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• August 21, 2023

eLearning is one of the fastest-growing businesses in the world, especially after the outbreak of COVID-19. If you plan to start your eLearning business, you must be fully aware of the types of eLearning business models you can choose and establish a business on.

COVID-19 created a huge opportunity for the ed-tech industry as 1.37 billion learners were impacted by national school closure in March 2020. Albert Einstein once said, “In the midst of every crisis lies great opportunity .” Similarly, this crisis presented an opportunity in the form of e-learning businesses. With the massive demand for e-learning and online education across the globe, it is high time for you to start an eLearning business , and to be successful; you need to adopt an eLearning business model.

What is an eLearning Business Model?

An eLearning business model is a framework that would guide your business to generate monetary returns. It provides a roadmap to your business plans and helps you envision the long-term value of your business. Different types of eLearning business models are being used by businesses but we have gathered the most successful and proven business models for you.

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There are 3 most common and successful eLearning business models that you can follow. For your ease, we have attached an infographic below displaying the 3 eLearning models.

1. Night School Model

The term night school model came up from the concept of skill-based classes. It is a classical business model where a learner pays a one-time fee to access the course content. Courses under this business model follow a fixed framework that includes learning modules, assessments, quizzes, or examinations to test the learner. So, for example, if you are interested in learning Tableau , then you can follow the below steps:

• Search the course on an eLearning platform such as Udemy or Coursera
• Enroll by paying a nominal fee
• Access the course content
• Pass the quiz and complete the course

The night school model is most suitable for learners seeking a specific skill or learning a particular subject or a language. Most eLearning businesses adopt this model as it is a suitable alternative to physical classroom learning. This eLearning business model can be helpful for new businesses who are looking to generate cash flow by the subscriptions and sale of courses. Moreover, It is also a suitable model for businesses with high-priced courses.

However, this model has some downsides as well. The learner would only pay the course fees once and might not reinvest in your eLearning business again. In addition, if you want to focus on multiple topics, you will have to make separate courses for each of them since learners seek specific courses; hence, it is time-consuming.

There are some pros and cons of the night school model that are displayed in the table below:

2. Academy Model

The academy model is subscription-based, where the eLearning platform operates as a virtual school. An academy eLearning business model encourages students to learn and develop multiple skills and provides an extensive library of courses, videos, and other learning materials. The academy model also provides numerous features for the learners, such as live question-and-answer sessions, support groups, and one-to-one sessions with the instructors.

This model creates a long-term relationship between the platform and the learners. It is suitable for creators, fitness enthusiasts, sports fanatics, and professionals in their respective fields. The academy model covers broad topics and then covers each area in detail, attracting learners looking to learn multiple skills.

For example, you want to learn about graphic designing in an eLearning platform . The academy model would provide information about different tools and software such as Photoshop, Indesign, Illustrator, and other Adobe software.

One of the plus points of this model is the constant inflow of subscription fees from the subscribed learners. Moreover, you can earn more in the future with the increase in the number of subscribers without additional effort to create more content. The pros and cons of this model are listed in the table below:

3. Combined Model

A combined model is the integration of the “Night School Model” and “Academy Model.” This model offers both subscription-based offers as well as stand-alone courses with one-time fees. This model is suitable for those students who are willing to pay extra for additional course material or courses that can help them improve their academics and skills.  

How to choose the most suitable eLearning Business Model?

You have clearly understood all three eLearning business models; now, you can find the best fit between your business and the eLearning business models. Based on your core competencies, you can assess all three options and then opt for the most suitable one.

Edly is providing free eLearning business consultancy and platform demo that you can try out before making a final decision.

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How To Start Your First eLearning Video Business – Full Guide

Learn More about Video Monetization

• What Is An eLearning Business

Why You Should Start An eLearning Business

• eLearning Business Example
• eLearning Business Plans (3 types)
• How To Start An eLearning Business (6 steps)

Starting an eLearning business can be confusing.

You know you have the skill to teach, and some people want to learn it, but connecting the two and building a business around it? Man, where do you even start?

Well, it turns out, right here. 

At Uscreen we have lots of experience helping budding business owners, like you, start and grow their eLearning business. (Even if they have no entrepreneurial experience!)

And I’d like to share some of the major insights we’ve picked up along the way. Meaning you can get to work, safe in the knowledge you’re following the right steps.

So, if you want to start an eLearning business that is both profitable and enjoyable read on to find out more. We’re going to cover:

• What is an eLearning business?
• Why there’s never been a better time to start yours
• A case study of a 5-figure eLearning business
• 3 types of successful eLearning business models
• How to start an eLearning business in 6 steps

Let’s go…

What Is An eLearning Business?

An eLearning business is an online platform that educates people, either by imparting niche-specific knowledge or teaching new skills. 

eLearning businesses generate income in a number of ways, but the most common are:

• One-off sales of products like eBooks and courses
• Subscription access to independent online schools

Self-paced online learning has become popular over the last few years – it’s worth around $103.8 billion – and the COVID-19 pandemic has accelerated the industry’s growth. (More on that next!)

So, what makes eLearning businesses so popular? Well, for students, it’s because they offer a lot of flexibility . They can choose their own…

• instructors 
• learning schedules
• payment options

…to create a customized experience that fits their needs. These are all important elements that aren’t typically offered by traditional offline learning environments.

Instructors can also take advantage of higher levels of flexibility and creative freedom. You’re not bound by traditional syllabuses or teaching structures.

Instead, you can cover the topics that interest you, in the niche you care about, to provide the most value to your audience. Better still, you can work on your own schedule.

At Uscreen, we’ve seen people build profitable eLearning businesses around:

• Arts & Crafts .
• Basketball.
• Musical instruments.
• Language learning.
• Many, many more.

And, thanks to the COVID-19 pandemic, there has never been a better time to start an eLearning business. Here’s why…

COVID-19 has shaken up how we approach work, learning, and recreation. And, people from all over the world are turning to eLearning platforms in the “new normal”.

Specifically, we’ve seen a rise in 3 types of learners:

• Those looking to grow and adapt to different ways of working.
• Those looking to escape the pandemic through learning new skills and knowledge.
• Those looking to learn in COVID-19 safe environments .

In fact, Google’s data shows a clear rise in people looking for terms like “online course” since the first lockdown measures were introduced:

There’s now a clear opportunity for anyone who wants to start an eLearning business. The supply of online learning resources is nowhere near the current demand for it!

The Associated Press reports that demand will grow 10% each year until 2024 when it will reach a worth of $21.64 billion . (Tapping into just 1% of that industry would be $216.4 million!)

Better still, when you build your eLearning business using online video , it can be affordable to start and manage, with potentially high returns. Let’s look at an example to show you what I mean!

How Frances Long Built A 5-Figure eLearning Business

Frances Long runs Your Book Of Memories , where she teaches people how to make their own mini albums.

Frances began by creating videos for her YouTube channel using a simple, inexpensive setup. Though the content of each video is complex, the creation of it is not.

Here’s one of her early videos so you can see what I mean:

Click here to watch the video -> youtube.com/watch?v=8idTnr4wdSk

Once she built a community on her channel, she pivoted to running her own eLearning business using Uscreen . 

Students can access her content in 2 ways:

• They can pay a monthly fee for access to her school, and access all of the tutorials in her library
• They can pay a one-off fee to access an individual tutorial

This gives Frances’s audience flexible access to her premium educational content. And, it gives Frances multiple income streams for her eLearning business.

The combination of these simple elements helped Frances bootstrap her way to $13,000 in her first 4 months after launching, and her income continues to grow.

In the next section, we’re going to look at how you can start your own eLearning business, starting with choosing the right business plan.

The 3 Types Of eLearning Business Plan s

There are 3 different types of eLearning business plan you can use:

• The “night school” model
• The “academy” model 
• The “combined” model

Let’s take a look at them and see which one is right for you…

Option 1: The “Night School” Business Model

The “night school” model is a classic if you just want to sell one-off access to a course. It’ll be familiar to you if you’ve ever taken an adult learning course.

Students…

• pay an up-front fee for the course
• follow a set structure from start to finish (with little deviation from the main topic)
• finish the course with a test or quiz to show proficiency

…making them best suited for students who are focused on learning one topic or skill. 

InkWorkshops use this eLearning business model well. They sell individual access to laser-focused tattoo workshops:

The benefit of this business model is that you receive a lot of up-front money. You can generate hype and sell access for a short time, which can translate into high earnings.

The downside is you only earn once from each customer. Once they have access, there’s no need for them to reinvest in this course.

You’re also limited to one topic per course, so you’ll need to create multiple standalone courses if you want to cover a variety of topics, which can be pretty time-consuming.

Option 2: The “Academy” Business Model

The “academy” model is a much longer-term option.  It’s where you create an online school that allows…

• your students receive recurring value
• you receive a recurring income

…in exchange for a recurring monthly subscription fee.

The academy style model allows you to focus on a breadth of skills your students will need. You can build an extensive library of tutorials to cover multiple necessary skills.

Let’s say you want to start an eLearning platform for guitarists. Instead of teaching one skill – like how to play a specific song – you could open it up to teach:

• How to practice chord progressions.
• How to restring your guitar.
• The basics of finger-picking.
• How to read sheet music.

These topics are far too complex and important to make part of one single course, so they all need to be taught as skills in their own right. 

Magic Stream does this extremely well. They’ve built an extensive catalog of videos that budding magicians can access for a minimal monthly fee:

From the business side of this, there are lots of benefits.

You can earn a recurring income every month from both past and new students. And, you can continue to earn from content you uploaded months or even years before!

Option 3: The “Combined” Model

Okay, this is my favorite eLearning business model…

The “combined” model is where you take the night school and academy models and put them together to create a supercharged income opportunity.

Here you use:

• the academy model as your core offering.
• the night school model to provide flexible options or add-ons.

It could be that your customers want access to just one tutorial from your database, or you’re offering a special live stream session that’s worth paying a few extra dollars for.

Students are ready and willing to pay for these if they feel it will help them improve at what it is they’ve come to learn from you.

This is the same model that Your Book Of Memories used earlier in the post, so you know it’s tried and tested!

How To Start An eLearning Business In 6 Steps

In this section, we’re going to explore how to start an eLearning business and share the specific steps you need to take.  You’re going to:

• Define your audience
• Identify your core content
• Pick and create 1-3 actionable lessons
• Select your eLearning platform
• Set your prices
• Market your new eLearning business

Before we start, it’s going to be useful if you already have authority within an online community, or audience you’ve created, before you begin to build an eLearning business. 

This will give you better access to content ideas, potential customers, and initial feedback. While not essential, I do recommend you have this before you follow any of the steps below!

Let’s get into it…

1. Define Your Audience

The first step is to define your target audience. 

It’s useful to think of this as a subsection of your current audience. The 20% of people who will be interested in signing up for your premium service.

Ideally, you’ll build an “avatar” that is an amalgamation of the 6-8 key characteristics, wants, and needs that your customers share.

You should ask questions like:

• How old are they?
• What gender (if relevant) are they?
• Where are they located?
• What are they struggling with?
• What do they want to achieve with the skills you’ll teach them?

The answers to these questions will differ depending on your niche and what you teach. The best way to answer them is to reach out to members of your current audience and ask them!

Here is a great video from entrepreneur, Eben Pagan , on how to create a customer avatar, with specific examples from an eLearning business:

2. Identify Your Core Content

The next step is to identify the specific lessons your audience needs the most.

These are the core skills that will have the biggest impact on your audience’s success. If they come away armed with these 1-3 things, they’ll have got their money’s worth.

This will help you ensure your existing customers are satisfied and help you to attract new customers with your core materials.

Let’s say you’re building an eLearning business for creative freelancers. You might create your core lessons around:

• Acquisition: how to find and pitch to new clients
• Productivity: how to manage your time and workload
• Negotiation: how to effectively raise your rates

This is something we do in our own eLearning products. For example, in Fitness Accelerator , we focus on 3 core categories for our video tutorials:

• Setting up: how to set up your online fitness platform
• Pro tips: how to create engaging, professional content
• Marketing: how to grow your online fitness business

Here’s how that looks on the website:

These core elements should hit the key needs and take your customers towards their desired end result.

3. Pick & Create 1-3 Actionable Lessons

In this step, you’re going to drill down and create some actionable lessons.

I recommend you create a completable “module” for each of your core content categories before you launch your eLearning business.

Sticking with the creative freelancer example from above, this might look like:

• Acquisition: how to write a high-converting outreach email
• Productivity: how to structure your working day
• Negotiation: 10 key things your proposal needs to have

The point here is to choose high-value lessons that set the tone for your future content, and can generate early results or progress for your customers!

If you’re starting off on a low budget, here is a great video from Think Media on how to create your first videos using only your smartphone:

Click here to watch the video -> youtube.com/watch?v=ek53TQ9U35o

4. Pick Your eLearning Platform

It’s time to look at where you’re going to build your eLearning business.

You may already have considered some “education” platforms that allow you to host single courses, but I’m going to recommend you consider a more comprehensive solution. 

Specifically, I’m going to recommend you use a video monetization platform. Here’s why…

Video is the most effective way of teaching people remotely. It allows you to convey complex information easily. Just ask the 86% of people who use YouTube videos to learn new skills !

You also need a platform that allows you to:

• Create your own controlled learning environment
• Connect directly with your audience within a standalone platform
• Offer a wide range of payment options
• Create combinations of monetization options
• Use analytics for both your videos and marketing
• Take control of your income

You can do all of this – and much, much more – by using Uscreen . You can find out more about us, and what we offer, by clicking here or watching the video below:

Click here to watch the video -> youtube.com/watch?v=fxAZYn6gj74

5. Set Your Prices

Next up, let’s look at how to set prices for your eLearning business.

In the video below one of our resident video experts, Nick Nimmon, will talk you through a tried and tested strategy for setting prices for online courses and eLearning businesses.

Check it out:

Click here to watch the video -> youtube.com/watch?v=0YkQySdR9VU

6. Market Your eLearning Business

The final step is to begin marketing your eLearning business. This is where having an existing audience really helps!

I recommend you start by identifying your existing marketing channels, like…

• your newsletter
• social media feeds
• YouTube channel audiences
• community forums 

…and promote your new platform there. 

You should also consider using YouTube to create a marketing “funnel”. This is where you share:

• Top-level videos to engage potential and new audience members
• Middle-level videos to begin educating them
• Bottom-level videos, like trailers, to point them towards your platform

You can learn more about how to create a YouTube marketing funnel here .

Better still….

You can use Uscreen’s marketing tools to build more comprehensive and effective marketing campaigns. With them, you can:

• send abandoned cart emails
• create “reduce churn” sequences
• offer high-converting free trials
• share promotional coupons
• connect with 1000+ tools via Zapier

…so you can build tailored campaigns to market your eLearning business, your way.

Bonus: Join Uscreen’s Instructional Video Business Accelerator

We created the Instructional Video Business Accelerator for those of you who are serious about starting an eLearning business.

The Instructional Video Business Accelerator is a self-paced program that helps you learn the core skills you need to build a long-term eLearning business. It’s made up of hours of video tutorials that will help you:

• Create your eLearning business.
• Record impactful video lessons.
• Build a community of excited students.
• Effectively market your platform.

The Instructional Video Business Accelerator is automatically accessible to all eLearning Uscreen clients. Start your free trial to get access today ! Be sure to check eLearning as your industry while signing up.

Wrapping This Up…

There has never been a better time to start an eLearning business. COVID-19 has changed the way people want and need to learn, and the demand is higher than ever.

If you want to learn more about the key skills you need to launch and grow your own eLearning platform, be sure to check out Uscreen’s Instructional Video Business Accelerator!

Care for an on-demand demo?

James Johnson

James is a Photography YouTuber from Manchester, England. A former digital nomad, he’s been working online and in the creator economy for over a decade.

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Edtech Business Models: Key Insights Explored

• Business Model

Table of Contents

Are you curious about the driving force behind the rapid growth of the education technology industry? Look no further! Here we will uncover the key insights that have transformed the landscape of education. 

As technology continues to shape the way we learn, Edtech Business Models have emerged as a pivotal aspect of the sector. From upsurging interest in Edtech to the latest trends affecting the industry, we will cover it all. 

Get ready to discuss the success stories of well-established education startups and the innovative approaches of industry giants like Duolingo, Khan Academy, Masterclass, Udacity, and Udemy. 

Let’s embark on a journey of discovery into the world of Edtech Business Models!

What Is an Edtech Business Model?

