CEO & Chief Creative Officer
If you’re an avid observer of the Student Search market (I know I am!), you may have noticed an alarming trend. Nearly all of the major Search providers have changed ownership three or more times over the past decade!
Why? Because these companies are owned by private equity (PE) firms, and their shareholders – typically high-net-worth individuals and institutional investors – expect a return on their investment every three to seven years. Therefore, once a Search company is sold to a private equity firm, it becomes a vicious cycle – with one PE firm usually selling out to another PE firm every few years.
While clients/customers in other industries have benefited from PE firms’ investment – in terms of infusing much-needed capital and introducing valuable efficiencies – in the 30+ years I’ve worked in serving the admissions market, I haven’t seen any cases of private equity investment benefiting the admissions community.
So before you choose a Search provider, you may want to take a closer look at their ownership structure.
Below are some of the differences between PE-owned Search companies and Fire Engine RED, a Search provider that’s privately owned – and, by the way, is not for sale.
CEO and management team
The Search companies that are PE-backed have CEOs with experience and talent … but these CEOs come from industries that operate very differently from the education market (such as health care). They’ve installed their own boards of directors and management teams, who know a lot about maximizing profitability, and know when to sell the company. But is this the kind of experience your admissions office needs?
As founder, CEO, and majority owner of Fire Engine RED, I’ve spent my entire career serving the admissions/enrollment field, as have the members of my leadership team. We’ve always put our clients’ needs first and remain laser-focused on providing them with the best return on their investment. In addition, we’ve found that putting our clients’ needs first is actually great for business; when our clients succeed, our success follows. In fact, last year our Search business grew by more than 30% – all because word has spread about the concrete results we’re getting for our clients.
Attitude toward people
The first few years a Search vendor is owned by a private equity firm are often fraught with turmoil – including layoffs that strip the vendor of the very people who helped make it a success in the first place. And the people who remain with the company spend more time worrying about keeping their jobs than doing their jobs.
At Fire Engine RED, people matter – a lot. We do right by our people because we care about them, and because it’s good business. When people are valued, they go the extra mile for clients. Our employee retention rate is 90-plus percent, so you can be assured we’re not sacrificing valuable industry knowledge and proven talent for a quick boost to the bottom line.
Short-term vs. long-term focus
PE firms exist to invest in companies, make them more valuable, and sell them for a large profit within a relatively short period of time. PE-owned Search companies have attempted to create “value” by cutting – budgets, people, and so forth – but their definition of “value” is quite different from mine.
At Fire Engine RED, we define value in terms of the strong partnerships we have with clients and the results we help them achieve year after year. We’re never complacent; in fact, we’re continually reinvesting in our company – always testing new strategies and ideas to ensure our clients stay ahead of developments in the ever-changing education market.
One-size-fits-all vs. custom offerings
To boost their earnings, private equity-owned Search companies often provide clients with templatized solutions. In addition, these vendors have added new offerings and continue to spread themselves too thin, by trying to be “all things to all schools.” However, these one-size-fits-all solutions are often ineffective in today’s complex college admissions environment.
Conversely, Fire Engine RED gets results by customizing our offerings and doing the hard work; we know that that no two schools (or Search goals) are exactly the same. Our clients have benefited because we’re uniquely focused on Search – and because we’ve chosen to make our Search offerings deeper and more customized, rather than adding a multitude of new services to our company.
So whether you currently work with a Search provider, or are in the market for one, I’d encourage you to find out more about their ownership structure – and decide for yourself if the vendor is the right fit for your school!