Starting with a Personal Problem and Building a Big Solution with CEO Jessica Chang

Welcome to this episode of the Million Dollar Mastermind. I'm Larry Weddell. And before we get started, if you want to know exactly how to win again and again, go to Wydell on winning.com webinar now to watch something I've put together for you. Now let's get going into this episode.

Of Million Dollar Mastermind. I'm here with Jessica Chang, and Jessica has a special thing going in the area of child care, in fact, the largest child care network in the U.S. so welcome, Jessica.

Thank you for having me.

And you're the co founder and CEO of We Care, and that is we, I guess, for little people. And you have been involved. You got started operating daycare businesses and turned that into something huge. I'm going to let you tell that story, but I don't even know when you started. Jessica.

Well, We Care as a company started in 2017, but my love and my passion for childcare started way earlier.

Okay. And so talk about how you start with a passion for child care and turn it into a monster business like been featured in the Wall Street Journal, New York Times, articles, stories, things like that, NPR, and also had a full special with PBS NewsHour. And so maybe we'll talk some about that. But how do you go from a passion about child care and whip it up into something that is all over the country?

Yeah. So I guess it really starts with a personal problem. And a couple of years before 2017, I found myself in an awesome position of being able to have a kid. And really, I think that was my first point of really understanding the childcare industry when you are put in a position where you basically had to choose between your career or having a family? And I felt that to be really unfair. Like, why do I have to decide if I want to have kids? And if I do have kids, I need to actually stay at home and take care of my kids. And the reason is because childcare is so unsustainable, you find consistently that the cost of childcare is more than what you're paying for community college. You find out that childcare also has wait lists of six months to two years. When you ask a working parent like, hey, what are you going to do when you have a kid? A lot of times they don't have a solution and one parent has to stay at home. That made me realize at that moment of, well, if I'm facing this situation, what about other families? What about that single mom that doesn't really have a choice to stay at home? What is she doing that really led me into a journey of exploration on why our early child care system was so broken. And why is it that year after year supply was actually decreasing while demand had double digit growth year after year. And so that led me to actually owning and operating preschools because I really wanted to understand why. My background is I've spent a lot of years in finance and also as an operator. So I felt like, hey, look, if I could actually personally figure out a solution with one school, maybe that could lead to more. And after owning and operating three schools, I really came away with learning three major points. One, that a lot of times it is a discovery issue for families, like they can't really find the right schools, but they also don't realize that sometimes there's like a home, daycare right next to them on their block and they had no idea. The second issue was that a lot of schools were being operated by mom and pops and 97% of that market is completely fragmented. And what you realize is that when a mom and pop is owning it, their love is teaching. Their love isn't spreadsheets or figuring out what SEO is. So there's a big operational headache that they don't want to deal with and that's making it hard for them to actually stay in business. So many of those businesses end up closing. And then third is that in general there's not new people coming in to populate the industry. An average preschool teacher makes 20,000 a year. That's not even even enough money to sustain their own families, let alone be able to pay off school debt. And to be frank, especially now when you're saying like, hey, look, you're going to be making the same amount of money having a master's in education as someone that joins a Target or Walmart that might have only graduated high school, that becomes a really a big like, well, why am I in childcare? Why am I doing so much? And really a job that should be the most important thing yet. I'm not getting paid what I deserve. And that's what actually, really led me to actually start we care. After the third school, I said like, look, this is a way bigger problem and I can't really just continue to own and operate school after school. It's not going to make a debt in the industry. And this industry is getting significantly worse. And what I realized was that we had to come up with an early child care solution that was sustainable both for families, meaning families had to be able to afford it and it'd be convenient for them. But then Also for providers too, because childcare providers need help with operations, but they also need to get paid a lot more money. And that solution ultimately became what we care is now really a marketplace for home daycares, a licensed marketplace for family child care providers. And these are actually licensed schools or micro preschools being brought out of people's homes and usually started by a preschool teacher or elementary school teacher. And by actually supporting them, you can create a business in a box solution for that provider so they can operate easier and they can make about three times more than they would as a preschool teacher, while then passing on the savings directly to families. So families can actually find something that is usually 40% cheaper than what's available in the market. And it can be conveniently located for them right next to where they live, like within a one to two block radius. And most of them are open more than 12 hours, which works a lot for working families, middle income working families that might have two, like a second shift or might have to work on weekends.

