The Learning Company
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The 2007-present logo.
|Headquarters||Boston, Massachusetts, United States|
|Key people||Warren Robinett (co-founder)|
|Parent||Houghton Mifflin Harcourt|
The Learning Company (TLC) is an American educational software company. It produced a grade-based system of learning software and tools to improve productivity. The products for preschoolers through second graders feature Reader Rabbit, and software for more advanced students features The ClueFinders.
Founding and ownership
The original The Learning Company (TLC) was founded in 1980 by Ann McCormick, Leslie Grimm and Teri Perl, three PhD educators who, along with Warren Robinett, a former Atari employee who had programmed the popular game Adventure, saw the Apple II as an opportunity to enhance the ability to teach young children concepts of math, reading, science, problem solving and thinking skills. Part of the original funding for the company came from a National Science Foundation grant. Additional funding was provided by Jack Melchor and Melchor Venture Partners, among others.
From 1980 through 1984, TLC raised $4.4M in grant and venture capital financing and created a line of 15 widely acclaimed children's educational software products, which were sold through the newly evolving U.S. retail and school computer software channels.
Early Struggles and Successful Transition Period
During the first four years, the founding Board of Directors hired and replaced four CEOs as the Company incurred significant losses attempting to develop a sustainable business.
In the first half of 1985, with little of the initial investment remaining, the Board hired as CEO Bill Dinsmore, a former McKinsey & Company consultant with a 15-year track record turning around and building high quality consumer product lines. He immediately initiated a "customer-driven" approach to analyze TLC’s product offering, improve the effectiveness and engagement of each product, and to identify opportunities to develop new ones.
Shortly after Mr. Dinsmore was hired, Reece Duca, a founding Partner of the Investment Group of Santa Barbara (IGSB), became a member of the Board of Directors and purchased shares from several founders and original venture firms. In late 1986, Mr. Duca was elected Chairman of the Board and for the next decade he devoted a significant amount of his time to help TLC develop and refine a successful business model and strategy for this nascent industry. IGSB became The Learning Company's largest shareholder.
In the second half of 1985, the product line was consolidated from 15 products down to the 5 products with the most promising demand. Additionally, an improved and focused new product development process was instituted to identify subjects that parents and teachers named as highest priority for children ages 3-14. This new strategic approach was almost immediately successful. By the end of 1985, TLC’s cash flow turned positive.
During the 10 year period from 1985 to 1995, TLC’s revenues grew at a 36% compounded rate from $2.4M to $53.2M and profitability increased from breakeven in 1985 to a 20% pre-tax margin. The leading families of products were the "Reader Rabbit" series for ages 2-8, the "Treasure Mountain" Reading-Math-Science series for ages 5-9, the "Super Solver" series for ages 7-12, the "Student Writing & Publishing Center" for ages 7-adult, and the "Foreign Language Learning" series for ages 15-adult.
The success of TLC during this period was a result of several factors. First, the Company assembled what was considered to be one of the most talented management teams in the education technology space. Second, TLC assembled an excellent, cross disciplinary development of educators, software engineers, UX designers and brand managers who used a process involving extensive market validation with teachers, parents and children to guide the features and functionality for each product. And third, TLC made the decision to spend no money at all on print or media advertising and to devote the resources to product development.
TLC went public on April 28, 1992 in an IPO led by Morgan Stanley and Robertson, Stephens & Co. From 1992 to 1995, TLC achieved 16 consecutive quarters of revenues and profits growth, never experiencing a down quarter or year. TLC’s early struggles, followed by 10 consecutive years of outstanding performance, were the subject of case studies at both Harvard and Stanford universities.
The Learning Company was Acquired by Softkey
In 1995, TLC was acquired in an unsolicited transaction by Softkey for $606M, all cash.
Subsequent to the acquisition, TLC was reformed from the merger of WordStar, Spinnaker and SoftKey Software and was relocated from San Francisco and Toronto to Cambridge, MA. Prior to that SoftKey was a Canadian company that was founded by Kevin O'Leary and traded on the Toronto Stock Exchange. During the years following the three-way merger, the combined company was led by Michael J. Perik as CEO, Kevin O'Leary as President and R. Scott Murray as CFO. The trio of former Canadians together set the course for the next generation in the consumer software industry by making educational software affordable to the average parent and student. The trio led the combination of many leading brands through acquisitions of such companies as Broderbund, MECC, The Learning Company, MindScape and Creative Wonders to name just a few. The company held some of the best known educational and office productive brands in the market. These included Reader Rabbit, Carmen Sandiego, Oregon Trail, Myst, Riven, Printshop, PrintMaster, Compton's Encyclopedia, Sesame Street, American Girl to name just a few. In addition to Perik, O'Leary and Murray, the company was led in sales and international operations by David Patrick and Anthony Bordon, both of whom are now pioneers in the digital media and social media applications industry.
