A Lesson from Andrew Crapuchettes: Part 2
If you haven’t already, make sure to read part 1 of this prophecy from yesterday.
Emsi seeks to find the sweet spot where these three needs converge, where companies find unique employees with needed skills and where skilled employees discover the companies that need them, or find the educational programs that can train them for available opportunities.
The company collects masses of employment data from around the world and subjects it to machine learning sorts and searches under the guidance of data scientists recruited by the same techniques they later sell to others. Growing at an astonishing rate of near 40% per year for over a decade, Emsi offers crucial lessons in value creation for investors, politicians, employees, educators, and entrepreneurs everywhere.
Consulting for companies such as Facebook and Blackstone, Emsi’s ingenious data bases, machine learning enablers, and shrewd economic analysts provide a counterforce to the political fantasies and diversity pressures that stultify employment policy across the country.
Emsi also aids governments such as Atlanta that want to attract businesses, and universities that want to optimize their syllabi for the skills actually needed by companies and students around the world. It helps companies find the rare talent and special skills they seek. Thus, Emsi offers services useful to people seeking employment or education, universities choosing what educational specialties to offer, and governments providing employment services and economic environments.
In a world of anti-merit agitators, crony interests, and litigious complainants, Emsi offers a system of data and facts and talents and skills that countervail the “diversity” corruption of job searches, the trivialization and debauchery of curricula, and the dissipation of talent in skills mismatches. The key is recognizing that the employment and skills needed in the economy are not diverse or zero-sum, but unique in each job and exponential in their power.
In 2008, Crapuchettes sold Emsi to Tregaran Private Equity of Palo Alto for under $10 million. Named for a town in Switzerland that is only reachable by bike, Tregaran specialized in investments that are hard to get.
Two and a half years later, it sold Emsi to Careerbuilder.com — a job posting board with low-margins, in two stock sales totaling some $40 million.
Although Careerbuilder.com was a low margin leader in a declining market for routine job postings, it harbored Emsi, growing at some 40% per year with large margins. Although Crapuchettes had sold most of his interest, he had retained performance-based equity bonuses.
After four and a half years — in 2016 — Careerbuilder.com sold to Apollo Private Equity.
When Apollo took over, Crapuchettes learned from previous Apollo leaders that the fund was likely to sell Careerbuilder.com’s, Emsi value center. They would seek an amount that would make the entire deal a success.
So Crapuchette went prospecting for a buyer that would accommodate his interests.
He found Strata, a non-profit (formerly USA Funds) that had collected around a billion dollars from a sale of ascendant student debt when the fed collapsed interest rates. With a billion dollars and nothing further to do, Strata made itself into an investor in high-quality private companies to help drive value for higher education in America. Its tag line is, “completion with a purpose.” Crapuchettes sold his own performance-generated equity in May 2018 but remains excited about Strada and Emsi’s mission.
This story continues, as Crapuchettes still runs the company and is preparing for further adventures in Moscow, including a handsome new headquarters building that will dominate a downtown space.
It is ironic that even the Trump Administration — which has consulted with Emsi — at times seems to imagine that human talent and skills are somehow homogeneous and fungible in a zero-sum world economy. By keeping skills out, you can enhance the value of the skills remaining. If that were the case Emsi would not have one of the world’s best businesses.
Trump advisor Peter Navarro, for example, imagines that immigrants coming to the US, or competing against US companies, are differentiated chiefly by price, or by wages, rather than by unique and indispensable skills and capabilities.
Emsi shows that immigrant talent creates rather than consumes jobs. Every Satya Nadella of Microsoft, or Sundar Picchai of Google, or Lisa Sum of AMD — among millions of immigrant talents — provides crucial vitality and vision to the Americna job market. Keeping talented people out, simply destroys jobs.
To maximize employment and growth, immigrant talent and foreign students should not be sent home after a limited stay but given a fast track to citizenship on the model of the early growth of the United States and the recent growth of Moscow, Idaho.
Emsi’s voluminous data remorsely proves the uniqueness of particular human abilities and the lucrative yields of getting particular talent and education connected to the most fruitful opportunities.
This is a critical lesson for all investors in a difficult time. This prophecy will benefit from the lessons and linkages it made at Emsi and in Moscow.
Editor, Gilder’s Daily Prophecy