1
00:00:10,280 --> 00:00:14,520
Speaker 1: Hello, and welcome to another episode of the Oddlots Podcast.

2
00:00:14,640 --> 00:00:16,919
Speaker 2: I'm Joe Wisenthal and I'm Tracy Alloway.

3
00:00:17,200 --> 00:00:21,000
Speaker 1: Tracy, the economics of care work one of these topics

4
00:00:21,079 --> 00:00:23,040
Speaker 1: that I think we're both interested in, but like news

5
00:00:23,079 --> 00:00:25,600
Speaker 1: developments keep derailing our pursuit of.

6
00:00:25,560 --> 00:00:28,400
Speaker 2: This area, right, things keep happening. Yeah, really, And so

7
00:00:28,480 --> 00:00:30,920
Speaker 2: we can't talk about the economics of preschool.

8
00:00:30,640 --> 00:00:32,600
Speaker 1: And I guess the one other time we sort of

9
00:00:32,640 --> 00:00:35,520
Speaker 1: talked about it, like so much of the conversation about

10
00:00:35,520 --> 00:00:39,879
Speaker 1: like infrastructure or making this economy like more productive, like

11
00:00:40,200 --> 00:00:44,000
Speaker 1: so much emphasis on like the built economy.

12
00:00:43,520 --> 00:00:45,360
Speaker 2: The good side of the the good.

13
00:00:45,240 --> 00:00:49,199
Speaker 1: Side factories and can the factories make good batteries and

14
00:00:49,280 --> 00:00:51,360
Speaker 1: stuff like that. But I do think that like when

15
00:00:51,400 --> 00:00:54,240
Speaker 1: you look at like long term challenges for the US,

16
00:00:54,680 --> 00:00:59,080
Speaker 1: so many things related to like childcare, elder care is

17
00:00:59,120 --> 00:01:01,400
Speaker 1: a really big one, and the sort of like the

18
00:01:01,480 --> 00:01:04,840
Speaker 1: economics of these industries that like aren't going to have

19
00:01:05,000 --> 00:01:08,600
Speaker 1: like some huge productivity breakthrough tomorrow or like it takes

20
00:01:08,600 --> 00:01:11,680
Speaker 1: a lot of labor, and they seem to keep getting

21
00:01:11,680 --> 00:01:12,920
Speaker 1: more challenging for pure.

22
00:01:12,720 --> 00:01:16,080
Speaker 2: Right, in many respects, they seem more troublesome than some

23
00:01:16,120 --> 00:01:18,560
Speaker 2: of the good sides. I think we talked about this before,

24
00:01:18,600 --> 00:01:21,280
Speaker 2: but certainly if you look at inflation numbers and if

25
00:01:21,280 --> 00:01:24,920
Speaker 2: you divide them up by you know, consumer goods versus services,

26
00:01:25,200 --> 00:01:28,920
Speaker 2: the really long term price pressures are mostly on the

27
00:01:28,959 --> 00:01:32,640
Speaker 2: services side, so again things like healthcare and education. And

28
00:01:32,680 --> 00:01:36,440
Speaker 2: then secondly, to your point, in some respects, it feels like, Okay,

29
00:01:36,480 --> 00:01:39,480
Speaker 2: if there's a bottleneck of a particular good, well we

30
00:01:39,560 --> 00:01:44,000
Speaker 2: can build a new factory or increased capacity at the ports. Yeah,

31
00:01:44,120 --> 00:01:47,120
Speaker 2: you know, I'm sort of simplifying it. But when it

32
00:01:47,160 --> 00:01:52,240
Speaker 2: comes to care work, there's this massive labor issue which

33
00:01:52,320 --> 00:01:56,560
Speaker 2: you can't just build fifty new preschools in a particular

34
00:01:56,600 --> 00:02:00,080
Speaker 2: city because you would still need to man them, and

35
00:01:59,800 --> 00:02:02,360
Speaker 2: even and then even if you could get the labor

36
00:02:02,440 --> 00:02:06,000
Speaker 2: to keep them going, there is a fundamental issue with

37
00:02:06,040 --> 00:02:07,200
Speaker 2: the business model.

38
00:02:06,880 --> 00:02:09,880
Speaker 1: Itself totally, you know, And you mentioned the porch and

39
00:02:09,919 --> 00:02:12,200
Speaker 1: you said you're oversimplified, but I don't think so. I mean, like,

40
00:02:12,240 --> 00:02:13,720
Speaker 1: you know, that is sort of what a lot of

41
00:02:13,760 --> 00:02:16,880
Speaker 1: this conversation is about. You can expand them, you could

42
00:02:17,200 --> 00:02:19,760
Speaker 1: get you know, repeal the dreadg Act and allow more

43
00:02:19,800 --> 00:02:23,040
Speaker 1: boats into the Port of Los Angeles, and then theory.

44
00:02:23,200 --> 00:02:25,800
Speaker 1: You know, some ports are automated so that one person

45
00:02:25,960 --> 00:02:28,080
Speaker 1: can do what ten people did in terms of unloading

46
00:02:28,120 --> 00:02:30,760
Speaker 1: containers and things like that. I mean, maybe at some

47
00:02:30,840 --> 00:02:34,399
Speaker 1: point we'll have robots take care of like all old

48
00:02:34,440 --> 00:02:36,880
Speaker 1: people and children and someone, but that does not seem imminent.

49
00:02:37,440 --> 00:02:37,560
Speaker 3: Uh.

50
00:02:38,880 --> 00:02:42,320
Speaker 2: It seems rather a dystopian though not imminent, but very dystopian.

51
00:02:42,560 --> 00:02:45,120
Speaker 2: But okay, So we have done an episode on this

52
00:02:45,200 --> 00:02:48,360
Speaker 2: with Nancy Folbright where we talk sort of generally about

53
00:02:48,400 --> 00:02:53,160
Speaker 2: the issues at play with preschool education. But I think

54
00:02:53,160 --> 00:02:55,040
Speaker 2: we need to delve in a little bit more on

55
00:02:55,080 --> 00:02:59,200
Speaker 2: some of the practical difficulties of running this type of business.

56
00:02:59,480 --> 00:03:01,400
Speaker 1: Right, this one of those things. It's not like a

57
00:03:01,480 --> 00:03:04,480
Speaker 1: post pandemic. I mean, it's worsened in this sort of

58
00:03:04,639 --> 00:03:08,800
Speaker 1: current post March twenty twenty era, like the stress that

59
00:03:08,960 --> 00:03:12,320
Speaker 1: families feel about childcare, but like in least in New

60
00:03:12,400 --> 00:03:15,400
Speaker 1: York City, people were stressed about it in twenty nineteen

61
00:03:15,480 --> 00:03:18,000
Speaker 1: and twenty eighteen and probably long, you know, for years

62
00:03:18,000 --> 00:03:21,600
Speaker 1: and years. So there's like something that deeply structural going on.

63
00:03:21,680 --> 00:03:24,360
Speaker 1: And you has a really good question in the interview

64
00:03:24,360 --> 00:03:26,520
Speaker 1: with Nancy full Brad It's like, where does the money

65
00:03:26,520 --> 00:03:28,480
Speaker 1: where they w there is the money? Like, what is

66
00:03:28,520 --> 00:03:28,960
Speaker 1: the cost?

67
00:03:29,080 --> 00:03:30,880
Speaker 2: I think I'm just going to be asking this question

68
00:03:30,960 --> 00:03:33,200
Speaker 2: over and over again on this episode, but I do

69
00:03:33,320 --> 00:03:37,040
Speaker 2: not understand how people can pay two thousand dollars a

70
00:03:37,080 --> 00:03:42,280
Speaker 2: month for childcare and yet the childcare workers themselves seem

71
00:03:42,400 --> 00:03:45,120
Speaker 2: to be not paid very well. So where is the

72
00:03:45,160 --> 00:03:45,720
Speaker 2: money going?

73
00:03:46,160 --> 00:03:48,960
Speaker 1: And I think there are many people listening who'ld be like, wait,

74
00:03:49,000 --> 00:03:51,360
Speaker 1: Tracy knows of a place where you can get childcare

75
00:03:51,400 --> 00:03:52,200
Speaker 1: for two thousand dollars?

76
00:03:52,280 --> 00:03:52,760
Speaker 2: Oh really?

77
00:03:52,920 --> 00:03:55,120
Speaker 1: Sorry? No, no, no, I know, like that's that cheap.

78
00:03:55,280 --> 00:03:57,160
Speaker 2: I was trying to think of something reasonable.

79
00:03:58,040 --> 00:04:00,720
Speaker 1: I think that there are many people who pay I

80
00:04:00,760 --> 00:04:02,840
Speaker 1: don't know. I actually don't know, but okay, let's find out.

81
00:04:02,880 --> 00:04:07,120
Speaker 1: It is an expensive cost for any family, particularly in cities.

82
00:04:07,600 --> 00:04:10,280
Speaker 1: And also it seems to be the case that the

83
00:04:10,360 --> 00:04:14,680
Speaker 1: workers generally are not paid all that well in many

84
00:04:14,760 --> 00:04:17,400
Speaker 1: locations at least. So your question of like where's the

85
00:04:17,400 --> 00:04:19,560
Speaker 1: money going, what's the cost? Et cetera, like we just

86
00:04:19,600 --> 00:04:20,919
Speaker 1: need to dive more into that.

87
00:04:21,400 --> 00:04:22,200
Speaker 2: Yeah, let's do it.

88
00:04:22,279 --> 00:04:24,120
Speaker 1: Well. I'm very excited to say we do have the

89
00:04:24,200 --> 00:04:28,599
Speaker 1: perfect guest because he is in this business specifically, we're

90
00:04:28,640 --> 00:04:31,159
Speaker 1: going to be speaking with Matt Bateman. He's a member

91
00:04:31,200 --> 00:04:35,560
Speaker 1: of the founding team at Higher Ground Education, which is

92
00:04:35,600 --> 00:04:39,080
Speaker 1: a startup that has a chain over one hundred and

93
00:04:39,080 --> 00:04:42,800
Speaker 1: twenty Montassori schools around the country, mostly under the guide

94
00:04:42,839 --> 00:04:47,400
Speaker 1: Post Montessori brand. He is currently technically the VP of

95
00:04:47,560 --> 00:04:50,960
Speaker 1: Pedagogy at Higher Ground Education, and he knows a lot

96
00:04:51,040 --> 00:04:54,599
Speaker 1: about the actual business of childcare, where the cost go,

97
00:04:54,760 --> 00:04:57,240
Speaker 1: et cetera. And so Matt, thank you so much for

98
00:04:57,360 --> 00:04:58,360
Speaker 1: coming out on the podcast.

99
00:04:59,160 --> 00:05:01,120
Speaker 3: Well thanks for having Matt.

100
00:05:01,120 --> 00:05:05,560
Speaker 1: Just to establish why we're talking. What is Higher Ground Education?

101
00:05:05,760 --> 00:05:08,479
Speaker 1: Why was it founded? I guess in twenty sixteen, like

102
00:05:08,520 --> 00:05:11,200
Speaker 1: sort of like what is this this business that you

103
00:05:11,279 --> 00:05:11,880
Speaker 1: helped launch.

104
00:05:12,040 --> 00:05:16,120
Speaker 3: It's a missionary company. So we're out there trying to

105
00:05:16,160 --> 00:05:19,039
Speaker 3: create more monassory schools, create more monesssory education. And the

106
00:05:19,120 --> 00:05:23,800
Speaker 3: fundamental mission of the company is educational or pedagogical, which

107
00:05:23,839 --> 00:05:26,880
Speaker 3: means kind of related to teaching methods. It's that the

108
00:05:27,040 --> 00:05:31,200
Speaker 3: kind of support that children get in early childhood centers

109
00:05:31,279 --> 00:05:34,599
Speaker 3: or even from their parents can be greatly greatly improved.

110
00:05:35,120 --> 00:05:38,520
Speaker 3: This is the monasory thesis by approaching education very differently,

111
00:05:39,000 --> 00:05:40,919
Speaker 3: and so that's the premise and I mean there are

112
00:05:40,920 --> 00:05:42,880
Speaker 3: a lot of monastery schools. There are thousands of Monessori

113
00:05:42,920 --> 00:05:46,480
Speaker 3: schools in the US, tens of thousands across the world.

114
00:05:46,920 --> 00:05:49,120
Speaker 3: But we wanted to do something big in the space,

115
00:05:49,320 --> 00:05:52,479
Speaker 3: to grow bigger, to create something like I don't know,

116
00:05:52,560 --> 00:05:55,040
Speaker 3: like the whole foods of Monessuri create create a new

117
00:05:55,440 --> 00:05:57,520
Speaker 3: a new kind of branding impact and a new reach

118
00:05:58,000 --> 00:06:00,640
Speaker 3: for Monesssory Education understood it.

