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Steve Gross is the CEO of Calvert Education Services. Founded in 1906 through the Calvert School of Baltimore, Calvert Education Services provides homeschooling, instructional support services, and virtual and distance learning programs for students in kindergarten through 12th grade. The company’s curriculum encompasses history, mathematics, reading, writing, arts, music, literature, science, social studies, geography, and many more enrichment courses. For this citybizlist interview, Steve spoke with David Warnock, the founder and CEO of Camden Partners, who also serves as Calvert Education Services’ chairman of the board.
DAVID WARNOCK: Talk for a minute about the transition from being a not-for-profit company to a for-profit company. For 100 and some years the Calvert Homeschool was a private company literally run in the basement of the day school. I think one of the biggest challenges is to take a not-for-profit culture—which is a perfectly good culture, but it’s not the same thing as a for-profit culture—and you’ve done a lot, and it’s been a challenge.
STEVE GROSS: The organization was formed 115 years ago. The very visionary headmaster of the Calvert School here in Baltimore had the notion—ahead of his time really—around the notion of distance learning. The organization grew—it wasn’t a company, it was a nonprofit organization, part of the school—and it grew and did well and had very illustrious alumni over the years—always a reputation for quality—but the alumni included Presidents, Supreme Court Justices, Nobel Prize winners, Pulitzer Prize winners, Grammy Award winners, both sides of the political aisle, athletes—really, a very prestigious set of alumni—and a very mission-driven organization that thrived over the years.
In more recent years, there was a divergence between the Calvert Homeschool organization and the school itself. Eventually, the organization was taken private. I was brought in a few years ago. It was interesting to deal with an organization that had such a storied history, but at the same time needed to sharpen its blade in terms of the ability to compete. I would say that took on a couple of forms: one is a cultural form, but the second is a capability form. A cultural form in terms of really being competitive and understanding where the bar is and a competitive growing space—the virtual school and blended school of space which is where we focus heavily on now—as well as just being able to have the capability to compete in arenas like that and having the mindset to compete in areas like that. It’s been a journey getting the organization there and I think we’ve made really good progress.
Calvert is an organization that has been around for a hundred years. We operate in almost 50 countries. We have between 5,000 and 10,000 students. Those students come in a variety of different ways. One is through our consumer homeschooling business—we call that private pay. The bulk come through schools, both domestic and international. Domestically, we sell to virtual and blended schools, we sell to hundreds of those schools. And then internationally, we sell to international schools, and we sell to about 20 of those.
DAVID WARNOCK: When Camden invested in Calvert, it was on the perception that Calvert was under-invested. The day school didn’t have the money to invest in curriculum, didn’t have the money to invest in frankly the kind of management team that Steve has put together. We were on the cusp of a nation of digital natives and we were on the cusp of a world of digital natives, and we were on the cusp of kids that were used to communicating and learning in a virtual environment. Calvert had the capability to transform itself and play in that arena. They’d already done that a little bit with private pay homeschool business, and we knew a lot about the virtual charter business, but there was a tremendous opportunity to take Calvert take a great brand, bring a great management team to it, and really ride that wave of online learning. It’s taken us a little bit longer than we thought. I think that the transition from being a private pay mentality to a public pay mentality is something that Steve’s a done a great job of addressing, primarily by bringing in a team of superb people who have experience at a whole host of other successful companies. But I feel like we are at the forefront of a tremendous wave in the way young people want to learn.
STEVE GROSS: That’s well said. I totally agree. The other motivating factor—I’m sure, David—is that you’re investing in a growth market. Someone showed me a piece of data yesterday that K–8 in what’s called non-managed virtual schools. A segment of the virtual schools that are not run by K-12 in connections is growing between 30% and 40%. That’s huge. We’re cracking the code to figure out how to access that and get our disproportionate share of it.
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