Mission-Driven: Rachel Romer Carlson's Story
How She Built Guild Education Into a $4.4B Company
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Rachel Romer Carlson built Guild Education into a $4.4 billion company by innovating in a space that impacts tens of millions of Americans.
Much like how Iman Abuzeid flipped nurse hiring on its head with Incredible Health and Christina Cacioppo created a whole new category with Vanta, Rachel put her own spin on “education as a benefit” for some of the largest employers in the world.
Those employers, which include the likes of Chipotle, Disney, and Walmart, are able to educate and upskill their employees, who work towards a variety of degrees and certificates found through Guild’s platform and guided by their coaches.
At the same time, universities and institutions collectively save millions of dollars in recruiting students.
It’s a win-win for everyone.
And it’s not surprising that, given her background, Rachel built this incredibly impactful company.
As you’re about to discover, education is core to Rachel’s story, it’s fueled her career, and it’s unlocking opportunities for millions of Americans.
Let’s get to it.
Rachel grew up in Colorado and was surrounded by a family of educators.
Her grandfather, Roy Romer, was the 39th Colorado Governor, helped form the Western Governors University, and served as the superintendent of the Los Angeles Unified School District for six years.
At the GSV conference in 2019, Rachel was able to interview him:
Had the amazing opportunity today to interview my Grandpa onstage at the GSV conference. Best takeaway - of all his many titles in life (governor, pilot, entrepreneur, chair, CEO, superintendent, etc...) his favorite is “learner”. Still reads a book a week! https://t.co/Tn7XdmERUp
— Rachel Romer (@Rachel_R_Romer)
Apr 10, 2019
Rachel’s grandmother, Bea, ran a preschool in Denver, and her father, Chris Romer, has been heavily involved in a variety of education companies and initiatives in his career.
As Rachel would describe, “I sat at the dinner table growing up that talked about education all the time.”
One of her later investors, Wesley Chan, would later remark in 2018:
The great thing about investing in Guild is that Rachel has been thinking about this her entire life. A lot of founders stumble on an idea and then spend the next five years figuring it out.
Early in her career, Rachel worked on Barack Obama’s 2008 presidential campaign and did a brief stint at the White House in addition to working at a couple of education companies.
After attending Stanford for her undergraduate degree, she came back for a dual master’s, getting an MBA and a Master’s in Education.
At this time, she started her first venture, Student Blueprint, somehow finding the time to start a company while getting two master’s degrees.
A Forbes article described the company:
Student Blueprint sought to use technology to match community college students with jobs. It was a noble idea, but she decided to finish school and sold the software she had developed to Paul Freedman’s Entangled Group in 2014 for a negligible sum.
Around this time, she came across one of the key insights that would lead to her starting Guild - the amount of money universities and colleges were spending to recruit students.
Collectively, colleges were spending billions of dollars on this effort. Some schools would spend $100+ million per year on advertising, working out to hundreds or thousands of dollars per student.
Much of this money went straight to Facebook and Google, with a large portion of the first year of tuition students paid going towards that expense.
Rachel reflected on this in a Colorado Sun article in 2018:
That’s the forgotten part of higher ed. It’s still a business and the business model is upside down because of the increasing cost of digital advertising.
Of course, in every problem lies an opportunity.
The opportunity in this particular problem would form the basis for a multi-billion dollar company.
Starting Guild Education
Let’s set the scene.
Rachel has been surrounded by educators her entire life.
She’s worked at education companies and even started her own.
It’s clear she’s both highly motivated and mission-driven.
She decides, along with her Stanford GSB classmate, Brittany Stich, to build a company to educate and upskill the 88 million Americans who are most in need, building on that key insight I mentioned previously.
They wrap up their MBA, Rachel pitches the idea for Guild, which would leverage relationships with employers to bring down that acquisition cost for colleges and provide career opportunities for frontline workers, to a number of investors, including one of her professors, Michael Dearing, and the investor Aileen Lee of Cowboy Ventures.
At this time, there are some education programs that large employers have adopted, but they’re limited, often only including one school as an option for employees, with as many as 40% of these employees getting rejected from the institutions and not having any other options.
Rachel’s idea to create a platform for connecting colleges and institutions with employers, giving employees many options, saving colleges money, and improving employers’ retention, recruitment, and brand, resonates with investors.
She ends up raising a $2 million seed round.
Here’s how Rachel articulated the founding story in an interview with Tyton Partners:
Guild grew out of research that showed the clear connection between college, learning, and career. This led us to think about large employers and particularly ways that their traditional education programs could be improved.
We focused on transforming tuition reimbursement so that employers could pay directly, and so learners didn’t need to go into debt.
We built a scalable solution that included high quality coaching and other services working adults would need.
Coaching was a major insight: It is critical to find ways to strengthen resilience in education, eliminate shame, and build confidence for our learners.