119
00:06:00,800 --> 00:06:02,920
Speaker 1: Tracy. By the way, I don't think this actually cauds

120
00:06:02,920 --> 00:06:04,800
Speaker 1: a disclimer. I went to a Montessori school for a

121
00:06:04,800 --> 00:06:07,360
Speaker 1: few years. I'm a big fan. I really, It's not like, well,

122
00:06:07,360 --> 00:06:07,840
Speaker 1: there's things.

123
00:06:08,200 --> 00:06:09,640
Speaker 2: The reason that doesn't surprise me.

124
00:06:10,240 --> 00:06:13,080
Speaker 1: But uh yeah, when I from like eight grade one

125
00:06:13,160 --> 00:06:15,640
Speaker 1: through three for few years, and I have, I had

126
00:06:16,040 --> 00:06:17,280
Speaker 1: very positive memories of it.

127
00:06:17,400 --> 00:06:21,560
Speaker 2: I think I went to technically like government preschool. It

128
00:06:21,600 --> 00:06:23,440
Speaker 2: was provided by the US embassy.

129
00:06:23,640 --> 00:06:26,720
Speaker 1: Oh which country were in Japan? Oh wow?

130
00:06:27,000 --> 00:06:30,200
Speaker 2: Yeah? Okay, Well, Matt, can I just ask the obvious question,

131
00:06:30,440 --> 00:06:34,880
Speaker 2: So a parent or a pair of parents, they're paying

132
00:06:35,200 --> 00:06:39,279
Speaker 2: hundreds of dollars a month for childcare. Where is that

133
00:06:39,360 --> 00:06:39,880
Speaker 2: money going?

134
00:06:40,200 --> 00:06:41,800
Speaker 3: I'm going to answer the question as I understand it.

135
00:06:41,800 --> 00:06:45,119
Speaker 3: I mean, the unit economics of an early childhood center

136
00:06:45,160 --> 00:06:49,640
Speaker 3: are pretty simple. It's tuition minus labor minus rent. So

137
00:06:50,160 --> 00:06:52,520
Speaker 3: is your question just the numbers don't add up. If

138
00:06:52,520 --> 00:06:54,600
Speaker 3: you've got one hundred people in a center times the

139
00:06:54,640 --> 00:06:57,640
Speaker 3: amount of tuition that's the list price, it seems like

140
00:06:57,680 --> 00:06:59,640
Speaker 3: it should either be making like ninety percent margins or

141
00:06:59,640 --> 00:07:01,479
Speaker 3: the teacher would be getting paid more. Is that the question?

142
00:07:01,560 --> 00:07:03,760
Speaker 2: I think it's more. It feels like the teachers should

143
00:07:03,800 --> 00:07:07,039
Speaker 2: be getting paid more, and so labor shouldn't be as

144
00:07:07,120 --> 00:07:09,240
Speaker 2: much of an issue as it seems to be currently.

145
00:07:10,080 --> 00:07:12,600
Speaker 3: I mean a few caveats. A lot of people don't

146
00:07:12,600 --> 00:07:15,720
Speaker 3: pay list tuition, so I mean that is I mean

147
00:07:15,800 --> 00:07:19,520
Speaker 3: even at very elite schools, at chain schools, there's a

148
00:07:19,560 --> 00:07:22,720
Speaker 3: kind of list price, and then there's graded discounting down

149
00:07:22,760 --> 00:07:26,280
Speaker 3: to fifty percent or even lower, and so the average

150
00:07:26,320 --> 00:07:29,560
Speaker 3: list price can can be a lot lower than the

151
00:07:29,640 --> 00:07:31,760
Speaker 3: list price. The kind of average gross tuition can be

152
00:07:31,800 --> 00:07:33,280
Speaker 3: a lot lower than the gross tuition that you would

153
00:07:33,320 --> 00:07:37,360
Speaker 3: get just by multiplying the tuition numbers. The second thing

154
00:07:37,440 --> 00:07:40,240
Speaker 3: is there, I mean there is overhead in this business.

155
00:07:40,920 --> 00:07:44,960
Speaker 3: I think the overhead actually hits one off centers kind

156
00:07:45,000 --> 00:07:48,480
Speaker 3: of mom and pop centers, which are most centers harder

157
00:07:48,680 --> 00:07:52,000
Speaker 3: than it hits the chains because of there's regulatory overhead

158
00:07:52,400 --> 00:07:56,240
Speaker 3: with licensing, there's kind of operational overhead. This is not

159
00:07:56,320 --> 00:07:58,960
Speaker 3: an industry where there's like a billing system in a

160
00:07:59,000 --> 00:08:02,040
Speaker 3: box than any preschool center can use and it's really easy.

161
00:08:02,120 --> 00:08:04,760
Speaker 3: It's it's actually pretty difficult to get it set up

162
00:08:04,800 --> 00:08:07,520
Speaker 3: and chasing payments and chasing parents. Usually the people that

163
00:08:07,520 --> 00:08:12,200
Speaker 3: set up centers are like entrepreneurial moms that decided to

164
00:08:12,240 --> 00:08:14,880
Speaker 3: start a preschool twenty years ago and they've learned the

165
00:08:14,880 --> 00:08:17,240
Speaker 3: business side as they go. It's a very small business

166
00:08:17,720 --> 00:08:21,360
Speaker 3: kind of vibe. And in that setting operational complexity and

167
00:08:21,400 --> 00:08:23,960
Speaker 3: regulatory complexity, which I mean it varies, but I mean

168
00:08:24,000 --> 00:08:26,200
Speaker 3: in New York City there's a ton of regulatory complexity

169
00:08:26,520 --> 00:08:29,920
Speaker 3: eats up costs. And then the last bit, which is

170
00:08:29,920 --> 00:08:32,400
Speaker 3: a kind of like intersection of regulatory and labor complexity,

171
00:08:32,480 --> 00:08:35,760
Speaker 3: is there are ratio requirements, and there are there are

172
00:08:35,800 --> 00:08:38,679
Speaker 3: ratio requirements, and there are also just requirements on who

173
00:08:38,679 --> 00:08:41,040
Speaker 3: can work in a preschool at all. And I mean

174
00:08:41,080 --> 00:08:42,719
Speaker 3: you see this a lot in places like New York,

175
00:08:42,760 --> 00:08:44,480
Speaker 3: Like it's not that easy to find guides that are

176
00:08:44,559 --> 00:08:47,640
Speaker 3: qualified to work in preschools. You need a certain kind

177
00:08:47,640 --> 00:08:50,120
Speaker 3: of bachelors or masters are credential. I can't remember exactly

178
00:08:50,160 --> 00:08:53,320
Speaker 3: what the details are in New York City, but it's

179
00:08:53,360 --> 00:08:56,679
Speaker 3: not just like you can tap into a wide hiring pool,

180
00:08:56,880 --> 00:08:59,760
Speaker 3: a wide labor market, and so all these things kind

181
00:08:59,760 --> 00:09:02,760
Speaker 3: of in being like you need to have a certain ratio,

182
00:09:03,320 --> 00:09:05,880
Speaker 3: You've got some overhead. There's a lot of operational complexities,

183
00:09:05,880 --> 00:09:07,880
Speaker 3: so maybe you should add another person to your staff.

184
00:09:09,080 --> 00:09:10,600
Speaker 3: And if you add another person to your staff, which

185
00:09:10,640 --> 00:09:12,920
Speaker 3: is the easiest way to solve a lot of these problems,

186
00:09:13,040 --> 00:09:14,360
Speaker 3: is you just kind of over staff, you end up

187
00:09:14,360 --> 00:09:17,319
Speaker 3: paying everybody less. I mean, that is the endemic problem

188
00:09:17,640 --> 00:09:20,160
Speaker 3: in the early childhood market. So that's a kind of

189
00:09:20,520 --> 00:09:22,960
Speaker 3: shotgun blast overview. I mean I think that. I mean,

190
00:09:23,000 --> 00:09:25,840
Speaker 3: the reality is is most centers don't make much money.

191
00:09:25,960 --> 00:09:27,280
Speaker 3: I mean a lot of them lose money, a lot

192
00:09:27,280 --> 00:09:29,800
Speaker 3: of them close, a lot of them have razor thin margins.

193
00:09:30,400 --> 00:09:34,920
Speaker 3: And even the big centers, I haven't seen kindercres numbers

194
00:09:35,480 --> 00:09:39,360
Speaker 3: post pandemic or the Warning Care Group. But if you

195
00:09:39,400 --> 00:09:42,080
Speaker 3: look at I mean, Bright Horizons is public and so

196
00:09:42,120 --> 00:09:45,160
Speaker 3: you can look at their numbers their early childhood care business.

197
00:09:45,280 --> 00:09:47,160
Speaker 3: I mean, if it weren't for ARPA money, it would

198
00:09:47,320 --> 00:09:48,439
Speaker 3: be cashlow negative.

199
00:09:50,679 --> 00:09:53,680
Speaker 2: Can I just ask? That was a great overview, And

200
00:09:53,679 --> 00:09:55,640
Speaker 2: I think we're going to drill into like a bunch

201
00:09:55,679 --> 00:09:58,680
Speaker 2: of the things that you just said. But what is

202
00:09:58,800 --> 00:10:03,040
Speaker 2: insurance like for preschool because I can imagine that that

203
00:10:03,160 --> 00:10:05,760
Speaker 2: must be you know, you talk about sort of regulation.

204
00:10:05,880 --> 00:10:08,840
Speaker 2: I imagine that must be one big risk factor and

205
00:10:08,880 --> 00:10:11,280
Speaker 2: potentially quite a large expense.

206
00:10:11,880 --> 00:10:14,880
Speaker 3: We have viability insurance. I don't think it's that significant.

207
00:10:15,920 --> 00:10:18,600
Speaker 3: I would have to ask somebody else on my team,

208
00:10:18,640 --> 00:10:20,439
Speaker 3: but I don't. I don't think it's really that significant.

209
00:10:36,559 --> 00:10:40,199
Speaker 1: Go on, you know, and talk about like scaling, et cetera.

210
00:10:40,360 --> 00:10:44,400
Speaker 1: And so you say that there's this endemic problem of

211
00:10:45,040 --> 00:10:48,880
Speaker 1: over hiring, et cetera, and that this creates talk to

212
00:10:48,960 --> 00:10:51,960
Speaker 1: us like about this phenomenon of like the choices that

213
00:10:52,080 --> 00:10:54,520
Speaker 1: a school makes, how it sort of like solves the

214
00:10:54,600 --> 00:10:57,080
Speaker 1: hiring problem and then pushes wages down for everyone.

215
00:10:57,720 --> 00:10:59,800
Speaker 3: I mean, that's one aspect of it. And I wouldn't

216
00:10:59,800 --> 00:11:02,680
Speaker 3: say it's like the main or the primary problem, but

217
00:11:02,679 --> 00:11:04,679
Speaker 3: it's like one of the ways that the problem manifests.

218
00:11:04,679 --> 00:11:09,360
Speaker 3: So let's say you've got a small center with five classrooms, sure,

219
00:11:09,679 --> 00:11:12,400
Speaker 3: and you need to have two teachers in each classroom.

220
00:11:12,480 --> 00:11:15,200
Speaker 3: Let's just make it simple. Some of the classrooms are toddler,

221
00:11:15,240 --> 00:11:17,160
Speaker 3: some of the costumes are preschool, but you need to

222
00:11:17,160 --> 00:11:20,400
Speaker 3: give those teachers breaks. Or you're in a labor crunch

223
00:11:20,760 --> 00:11:23,320
Speaker 3: and you're losing teachers more frequently, or teachers aren't showing up,

224
00:11:23,360 --> 00:11:25,080
Speaker 3: like a teacher calls in sick, and that's happening more

225
00:11:25,080 --> 00:11:27,040
Speaker 3: and more often. This is the kind of post pandemic

226
00:11:27,600 --> 00:11:31,000
Speaker 3: reality is. Call outs are just like every industry call outs,

227
00:11:31,000 --> 00:11:33,160
Speaker 3: it's getting more common. Well, you need something that we

228
00:11:33,240 --> 00:11:35,400
Speaker 3: call in this industry a floater or a kind of

229
00:11:35,559 --> 00:11:38,240
Speaker 3: standing substitute teacher to be able to kind of go

230
00:11:38,280 --> 00:11:41,760
Speaker 3: and fill in. And then, unless you're thinking very creatively

231
00:11:41,800 --> 00:11:44,080
Speaker 3: about that role, the kind of standard way to think

232
00:11:44,120 --> 00:11:46,400
Speaker 3: about that role is you just have another person who's available.