An Edtech Business Model refers to the strategic framework that outlines how an education technology company generates revenue and sustains its operations. It encompasses various elements, such as target audience, product offerings, revenue streams, and distribution channels. 

Edtech startups often adopt different business models, including freemium, subscription-based, marketplace, and sponsored models, to cater to the diverse needs of learners, educators, and institutions. 

These models are designed to optimize the delivery of educational content, leverage technology to enhance learning experiences, and create a sustainable and profitable venture within the fast-evolving landscape of education technology.

What Makes EdTech a Profitable Business Model?

The EdTech revolution has reshaped the educational landscape, leveraging technology to enhance learning experiences. This dynamic sector offers a plethora of educational apps and solutions for kids and organizations, making it a highly lucrative business model.

Look at the following image to analyze some edtech stats that prove it’s accelerated growth –

1. Impressive Market Potential

With the global education technology market valued at USD 89.49 billion in 2020 and projected to grow at a CAGR of 19.9% from 2021 to 2028, EdTech’s growth potential is undeniable.

You can understand the market potential of ed-tech startups by having a look at the following graph –

2. Resilience Amidst Challenges

Even amidst the COVID-19 pandemic, EdTech has demonstrated remarkable resilience, cementing its status as a future-proof investment.

3. Entrepreneurial Opportunities

EdTech is a magnet for entrepreneurs seeking to fund and develop innovative ideas, driving advancements in 21st-century education.

4. Strategic Considerations

Success in EdTech hinges on carefully evaluating business models and embracing cutting-edge technologies like AI, ML, AR/VR, and robotics.

5. Compelling Portfolios

For investors, a robust portfolio of educational app development services is a crucial indicator of a startup’s potential.

6. Targeting Sub-Verticals

By tailoring solutions to specific educational sub-verticals, EdTech startups can gain a competitive edge and cater to unique demands.

As EdTech continues to shape the future of education, strategic vision, innovation, and a customer-centric approach are key to thriving in this dynamic and promising industry.

What Trends Are Affecting The Edtech Industry?

The EdTech industry is experiencing a transformational wave driven by technological advancements and changing user preferences. Here we have highlighted the key trends that are shaping the future of education technology. 

By looking at the image below, you can have a better understanding of the key trends –

1. Global Internet Penetration

With approximately 62% of the world population having internet access, digital learning is becoming borderless. As the total number of internet users is projected to reach 6 billion by 2022 and 7.5 billion by 2030, Edtech Solutions has an extensive global reach. Remote accessibility of learning material and self-paced classes is becoming commonplace, providing personalized and inclusive education opportunities.

2. Data-Driven Decisions

The adoption of digital textbooks and AI-driven analytics is transforming the way educational content is delivered. Big Data, machine learning, and predictive analytics enable personalized learning experiences, allowing educators to focus on teaching while technology takes care of individual needs.

3. Virtual Reality

Immersive learning through Virtual Reality (VR) is revolutionizing education. VR simulations and AI-driven experiences provide students with practical and engaging learning opportunities. Startups like Labster and Interplay Learning are leveraging VR to create virtual laboratories and skill training programs.

4. Augmented Reality

Augmented Reality (AR) is gaining popularity due to its smartphone compatibility. AR apps like BBC Civilisations and educational tools like Pokémon Go enhance learning experiences by blending virtual elements with the real world.

5. Conversational AI

Conversational AI, powered by voice-enabled devices, is making its way into the education industry. Companies like Cognii offer conversational AI products to improve critical thinking and learning for K-12 students and corporate professionals.

6. Adaptive Learning

Adaptive learning algorithms are tailoring education to individual student needs. Startups like Quizlet and Querium use AI to identify students’ requirements and customize the learning experience. Although some attempts at hyper-personalized learning have faced challenges, investors remain confident in its potential.

7. Robotics

Robotics is making strides in education management. Startups like Roybi and Robotify use machine learning to customize STEM education for young children. Robotics-based educational tools enhance interactive learning and cater to diverse learning styles.

8. Blockchain

Blockchain’s decentralized nature offers opportunities to upgrade education infrastructure and secure student records. Platforms like Blockerts and ODEM facilitate certificate issuance, verification, and connection between students and teachers through smart contracts.

9. Game-Based Learning

Gamification is gaining traction in online learning systems, engaging students through interactive and enjoyable experiences. Projects like “Minecraft: Education Edition” exemplify the success of using games for educational purposes.

These trends collectively redefine education and create new avenues for entrepreneurs in the EdTech sector. Embracing technology-driven innovations can lead to successful entry and growth in this thriving industry.

What Are the Top 5 Target Markets in the EdTech Industry?

The success of an EdTech start-up heavily relies on identifying and understanding the right target markets. With a diverse range of audiences, catering to their specific needs is crucial. Let’s elucidate on the top five target markets in the EdTech industry –

1. K-12 Education

This market encompasses students, teachers, parents, and educational institutions from pre-K to 12th grade. Interactive and personalized learning experiences are crucial in this segment, with EdTech companies leveraging technology and data analytics to enhance teaching and student progress tracking.

2. Higher Education

Comprising undergraduate and graduate students, as well as working professionals seeking further education, this market demands flexible online learning platforms like MOOCs, virtual classrooms, and Learning Management Systems. EdTech companies must continuously adapt to the evolving needs of higher education learners.

3. Professional Development

Working professionals seeking skill enhancement and career advancement represent this market. They look for convenient and flexible learning solutions, often delivered online, to improve their expertise. The professional development segment offers significant growth potential for EdTech start-ups.

4. Corporate Training

This market focuses on providing Learning and Development opportunities to employees within organizations. EdTech companies cater to businesses of all sizes, delivering scalable and effective training solutions to enhance employee productivity and job satisfaction.

5. Language Learning

Catering to individuals interested in learning a new language, this market includes language apps, online courses, tutoring services, and language exchange platforms. EdTech companies play a vital role in meeting the demands of language learners in today’s globalized world.

EdTech entrepreneurs can develop innovative solutions that resonate with their audience, paving the way for success in this dynamic industry by recognizing and addressing the unique needs of these target markets.

What Are the Top 6 Business Models in the EdTech Industry?

Selecting the appropriate business model is essential for the success of any EdTech start-up. We will explore the most widely-used business models in the EdTech sector, examining their advantages, drawbacks, and real-world examples, including SaaS business model examples.

1. Freemium Model

The Freemium Model involves offering a basic version of an educational product or service for free while charging users for access to premium features or advanced functionalities. This approach allows users to experience the product before committing to paid options, attracting a broader user base.

• Attracts a large user base by offering free entry.
• Enables users to test the product’s value before purchasing.
• Generates a recurring revenue stream from premium upgrades.
• Converting free users to paying customers can be challenging.
• Requires significant investment in customer acquisition to sustain growth.
• Quality differences between the free and premium versions may lead to user dissatisfaction.

2. Subscription Model

The Subscription Model entails users paying a regular fee, either monthly or annually, to access the educational product or service. This approach fosters predictable revenue streams, encourages customer loyalty, and allows continuous product improvement.

• Provides a predictable revenue stream with ongoing subscriptions.
• Offers scalability and growth potential for the business.
• Facilitates continuous improvement and updates to meet subscribers’ needs.
• Acquiring and retaining subscribers can be challenging without unique or high-quality content.
• Some potential customers may be deterred by subscription pricing.
• Faces competition from free or low-cost alternatives in the market.

3. Marketplace Model

The Marketplace Model involves creating a platform that connects educators or content creators with students or learners. This platform facilitates the buying and selling of educational content, resources, or services.

• Provides a scalable business model with relatively low overhead costs.
• Generates revenue through commissions or transaction fees.
• Offers a diverse range of educational content and services to users.
• Quality variations in educational content depend on individual sellers.
• Competes with other marketplaces for both buyers and sellers.
• Requires managing disputes or issues between buyers and sellers.

4. Partnership Model

The Partnership Model involves forming strategic alliances with other companies or organizations to offer educational content or services. Partnerships can expand market reach and leverage each other’s expertise and resources.

• Provides access to new customer segments and markets.
• Allows the company to leverage the partner’s expertise and resources.
• Enhances brand recognition and credibility through partnerships.
• Establishing and maintaining partnerships may require significant time and resources.
• Limited control over the quality and delivery of the product or service offered through partnerships.
• Potential competition with the partner organization for market share.

5. Sponsorship and Grants

The Sponsorship and Grants Model involves receiving financial support from sponsors or grant-giving organizations to deliver educational content or services. This funding allows the company to focus on content quality without immediate revenue generation.

• Provides significant funding without relying on customer revenue.
• Increases visibility and reach through association with sponsoring organizations.
• Allows a focus on educational content impact and quality.
• May encounter restrictions from sponsors, limiting innovation and evolution.
• Faces competition for limited grant funding from other organizations.
• Requires demonstrating a certain level of impact or outcomes to maintain funding.

6. Ad-Based Model

The Ad-Based Model offers educational products or services for free to users while generating revenue through advertising. This model lowers barriers for users and aims to monetize the product through targeted advertisements.

• Provides a low barrier to entry for users who may be hesitant to pay for educational content.
• Can generate significant revenue through targeted advertising.
• Enables offering a high-quality product or service to users for free.
• Advertisements may distract or annoy users, leading to a poorer user experience.
• The quality of the content may be impacted by the need to prioritize advertising revenue.
• Ad-based revenue can be unpredictable and fluctuate based on market conditions.

By understanding the strengths and weaknesses of each business model and aligning them with their target market, EdTech entrepreneurs can create sustainable and successful ventures in this ever-evolving industry.

How Can You Create a Successful EdTech Startup Business Model?

In the wake of the global COVID-19 pandemic, EdTech has gained immense popularity, revolutionizing traditional education with enhanced pedagogy and learning experiences. 

The following graph illustrates how global education technology expenditure will be growing in the upcoming years –

EdTech’s target audience extends beyond the education sector to include employees in large organizations seeking corporate learning solutions. To create a successful EdTech business model, follow these key steps:

1. Understand Your User Base

Gain a clear understanding that while kids or employees will be using the app, parents or organizations will be making the decision to invest in your product. Tailor your offering to address their needs and concerns effectively.

2. Identify Current Issues

Engage with potential clients, conduct thorough research, and identify existing loopholes or shortcomings in the current education system. Gather feedback on desired features and functionalities to create a user persona that caters to your customers’ needs.

3. Build a Minimum Viable Product (MVP)

Before launching a fully-fledged application or solution, develop an MVP with essential features and unique selling points. Share the MVP with prospective clients to gauge their reactions and gather valuable insights to refine and improve your offering.

You can lay a strong foundation for your EdTech startup and increase the likelihood of success in this rapidly growing industry by following these steps.

What Are the 5 Popular EdTech Companies And Their Business Models?

Several prominent EdTech companies have disrupted the education landscape with innovative business models that cater to diverse learning needs. Let’s learn about some of these leading players and their successful approaches:

1. Duolingo

Duolingo, a language learning platform, adopts the freemium business model. It offers a basic version of its app for free, providing users with language lessons and practice exercises. To access advanced features and remove ads, users can opt for a premium subscription called Duolingo Plus. The freemium model attracts a vast user base and generates revenue from premium subscriptions.

2. Khan Academy

Khan Academy operates on a nonprofit model, offering free educational resources and instructional videos across various subjects. Founded with a mission to provide a world-class education for anyone, anywhere, Khan Academy relies on donations, grants, and support from philanthropic organizations to sustain its operations.

3. MasterClass

MasterClass follows the subscription-based business model. It offers a premium subscription that grants users access to a vast library of online courses taught by celebrity instructors in various fields. The subscription-based approach allows MasterClass to generate recurring revenue while providing subscribers with exclusive and high-quality content.

Udacity offers a unique business model focusing on upskilling and career advancement. It partners with companies to offer nano degree programs that prepare learners for specific job roles in tech industries. Students pay for these programs, and Udacity collaborates with partner companies to ensure course content aligns with industry demands, increasing employment opportunities for graduates.

Udemy operates as a marketplace business model, providing a platform for instructors to create and sell online courses. Instructors set the course prices, and Udemy takes a commission for every sale. This model allows Udemy to offer a wide range of courses, catering to various subjects and interests while empowering instructors to monetize their expertise.

These EdTech companies showcase the diversity of business models available in the industry. From freemium and subscription-based models to nonprofit initiatives and marketplace approaches, each organization has found success in addressing the evolving demands of learners worldwide.

Wrapping Up

The EdTech industry is witnessing a transformative era, revolutionizing education for learners of all ages. With innovative business models and a diverse range of offerings, EdTech companies like Duolingo, Khan Academy, MasterClass, Udacity, and Udemy have reshaped the learning landscape.

Embracing technology-driven solutions, they cater to global audiences, making education more accessible, personalized, and engaging. As the demand for digital learning continues to soar, EdTech’s future holds immense potential for empowering minds and shaping a brighter tomorrow.

Shahria Emon

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How to Start an eLearning Business: A Strategic 2024 Guide

• February 1, 2024
• / Entrepreneurship
• / By SBToolkit

Embarking on an eLearning business journey in 2024? Feel overwhelmed by the possibilities and unsure where to start?

Our guide is here to simplify your path to success in the booming eLearning industry. We understand your eagerness to make a mark and your need for clear, actionable steps.

That’s why we’ve crafted a comprehensive, easy-to-follow guide covering everything from selecting the right business model to creating engaging content and effective marketing strategies.

Whether you’re a seasoned educator or a budding entrepreneur, our guide is tailored to help you learn how to start an elearning business in 2024.

Key Takeaways

• The eLearning market is experiencing steady growth, being valued at USD 1852.68 million in 2021 and expected to reach USD 2198.51 million by 2027, indicating strong opportunities for new ventures in various niches.
• Selecting the right business model is pivotal for success in eLearning, with options like individual courses, subscription-based platforms, and hybrid models allowing for tailored approaches to content monetization and customer acquisition.
• Marketing and engagement are key to an eLearning business’s success, necessitating effective strategies such as a strong online presence, influencer partnerships, and the use of social media, while also focusing on robust metrics to measure success and ROI.

Understanding the eLearning Business Landscape

The eLearning industry is a force to be reckoned with, boasting an elearning market size that was valued at a promising USD 1852.68 million in 2021 and is expected to expand at a fantastic CAGR of 2.89% during the forecast period, reaching an impressive USD 2198.51 million by 2027. Meanwhile, the types of elearning businesses are as diverse as the students they serve. From online courses and virtual classrooms to mobile learning and gamified experiences, there’s a niche for every interest and learning style.

As a prospective e learning business owner looking to start an elearning business, you’re standing at the threshold of a thriving global industry populated by major players such as:

• Aptara Inc.
• Blackboard Inc.
• Cisco Systems Inc.

However, there’s plenty of room for innovation, providing ample opportunities for newcomers to carve out their space in this dynamic field and create their own successful elearning business.

Choosing the Ideal eLearning Business Model

The selection of an appropriate eLearning business model marks a significant milestone in your journey. This entails:

• Synchronizing your program’s objectives with your target audience’s needs
• Customizing courses for different segments
• Committing to continuous improvement

Your chosen business model could potentially revolutionize your venture, ushering in thrilling opportunities and directing the course of your success.

Let’s delve into the three main eLearning business models: individual courses, subscription-based platforms, and hybrid models.

Individual Courses: One-Time Payments

The individual courses model is a classic approach where learners pay a one-time fee to gain lifetime access to a specific course. This model offers immediate monetization and is ideal for high-value courses priced at $199 or more. To encourage one-time purchases, you can:

• Include a direct purchase link
• Offer valuable packages
• Highlight your brand’s uniqueness
• Bundle courses to increase their perceived value.

The one-time payment model offers opportunities for:

• Streamlined payment processes
• Improved user-friendly options
• Enhanced productivity through integrated systems
• Increased engagement
• Potentially boosted course completion rates.

Subscription-Based Platforms: Recurring Revenue

On the other hand, the subscription-based model is an amazing eLearning business approach where users pay a recurring fee to access a library of eLearning content. Think of platforms like Coursera, Skillshare, and Moodle. This model is perfect for businesses looking to provide a wide range of topics and continual learning opportunities.

The subscription model offers several benefits:

• It provides a reliable revenue stream for businesses, allowing them to continuously invest in top-notch content and course updates.
• It offers customers access to a broader and more diverse course library.
• It is more affordable for customers, as they only need to pay a monthly or annual fee instead of a large upfront cost.

Overall, the subscription model fuels long-term content creation and makes high-quality courses more accessible to a wider audience.

