Education Week - September 26, 2012 - 10

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EDUCATION WEEK

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SEPTEMBER 26, 2012

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INDUSTRY & INNOVATION > Tracking business trends and emerging models in K-12
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Whittle Is Seeking A Global Audience For New Ed. Venture
Edison co-founder launches bilingual school
By Amanda M. Fairbanks
New York

Christopher Whittle could finally breathe a sigh of relief. In February of last year, Mr. Whittle stood before a packed house of parents in Lower Manhattan’s Crosby Street Hotel. Ever the salesman, he was talking up his vision for a new private school—an idea, really—that had yet to begin construction and was still far from completion. He had spent the prior months on tenterhooks. Even for the veteran entrepreneur, one who had already raised $75 million from two private-equity firms, there was still the acute possibility of failure. It was conceivable that his latest gamble simply wouldn’t resonate with tuition-paying parents—or worse, that no one would bother showing up. But no sooner did Mr. Whittle begin to speak than he felt an unmistakable sense of redemption. The standing-room-only crowd assured him that if he dared build it, they would come. During the next eight months, his leadership team convened up to three information sessions a week, and even then, just barely kept pace with demand. Their hard work paid off. Nearly 2,700 students applied for a slot at Avenues: The World School.

Potential Legacy?
Avenues, a for-profit private school in New York’s Chelsea neighborhood, opened its doors during the second full week of September. In an 84-year-old, 10-story concrete building overlooking the High Line, an above-ground park, and previously used by Disney to store television props, Avenues will someday accommodate 1,635 students all the way from preschool through high school. This year’s entering enrollment of 738 students goes up to grade 9. According to People magazine, Suri Cruise, the daughter of Tom Cruise and Katie Holmes, is in the 1st grade there. The flagship Manhattan location is but one in a series of about 20 global campuses that Mr. Whittle and his team plan to roll out over the next 15 years—at a pace of one or two schools each year. From Beijing to São Paulo to London, the bar has been set extraordinarily high. The aim: to create a global system of schools whose graduates might become bilingual citizens of the world and, its mission statement
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boasts, “architects of lives that transcend the ordinary.” For Mr. Whittle, who is no stranger to entrepreneurial success and failure, a lot is riding on this latest venture: his reputation, his integrity, and his legacy. Some private educators and other observers say flatly that his plan won’t work. “You have periods where you’re on top of the world and periods where you’re not,” said Mr. Whittle, while sitting in the sparsely adorned Avenues headquarters this past July. His manner was warm and genial, his accent thick with Southern charm. He wore khaki pants and a blue and white striped button-down shirt, eschewing his trademark bowtie because of the summer heat. The former Esquire magazine publisher and Edison Schools cofounder used to believe that important things in life consumed seven to 10 years. He has since amended his thinking. From the germ of an idea to its full execution, he now believes that big ideas swallow up the better part of two decades—or somewhere between 15 and 20 years. “About five years ago, I started thinking, all right, what’s my chapter three? At the kind of energy they require, I started realizing that I have one more of those kind of chapters in me,” said Mr. Whittle, who is 65. “I have this feeling of unfinished work.” But unfinished work aside, the question remains: Can he remake what’s possible in private education and in so doing, finally silence the naysayers and solidify his legacy? Even the relentlessly optimistic Mr. Whittle conceded that it’s too soon to know for sure.

Christopher Whittle recently opened Avenues: The World School, the first in a network of elite, for-profit private schools he plans to build around the world.

‘Roller Coaster Rides’
Nowadays, Chris Whittle describes himself as wearing three distinct hats: educator, real estate developer, and investment banker— and in precisely that order. In much the same way, his career has spanned three separate chapters. The first chapter began just after he graduated from the University of Tennessee in 1969. Alongside Philip Moffitt, he founded 13-30, a publishing company that eventually became Whittle Communications. In later years, the company purchased and turned around a floundering Esquire. Mr. Whittle also created Channel One News, a 12-minute daily news broadcast (10 minutes of news; two minutes of commercials) that was marketed to schools for classroom viewing.

