Interview with Tom Adams, Chairman of the Board for Rosetta Stone
Tom Adams is the Chairman of the Board for Rosetta Stone, having joined the company as CEO in 2003. He was named the Ernst & Young 'Entrepreneur of the Year' in 2009 and SmartCEO 'CEO of the Year' 2009. A native of Sweden, Tom grew up in France and England and is fluent in French, Swedish, English, and Spanish. He has a working knowledge of German and Chinese and is currently in the process of learning Russian. I recently had the chance to speak to Tom for the brief 'Last Word' of my Languages and Entrepreneurship report, but his answers are so brilliant that I thought it would be useful to transcribe the interview in full...
- You did a History degree at Bristol – did you get a chance to go abroad or to travel while you were there?
- You speak so many languages!
- And did you always plan to do an MBA?
- And was it your MBA that inspired you to go into a business and transform it?
- Did you get to travel a lot before you started Rosetta Stone?
- Did you find that even though you may not have been able to speak those languages, your language skills and intercultural skills came in handy to communicate with people out there?
- What was your first challenge for transforming Fairfield Language Technologies into Rosetta Stone?
- Now that you have such a huge team working with you, do you have some sort of recruitment policy to make sure that your staff cover all the languages and cultures, and do you make sure your team use the software before or when they join.
- So is it valuable having quite a multicultural group there as well, so you can make sure that you deal with all your new clients in their language?
- Do you have any advice to pass on to year abroad students or graduates with a business idea?
- Have you absolutely loved your time there?
- Are you involved in entrepreneurship education at all?
You did a History degree at Bristol – did you get a chance to go abroad or to travel while you were there?No, the people who got to go abroad were doing a language as their degree, like French or French and Economics or French and History. They would get a year or a semester abroad, so I didn’t get that opportunity - but afterwards I learnt Spanish on a programme in Salamanca in Spain. I felt like I needed more languages – I wanted to have at least one more language before I went into the workforce.
You speak so many languages!I got some by virtue of my parents moving to different countries. My great grandfather was British, but both of my parents are Swedish nationals so I grew up in Sweden. I was born there, and then lived in France for my first ten years where I was very immersed in that culture, and went to the local French school. When I was ten my parents moved us to the UK and, without much interest in language construction, they threw us into a British school and we didn’t know what was going on. We showed up for class and talked to the other students there – in that situation you figure out the language quickly because you have to; you have no choice. So within the next six months I was fluent in English – well, fluent enough that I could understand most of what was being discussed.
And did you always plan to do an MBA?It was something I’d always thought about. I was working in Asia and wanted to make a career change, so I thought an MBA might be useful to launch me into something new and different. Having studied just History and having learnt the trade of buying and selling commodities, I felt pigeonholed. The MBA was a way to broaden myself and be relevant to all different things.
And was it your MBA that inspired you to go into a business and transform it?I had a mishap in that when I graduated there was an awful labour market for MBAs, especially as consulting and investment banking were cutting back, and so I ended up getting a job at Enron – the notorious company that ended up going bankrupt. I got a job there, and literally my first day was three days after the CEO had resigned, which was about two months before the whole company collapsed. I worked there for the first two months post-MBA because it was the best job I could find – it wasn’t what I wanted to do as I wanted to make a career change: it was too commodities-oriented. So then, after that setback, I started looking at buying different companies, and got involved in the predecessor company that was Rosetta Stone, called Fairfield Language Technologies. I went in and they liked me. The Founder had passed away of a heart attack, I had a good friend in the company, they liked what I had to say and I became the CEO nine years ago.
Did you get to travel a lot before you started Rosetta Stone?I’ve travelled a lot in my business career. My job before Rosetta Stone was as a Commodity Trader and I was on planes every single week travelling to emerging markets.
Did you find that even though you may not have been able to speak those languages, your language skills and intercultural skills came in handy to communicate with people out there?My theory is that you don’t necessarily need to know the language of the country you’re visiting, although it’s incredibly helpful. What you need is to have extensive international exposure to be able to assimilate into what’s new. I’ve been working with a colleague on programming languages and once he knows two or three programming languages – not necessarily to an expert level, but to a level that enables him to interact with the next programming language - it’s not that challenging. The principles are the same.
What I would say is that for every country I spent time in, I would actually try to break down the language barrier. For example when I lived in China, which I did for two years between 1998 and 2000, I immersed myself and quickly got to the point where I was speaking enough Chinese to be proficient. My experience was so different in China once I could speak the language. Even though I didn’t speak a lot of Chinese back then, I could ask someone “多少成本？” and then respond and be able to figure out how much to pay for something. It’s all about confidence: suddenly you’re not intimidated – you’re not out of your element.