Hybrid Models: Combining Strategies

The hybrid model merges the best of both worlds. It combines one-time payments and subscriptions, offering exclusive courses for a fee and access to basic courses through a subscription. This model offers access to all content for a one-time fee plus an optional subscription for updates and new content.

The exclusive sector of a hybrid e learning model, inspired by the night school model, should feature a mix of in-person classroom experiences and online courses that focus on experiential and observational learning. This way, you’re offering unique and high-value learning experiences not easily found elsewhere.

A hybrid model effectively caters to a broad customer base by:

• Facilitating both in-person and electronic learning sessions
• Expanding the target market geographically
• Offering diverse learning experiences suitable for a more inclusive audience.

Identifying Your Target Audience

Comprehending your target audience is indispensable for your eLearning venture. This process entails studying and pinpointing the traits, requirements, and predilections of the learners, such as age, profession, and past performance, to create a tailored learning experience.

Effective ways to start identifying your target audience include defining learner characteristics and conducting market research to understand the needs and preferences of potential learners. Having identified your audience, the next step is to profile them. This involves conducting an audience analysis and gathering valuable data about your learners. You need to focus on the specific challenges that your eLearning program will help them overcome.

Designing and Developing High-Quality Course Content

The design and development of top-tier course content involves using effective strategies such as:

• Scenario-based learning
• Infographics
• Guided learning
• Self-directed learning
• Simulations
• Storytelling
• Case studies

These strategies help create engaging and immersive learning experiences.

The goal extends beyond simple knowledge delivery to creating an engaging and impactful learning experience. This can be achieved by employing various learning methods tailored to course objectives. Some effective learning methods include:

These methods provide a dynamic way to grasp real-life situations and empower learners to put concepts into action.

To make e learning course more engaging and interactive, consider incorporating quizzes, simulations, drag and drop activities, interactive videos, and gamification.

Selecting the Right eLearning Platform

Your eLearning platform serves as the nerve center of your business, where your courses are brought to life and learners converge to acquire new skills. Selecting a suitable eLearning platform, or learning management system, is critical, given that it needs to offer scalability, customizability, and user-friendliness. With the increasing popularity of e learning platforms, making the right choice becomes even more essential.

Scalability ensures that your platform can accommodate growing numbers of users, courses, and data without compromising performance. Customization allows you to tailor the platform to the specific needs of different learners and businesses. And of course, it needs to be user-friendly, both for you as the provider and for your students as the consumers.

It helps customize the script to suit your business needs and include unique branding.

Marketing and Promoting Your eLearning Business

Upon readiness to launch your eLearning venture, you should then proceed to publicize it to the world. You can achieve effective marketing through strategies such as:

• Developing an engaging website
• Tapping into influencers
• Generating captivating content
• Utilizing social media
• Email marketing
• Search engine optimization
• Paid advertising
• Utilizing online learning business platforms like Udemy, Coursera, and Skillshare

These are also effective ways to reach your target audience.

Social media platforms like Facebook, LinkedIn, YouTube, Twitter, and Instagram are particularly effective for promoting eLearning courses. These platforms allow you to reach a wide audience, share engaging content, and interact directly with potential students.

Measuring Success and ROI in Your eLearning Business

Assessing success and ROI forms an essential part of comprehending your eLearning business’s performance. Key performance indicators (KPIs) such as:

• Revenue per course
• Product engagement score

can give you valuable insights into your business performance.

To calculate ROI for your eLearning business, you need to:

• Set learning objectives
• Work out a plan
• Collect data during and after the program
• Isolate the training effect
• Convert results

It involves measuring the cost of developing and disseminating training programs on eLearning platforms against the benefits or value accrued.

You can also efficiently monitor user progress and satisfaction by:

• Measuring completion rates
• Tracking learner performance and progress
• Gathering learner satisfaction and approval ratings
• Asking learners for feedback

Overcoming Common Challenges in the eLearning Industry

Operating an eLearning venture comes with its fair share of hurdles. While enhancing student engagement and participation might pose a challenge, it is surmountable with the adoption of appropriate strategies. Utilizing multiple formats, embracing a flexible approach to participation, and integrating gamification can all help to enhance student engagement.

Improving course completion rates is another common challenge. Here are some strategies to help boost course completion rates:

• Analyze reasons for low completion and make necessary adjustments
• Revise curriculums to make them more engaging
• Increase accessibility
• Diversify content formats to cater to different learning styles
• Set clear instructions and expectations

By implementing these strategies, you can significantly boost course completion rates.

In this journey through the eLearning landscape, we’ve explored the potential of the industry, the importance of choosing the right business model, identifying and understanding your target audience, creating high-quality course content, selecting the right platform, marketing and promoting your business, measuring success, and overcoming industry challenges. Starting an eLearning business is an exciting venture that opens up a world of possibilities. The path is yours to carve. So, why not take that first step today?

Frequently Asked Questions

Is elearning a good business.

Yes, eLearning can be a highly profitable and flexible business, with a diverse range of features and a vast potential market.

What is eLearning in business?

eLearning in business refers to the delivery of learning through digital resources, allowing for flexible learning opportunities beyond traditional boundaries. It provides the convenience of learning from any location and at any time.

How do I set up an eLearning business?

To set up an eLearning business, you need to first identify your target audience, decide on your core content, create lessons and courses, choose an eLearning platform, price your courses, and promote your business. Good luck with your venture!

How do I start a virtual education business?

Start by identifying your target audience, deciding on core content, creating lessons and courses, choosing a suitable eLearning platform, pricing your courses, and then promoting your virtual education business. Good luck!

What is the potential of the eLearning industry?

The eLearning industry has great potential and is expected to reach a market size of USD 2198.51 million by 2027.

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How To Build An Elearning Business In 2024: Six Approaches That Work

he global school shutdown caused by the covid-19 outbreak has offered a chance for e-learning companies to reach approximately 1.37 billion students. The desire to learn and the need to supplement limited access to educational institutions have led to a boom in the eLearning industry. The e-learning industry is projected to grow at a CAGR of 20 percent to reach $315 billion by 2028.

Thus, now is an excellent time to start your own e-learning or training business, given the worldwide demand for online and distance learning. However, implementing an e-learning business plan is no easy feat. The key to achieving success is to try things no one else has. Consider  Cathy More  and her ilk as an example. Cathy is a well-known training pioneer who has made it her mission to rid the world of boring education. Companies such as Microsoft, Pfizer, the US Army, Barclays, and the US Department of the Interior have all used Cathy's designs. 😎 

Don't be disheartened that the key players have already taken their places at the table, and you're just getting started. At least, this is why we are here to teach you how to fly.  EducateMe  outlines the fundamental but essential steps to create an e learning business in this article. Want to follow in Cathy's footsteps or perhaps join the ranks of successful e-learning companies? Buckle up and enjoy the ride as we reveal the inside scoop. 

In six steps, the following summarizes how to start an e-learning business.

1️⃣ Define your audience

2️⃣ Establish a core content

3️⃣ Choose an LMS

4️⃣ Launch your courses

5️⃣ Promote your company 

Ready to learn? Let's go! 🚀

What Is an E-learning Business? 

Too frequently, learning and  online learning  are confused with one another. Before defining an e-learning business model, it is necessary to clarify what falls within and outside the learning scope.

E-learning, often known as "virtual learning," primarily refers to an internet-based form of education. The instructor and students do not meet in person. All coursework and contact are conducted through email, message boards, chat, or video conferencing. Some schools refer to this course format as "fully online."

• Out of scope

The bulk of the coursework will be completed online through forums, shared papers, email, chat, and so on. However, this does not mean that students and teachers have no face-to-face contact. Coursework may be completed in a classroom or remotely, so long as most discussion takes place online. Online learning falls under this category.

So what Do Elearning Startups Do? 🤔

You need an e learning business if you want to effectively educate people in a specific field or teach them new skills while maximizing your resources and increasing your revenue. Consequently, learning startups refer to platforms used by instructors to administer online courses or impart curriculum-aligned learning experiences. eLearning programs may contain videos, quizzes, simulations, games, activities, and other interactive elements. Additionally, students could view a recorded lecture or attend a live lecture.

Types of eLearning Business Models

There are three primary business models for e-learning that instructors may implement. 

✅ Night School Model

The term "night school model" was coined to describe community colleges' vocational and evening courses. The majority of eLearning companies follow the model of conventional night schools. In this tried-and-true arrangement, students pay a one-time fee for curriculum access. This business model provides courses with predetermined learning modules, assessments, quizzes, and examinations that adhere to a specific structure. 

✅ The Academy Model 

The Academy eLearning model is comparable to a cyberspace membership or subscription service. Students are granted access to all content, including live classes and courses, for a monthly fee. As their expertise grows, students have a greater say in what and when they study. The business model of the academy provides students with a plethora of study materials, including courses, videos, and other media, from which they can learn and develop in various domains. 

✅ The Combined Model 

The "combined" model is a hybrid of the night school and academy models, intending to increase income. Here, the academy model is the primary offering, while the night school strategy is an optional extra. In addition to subscription-based services, this model offers both a "buy once, use forever" option and individual courses.

Who Needs an Elearning Business? 🤷‍♂️ 

Launching an e-learning startup is just one aspect of the process, but before you start, you'll need to determine if it's a good fit for you. 

Course Designers 🖼 

Online course developers are those who make courses available to students online. Packaging your expertise into an eLearning course may supplement your income or start a new one. Using an eLearning business model, you may differentiate yourself from the competition by deciding to develop courses that feature your comprehensive knowledge and skills.

Online teachers 🧑‍🏫 

Starting an online learning business requires excellent communication and teaching skills, a stable computer, and knowledge of the subject area being taught. Your responsibilities as a remote tutor may change based on the kind of eLearning company you run, the grade level you instruct, and your student's age and learning needs.

Training Camps ⛺️ 

The eLearning industry presents an opportunity for boot camp planners to integrate their events. The first guideline for managing a successful boot camp is removing students from their normal environments. Corporate learners can now interact with distant colleagues and facilitators via the eLearning industry, broadening their access to education and training opportunities.

Is Elearning a Profitable Business and Why Launch One? 

The importance of the eLearning industry has grown as the educational landscape has shifted away from classroom-based instruction to online courses. An e-learning company facilitates digital interaction between educators and their students. Several important factors are contributing to the increase in interest and participation. Listed below are the most important ones.

Start Your eLearning Academy with Confidence - Try Our Guide Today!

Feeling uncertain about building your eLearning academy? Our guide can help you start with confidence

The COVID-19 Pandemic has Irrevocably Altered the Future of Education, with Elearning at the Forefront of the Revolution

According to Technavio's most recent market analysis, the e-learning market's potential growth gap is  expected to increase by USD 1.72 trillion between 2021 and 2026 . The report finds that the market is expected to expand at a CAGR of 16.35% over the predicted time frame. The e-learning market's growth is largely fueled by improved learning in the academic sector. 

COVID-19 boosted e-learning revenue. In response to rising employee safety concerns, companies are adopting work-from-home policies. This hinders companies' training, communication, progress monitoring, and upskilling, fueling demand for e-learning platforms among large corporations and SMEs. 

Corporates Are Investing Heavily in R&D for Their Clientele, and Employees

Between 2022 and 2028, the service providers industry is anticipated to grow at a rate of 30% due to the increasing emphasis on portfolio expansion among Indian businesses. The rapid spread of coronavirus necessitated the closure of schools and universities, necessitating the development of online alternatives for reinstatement of regular classes. Terms such as social and  collaborative learning are becoming commonplace in fast-advancing companies. Businesses invest more money in research and development to provide new products and services to satisfy consumer demand. 

The North American Government Is Improving Its Telecom and IT infrastructures 

Increases in telecom and IT infrastructure investment, scalability of resources, and greater access to university courses have all contributed to the expansion of the eLearning industry, as have service providers' substantial According to the International Telecommunication Union, the number of internet users will increase from 4.1 billion this year to nearly 5.3 billion in 2022. (ITU). The development of the industry is being driven by the growing number of people with Internet access. As the telecommunications and broadband industries have expanded, so has the availability of inexpensive Internet connection options. 

Higher Education Now Prioritizes Scalable Resources and Expanded Course Availability

In addition, there is a great deal of encouragement to launch an eLearning company because the demand for online learning materials currently exceeds the supply, resulting in a substantial increase in the earnings potential of market participants.

What Is ROI in Elearning?

Using an economic formula known as elearning return on investment (ROI), 💰 one can calculate the financial benefits of offering online training courses or operating an eLearning business. For an eLearning project to be successful, its benefits must exceed its expenses. A calculation of return on investment justifies the investment in training by comparing the costs of development and delivery to the value or benefits realized. 

The owner of an eLearning company is understandably curious as to whether or not their online training program produced the desired outcomes, whether or not their trainees found it useful, and whether or not their company's bottom line has increased significantly. In essence, eLearning ROI is an essential performance metric for determining whether or not your eLearning organization is optimizing its financial resources.

How Do You Measure Elearning Business ROI?

When starting an e-learning business, the ROI estimate is essential. Measuring ROI enables a business to determine the success of a campaign and establish benchmarks for future campaigns. For instance, after establishing an e-learning startup, you could use ROI measurement to determine when something fails, allowing you to swiftly reevaluate or re-shape your offerings and avoid wasting time and money on something that isn't working.

Traditional Elearning ROI Calculation

ROI is frequently calculated by dividing the profit from an investment by the amount invested. The ROI of your eLearning company can be determined by comparing the cost of creating and delivering training programs to the results they produce. To determine the average eLearning ROI, simply divide the amount of money your company made due to the program by its implementation cost. You can calculate your return on investment as a percentage using this formula by multiplying the result by 100. To declare your effort a success, you must show that the benefits and value of your program outweigh the costs.

Kirkpatrick's Four Tiers Evaluation

Donald Kirkpatrick's 4-level model, which considers learner feedback, the impact on the business, and the return on investment, is the most widely used technique for determining training effectiveness. 

• The first level or stage is known as "Reaction." Students' responses to surveys and comments reveal what should be improved and whether the material was useful. 
• Each participant's learning level will determine how much they take away from experience. It assesses how well the learner is progressing toward their objectives, whether the training objectives are being met, and whether there are knowledge gaps that can be filled by modifying the course content. 
• Upon completion of a course, instructors can determine whether their students' behavior has changed and whether the skills and knowledge they gained have been applied by observing their behavior levels. 
• The effectiveness of training is determined by calculating its impact or influence on the trainees' outcomes. Productivity gains are a common indicator of success. 
• In Kirkpatrick's assessment methodology, Level 5 is the transition between the first four stages and the final step in calculating ROI for online education. The ROI of online learning can be calculated by comparing the cost of the training to the benefits it offers.

Through an LMS (the most practical method)

A learning management system (LMS) is essential software for your e-learning business. It enables you to host training and provides multiple options for collecting training data and generating reports on the fly. Using your cloud-based learning management system (LMS), students can access course materials anytime and from any location. Your learning business's return on investment (ROI) may not rack up immediately. However, your business will begin to generate a return on investment once you replace traditional training with an LMS.

How to Build an Elearning Business in 6 Steps

There are two possible routes for launching an e-learning business. The first is to create a website or mobile application to promote your business, and the second is to use an LMS to aggregate or sell courses. Custom websites and applications are an excellent concept, but they require a substantial investment and technical expertise to develop and maintain. In contrast, LMS implementation requires fewer resources and no technical knowledge. Consequently, instructors utilize LMS more frequently.

If you prefer the LMS route, the following is a 6-step guide on how to start e learning business models.

Step #1. Define Your Audience

Market research is required to determine who you should target. To narrow down your target audience, ask yourself questions like: 

• Who is my target audience? 
• What age range should I shoot for? 
• What are their annoyances or pain points? 
• What kinds of courses do they want to take? 

With the answers to these questions, you can tailor your course material to the needs of your audience.

Step #2. Determine Your Core Content

If you want to launch an e-learning startup, you should prioritize long-term value and attract prospective new learners, and keep your current customers. A list of the core skills students want to learn is extremely beneficial. Based on this data, you can decide what to focus on creating and who you're attempting to reach. Furthermore, you may complete more than one critical piece of content with different subsets of your target audience. 

Step #3. Select an LMS

When it comes to launching your eLearning business, you have some options. However, to provide students with engaging online course material, we recommend using a platform with an open-source LMS. You can customize an open-source platform to meet your specific needs. 

Step #4. Make Your Courses Available

It's a good idea to create some sample lessons and courses that cover the main features of your platform before launching it. To see high rates of early acceptance and positive feedback, ensure your material is high quality and provides value to the learner. Your students' reactions to these initial practical exercises will determine the long-term success of your eLearning platform. 