233
00:11:47,000 --> 00:11:51,520
Speaker 3: It starts to get expensive pretty quickly because you're looking at, okay,

234
00:11:51,600 --> 00:11:54,640
Speaker 3: like we had ten people on staff who are teaching,

235
00:11:54,679 --> 00:11:56,360
Speaker 3: and now we have twelve people on staff because we

236
00:11:56,360 --> 00:11:57,800
Speaker 3: have two floaters, and then we have two admins and

237
00:11:57,960 --> 00:12:01,719
Speaker 3: fourteen people on staff is very small, Actually, for a

238
00:12:01,760 --> 00:12:03,600
Speaker 3: school of the size, most schools would have three or

239
00:12:03,640 --> 00:12:07,560
Speaker 3: four admins, and then you have to think about turnover

240
00:12:07,600 --> 00:12:09,280
Speaker 3: and the teachers that you're training, and so it just

241
00:12:09,320 --> 00:12:11,680
Speaker 3: it's it's I mean, it's a labor intensive industry. Everybody

242
00:12:11,720 --> 00:12:14,959
Speaker 3: knows that, but it's just like it's even more labor intensive.

243
00:12:15,000 --> 00:12:17,800
Speaker 3: I think then people realize it is, at least on

244
00:12:17,840 --> 00:12:18,920
Speaker 3: the standard models of it.

245
00:12:19,040 --> 00:12:20,960
Speaker 1: I want to go back to something you said that

246
00:12:21,160 --> 00:12:25,280
Speaker 1: a lot of sort of the chain companies that own

247
00:12:25,480 --> 00:12:29,000
Speaker 1: childcare centers would be cash flow negative without what money?

248
00:12:29,000 --> 00:12:31,400
Speaker 1: Did you say, ARPA money? And what is that money?

249
00:12:31,559 --> 00:12:34,320
Speaker 3: I mean that's right Horizons in particular. Yeah, money is

250
00:12:34,520 --> 00:12:38,040
Speaker 3: it's some sort of COVID grant system. Oh, I can't

251
00:12:38,040 --> 00:12:40,280
Speaker 3: remember what it stands for, but it's I mean, Bright

252
00:12:40,360 --> 00:12:42,520
Speaker 3: Haresins does make money. They make money with backup care

253
00:12:43,160 --> 00:12:45,800
Speaker 3: and and in other ways. But if you just kind

254
00:12:45,800 --> 00:12:47,640
Speaker 3: of look at the unit economics of their centers, of

255
00:12:47,679 --> 00:12:51,280
Speaker 3: their preschool centers, it's not great. It's it's just a

256
00:12:51,360 --> 00:12:53,800
Speaker 3: kind of low margin business. I mean, this is something

257
00:12:53,800 --> 00:12:56,520
Speaker 3: that we we struggle with as well. In good cases,

258
00:12:56,520 --> 00:12:58,080
Speaker 3: we can push the margins up, but when you're starting

259
00:12:58,080 --> 00:12:59,959
Speaker 3: at school, when you've got a new center, when you're

260
00:13:00,240 --> 00:13:03,040
Speaker 3: looking at like, you know, somewhere between one and three

261
00:13:03,120 --> 00:13:06,440
Speaker 3: years of cash flow burn no matter what, as you're

262
00:13:06,480 --> 00:13:08,920
Speaker 3: kind of ramping up. I think that sometimes people have

263
00:13:08,960 --> 00:13:11,280
Speaker 3: this impression because private equity is so interested.

264
00:13:11,600 --> 00:13:13,360
Speaker 2: This was going to be my next question, like, if

265
00:13:13,360 --> 00:13:16,440
Speaker 2: the margins are so thin, why is private equity so

266
00:13:16,520 --> 00:13:17,520
Speaker 2: interested in this business?

267
00:13:17,679 --> 00:13:20,400
Speaker 3: Apparently I think that they're interested in it because it's

268
00:13:20,840 --> 00:13:24,440
Speaker 3: it's kind of sticky and has regulatory modes. And I mean,

269
00:13:24,520 --> 00:13:27,199
Speaker 3: what private equity does in this industry is they it's

270
00:13:27,200 --> 00:13:30,559
Speaker 3: a roll up strategy. Basically, they come in and they

271
00:13:30,600 --> 00:13:34,920
Speaker 3: buy centers from small businesses that are looking to sell,

272
00:13:35,000 --> 00:13:37,960
Speaker 3: like schools that started in the sixty seventies eighties, or

273
00:13:38,280 --> 00:13:40,560
Speaker 3: small businesses that are now owned by other holding companies,

274
00:13:40,600 --> 00:13:44,000
Speaker 3: by other private equity companies, and they combine them and

275
00:13:44,040 --> 00:13:46,600
Speaker 3: they try to get as many operational and administrative efficiencies

276
00:13:46,600 --> 00:13:49,000
Speaker 3: as they can, and they close the ones that aren't profitable,

277
00:13:49,240 --> 00:13:51,600
Speaker 3: and they try to get to fifteen percent margins or whatever,

278
00:13:51,880 --> 00:13:54,280
Speaker 3: and then they either repacket it and sell or they

279
00:13:54,280 --> 00:13:57,080
Speaker 3: go public, depending on the modelism. There's been a lot

280
00:13:57,080 --> 00:13:59,920
Speaker 3: of passing back and forth of clusters of schools and

281
00:14:00,000 --> 00:14:00,640
Speaker 3: private equity.

282
00:14:01,200 --> 00:14:05,480
Speaker 2: How do you scaling efficiencies work in preschools, Because on

283
00:14:05,520 --> 00:14:08,959
Speaker 2: the face of it, it wouldn't appear to me that

284
00:14:09,080 --> 00:14:13,320
Speaker 2: like running ten schools versus running one school would be

285
00:14:13,600 --> 00:14:14,840
Speaker 2: vastly more efficient.

286
00:14:15,640 --> 00:14:18,559
Speaker 3: It's not vastly more efficient. But if you're dealing with

287
00:14:18,840 --> 00:14:22,760
Speaker 3: baseline thin margins, eliminating an admin person at a school

288
00:14:23,320 --> 00:14:27,040
Speaker 3: because you can centralize that functional or coming up with

289
00:14:27,080 --> 00:14:30,480
Speaker 3: a standardized operational or onboarding system or a system for

290
00:14:30,960 --> 00:14:34,200
Speaker 3: vetting hires hiring is a pain in education just I mean,

291
00:14:34,480 --> 00:14:36,720
Speaker 3: this is some of this is preschool in early childhood,

292
00:14:36,720 --> 00:14:38,880
Speaker 3: but some of us, just like private schools or just

293
00:14:38,920 --> 00:14:41,600
Speaker 3: the schooling system in general, some of these issues just

294
00:14:41,680 --> 00:14:44,600
Speaker 3: kind of get inherited from the general complexity of education.

295
00:14:45,120 --> 00:14:46,680
Speaker 3: But yeah, I mean, if you kind of can go

296
00:14:46,760 --> 00:14:50,360
Speaker 3: down from four admins to two, or you can have

297
00:14:50,400 --> 00:14:52,720
Speaker 3: a scheduling system that lets you eliminate one float or

298
00:14:52,720 --> 00:14:55,680
Speaker 3: something like that, that's where the private equity kinds of

299
00:14:55,680 --> 00:14:58,440
Speaker 3: efficiencies come in. How we think about it as a

300
00:14:58,440 --> 00:15:01,200
Speaker 3: little bit different. I mean, the big question is are

301
00:15:01,240 --> 00:15:05,600
Speaker 3: there innovations that can help are thesises there are, and

302
00:15:05,640 --> 00:15:08,360
Speaker 3: that these kinds of standard models that take these like

303
00:15:08,440 --> 00:15:12,440
Speaker 3: half academic, half progressive, play based preschools and just try

304
00:15:12,480 --> 00:15:14,360
Speaker 3: to scale them out. Like the thing that's actually needed

305
00:15:14,400 --> 00:15:19,200
Speaker 3: is programmatic innovation, including innovation on the staffing side in

306
00:15:19,240 --> 00:15:22,040
Speaker 3: terms of how teachers are hired and trained and how

307
00:15:22,040 --> 00:15:25,600
Speaker 3: the funnel works, and can you do something like you know,

308
00:15:25,720 --> 00:15:30,560
Speaker 3: Montossuri ran incredible schools in Rome where there were one

309
00:15:30,640 --> 00:15:33,800
Speaker 3: hundred fifty students and five lead teachers and five assistant

310
00:15:33,840 --> 00:15:36,320
Speaker 3: teachers for three to six years old. That's that's like

311
00:15:36,440 --> 00:15:40,080
Speaker 3: much better ratios. And those programs were amazing. They were

312
00:15:40,120 --> 00:15:41,680
Speaker 3: kind of world changingly.

313
00:15:41,360 --> 00:15:44,160
Speaker 1: Goes, you're talking about the actual Montessori. Yeah when you

314
00:15:44,200 --> 00:15:44,440
Speaker 1: say that.

315
00:15:44,440 --> 00:15:46,320
Speaker 3: Okay, yeah, I'm talking about Montesssuri in like you know,

316
00:15:46,440 --> 00:15:49,480
Speaker 3: nineteen thirteen or whatever. And I mean, this is what

317
00:15:49,520 --> 00:15:53,120
Speaker 3: she's famous for. She's famous for taking children who were

318
00:15:53,160 --> 00:15:55,400
Speaker 3: living in slums the likes of which the US has

319
00:15:55,480 --> 00:15:57,600
Speaker 3: never ever seen, the kind of poress of the poor,

320
00:15:58,320 --> 00:16:01,360
Speaker 3: the least privileged possible, and you know, she had them

321
00:16:01,440 --> 00:16:05,120
Speaker 3: kind of like happy and reading and academically advanced by

322
00:16:05,120 --> 00:16:07,480
Speaker 3: the time they were three and four. And nobody understood

323
00:16:07,480 --> 00:16:08,760
Speaker 3: how she did it because this was a time when

324
00:16:08,800 --> 00:16:10,680
Speaker 3: nobody was teaching children how to read at three or four,

325
00:16:10,720 --> 00:16:12,640
Speaker 3: even even wealthy children were learning how to read. And

326
00:16:12,680 --> 00:16:14,960
Speaker 3: so and she did it with relatively low ratios and

327
00:16:16,080 --> 00:16:17,360
Speaker 3: or high ratios, I guess.

328
00:16:17,240 --> 00:16:20,400
Speaker 1: Depending on who's the denominator and what is the numer.

329
00:16:20,200 --> 00:16:22,480
Speaker 3: Yeah, exactly. And once you get up to the three

330
00:16:22,520 --> 00:16:25,520
Speaker 3: year old range, and you have a program that's really

331
00:16:25,560 --> 00:16:29,120
Speaker 3: based on setting up an environment in a certain way

332
00:16:29,160 --> 00:16:31,040
Speaker 3: and giving children a lot of independence and setting a

333
00:16:31,080 --> 00:16:33,600
Speaker 3: certain kind of culture in the school, you don't need

334
00:16:33,640 --> 00:16:36,120
Speaker 3: to kind of staff for supervision or staff for tutoring

335
00:16:36,160 --> 00:16:39,880
Speaker 3: in the same way. That's part of our hypothesis is that, yeah,

336
00:16:39,960 --> 00:16:41,880
Speaker 3: like in infant care and toddler Carroll, like you're you're

337
00:16:41,920 --> 00:16:45,320
Speaker 3: always going to need you know, it's always going to

338
00:16:45,320 --> 00:16:47,640
Speaker 3: be labor intensive in the sense of being a lot

339
00:16:47,640 --> 00:16:51,520
Speaker 3: of teachers per student or a low amount of students

340
00:16:51,520 --> 00:16:54,880
Speaker 3: per teacher. But that gets I think people think of like, oh,

341
00:16:55,040 --> 00:16:57,400
Speaker 3: in elementary school, you can have like a higher ratio

342
00:16:57,480 --> 00:16:59,680
Speaker 3: and it can still be good. And I think that

343
00:16:59,680 --> 00:17:02,360
Speaker 3: that's all so true in preschool and there are other

344
00:17:02,400 --> 00:17:03,000
Speaker 3: things like that.

345
00:17:03,120 --> 00:17:05,800
Speaker 2: So actually that leads me to something that else that

346
00:17:05,840 --> 00:17:08,159
Speaker 2: I wanted to ask, which is how much do the

347
00:17:08,240 --> 00:17:13,040
Speaker 2: sort of economic aspects of running a preschool change along

348
00:17:13,119 --> 00:17:15,080
Speaker 2: with the education style.

