The New York Times writes-up the Wireless Generation situation in New York. The state’s comptroller declined to approve a contract with Wireless Gen because of the larger issues consuming News Corp. It’s unfortunate that Wireless – a genuinely innovative company – is getting caught up in problems that have absolutely nothing to do with it and also worrisome in terms of the future of the company and the shadow the NewsCorp problems are casting.
But one part of the story jumped out at me as incomplete in an important way:
New York will still work with Wireless Generation indirectly, as part of a consortium of states building a shared data framework known as the Shared Learning Collaborative. Financed by the Bill and Melinda Gates Foundation, the $44 million project, awarded to Wireless Generation in June, is being directed by Stacey Childress, a former board member at Wireless Generation. She stepped down and sold her stock in the firm before taking the position at the Gates Foundation, a Wireless Generation spokeswoman said.
That’s all accurate but it’s not the entire story – and I have a little visibility into this aspect of it. Childress had about 30,000 options on Wireless stock when she left the company’s board because Wireless paid board members in options rather than cash. Her options were priced at $2.50 and $2.75. When she went to the Gates Foundation Childress sold them – using a conservative valuation method – for $1.33, roughly half of their book value. The exact price per-share Childress (and other board members) would have received when Wireless was bought by NewsCorp is not public information but a reasonable estimate of her share’s worth is $300-$400K.
In other words, she left well more than a quarter-million on the table in an effort to avoid conflicts of interest and do the right thing.
What’s more, Childress declined to do cash-for-service consulting for Wireless because she taught a Wireless Gen case in her course at Harvard Business School and didn’t think it was appropriate.
Let’s be clear, Childress will be able to put food on the table while working at the Gates Foundation and in the future but, still, that’s a lot of money to pass on in order to take a job where you think you can have social impact. And it’s a good example of how people have to navigate complicated situations and make tough calls. So the next time you hear someone braying about how everyone is just in education reform to make money, remember this example. Plenty of people do the wrong thing (in every industry) but in our field plenty more disadvantage themselves and their families in an effort to do the right thing.
Disclosure: Bellwether has worked with Wireless Gen but we were not involved in the News Corp acquisition and don’t hold stock or options. Bellwether also works with and is funded by the Bill and Melinda Gates Foundation.