The team led the sale of software in well known retail chains such as BestBuy, Office Depot, Staples and WalMart, in direct mail channels, across Europe and in the OEM channels as well as creating one of the first on-line imaging models in the market. In 1995, the Tribune Company invested $150 million into the company to complete the acquisition of The Learning Company in December 1995 for approximately $600 million in cash, along with the acquisitor of MECC for $400 million in stock issuance. In 1996, SoftKey changed its name to "The Learning Company" and moved its public stock listing from the NASDAQ to the NYSE. In 1997, The Company completed an investment of $150 million led by Bain Capital and TH Lee Capital. In addition, Lamar Alexander joined its board of Directors. Mr. Alexander was a Former Secretary of Education in the George H.W. Bush Administration and a candidate for President of the United States. He is now a Senior Senator representing the State of Tennessee in the United States Congress.
In the fall of 1998, Mattel agreed to acquire The Learning Company in a stock-for-stock merger valuing the company at approximately $4.2 billion. Following the closing of the merger with Mattel in May 1999, the trio of Perik, O'Leary and Murray departed the company shortly thereafter to begin leading other enterprises. Kevin O'Leary became a well known financial television commentator in Canada, a panelist on the reality show Dragons Den in Canada and a panelist on the hit television show on ABC called "Shark Tank". He also founded O'Leary Funds and raised over $1 billion AUM in Canada as well as founding O'Leary Wines. Scott Murray became a highly successful CEO and went on to lead companies such as Stream Global Services, Modus Media International and 3Com Corporation. He also founded Global BPO Services and raised $250 million in an IPO.
Reader Rabbit/The ClueFinders series
- Grade-based titles
- Reader Rabbit Baby
- Reader Rabbit Toddler
- Reader Rabbit Preschool
- Reader Rabbit Preschool: Sparkle Star Rescue
- Reader Rabbit Kindergarten
- Reader Rabbit 1st Grade
- Reader Rabbit 2nd Grade (now sold as Reader Rabbit 2nd Grade: Classic)
- Reader Rabbit 2nd Grade: Mis-cheese-ious Dreamship Adventures
- The ClueFinders 3rd Grade Adventures
- The ClueFinders 4th Grade Adventures
- The ClueFinders 5th Grade Adventures
- The ClueFinders 6th Grade Adventures
- Other titles
- Reader Rabbit 1
- Reader Rabbit 2
- Reader Rabbit 3
- Reader Rabbit's Reading Journey
- Math Rabbit (Later changed to Reader Rabbit Math)
- The ClueFinders Math Adventures
- The ClueFinders Reading Adventures
- The ClueFinders Search and Solve Adventures
- The ClueFinders: The Incredible Toy Store Adventure!
- The ClueFinders: Mystery Mansion Arcade
- Caillou Magic Playhouse
- SpongeBob SquarePants Typing
- Some PBS Kids games
Super Solvers series
- Midnight Rescue! (Later re-released as 'Super Solvers Reading' and then 'Leap Ahead! 3rd Grade')
- OutNumbered! (Later re-released as 'Leap Ahead! 3rd Grade')
- Challenge of the Ancient Empires! (Ancient Empires)
- Spellbound! (Later re-released as 'Leap Ahead! Spelling')
- Gizmos & Gadgets!
- Mission: T.H.I.N.K.
Super Seekers games
- Treasure Mountain! (Originally released as a regular Super Solvers title)
- Treasure MathStorm!
- Treasure Cove!
- Treasure Galaxy!
Carmen Sandiego series
- Carmen Sandiego's ThinkQuick Challenge
- Where in the World is Carmen Sandiego? Treasures of Knowledge
- Note: When The Learning Company purchased Brøderbund Software, they gained the rights to the Carmen Sandiego series. Only the Carmen Sandiego games created by The Learning Company are included here. Note that some original Brøderbund games are now sold under The Learning Company name.
- Prince of Persia 3D (1999)
- Real World series
- Operation Neptune (Eventually added to the Super Solvers series)
- Time Riders in American History
- Math For The Real World
- Adventure/puzzle games
- Tools and other programs
- All-Star Typing
- Read, Write, and Type
- MetroGnomes' Music
- The Children's Writing & Publishing Center
- The Writing Center
- Student Writing Center
- Other early educational programs
- Magic Spells
- Bumble Games
- Bumble Plot
- Moptown Hotel
- Moptown Parade
- Juggles' Rainbow
- Juggles' House
- Starflyers series
- Starflyers: Royal Jewel Rescue
- Starflyers: Alien Space Chase