349
00:17:16,320 --> 00:17:21,479
Speaker 3: They do change a bit, So I think that they're

350
00:17:22,320 --> 00:17:25,000
Speaker 3: fairly different for us once you get to three years

351
00:17:25,000 --> 00:17:28,480
Speaker 3: old because of how we do preschool classrooms, because we

352
00:17:28,480 --> 00:17:31,440
Speaker 3: have a one to twelve ratio there. They're also different

353
00:17:31,520 --> 00:17:34,800
Speaker 3: for us, and that we consider the job of an

354
00:17:34,840 --> 00:17:39,120
Speaker 3: early childhood educator to be a certain kind of expertise

355
00:17:39,160 --> 00:17:41,480
Speaker 3: that we train on and pay for, and so the

356
00:17:41,880 --> 00:17:44,520
Speaker 3: economics of paying teachers is just a little bit different

357
00:17:44,560 --> 00:17:47,600
Speaker 3: for us, paying and hiring teachers and supporting teachers. But

358
00:17:47,880 --> 00:17:52,240
Speaker 3: in general, I don't think that it changes that much

359
00:17:52,400 --> 00:17:55,960
Speaker 3: across most centers. Even the changes that I think are

360
00:17:55,960 --> 00:17:58,399
Speaker 3: there for us, which are real and meaningful, they're not

361
00:17:58,440 --> 00:18:03,359
Speaker 3: like order of magnitude changes. They're small differences that do

362
00:18:03,400 --> 00:18:04,080
Speaker 3: make a difference.

363
00:18:04,600 --> 00:18:06,560
Speaker 1: Can you talk about I mean you talk about I

364
00:18:06,560 --> 00:18:09,320
Speaker 1: mean every industry, especially these days, has had problem with

365
00:18:09,400 --> 00:18:15,040
Speaker 1: labor retention. Probably it's worse for education and service sector

366
00:18:15,200 --> 00:18:19,000
Speaker 1: childcare stuff. I know that the daycare center that my

367
00:18:19,160 --> 00:18:22,520
Speaker 1: kids both went to that we get an email like

368
00:18:22,600 --> 00:18:25,440
Speaker 1: every few weeks or maybe every few months about on

369
00:18:25,480 --> 00:18:28,080
Speaker 1: this teacher is leaving and then so on else and

370
00:18:28,359 --> 00:18:31,280
Speaker 1: so I'm pretty like aware of that. Can you talk

371
00:18:31,320 --> 00:18:34,760
Speaker 1: about like your strategy It sort of sounds like you're

372
00:18:34,760 --> 00:18:38,200
Speaker 1: saying it, But are there things that companies can do

373
00:18:38,720 --> 00:18:42,040
Speaker 1: or operators can do that would sort of like training

374
00:18:42,040 --> 00:18:44,760
Speaker 1: and investment in the teachers to reduce churn.

375
00:18:46,119 --> 00:18:49,160
Speaker 3: So just the state of the problem is the total

376
00:18:49,240 --> 00:18:51,560
Speaker 3: labor and early childhood is still less than it was

377
00:18:51,600 --> 00:18:54,080
Speaker 3: in twenty nineteen. Wow, I can't remember how much less.

378
00:18:54,080 --> 00:18:55,879
Speaker 3: I think it's like five percent less, but it's you know,

379
00:18:55,920 --> 00:18:59,240
Speaker 3: there was a slowly studying increased curve, as there often

380
00:18:59,320 --> 00:19:01,760
Speaker 3: is any kind of labor market that's healthy, and then

381
00:19:01,800 --> 00:19:04,720
Speaker 3: there was a huge drop and it hasn't quite recovered yet.

382
00:19:04,720 --> 00:19:06,440
Speaker 3: It's been going steadily up since them, but it hasn't

383
00:19:06,480 --> 00:19:09,840
Speaker 3: quite recovered. Pay has gone up twenty twenty five percent,

384
00:19:10,400 --> 00:19:13,840
Speaker 3: I think in the last two or three years, and

385
00:19:13,880 --> 00:19:16,119
Speaker 3: that's one of the main things that companies are doing

386
00:19:16,880 --> 00:19:18,920
Speaker 3: is they're trying to pay teachers more. We're certainly paying

387
00:19:18,960 --> 00:19:21,159
Speaker 3: teachers more, I think more. I can't remember exactly how

388
00:19:21,240 --> 00:19:23,440
Speaker 3: much more than twenty five percent, but more than that

389
00:19:23,640 --> 00:19:25,280
Speaker 3: is the amount that our wages have gone up. I

390
00:19:25,280 --> 00:19:30,359
Speaker 3: don't know how much of it is just a wage issue.

391
00:19:30,160 --> 00:19:33,560
Speaker 3: So I mean, wages aren't going to double, like they're

392
00:19:33,560 --> 00:19:34,919
Speaker 3: going to keep going up, but they're not going to

393
00:19:34,920 --> 00:19:37,360
Speaker 3: go dramatically up just because of the unit economics of it.

394
00:19:38,040 --> 00:19:39,959
Speaker 3: I think that a lot of it has to do

395
00:19:40,040 --> 00:19:42,800
Speaker 3: with kind of seeing the job as a meaningful career,

396
00:19:43,000 --> 00:19:46,440
Speaker 3: as something with dignity. Early childhood work is also relatively

397
00:19:46,480 --> 00:19:49,960
Speaker 3: low status, and then the things that employers can do

398
00:19:50,080 --> 00:19:52,040
Speaker 3: or the things that centers can do, is like, how

399
00:19:52,040 --> 00:19:55,240
Speaker 3: do you kind of actually manifest that both in terms

400
00:19:55,240 --> 00:19:58,920
Speaker 3: of meaningful opportunities and in terms of the kind of

401
00:19:58,960 --> 00:20:01,000
Speaker 3: dignity of the work itself. I mean, I've worked in

402
00:20:01,119 --> 00:20:03,960
Speaker 3: preschools that aren't Montessori as well as Montessori preschools. You

403
00:20:04,000 --> 00:20:06,639
Speaker 3: feel like a babysitter, Like you feel like you're watching

404
00:20:06,640 --> 00:20:08,760
Speaker 3: a bunch of kids and you're running out the clock.

405
00:20:09,400 --> 00:20:12,240
Speaker 3: And that's just it. I mean, even if you love children,

406
00:20:12,359 --> 00:20:14,320
Speaker 3: and I love children and I've done this kind of work,

407
00:20:14,359 --> 00:20:17,040
Speaker 3: it's like doesn't feel like a kind of sustainable, long

408
00:20:17,080 --> 00:20:18,520
Speaker 3: term thing. It feels like something you do for a

409
00:20:18,560 --> 00:20:21,399
Speaker 3: while or is gig work. And seeing it as like

410
00:20:21,440 --> 00:20:23,640
Speaker 3: this is a kind of expertise and a kind of wisdom,

411
00:20:24,040 --> 00:20:25,960
Speaker 3: and there's curriculum here, and there are things that you

412
00:20:25,960 --> 00:20:27,879
Speaker 3: can do and master, and there are growth paths. I

413
00:20:27,880 --> 00:20:30,480
Speaker 3: think that that's the biggest thing. And there aren't that

414
00:20:30,600 --> 00:20:33,080
Speaker 3: many early childhood approaches. I mean, Montosauri is one. There

415
00:20:33,119 --> 00:20:35,320
Speaker 3: are others that kind of take it that seriously.

416
00:20:36,359 --> 00:20:39,960
Speaker 2: Have there been, you know, throughout your career, any shifts

417
00:20:39,960 --> 00:20:44,119
Speaker 2: in the demographics of people who work at preschools, Like

418
00:20:44,160 --> 00:20:46,520
Speaker 2: did it used to be an older cohort and now

419
00:20:46,560 --> 00:20:48,760
Speaker 2: maybe it's younger or vice versa.

420
00:20:49,480 --> 00:20:53,360
Speaker 3: That's a really good question. Anecdotally, I feel like it's

421
00:20:53,440 --> 00:20:56,119
Speaker 3: gotten younger. But I also I mean, I've been in

422
00:20:56,119 --> 00:20:58,040
Speaker 3: this industry for about ten years, so not that long.

423
00:20:58,200 --> 00:21:00,560
Speaker 3: But even though I feel that way, like when I'm

424
00:21:00,560 --> 00:21:02,280
Speaker 3: thinking about the teachers that we're training and the teachers

425
00:21:02,280 --> 00:21:04,920
Speaker 3: in our schools, like it still really is the full range.

426
00:21:05,000 --> 00:21:08,440
Speaker 3: So you did see a lot of retirements right around

427
00:21:08,440 --> 00:21:12,480
Speaker 3: when COVID hit right, and that kind of knocks the

428
00:21:12,560 --> 00:21:15,720
Speaker 3: older end of the distribution off. I don't know whether

429
00:21:15,720 --> 00:21:18,440
Speaker 3: that's just going to heal over time naturally, or whether

430
00:21:18,440 --> 00:21:20,920
Speaker 3: that's here to stay. Yeah, that's a good question.

431
00:21:21,280 --> 00:21:23,720
Speaker 1: I want to go back to ra shows, and of

432
00:21:23,760 --> 00:21:26,119
Speaker 1: course you talked about that, you know, the in theory,

433
00:21:26,480 --> 00:21:29,720
Speaker 1: as you know Maria Montessori showed one hundred and ten

434
00:21:29,920 --> 00:21:33,240
Speaker 1: years ago. Maybe you don't need as many teachers and

435
00:21:33,560 --> 00:21:35,359
Speaker 1: once you get to the age of three or whatever.

436
00:21:35,920 --> 00:21:40,080
Speaker 1: RA shows generally though regulated, and probably for most schools,

437
00:21:41,040 --> 00:21:44,000
Speaker 1: the regulations are there for a pretty good reason, and

438
00:21:44,400 --> 00:21:47,560
Speaker 1: especially if you're going to have babies, et cetera, like

439
00:21:47,640 --> 00:21:49,640
Speaker 1: you want, you know, a lot of eyes on them

440
00:21:49,720 --> 00:21:55,080
Speaker 1: for pretty obvious reasons. But as a company with schools

441
00:21:55,160 --> 00:21:58,879
Speaker 1: in multiple states, can you talk about like you have schools.

442
00:21:59,320 --> 00:22:01,119
Speaker 1: I don't know if for sure this is true, but

443
00:22:01,200 --> 00:22:04,480
Speaker 1: in my mind I imagine that Texas laws are much

444
00:22:04,480 --> 00:22:07,800
Speaker 1: more liberal about this stuff than New York City laws.

445
00:22:08,000 --> 00:22:10,520
Speaker 1: Can you talk about what you see the differences you

446
00:22:10,560 --> 00:22:11,720
Speaker 1: see from state to state.

447
00:22:12,440 --> 00:22:13,879
Speaker 3: I mean, some of them are in ratios, but some

448
00:22:13,960 --> 00:22:15,479
Speaker 3: of it is just like I mean, I lived in

449
00:22:15,520 --> 00:22:20,000
Speaker 3: New York for years with a small child and grand

450
00:22:20,000 --> 00:22:23,600
Speaker 3: schools for small children. It is essentially illegal to open

451
00:22:23,600 --> 00:22:27,120
Speaker 3: an infant program in New York City for children under

452
00:22:27,160 --> 00:22:29,359
Speaker 3: eighteen months. I mean, you need it needs to be

453
00:22:29,359 --> 00:22:31,040
Speaker 3: on the ground floor and you need to have too egress.

454
00:22:31,080 --> 00:22:33,879
Speaker 3: I mean, just the space requirements are so onerous, and

455
00:22:33,880 --> 00:22:36,159
Speaker 3: then the kind of licensing review process is so onerous

456
00:22:36,160 --> 00:22:38,080
Speaker 3: that it's really really hard. We have infant programs in

457
00:22:38,080 --> 00:22:38,440
Speaker 3: New York.

458
00:22:38,760 --> 00:22:41,840
Speaker 1: I'm pretty sure, because I'm pretty sure my I think

459
00:22:42,080 --> 00:22:44,280
Speaker 1: at least one of my kids was in that program.

460
00:22:44,320 --> 00:22:45,440
Speaker 3: Before I'm overstating.

461
00:22:45,480 --> 00:22:47,200
Speaker 1: It's no, I know, it's.

462
00:22:48,880 --> 00:22:51,240
Speaker 3: It's legal. It's just hard, especially if you're kind of

463
00:22:51,240 --> 00:22:54,040
Speaker 3: looking at kind of entrepreneurial when off hop operator. It's

464
00:22:54,119 --> 00:22:57,439
Speaker 3: really really hard and that and that's not true in Texas,

465
00:22:57,880 --> 00:23:00,000
Speaker 3: but I mean it's it's not that easy in Texas either.

466
00:23:00,040 --> 00:23:02,639
Speaker 3: There's still a licensing process, so there are big differences.

467
00:23:02,880 --> 00:23:05,680
Speaker 3: There are some differences in ratio requirements in Chicago and

468
00:23:05,720 --> 00:23:07,840
Speaker 3: New York. The racio requirements are a little bit stricter.

