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The NEN Interview – Steve Tucker, CEO itslearning

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Steve Tucker, CEO of itslearning
image of Jonathan Viner

Jonathan Viner,
Nordic EdTech News

Still proudly headquartered in Bergen, Norway, but with established markets in 26 countries and 4.5 million active users, itslearning is the leading European LMS provider. The business is a Nordic EdTech pioneer with offices across the region. It’s owned by Sanoma, a publicly listed Finnish learning and media company.

I was delighted to talk to itslearning CEO Steve Tucker last week for this latest Nordic EdTech News interview. Our conversation was packed with great insights, including the rise of the classroom as a service concept, growing and scaling EdTech businesses internationally, the importance of the Nordics to itslearning and responding to the challenges / opportunities of the pandemic.

Jonathan Viner (JV): Good afternoon Steve and thanks very much for talking to me today! Let’s start with the basics – what does itslearning do?

Steve Tucker (ST): So itslearning is a technology business. We’ve been in existence for over 20 years and we provide what is known in the market as a learning management system (LMS). This is the platform through which students and teachers manage their work and their daily learning and teaching processes.

Prior to March 2020, schools used itslearning to deliver blended learning, which combines face-to-face in classroom learning and online learning. But the business has certainly changed over the last 18 months to support customers with both remote and hybrid learning. I’m really proud of what we’ve achieved in that period and it has shown the passion that our team at itslearning have for what we do.

For the first time in my career, I’m loving working for a firm that makes a difference in the world and how we enable students to keep learning even when they aren’t in school. It’s a really great place to work!

JV: Can you give me a sense of the business’ scope?

ST: Well, the scope of the business has certainly changed over the last two years as we moved in December 2019 from private equity ownership to being owned by Sanoma Learning. We’ve shifted from focusing on accelerated short term growth to prioritising sustained long term success as part of Sanoma. Aligned to that, I made the decision early last year that we should divest our US business and focus on being a European business – one headquartered in and with a real passion for the Nordics.

Our head office in Norway is really the development hub and that’s where the lion’s share of the staff are. We also have offices in Denmark, Finland and Sweden, which make up the Nordic region. And then our European region has offices in France, Germany, the Netherlands and the U.K. We do also have customers in Africa, Eastern Europe, the Middle East, Australasia and Mexico, but we support them from Europe and through partners rather than having local offices.

JV: How will you manage that planned US market exit?

ST: The deal was transacted in August last year with Altitude Learning in the US. The partnership agreement gave Altitude Learning the right to support our customers until the end of the 2021-22 school year and through to the end of current customer contracts beyond that.

We’ve guaranteed that we would live up to the contractual arrangements we had with those customers in terms of delivering our service. They are now migrating onto either Altitude’s own platform or another platform of choice in the US.

Given the business’ reach, size and scale in Europe, it was more important to invest and grow the great business that we have here than growing the business in the US, which is obviously a very different market.

JV: Clearly the LMS market is hugely competitive – what sets itslearning apart from the rest?

ST: I think there are probably two answers to that question. Firstly, I think it’s the scale and the breadth of the functionality that we deliver for our managed service customers. After 20 years, the product is about as full of functionality as customers could possibly get in terms of the daily workflows for students and teachers.

And secondly, we can offer additional value through Sanoma Learning. In each of the countries we work in, Sanoma Learning also owns market-leading educational content providers. So what we’re moving towards is a classroom as a service solution. Rather than just buying the technology as a service and then buying your content from a publisher separately, customers will be able to get the whole service from itslearning.

JV: You talk about classrooms, students and teachers, but what percentage of the business is K12 versus higher or vocational education?

ST: It obviously varies from country to country, but the core of our business is in K12. We’ve seen a lot of success more recently in both higher and vocational education, which accounts for 12% of our business.

K12 has certainly been driving much of the rapid growth in Germany and it’s also an important market for Sanoma Learning. As there’s not much Sanoma content currently in higher and vocational education, we tend to play as a standalone business in those markets.

