CIBC Innovation Banking Podcast

Announcer:

Today on the CIBC Innovation Banking Podcast.

Michael Hainsworth:

I would be lying in bed awake at night scared to death that once this is gone, everyone's going to go back to the way things were Pre-COVID.

Jarrod Morgan:

(Laughter) Yah, I mean, I think probably the first 30 to 45 days of this COVID mad dash, we had a lot of the same thoughts. The idea that we could in some future day remove this convenience just I don't think is realistic anymore. It’s long time for the testing industry to have it’s “Netflix Moment.”

Announcer: 

Here is Michael Hainsworth.

Michael Hainsworth:

Proctor U knows how to be nimble. The online testing start-up always knew the future would be flexible. But after seeing almost a decade’s worth of growth over a few months, founder and Chief Strategy officer Jarrod Morgan tells us being pro-active saved the 12 year success story from stumbling out of the physical distancing gate. But how does a start-up prioritize new opportunities while keeping existing clients happy? Morgan says the challenges have changed but the approach hasn’t.

Jarrod Morgan (00:08):

You know, it was interesting. We had some technology challenges and constraints that feel silly and quaint today. But back in 2008, one of the initial issues was that not everybody had a web cam. Back in 2008 laptops, computers, desktop computers, it just wasn't normal for you to have a built in webcam. So one of the initial technology things that we had to get over was the availability of cameras. Within a year or so of starting, we actually had a shift and we saw more computers actually have those built in, which was really helpful for us as we expanded. We feel like technology has really moved our way. We were very fortunate to be skating to where the puck was going to be, so to speak, and we've really benefited from being where the market was going to go.

Michael Hainsworth (00:56):

Skating to where the puck is going to be certainly appeals to this Canadian hockey fan.

Jarrod Morgan (01:01):

Usually I use baseball analogies, but that was not going to work in this scenario.

Michael Hainsworth (01:07):

As to where that puck is going when it comes to COVID-19, because when the pandemic first hit, tell me how your team responded. And then let's talk about where you see that puck going.

Jarrod Morgan (01:17):

The first we heard about COVID-19 was still when it was in China. And interestingly enough, before it really became a global thing, we had organizations that we were working with that had a significant presence in Asia, and were trying to make plans to continue to serve that market if this thing they were hearing about, this COVID thing, really became a problem. And quickly, as we all know, it became a global issue, and we went from serving Asian markets to figuring out how to be ready to serve the entire world. I think the industry was really, like the rest of the world, was really caught off guard. ProctorU was created back in 2008, and we have been spending the last 12 years telling people that the way that we administer a test is the future of how testing is going to go.

Jarrod Morgan (02:09):

And suddenly because of COVID, the future became immediate. It was now. Because there was a lack of a physical alternative. So the reaction from schools and from learning programs, testing programs, and certification programs that we've worked with was initially panic. Everything had to move online. There was a lot of confusion, and what we had to do was try to streamline our process. And this all happened as our own offices at ProctorU started to close and we went to remote and all of us were working at home. So it was very interesting for the ProctorU team to be busier than we had ever been in our 12 year history and yet not able to go into the office. Everybody went to triage mode cause we had an influx of need that we saw in the market that we just had to answer because these programs really, really needed help making sure that people that were mid-semester were able to complete their degrees, or if there was a licensure exam that needed to happen so people could continue to move through their career. These things had to happen and they had to happen in a timely way.

Jarrod Morgan (03:18):

So what we had to do was figure out how do we get these people online quickly so that everybody that gets a grade or gets a credential in this era, it's just as valid as the ones that were given back in January or back in 2019. We want to make sure that people that graduate or get credits or get a certification in this era are looked at just the same as you would have looked at them in 2019.

Michael Hainsworth (03:43):

So once you moved from a reactive state, how do you make your company proactive? Is this just a function of more is more, or does your strategy need to be more nuanced?

Jarrod Morgan (03:53):

You know, I think it's got to be nuanced. The way to grow a business is to really deeply understand your consumer and understand the people that work with your company. So what we have tried to do is really plug into the planning conversations that are going on with universities, that are going on with certification programs, and all of us read what's coming out of the media and the news and the world in real time and figure out what does the next 12 months really look like? And we'll hear one thing, what do we really think is going to happen? And if we think that we're going to have universities go back to campus in the fall, what backup plans do we have so that we're not in the same situation we were in when we were in the spring and had to all sprint to some kind of hybrid version without a lot of planning. So what we've been really trying to do, particularly with our higher ed clients, is most of them are all trying some sort of either hybrid or in person attempt at a semester in the fall.

