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!
— 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:
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:
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:
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:
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:
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:
Their first major customer?
How’d she land them?
Through a LinkedIn message.
An article in Forbes told the story:
And what was new about Guild’s approach?
Rachel elaborated on this in a GSB article:
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:
Guild’s business model is one that aligns the incentives of all parties involved, something Rachel mentions below:
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:
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:
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 🙌🙌🙌
— 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:
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:
And Rachel explained what fueled that decision as well:
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.
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.
And in December they hire former Patagonia Chief People Officer, Dean Carter, an important role for Guild moving forward.
And why did Dean join Guild?
Here’s his reasoning, which I think speaks to the quality of the organization Rachel has built:
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:
On pursuing ambitious career and family goals:
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