JV: You just mentioned Germany. Why does the itslearning proposition resonate so well in that market?

ST: Well the first thing to say is that there has been a significant market shift in Germany towards digital learning, but I think that it really goes back to our full-service solution that I mentioned earlier.

There’s also lots of other things that make us very suitable for the German market. We’re designed for enterprise scale roll outs with many hundreds of thousands of users across a state. itslearning is also GDPR compliant, hugely secure and we’re based in Europe rather than the US.

We also have a very dedicated and experienced team in country, who can, when needed, refer and get assistance from our global support team in Norway. All of whom are in the same time zone – these things make a big, big difference for us.

JV: In what ways does being a Norwegian business influence itslearning?

ST: One of the things I absolutely love about itslearning is its Nordic culture of being 100% dedicated to supporting the students and teachers who we work with. It’s something that I’ve not come across before and people here go above and beyond on a daily basis for our users.

We are also absolutely focused on being partners for customers rather than just a vendor that they pay money to. I think that this was really evident during the pandemic – although we saw a huge, huge increase in usage, not a single customer was charged more because of that.

For our customers outside of the Nordic region, it also carries a sign of quality design and a strong Scandinavian ethos. That really helps to set us apart from the competition.

JV: Unfortunately, Corona hit not long after you arrived at itslearning. So how will the lessons you’ve learned over the last 18 months help support itslearning going forward?

ST: At the beginning of the pandemic we didn’t know how scalable / successful the platform was going to be versus the competition. After just three weeks, we had double the number of users but remained up and available to students and teachers over the period. Of course, we had challenges but we learnt that we have a really scalable and stable platform.

The other thing that I learnt as a new CEO was just how important we were to the students and teachers that use us. We went from being a solution that supported teaching and learning to a solution that kept teaching and learning going when schools had to suddenly close due to Covid-19. So the pandemic really showed schools just how vitally important it was for them to have an LMS through which students can access remote learning.

Moving forwards, we now know that we can cope, whatever we might decide to do commercially. And secondly, we know that there’s definitely a market for this. That’s really helped in the more strategic conversations that I have with Sanoma Learning, particularly in terms of the opportunity for itslearning to become the LMS of choice across the entire Sanoma portfolio.

JV: What does the future vision for itslearning now look like?

ST: Well, I think there are two very separate streams. The first is looking at us as a standalone Norway-based business, continuing to serve the customers that we’ve got and seeing where we can do more in the countries we’re active in. We are confident that we’ll see relatively good growth for the business and I’m really excited that we’re on a really good track.

On the other side, we’re exploring what else the business should do to become a more integral part of Sanoma Learning. We’re already working closely with Sanoma Utbildning in Sweden and with Sanoma Pro in Finland and I think that there’s a real growth opportunity for us here as well.

JV: You said when you started the job that Sanoma Learning has “a plan to invest in us and they plan to see us grow.” To the outside eye, progress on these objectives is not very visible, but to what extent have these goals been achieved or ticked off?

ST: I would say it’s a journey, but I think that on both of those, we will achieve 100% of those statements. The investment is certainly now beginning to come into the platform and in growing the engineering team as well. As we move into the second half of this year, you’ll see more investment in building the itslearning product to be even bigger and more scalable, as well as including some functionality from other Sanoma products.

We’ve certainly had support in growing the business. Finance and HR are now fully integrated, so we now have stronger people processes and more career progression opportunities than we’ve ever had before. Ditto IT and product. Actually I think that the investment and the business integration is happening slightly faster than I would have anticipated. But it’s also important that we maintain a strong itslearning brand.

To put it bluntly, I think the Sanoma acquisition of itslearning was probably the best outcome we could have had as a business. The worst outcome would have been being acquired by another private equity firm.

JV: When you look at the business, what do you see as its biggest challenge or biggest vulnerability moving forward?