469
00:23:08,200 --> 00:23:12,480
Speaker 3: It tends to be the licensing process, the space requirements

470
00:23:13,160 --> 00:23:14,800
Speaker 3: we have. I mean, this is another thing that you

471
00:23:14,800 --> 00:23:17,240
Speaker 3: can get with economies of scale. If you're opening new centers,

472
00:23:17,600 --> 00:23:20,000
Speaker 3: which we do. We don't just do acquisitions, so you

473
00:23:20,000 --> 00:23:23,560
Speaker 3: open a lot of new centers. Is there's a construction

474
00:23:23,640 --> 00:23:27,000
Speaker 3: process that has to happen with almost any space and

475
00:23:27,080 --> 00:23:30,160
Speaker 3: that means that you need certificates of EUCK agency and licensing,

476
00:23:30,200 --> 00:23:32,400
Speaker 3: and there's this whole process. And in some places we've

477
00:23:32,400 --> 00:23:34,440
Speaker 3: got it down to a few weeks where we can

478
00:23:34,480 --> 00:23:36,400
Speaker 3: do that, like you know, like a couple of months

479
00:23:36,440 --> 00:23:39,080
Speaker 3: for construction and the licensing process and everything. And another

480
00:23:39,119 --> 00:23:40,960
Speaker 3: place is like New York or San Francisco, you're looking

481
00:23:41,000 --> 00:23:45,560
Speaker 3: at like a year, two years even and you're carrying

482
00:23:45,880 --> 00:23:49,480
Speaker 3: the costs of the space when possibly staff, depending on

483
00:23:49,520 --> 00:23:51,600
Speaker 3: what you're doing with it for that time with no enrollment.

484
00:23:52,080 --> 00:23:56,320
Speaker 2: How competitive are preschools on cost? And what I mean

485
00:23:56,359 --> 00:23:59,359
Speaker 2: by that is how big a concern is it? Because

486
00:23:59,359 --> 00:24:01,359
Speaker 2: on the one hand, I imagine that, you know, it

487
00:24:01,440 --> 00:24:04,680
Speaker 2: is a sizeable chunk of money for parents who are

488
00:24:04,760 --> 00:24:07,760
Speaker 2: spending hundreds or possibly thousands of dollars a month on

489
00:24:07,800 --> 00:24:11,080
Speaker 2: this expense. But at the same time, I also imagine

490
00:24:11,080 --> 00:24:13,480
Speaker 2: that if you're a parent of a young child, you

491
00:24:13,560 --> 00:24:16,879
Speaker 2: might be nervous about taking the cheapest option right, and

492
00:24:16,920 --> 00:24:21,160
Speaker 2: you might have a tendency or a willingness to take

493
00:24:21,200 --> 00:24:25,280
Speaker 2: something that's more expensive. So do you find that you're

494
00:24:25,280 --> 00:24:27,720
Speaker 2: competing on costs quite a lot, or is there like

495
00:24:27,760 --> 00:24:30,160
Speaker 2: a little bit of insulation there we.

496
00:24:30,119 --> 00:24:32,680
Speaker 3: Compete on costs, for sure. I think at the at

497
00:24:32,680 --> 00:24:36,520
Speaker 3: the ultra elite level like West Side Montessori or the

498
00:24:36,680 --> 00:24:39,239
Speaker 3: kind of storied New York preschools where people are like

499
00:24:39,760 --> 00:24:41,280
Speaker 3: this is a you know, they think of it as

500
00:24:41,280 --> 00:24:43,480
Speaker 3: like part of a path to Harvard or whatever, and

501
00:24:43,480 --> 00:24:45,960
Speaker 3: they're charging fifty thousand dollars a year. There is some

502
00:24:46,200 --> 00:24:48,200
Speaker 3: price insulation there, but even there it's not I mean,

503
00:24:48,200 --> 00:24:51,000
Speaker 3: it's not totally anelastic We raise prices and then we

504
00:24:51,040 --> 00:24:53,360
Speaker 3: find that it's too much and we have the backtrack

505
00:24:53,440 --> 00:24:55,680
Speaker 3: like we face, we face price competition.

506
00:24:55,840 --> 00:24:58,119
Speaker 2: Oh so if you raise prices too much, you do

507
00:24:58,280 --> 00:25:00,439
Speaker 2: see attrition of oh.

508
00:25:00,400 --> 00:25:03,920
Speaker 3: Yeah, yeah, definitely. I find it interesting that you find

509
00:25:03,920 --> 00:25:05,919
Speaker 3: that surprising where you kind of under the impression that

510
00:25:05,920 --> 00:25:06,240
Speaker 3: that was.

511
00:25:06,320 --> 00:25:09,359
Speaker 2: Well, I thought it was. You use the word sticky before,

512
00:25:09,520 --> 00:25:12,440
Speaker 2: and I kind of assumed like once kids were in

513
00:25:12,480 --> 00:25:16,080
Speaker 2: a school that the parents liked more or less, barring

514
00:25:16,160 --> 00:25:19,280
Speaker 2: some massive financial disaster like if they lose their job

515
00:25:19,400 --> 00:25:22,080
Speaker 2: or something like that, that they would be very motivated

516
00:25:22,080 --> 00:25:23,000
Speaker 2: to stay in that school.

517
00:25:23,520 --> 00:25:26,080
Speaker 3: Let's say that you're doing infant through preschool, and a

518
00:25:26,160 --> 00:25:28,880
Speaker 3: typical case so we do for one age is zero

519
00:25:28,920 --> 00:25:31,480
Speaker 3: through six. But say you're doing like two to five,

520
00:25:31,520 --> 00:25:33,399
Speaker 3: which is a more typical case, SOS child is there

521
00:25:33,400 --> 00:25:36,440
Speaker 3: for three or four years, you're losing a quarter of

522
00:25:36,480 --> 00:25:39,800
Speaker 3: your class a year. So if you raise prices, I mean,

523
00:25:39,880 --> 00:25:41,560
Speaker 3: let's just say that you don't even none of your

524
00:25:41,560 --> 00:25:44,840
Speaker 3: existing families disenroll, which which isn't going to be the

525
00:25:44,880 --> 00:25:48,160
Speaker 3: case necessarily. But if you raise prices and like you're

526
00:25:48,400 --> 00:25:51,800
Speaker 3: the twenty five percent of your new families are new families,

527
00:25:51,800 --> 00:25:53,560
Speaker 3: and you have to compete for those families on the

528
00:25:53,920 --> 00:25:57,520
Speaker 3: kind of new rates. We actually do this thing where

529
00:25:57,520 --> 00:25:59,920
Speaker 3: we signal what our rate increases are going to be

530
00:26:00,119 --> 00:26:02,360
Speaker 3: when you sign up, so there's no surprise rate increases,

531
00:26:02,440 --> 00:26:04,199
Speaker 3: and you do have rate increases, but we say, like

532
00:26:04,240 --> 00:26:05,679
Speaker 3: we have a rate sheet and you sign up for

533
00:26:05,760 --> 00:26:07,680
Speaker 3: it and you know transparently what they're going to be,

534
00:26:07,760 --> 00:26:10,760
Speaker 3: so you walk in those rates. If you lose half

535
00:26:10,760 --> 00:26:12,960
Speaker 3: of those families, like your business is sunk. Like that.

536
00:26:12,960 --> 00:26:14,520
Speaker 3: That's that's part of what it means to be in

537
00:26:14,560 --> 00:26:16,720
Speaker 3: a business where like you make money on the last

538
00:26:16,920 --> 00:26:18,159
Speaker 3: four families that are enrolled.

539
00:26:18,800 --> 00:26:21,919
Speaker 1: I hadn't thought about that dynamic that just by definition,

540
00:26:22,240 --> 00:26:24,600
Speaker 1: any like school basically is going to lose a lot

541
00:26:24,640 --> 00:26:29,560
Speaker 1: of customers every single year automatically just because people graduate

542
00:26:29,640 --> 00:26:31,719
Speaker 1: or a trick. I don't know, do you graduate.

543
00:26:31,760 --> 00:26:33,560
Speaker 3: Yeah, And if you're if your kind of mental model

544
00:26:33,600 --> 00:26:35,840
Speaker 3: is K twelve, you might think, oh, you're like losing

545
00:26:35,880 --> 00:26:38,400
Speaker 3: five percent or eight percent or whatever, but like, really

546
00:26:38,400 --> 00:26:40,560
Speaker 3: you're losing like a fifth, a quarter or a third

547
00:26:40,640 --> 00:26:42,800
Speaker 3: of your students every year. And that's if you've got

548
00:26:42,840 --> 00:26:44,919
Speaker 3: a really healthy pipeline coming through like that, that's kind

549
00:26:44,960 --> 00:26:46,720
Speaker 3: of what you're shooting for. That's the success cases that

550
00:26:46,720 --> 00:26:47,880
Speaker 3: you're graduating students.

551
00:26:48,480 --> 00:26:52,800
Speaker 1: So I know, like every American considers themselves to have

552
00:26:52,880 --> 00:26:56,679
Speaker 1: been raised middle class, but I was so and I

553
00:26:56,840 --> 00:27:01,080
Speaker 1: definitely include myself in that category. And the years that

554
00:27:01,160 --> 00:27:04,959
Speaker 1: I went to Montessori school, I was living in Juliet, Illinois.

555
00:27:05,680 --> 00:27:07,520
Speaker 1: I had a lot of friends there whose families were

556
00:27:07,600 --> 00:27:11,720
Speaker 1: unambiguously middle class. These days, when I think about like

557
00:27:11,800 --> 00:27:15,080
Speaker 1: monosory schools, I do not think that. Like I think like, oh,

558
00:27:15,119 --> 00:27:17,600
Speaker 1: you're like, oh, you have to be rich to go

559
00:27:17,680 --> 00:27:20,120
Speaker 1: to a Montessori school or some sort of like anything

560
00:27:20,160 --> 00:27:23,760
Speaker 1: that sort of has the vibe of like progressive education.

561
00:27:24,520 --> 00:27:28,240
Speaker 1: I just assume is sort of this luxury consumption good

562
00:27:28,760 --> 00:27:31,280
Speaker 1: and be like, why is that the case? And has

563
00:27:31,320 --> 00:27:34,639
Speaker 1: it gotten worse? Because I don't know. The people that

564
00:27:34,720 --> 00:27:37,960
Speaker 1: I went to school with strike me as I don't

565
00:27:38,000 --> 00:27:39,960
Speaker 1: know if in the year twenty twenty three they could

566
00:27:40,000 --> 00:27:41,600
Speaker 1: have sent their kids to a Montessori school.

567
00:27:41,760 --> 00:27:46,800
Speaker 3: So cost of childcare has gone up because of education

568
00:27:46,880 --> 00:27:49,280
Speaker 3: in general has gone up faster than in other areas.

569
00:27:49,600 --> 00:27:51,920
Speaker 3: I can't remember what all the different buckets are. You

570
00:27:51,960 --> 00:27:53,520
Speaker 3: guys would know better than I would. But whenever I

571
00:27:53,520 --> 00:27:56,000
Speaker 3: look at the inflation curves and it's like education, healthcare,

572
00:27:56,080 --> 00:27:58,400
Speaker 3: and then like you know, food is flat, and then

573
00:27:58,440 --> 00:28:04,439
Speaker 3: something like electronxes, like you know, yeah, so yeah, I

574
00:28:04,440 --> 00:28:08,280
Speaker 3: mean it's it's gotten more expensive. I think in general

575
00:28:08,320 --> 00:28:12,639
Speaker 3: it keeps pace with or slightly outpaces wage growth. So

576
00:28:13,040 --> 00:28:16,240
Speaker 3: given that most of the costs in education is labor,

577
00:28:16,400 --> 00:28:18,080
Speaker 3: I mean I think that that's part of what you're

578
00:28:18,080 --> 00:28:20,679
Speaker 3: looking at there. I don't know if I have the

579
00:28:20,680 --> 00:28:22,680
Speaker 3: full story as to I think it has gotten a

580
00:28:22,720 --> 00:28:26,399
Speaker 3: little bit worse. I don't think it's as bad as

581
00:28:26,520 --> 00:28:29,480
Speaker 3: it seems for a lot of different reasons. So there

582
00:28:29,560 --> 00:28:32,160
Speaker 3: is Hey, there's more public funding now than there's ever

583
00:28:32,200 --> 00:28:34,800
Speaker 3: been at the early childhood age. B it's just very

584
00:28:34,840 --> 00:28:36,800
Speaker 3: so much by location, Like I mean, if you're kind

585
00:28:36,800 --> 00:28:38,240
Speaker 3: of pegging on New York City.

586
00:28:38,320 --> 00:28:41,719
Speaker 1: Yeah, I admit that, like the economics of school, a

587
00:28:41,760 --> 00:28:44,520
Speaker 1: monassory school in New York City where everyone is a

588
00:28:44,600 --> 00:28:47,080
Speaker 1: crazy status obsessed in thinking that they need to get

589
00:28:47,080 --> 00:28:48,640
Speaker 1: their kids in the right school so that they can

590
00:28:48,680 --> 00:28:50,400
Speaker 1: one day go to Harvard and then one day go

591
00:28:50,400 --> 00:28:52,360
Speaker 1: to a law firm. It's probably different than it was

592
00:28:52,400 --> 00:28:55,000
Speaker 1: in Juliet, Illinois in the early nineteen eighties.