Jarrod Morgan (05:03):

We need to have conversations with them and have levers to pull and dates and deadlines that we need to pull them by, so that if we need to move quickly online, we have plans, we have instructions to hand out to both faculty and student, so that all of them can get online. So it's about being prepared for what happens. We were lucky in the sense that we had been building ProctorU to be able to withstand all sorts of things. So instead of having a single location where our workers are, we have 16 different locations in eight countries that are capable of having workers connect to a student there. And what that allows us to do is, if there's a particular area that gets overcome with an outbreak or has a lockdown, we can shift our workload as that organization goes remote and it allows us to stay up, and we've been able to stay up this entire time during the COVID crisis because of that flexibility.

Jarrod Morgan (06:05):

Now I'd like to say we were really smart and saw the pandemic coming. We didn't, we actually built that kind of infrastructure because we had had experiences with natural disasters, hurricanes and things like that, that had brought facilities offline. We started the year with about 300 proctors. We've now got well over a thousand, and it's a lot easier for us to hire as we do it in multiple locations than it is to try to do that in one. So having a culture of being proactive was really helpful for us when a crisis hit, but you can't really stop there. We had to look outward and say, what's the next 12 months going to look like, and how do we work with our clients to make sure that if they need us in a short run, that we're ready to take them in.

Michael Hainsworth (06:47):

And what is the most valuable lesson you've learned over the past few months from having to rapidly scale up like that?

Jarrod Morgan (06:53):

I think we've learned that everybody is not at the same place, both mentally and both organizationally when it comes to this global shift online. Everything in culture has really moved from a very analog experience to an online experience over the last 20 to 30 years, and education and learning, not everyone was at the same place. Some organizations had been very forward thinking, and this was a relatively easy shift for some organizations because they already had a portion of their organization online. For companies, for certification bodies, for universities that were still at the very beginning stages of understanding this, it was a real challenge just getting people to wrap their head around what it takes to actually move something online properly. And what was interesting. And one of the things that we observed in the first, I would say 60 to 90 days of this, was we started having conversations that we hadn't had in almost a decade, because there was an entire new population moving into the digital world that just hadn't really played in that space before. And some of the conversations were as simple as why would you need to have someone ensure that someone is not cheating on an exam? Or why would people cheat on an exam? Or do people actually cheat on an exam?

Jarrod Morgan (08:22):

And we thought that was just so strange because to us, it was a no brainer. I mean, of course people cheat on an exam. It's just part of the human condition. As long as there's been education, there's been a group of people that will look for shortcuts. But we actually had to go through and brew that conversation with people. Luckily in 2020 we have enough data, not just from us, but from people in the industry, like the National College Testing Association that have a lot of data about why students cheat and when they feel more motivated to cheat, or when they feel justified that it's really not that wrong. And we've been able to work through that. But the learning curve that had to happen in the span of really 30 to 60 days for these people to get online was pretty remarkable. And you just don't know where everybody is in their migration online or their acceptance of doing that.

Michael Hainsworth (09:21):

How do you prioritize new opportunities? I can imagine you've got a lot of opportunity coming in the door. What goes to the top of the list?

Jarrod Morgan (09:28):

That's a great question. We have had just a tremendous influx of need coming in from the market. We want to treat everybody the same and we want to make sure that the people that have been with us, the organizations that have been with us for years feel just as serviced and welcome as the newer organizations that are coming in with very big programs now. In order to do that, we've had to rapidly expand our capacity. People generally think of proctors when we say that, but it's been more than that. It's been people inside of ProctorU, what we call program managers and customer support workers, and everybody that it takes to stand up and manage these kinds of programs. We've had organizations come online with us that it probably would have taken us 10 years to get to a place where we're at the level of usage that we are now.

Jarrod Morgan (10:24):

A couple of them in particular, such as the GRE and TOEFL exam, which are really widely used around the world. We went from zero to a material amount of their testing in a rapid span of time because of the lack of options. So making sure that we have the capacity ready for them, making sure that we have not just the proctoring capacity, but also the support personnel, took a big move from our HR departments and all the hiring that we had to do. We're happy that we've been able to provide a lot of really great landing spots for talented, smart people that have found themselves displaced in a job through the middle of this. We've been a great landing spot for a lot of talent.

Michael Hainsworth (11:10):

So how do you scale up when there is the potential need to scale down once COVID-19 passes? If I were in your shoes, I would be lying in bed awake at night scared to death that once this is gone, everyone's going to go back to the way things were in 1987.