So this is how it went. But these things, these dominoes don't fall into place automatically. I mean, you, you had to push to find the facts, the situation, the reality, get people to listen to you and talk about.

Those.

Hurdles, you know, those things you had to do in terms of proving it to yourself, this was a viable thing. First of all, what did you find out about running your first daycare center?

Well, I think when you're operating large businesses, a lot of these things are already in place. And when you're operating like a small business, you really have to do everything yourself. And there was a lot of learning on the job. Why is it that we can't pay teachers more? That became a very big realization. And I think you have to ask yourself constantly why you're doing it. And my reason on why I was doing this was actually for my own family. Like, I wanted to provide a better, a better situation for my own kids. Right? I wanted not just for my own children, but for other kids too. Because there is a significant difference for kids that get preschool education versus kids that don't. And that significant difference comes at kindergarten where one child has had the opportunity to have social, emotional learning, had the opportunity to learn their ABCs and even do math, while another kid did not. Like, significant differences. And that was really the reason that pushed me further. Like, some days were really horrible and I had to consistently ask myself, what am I doing? Why am I doing this? Like, I could be a VP in a large finance or tech company. Why am I like at the end of the day, potentially scrubbing a toilet. But it made me realize that all the ins and outs of what a child care provider was doing and how I could help them long term and I had to learn those lessons.

But how did you start? I mean, did you give up your job? Did you get a severance package or something? How do you go about making that first job? Yeah, because the economics, you've got to somehow make the economics make some kind of sense before you leap.

Hey, listen, there's a lot of information online, but there aren't a lot of people who have actually done something. In my case, I've actually built a successful business that's accrued over $5 billion.

In assets under management and has done.

Well even during trying times. Now, if you want to know exactly how I've done this, go to Whiteellumwinning.com webinar Now I've compressed a decade of learning into five short weeks, just for those of you who want to give yourself an incredible advantage and are tired of waiting and watching others move.

So I did leave my job because I felt this was a larger and more important issue that I needed to resolve. And you know, the first opportunity didn't easily fall in my lap. I wasn't like, look, I'm looking for preschools and this is how I'm going to do it. I actually found out about preschools that were for sale and I had made some money being in finance and I took that money that technically was supposed to be saved for my kids education. I took that money and said, look, I'm not going to be a help to my kids if I can't even understand the most basic issues of childcare. I took that money to actually be able to buy a preschool that was run down and, and put sweat and tear into fixing the school up, speaking to families, understanding what teachers needed, and taking a gamble essentially.

So you took over an existing daycare center, you bought it?

I bought it. It was not doing well. So it wasn't making money.

Wasn't making money. How many kids did they have on it regularly coming in?

They were licensed for 45 and they had about 18 kids.

And did you buy a building and a yard and a playground and things like that? Or a house? What was it?

Oh no, I couldn't even afford the actual building. I bought the business by itself. Oh yeah.

So you had the name and the correct.

I just had the name.

That's stuff like that.

Oh no, you, you had to get relicensed too.

Oh great.

So I basically bought a name and I bought an opportunity to with teachers, too. Like, I had to convince families and convince teachers that, hey, though, I'm. Though I don't have any childcare or teaching experience, I'm a true operator and I can fix this. So I also had to convince teachers to stay with me too.

Like, how many teachers were there?

There were four teachers, really.

Okay. And so how did you. You just. How did you go about making this come together? And how fast did it turn around in terms of revenue and word of mouth and yeah.

It took to get it licensed. It took six months. And that was. Let me tell you, that is a whole different process. But you're getting licensed by the Department of Social Services, so it takes time, Right. And then it took me actually only three months to get it to profitability. And that was the kind of that aha. Moment was that discovery piece was I found out that, you know, the school didn't even have a website. It barely even had a sign. So, yeah, like, parents had no idea that there was even a school there, and it was actually behind a church. So it took like, one like, you know, I've been a tech entrepreneur. I know how to create my own website. So I put up a website, I started to do SEO, I started to pay for Google Ads, and I sat there with parents coming in for tours and talking to them and asking them, what do you want? And to really get that understanding, that's when we really started to see enrollments happen. But that was like, my first realization was that there was such a big disconnect between families that were looking for care and the child care providers. Like, I had experience. I'm an operator, I'm a tech entrepreneur. I know exactly what the millennial parent wants. But it isn't generally the same for a child care provider that's been doing it for 30 years and really doesn't know the nuances that you need to know and from a tech perspective to really meet what parents really want.

