1. Tell us a bit about Allovue and what you do.
I’m a former Baltimore City middle school teacher, who saw first-hand how budgeting impacts student success, and founded Allovue in 2013. Our founding team brought together educators, technologists, education finance experts, and data specialists to build innovative education finance technology solutions and meet the needs of education decision-makers. We’re building “EdFinTech” solutions because we believe that effective resource allocation is directly correlated with student success.
We are currently working with districts and state departments of education across the country representing 1.5 million students – that’s 3% of all K-12 and $15 billion of spending – to budget and manage their spending. Allovue’s software platform, Balance, integrates seamlessly with districts’ existing accounting systems and other data systems to help educators budget, manage, and evaluate spending. Allovue also provides supplemental services, including funding equity analysis, diagnostic surveys, financial management training.
2. Now that the school year is underway, what has surprised you the most about what your customers/students are doing and what’s happening in your market in general?
We have always said to our customers that every season is budget season, but this year they really believe us, and budgeting this year is indeed truly a year-round process. We are seeing clients close their books and then immediately start planning for 2022.
What’s different this year is that the rubber is hitting the road on two main areas: (1) capital infrastructure investments and (2) technology investments.
Starting with capital improvements, things like plumbing, sanitation, and upgrades to air quality have been pushed and pushed to the budget back burner for decades. Why can’t we bring children back to school buildings? Because the average school building is 50-60 years old, so there are problems with lead contamination, sanitation and air filtration systems. Most schools are not up to code for this type of environment. There’s often no soap in the bathrooms for handwashing – it’s common for teachers themselves to buy soap for the bathrooms! We need to be talking about the real public health issues associated with students/teachers walking daily into unsafe schools like this.
And with technology investment, I have watched over the last 10 years as superintendents have been literally run out of town for making investments in one-to-one technology. Districts and superintendents have been begging for internet and computers and municipal initiative for households to get internet so they can get online at home. They have been called greedy and accused of only wanting the newest shiny thing, when most were only trying to bring their classrooms into the 21st century. Of course, now COVID has caused a hue and cry in terms of “why don’t we have the technology to do online learning?” And this is not a one-time investment: districts will need professional development, charging stations, software subscriptions, cycle planning for reinvestment, and will need to plan for what this looks like from a budgetary standpoint in order to be better prepared in the future.
Capital improvements typically require a bond offering, while tech investments usually come from the operating budget. Our mission is much bigger than software: we empower educators to strategically and equitably allocate resources to best support the needs of students. I am a staunch advocate for these fundamental issues about how school districts and states allocate and spend money. I advise state legislatures and local districts around these issues and am very vocal about my opinions about equity.
3. What does the new normal for Allovue look like and do you see this continuing or do you think education will go back to what was ‘normal’ prior?
Our business has been very conference-driven, traveling 200 days a year to attend them and meet clients and prospects. Seventy per cent of our business development was driven by conferences so we’re now looking to digital marketing to reach customers: conferences are not coming back this year and possibly not the next school year. We are forging some new partnerships, but getting creative while we rebuild our lead generation machine. We have gotten rid of our office, too, and are all working from home.
4. Your TikTok campaign is getting a lot of attention!
I take my role in thought leadership very seriously in an industry that is often abstract and esoteric. Having experience as a middle school teacher has been helpful. My message to all education personnel is: “Here is why you need to be a finance person in your district and not just say, ‘I am not a numbers person.’”
I saw two big voids: (1) figuring out how to get some of this thought leadership out into the ecosystem (2) figuring out how to keep me from getting too bored, now that I’m not presenting and speaking at conferences. Our Chief Product Officer saw that teachers were doing some teaching on TikTok and I said, “What if we do this series, max 60 seconds, on finance for teachers?” He thought it was a terrible idea! But I decided to go ahead with it. I’m just covering basic ed financing to help viewers be informed citizens in the world of schools. I’m covering levels of state funding sources; the history and roles of federal, state and local funding – stuff that normally makes people’s eyes glaze over. It doubles as a fun, creative outlet for me, gets our name out there (although not heavily branded), and pushes out through our pages but not as a commercial for Allovue.
The reaction has been fantastic. People are coming out of the woodwork, who I have not talked to in ages. We’re building a following with new superintendents and people on school boards. It’s not an overnight success, but TikTok is definitely attention-getting and gives superintendents something good to share with the school community. [ED: To see Jess’s TikTok posts, follow her there or on Twitter.]
I play the long game. I believe that our work and vision is to create a more informed citizenry around school finance and educate parents and teachers about the basic mechanics of something that is such a significant part of the public finance.
5. How has this year changed your Company and the way it operates?
We were in growth mode at the beginning of this year was very high and we were on the path to double down with a big tranche of investment. Then the pandemic hit in early March. I had been in Europe and California so I had more of a sense that it was going to get very bad. I started with the concept that everything would be shut down for a year. I wasn’t sure if renewals would happen, if receivables would get paid, and so on.
I rolled out a 12-step disaster plan to my board and told them that all options were on the table. We started slashing discretionary expenses. Our lease was up next year and we were already thinking seriously about not renewing it. The office was the biggest line item in our budget aside from people. We were able to sign over our office space to a new tenant and they even bought all of our furniture. So, we moved from a 6,000 sq. ft office to a 150 sq. ft coworking space for significant cost savings. I think we will stick with this for the foreseeable future. Unfortunately, we also made some staff reductions in the Spring.
Through a combination of cutting expenses and growing our customer base, we ended up reducing our burn-rate considerably. Now we may look to debt or other alternative capital vehicles for the remaining growth capital that we need to raise. We are still projecting strong growth and ended this year close to break-even and on a good path to profitability.
The pandemic has definitely given me some space to turn inward. By nature, I have been external-facing, so now I can focus on the team and it has given me some ideas on how we can expand more cross-team collaboration to solve problems.
There are benefits to the different teams having a strong culture/bond within teams, but it can also create silos, so we now have a good opportunity to collaborate across teams. As we do our 2021 planning, we are thinking about new ways that we can create our shared goals and create new processes for collaborating.
|ANDY M. BENNETT|
|COLTON T. SMITH|
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