Step #5. Decide on a Price 

Every e learning business must make a profit, and detailed course pricing is one way to do so. It would help if you struck a balance between charging too little and failing to make enough to cover your expenses and charging too much and failing to attract any students. You could conduct a market study and compare the prices of similar classes on competing websites. Establishing a market presence frequently entails undercutting competitors' prices or offering discount deals. 

Step #6. Market Your Elearning Business

You won't be able to succeed without solid marketing, no matter how strong your platform is. You'll need to actively promote your business through marketing, social media, and other channels to stand out among the hundreds of eLearning platforms. 

Elearning Startups Founders' Lessons

Here are some pearls of wisdom from early learning entrepreneurs. We didn't name them but picked up their most important messages.

👉 Lesson 1. It's All about being in the Audience!

The learners are now the mainstay of education. This trend is further supported by concepts such as  cohort-based learning . As an instructor, you must capture your students' attention and reassure them that they are not alone in their struggles. When starting an eLearning company, focus your efforts on the target audience. When users feel like they belong on your eLearning platform, they have an emotional investment, which motivates them to tell their classmates about it. 

👉 Lesson 2. You Can't Ignore the Technical Sides

Technical considerations and project technology execution are equally important to the instructional component of the project. You must understand the fundamental guidelines for evaluating your eLearning business software. 

👉 Lesson 3. Do Everything You Can (Mistakes Too)

You can save money in the early stages of a project by doing as much of the work as possible on your own. Your future failures will not negate the valuable lessons you've already learned. 

👉 Lesson 4. Adopt Industry Best Practices to Increase Your Demand

The goal of online education is to make learning enjoyable and beneficial. Best practices in the industry may be used to increase sales in this manner. Suppose you want your students to be able to see how they're doing and receive feedback on how they can improve. In that case, one option is to use an artificial intelligence-powered ePortfolio module. Games can help to foster student competition.

Create an E-learning Startup on EducateMe 🔥 

Beginning an eLearning business may not be the simplest endeavor. But with an all-inclusive and feature-rich LMS like EducateMe, you can streamline the process.EducateMe is a platform that enables instructors to offer live courses, foster engagements between mentors and their students, and offer performance analytics.

8 Best LMS For Sales Training [2024]

Key 12 LMS Requirements For Your Checklist

10 Best Affordable LMS [2024]

Create and scale collaborative courses

Keep reading

The Instructors' Guide For Creating A Collaborative Learning Environment in 2024

How To Create An Online School In 5 Easy Steps [2024 Guide]

8 Best LMS for Small Businesses [2024 List]

LXP vs LMS: Benefits, Features, Users, Content Compared to Help You Choose in 2024

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How to Start an E-Learning Business If you like sharing knowledge with other human beings, the e-learning industry might be just the right thing for you.

By Simon Moser Edited by Jessica Thomas Nov 8, 2020

Opinions expressed by Entrepreneur contributors are their own.

The e-learning industry has exploded with popularity and innovation in recent years, as remote tutors, online courses, workshops and other remote-learning resources have become more accessible, more rewarding and better recognized.

As per data from Supplygem, every dollar spent on e-learning makes companies back $30 in productivity, and 93 percent of companies say they plan to adopt online learning in the near future.

As one of the web's fastest growing industries, entrepreneurs in the e-learning industry can leverage this growth to build a potentially lucrative e-learning enterprise, with few starting resources necessary in many cases.

Become a remote tutor

As more people work from home than ever before, and many students now complete their studies from home, the demand for remote tutors has never been higher. This represents an excellent opportunity for educated and experienced individuals to make money by sharing their insights and knowledge.

Depending on your field of expertise, you can expect to earn anywhere from $10 to well over $100 per hour of remote tutoring — with the potential for significantly more in highly niche fields or for very experienced tutors. This is all while being able to work from the comfort of your own home, whenever you want, in whichever field you are most passionate about.

Related: How Remote Education Is Evolving During the Crisis

Getting started with remote tutoring is simple, because there are dozens of different platforms available that can be used for this very purpose, including Chegg, Skillshare and Teachera. Once you have chosen your platform of choice, you will be free to start offering your services, either charging an hourly rate or selling your services as a package deal.

As with most things, different platforms tend to have a different customer demographic and might cater towards different niches better than others. Because of this, it's wise to play the field somewhat to see which of the numerous platforms offers the best mix of payment, flexibility, regularity and more to see what works best for you.

As a remote tutor, you will typically deliver your classes through video conferencing software like Google Hangouts, Zoom or Skype, but you might also need to make use of virtual whiteboards and other real-time collaboration tools to make your lessons a more interactive experience.

Create your own content

Although remote tutoring can be a highly rewarding endeavor, many entrepreneurs instead opt to create their own e-learning courses, because these can be used to drive passive income that can last months or potentially years in some cases.

Unlike remote tutoring, which typically sees tutors hold classes with a single student or a small group of students at a time, e-learning courses are generally self-study. This means the tutor simply creates the course once, and it is then served to users through one of the myriad course distribution platforms, such as Udemy or Coursera. Some lessons might be given away for free as introductory material or as part of a marketing strategy to help boost conversions.

Related: 5 Tips for Creating Your First (Successful) Online Course

As with all things, it's important to do your homework before creating your own e-learning courses. This includes researching your audience, brainstorming for content ideas and developing the template for your courses. You'll also need to put some thought into your platform of choice, because these can vary considerably in their commission, reach and the tools and services they provide to tutors.

Many content creators start by using platforms like Thinkific and Kajabi to create their courses, because they offer many of the tools needed in one place.

Some of the top earning courses on Udemy earn their creators well in excess of $10,000 per month, whereas top teachers on Skillshare can expect to earn in excess of $3,000 a month. Because these courses are typically prepared in one batch rather than being delivered as daily lessons, once the course is created and launched you're done. Any income generated from then on is almost entirely passive other than a little occasional minor upkeep.

Make or buy?

Despite the fact that Udemy and other e-learning platforms are able to connect their course creators and teachers with a significant potential customer base, some entrepreneurs in the sector still decide to build up their own platform from scratch. "The big platforms are great if you're starting out and want a simple solution for hosting your course, however developing your own unique platform has a lot of benefits that Udemy and others cannot provide," says Connor Marriott, who is teaching entrepreneurs the art of scaling an online business through his e-learning company Instinct Education .

"Research suggests that a customer's initial experience with a program will determine how regularly they use it and ultimately the results they experience. By building your own platform you can ensure your customers are impressed with your course from the moment they first enroll, which will lead to higher consumption rates of the material and greater implementation of the course content. Of course, this also means higher customer satisfaction and, most importantly, better results for our clients," he says

Related: 7 Tips for Making 7 Figures Selling Online Courses

With the global massive open online course (MOOC) market predicted to grow as an estimated CAGR of 18.13 percent for the next five years, and more people than ever before signing up for online courses, there's still ample room for fresh talent in the space. With that in mind, those who do best are usually those who build their presence well beyond their content delivery platform, taking advantage of social media, email newsletters or even an entire content marketing funnel to drive traffic to their courses.

Workshops and boot camps

For those who love the efficiency of e-learning courses but still want to maintain direct contact and tutorage with learners, consider creating an online workshop or boot camp.

An online workshop is essentially an online interactive course that typically features small class sizes and direct communication with the course creator. Much of the content may be prepared in advance, similar to a MOOC, but most workshops typically have significant back and forth between the students and the course creator, helping to tailor and personalize the content to the individual needs of the students.

Many online workshops take place on specific days and at specific times, where the tutor is usually on hand to help students collaborate and guide them through the material, whereas other workshops are described as "asynchronous" in that students can go through the workshop material at their leisure and use a chat feature or similar tool to communicate with other students and the workshop host.

Related: 15 of the Best and Most Unusual Online Courses for Entrepreneurs

Unlike with standard online courses, tutors can typically command hundreds to potentially thousands of dollars per student for a workshop slot — again depending on the reputation of the host, target industry and content covered. Workshops in emerging industries and highly sought after niches like financial technology (fintech), blockchain, cannabis products and consumer goods can be a good start, but these are best broached by tutors with authority and experience in these fields.

To kick it into the next gear, consider stringing several workshop-like sessions back-to-back to create a more intensive program, known as a boot camp. These give students a rigorous schedule to follow and helps them network with their peers while allowing you to condense your classes down into a short window — helping you maximize efficiency and boost your output considerably.

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How to Create an eLearning Organization Business Model

Having accumulated a wealth of knowledge in an organization, managers are looking for ways to make it available to employees in a meaningful way. We see a plethora of eLearning organizations springing up to respond to these needs.

It’s a lucrative, but a competitive eLearning market out there! Without the right eLearning business model, your eLearning venture may sink before it launches!

In this article, we will share with you some best practices in developing the right eLearning business model for your eLearning organization.

So, you have finally decided to test the eLearning business waters. You have researched the market trends of eLearning offering organizations and you feel you can offer better eLearning products to the market. Congratulations on this noble idea!

Let’s help you make it a successful reality. If you don’t have a business model, then it’s never too late. Simply apply our strategy to your eLearning venture.

If you already have an eLearning business model, then compare yours with ours. Share any additions you made in the comments section, or any new points you can share. Sharing is caring!

Before you begin working on your new eLearning business organization, determine a list of knowledge, learning needs and wants of a typical organization. What has been frustrating people in the presence or absence of an eLearning program? What are the gaps in eLearning offerings? What kind of eLearning programs are more in demand?

Also, make a note of the groups of learners you would be serving. Are they large in size, geographically distributed and/or what is their level of expertise? Are there any culture and language considerations required for your learners? Get to know your learners well in order to study your target market.

Once you have defined the target market and its segments for your eLearning organization, begin developing your business model. Your goal is to determine what makes you unique and stand-out in comparison to your competitors.

The journal MERLOT (Journal of Online Learning and Teaching) is rife with research findings that suggest core strategies to develop an eLearning business model.

Here are the latest on an eLearning business model development. Answer these questions to define your eLearning program offering:

• Will you be serving all the members of the target market or a subset?
• What makes you unique: in what situations will your target market turn to you for their eLearning needs?
• How competitive is your selling strategy? What factors will drive your customers to your business?
• Are your courses all about purchase-and-download-eLearning-programs? Or, do you have eLearning facilitators that will interact directly with course participants?
• What content area will you be focusing on?
• What content would be beyond your scope?
• Who are your competitors?
• What is the frame of reference used in your courses? For example, which country and economics are your courses based on?
• Define the value you will provide your learners. A value not present in the market.
• What values are you NOT providing?
• What existing eLearning frustrations are you addressing?
• How will the learners be affected from your eLearning offerings?
• What are the distinguishing factors that set you apart in the market?
• Why can’t these factors be copied?
• Define effective methods to develop eLearning programs.
• Effective methods to market your eLearning program.
• How will you keep your courses current – content and technology included?
• Define strategies to learn about current learner needs.

Developing an eLearning business model early in your organizational development process is crucial to its success. Simply define these parameters orf your eLearning business and you can be on your way to sell online courses .

And do consider creating a web presence for your new eLearning venture.

No matter how good your organization is in terms of skills and experience to develop the right eLearning courses, without an insightful eLearning business model, you cannot go too far.

A strong business model will enable you to focus on the desired target market and improve your eLearning offerings to satisfy them. Apply these five questions to your model to get started or to steer your business in the right direction.

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Evolution of the Higher Ed Business Model

Dec 03, 2020 • 4 minute read • ross lucivero, chief product officer.

Cultural and technological changes have been disrupting the higher education business model for at least a decade. Online learning and education-on-demand were already encroaching on the traditional classroom experience, but at a pace educators and administrators felt they could control.

COVID-19 has changed all that. Closed campuses, remote learning, faculty furloughs, and declining enrollment are forcing fast-paced changes that will transform higher education for years to come. It’s possible—if not probable—that many changes are here for good, regardless of the ebb and flow of coronavirus. These are the most notable trends in the higher education business model for 2020 and beyond.

Technology-Supported Remote Monitoring and Proctoring

Pre-COVID, the online education market was expected to reach $350 billion by 2025 , accounting for about a third of all higher education dollars. That figure will undoubtedly rise significantly, given that about 45% of all colleges and universities are operating primarily online this year compared to only 23% operating primarily in person.

The huge surge in online education is accompanied by a growing need to monitor remote test-taking. Technology has emerged to offer new proctoring solutions that ensure fairness and integrity in the examination process while delivering real cost savings for institutions.

One such solution uses facial recognition and biometric keystroke technology to ensure the person taking the exam matches the student’s ID. Examity, an India-based company, offers real-time video monitoring technology that detects unusual movements by the test-taker during an exam. ProctorTrack is a hybrid model combining machine learning and biometric monitoring to ensure students’ identities.

Learning Analytics

In the past, educators were limited to attendance and test results to track their students’ progress. Now, however, technology has opened the door to a wide array of metrics including engagement with online lessons and discussion groups, online self-assessments, and even time spent with digital resources or in-person at the library.

Proponents of data gathering for learning analytics say the information helps them more quickly identify struggling students and provide targeted assistance. Nottingham Trent University in England gives students access to a personal dashboard that lets them compare their performance across several metrics against their peers. Educators believe this gives students more control over their studies. Other universities are using student data to help shape curriculum and teaching methods.

Opponents, however, point to the obvious ethical concerns with this type of personal data collection and retention. Institutions that utilize analytics must recognize the need for strong data governance policies before jumping on the artificial intelligence bandwagon.

Personalized Educational Content

Along with learning analytics, AI is creating new opportunities for personalized academic content in the form of live-stream and on-demand videos. A 2018 study showed that 90% of incoming freshmen expected on-demand educational content.

The goal of personalized content is a Netflix-style experience where algorithms suggest targeted video content based on students’ interest and engagement with other content. AI-driven personalized academic content is widely considered a core capability to meet the needs of current and future students who are increasingly video-centric in their learning preferences.

Within the coming two years, 22% of university leaders say they plan to implement AI-driven adaptive learning software; 20% say they will use the technology to create academic playlists of lectures.

Mobile Learning

It’s not surprising that the mobile learning market is growing in tandem with the overall trend toward remote and on-demand education. Pre-COVID, experts projected the mobile learning market would grow 36% year-over-year and reach nearly $40 billion by the end of 2020.

Far from being a classroom distraction, mobile devices can actually increase engagement and retention of key concepts. Middlesex University gave first-year anatomy students access to a mobile app with 3D anatomic models and interactive learning activities. Students who used the app on their iPad during class demonstrated more overall engagement with the material and earned higher grades than students who did not use the app on their mobile devices.

Beyond supplementing core classroom educational activities, mobile learning is a way to help students incorporate learning into their lives. Colorado Technical University, for example, uses an app to help students access relevant support services, get real-time notifications about deadlines, due dates, and scheduling, and improve their time management skills.

Data Privacy and Security

Personal data is the fuel that drives these digital transformations in higher education. While all institutions are obligated to comply with FERPA and other regulations governing student data, the expanded scope of data collection opens up new ethical questions, as well.

The challenge for administrators is balancing the need for data mining to power the personalized, on-demand educational experience today’s students demand with their legal and ethical obligations for data privacy and security. It’s perhaps not surprising that privacy officer is one of the fastest-growing positions in higher education.

Beyond developing strict data governance policies, institutions are turning to technology to promote data security. Some are using blockchain to ensure the integrity of student records while others are relying on cloud-based systems that offer more security over on-premise solutions. Most are expanding their data policies to include strict screening of third-party vendors for compliance.

Bottom Line

COVID has accelerated the democratization of education and the push for on-demand learning. The days of education delivered exclusively in the laboratory or lecture hall are over, and along with it, the one-size-fits-all model of learning.

The technologies powering the new face of higher learning are not without their risks, however. Remote monitoring, data mining, learning analytics, and mobile technologies play an important role in higher ed’s new business model, but they must be implemented responsibly with intentional policies for privacy and security.

Ultimately, however, the institutions that get it right will be well-positioned to serve the needs of today’s digital natives who expect a personalized and technologically seamless educational experience. 

3 Steps for Improving UX in Higher Education

Apr 04, 2023 • 3 minute read • ross lucivero, chief product officer.

Human-Centered Change and Innovation

Innovation, change and transformation thought leadership, lovingly curated by braden kelley, the education business model canvas.