593
00:28:55,040 --> 00:28:57,040
Speaker 3: Yeah, I mean New York is very bimodal and New

594
00:28:57,120 --> 00:28:59,960
Speaker 3: York it's like head start programs or like you know,

595
00:29:01,640 --> 00:29:03,800
Speaker 3: twenty five hundred dollars a month would be cheap, well,

596
00:29:03,920 --> 00:29:05,880
Speaker 3: you know for the kind of other end of the

597
00:29:06,840 --> 00:29:10,480
Speaker 3: of the range, but in like Dallas, like you can

598
00:29:10,480 --> 00:29:12,600
Speaker 3: get good daycare for twelve hundred dollars a month, one

599
00:29:12,600 --> 00:29:14,680
Speaker 3: thousand dollars a month, and maybe some of that would

600
00:29:14,680 --> 00:29:16,200
Speaker 3: be a little bit subsidized, And then you're looking eight

601
00:29:16,240 --> 00:29:17,720
Speaker 3: hundred dollars a month, and then all of a sudden

602
00:29:17,760 --> 00:29:21,040
Speaker 3: it starts to look a lot cheaper than like an

603
00:29:21,080 --> 00:29:23,520
Speaker 3: any and like totally worth it to get a job.

604
00:29:23,560 --> 00:29:25,440
Speaker 3: Even a kind of middling pay job and send your

605
00:29:25,480 --> 00:29:27,479
Speaker 3: kids to school if that's what enables you to do. So,

606
00:29:28,160 --> 00:29:30,160
Speaker 3: I think that the range is probably bigger than your thinking.

607
00:29:30,160 --> 00:29:33,280
Speaker 3: But has it gotten worse. I think it's probably gotten

608
00:29:33,320 --> 00:29:34,200
Speaker 3: a little bit worse. Yeah.

609
00:29:34,520 --> 00:29:39,560
Speaker 2: Wait, so setting New York aside, which is crazy, crazy

610
00:29:39,720 --> 00:29:42,760
Speaker 2: for a bunch of different markets. This was a wider

611
00:29:42,800 --> 00:29:45,240
Speaker 2: point brought up by our previous guest on this topic,

612
00:29:45,360 --> 00:29:48,600
Speaker 2: Nancy Folbright, who argued that one of the reasons why

613
00:29:48,720 --> 00:29:52,040
Speaker 2: childcare costs are going up is like, yes, okay, labor

614
00:29:52,080 --> 00:29:56,000
Speaker 2: costs happened going up, But there's also this selection bias

615
00:29:56,280 --> 00:30:00,360
Speaker 2: at play, which is, if you cannot afford childcare, you

616
00:30:00,400 --> 00:30:02,640
Speaker 2: opt out of the market entirely. Maybe you find a

617
00:30:02,680 --> 00:30:06,160
Speaker 2: family member who can look after your kid, or maybe

618
00:30:06,360 --> 00:30:08,280
Speaker 2: you know you don't work anymore and just leave the

619
00:30:08,360 --> 00:30:11,480
Speaker 2: labor market all together. And so there's selection bias at

620
00:30:11,560 --> 00:30:15,200
Speaker 2: play in that the people who can afford preschool are

621
00:30:15,360 --> 00:30:18,000
Speaker 2: the ones paying for preschool, and there's a whole segment

622
00:30:18,040 --> 00:30:21,360
Speaker 2: of society who are just not included in that data.

623
00:30:21,520 --> 00:30:25,160
Speaker 2: Is that a valid criticism from your perspective.

624
00:30:24,880 --> 00:30:26,600
Speaker 3: If I understand the point correctly, that there's a kind

625
00:30:26,600 --> 00:30:29,680
Speaker 3: of step function where it's like you're either there's a

626
00:30:29,680 --> 00:30:34,080
Speaker 3: threshold below what you're not considering paying for childcare. Yeah,

627
00:30:34,320 --> 00:30:37,760
Speaker 3: and there's a threshold and that threshold has probably gone up, right. Yeah,

628
00:30:37,800 --> 00:30:41,920
Speaker 3: I think that that's true. They're kind of interesting little

629
00:30:41,960 --> 00:30:44,800
Speaker 3: sub markets of the early childhood space, like at home

630
00:30:44,840 --> 00:30:47,280
Speaker 3: care or in home care, or like a teacher runs

631
00:30:47,280 --> 00:30:49,920
Speaker 3: a program out of their home and they might take

632
00:30:49,960 --> 00:30:52,200
Speaker 3: like three students or five students or something like that.

633
00:30:52,560 --> 00:30:54,840
Speaker 3: I think that if you wanted to kind of lower

634
00:30:54,880 --> 00:30:58,400
Speaker 3: that threshold of the kind of cost threshold, I think

635
00:30:58,400 --> 00:30:59,720
Speaker 3: you would have to think about, how do we see

636
00:30:59,720 --> 00:31:01,800
Speaker 3: a lot more of that kind of model where you've

637
00:31:01,800 --> 00:31:04,840
Speaker 3: got a neighborhood, like where a lot of neighborhoods have schools,

638
00:31:04,880 --> 00:31:07,560
Speaker 3: where like a mom whose kids have gone to college

639
00:31:07,600 --> 00:31:11,000
Speaker 3: like walks after three or four toddlers, and kind of

640
00:31:11,000 --> 00:31:13,920
Speaker 3: what are the economics of that that is? I mean,

641
00:31:13,920 --> 00:31:17,280
Speaker 3: that is not usually either illegal or not or kind

642
00:31:17,280 --> 00:31:19,480
Speaker 3: of highly regulated, and it's just it's also we just

643
00:31:19,480 --> 00:31:22,080
Speaker 3: don't have a culture of that kind of thing. But yeah,

644
00:31:22,080 --> 00:31:24,240
Speaker 3: I mean in terms of the question is there a

645
00:31:24,280 --> 00:31:26,520
Speaker 3: step function, is there a threshold effect? Does that drive

646
00:31:26,600 --> 00:31:28,520
Speaker 3: up pricing? Yeah? I think almost certainly.

647
00:31:28,560 --> 00:31:30,960
Speaker 1: Does you know, it feels like there's this whole range.

648
00:31:31,200 --> 00:31:35,120
Speaker 1: There's the heavily subsidized schools. There are the sort of

649
00:31:35,160 --> 00:31:37,880
Speaker 1: mom and pop schools that were like, you know, maybe

650
00:31:37,920 --> 00:31:40,320
Speaker 1: in the nineteen sixties or nineteen seventies and someone set

651
00:31:40,360 --> 00:31:42,360
Speaker 1: up a school that's sort of like out of their house,

652
00:31:42,400 --> 00:31:44,360
Speaker 1: and I think my sister went to them when I

653
00:31:44,400 --> 00:31:46,080
Speaker 1: when I was growing up, like it was literally like

654
00:31:46,320 --> 00:31:49,520
Speaker 1: in our neighborhood. It looked just like a house. And

655
00:31:49,560 --> 00:31:52,120
Speaker 1: then there's all these like private equity ones, like do

656
00:31:52,160 --> 00:31:54,160
Speaker 1: you hit like this sort of like broader what does

657
00:31:54,160 --> 00:31:56,560
Speaker 1: the whole like market look like? How much has it

658
00:31:56,640 --> 00:31:59,880
Speaker 1: gone corporate versus said twenty years ago.

659
00:31:59,840 --> 00:32:04,000
Speaker 3: It's mostly mom and pop still, Yeah, I think the

660
00:32:04,000 --> 00:32:06,120
Speaker 3: official numbers are that it's like a seventy billion dollar

661
00:32:06,240 --> 00:32:08,200
Speaker 3: year market, but it's higher than that. I think that

662
00:32:08,200 --> 00:32:10,520
Speaker 3: that's an underestimate for various reasons. So if you say

663
00:32:10,520 --> 00:32:14,440
Speaker 3: it's like one hundred billion dollar to addressable market early

664
00:32:14,520 --> 00:32:16,560
Speaker 3: childhood centers in the US, and you could broad on

665
00:32:16,600 --> 00:32:18,280
Speaker 3: that to be like two hundred billion if you included

666
00:32:18,320 --> 00:32:22,200
Speaker 3: just nannies and other kinds of ChIL childcare expenses, KinderCare

667
00:32:22,240 --> 00:32:24,600
Speaker 3: is like a seven billion revenue and it's the biggest

668
00:32:24,640 --> 00:32:27,400
Speaker 3: by far, and then you have Learning Care Group and

669
00:32:28,400 --> 00:32:32,280
Speaker 3: Right Horizons that's another seven billion spring. So probably like

670
00:32:32,360 --> 00:32:35,840
Speaker 3: ten maybe fifteen percent of it is pe or other

671
00:32:35,960 --> 00:32:38,960
Speaker 3: kinds of big companies, and the rest is really mom

672
00:32:39,000 --> 00:32:42,800
Speaker 3: and pops. I don't know exactly what percentage is subsidized

673
00:32:42,840 --> 00:32:44,800
Speaker 3: because the way that the subsidies work is so varied,

674
00:32:44,840 --> 00:32:48,360
Speaker 3: and often subsidies go to private centers. It's often it's

675
00:32:48,520 --> 00:32:50,800
Speaker 3: unusual for there to be like a public preschool in

676
00:32:50,800 --> 00:32:53,240
Speaker 3: the sense that there's a public school, but most I

677
00:32:53,280 --> 00:32:56,280
Speaker 3: mean the kind of chains like I mean, you know,

678
00:32:56,720 --> 00:33:00,000
Speaker 3: we're dropping the bucket and you know, higher ground school.

679
00:33:00,440 --> 00:33:03,240
Speaker 3: It's it's a huge market and it's very very fragmented.

680
00:33:03,240 --> 00:33:05,880
Speaker 3: The biggest players are like, you know, the biggest company

681
00:33:05,960 --> 00:33:07,480
Speaker 3: takes up like less than five percent of the market.

682
00:33:07,560 --> 00:33:28,760
Speaker 1: Probably you said something earlier that many daycare jobs or

683
00:33:28,840 --> 00:33:32,880
Speaker 1: childcare jobs, as a society, we don't they're not seen

684
00:33:32,920 --> 00:33:36,320
Speaker 1: as high status jobs, high dignity jobs, and perhaps in

685
00:33:36,360 --> 00:33:39,120
Speaker 1: some cases the person in the position feels like, as

686
00:33:39,160 --> 00:33:41,800
Speaker 1: you say, like they're sort of a babysitter waiting out

687
00:33:41,800 --> 00:33:43,959
Speaker 1: the clock. And waiting for the parents to pick them

688
00:33:44,000 --> 00:33:46,840
Speaker 1: up and then the day's over. Can you like talk

689
00:33:46,880 --> 00:33:49,840
Speaker 1: a little bit more about the structural challenges that pose

690
00:33:49,920 --> 00:33:52,440
Speaker 1: because at the end of the day, like there just

691
00:33:52,480 --> 00:33:55,000
Speaker 1: seems to be like this mismatch, like and who is

692
00:33:55,080 --> 00:33:58,680
Speaker 1: going into you know, the supply of future teachers, Like

693
00:33:58,880 --> 00:34:02,080
Speaker 1: who is going in to this career? And like are

694
00:34:02,080 --> 00:34:04,840
Speaker 1: there policy levers that you think could be done to

695
00:34:04,920 --> 00:34:08,319
Speaker 1: sort of increase the number of people that want to

696
00:34:09,120 --> 00:34:10,520
Speaker 1: make this a career in some way?

697
00:34:11,520 --> 00:34:13,560
Speaker 3: So the people that go into the early childhood education

698
00:34:13,600 --> 00:34:15,799
Speaker 3: are people that love children by and large, I mean

699
00:34:15,880 --> 00:34:19,040
Speaker 3: not always. You occasionally find somebody working in early childhood

700
00:34:19,080 --> 00:34:21,640
Speaker 3: education who actually hates children, and that's tragic and awful.

701
00:34:21,760 --> 00:34:25,440
Speaker 3: It seems like a bad but it's a bad combo. Yeah, yeah,

702
00:34:25,480 --> 00:34:27,360
Speaker 3: I mean one side this is a little bit of

703
00:34:27,360 --> 00:34:28,960
Speaker 3: an aside, but one side of this being a very

704
00:34:29,000 --> 00:34:32,239
Speaker 3: labor intensive industry and a very human industry, where I

705
00:34:32,320 --> 00:34:34,279
Speaker 3: mean I agree that it would be I don't think

706
00:34:34,480 --> 00:34:37,640
Speaker 3: robots watching our children are in the cards any time. Ever.

