An exclusive Tech Tribune Q&A with Tonio DeSorrento, the co-founder and CEO of Vemo Education, which was honored in our:
Tell us the origin story of Vemo Education – what problem were you trying to solve and why?
I worked in student finance, where the predominant thinking is that affordability improves college access. The problem is that with enough loans, everything becomes affordable.
Increased access to loan dollars prompted a crisis of value in higher education. For years, students and families asked, “Can we afford college?”. By 2015, they had started to ask a different question: “Is college worth it?”.
Vemo Education’s co-founders understood that over 80% of people who attend college, from transitioning veterans to adult learners to traditional students, don’t attend college for prestige. They enroll, first and foremost, for employment outcomes.
At Vemo, we know the value of higher education doesn’t start and end with career readiness. But for many students, career readiness is the most valuable indicator of college success.
Why, then, had no one linked the cost of college to career outcomes – to the value most students seek from higher education? With income share agreements (ISAs), Vemo Education’s co-founders set out to bridge the disconnect between the cost and value of college.
We knew ISAs, or “pay-for-success financing,” would be powerful for a few reasons. ISAs align schools with students: A financial commitment to post-graduation success can change colleges’ behavior in a way that benefits everyone on campus. We also saw that students and families were enthusiastic about pay-for-success tuition. They want a material commitment from schools.
When colleges take accountability for career outcomes, they communicate value. That value signal can help schools cut through the noise. It may be particularly helpful as colleges compete for enrollment.
What was the biggest hurdle you encountered in your journey?
I worked with a number of people who tried to pioneer ISA models and who pivoted, or failed, before the other co-founders and I established Vemo. It seemed like those pioneers had put ISAs first. Vemo took a different approach: We put schools first.
We knew we could solve a valuable problem for schools, students, and parents using income share agreements. But higher education is a difficult market to enter. Colleges are risk averse. Add to that the businesses that had tried to offer ISAs before and failed. It wasn’t easy to convince schools to take on risk. Thankfully, in the last five years, more and more colleges have recognized the shift ISAs cause at schools. The prospect now seems less of a risk than a strategic advantage.
What does the future hold for Vemo Education?
Vemo is a customer-centric business. Today, we help colleges reach strategic objectives: higher enrollment, improved retention, and accelerated completion. In the future, we expect these advances:
First, Vemo intends to do more meaningful work with college partners. We plan to help more schools whose students could benefit from pay-for-success tuition.
Second, we plan to utilize our understanding of student finance and financial aid to expand the support we offer schools. In the future, Vemo will complement ISAs with other services and technologies that can propel partners toward their strategic enrollment, retention, and completion goals.
There’s a good reason why Vemo isn’t going to limit itself to ISAs. When colleges launch ISA programs, they aren’t just adding one more product to their menu of financial offerings. When colleges offer ISAs, they experience real change. Students and parents respond. Schools learn about their students’ needs and preferences. They learn about outcomes. They learn smarter ways to attract students and communicate value. All of that helps Vemo make a greater impact at a school.
As we move forward, Vemo will measure success by impact – not by ISAs. How has a college’s retention rate changed? How many more students have been able to graduate on time? We couldn’t measure ourselves by impact early on. We had to earn that by executing ISA programs well at colleges.
What are your thoughts on the local tech startup scene in Arlington?
We see such a diversity of local industries in Arlington = from cyber to defense to education and beyond. We see startups and mature businesses. To be honest, Vemo doesn’t cross over with many of them. But we know how productive a place Arlington is. When we moved Vemo’s headquarters here, we understood that businesses come to Arlington to do the real work. To move themselves forward.
What’s your best advice for aspiring entrepreneurs?
People start companies for lots of different reasons. It’s fair to be motivated by financial ambitions, or by the idea of being your own boss. But that can’t be your only motivation. If youre going to start a company, you need to know your “why.” You have to be committed.
Entrepreneurship isn’t just a series of successes. It requires you to stick through all the hard things, whether it’s losing customers, losing talent, or going broke, and to keep pursuing your mission. The “why” will keep you going through the hard times. My advice is to measure your success by whether you’ve achieved that “why”, not by anyone else’s definition of success.