Now, what would you say is the toughest thing that. The most depressing thing that was said to you or thing that happened early on that you had to kind of reset your. You know, that they. There's a thing, a statement, like in football, it's like nothing wakes you up like getting hit right in the teeth. You know what I'm saying? You say, either I'm going to give in to this or I'm going to. I'm going to come back and, you know, a lot more serious. So if. What. What was the thing where you emotionally hit you the hardest early on.

Well, actually, that happened during COVID and that actually happened for We Care. So this is We Care. We were like a tech company that is focused on creating more access for families. And, you know, we're a marketplace. And right before COVID hit, we were. We already became the largest network of child care providers in the US And Covid hit us like a giant, like, asteroid.

Right.

And I remember distinctively, this was sometime in April where our revenues, like, went significantly down. It was like a nose dive. And we were really fearful at that time because you didn't know, as a child care network, childcare, we had no idea how it was going to affect children. And if anything, all we knew was like, hey, look, during flu season, being in a childcare center was one of the worst things possible. Right? Kids spread the flu like crazy. And at that time, we didn't know how Covid spread, but there was a big fear, right?

Right.

So from families fearing it to, like, families didn't want to send their kids into daycare, and you couldn't blame them. It's like, like, I get it. You really want to protect your children. And childcare providers looking to you, it's like, well, how am I going to make ends meet tomorrow? Because my home, daycare is not only my business, this is also my actual home. So if I don't have a business, I lose my home.

Right. So what you do.

It was. It was really tough because we. We.

Asteroids are bigger than meteors. Isn't that right?

I, like, we really had to sit there and ask ourselves, like, oh, my God, do I still have a company? And everyone is looking to you. Like, all my employees were looking to me and be like, well, do you have an idea what we should do? And I'm sitting at home because we were all remote at that time. And I'm sitting at home, like, holding my head, like, what can we do? Everything is falling. Like, all industries are falling. And you know what? That was probably the toughest thing because it felt like it was out of our control. There was nothing that we could do to make it better. But that's actually when I think the biggest and brightest ideas actually come out.

It was out of your control. I mean, you couldn't control Covid, but you could do. Your mind obviously shifted to things you could do. So what kind of things came to you?

Childcare is a benefit, to be honest. What came out of it? And what we realized was that, hey, look, when Covid hit parents and providers both suffered and rely on parents and providers to be able to create a sustainable child care industry. It was unfair. And what came out of that is our realization that there was a bigger player that can actually help destabilize child care, and that was employers. It's like, hey, well, why do I really need childcare? Well, I'm actually going to work. So it became like the, oh, aha. Like, what can we do to get employers involved in this process so that they can help their working families? And if they are helping their working families, that's also going to help the providers as well.

Who did you, who helped you with this brainstorming? When you're at this panic point where, you know, people think that, you know, you have to be this genius sitting on the mountaintop and you, you come, you get an idea and then you come down and tell all the idiots how we're going to do it. But, you know, the most of the time there's collaboration. You kind of get a piece of an idea and, you know, you trot it out there and see how it goes, see how it responds, see what people say about it. And, you know, you kind of cobble together these, these solutions. So who were you talking to to kind of move forward, to be honest.

Fundamentally, like, the best people to ask is your customers. So that's what we did. Like, we, we went down to the ground level, called up our families and asked them, what can we do to help? Because really, like, we were like, oh, I don't know what to do. Like, let's, let's ask our end customers what they need. And by far the response back was, can you talk to my employer? Because I am dying here. I not only have kids and remote learning at home, I'm still trying to pull like eight or nine hours a day. Yeah. And that was it. Like listening to your customer, you find out exactly that cool brainstorming thing, the aha Idea. You actually just ask your customers for it.

Yeah. So much, you know, so many of the solutions are right there. If you ask the right questions to the right people. And if you're in business, that's the place to go to. Thanks. Thanks for that insight.

If you enjoyed what you've heard and are dead serious about finding out for yourself exactly how this works in the real world, I've taken the most valuable business lessons I've learned over 40 years and put them into something for you to watch. Go to Whiteellumwinning.com webinar now in order to move up as fast as possible, I'M Larry Wydell, and I run the Million Dollar Mastermind. Go, go, go.