707
00:34:37,920 --> 00:34:40,280
Speaker 3: One half of that is it's a management intensive industry

708
00:34:40,440 --> 00:34:42,440
Speaker 3: kind of like the culture of a school and the

709
00:34:42,520 --> 00:34:46,040
Speaker 3: kind of happiness of your staff, and it matters a

710
00:34:46,080 --> 00:34:48,600
Speaker 3: lot and kind of interfacing with all these you know,

711
00:34:48,640 --> 00:34:52,400
Speaker 3: you've got ten twenty personalities in a small center, all

712
00:34:52,440 --> 00:34:54,480
Speaker 3: literally stepping on each other's toes. Like keeping that a

713
00:34:54,520 --> 00:34:56,640
Speaker 3: really positive place which is really important for the children

714
00:34:56,760 --> 00:34:58,840
Speaker 3: is really hard. That's an aside. You can divide it

715
00:34:58,840 --> 00:35:01,759
Speaker 3: into three issues that are all interrelated. One is the

716
00:35:01,760 --> 00:35:04,640
Speaker 3: money problem, like what about people that want to make

717
00:35:04,640 --> 00:35:07,040
Speaker 3: more money? I think that there are possibly solutions to

718
00:35:07,120 --> 00:35:10,640
Speaker 3: that where you tie early childhood education into other career paths.

719
00:35:10,719 --> 00:35:13,600
Speaker 3: The other is the kind of status problem that's in

720
00:35:13,640 --> 00:35:15,719
Speaker 3: some ways the hardest problem, just like how do you

721
00:35:15,880 --> 00:35:20,280
Speaker 3: get people to see working with small children as important?

722
00:35:20,360 --> 00:35:22,319
Speaker 3: I mean, this is the problem that mothers I mean

723
00:35:22,760 --> 00:35:25,400
Speaker 3: tied into all sorts of other social issues, on gender

724
00:35:25,440 --> 00:35:28,920
Speaker 3: issues and so on. And then the third problem is,

725
00:35:30,160 --> 00:35:32,000
Speaker 3: and this is kind of why higher Ground exists, and

726
00:35:32,080 --> 00:35:33,719
Speaker 3: we haven't talked about it much, but it's how do

727
00:35:33,719 --> 00:35:37,160
Speaker 3: you actually make early childhood education good? Like how do

728
00:35:37,200 --> 00:35:37,600
Speaker 3: you make it.

729
00:35:37,560 --> 00:35:40,600
Speaker 1: So that I laugh there, not because like it's funny,

730
00:35:40,880 --> 00:35:43,600
Speaker 1: but it is funny in the sense that is the

731
00:35:43,760 --> 00:35:47,520
Speaker 1: education good. Often it feels like is the secondary or

732
00:35:47,680 --> 00:35:51,200
Speaker 1: churchary question? Even though we are talking about schools here and.

733
00:35:51,400 --> 00:35:54,879
Speaker 3: I think, I mean, most education isn't good, is my view.

734
00:35:55,120 --> 00:35:57,799
Speaker 3: Certainly most early childhood education isn't good. It's and it's

735
00:35:57,880 --> 00:36:00,319
Speaker 3: very far from great. Even if it's like passable, you know,

736
00:36:00,400 --> 00:36:04,319
Speaker 3: it's not great. And what everybody wants, I mean, people

737
00:36:04,320 --> 00:36:06,239
Speaker 3: want money, and people want status, but what everybody wants

738
00:36:06,280 --> 00:36:07,840
Speaker 3: most out of their job is they want to do

739
00:36:07,920 --> 00:36:11,239
Speaker 3: good work. And the thing that's going to change early

740
00:36:11,280 --> 00:36:14,799
Speaker 3: childhood education is changing how we approach it at the

741
00:36:14,880 --> 00:36:17,080
Speaker 3: level of the classroom, in the programming. And this is why,

742
00:36:17,200 --> 00:36:20,080
Speaker 3: this is why I'm such a such an evangelist about

743
00:36:20,400 --> 00:36:24,440
Speaker 3: Montessori and developmentally informed education and kind of like thinking

744
00:36:24,600 --> 00:36:27,200
Speaker 3: about alternative education and differences to the system. Is education

745
00:36:27,320 --> 00:36:32,160
Speaker 3: needs to change and that that will change the teaching profession.

746
00:36:32,880 --> 00:36:34,960
Speaker 3: I mean that change would, I mean, it goes a lot.

747
00:36:34,960 --> 00:36:36,600
Speaker 3: And this is why part of what we do we

748
00:36:36,680 --> 00:36:38,440
Speaker 3: run a training center. We train a thousand teachers a

749
00:36:38,520 --> 00:36:41,960
Speaker 3: year in our Moneessory Training Center, are kind of accredited

750
00:36:42,000 --> 00:36:45,600
Speaker 3: training center, and that is essential, like that you can

751
00:36:45,640 --> 00:36:47,160
Speaker 3: kind of take somebody in then say there's a totally

752
00:36:47,160 --> 00:36:49,439
Speaker 3: different way of thinking about it. We're going to kind

753
00:36:49,440 --> 00:36:52,719
Speaker 3: of deprogram you from your traditional thinking about education and

754
00:36:52,800 --> 00:36:54,960
Speaker 3: open your eyes to a new way of thinking about children,

755
00:36:55,000 --> 00:36:59,040
Speaker 3: about learning, about curriculum, about development, about growth. Certain people

756
00:36:59,120 --> 00:37:02,680
Speaker 3: love that. I mean, that's a calling for a certain

757
00:37:02,760 --> 00:37:03,240
Speaker 3: kind of person.

758
00:37:04,160 --> 00:37:06,319
Speaker 2: So just on that note, you know, Joe and I

759
00:37:06,440 --> 00:37:10,240
Speaker 2: started this conversation talking about how, to some extent, expanding

760
00:37:10,280 --> 00:37:16,920
Speaker 2: capacity in durable goods is simpler than expanding capacity in

761
00:37:17,040 --> 00:37:20,920
Speaker 2: something like daycare or preschool education. And you talked a

762
00:37:20,960 --> 00:37:23,080
Speaker 2: little bit about what it would take to get more

763
00:37:23,120 --> 00:37:27,480
Speaker 2: people entering this profession. But are there other ways that

764
00:37:27,560 --> 00:37:31,040
Speaker 2: you could expand capacity? Would it be, for instance, you know,

765
00:37:31,160 --> 00:37:35,920
Speaker 2: maybe tweaking the type of education, making it more for

766
00:37:36,040 --> 00:37:39,480
Speaker 2: lack of a better word, efficient, that sounds terrible, efficient education,

767
00:37:40,320 --> 00:37:45,160
Speaker 2: or government support of some of some form or another funding.

768
00:37:45,800 --> 00:37:49,919
Speaker 2: What would it take to actually expand this sector significantly?

769
00:37:50,480 --> 00:37:52,399
Speaker 3: Okay, here's the standard narrative. I don't know how much

770
00:37:52,440 --> 00:37:54,080
Speaker 3: I believe the standard narrative, but it's out there and

771
00:37:54,080 --> 00:37:56,080
Speaker 3: there's probably something to it. There's been a kind of

772
00:37:57,160 --> 00:38:01,760
Speaker 3: collapse that the pandemic accelerated. Families that put down roots

773
00:38:01,800 --> 00:38:03,040
Speaker 3: and they know one another, and they get to know

774
00:38:03,040 --> 00:38:05,480
Speaker 3: their neighborhood and they might have extended family in the area,

775
00:38:05,920 --> 00:38:07,719
Speaker 3: and this is how they kind of raise children. The

776
00:38:07,800 --> 00:38:09,640
Speaker 3: kind of critical narrative is like we've can become more

777
00:38:09,680 --> 00:38:12,800
Speaker 3: adamized as a society, so like we don't know our neighbors,

778
00:38:12,800 --> 00:38:15,120
Speaker 3: and like if you're got to working families and you

779
00:38:15,120 --> 00:38:16,800
Speaker 3: need help with child care, you've got to hire someone.

780
00:38:17,280 --> 00:38:20,160
Speaker 3: And that didn't used to be the onli or even

781
00:38:20,200 --> 00:38:23,359
Speaker 3: the main solution to early childhood education or childcare. To

782
00:38:23,400 --> 00:38:26,680
Speaker 3: the extent that that's true, I think that's probably a

783
00:38:26,719 --> 00:38:29,720
Speaker 3: half truth. I'm kind of skeptical of kind of adomization narratives,

784
00:38:29,760 --> 00:38:32,120
Speaker 3: and I'm generally skeptical of like there was a golden

785
00:38:32,120 --> 00:38:38,040
Speaker 3: age where childcare was great, right neighbor Yeah, But to

786
00:38:38,160 --> 00:38:40,439
Speaker 3: the extent that that's true, I do think that there

787
00:38:40,440 --> 00:38:45,000
Speaker 3: need to be kind of different operating modes for early

788
00:38:45,080 --> 00:38:49,120
Speaker 3: childhood where I mean, we were doing things like we

789
00:38:49,160 --> 00:38:52,800
Speaker 3: are running preschools in neighborhood houses. We'll like rent a house,

790
00:38:53,560 --> 00:38:56,200
Speaker 3: like a five bedroom house, We'll move a preschool teacher

791
00:38:56,239 --> 00:38:57,920
Speaker 3: into that house, and we'll say we'll pay your rent

792
00:38:58,600 --> 00:39:00,760
Speaker 3: and like you know, in three on the first floor,

793
00:39:00,760 --> 00:39:02,880
Speaker 3: like you run an early childhood neighborhood center, and like

794
00:39:02,920 --> 00:39:04,520
Speaker 3: that kind of thing is the kind of thing that

795
00:39:04,520 --> 00:39:09,320
Speaker 3: we're experimenting with. I mean, if that was more common,

796
00:39:09,360 --> 00:39:12,000
Speaker 3: more standardized, more culturally accepted, and we got better at it,

797
00:39:12,080 --> 00:39:14,200
Speaker 3: not just we as on higher ground, but just as

798
00:39:14,239 --> 00:39:17,080
Speaker 3: a as a culture, that was a kind of problem

799
00:39:17,120 --> 00:39:20,000
Speaker 3: that we really were invested in solving. I think that

800
00:39:20,000 --> 00:39:22,440
Speaker 3: that kind of shift would be good. The early childhood

801
00:39:22,440 --> 00:39:25,080
Speaker 3: center model, it's i mean the school model in general,

802
00:39:25,120 --> 00:39:27,200
Speaker 3: even just like you go to school for eight hours

803
00:39:27,200 --> 00:39:30,560
Speaker 3: a day until you're eighteen, Like it's getting disrupted, and

804
00:39:30,600 --> 00:39:33,480
Speaker 3: that goes all the way down to child childcare and

805
00:39:33,520 --> 00:39:35,560
Speaker 3: early childcare. And there's a question as to what it

806
00:39:35,560 --> 00:39:37,040
Speaker 3: looks like, what do micro schools look like, what do

807
00:39:37,080 --> 00:39:39,080
Speaker 3: home schools look like? What are the whole range of

808
00:39:39,080 --> 00:39:41,480
Speaker 3: homeschool options? How do you get expertise in this area?

809
00:39:41,920 --> 00:39:45,120
Speaker 3: It's it requires thought and innovation, and it's it's an

810
00:39:45,120 --> 00:39:47,880
Speaker 3: exciting time. If you kind of look, if you squint

811
00:39:47,880 --> 00:39:49,520
Speaker 3: and you look at the industry as like this is

812
00:39:49,520 --> 00:39:51,759
Speaker 3: where it's at right now, it looks very dark. I

813
00:39:51,840 --> 00:39:55,120
Speaker 3: mean it's like there's a labor crunch. Education is very bimodal.

814
00:39:55,480 --> 00:39:57,719
Speaker 3: It's hard to expand capacity. But if you kind of

815
00:39:57,760 --> 00:40:01,359
Speaker 3: step back and you say parents are really skeptical of

816
00:40:01,400 --> 00:40:05,120
Speaker 3: existing institutions and people are hungry for something different, I

817
00:40:05,120 --> 00:40:06,920
Speaker 3: think you can be a lot more optimistic, and I

818
00:40:06,960 --> 00:40:08,840
Speaker 3: think we will see changes in the next time twenty

819
00:40:08,840 --> 00:40:10,040
Speaker 3: thirty years in this space.

820
00:40:10,320 --> 00:40:13,200
Speaker 1: So I just have like one sort of last question,

821
00:40:13,320 --> 00:40:15,719
Speaker 1: and maybe it sort of very ties into this what

822
00:40:15,760 --> 00:40:17,799
Speaker 1: you were just talking about. But like, you know, people

823
00:40:17,840 --> 00:40:19,880
Speaker 1: have this idea, and I think, for like good reason

824
00:40:19,960 --> 00:40:23,439
Speaker 1: that we should have publicly funded childcare from day one.