ST: I think that it’s the speed of change that we see in the market and making sure that we stay ahead of it. We need to keep listening to all of our customers and to meet the needs they have, particularly as they reassess their position after the peak of Covid-19.

We also need to make sure that we support our publishing partners, who may be quite early on in their digital transformation. Distribution for us is done digitally and online, while for many of them it still involves white vans and warehouses. But working together, we need to understand where disruptors like Google add value and ensure that we keep pace and provide a compelling, integrated solution for our customers.

JV: On that point, how can you provide both a scalable proposition that works across Europe and be agile enough to deliver a solution that meets the needs of a single Norwegian school?

ST: It’s a challenge, but I think that over the last couple of years we’ve got much better at understanding the cost to us and the real value to the clients of doing some of these things.

Of course, it also varies market by market. We know that France has a government-led technology structure that everyone has to adhere to. That is a huge investment for us, particularly in a market where the per user value is very low as well. But it’s fine for us to do that – we just need to understand what the overall opportunity is for us as a business. So that’s looking at how many students and teachers we could really convert versus the cost of entering the market.

JV: You employ over 150 people in 8 different countries. Are you planning for them to return to the office or to continue working from home?

ST: I guess that one of the advantages of having people in eight different countries is that we were already familiar with remote working before the pandemic. And as a technology business, I think it’s been an easier transition than for others.

But we have a new strategy called ‘The Better Normal’ that we’re working very closely with Sanoma and our partner businesses to deliver. This includes six golden rules for working at home and we’re encouraging staff to take breaks and time off, plus making time for lunch and catching up with colleagues.

Will we maintain our offices? Absolutely. But, depending on your role, I don’t think that we’ll all go back to the office full time. I think that our offices will be used as collaboration, team building, social spaces rather than places where colleagues sit at a desk and work.

JV: How do you communicate strategy to a widespread European workforce and keep everyone aligned?

ST: We’re very open and transparent as a business, so we share our aspirations, strategy and financial data regularly with all the staff. We have monthly town hall meetings where we go through everything and different departments present what they’ve been up to. Information is also regularly shared on Yammer and we have a very good flow of conversation with staff there.

itslearning also has an incredibly flat management structure and my management team is available pretty much 24/7 to any staff who have a problem or a question. I also probably spend 20% of my week speaking with staff, sharing information or answering their questions. We also have 16 employee shareholders and I work very closely with them.

JV: itslearning has clearly been very successful scaling a sizable business from the Nordics. What advice would you give to EdTech founders struggling to replicate that success?

ST: In the early days, I think it’s about understanding the risk of moving into new markets and being really clear about the value your product brings.

It’s vital to listen to what potential customers and users are saying in each market and then very carefully put your toe in the water. We do this at itslearning as we move into new territories – we always start small and move in a couple of very good, experienced commercial people and see what happens. As the business grows, we then backfill, always keeping the company culture the same.

Also it’s really important that you’re realistic about what’s possible. Don’t fool yourself that just because the market is x size, that you are going to go and win that market without significant investment. So understand how much you’re going to have to invest in order to capture and/or grow the market. Make sure that it’s profitable business – obviously some regions are more profitable than others, that’s fine, but make sure all are contributing.

And then, it’s about ensuring that the investment is going into the right areas. For us, we saw that the Nordic market still had a lot of opportunity and that there were a lot of really valuable existing customers here in and across Europe, so that’s where we focused.

JV: One final question and from one expat EdTech Brit to another! How are you finding life in Norway?

ST: I keep annoying everyone in the UK because I keep referring to Norway as home. We absolutely love it! I’m a country boy at heart and so it’s been great during the pandemic to enjoy the outdoors – canoeing, running and walking the dog. I’m just totally sold on the place, I really am!

JV: Thanks very much for your time Steve. I’m pleased to say that I completely agree!

Jonathan Viner, Nordic EdTech News

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