What was your first challenge for transforming Fairfield Language Technologies into Rosetta Stone?When you come into a company that’s had a founder and is a small family business, the first thing you have to do is make sure that you do no harm, and figure out really quickly which of the company’s principles have made it successful. So I realised that the company had a great methodology for teaching. I understood that the people who worked there were deeply passionate about the cause of language training, and that passion was a fantastic asset to treasure, nurture and develop and so I was very quickly conscious about wanting to continue the focus and the work on language training. We had an international strategy that wasn’t fleshed out, and we were working with small-scale distributers in very large markets. There wasn’t a very systematic way to increase awareness necessarily, so a lot of the business aspects weren’t great. That’s actually where I put most of my focus initially, to get back on the right track about what was working and what to do to increase cash flow.
There were some fundamental things that I focused on. For example, getting everyone on the same page about the bigger goal, or mission statement. We knew that our focus would be on delivering the best technology-based initiative for language learning in the world and that that was the ultimate goal for broader education including maths, reading, geography, history and all the other subjects that you can teach. We knew it was going to be more than software; we were going to introduce the live components and the community element to the language-learning experience online – all of that was worked out very early and executed much later. The second part is reflective of my commercial philosophy, which was on the business side, and it was actually more important to be experimental than to be strategic. It was much more important to try out a lot of ideas than committing to a particular marketing approach. We tried to track everything as best we could so that when we got success from anything we did, it would just encourage us to rack that up, and that would unlock new potential, and so on. So we were highly tactical on the commercial side, and very strategic with the brand. And that works for us.
Now that you have such a huge team working with you, do you have some sort of recruitment policy to make sure that your staff cover all the languages and cultures, and do you make sure your team use the software before or when they join.We don’t force people to use the software, but we create strong incentives, so for example if you complete a level you get X days of vacation in addition to what you get normally.
So is it valuable having quite a multicultural group there as well, so you can make sure that you deal with all your new clients in their language?Some offices are more international than others; obviously in Europe the offices are more international. In the US we have one of the most international teams of any US company, but because immigration laws are more restricted here, we probably have a more American team that you would traditionally have. Speaking another language is a huge plus in the interview process though.
Do you have any advice to pass on to year abroad students or graduates with a business idea?A lot of the complexity in executing business strategy is the international dimension. Whatever industry you’re in, it’s likely that your biggest margin is going to be outside your home market. Take Rosetta Stone right now – our biggest market is the US which is our home market, but it’s very obvious that for the company to grow and be successful, we’ve got to hit a home run in Asia because about 40% of all language students worldwide are from China, Korea and Japan. A familiarity with those cultures and with those environments is increasingly vital so if you’re in college or university and wondering ‘what’s next?’ or ‘how do I prepare myself for the world?’ then having a good sense of technology or business is important. It’s also important to be able to draw on experiences of living abroad in assessing strategies for how to go global. Many Swedish companies – like Skype – are designed at the outset to be global. Most American startups with similarly big ambitions start out domestic, and so I think that if one lives in the UK, or somewhere in Europe, the more you can take a global approach, the more likely you can be competitive. It’s about your momentum and whether you can scale at a rate that’s fast enough to succeed.
Have you absolutely loved your time there?It’s amazing. My life has been fantastic. Being able to work in a field that you’re passionate about is so rewarding. Anyone who’s able to have work and passion combined has an amazing privilege. But I think that life is what you make it and you can have a lot of fun in any industry – you can have a passion for winning or making whatever it is that you’re working on better. One of the benefits of being able to work doing something that you love is that other people who work with you are also, often, sharing that same passion, and so you’re surrounded by people you like, and that’s also conducive to being fulfilled and satisfied at work. It’s almost like the work itself is a kind of virtuous circle. The harder you work at it, the more you love it, and the more you get out of it.
For anyone who’s had an international experience, you know that you feel different when you come back; you’re enriched and you’re far the wiser, and so being able to work in a field where you’re able to give any aspect of that back and give other people the same opportunity is amazing!
Are you involved in entrepreneurship education at all?Not yet, it’s something I am going to do. Most entrepreneurs get great satisfaction out of mentoring other entrepreneurs, and the impact you can have on a one-on-one basis can’t be understated because often it’s not about small business, it’s not about big business, it’s about small to medium-sized companies that become big to medium-sized companies. That’s where the jobs get created, and those organisations that do that tend to be companies like Rosetta Stone and other technology-led companies. So when you’re working with an entrepreneur who’s set out on doing something similar, not only does it help them realise their dream, it actually creates tremendous goodness more broadly as they do well and other people may get jobs and opportunities – it’s very fulfilling.
The other thing I’ve found is that it’s worthwhile making time to take part in startup weekends where everyone gets paired up to work on a project for three days and build a prototype which they present to venture capitalists who are judges on a panel. They are learning the Lean Startup model and becoming more confident in their ability to collaborate on the issues they’ve faced in the market. I find things like that very satisfying.
A lot of entrepreneurs become Angel Investors as well, and I think it’s fantastic that that’s becoming so widespread and is a viable option for people, while ten years ago it was much more something you heard about that happened to someone that someone else knows.