GUEST POST from Arlen Meyers

The business model canvas is one of many useful tools to design, evolve and test products and services business models.  While the original model was proposed to help founders create a viable and scaleable business model,  it has also helped non-profit executives, as  the mission driven business model,  and those looking to make a career change, using a personal business model as the  Business Model You.

The construct is also useful if you are an edupreneur, trying to create and launch new educational products and services, including new courses, certificates, programs or degree offerings.

Edupreneurship rests on several foundational principles:

• Having an entrepreneurial mindset
• Intra- and entrepreneurial knowledge, skills, abilities and competencies
• Design thinking  focused on creating stakeholder and beneficiary defined outcomes
• A systems engineering approach to  solving wicked problems,  like how to fix outcomes disparities and their social determinants
• A different business model
• More respect for and attention to edupreneurial champions
• Better teacher education and training
• An incentive and reward system for not just tweaking a failed system , but rather, making it obsolete given the basic structural changes in the US economy
• Eliminating unnecessary and burdensome bureaucracy, credentialing that does not add value and administrivia
• Paying more attention to and measuring student defined outcomes
• Better public-private integration
• K-20 integration and alignment

13.  Teaching students what they need to win the 4th industrial revolution

14.  Embracing cradle to career integration

15.  Creating a competent diverse and equitable talent pipeline

We has seen several recent advances in edupreneurship.

Here is the boomer’s guide to teaching millenials.

The UGME steering committee recognizes that medical education programs are faced with the ubiquitous challenge of repeated calls for innovation and that, frequently, these calls do not adequately address the associated resource demands. As medical educators, we have become highly creative in identifying strategies to do more with less, but as we know, this is not a sustainable model of stewardship. In 2016 and 2017, the UGME section collaborated with the Group on Business Affairs (GBA) to explore evolving models to support and sustain UGME programming. A result of this work is the Business Model Canvas for Medical Educators. The original Business Model Canvas was proposed by Alexander Osterwalder in 2008 and has been modified over time to fit other needs.  The Table of Contents will direct you to resources, including the Business Model Canvas for Medical Educators template and two examples submitted by institutions who have successfully used the template to secure funding from within their own institution.

The edupreneurship business model canvas has a few modifications to the traditional startup one:

Customer segments:  The primary customer are students. However, there are many other education stakeholders, including admininstrators, alumni, donors, employers and parents.  In addition, for any given subject, potential students will have different backgrounds  and experience in the subject, will have different jobs they want done, and, therefore, will have different applications for what they learned, be it finding a job, getting a promotion, or adding value where they presently work.

Value proposition : For each customer segment , you have a specific value proposision. You typically describe it in the course syllabus, telling users about the intended audience, the goals of the course, the learning objectives, and the curriculum. For example, the value proposition for a course I teach to xMBA/HA students is :

This course will introduce graduate level students in healthcare administration and leadership to the principles and practice of healthcare innovation and entrepreneurship defined as the pursuit of opportunity under volatile, uncertain, complex and ambiguous conditions with the goal of creating stakeholder defined value through the deployment of innovation using a valid, automatic, scaleable and time sensitive (VAST) business model.

Following completion of this course, you should be able to:

1. identify gaps in your health entrepreneurship competencies and develop a personal and professional development plan to address them

2. create an organizational culture of innovation, lead innovators and overcome the barriers to healthcare innovation dissemination and implementation

3. identify the multiple clinical and non-clinical ways to practice healthcare entrepreneurship

4. Create a plan to solve a problem inside or outside of your organization that meets the goals of the quintuple aim (Quality, cost, access, experience, waste/business operations)

5. Identify the startup life cycle and challenges at each stage

Channels : This describes how you will deliver your course. Will it be face to face, online or some hybrid model with elements of both?

Customer relationships:  This describes how you will get, keep and grow the numbers of students who will take the course, e.g. promoting in the course catalog, attending a career or course proposal day, creating awareness on social media or using word or mouth dissemination from previous students.

Revenue model : This describes how your employer or you will generate revenue from the products. Traditionally, universisty based courses use a “butts in the seats” model, but COVID and new eductional technologies have radically changes the revenue generating possibilities, inluding advertising, freemium models, subscription models and others.

Key resources:  This describes the human, physical, intellectual property and financial resources you will need to build, execute and scale your initiative. For example, do you want to copyright your materials, or , do you want to make them an  open educational resource using a Creative Commons license?

Key activities:  This what you need to do to perform and deliver on your value proposition, like what you will do using a learning management system, like create videos, run office hours, moderate asynchronous virtual discussions and design and grade exams and quizzes

Key partnerships : This describes who can help you, be they guest faculty, educational technology partners, corporate sponsors, e.g. if you are using project based learning techniques or online tools and resouce producers, e.g cases from the Harvard Business School collection.

Costs:  This describes the tangible and intangible costs to produce your product. In most instances, your time, opportunity costs and effort will overshadow the monetary costs.

COVID has accelerated the pace of change in higher education,  forcing them to create entrepreneurial universities.  Teaching faculty how to use the education business model canvas should be part of faculty development to mimimize projecdt and product failure.

Here is what I learned, using the business model canvas, teaching sickcare innovation and entrepreneurship to first year medical students at the University of Colorado.

In this post ,  Steve Blank offers a new definition of why startups exist : a startup is an organization formed to search for a repeatable and scalable business model .

So is a new course or certificate. Use the education driven business model to make your product desireable, feasible, viable and adaptable and be sure to document your success when it comes time for your evaluation,promotion and tenure review. More likely, though, you will be  including it in your failure resume,  since, like the vast majority of new products,  yours is likely to fail  because 1) you offered a product students don’t want to buy or someone does not want to pay for, and 2) you do not have a  VAST  educational product business model.

Image credits: Strategyzer

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Higher education industry is implementing new business models

To gain a better understanding, on a global and regional level, of what's important to higher education students and what their challenges are with respect to learning, academic goals, and career goals, as well as staff perspectives on how to best communicate with, instruct, and prepare students, Salesforce partnered with Ipsos and The Chronicle of Higher Education to collect over 2,200 higher education student and administrators using an online quantitative survey. 

Here is the executive summary of the 2021 Connected Student Report : 

• Supporting students and staff wellbeing is critical - Concerns about student mental health and wellbeing had already led many institutions to offer more services, including ones that students could access online. The anxieties and calamities faced by students and faculty, and staff increased those worries, with 76% of students and 73% of staff reporting that maintaining their well-being remains a challenge. 
• Flexible learning and working options are here to stay - One major takeaway from the report is the need for learning options that fit within students' busy schedules. One in four students said that having more flexible courses and part-time offerings would help them succeed. 43% of students prefer hybrid courses.
• Student career pathways are top of mind - Financial challenges and anxiety about the future are common amongst students. Close to half of students (49%) say that future career prospects are most important when deciding to enroll in a college/university.
• Universities explore new business models - The COVID-19 era has led many institutions to make considerable adjustments to how they operate -- changes that represent opportunities for growth and increased efficiency. 45% of staff said their institutions are implementing new business models.
• Learners and institution success require innovation - Many institutions are experiencing a gap in trust. Nearly 6 in 10 students say the trust gap between students and institution leaders is due to a lack of consistent communications; about half of the staff agree. 45% of staff said their institutions are prioritizing investments in integration technology

2021 Connected Student Report, Salesforce.org 

Here is a deeper look into each of the key takeaways from the 2021 Connected Student Report : 

Supporting student and staff wellbeing is critical 

• 34% of students said they need more help managing their course load.
• 76% of staff said maintaining their work/life balance is a top challenge.
• 40% of students said their institution can best support their wellbeing by offering more flexible learning options. 

Flexible Learning & Working Options Are Here to Stay

• 54% of staff prefer hybrid courses.
• Students expect 50% of their courses moving forward to be online.
• 46% of staff anticipate more remote work in the near future.

Student career pathways are top of mind

• 31% of students identified low career prospects as why they have a poor college/university experience.
• 29% of students said they need more career resources from their college/university in order to be successful.
• 50% of staff say their institutions are strengthening corporate partnerships in order to help students prepare for digital careers.

Universities Explore New Business Models

• 48% of staff said their institutions are investing in new business models focused on more part-time learning options.
• 33% of staff said their institutions are investing in new business models focused on executive education.
• 29% of staff said their institutions are investing in new business models focused on credentialing/ micro-credentialing.

Learner & Institution Success Requires Innovation

• 27% of staff say their institutions are hiring for a head of digital experience.
• 53% of staff members say they will rely on social media to better engage with students in the coming fall semester.
• 40% of staff said their institutions are prioritizing investments in real-time data analytics.

2021 Connected Student Report, Salesforce: Technology challenges and investment areas in higher education 

The 2021 Connected Student Report also highlighted solution line key findings: 

Recruitment and Admissions

• Students say they would choose one university over another if it offered more help finding paid internship/ job opportunities (40%) or more flexible course options (36%).
• 51% of recruitment and admissions staff anticipate an increase in social media engagement to target incoming students.
• Coming out of the pandemic, only 7% of staff anticipate their institutions will continue to buy lists to attract prospective students, yet close to a quarter (24%) expect digital advertising to be a key tactic moving forward.

Student Experience 

• Only 27% of students say they can easily sign up for an advising appointment at their college or university.
• 26% of students say they have to sign in to two or more different platforms to find answers to their questions and access the resources they need to be successful every day.
• 92% of staff say tailored student enrollment plans have successfully ensured accepted students enroll at their university or college.

Advancement 

• Advancement staff anticipate video conferencing (39%), social media (38%) and email (38%) to be the most effective channels in securing major gifts coming out of the pandemic.
• 55% of advancement staff anticipate more virtual events to engage alumni and constituents coming out of the pandemic compared to pre-pandemic times.
• Of those students that don't feel connected to alumni, 34% said it's because their college or university does not provide an online community to interact with alumni.

Marketing and Communications

• 59% of students attribute a leadership-student trust gap at their college or university to a lack of consistent communications; about half of the staff agree.
• When asked how their university could improve their communications,42% of students said more personalization.
• When asked how their university could improve their communications,39% of students said more reminders or alerts.

2021 Connected Student Report, Salesforce: Communication is key to establishing stakeholder trust 

9 in 10 students want institutions to communicate with them as often or more via email, personalized communications, and alerts. Around four in 10 say they'd like communications to be more personalized, while 25% say they'd like a more personalized college experience overall.

2021 Connected Student Report, Salesforce: Three ways universities can improve student communications 

Institution Operations 

• 62% of staff say their institution is reevaluating their faculty/staff support & service model as a result of the pandemic.
• Of those staff members that indicated they don't have enough support from their institution, 31% said it's because their college/university uses multiple technology systems. It's hard to get the data they need to do their jobs effectively.
• When asked how their institution could better help staff, close to half said more online resources for technology support (44%) and an online portal to connect with other staff members (42%).

The pursuit of new business models in higher education is an important finding. According to the Chronicle: 

"COVID-19 may not have created any new reasons for colleges to change how they do business, but the pandemic rapidly accelerated the process. Just in the U.S., the loss of dining hall income, residential and student fees and, in many cases, tuition has likely cost institutions around $183 billion . Post-pandemic, institutions will need to do more than assure the safety of students and staff. They'll have to keep an eye on the bottom line as well. Findings show that many institutions are reworking their business plans to reflect this reality. Nearly half of staff surveyed globally say their institution is more likely (at 45%) than not (35%) to be implementing a new business model. 

Some institutions, such as Southern New Hampshire University, are creating new models that make on-campus learning more affordable, while Cambridge announced in May that it will roll out 50 online courses over the next five years, with an eye toward increasing learning opportunities. As institutions look ahead, many have made shoring up their value proposition for future workers more of a priority."

2021 Connected Student Report, Salesforce: New business model trends in higher education

The report highlighted these key findings: 

• Nearly half of all institutions are implementing new business models due to the pandemic. 
• 7 in 10 staff say their institutions are investing in new growth opportunities, chiefly more online learning options. 
• About half of the total staff surveyed say those business model revisions involve the creation of more part-time learning options or shorter-term courses and programs -- changes that reflect more of a concern for non-traditional learners and other working students. 
• Nearly 40% of staff surveyed say they are seeing more partnerships between corporations and higher education. 
• About half say that their institutions are engaging employers to help recruit students by managing corporate relationships on a single platform or by tailoring marketing campaigns to corporate partners -- with France and the U.S. courting private companies at the highest rates. We know companies are key to solving the digital skills gap . 

2021 Connected Student Report, Salesforce: Staff predict more investments in technologies and engagement opportunities 

• Institutions have continued to upgrade their technology during the pandemic. Slightly less than half of those on staff say that more people on campus are involved in making tech decisions, with more than half of those in the Netherlands and U.S. reporting the highest rates of collaborative tech decision making.
• The digital competency of staff has become a priority for most institutions as well. More than 6 in 10 staff members say that the pandemic led their institution to re-evaluate their staff support and service models and invest in training that would allow faculty and staff to do their jobs virtually.
• More than half of staff (52%) anticipate their institution will invest in classroom technology, while a slightly lesser number (46%) expect to see more money going toward research tech. A considerable number (44%) anticipate investments in faculty and staff learning and engagement opportunities.

2021 Connected Student Report, Salesforce: Higher Education is investing new technologies, leadership roles and staff services models 

New business model innovation is a top priority for higher education institutions. Whether it be new sources of revenue or new areas of investment, institutions are evaluating how to create value from anywhere and what internal shifts they need to make to catalyze these changes. Learning from anywhere, success from everywhere. 

To learn more about the 2021 Connected Student Report, you can visit here . 

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Center for American Progress

Rethinking Higher Education Business Models

Steps toward a disruptive innovation approach to understanding and improving higher education outcomes.

Robert Sheets, Stephen Crawford, and Louis Soares explain the need for parallel innovations in higher education’s business models and “value networks.”

Building an Economy for All, Economy, Higher Education, Worker Rights +1 More

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The cost of college has skyrocketed during the last two decades, rising by 429 percent, a rate that’s even higher than the rate for health care. To cover these costs students have borrowed ever-larger amounts resulting in an average debt at graduation now exceeding $27,000. Yet only 50 percent of students pursuing a bachelor’s degree—and 21 percent of those pursuing an associate’s degree—complete their college programs.

Clearly, the great challenge facing higher education today is to contain costs while at the same time improving outcomes—in short, to increase productivity.

Information technology has long been seen as a major key to meeting this challenge, but the results thus far have been disappointing. In this brief we argue that the fault is not with the technology but rather in the ways it has been deployed. Drawing on the work of eminent Harvard Business School professor Clayton Christensen and others, we explain the need for parallel innovations in higher education’s business models and “value networks.” We also urge policymakers to facilitate such innovations by funding more applied research in these and related areas, including higher education’s regulatory and standards environments.

Concerns about college affordability have grown so serious that President Barack Obama issued a warning about the rising cost of higher education in his most recent State of the Union address. At the same time his administration is encouraging innovation in higher education through such initiatives as First in the World and Race to the Top: College Affordability. While we applaud such initiatives it is important to note that these initiatives are far more likely to succeed if they are informed by an understanding of the differences between sustaining and “disruptive” innovation and the roles that new business models and value networks play.

The theory of “disruptive innovation”—the notion that certain innovation can improve a product or service in such a way that it creates new markets that displace existing ones—was developed and advanced by Christensen in the 1990s. According to Christensen, who has studied the evolution of many industries, disruptive innovation occurs when sophisticated technologies are used to create more simplified and more accessible solutions to customers’ problems—solutions that are often less high performing than previous technologies but whose price and convenience attract whole new categories of consumers. The first generations of transistor radios, desktop computers, and MP3 players are examples. These new solutions—innovations to existing technologies deployed through new business models—gradually improved to the point where they displaced the previously dominant solutions. Christensen’s key point, however, is that new technologies like these cannot achieve their transformative potential without compatible changes in their industry’s business models and value networks, which in turn may require shifts in the standards and regulatory environment.

Innovations in business models have occurred in most sectors of our economy, from manufacturing (Nucor Corp.) to music (iTunes) and from health care (Minute Clinics) to retail (Amazon and eBay). In each, technology drove new ways of doing business to create more value for customers. Recent reports have highlighted emerging business models that may have similar potential in higher education, including those represented by Western Governors University, MITx, Carnegie Mellon’s Open Learning Initiative, and the leading for-profit institutions. These business models exhibit many of the features of what experts call multisided, unbundled, and open business models. Some observers believe they have the potential to dramatically change how instruction and research are delivered to expand access, reduce costs, and facilitate degree completion.