We used these important founding principles— the connection between education and career, the need to eliminate cost and prevent debt altogether, and an ability to deliver high quality coaching and support service — to create Guild.
After that seed round, in only the second board meeting, she’d make a crucial decision for Guild, going against the advice of her board members.
A Critical Move
Rachel started Guild in Palo Alto, while at Stanford, but shortly after raising funding, she was contemplating moving the company.
When she brought it up in a board meeting, her investors thought she was crazy, but she had a test to see if it could work.
Guild had initially been built by a dev shop and, after raising funding, it was time to hire a Head of Engineering.
Rachel posted the job description in SF, Palo Alto, Denver, and Boulder.
She showed her board of directors the candidates without the cities they were located in.
They agreed on the best candidate.
And who was it?
A woman named Jess Rusin in Golden, Colorado, near Denver.
It confirmed early on that Rachel could build a team in Colorado.
Guild had just 5 employees at that time, with Jess and another joining shortly after the company moved to Denver.
It was one of the hardest decisions Rachel made:
We’re now in an era when everyone says you should move your business outside of the Bay Area, but in 2015, that was not well-received.
People thought, “Hey, this is the Renaissance; how dare you leave Venice or Rome?”
I knew it would be unsustainable to hire droves of coaches and ask them to live and commute in San Francisco, and I believed it made sense to have our coaches, as well as our product leaders and our engineers, in the same place.
I also knew my husband and I wanted to have children and that many of the people I wanted to hire were going to be parents. In hindsight I think it’s one of the two or three best decisions we’ve made. We’ve built the working-parent culture that we aspired to build. And it’s great to be within one flight of everyone we partner with.
Rachel expanded on the decision in another interview, talking about the difficulties of paying an employee $100k and having that seem like they’re living at the poverty line with $3,500 rent in San Francisco.
It was the right move for Rachel and her company and goes to show how it can be worth it to trust your own decisions when running your company.
She’d continue to trust herself more and more as the company grew.
Getting Guild Off the Ground
Rachel learned a lot in the early days of Guild, something she talked about in an article in the Colorado Sun in 2018:
We learned the employer could connect us to the people we want to serve (solving) that distribution channel and bringing down that acquisition cost. Along the way, we found that the employers were actually willing to pay tuition, which was a great surprise.
Turns out now, in the economic climate we’ve been in for the last few years and especially in the future of automation, employers are especially interested in providing education benefits and training and upskilling benefits.
Their first major customer?
How’d she land them?
Through a LinkedIn message.
An article in Forbes told the story:
After relocating to her home turf in Denver, she landed her first major corporate partner in the summer of 2016 when she sent a LinkedIn message to a Chipotle benefits manager that played up the fast-food chain’s “strong Denver roots and social mission.” With help from Guild, Chipotle’s $12-an-hour burrito rollers are now pursuing online bachelor’s degrees from Bellevue University in Nebraska or taking computer security courses at Wilmington University in Delaware.
And what was new about Guild’s approach?
Rachel elaborated on this in a GSB article:
We brought tuition reimbursement into the modern era by building a software platform and payments integration with the employers on one side and the universities on the other so that employees no longer have to front the money.
That’s so important because the average American has about $400 in liquid assets. To ask that person to spend $1,000, $3,000, $5,000 on tuition — you’re asking those people to spend their entire emergency savings account just to go back to college for a course or two.
The second core innovation came when we realized that tuition reimbursement has no quality assurance, no monitoring for outcomes, no understanding for the corporation of the return on investment.
They monitor these outcomes on the backend of their platform to see how this is impacting employers, looking at everything from their recruitment and retention rates to how often employees get promoted to the impact on the employer’s brand, something Rachel particularly enjoys.
This last piece, improving the employer’s brand, has been tangibly affected by working with Guild:
We get to spend a lot of time helping companies like Walmart share the good parts of what they’re doing within local communities. Walmart doesn’t always get a fair shake on what they’re actually doing for their workers. A program like this has helped them earn the accolades they deserve for the investment they’re making in their workforce.
When Walmart announced our program, it lifted its stock price and lifted the perception that customers had of them, and it dramatically impacted the impression that their employees or prospective employees had of the business. And when it was named to Fortune’s Change the World list last year, it cited this program as a contributor.
Guild’s business model is one that aligns the incentives of all parties involved, something Rachel mentions below:
At a simplified level, the employers are paying universities for tuition. They’re getting tuition rates at bulk discounts, of course, and the tuition discount the schools are offering is coming from money they typically would spend on marketing to attract students.
The universities are spending another part of what they’re saving in student acquisition costs to pay Guild for the technology and support services we provide students. Guild is paid by universities on a term-over-term basis, only as the students successfully progress through their programs.
In this model, Guild makes 3% to 35% of the tuition revenue that companies pay to schools, a number that varies depending on the service needs of each institution.
