Working as a consultant with an engineering background in Germany, she realized that there should be a better day care option for children.
As a result, the Wahlers opened their first Little Giants childcare facility in Stuttgart in 2006—a private, bilingual alternative to the public day cares used by the vast majority of Germans. After experiencing great success with the first location, Jelena and Peter soon expanded their business to Munich and Frankfurt. Within two years Giant Leap had established a national network of child care centers that now includes 15 facilities in 10 cities with plans to grow to 20 units in 11 cities by the end of this year.
Both Wahlers attended Duke University’s Fuqua School of Business, graduating from the Daytime MBA program in 2002. Jelena also serves on the school’s regional advisory board for Europe. She provided perspective on her entrepreneurial and leadership experiences in a Fuqua Q&A.
Q) How did you first identify the demand for this service?
Back in 1998 when our daughter was born, day care in Germany was just emerging. The quality was unacceptable and the operating hours were insufficient for people working in upper management levels. On the other hand I was, and still am, convinced that children belong in a group with other children rather than simply with a nanny, for example. Humans are herd-animals—therefore for me the only viable option is a good day care center.
That said, while we lived in North Carolina (from 2000 to 2002) our daughter attended two excellent preschools in Cary and Durham. Back in Germany we became parents again—this time with a boy. However the day care situation was still difficult and both my husband and I are people who get things done rather than complain about problems. Thus we decided to open a day care center that meets the needs of two working parents. Our idea was for our son to have a ‘second home away from home,’ ‘a place to have fun and be happy’ and last but not least ‘a school in which a child can develop to his or her full potential.’
Q) What are some of the challenges you faced early on?
The biggest challenge was to gain the trust of municipal employees, as childcare back in 2006 was for the most part state-operated or provided by churches. The child-services were afraid that the quality we would provide wouldn’t be sufficient, and they didn’t believe that two MBAs could come up with a good day care solution.
The second challenge was to find a suitable building in downtown Stuttgart—and we definitely wanted our day care to be downtown. We needed a garden, and the landlords didn’t like the idea of signing a long-term lease with a startup. Furthermore our customers had to take a big leap of faith to trust a startup taking care of their precious children, which was definitely not easy for them.
Q) How do you scale a service such as childcare? What strategy did you use to open new locations and grow without losing sight of quality?
Actually it is not much different than any other business in the service-industry. We need good and reliable employees. They are trained, depending on their position several times per year, to improve the quality of their work and to make sure they are continuously working on their personal improvement. Also we make sure that our employees enjoy going to work every day. We provide day care for their own children in one of our centers, and we also try to accommodate their needs regarding reduced and flexible working hours.
All of the centers are operated and owned by one of our companies, all being subsidiaries of Giant Leap GmbH u. Co. KG. Regarding franchising: we deliberately decided against a franchise-system years ago. Initially we thought about a franchise strategy, but as stated in your question, it is hard maintaining a good quality. We just saw how difficult this is with the recent Burger King scandal in Germany—dozens of restaurants were shut down by the authorities because of bad hygiene.
Quality is a major issue especially in day care centers. Whatever teachers do wrong, can harm a child. If one franchise-school gets bad publicity, the whole brand is harmed. Also German law makes it rather easy for a franchisee to leave the system; they will keep all their clients and licenses. Finally there are no tangible goods a franchisor can sell to its franchisees, only knowledge and processes: children don’t come frozen or in packages. By the way, there used to be a child care franchise system when we started, but it went bankrupt—I think we know why!
Regarding quality, I travel three to four days a week—sometimes announced, sometimes not—to our centers and visit them. I check the quality of the work and also talk to our customers. My husband makes sure that all the other issues a company needs to stay competitive are in place: marketing, finance, accounting, etc. Every week we have regular meetings with each and every center director. Twice a year all directors gather and work on ways to improve the company. Last but not least, I check the quality of every business-unit by a simple question: Would I enroll my own child? The answer must be yes, otherwise the center needs restructuring.
Q) During your first few years, you were operating with little competition from other private day cares. How did you adapt when competition began to rise?
We reduced our prices in locations where people were extremely price sensitive by making deals with the municipalities to match the cost of public child care. The cities reimburse us for the revenues lost due to reduced tuition fees. This transformation from ‘high-end, high-priced’ to ‘high-quality for a reasonable price’ was managed commendably by my husband. I trusted his gut-feeling and we made the step from fancy, which was necessary to enter the market, to affordable, which is necessary to grow on a larger scale.
Q) Describe a key learning point in your career that still resonates today and influences how you approach leadership.
Adapt to circumstances, never give up, and make the best out of any situation. You can create a successful company in any market, the only challenge is to figure out how and never accept the “it’s not possible” mentality. I always was, and still am leading by example and when you do so, convincing your employees to follow your vision just comes natural.