Building on CAP’s previous work in “Disrupting College and Guiding Innovation in Higher Education,” this brief begins by explaining Christensen’s analytical framework. It then focuses on one component of that framework, business models, and explains some important types of them. We then explore how new higher education business models could better harness recent advances in information technology and thereby achieve dramatic improvements in learning and credentialing, research and development, and business management. Lastly, our brief examines the policy implications, especially for the federal government’s applied research budget, our objective being to help policymakers understand what works well and what has the potential to be successfully replicated on a large scale—to “go to scale.” Specifically, our policy recommendations include:

• Using disruptive innovation thinking as a guide for competitive grant making in higher education programs and research
• Surveying federal agencies to identify all relevant programs and classify them according to the key categories for innovation in higher education—learning and credentialing, research and development, and general business services that support the first two
• Creating a primer on disruptive innovation for grant making that will be used across federal agencies
• Creating a disruptive innovation panel to help the Obama administration evaluate new technologies and the business models they enable for scalability

Christensen’s analytical framework

In the early 2000s Christensen and his colleagues developed a useful analytical framework that highlights four key “drivers” of disruptive innovation: technological enablers, business model innovations, value network adjustments, and the standards and regulatory environment. Let’s examine each more closely, folding in ideas from other experts where they are helpful.

Technological enablers

According to Christensen and his co-authors, technology enables disruptive innovation when sophisticated technologies create more simplified and routinized solutions to customer problems or needs. In education the authors point to online learning technologies as well as more specific types of student-centric and adaptive online learning systems based on advances in information technology as well as learning and assessment. Other examples are breakthroughs in information technology related to personalization, content management and social media, data management and analytics, and the management of business processes. Gregory Jackson, vice president for policy and analysis at EDUCAUSE, summarizes the recent advances in information technology that are most relevant for higher education and offers an excellent assessment of their potential to transform current practices.

Business model innovation

A business model describes how an organization creates, delivers, and captures value. Most business model definitions highlight four key elements:

• Customer value proposition, which explains how an organization will address a customer need
• Value chain, which organizes processes, partners, and resources to deliver the value proposition
• Profit formula, which lays out how an organization will make money
• Competitive strategy, which describes how an organization will compete with rivals and defend its position in the value network.

We describe each of these elements in more detail later in the brief.

Value networks

In the words of Christensen and his colleagues, “a value network is the context within which a firm establishes its business model and how it works with suppliers and channel partners or distributors so that together they can respond profitably to the common needs of a class of customers.” The overall design of the dominant value propositions, value chains, profit formulae, and strategies must fit together within a consistent and reinforcing economic logic so that they function well as a larger organizational ecosystem. Consequently disruptive innovations are not easily plugged into existing business models and their value networks. They require new business models and the replacement or restructuring of existing value networks to truly go to scale.

We build on and extend Christensen’s concept of value networks by arguing that dominant business models and value networks help establish the overall shape and competitive structure of an industry, which itself constrains or enables disruptive innovation. According to Michael Porter, a distinguished Harvard Business School expert on business strategy, competitive structure involves threats not only from direct rivals and competitors, but from the bargaining power of buyers and suppliers, new entrants, and “adjacent” products and services that could be used in place of core industry ones. Therefore, business models, value networks, and the competitive structure of industries must be considered together in examining opportunities for disruptive innovation.

Standards and regulatory environment

The emergence and spread of new business models and their value networks is more likely if the standards and conformity assessment situation and the policy and regulatory environment are supportive.

Standards and conformity assessment environment

The United States and other countries promote the development and implementation of national and global standards and conformity assessment systems for a wide variety of purposes, including facilitating global trade, improving the performance of industries, increasing competition, and protecting consumers. Standards are agreed-upon definitions of the fundamental characteristics and interfaces of all types of entities in the marketplace, including products, services, systems, organizations, and even people. They can be used to promote competition and collaboration by facilitating transparency and fostering “interoperability”—the ability to function effectively with other systems—thereby reducing information complexity and switching costs.

Conformity assessment systems define the approaches for certifying that an entity conforms to the standards used to describe it in the marketplace. Conformity assessment can be used to promote confidence and trust in the marketplace among consumers and businesses. Like other industries, higher education has an active public-private standards and conformity assessment community in key areas such as competency definition; assessment and credentialing; digitized learning content and learning management systems; data infrastructure management; institutional and program accreditation; and institutional and program comparisons and ratings. The actions of this community can serve either to support or inhibit disruptive innovation in higher education.

Regulatory and public policy environment

An industry’s regulatory and public policy environment reflects government’s role in promoting industry performance and protecting the industry’s consumers and other stakeholders as well as the general public interest. Key areas of the regulatory and policy environment for higher education’s learning and credentialing services are student grants and loans, institutional and program capacity, institutional accreditation and approval, performance accountability, and consumer information and protection. Government agencies and legislative bodies work with established stakeholder and interest groups to improve the performance of the dominant business models and value networks and to protect incumbents from new and potentially disruptive entrants— basically, maintaining the status quo. A good illustration of this type of approach are student loan policies that assume that higher education services will be delivered through standardized semester-based schedules defined in terms of credit hours.

In Christensen’s framework the most important drivers of disruptive innovation are not the technological innovations themselves, though they usually receive the most attention. Instead they are the innovative business models that can harness the power of these new technologies and the value networks that support them in the context of the standards and regulatory environment. For the purpose of policymakers who seek to provide access to quality and affordable higher education for all Americans, understanding the interplay of these four elements of disruptive innovation is a key to optimizing the use of public funds. Since business models play a critical yet neglected role in disruptive innovation, we examine them in greater detail.

Business models

A business model is an organization’s blueprint for creating, delivering, and capturing value and for generating the revenue it needs to cover costs, reward stakeholders, and reinvest in order to remain competitive. All organizations, whether for-profit or nonprofit, have a business model, whether or not it’s explicit.

As mentioned above, business models involve four core elements:

• A customer value proposition, which explains how an organization will address customers’ needs through a product or service it offers
• A value chain, which organizes processes, partners, and resources to deliver the value proposition
• A profit formula, which lays out how an organization will generate enough revenue to more than cover costs
• A competitive strategy, which details how an organization will compete with rivals and defend its position in the value network

Given the many possible combinations of these four elements, it might be thought that any particular industry would exhibit a wide variety of business models. In practice, however, most mature industries, including higher education, feature only a few, which are normally referred to as the industry’s dominant business model(s). These provide the main trajectory for business growth and development within an industry—for example, the path to becoming a top-tier research university in the higher education industry.

New business models arise and even displace the currently dominant ones when innovative organizations develop different value propositions, value chains, profit formulas, and/or competitive strategies that enable them to provide greater value to more customers—often by taking better advantage of new technologies. Of special interest here are business models that are “open,” “multisided,” and “unbundled” and that involve “facilitated networks.”

Open business models

As defined by Henry Chesbrough, a leading expert on open innovation, open business models involve the use of external as well as internal ideas and resources, along with external as well as internal pathways for deploying them to create and capture value for an organization. “Outside-in” strategies exploit external ideas and resources within an organization, whereas “inside-out” strategies create additional value from internal ideas and resources by moving them through external pathways. In Chesbrough’s view the most advanced type of open business model is the open “platform” model. This model leverages customer co-creation and interdependencies between customer groups and attracts other businesses to invest ideas, time, and money in ways that increase the value of the platform for the organization. The use of such platforms by Amazon and Apple are prime examples.

Multisided models

Many open business models, especially open platform models, involve some features of what Alexander Osterwalder and Yves Pigneur, co-authors of the 2010 bestseller Business Model Generation , call “multisided” models. These create value by facilitating interactions between interdependent groups of customers, such as applications developers and users on the platforms. Higher education institutions have a multisided business model to the extent that they leverage the interdependencies between employers and students in providing learning and credentialing services. Some also leverage the interdependencies between businesses interested in commercializing university research and government funders interested in accelerating technology and economic development.

Unbundled models

Many open business models, especially open platform models, also include key features of what Osterwalder and Pigneur call “unbundled” business models. Unbundled models separate three core business functions that require different types of organizational expertise: customer-relationship management, product innovation, and infrastructure management.

Customer-relationship management businesses focus on customer acquisition and retention and seek to be a one-stop connection for customers. The hope is to realize significant economies of scope by offering a comprehensive set of competitive products and services that can be provided in cooperation with internal or external product innovation units.

In contrast, product innovation businesses focus on the constant development of products and services that can be promoted, distributed, and supported through customer-relationship management businesses. They seek to harness economies of scale by distributing their products and services through large internal or external distribution channels managed by customer-relationship management partners.

Finally, infrastructure management businesses also seek economies of scale, but do so by providing both internal and external customer-relationship management and product innovation businesses with an infrastructure platform that can support large volumes of transactions. The most widely cited examples of unbundled business models are in telecommunications. Wireless providers build platforms supporting products and services that are offered by hardware and software product innovators and are delivered through customer-relationship management businesses—either the wireless providers themselves or external retail partners.

Facilitated network models

Christensen and his colleagues identify an additional type of business model that could prove highly relevant to higher education—the “facilitated network” model. Facilitated network models can be used to enable customers to better access and use the most appropriate mixture of products and services offered by multiple organizations. In the health care industry, for example, patient-centered networks provide support to patients in accessing and managing the services of multiple health care providers. Similarly, in higher education there are now organizations that provide career and educational planning services directly to students who are searching for and applying to higher education programs. These models change the competitive structure of the industry by increasing “buyer power” as a result of reducing informational complexity and asymmetry. To put it more simply, students gain some consumer leverage with higher education institutions that traditionally have had more information about the students than the students have had about them.

The promise

Business model frameworks have become a cornerstone of business strategy development and analysis across a wide variety of industries and sectors, and have more recently entered the discussion related to higher education. Multisided and unbundled open business models—especially when combined with facilitated network models—hold great promise for improving the performance of higher education. That promise flows from their potential to achieve enormous economies of scale and scope, and in the process, enable genuine personalization in learning and credentialing along with comparable improvements in research and development and in business management. The following sections examine that potential in each of these three areas.

• Learning and credentialing

Christensen and his colleagues argue that higher education institutions incur major costs and inefficiencies by administering two different types of business under one roof—research, which operates as a “solutions shop,” and learning and credentialing, which is a “value-adding process.” Yet learning and credentialing can itself be unbundled to unlock even greater economies of scale and scope.

In addressing students’ concern with launching a successful career, colleges. and universities usually offer a value proposition that involves the following elements:

• Determining what a student needs to know and be able to do for a successful career launch in a chosen field
• Developing a sequence of learning experiences and related services for achieving these skills through a curriculum, including learning units such as courses, modules, and objects, with the necessary learning and assessment resources
• Providing learning services based on the design and curriculum
• Assessing students’ skills and providing various types of credentialing, including grades, portfolios, certificates, and degrees that have market value
• Connecting students with employers, for example, through internships, and helping students find and transition to employment and advance in their careers

Most higher education institutions take a decentralized and bundled approach to instruction, meaning that faculty departments, committees, and/or individual faculty members develop the curriculum—product innovation—and deliver the instruction—customer-relationship management—through their own processes. Most faculty members are content experts who have no formal training in curriculum development and instruction. Yet they are expected to select or develop most of the learning and assessment materials used in their courses. Complicating matters, these processes may be different for different delivery channels, such as credit versus noncredit programs. The traditional models also give great latitude to faculty in how they incorporate learning technologies, resulting in very uneven use in learning and credentialing.

Further, many higher education institutions are under considerable pressure to offer a large menu of programs and courses. Yet these institutions find it difficult to acquire the faculty expertise and organizational resources needed to ensure high quality across such a broad range of specialties. One result of this shortcoming is a combination of strong and weak programs. Given their current business models, these institutions face a real dilemma—they can achieve greater economies of scale only by sacrificing economies of scope. That is, they find it almost impossible to offer as wide an array of programs as desired by students (and sometimes employers) and still maintain high quality across the institution at affordable costs.

Institutions using more innovative business models are achieving greater economies of scale by increasing the centralization of the product innovation function, including the design, development, assessment, and credentialing components of the value proposition—that is to say, the curriculum development. These institutions also administer fewer programs and minimize the number of pathways through these programs with fewer electives.

Western Governors University in Salt Lake City, Utah and many for-profit institutions have gone even further, achieving significant economies of scale by centralizing more of the curriculum development function, often in partnership with outside experts and organizations in their value networks. They organize the delivery of instruction separately, through standardized processes using specially trained instructors and mentors. They support both functions through centralized infrastructure management systems that provide additional economies of scale.

These innovative business models can be expanded even more by further outsourcing curriculum development through partnerships with other universities and colleges, content aggregators, and academic and professional publishers who are moving to provide “curriculum as a service.” This outsourcing could draw from public and private learning exchanges similar to the Learning Registry, launched by the U.S. Departments of Education and Defense in November 2011. Outsourcing could provide institutions with nationally branded curricula (using the brand of a leading university) or institutionally branded curriculum (using a “private label”) that could be delivered through the institution’s own delivery channels.

The partners providing instructional delivery services could work with internal or external curriculum developers—outside-in models—to provide a wide array of personalized programs and courses, including ones customized to meet the needs of specific employers. Students could also start and progress at their own pace, choose the learning formats that best address their learning styles and preferences, and select and use mentors and tutors as well as other resources in their learner-centered networks. Many of the instructional delivery services, such as mentoring and tutoring, could be provided by outside partners. All of these options provide new opportunities for higher education institutions to achieve greater economies of scope by offering more students a multitude of high-quality options at competitive prices.

Under this unbundled model, infrastructure-management services could also be outsourced to provide a multisided open platform for institutions to work cooperatively with both internal and external curriculum developers and a wide variety of learning-delivery partners. These infrastructure-management services could provide authoring software containing learning-design templates and guidelines including universal design for accommodating multiple learning styles, as well as learning object repositories and registries for both free open-source and proprietary-content resources. In addition, they could provide learning management systems that resemble more flexible and open “virtual learning environments,” which in turn could support fully bundled traditional courses or more unbundled self-study and mentor-support services. These shared infrastructure-management services could be supported by global and national eLearning standards.

Facilitated networks could empower and support learners faced with the added complexity of these new learning and credentialing systems. They would do so by providing students with career and learning management services and group- purchasing options that help students select, access, and optimize the use of these systems. The facilitated network could be supported by existing career and educational planning system providers or by new market entrants. These players could change the competitive structure of higher education through the increased buyer power created by reducing informational complexity and asymmetry and by providing opportunities to secure higher-quality services, with more convenience, at better prices.

Such multisided, unbundled, and facilitated network business models offer promising options for providing low-cost and effective learning and credentialing systems, ones that can be personalized to meet the needs of individual learners. These systems can also be customized for employers seeking different types and combinations of employee competencies and/or different levels of assurance that employees have these competencies—assurances ranging from self-evaluated learning portfolios to instructor assessments and grades to third-party assessment and certification.

Gateway learning and credentialing

The potential of such business models to capitalize on both economies of scale and economies of scope and to transform the competitive structure of higher education is especially high in the case of “gateway” learning and credentialing. Gateway courses are the major general education and prerequisite courses required for two-year and four-year degree and certificate programs. They represent a large share of the postsecondary credits awarded by high schools, community colleges, and universities. This market space has been the focus of many of the most widely cited reform efforts, including those of the National Center for Academic Transformation, or NCAT, and of national and state attempts to simplify credit transfer in order to reduce costs and accelerate time to degree.

A secondary school initiative—the Shared Learning Collaborative, or SLC, coordinated through the Council of Chief State School Officers, or CCSSO, and funded by the Bill & Melinda Gates Foundation and the Carnegie Corporation of New York—provides an example. The SLC is working with a consortium of states to test a new, shared learning environment that provides fully open and transparent “learning maps” for the national “common core” academic standards. These maps can be linked to national, state, or local summative and formative assessment data, as well as to curriculum materials, through national metadata tagging standards. This shared learning environment will create an open marketplace for distributed content development and aggregation through infrastructure management systems. This will include learning management and repository and registry systems that have the potential for integration with state and local student data systems and learner-managed accounts to support personalized learning and the use of intelligent agents and smart learning-ware.

If the SLC is successful, these learning standards, maps, and related learning and assessment resources could easily be extended into a shared marketplace for postsecondary gateway courses, especially in general education and the lower-level prerequisite subjects related to the national common core standards in language arts, mathematics, and science. The maps and assessment resources could provide the basis for new economies of scale for specialized global curriculum developers in the more “commoditized” content areas, for example, math. Developers could produce and distribute high-quality and low-cost curricula that can be customized for multiple channels and personalized to the needs of learners. This could also result in significant economies of scope for smaller regional or local “channel partners,” such as community colleges, which could provide high-quality, low-cost, and personalized learning services for their students and eventually offer even more gateway courses. They could also afford to make use of what Osterwalder and Pigneur call “long-tail” business models—for example, low-enrollment programs and course options—to meet specialized employer and student needs.