And by 2020, the data would show that an employee that was in a program curated by Guild is 2.7 times more likely to be promoted.
Companies are seeing a $1.30 to $2.10 ROI for every dollar they spend.
They do have competitors of course, which at this time include universities that offer online courses directly as well as companies like Udacity.
But let’s not get too far ahead of ourselves.
After raising a seed round with little more than an idea and some research, by 2016, Rachel has grown Guild enough to get to the next step in its lifecycle - a Series A.
Series A & B
On September 16, 2016, Guild announces an $8.5 million Series A led by Redpoint Ventures, with Social Capital, Harrison Metal, Cowboy Ventures, and Fern Mandelbaum participating as well.
At this time, Guild is helping employers in two ways.
First, by providing some of their own programs to help employees, including GED, ESL, and management courses.
Second, through partnerships with schools that include Colorado State University’s Global Campus, Western Governors University, Bellevue University, and Brandman University.
Within the next year, they’d become a Certified B Corporation and by September 2017, they raise a $21M Series B led by Bessemer Ventures, solidifying their spot as one of the leading education benefits companies.
By this time, Rachel and her team are working with a number of large employers to offer Guild to their employees, and the opportunity is massive:
As the labor market tightens, employers are investing over $22 billion annually in traditional tuition assistance programs. Our platform empowers employers to make smarter education investments and measure the positive return on investments in their workforce - it's “Education as a Benefit.”
Less than a year after that, Rachel raises another round of funding and undertakes a whole new challenge - parenthood.
In July 2018, Guild announces their $40M Series C led by Felicis Ventures with a whole slew of investors joining. As part of this round of funding, Wesley Chan of Felicis joins their board of directors.
At this time, Guild’s programs are available to 2.5 million working adults and they have partnerships with 90 universities and learning providers.
And what they’re doing is certainly working:
Most of our companies see an ROI on the employee investment within the first year or two.
Here’s why: on an incremental basis, our programs simply need to cost less than the cost of losing a high performing employee and hiring and training their replacement.
We accomplish that by partnering with affordable, nonprofit universities and focusing with them on dual retention: helping employees succeed at school and at work… Companies with frontline workforces struggle with annual turnover rates well above 50%. So for our companies, a 4-year retention rate is a phenomenal outcome, and they’re thrilled to see that employee move on to their next job after completing a degree.
A few months prior to the Series C announcement, Rachel gives birth to her twins, Maggie and Lily, and takes maternity leave.
By November 2018 Guild passes 200 employees and has a 50/50 ratio of male-female tech employees, something very uncommon in the industry.
And they continue to grow, by this time working with employers like Discover, Lowe’s, and Lyft as well.
They also start to plan for a daycare and preschool for their own employees:
Reviewing plans for @GuildEducation’s daycare + preschool 🙌🙌🙌 https://t.co/0SFU98dDz1
— Rachel Romer (@Rachel_R_Romer)
Sep 27, 2019
I love this as it shows a part of the company’s values, not just by talking about it, but by committing resources to it.
In November 2019 Rachel raises a $157M Series D for Guild led by General Catalyst, valuing the company at $1 billion.
Ken Chenault, the former CEO of American Express and a partner at General Catalyst at this time, joins their board of directors.
Guild is now a team of 320 people, with Rachel expecting the team to grow by 150 people over the next 6 months.
In a Q & A Rachel did in October 2019, she shared two things I think are obviously part of how she’s been so successful with Guild.
First, is her use of data. Not only is she able to easily rattle off statistics that make a strong case for the effectiveness of the work she’s doing at Guild, but she’s built a database of each school she considers for her platform, getting granular with metrics the federal government doesn’t track. She reminds me of Iman Abuzeid in this regard.
Second, is her ability to build relationships. Given her family’s political background, I don’t think it’s surprising to see that she excels in this regard.
In the Q & A I mentioned above, she talks about building relationships with all the top 300 schools that are high quality and low cost in the U.S. who could potentially be a fit for Guild members.
She also mentioned relationship-building as the way she convinced Chipotle to become the first major employer to work with Guild and Bellevue and Brandman to become the first learning institutions she’d work with when all she had was 5 years of research and experience and an idea.
Guild would continue to grow, with Forbes estimating them doing $50 million in revenue in 2019 with workers on the Guild platform receiving $100+ million in tuition benefits that year alone.
In a GSB article in March 2020, when Guild has 470 employees, including 200 career coaches, Rachel explained why those coaches are so valuable:
Brittany and I both realized that community college students weren’t struggling because they’re not capable, but because they didn’t have the right academic support or a feasible schedule.
Most of the classes were in the middle of the day while they also were trying to hold down jobs, so our nation had effectively built dropout factories where the structures were simply not designed for working adults.
