Stephen Bailey is building a business around corporate education, but he can’t stuff the audience into a conference room. He has built a company, ExecOnline, that is democratizing access to elite business education by delivering business school classes to thousands.
ExecOnline, with annual revenue of more than $20 million a year, gives often-ignored mid-level managers the kind of business education once reserved for a corporation’s chosen few.
“Companies traditionally saved their training for the 1 to 3 percent of ‘high-potential’ mid-level managers,” Bailey said. “Those were reinforcing networks that often exclude women and minorities who are looking for opportunities to break through to senior management.”
Bailey, a 40-year-old graduate of Yale Law School, knows firsthand the power of opportunity. Yale supplied him with a network of contacts that has served him well in business.
“Part of my perspective in bringing this education of elite schools is from my own experience of the power of these institutions to affect the trajectory of my career,” Bailey said.
ExecOnline offers instruction on a wide range of topics, including such practical matters as how to have a difficult conversation in the workplace and higher-order concerns such as the complexities of corporate finance.
“These are the subjects that often make the difference in careers,” Bailey said.
Unlike traditional business school MBA programs, which include two years of intensive classroom instruction, corporate education programs offer promising employees a chance to attend class while holding a job. But class size is still limited by the number of people who can fit in a classroom.
ExecOnline allows thousands to have access to corporate education without going near a bricks-and-mortar classroom.
“One of our financial services clients has 200,000 employees and 25,000 middle managers,” Bailey said. “You are not going to cram 25,000 people into a classroom.”
ExecOnline has partnerships with seven business schools: Yale School of Management; Haas School at the University of California at Berkeley; Columbia University; Sloan School of Management at the Massachusetts Institute of Technology; Wharton School at the University of Pennsylvania; the University of Chicago Booth School; and the International Institute for Management Development in Lausanne, Switzerland.
Course selections include “Strategic Growth” from Columbia; “Operations Excellence” from MIT’s Sloan School; and “Fostering Inclusion and Diversity” from Yale. ExecOnline shares its revenue with the business schools, but Bailey would not disclose the split.
ExecOnline has 300 corporate clients that buy credits that employees can use for three-week and six-week programs. Companies pay $2,000 to $5,000 per person for a program. Clients have paid from $50,000 to $2 million for a year of credits.
Bailey declined to name the companies he serves, but the list includes Fortune 500 banks and Dow Jones industrials, manufacturers, technology firms and energy companies.
The classes are a mix of live and video-recorded lectures. Participants sign on to the ExecOnline website and spend about five hours a week at assigned times watching lectures and interacting with peers, faculty and coaches. Students who complete a course receive a certificate.
As many as 100 students can listen to a lecture, after which they can press a key to break into small teams. ExecOnline programs are designed to fit into managers’ busy schedules. With the exception of the live events, participants can complete coursework at their convenience. The most popular time is Sunday evening, Bailey said.
ExecOnline employs 110 people between its two main offices, in New York and the District of Columbia.
“We’ve been in Washington since 2015,” Bailey said.
The company isn’t profitable, but Bailey expects the company to achieve positive cash flow in the next year.
Bailey grew up in New Orleans, where his mother is a psychiatrist and his father a dentist. “I am good from the neck up,” he said.
He graduated with a degree in history from Emory University, where he was on a championship debate team. He graduated from Yale Law in 2004. After a brief immersion at a D.C. law firm, he left legal practice in 2006 and started sniffing around the business world.
“I knew I wanted to join a company” he said. “Practicing law wasn’t creative enough”
While practicing law, he helped arrange financing for a business information start-up called Frontier Strategy Group. He connected a founder of Frontier to a successful investor he knew from Yale.
“Knowing people who founded companies introduced me to a whole new world of possibilities,” he said.
He joined Frontier and worked there for five years, rising to chief executive. He left around 2011 after disagreeing with ownership over the company’s direction. At 32, he started pursuing his own start-up. “I wanted the buck to stop with me.”
He also wanted to lead people, a desire that has something to do with the innate complexity he finds in human beings. He chalks some of that up to being the son of a psychiatrist. “I had both a natural ability and desire to lead people,” Bailey said.
He started working the contacts he had inside and outside the business world. One of them was a recruiter who suggested that Bailey look at the business of online education.
Bailey knew from his years at Frontier how difficult it was to deliver best practices to mid-level managers. After further research, he identified a problem: best-in-class business education was available to a relative handful of people. Many women and minorities, especially, were denied a chance to break through to top management.
He wanted to explore the trend of major, not-for-profit universities partnering with for-profit companies to take their education online.
Bailey was walking down Frederick Douglass Boulevard in Harlem in fall 2011 when it hit him: Deliver scaled-up, high-quality online business education to mid-level corporate managers. By Christmas, he had a business plan that would make classes accessible to executive wannabes and allow them to work at their own pace.
By spring 2012, he had a name and a logo and was launching the hunt for investors on the East Coast and in Silicon Valley, names like Accel and Emergence Capital.
Among the first investors was Kaplan Ventures, the for-profit education arm of what was then The Washington Post Co., run by Donald Graham. Kaplan, now part of Graham Holdings, invested $200,000 and still owns a piece of the company. It also has a seat on the ExecOnline board of directors.
Individual investors include Thomas Lehrman of Gerson Lehrman Group, Sean Glass of Higher One and Tom Monahan, former chief executive of the Corporate Executive Board. ABS Capital in Baltimore and Osage Venture Partners and New Spring Capital, both in the Philadelphia area, are venture-capital investors.
Osage was co-founded by a fellow Yale Law School graduate. Bailey said they turned the Yale connection into a deeper business relationship, further evidence that Bailey’s law school education gave his career the kind of boost that he is now trying to give others.