After selling Channel One for $250 million to K-III Communications Corp. in 1994, wrote Mr. Whittle in his book Crash Course: Imagining a Better Future for Public Education, he had come to believe that “up was the only direction we could go. I was wrong—and things went wrong.” With the founding of Edison Schools in 1992, Mr. Whittle hit his first rough patch. At Edison, he hoped to create a network of first-rate schools that would also turn a profit. Within a decade, his plan to build a national network of 1,000 such schools (at a cost of $2.5 billion) had crumbled. Edison instead went into the business of managing existing public schools, offering school districts cost savings on administration while sending the profits back to investors. But despite attracting big-name financial backers, the company hemorrhaged money. Benno C. Schmidt Jr., now 70, was the president of Yale University when Mr. Whittle offered him a new gig: running Edison Schools. Mr. Schmidt sensed in Mr. Whittle an entrepreneur “who knows how to make big ideas reality.” Mr. Schmidt is now Avenues’ chairman. Both men continue to sit on EdisonLearning Inc.’s board of trustees. Alan Greenberg, 61, who is now Avenues’ president, first worked alongside Mr. Whittle back in their 13-30 days. After the acquisition of Esquire, Mr. Greenberg became its publisher. All told, the two men have worked together for nearly 20 years. Messrs. Whittle, Schmidt, and Greenberg provided the first round of capital for the creation of Avenues. Although none would confirm an exact dollar amount, the combined estimate is somewhere www.edweek.org/go/marketplacek12

in the $10 million range. Mr. Greenberg considers Mr. Whittle’s ups and downs par for the course. “I don’t care if you’re Steve Jobs or Ted Turner or Chris Whittle, you’re going to have your roller coaster rides,” he said. “Many highly successful people have encountered the same thing. You have to look at the end result.”

CAREER MILESTONES
Chief Executive Officer, Avenues: The World School Current Board Member, EdisonLearning Inc. (formerly Edison Schools) Co-founded Edison Schools, 1992 Created Channel One News, a national in-school news program, 1989 Founded Whittle Communications, 1986 Chairman, Esquire magazine, 1979-1986 Co-founded 13-30 Corp., a publishing company, 1970

Spanish, Mandarin Focus
The origin of Avenues stems directly from the lessons Mr. Whittle and Mr. Schmidt say they learned while running Edison. “We are all products of our experience,” said Mr. Schmidt. “I don’t think Chris and I could have possibly had the ideas or executed around Avenues had we not had the experience of bringing Edison to life.” The two began to conceive of a new model of schooling, free of the regulatory issues, union politics, and glare of publicity that come with managing public schools. Or, if given a blank sheet of paper from which to construct a new school model, what it was they’d do differently. It turns out, quite a lot. “Could we create the next generation of schools if we were constraint-free?” Mr. Whittle recalled asking. “Avenues is about as constraint-free as you can get. It’s night and day. And if anyone tells you there isn’t a difference between $40,000 and $10,000 per pupil, don’t believe them.” Avenues started out as Nations Academy, first designed with a 60-campus global footprint. By the fall of 2008, Mr. Whittle and his team of advisers had amassed nearly $200 million in private-equity money from gems Education, a schooling company in the United Arab Emirates. Then the financial world collapsed. “You couldn’t raise a dollar,” Mr. Whittle said. “So we let the world calm down, regrouped, and started again post-financial crisis.” Shortly thereafter, Liberty Partners and

Partners, two private-equity firms, each pledged $37.5 million in seed money. When it came to deciding upon Avenues’ for-profit business model, Mr. Whittle said it would have been next to impossible to raise $75 million in private philanthropy to launch a nonprofit school. “I’m a good fundraiser, and I don’t know if I could do it. I don’t know if our whole team together could do it,” he said. “And that’s in America. In the rest of the world, there’s no way you could do it.” One primary goal is for each Avenues student to become bilingual— and possibly trilingual. In New York, half the parents of students in its inaugural class were born outside the United States. Its immersion program allows for two tracks: Spanish and Mandarin. Depending on the chosen language, half the day of instruction at Avenues is taught in the student’s foreign language. In later years, its students will be able to crisscross the globe, spending semesters studying abroad at various Avenues campuses. Because of the immersion program, half the teaching staff is flullr

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Education Week - September 26, 2012

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