The average graduation rate was between 5% and 20%. And whenever anyone would bring up that statistic, everyone would shrug and say, “Well, not everyone’s cut out for college.” I found that so disparaging. Coaching helps increase the odds that someone will be successful.
By March 2020, tens of thousands of students are starting new classes each month.
Bryan Deeter, an investor at Bessemer Venture Partners, estimated that Guild would do $100 million in revenue in 2020.
Then, in June 2021, they raise a $150M Series E, valuing the company at $3.75 billion.
Rachel confirmed in the announcement that Guild more than doubled their revenue since March 2020, when the shutdowns for COVID began.
A Forbes article about America’s Richest self-made women in 2021 details how generous Rachel has been about equity as well at Guild:
Carlson has been generous with doling out ownership of Guild Education. All of her 1,000 employees hold a stake in the company, and over half of them have equity positions worth at least $100,000. Her ownership has dwindled from 95% when she founded the company in 2015 to a current estimated 15% after eight funding rounds and handing shares to employees.
And Rachel explained what fueled that decision as well:
I had a less than ideal early experience as an employee where no one explained to me really what equity was or how to exercise it. I just felt like I could do something different in my own company and teach everyone the value of equity. Now all employees have a position of $15,000 or greater.
By this time, Guild has 100 colleges and universities on the platform, over 2,300 specialized programs offered, and a team of 300 full-time coaches.
At the end of 2021, Guild has 120,000 students enrolled in different programs.
This is also the time when Rachel also shares her top books, something akin to Christina Cacioppo and Patrick Collison who are also voracious readers.
By February 2022, Guild has 1,300 employees and 4.4 million Americans have access to their platform (A number that would grow to 6 million by the end of the year).
In June, they raise a $175M Series F as a sort of “rainy day” fund to secure the long-term future of Guild, and the company is valued at $4.4 billion.
They also get another big-name investor - Oprah.
I believe deeply in the power of education to change the trajectory of a person’s life, and Guild is creating a more equitable path to quality education.
And in December they hire former Patagonia Chief People Officer, Dean Carter, an important role for Guild moving forward.
As we reflect on the heroic marathon that our HR leaders have run over the last three years, and the opportunities ahead to transform corporate human capital strategies, one leader’s vision has stood out – Dean Carter.
We are thrilled to find such a phenomenal and passionate leader in Dean who shares similar values around the future of work, the HR function, and the employee experience overall.
And why did Dean join Guild?
Here’s his reasoning, which I think speaks to the quality of the organization Rachel has built:
Guild has a deep understanding of the expanding role of CHROs and their potential to make a change in their organizations and in the lives of their employees.
As a B Corp, Guild has demonstrated an ability to do well by doing good for its members and also its employees – most notably through its onsite early childhood education center, The Beehive.
I’m honored to join the company’s critical mission and play a role in transforming the employee experience for Guilders internally, and for the American workforce that Guild serves, unlocking opportunity for all of our members.
And what else speaks to the quality of the organization that Rachel built?
The 26,000 candidates that applied to work at Guild in the last quarter alone.
Their double bottom line of passion and purpose is certainly resonating and, while they’ve gone through their struggles, they seem poised to continue their impressive run, with Rachel leading the way.
In each edition of the Just Go Grind newsletter, I like to include a few more quotes at the end from my research into the founder who is featured, sharing their wisdom.
On communicating her maternity leave:
I wanted to be as transparent as possible, so I tried to lay out the known and unknown realities ahead. I didn’t know how I and the babies would recover from labor, or whether we’d spend time in the NICU, as is common for twins. I told them that I didn’t know how long it would take for my body to figure out how to breastfeed, how many all-nighters my husband and I would actually be pulling, and most importantly, how my head and heart would feel when torn between my first baby, Guild, and the two new human babies I was bringing into the world.
I told the team that whatever I chose would be rooted in flexibility and optionality. Rather than use my own experience to create the Guild blueprint, I emphasized that I would lead by offering choices and space for each employee at Guild to do what is best for them when they have children of their own.
Have you done the work to understand your own triggers, your own emotions, your own values? What really motivates you? What demotivates you? If you don’t do that work you actually aren’t capable of doing that work with other people.
On pursuing ambitious career and family goals:
We need more CEOs–both female and male–to commit to giving their employees space and choice to pursue ambitious career goals as well as ambitious family goals. And we need more leaders to use their own maternity and paternity leave to set a positive example for their employees. I’m committed to making this a reality at Guild, and excited to support other CEOs and leadership teams to do the same.
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And if you enjoyed this profile, take a look at the first nine:
Sam Altman of OpenAI
Melanie Perkins of Canva
Tope Awotona of Calendly
Ooshma Garg of Gobble
Ryan Petersen of Flexport
Iman Abuzeid of Incredible Health
Tony Xu of DoorDash
Christina Cacioppo of Vanta
Patrick Collison of Stripe
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