't really know what that like, it's hard for them to understand how valuable it is until they're in the service. So that can be also really challenging when you're making those investment decisions, because that may not factor into the way they decide to start or to try you. But actually, it would have a big impact on retention, I imagine.

[00:37:48] Rowan Kunz: Yeah. I mean certainly I think, I mean, look, I think it's probably had a couple of impacts for us. I think, certainly, our observation is it does have some degree of impact on customers making a choice to work with us as opposed to elsewhere. You know, because I think there is certainly a recognition, I think particularly, you know, your experience is really I think one that many parents and students have had where, you know, they've got support and, you know, the tutor themselves is actually, they're great. They're intelligent, they're articulate, lovely person. But then, you've got a really specific curriculum, a really specific syllabus, and you've got an assessment that you're facing and how do you grapple with that, right? Like, what's the level of support that you're going to have to be able to navigate that? And it's just not quite the same. So, I think we do find, in our case that that does make it a difference. And I think the reason it also makes a difference is that most one-on-one. So, what we do, a couple of things, and I suppose, you know, as we talk a little bit more, it probably come out, we do both one-on-one and group-based format support. And that's pretty unique actually in the market. I guess that's one of the other differentiators that I didn't highlight in terms of how we've sort of positioned ourselves. And the reason that's pretty unique is that most organisations tend to do one or the other. You know, they tend to do one-to-one, online or in-person or they do group online or in-person. And for us,  we went; great, actually, how do we build personalisation to what we do? Which is, what's the student's learning needs and then what is the right fit of support? Because sometimes it's one-to-one, sometimes it's group, sometimes it's a bit of both. Now the reason I say that then is that most group-based tutoring organisations have scale to invest in significant teaching resource and curriculum to ensure that there's a really great experience. Whereas, a lot of one-to-one, don't. And so, I think the other thing that then is quite unique for us is that we've been able to leverage some of the scale that we've been able to build to go; great, let's build these resources that are here, these curriculum resources to support tutoring, and then let's deliver that in a one-on-one environment. And let's not just deliver it in a one-on-one environment, but like when you get started with us, we'll also, you know, once your tutor works out what you are needing, we'll ship out a physical printed resource book to support the lessons with you. So, we've found that, I think that certainly has helped and that's been like a really important factor for us. And then alongside it, I think the flip side is as well, is it also really helps I think, on just retention with tutors because tutoring, from a tutor's perspective, depending on the subject you're doing, can sometimes take a lot preparation. You've got a lot of work to go and prep or, you know, if you don't have access to these resources and you are that local tutor that's supporting, your kid… like you might be going away, going, oh, they've got this exam coming up. I'm going to go and prepare all of these worksheets. Of course, you know, like AI might make that a little bit easier in the future to be able to do. But I think that's been our observation as well, is it just really has helped to not only improve overall the quality of sessions that our team can deliver, but it also enables them to be able to spend more time thinking about how they're going to engage the student a lesson, you know, spend more time on some of the higher order things that are going to be more important in a lesson, and save them some time on prep and hopefully therefore just improve their retention as well. And them sort of staying with Art of Smart and with their students.

[00:41:521] Sean Steele: And so, of curriculum is the second. So, what's the third?

[00:41:24] Rowan Kunz: Yeah. So, the third for us has been Campuses. Yeah, so, we made a decision in sort of 2017 to, I guess A) at that point we had been only one-on-one in homes and very small percent online, and so that had been our primary delivery model. And I guess what we realised was, you know; hey, we want to find a way to build deeper relationships with customers and families, so that we can support them. And you know, that was through both, like the range of programs we were sort of hoping to build out at that point, but also in just the delivery. So, for us, we opened our first campus towards the end of 2017. And that also heralded the beginning of running group programs as well, and so, you know, that was also, I think another really just key pillar for us. Yeah.