825
00:40:23,480 --> 00:40:25,879
Speaker 1: We hate we have this sort of strange system where

826
00:40:25,920 --> 00:40:29,279
Speaker 1: the public schools are as everyone knows in large part

827
00:40:29,360 --> 00:40:33,160
Speaker 1: places where people are A big reason they exist is

828
00:40:33,160 --> 00:40:37,279
Speaker 1: for working parents to drop off their kids hopefully it's

829
00:40:37,280 --> 00:40:39,600
Speaker 1: a good education. But also a big part is just

830
00:40:39,880 --> 00:40:42,680
Speaker 1: this sort of public this free childcare, but only once

831
00:40:42,680 --> 00:40:44,759
Speaker 1: the kid turns like five or six or whatever the

832
00:40:44,840 --> 00:40:47,799
Speaker 1: exact age is. So let's say like we wanted as

833
00:40:47,800 --> 00:40:49,759
Speaker 1: a country. You're like, this doesn't make any sense, Like

834
00:40:49,800 --> 00:40:51,560
Speaker 1: why do we only start this at age five? We

835
00:40:51,600 --> 00:40:53,799
Speaker 1: want to start it from like day one or you know,

836
00:40:53,920 --> 00:40:56,880
Speaker 1: month free or whatever it is. What would be the

837
00:40:56,960 --> 00:41:00,359
Speaker 1: biggest constraint to being able to happen.

838
00:41:00,680 --> 00:41:03,400
Speaker 3: So I'm very skeptical of that solution, both like philosophically

839
00:41:03,440 --> 00:41:06,160
Speaker 3: and politically, but also operationally, I would say, and I

840
00:41:06,200 --> 00:41:08,360
Speaker 3: should also say there are people, especially people in the

841
00:41:08,360 --> 00:41:10,360
Speaker 3: Montessori world, who think that is the solution. That is

842
00:41:10,400 --> 00:41:12,880
Speaker 3: obviously the solution is to kind of integrate monesssory with

843
00:41:12,920 --> 00:41:16,480
Speaker 3: the public space in multiple ways. There's a debate about that.

844
00:41:16,560 --> 00:41:19,120
Speaker 3: I think what you would find really quickly is that

845
00:41:19,280 --> 00:41:22,200
Speaker 3: making early childhood education good, like really good in a

846
00:41:22,239 --> 00:41:25,279
Speaker 3: way that actually meets children's developmental needs, is harder than

847
00:41:25,320 --> 00:41:29,799
Speaker 3: getting elementary school right. That's harder. It sounds crazy to say,

848
00:41:29,840 --> 00:41:31,720
Speaker 3: you're just like, wait, aren't you just watching the kids?

849
00:41:31,840 --> 00:41:34,879
Speaker 3: Elementary school kids are actually as critical as I am

850
00:41:34,920 --> 00:41:37,919
Speaker 3: of most school trust structures and traditional school structures. Six

851
00:41:38,000 --> 00:41:40,240
Speaker 3: year olds are kind of ready for school. They're eager

852
00:41:40,280 --> 00:41:44,120
Speaker 3: to learn, they're curious, they're thinking conceptually. They don't need

853
00:41:44,120 --> 00:41:46,080
Speaker 3: a specifically, they don't need to think about learning in

854
00:41:46,160 --> 00:41:48,080
Speaker 3: terms of like a job or some vocation. This is

855
00:41:48,160 --> 00:41:50,120
Speaker 3: just what that age is. The kind of six to

856
00:41:50,160 --> 00:41:53,600
Speaker 3: twelve age especially is is the school agent. Always has

857
00:41:53,640 --> 00:41:56,600
Speaker 3: been in history, always there's a reason why if you

858
00:41:56,640 --> 00:41:58,759
Speaker 3: go back twenty six hundred years, school starts at six

859
00:41:58,840 --> 00:42:01,319
Speaker 3: or seven, and then there's this question as to what

860
00:42:01,360 --> 00:42:03,480
Speaker 3: to do when children get to like middle school, high

861
00:42:03,520 --> 00:42:06,319
Speaker 3: school age historically, but this kind of like six to

862
00:42:06,400 --> 00:42:09,040
Speaker 3: twelve age is when schooling happens, and there are developmental

863
00:42:09,080 --> 00:42:10,680
Speaker 3: reasons for that. If you want to push it down

864
00:42:10,680 --> 00:42:13,600
Speaker 3: to three much less two or one, and you want

865
00:42:13,640 --> 00:42:16,080
Speaker 3: to think about making that a healthy environment where children

866
00:42:16,120 --> 00:42:18,640
Speaker 3: are getting what they developmentally need, I think you have

867
00:42:18,680 --> 00:42:22,319
Speaker 3: to do something like Montossori, if not exactly Montissori, and

868
00:42:22,400 --> 00:42:25,319
Speaker 3: most preschools are really far from being that good. They're

869
00:42:25,400 --> 00:42:28,080
Speaker 3: really really far from being that good. And so I

870
00:42:28,120 --> 00:42:30,160
Speaker 3: think what you would see is that the kind of

871
00:42:30,200 --> 00:42:33,320
Speaker 3: the public preschools, it's just it will be a developmental disaster.

872
00:42:34,440 --> 00:42:36,240
Speaker 3: That's that's my that's my thesis.

873
00:42:36,280 --> 00:42:40,000
Speaker 1: Well, MATD. Bateman really appreciate your perspective. Obviously sort of

874
00:42:40,040 --> 00:42:43,200
Speaker 1: like extraordinary complicated question just in terms of some of

875
00:42:43,200 --> 00:42:45,160
Speaker 1: the dimensions that you brought up there, but even some

876
00:42:45,239 --> 00:42:48,439
Speaker 1: of the sort of simpler regulatory questions about like well

877
00:42:48,960 --> 00:42:53,080
Speaker 1: ratios and multiple points of egress in one state for another.

878
00:42:53,239 --> 00:42:56,160
Speaker 1: Really appreciate you coming on the podcast and talking about

879
00:42:56,160 --> 00:42:56,839
Speaker 1: the business.

880
00:42:56,840 --> 00:42:59,160
Speaker 3: Thank you're having a nice thanks really.

881
00:42:59,280 --> 00:43:11,640
Speaker 1: Yeah, thanks Matt Tracy. I thought that was really interesting.

882
00:43:11,680 --> 00:43:14,600
Speaker 1: I mean I think like simple, like you know, the

883
00:43:14,600 --> 00:43:18,600
Speaker 1: the economics as he described it, are like, yeah, you pay,

884
00:43:19,200 --> 00:43:21,880
Speaker 1: and then it's like wages and rent, et cetera. But

885
00:43:21,960 --> 00:43:24,919
Speaker 1: then like when you think about like management costs and

886
00:43:25,000 --> 00:43:27,600
Speaker 1: I you know, floaters and I've certainly seen this in

887
00:43:27,640 --> 00:43:31,160
Speaker 1: substitutes and churn, et cetera, you could see how it's

888
00:43:31,200 --> 00:43:35,480
Speaker 1: just like they get incredibly like inefficient, complicated business.

889
00:43:35,840 --> 00:43:39,040
Speaker 2: Yes, which is why I'm still kind of surprised that

890
00:43:39,080 --> 00:43:43,600
Speaker 2: there seems to be so much private equity interest and

891
00:43:43,760 --> 00:43:46,480
Speaker 2: like a belief in scaling it up. Although I do

892
00:43:46,520 --> 00:43:48,120
Speaker 2: take the point about like sure you can have a

893
00:43:48,160 --> 00:43:50,960
Speaker 2: sort of centralized administrator and things like that. I did

894
00:43:50,960 --> 00:43:54,440
Speaker 2: think it was really interesting his point about competing on

895
00:43:54,600 --> 00:43:58,840
Speaker 2: costs and the idea that like, well naturally just by attrition,

896
00:43:59,040 --> 00:44:02,719
Speaker 2: you're sort of losing students every year. That's something I

897
00:44:02,719 --> 00:44:03,960
Speaker 2: hadn't considered before.

898
00:44:04,200 --> 00:44:07,080
Speaker 1: Yeah, the fact that like so right, like as you said,

899
00:44:07,160 --> 00:44:09,200
Speaker 1: k through twelve hardly and you graduate in a year.

900
00:44:09,239 --> 00:44:11,080
Speaker 1: But if it's like a two or three or four

901
00:44:11,160 --> 00:44:14,680
Speaker 1: year program, like you're always losing students and always having

902
00:44:14,719 --> 00:44:15,600
Speaker 1: to pull at new ones.

903
00:44:16,080 --> 00:44:19,880
Speaker 2: Also, you guys are so down on robots watching kids,

904
00:44:19,880 --> 00:44:22,960
Speaker 2: But I have distinct memories of my parents leaving me

905
00:44:23,000 --> 00:44:26,920
Speaker 2: alone with like a Teddy Ruckspin doll in nineteen eighty

906
00:44:26,960 --> 00:44:30,040
Speaker 2: five for hours to entertain me. So it's already happened.

907
00:44:30,080 --> 00:44:31,279
Speaker 2: The robots are already here.

908
00:44:31,280 --> 00:44:31,760
Speaker 1: It's funny.

909
00:44:31,760 --> 00:44:32,759
Speaker 2: It's called the iPads.

910
00:44:32,800 --> 00:44:35,760
Speaker 1: I love yes, Oh my god, can I just say

911
00:44:36,280 --> 00:44:40,680
Speaker 1: as a parent, I love screens, I love iPads, I

912
00:44:40,719 --> 00:44:44,279
Speaker 1: love kindles, I love TV, I love Amazon Fire, I

913
00:44:44,320 --> 00:44:46,960
Speaker 1: love all of these things. They make life so much easier.

914
00:44:47,040 --> 00:44:48,960
Speaker 1: But actually it is funny you say that because he's like, oh,

915
00:44:49,000 --> 00:44:51,440
Speaker 1: there's never really a golden age, but maybe the golden

916
00:44:51,440 --> 00:44:53,320
Speaker 1: age is when like people are just more chill about

917
00:44:53,320 --> 00:44:58,160
Speaker 1: this stuff. Okay, No, seriously, if you were so, you know,

918
00:44:58,200 --> 00:44:59,640
Speaker 1: all the parents are like so neurotic.

919
00:44:59,760 --> 00:45:02,480
Speaker 2: No, it's like the child has to be learning something

920
00:45:02,719 --> 00:45:07,240
Speaker 2: all like every minute of the day in preparation for

921
00:45:07,400 --> 00:45:10,560
Speaker 2: you know, their future success. Whereas you could just sit

922
00:45:10,640 --> 00:45:13,799
Speaker 2: them down, like I don't know, a light bright or something,

923
00:45:13,800 --> 00:45:17,160
Speaker 2: I'm giving away my my nineteen eighties I'm sorry, childhood.

924
00:45:17,400 --> 00:45:19,680
Speaker 1: It's crazy that like if you have a two year

925
00:45:19,719 --> 00:45:21,959
Speaker 1: old you're like thinking about it on the Harvard track.

926
00:45:22,200 --> 00:45:24,680
Speaker 1: There's crazy. No, that is that's crazy.

927
00:45:26,400 --> 00:45:28,799
Speaker 2: No, I agree completely. Shall we leave it there?

928
00:45:28,920 --> 00:45:29,640
Speaker 1: Let's leave it there.

929
00:45:29,960 --> 00:45:33,160
Speaker 2: This has been another episode of the Odd Lots podcast.

930
00:45:33,160 --> 00:45:35,520
Speaker 2: I'm Tracy Alloway. You can follow me on Twitter at

931
00:45:35,520 --> 00:45:36,680
Speaker 2: Tracy Alloway.

932
00:45:36,360 --> 00:45:39,240
Speaker 1: And I'm Jill Wisenthal. You can follow me on Twitter

933
00:45:39,360 --> 00:45:42,440
Speaker 1: at the Stalwart. You can follow our guest Matt Bateman.

934
00:45:42,520 --> 00:45:46,879
Speaker 1: He's at m Bateman. Follow our producers Carmen Rodriguez at

935
00:45:46,960 --> 00:45:50,319
Speaker 1: Carmen Arman and dash Ol Bennett at dashbot. And check

936
00:45:50,360 --> 00:45:53,560
Speaker 1: out all of our podcasts under the handle at podcasts.

937
00:45:53,600 --> 00:45:56,200
Speaker 1: And for more Odd Loots content, go to bloomberg dot

938
00:45:56,200 --> 00:45:59,560
Speaker 1: com slash odd Lots, where we have transcripts, newsletter and

939
00:45:59,600 --> 00:46:03,800
Speaker 1: a bloog and check out our discord discord dot gg

940
00:46:04,160 --> 00:46:08,080
Speaker 1: slash odd logs. Listeners like yourself chatting twenty four to

941
00:46:08,080 --> 00:46:09,839
Speaker 1: seven about all of these topics.

942
00:46:09,840 --> 00:46:12,480
Speaker 2: And if you enjoy odd Lots, please leave us a

943
00:46:12,600 --> 00:46:16,240
Speaker 2: positive review on your favorite podcast platform. Thanks for listening,