Although innovative business models of the kind discussed above promise enormous productivity gains, they also face several barriers to widespread adoption. One barrier is the implication of a fundamental shift in the role of faculty in curriculum development and delivery, and in the shared governance arrangements that exist on many campuses. Second, these models threaten higher education’s traditional profit formula, which depends on low-cost gateway courses taught by part-time faculty to generate enough revenues to cover the unmet costs of the institution’s more expensive courses and activities. Third, these models are inconsistent with accreditation systems that assume that core learning and credentialing services will be managed within the institution through traditional business models. A shift toward more “open architecture” accreditation and related accreditation reforms would allow the accreditation of all internal and external partners in the institution’s value chain.

In addition, the gateway marketplace still faces a significant problem with credit transfer, due to the high switching costs both within the traditional education sector and between the traditional and nontraditional sectors, including for-profit institutions and specialized service providers like StraighterLine offering online college courses. Further, federal and state student loan policies have many legacy assumptions that impede the use of more flexible student financing options.

Lastly, these open models, especially facilitated network models, require full data integration within the higher education value network or ecosystem, similar to what is now being done through electronic health care data exchanges. This would require efforts by federal and state agencies to work with national standards bodies and higher education stakeholders to establish shared data infrastructures that go well beyond current state data infrastructures.

• Research and development

The United States has the largest public-private research and development sector in the world. Higher education’s share of this sector, although small—approximately 15 percent—is nonetheless critical since research universities conduct the bulk of government-funded basic research. That research is of special interest because entrepreneurs use it to develop innovative products and services that in turn spur economic development. As a result, federal and state governments promote a wide variety of strategies to improve technology transfer between universities and their industry counterparts, including the creation of technology-transfer offices supported through university patents and licensing. The most effective approach to technology transfer, however, remains the traditional practice of “open science,” in which technology is transferred through publications, conferences and meetings, consulting, personnel exchanges, informal interactions among bench scientists and engineers, and the movement of graduate students into private employment. This is most evident in the catalyst roles played by many leading universities in state and regional economic development through open public-private innovation networks.

Chesbrough first developed the concept of open innovation as a new way to improve industrial research and development through the leveraging of outside ideas and market opportunities. His book Open Innovation, published in 2003, showcases several open business approaches. It also highlights the role of innovation intermediaries, such as InnoCentive, an organization that provides a platform for companies to solve key problems by connecting them to diverse sources of solutions, including employees, customers, and outside parties, in creating global value networks through both inside-out and outside-in strategies. As Chesbrough notes, this open approach to research and development is even more important now, as these innovation activities are becoming widely dispersed throughout the world and a growing share is being carried out by more agile mid-sized and small businesses. Increasingly, large research and development enterprises will have to build more open global platforms that support a larger public-private value network or ecosystem of partners if they are to succeed. This applies to institutions of higher education as well as to private firms that depend on research and development.

Over the last few decades, many universities and their funders in the United States and Europe have taken major steps to harness the power of open innovation through public-private research partnerships, research parks, and shared research infrastructures. These efforts can be extended by further unbundling research and development activities—product innovation businesses—from the infrastructure services—infrastructure-management businesses—that support them. This would allow the development of global infrastructure-management organizations that are able to provide greater economies of scale and scope and make fuller use of research facilities, research support teams, and related information technology tools and resources.

These infrastructure-management services could also improve the use of the underutilized instructional assets and resources of nonresearch universities and community colleges and make them available for use by public and private researchers and entrepreneurs—similar to community-based design centers and innovation hubs. This unbundling of research and development activities from infrastructure management could also provide advantages to large research universities by lowering costs and enabling scientists to focus on their research and development. This in turn could provide a more level playing field for the small and mid-sized businesses competing on innovation in the global economy.

Business management

The concept of multisided and unbundled open business models can also be applied to some instructional and research support functions that are not currently being outsourced by higher education institutions. Enrollment management is one example. Enrollment management involves the outreach, recruitment, selection, enrollment, and “on-boarding” of students so that higher education institutions have the appropriate numbers and types of qualified students to ensure high levels of financial and operational performance and to maintain the institutional brand.

Many institutions of higher education and their suppliers, including secondary schools, have partnered with intermediaries, such as ConnectEDU, a firm that provides web-based information and education search and social media tools for connecting students, colleges, and employers. Such intermediaries create shared multisided platforms that provide tools and information to university admissions officers and enrollment managers, as well as to high school guidance counselors, students, and parents. These platforms show great promise for improving the performance of higher education as well as empowering customers by removing the information asymmetry and complexity in the marketplace—a major aspect of the competitive structure of the higher education industry, as discussed earlier.

Such innovation could be extended further by unbundling the applications, tools, and resources and the infrastructure management services of intermediaries, thereby creating an applications marketplace for enrollment management, including analytical services. These analytical services include firms such as SAS, the global research and analytics giant; Career Cruising, which provides career and education guidance and counseling services; and Parchment, a web-based provider of credential warehousing and distribution services, supported by multisided infrastructure-management services. These infrastructure-management services could provide full data integration with state preschool through college (P-20) data infrastructures to maximize the effectiveness of applications services in offering value to both institutions and learners and improving P-20 transitions, which are critical to federal and state government funders.

Policy recommendations

Disruptive innovation offers an analytical framework that can greatly help policymakers do their part in improving higher education. In this section we briefly discuss the implications for the federal government’s role and recommend some specific federal policy initiatives.

The federal government already encourages innovation in education, as evidenced by the Obama administration’s Race to the Top program and the portion of its 2013 budget aptly titled “Promoting Innovation in Education.” The administration also funds a considerable amount of applied research on education through the Department of Education, the National Science Foundation, or NSF, and other agencies. The NSF sponsors relevant research not only through its Directorate for Education and Human Resources but also through its Directorate for Computer and Information Science and Engineering.

The latter includes a “Cyberlearning: Transforming Education” program that “seeks to integrate advances in technology with advances in what is known about how people learn.” This program gives special attention to “technological advances that allow more personalized learning experiences, draw in and promote learning among those in populations not served well by current educational practices, allow access to learning resources anytime and anywhere, and provide new ways of assessing capabilities.” Yet the focus is entirely on the technology and its impact on individual learning. Neither here nor elsewhere is federally sponsored research focusing on the business models, value networks, or standards and policy environments that may be needed to harness technological advances and apply them broadly.

To correct for this neglect, we recommend the following:

First, the Obama administration should adopt a disruptive innovation framework in awarding grants through its innovation-promoting programs, including Race to the Top, i3, First in the World, and Race to the Top – College Affordability. This would allow grant applications to be evaluated according to their potential for, among other things, shedding light on the business models and value networks that are best suited to deploy productivity-enhancing improvements in technology.

Second, the Obama administration should conduct a cross-agency census to identify all competitive grant initiatives that fund programs or research that can expand our under- standing of productivity and innovation in higher education. These initiatives should be classified as follows:

• General business services that support learning and research

This classification will facilitate the aligning of funding with the major educational functions in which disruptive innovation could improve productivity. It should be applied across the board, from signature initiatives such as the proposed $55 million “First in the World” grant program to National Science Foundation grants to individual researchers studying effects of technology in higher education. It will be important that this census take in all relevant programs. Some NSF-funded programs in neuroscience research and even U.S. Department of Labor grants to community colleges may seem obvious. Yet others are not, a good example being the NSF Office of Cyber Infrastructure, which has an interest in how technology changes the way organizations operate.

Third, ARPA-ED, the research agency for education proposed by the administration, should be fully funded and should include an advisory panel on disruptive innovation in higher education. This panel’s form and function should be a hybrid of existing Department of Education advisory committees (student success, financial aid) and the committees that advise the Federal Drug Administration on clinical trial results and drug readiness for the market.

The panel should include members of the Committee on Measures of Student Success and The Fund for the Improvement of Postsecondary Education as well as experts in disruptive innovation. The panel would advise ARPA-ED on how to target investments made through signature programs to areas that show potential for disruptive innovation. It would also provide guidance on how to evaluate the emerging business models for scalability.

Fourth, the White House Office of Science and Technology Policy should work with disruptive innovation experts to create a primer on how to integrate disruptive innovation theory as an analytical framework and evaluation tool into federal grantmaking. The primer must include:

• An overview of disruptive innovation theory
• A description of its core elements—technology enablers, business models, value networks, standards, and regulatory environment
• Examples of industries in which technological innovations achieved their potential only after creative leaders developed new business models to harness and deploy them

This primer would be used by federal agencies to incorporate appropriate evaluation language into grants they make going forward with regards analyzing the impact cost and effectiveness.

In this paper we have argued that information technology’s potential to dramatically improve the performance of higher education will be realized only when new business models arise to harness it. Especially promising are open, multisided, and unbundled models that involve facilitated networks. Applied to learning and credentialing services, these approaches could improve performance by achieving greater economies of scale and scope and providing the basis for increasing personalization, access, and choice at affordable prices. They could also enhance research and development by improving access to and utilization of shared research infrastructures. Finally, they could assist institutions, students, and federal and state funders in the area of enrollment management and P-20 transitions. There are probably many actions policymakers could take to encourage the emergence and adoption of effective new business models, but a good starting point would be to embrace the recommendations we advance in this report.

Robert Sheets is the director of research, Business Innovation Services at the University of Illinois at Urbana-Champaign.

Stephen Crawford is a research professor at the George Washington Institute of Public Policy at the George Washington University.

Louis Soares is a Senior Fellow with the Center for American Progress and provides strategic guidance and policy expertise on higher education reform.

Center for American Progress and EDUCAUSE share a common interest in the advancement of higher education for the greater social good. We agree that innovation in higher education is necessary for future progress. Therefore, we bring together our organizational strengths to better understand the issues and opportunities at the intersection of public policy, information technology, and potential new models for education delivery. We promote public policy innovation by collaboratively convening thought leaders to create interdisciplinary dialogue on innovation in higher education, producing white papers to set the stage for policy action, and producing issue briefs that promote policies conducive to innovation in higher education.

The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here . American Progress would like to acknowledge the many generous supporters who make our work possible.

Robert Sheets

Stephen crawford, louis soares.

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Business Models Education Entrepreneurs are Exploring

For some strange reasons education is not considered entrepreneurial by nature, but in fact it is a humongous industry scaling between other sectors of business.

Given a little less importance than deserved, just like education the business model in education on which it is being operated plays a significant role in the success stories of an education enterprise.     

As said by Mr. Ravi Shankar Prasad, IT Minister “ Healthcare, Education and agriculture are three priority areas in terms of technology, where the government can provide long term benefits to people of India .”

For edupreneurs who are constantly working to mark a place in the industry, the business model turns out to be the backbone irrespective whether you are approaching for your next round of funds or some potential clientele.

In an institutional scale a business model describes the way an organization defines itself. It is not only an earning model: describing the earnings versus the costs, determining the net income of the organization. The business model also contains collaborations, essential activities and processes and core competencies. By defining the organization in this way shows clearly what the organization sees as its raison d’être, its competitive position in regard to other institutions and organizations.

A canvas of business model in education is painted by various colors such as key activities, value proposition, customers’ relationships, customers, revenue, channels, key resources, cost, key partners and more. Indeed, “ There is no substitute for a great product .” But without the right business model in education “the great product” may end up losing its worth.

Following are some business models that you would like to explore depending upon the nature of your product being offered.

Check’em out below:

This education business plan requires the company to offer a “Freemium” model for teachers, students and parents is the best way to maximize sales. Under this scheme, you have to provide your customer with amazing few free features of your product and premium version of your product is paid with even better features that make them shed a little weight from their pocket. The content must be of upmost quality with better material being provided for money.    

Institutional

This is the more traditional business model in education. The selling to schools is done through district leaders. The sales strategy is generally referred as “top-down,” meaning a district makes a purchase for all the schools under its administration. The main advantage of an institutional business model is that districts are positioned to sign large contracts. This is the best approach for edtech companies that need to integrate into school- or district-wide data systems, or whose users are going to be school administrators.

A less common, but quite interesting business model in education is one where neither schools nor parents pay. Instead corporate or foundation sponsors pay for product placement, usually as part of a corporate social responsibility (CSR) initiative. The advantage of this model is that the sponsor will care mostly about usage, which is likely to be quite high if you’re offering a quality, free product to schools.

The consumer approach is an emerging business model that allows schools to use a product for free, and then charges families if they want to continue usage at home. This model is suited to companies with products that kids can use on their own. Schools, in this case, essentially become lead generation for consumer adoption.

With this model, it is important to create a “product loop” between school and home, where teachers use the product with kids in school and then also recommend to parents that students continue using the product at home. The advantage of this model is that schools love free (quality) products, which can drive user adoption, and parents tend to listen to teachers’ recommendations for what tools to use at home. The adoption is highly seen in the edtech tools for the toddlers or the kindergarten level.

Growth with Aim to Monetize

This is one of the most common model being used by the edtech startup. Free services are being offered to sustain the user base with aim to monetize in the future. One big drawback of this model is meeting the high expectations they set for the VCs when it comes to monetization of the same. n edtech K-12, this very selective league includes a small number of companies  

Boots on the Ground

This model is highly expensive and slow but does bring some real results. Companies like MasteryConnect and BrightBytes have been able to mark a place with working on the same model.

The strategy is to pitch district administrators with a top-down sales approach that involves large ranks of salespeople with their “boots on the ground.” Sales cycles in K-12 are infamously bureaucratic, which makes it frustrating for startups that need to move fast and show continuous progress and significant growth on a monthly or quarterly basis. Even if a product does manage to catch the eye of the right person in the district administration, approval processes in these organizations are cumbersome.

Startups with this approach can succeed, but sales and marketing expenses will drive up the price of the product.

“ Money is like gasoline during a road trip. You don’t want to run out of gas on your trip, but you’re not doing a tour of gas stations .” – Tim O’Reilly

“ Vision is great, but don’t forget the numbers, especially in the edtech space .” – Sunitha Viswanathan, Unitus Seed Fund

Though both the quotes are in paradox but so is life. The road isn’t the same on all lengths.

[Whitepaper] The B2B and B2C Battle in EdTech Globally

What Education Entrepreneurs Miss When Selling to Schools

Because education entrepreneurs have no rule book get creative, imaginative and get out with something different… a business model of your own. 

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Exploring Higher Education Business Models (If Such a Thing Exists)

Posted October 8, 2013

By John O. Harney

Jay A. Halfond of Boston University and Peter Stokes of Northeastern University recently conducted a non-scientific “ pulse” survey of presidents at smaller New England institutions about their views of new models. The presidents generally agreed that to become more sustainable, colleges need to change their financial model, lower discount rates, reach new audiences through online learning and strengthen their institution’s competitive differentiation.

Too many institutions each year raise tuition beyond the rate of inflation and look to get more students, despite demographic forecasts promising fewer traditional college-age students.

Predicting a shakeout, most of the presidents expressed confidence for their own school’s ability to adapt, but only 57% agreed that, “the small New England college will remain an important fixture within the academic landscape for many years to come.” (It’s a bit like Americans voicing disdain for Congress as they reelect their own representatives.) As one respondent put it: “If your institution does not have a well-defined market niche … that is robust, be that market in or out of New England, it is toast.”

Meanwhile, innovators and entrepreneurs are using multiple technologies to make available freely or cheaply, the things for which universities charge significant money. “MOOCs,” free online courses, lecture podcasts, low-cost off-the-shelf general education courses, online tutorials and digital collections of open-learning resources are disrupting higher education’s hold on knowledge, expertise, instruction and credentialing.

Business model vocab

In a sense, everything NEJHE has ever covered over the decades—from classroom teaching to university research to town-gown relations—has been about higher ed business models. Yet the business model concept itself was largely unarticulated in academia until people—mostly business people—started telling higher education to act more like a business (ironically, around the time business meltdowns were fueling the recession).

Even today, elements of business models, including differences in institutional control, segment and mission, are not widely appreciated in higher ed. But there’s a perceived need for a common vocabulary and analytical framework to support dialog among diverse stakeholders including students, faculty, staff, administrators and trustees.