[00:42:14] Sean Steele: Again, more competitive. And so notwithstanding that can be a scale constraint as well. If it becomes a material part of the revenue, it can become a strong differentiator. But it could also, obviously, campus fit outs, costs money and you've got extra releases and all the rest. But from what I hear, you know, you've had the opportunity, and there are some big platforms that just do one-on-one tutoring. It's essentially just a marketplace. And so, the quality's probably very difficult, to control, but they've got a lot of scale and they've got no infrastructure and no Capex. But what I hear from your business and your brand is actually the holistic view of the student has been critical, which is one of the things that’s really necessitated that you make these investments in the way that you have done because you know that it’s going to produce better outcomes. Conscious of how much time we’ve got left, I’m really interested to understand where you think the industry is heading. Actually, I’ve got two questions there. One, what would you, I mean, everybody loves to just bash the education industry and like all of us as parents, were like; I can’t believe this isn’t taught in schools and blah, blah, blah, but you’re closer to it than anybody else. But if there was something that you could change about the way students are educated in the public or private typical kind of K to 12 environment, what would you change? And then second, where is education going? I mean, there’s so many people are probably very quick to go; well, ChatGPT is just going to become a personalised tutor. Or, you know, some version of ChatGPT and so why do we need humans anymore for tutoring? I’ll just get them a $20 a month license. So, talk to me first about what would you change and then where is it going?

[00:43:50] Rowan Kunz: Yeah, so what I’d change, it’s something I I’ve written about a lot and I’m very passionate about, is I think what I’d want to see change is much more integration of entrepreneurial education for students, particularly throughout senior high school. And I think just at its core, you know, I think it’s tricky because an ATAR at the moment, is the best still indicator of someone’s ability to succeed at university. But that’s all I think predicated upon a reality that university is still the best pathway for long-term future success, and I think for a range of careers. Certainly, you know, for a range of careers where you need a certain level of, you know, training in certification, whether or not it’s medicine or engineering as examples. Great. But I think, in a world now where there is so much more opportunity for young people and actually entrepreneurial thinking, being able to identify problems, see opportunities, learn how to build products and services, market, sell, launch teams. Like, I think that is such a critical skillset for helping young people navigate the future. Well, not even the future, really the now. And I think if I could click my fingers…

[00:45:12] Sean Steele: Almost more of a catch up, isn’t it? 

[00:45:14] Rowan Kunz: Yeah, exactly. If there’s one thing that I’d love to see, it would be, really that there is much more entrepreneurial education, particularly in years 10, 11, and 12. And look, schools are doing their best and I think more and more schools are bringing on leaders within the schools into entrepreneurial roles to encourage it. And a lot of the time that they’re struggling with curriculum constraints that, is already stuffed with so much other things. But I think, yeah, if we could really just dial that up. I think, Australia would really…

[00:45:50] Sean Steele: Well, it’s still very teacher led rather than curriculum led, isn’t it? Which is of course also a challenge because the knowledge changes quickly. Like I helped in my son, not the last school, but the previous school before that I introduced an entrepreneurship program to their year sixes and I co-facilitated it with the school because it was super important to me. And luckily my son wasn’t embarrassed about me then, because he was only in year six. And so, you know, dad is still king, that changes. And then in the, my son’s high school when he was going, they had an amazing sort of head of entrepreneurship as a business teacher who just, you know, they had full shark tanks and stuff that I sat on the panel of. And it was just awesome to see those kids going through that. But it was absolutely teacher led and when that teacher departs, who know…

[00:46:30] Rowan Kunz: That’s right. Yeah. And that’s what I see for a lot. Exactly. For a lot of schools, it is very teacher-led and it’s often something that a teacher has just volunteered to take on.

[00:46:38] Sean Steele: Yeah. It’s passionate.

[00:46:39] Rowan Kunz: … on top of everything else that they have, which is a lot. And so, exactly. You know, like there’s burnout risks, but also precisely right. They leave and it’s not part of this sort of broader culture.