Jarrod Morgan (11:25):

I think probably the first 30 to 45 days of this COVID mad dash, we had a lot of the same thoughts. I think what we have seen over the summer is a gradual realization by the market, by our clients, by us, that I don't think that we're going to see a whiplash effect back to the way things were. I think we have fundamentally changed the world, really, but certainly the industries that we work in. The reasons that we say that is that what we're hearing from the market is we've now introduced the concept that it is acceptable and okay to test at home online and you can do it securely. And the idea that we could in some future day remove this convenience just I don't think is realistic anymore. For certain, there's going to be a period of time, even after we maybe get a vaccine and people start to take it, there's going to be a period of time where people will probably still be uncomfortable going to an exam hall where there could be 50 to 100 people jam packed in that room.

Jarrod Morgan (12:30):

So there'll be a period of time where just public perception probably still steer people online, but ultimately when we get on the other side of this, which is what we're all hoping and praying for, we feel like the convenience, all of the reasons why people used ProctorU and online testing prior to the COVID era is going to be readily apparent that that sea change has happened. That you need to touch a group of test takers that are in a location where there isn't a place that they can go to actually physically take an exam, we can test them as long as they have a reliable internet connection. It used to be, you'd have people that needed to take a certification exam that might have to drive two and three hours to get to a physical location. Now that we've proven that you can scale online testing securely and in a way that everybody can believe in those people should not have to drive that distance anymore. And we don't think that people are going to accept driving two and three hours to take an exam once they've had this massive unintentional case study on how well it can work online.

Michael Hainsworth (13:31):

The explosion of digital communications tools has shone the spotlight on security. You've brought it up multiple times already, but privacy too, as well. Let's talk about hurdles and how one overcomes them with a client, regardless as to what business you're in. How did you telegraph to a potential client that you're secure, that you're private, when nobody really knows if it's true until it's not?

Jarrod Morgan (13:55):

It's a great question. I mean, it's something that the whole world is really grappling with what digital privacy and digital security really looks like. The last couple of years, you've seen GDPR come out from Europe, but really governing the whole world. In the United States we've seen CCPA and other states actually have their own set of rules. So I think it's a very good and justified process for people to be looking at what is the right way to deal with private information. And our philosophy has always been to hold only the necessity and the organizations that we work with are actually the controllers of the data. They're the ones that tell us how long we should hold it, what we should do with it, and all of that. It's about making sure that we know the rules, we know the laws and we do things both legally, but also ethically and thinking through what is the right way to do this?

Jarrod Morgan (14:53):

I think the whole world and lots of technology companies are all dealing with both of those issues, what's legal and what's ethical. We have worked really hard to make sure that we're involved in that conversation and really trying to figure out what is the right thing to do, like I said, not just legally, but what's ethical? What are the markets actually want us to be able to do with the data? And because of that, we created something called the Student Bill of Rights for education or higher education users. And that Student Bill of Rights, you can actually view online, and it is a set of beliefs and things that you should expect from any organization that is working with educational data. And we started it as really a starting place to start a conversation with both students and users and administrators to really figure out what's a rapidly evolving space and what's correct, and we've got it out there and it's open for comment so that rather than try to come up with our own answers, we'd really like to engage with the markets that we serve and figure out, again, what's both legal and ethical.

Michael Hainsworth (16:02):

So there has been so much talk about how COVID will permanently change society, and I think we've touched on a bit of this here and there. What do you see as the future of education and testing?

Jarrod Morgan (16:13):

Well, I mentioned it earlier. We've been telling people for 12 years that online testing is the future, and because of the COVID situation, the future became immediate and now. For higher education, you're going to see a blending of physical and online learning. And there's already a lot of that in the industry where you see blended programs. But we think you're going to see more of that. You're going to see you have the ability to attend online, you have the ability to attend on campus, and those things are a lot more interchangeable than they've been in the past. For certification programs if you think about the way that we proctor, we proctor exams online. We have someone sit at home and then you connect with one of our professionals and we're going to help you take the exam, monitor, and make sure that all the rules are followed. There's no reason why you should have to go back to a physical location. And we think that the market is ready for that. We think that it's long time for the testing industry to have its Netflix moment.

Jarrod Morgan (17:14):

So if you think about the test center model that's been around for a long time, it's very much like going to a Blockbuster video and renting a video. And what we do with online testing is very much like Netflix. And we think people now want that, expect that. People have busy lives. They don't have time to take days off of work and drive somewhere and have to go in physically and take an exam. We allow people to take an exam 24 hours a day, seven days a week, all days of the year. They can take it after the kids are in bed. They can take it when they're done studying. It's a much more convenient way to take an exam, and it makes a lot of sense to do that in a world that values convenience now.

Michael Hainsworth (17:56):

I love the Netflix analogy, but the scholastic child in me just had a whole Heart attack at the thought of binge testing.

Jarrod Morgan (18:07):

(Laughter) That's a level of overachiever I don't think we see very often for sure.

Michael Hainsworth:

(Laughter)

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