Still, “institutional diversity” is a hallmark of American higher education—with institutions ranging from community colleges to global research universities, religious and secular, public and private, nonprofit and, increasingly, for-profit, online, bricks-and-mortar or hybrids. And big differences in institution kind must inform any business model discussion. As  Catalogue for Philanthropy founder George McCully noted in a recent NEJHE forum : “The business model is a major challenge for higher ed. At the same time, major institutions which have very large endowments are in a positive feedback loop that is intrinsically inefficient. Harvard earns more from the yield on its endowment in a single year than its development officers can raise in five years.”

Among questions that arise:

• What is the future sustainability of higher education institutions (HEIs) in a world where higher learning is free and widely available beyond the academy’s walls?
• How does the issue of “quality” figure in the equation?
• How about social and cultural aspects of college life?
• Do these factors alter what people expect from college and are willing to pay for it?
• Will the accelerating profusion of open-learning opportunities, innovations and new providers displace traditional HEIs?
• Will such forces cause HEIs to reconsider their fundamental business models?

Genesis of NEBHE-Davis work

Recently, NEBHE was awarded funding by the Davis Educational Foundation to jointly convene higher education leaders for a frank and compelling conversation about costs and the higher ed business model. An October 2013 Summit on Cost in Higher Education will convene higher ed leaders to discuss costs and, by extension, business models. One catalyst for this investigation was the Davis Educational Foundation’s November 2012 report, An Inquiry into the Rising Cost of Higher Education . As one New England college president noted in the report: “I think all of us who work in higher education understand that the financial model for most universities and colleges in our region is no longer feasible.”

NEBHE aims to build upon the insights and concerns expressed by HEI presidents in that report and pursue additional research before and after the October summit. Among other things, a multimedia “whitepaper” will synthesize key findings from a literature analysis, survey and interviews with summit participants, Davis grantees and regional and national collaborators.

Costs and prices

There are two main angles to any inquiry about higher ed costs. One is cost-containment by institutions. The other is price affordability for students and families.

The institutional cost angle encompasses everything from the sensationalist stories about spending for luxury dorms and overpaid administrators on the one hand to the eternal fact that intellectual talent (traditionally professors and instructors) costs a lot of money to hire and retain.

In NEJHE, a feature by higher ed policy guru Jane Wellman described ways to increase college attainment by restructuring costs and increasing productivity despite an academic culture that views these strategies as code for budget-cutting.

The student and family angle is told by stories of rising tuition prices, stagnant aid and student loan debt now staggering to the point where graduates are delaying buying homes, cars and other big items and are steered by salary pressures into occupations that help them pay back their loans.

As higher education democratizes, future students are likely to have less means. The Pell Grant program, meanwhile, is unlikely to get richer, and tax credits may disappear in the interest of budget balancing. So how will we make sure students have access to all the newly freed-up content?

The traditional system of students who can afford to pay for college subsidizing those who cannot is thrown off kilter by various forays into merit-based over need-based aid. Institutions know that offering some merit-based aid to students who would probably go to college anyway, leads to more revenue for the institution than offering a full boat to someone who couldn’t pay. As Phil Wick, former financial aid chief at Williams College, wrote in NEJHE ( Connection ): “Institutions use ‘merit’ scholarships to boost tuition revenue. For example, a college that charges $20,000 in tuition knows that it can realizes $60,000 in additional revenue simply by replacing one $20,000 scholarship, which is need-based, with $5,000 merit awards to four students who could afford the full cost” and will pay what net price remains. Some money-saving strategies may force students to do things they may not want to, such as trimming unneeded credits. Others would include reverse transfer , in which students en route to bachelor’s degrees get an associate degree on the way, or prior learning assessment , in which college credit is awarded for college-level learning from work and life experience.

One business model phenomenon that colors both institutional cost containment and student price savings is online learning. It’s new and improved since the days of being  disparaged as somehow not as real as learning from an in-the-flesh prof lecturing in a bricks-and-morter classroom. In “Rethinking Higher Education Business Models,” University of Illinois at Urbana-Champaign director of research Robert Sheets, George Washington University professor Stephen Crawford and Center for American Progress senior fellow Louis Soares argue that “information technology’s potential to dramatically improve the performance of higher education will be realized only when new business models arise to harness it.” The piece published in 2012 by the Center for American Progress and EDUCAUSE states: “Clearly, the great challenge facing higher education today is to contain costs while at the same time improving outcomes—in short, to increase productivity.”

In “University Business Models and Online Practices: A Third Way,” Beth Rubin of DePaul University argues: “In the world of higher education, the third way lies between the efficiency-oriented market perspective aimed at adults, as taken by proprietary universities, and the traditional approach that focuses on research and teaching young students.”

Containing costs for institutions

Profs to adjuncts

The proposed solutions to making higher ed sustainable sometimes involve dissing professors, taking specific aim at tenure and sabbaticals. And indeed, there has been a move from tenured professors to adjuncts, who are usually paid by the course and don’t get benefits. Non-tenure-track faculty account for almost two-thirds of teachers in higher education Their average hourly wage is $8.90 an hour, with 80% of them earning less than $20,000 annually, according to the Adjunct Project . For the institutions, the adjuncts not only save money, but also appeal to career-minded students and families because they are tethered to the “real world” of work, rather than theory.

Competencies not credits

Southern New Hampshire University (SNHU) President Paul LeBlanc is the closest thing to a rock star in the arena of higher education business model innovation. SNHU became the first university eligible to receive federal aid for a program not based on the “credit hour,” the time-based unit that underlies courses and degrees. As the Chronicle of Higher Education summarized it, “The low-cost, self-paced education lacks courses and traditional professors. Instead, students progress by showing mastery of 120 ‘competencies,’ such as ‘can use logic, reasoning, and analysis to address a business problem.’” SNHU had already pioneered a cheaper, more flexible “no-frills” option for students who get access to the same SNHU faculty but don’t want to pay for amenities nor take time away from their jobs. Resource-sharing

In interpreting their survey of presidents, Halfond and Stokes called for more “practical opportunities for collaboration, alliances, resource-sharing and outsourcing.” NEBHE’s flagship program, Tuition Break (the Regional Student Program) allows New England states to share costs of many academic programs not offered in neighboring states in the region. More recently, NEBHE began offering New England campuses a comprehensive property insurance program tailored specifically to higher education at costs that have consistently been below industry trends. Established in 1994 by the Midwestern Higher Education Compact, this Master Property Program is based on a no-brainer: use your numbers to drive down prices and get a better deal.

Various consortia have also fought for economies of scale in areas ranging from academics to cell phone services. These groups include: the Connecticut Conference of Independent Colleges; Hartford Consortium for Higher Education; AICUM; Boston Consortium for Higher Education; Colleges of the Fenway; Colleges of Worcester Consortium; CONNECT-Southeastern Massachusetts Higher Education Partnership; the Council of Presidents of the Massachusetts State Universities; Five Colleges Consortium; the New England Higher Education Recruitment Consortium; Massachusetts Higher Education Consortium; the Association of Independent Colleges and Universities of Rhode Island; the Association of Vermont Independent Colleges; and the Cooperating Colleges of Greater Springfield.

In some ways, MOOCs (massive open online courses) are like consortia on steroids. In the past two years, they became everybody’s darling—based at prestigious universities but attracting partnerships with community colleges, rooted in hard sciences but spreading to humanities, originally culminating in certifications but increasingly offering credit toward degrees.

Still, the MOOC idea has felt some growing pains. “It’s time to push the pause button … on MOOC mania generally,” wrote David L. Kirp, professor of public policy at the University of California, Berkeley, in “Tech Mania Goes to College.” Kirp’s piece published in The Nation warned: “While modified MOOCs like the flipped classroom hold great promise, the pure MOOC model looks like a failure. New technologies have indeed made it possible to reach more students—MIT’s OpenCourseWare materials, free to all, have been visited by 125 million people the world over—and, sensibly used, can improve teaching as well. But there’s no cheap solution to higher education’s woes, no alternative to making a serious public investment, no substitute for the professor who provokes students into confronting their most cherished beliefs, changing their lives in the process.”

Other cost drivers

Though they seem hardly to be dignified as “business models,” a variety of different drivers also enter into the high cost of higher education. These include insurance, electricity, broadband, buildings and grounds maintenance, even paperclips. Plus, sports. At some colleges, appealing to students and donors involves building brand-new stadiums and paying head coaches more than top administrators and faculty. At others, the momentum is to eliminate some sports as Boston University did with its football team in 1997.

Ideally, all these cost containment steps could pass savings on to students in lower tuition and fee prices. But there are other strategies aimed more directly at reducing tuition and fee burdens. Free tuition

The federal government already spends enough on student aid initiatives and tax breaks to cover the tuition of every U.S. public college student—or almost. Consider “How Washington Could Make College Tuition Free (Without Spending a Penny More on Education),” advanced in The Atlantic magazine by Jordan Weissmann and in “From Master Plan to No Plan: The Slow Death of Public Higher Education” in Dissent magazine by Aaron Bady and Mike Konczal.

Pay it forward

A more recent proposal in Oregon would allow students to pay tuition after they graduate based on income. Under the so-called “Pay It Forward” idea, students would pay tuition only as a share of their salaries after graduation. But critics say the idea would give public colleges an incentive to build up programs likely to attract students who will earn the most money after graduation.

New models are being assembled right now. NEBHE’s exploration of these issues will continue to ask key questions: What is higher education’s current business model? What new models will bring access and success to more students. Keep them curious. Employable. And out of debt.

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Jan. 4, 2023

More From Forbes

How business leaders can help transform the future of education.

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Harsh Singh is the founder of Big Apple Admissions - an educational consultancy pioneering the outcome-based contracting.

With the impacts of GenAI tools like Claude, Gemini and ChatGPT being felt across schools, the call for a transformative approach to education has become even more urgent . I believe that business leaders, who are often those best armed with expertise in innovation, strategic planning and resource optimization, are in a prime position to catalyze significant changes in the public education sector.

This article outlines areas where I think you, as a business leader, can help revolutionize public education and ensure a brighter future for the next generation.

Advocacy For Policy Reform And Smart Investment

Business leaders can impact public education by advocating for smarter investment rather than simply more funding. While cities like New York spend approximately $40,000 per student , the key lies in how the funds are allocated.

It's important to advocate to reallocate resources toward areas that directly impact student learning and development, such as modernizing curricula, integrating technology and supporting teacher development.

Today’s NYT Mini Crossword Clues And Answers For Thursday, August 22

Oprah endorses kamala harris at dnc: her political history—and rare endorsements—explained, bill clinton takes crack at trump’s hannibal lecter references in dnc speech.

For example, there is a tremendous opportunity for AI technologies and tools to help tailor educational content to individual student needs, provide instant feedback and support adaptive learning technologies. Business leaders should also emphasize the importance of developing students’ emotional intelligence and interpersonal skills.

As a model, in the last few years, the San Francisco Unified School District and others have implemented a " weighted student formula " that allocates funds based on student needs. This approach, inspired by business strategies for resource optimization, has allowed for targeted investments in high-need areas.

Public-Private Partnerships (PPPs)

At the heart of both advocacy and investment, I think public-private partnerships have the potential to revolutionize the educational landscape. But the true impact comes when these partnerships are rooted in personal commitment from business leaders.

Therefore, it's important to not only contribute corporate resources but also your expertise and time. This direct involvement can range from mentorship and volunteer teaching to funding specific, high-need initiatives like STEM programs or digital literacy workshops.

For example, individual leaders from tech companies can offer coding classes or digital skills training, providing students with both practical knowledge and real-world experience. By directly engaging with schools, you can ensure that your contributions are effectively utilized and bridge the gap between academic learning and industry requirements.

I think an exemplary case of this is the partnership between IBM and P-TECH (Pathways in Technology Early College High Schools), where IBM employees volunteer as mentors and provide expertise in technology education.

Curriculum Overhaul And Teacher Training

The current education system often lags behind technological and societal advancements. As a part of your focus on advocacy and investment, you can collaborate with educators to overhaul the curriculum and make it more relevant to today’s world.

This involves integrating courses on digital literacy, coding and data analytics while placing equal emphasis on soft skills like communication, empathy and ethical reasoning. With the rise of large language models (LLMs) and AI, these human-centric skills are becoming increasingly valuable.

Past curriculum, the quality of education is intrinsically linked to the quality of its educators. Here again, business leaders are well-positioned to provide training in the latest educational technologies and methodologies. Look to sponsor and create workshops, conferences and certification programs that allow teachers to stay current with the latest educational trends and methods.

One thing I personally believe could impact the whole ecosystem is the involvement of stay-at-home or work-from-home individuals. There are so many people who are immensely talented, but either don’t know how to help or aren’t incentivized to. Ask yourself how you can reach these dormant educators.

Establishing Innovation Labs And Incubators

Creating innovation labs and incubators is another way to utilize your position and expertise to help foster a culture of creativity and innovation. These spaces can serve as hubs where students experiment with new ideas, collaborate on projects and develop entrepreneurial skills.

Outfitted with the latest technologies, including AI tools, these labs can help students explore fields like robotics and data science. As earlier mentioned, when it comes to curriculum overhaul, they should also emphasize the development of soft skills such as critical thinking, problem-solving and adaptability alongside technical abilities.

Funding And Scholarships With Purpose

For many students, financial barriers are obstacles to a quality education. Business leaders can help by establishing targeted scholarships and funding programs that focus on students from low-income families or underrepresented communities. Beyond scholarships, you can help fund initiatives that directly enhance educational outcomes such as advanced technology in classrooms or specialized training for teachers.

Investing in projects that modernize school infrastructure or enhance safety can help create a more conducive learning environment. Look particularly to invest in areas that yield the highest impact on educational quality and equity, like the development of comprehensive data systems to track student progress. Of course, when creating these systems, policies should be put in place that balance data-driven decision making with privacy protections that ensure the ethical use of student data.

Cultivating A Culture Of Lifelong Learning

In this rapidly changing world, education must extend beyond traditional schooling. Business leaders can assist in this area as well by helping to create alternative pathways for continuous learning. Look to establish partnerships between high schools, colleges and community centers to develop career tracks as well as fund adult education and retraining initiatives.

Efforts to support ongoing skill development can help graduates adapt to new career opportunities and market demands. Platforms for knowledge sharing between industry professionals and educators can also foster a culture of lifelong learning.

As a business leader, you likely possess the resources, influence and expertise to drive meaningful changes in public education. By advocating for smart investments, fostering public-private partnerships, overhauling curricula and integrating new technologies, you have the power to significantly improve educational outcomes.

I believe business leaders' involvement in public education is crucial for preparing the next generation to succeed. The challenges facing public education are significant, but with strategic and thoughtful assistance from business leaders, I believe they can be overcome.

Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?

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Here’s a Tip: Keep the Taxation of Tips As-Is

August 16, 2024

Joe Hughes Senior Policy Analyst

While the next President faces a wide range of pressing tax policy choices to make — from the expiration of much of 2017’s Trump tax law to international corporate taxation and beyond — a relatively silly idea has become the tax focus on the campaign trail: exempting tips from taxes. Despite its embrace by the candidates from both major parties, this policy idea would do little to help the roughly 4 million people who work in tipped occupations while creating a host of problems.

Exempting tips from taxes isn’t a new idea . It’s been proposed before and always abandoned because it’s practically impossible to do without creating new avenues for tax avoidance.

Lower-paid service employees definitely deserve support. However, altering the tax code in this manner is a very leaky way of achieving that. It’s an approach that rich people with accountants and lawyers would surely be able to abuse. Fund managers, attorneys, and other high-paid professionals could easily reclassify their fees — or at the very least, some percentage of them — as mandatory tips for performance.

This proposal treats households with similar levels of income differently based on profession. Servers and bartenders, for example, receive a large portion of their income through tips and thus would receive a large tax exemption. Teaching assistants or health care workers might receive similar overall income but would not receive the same exemption.

Finally, these proposals create incentives to drive even more low-paid service employees into the tipped worker category, harming many workers and their families. Tipped workers have more unstable incomes than non-tipped workers, are more likely to live in poverty, and are more vulnerable to wage theft, according to the Economic Policy Institute (EPI).

The good news is that lawmakers have designed way better ways of helping working families. EPI and other experts on work and wages have put forth many ways to better help working families, from eliminating the sub-minimum wage that allows workers who receive tips to be paid a paltry $2.13 an hour, to raising all minimum wages above the $7.25 where it has been mired for a decade and a half, to making it easier for workers to unionize. In terms of tax solutions, lawmakers rightfully concerned about low-wage workers should instead consider expanding the Child Tax Credit and Earned Income Tax Credit (and especially making the latter stronger for workers without children in the home).

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