[00:46:54] Sean Steele: Well, I think if you were fortunate to grow up in an environment where entrepreneurship was normalised in your household. But for those students who haven’t, if you think to go back almost to your own story and go; well, had you had parents, you know, my parents were absolutely sort of government orientation, zero entrepreneurship skills. It was not in my awareness whatsoever. But if you were to have access to those kinds of experiences in schools where all of a sudden you might still do your law degree, but you are thinking like you did halfway through, actually there is another potential pathway here. And I’ve got a little bit of confidence because I’ve actually had to build some stuff and sell some stuff, and had my ideas tested and I’ve got a little bit more confidence to feel like this is not my only path. There are other options even if my parents told me I have to be a doctor or whatever, maybe I’ll build a medical platform  rather than being the doctor themselves. What about the future, Rowan?

[00:47:46] Rowan Kunz: Yeah. So, I mean, look, I think without a doubt, AI will have a level of impact in education. I mean, it already is. Like, I don’t know, I can’t think of a student that I haven’t met that hasn’t at some level been trying to use ChatGPT to help them get through an assignment or an assessment. So, I think without a doubt it’s going to have an impact. I mean, we’ve sort of been looking at from our perspective, we sort of zoomed out and particularly more from, I guess a tutoring or outside of school support perspective. We really looked and zoomed out and looked at, okay, what are all of the different buckets of types of support that a tutor might provide? So, that’s for maybe the helping, you know, explicitly teaching some content, through to helping students break down an assessment question and create a plan, through to marking and feedback, through to supporting them with a study plan, helping them stay accountable, giving them emotional encouragement. So, I think if we look at that and you really separate each one, I think there’s a huge case to say that AI is going to be able to play a significant role in components of each of those steps. So, I think for us, the question has been; okay, well, how many, you know, if there’s, let’s say there’s 10 particular buckets of the types of support that a tutor might provide, it’s like; well, okay, to what extent is AI over time going to be develop to provide the number bucket. And so, what I suspect is time know, it might right now, ChatGPT is good, but it is still very limited in terms of its application. Maybe it’s one or two of them, you know, like, and so it’s there and it’s supporting students get a little bit of supplementary support, but then there’s a lot of issues with it, so they’re still requiring that human support. What I suspect is that over time, the number of buckets and the quality of the support that is provided by AI grows to a point where; yes, right, students most likely will have a reduced need for human support. Now, when I say reduced, like I would, my anticipation is, and we saw this through online, is that we saw that, some students took to online and it was perfect. And there was a huge bucket load of students as well where online didn’t play out. And you see that like we’ve gone back to 40-60, you know, we’ve gone back to that point where for 40% of students online, yep. And then 60, it was like, no. So, what my suspicion is with AI is that, there’s going to be a group of students where they’re just not self-disciplined enough, self-motivated enough to be able to take the full advantage, I think of AI.

[00:50:28] Sean Steele: The assumption is that it’s not just, if you think about what happens in an advice situation, you have to trust the person. The delivery mechanism, perhaps, maybe is a better way to say it. Like, who’s it coming from? Do I believe in the information? And do I believe in my ability to implement it? Like those three things all have a lot to do with whether you’ll actually receive advice and do something with it. So, to your point, I imagine there’ll be some kids who will listen to an AI co-pilot, say; Hey, maybe we want to be thinking about this in terms of your study plan. Some will just ignore it because they’re like, yeah, it’s fine, it’s coming from a system like whatever. But there’s all of those three things have to take into account and it’s not the same delivery mechanism for everyone.

[00:51:11] Rowan Kunz: So, I would suspect that there’s going to be a group that, yes, they’re still going to really need that, that face-to-face support, I suspect there’s going to be a group that are able to supplement with AI support. And then from time to time for some of the higher order, more challenging things, are going to dial in to get; great, I need a bit of human support now, because, you know, I’ve sort of come to the edge of what I can sort of get through an AI support. And then I suspect students that were never able to afford support before, which I think going to be really fantastic that are now going to be able to at least get a level of support at a much lower cost to be able to help them navigate the journey. So, I think, yeah, at least how we’re sort of looking at it in terms of just what we anticipate, yeah. Is going to be the likely ad outcome. And I think in all of that though, I think what’s going to be really interesting, and this is something that, that we’ve observed, garbage in garbage out. You know, like you need to know the right questions to ask. And so that’s I think going to be the really interesting thing for students utilising AI. And certainly, it is at the moment when it’s ChatGPT and it isn’t some specifically trained product, is… what are the

[00:52:31] Sean Steele: Is the data coming from that it’s learning from you?

[00:52:33] Rowan Kunz: Yeah. Do they know the right questions to ask? And so I think that that’ll also play a role in impacting it. But yeah, we suspect…

[00:52:38] Sean Steele: Well, back to your earlier point around how you built the business in the first place. You could ask ChatGPT today, and it’ll take the average of what’s out on the internet, much of which over time will also become autogenerated. So, I imagine like the quality of information will go down and so where’s the information coming from? Is it coming some from somebody who has a data set based on what success looks like with deep specialisation? Is that where the data set that informs the AI comes from? Or is it coming from general stuff on the internet which might get you part of the way that there can be a big difference I think in AI delivered, any kind of coaching tutoring type model based on what’s the data set that sits behind it and who has actually built that data set. So, I think there’s a real interesting space for people like Art of Smart to play when it comes to that. Rowan, I’m super conscious of time and this I could talk to you about education and how we transform that for our given we’re very philosophically aligned there, but I just really appreciate the time that you’ve given us today. And folks, if you were to listen, play this episode over again, one of the things I think you’re going to hear that so excites me, is that the reason Rowan is actually, I mean, Rowan could have taken numerous paths to scaling in the tutoring business. You could have gone straight in and gone for a sort of pure play online, no Capex, no, like just removing every possible constraint because the only thing you're interested in was scale and scalability, but actually what you've built is a business that's actually got really strong medium term competitive advantage because you've chosen two or three things to actually really double down on and invest in with a medium term to long-term focus. And that is the whole point of strategy. Strategy is medium term competitive advantage. And folks, this is exactly the kind of stuff that we are teaching in the ScaleUps Roadmap Program. And Founders like Rowan are exactly the kind of people that you'll find in the ScaleUps Roadmap Programs. If you're looking to get yourself around people with his kind of open-mindedness and intelligence and willingness to question things and make good decisions, those are the kinds of people you should expect to find the ScaleUps Roadmap Program. If you want to join us on one of them, just jump to www.scalehq.com.au. Click on courses, register your interests, and you'll find all about it. But Rowan, if people wanted to get in touch with you or follow along with the Art of Smart journey to see where you end up in the next three to five years, where would you direct them to?

[00:54:59] Rowan Kunz: I’d direct them to our website www.artofsmart.com.au. You know, they can check out what we do, who we are. Certainly, if they click the little resources section, they'll get into our massive sort of content library. So, if you've got high school students, primary school students, there's loads of free stuff there that you can use. I know Sean has mentioned that his sons got some homework to do in going through some of it. So, definitely check it out. And then also, the best thing to do there is, sign up for the email list, that way we'll send you each week, relevant year level state specific resources, advice, tips and guides. And that way you can stay in touch with both what we're doing, but also, just get ongoing resources to support you or your child through their educational journey.

[00:55:48] Sean Steele: Fantastic, Rowan, thank you so much. And folks, if you enjoyed today, then the best thing that you can do is to just click the share button and send this episode to someone that you know needs to hear are the kind of messages that Rowan has just delivered. So, share away. We'd be very grateful. Thanks very much Rowan. Really appreciate your time.

[00:56:04] Rowan Kunz: Awesome. Thanks for having me, Sean. It was great.

[00:56:06] Sean Steele: My pleasure.