meaning of business model in education

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The K-12 Business Model: How to Innovate in an Ever-Changing Learning Environment

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By Steve Halliwell and Cheryl Miller

Each fall, teachers will get a new sea of smiling faces in their classrooms. Almost no other industry operates under this unique business model, where each year your audience is replaced with a completely new one. And with that type of model in mind, it leads us to wonder what effect annual student influx has on technology adoption in the classroom and the cultural effect on the ability to experiment and personalize.

Meeting this year’s students “where they are” is going to look different than it did for last year’s class. And therein lies the challenge for both educators and EdTech leaders – how can we best serve an industry that’s constantly evolving every nine months?

No matter what your role in education is, we think it’s important to understand how the K-12 business model differs from other businesses and organizations, and what it requires to evolve alongside not only the education industry – but the classroom experience. Let’s explore what makes K-12 unique and how to best leverage technology to drive the experience.

Continuous Listening and Improvement

At the end of the year, educators and administrators come together to discuss what they’ll be doing and focusing on for the next year, and how that might be different than their previous strategy. On one hand, there’s an opportunity to reset and make a plan to evolve for the better. But on the other, adding in a completely new mix of students you don’t yet know becomes more challenging for both educators and EdTech leaders.

The cyclical nature of education allows for an annual review of what went well, what didn’t, how to augment the effort and what best practices were learned across the board should be shared – both in and out of the classroom. For teachers, this means evaluating one-on-one experience with the kids and examining what strategies and technologies are important to keep in the mix for next year, and which aren’t worth incorporating. This may be done on a more routine basis depending on the district, but at least once per year is standard across the board.

When you’re the company behind those classroom solutions that are either deemed essential or scrapable at the end of the year, it’s imperative to keep a finger on the pulse of those conversations districts are having on an annual basis. In the K-12 world, things are changing quickly and yearly. Don’t be the company that rests on its performance in the classroom from the year before. Teachers know they’ll be serving a new type of student next fall, and it’s important to be in the know as well.

Low Barrier to Entry

Another important aspect of the K-12 business model is how important it is for EdTech leaders to consider cost and how to create an offering that has a low barrier to entry for schools. Many teachers, especially those new to a district or grade, know all too well they might not have much data to lean on at the start of the school year. And while they may have last year’s performance, there’s a high chance they may not. Either way, the teacher will need assess how best to approach learning with their students on a group or individual level. Whether pedagogy-led or tool-driven approach, there are important decisions to be made and cost can make or break that choice.

Barrier to entry is critically important as a K-12 teacher or an EdTech company. The barrier needs to be as close to the floor as possible, meaning solutions need to basically unbox themselves. Schools need teacher-friendly technology and a great experience that feels perfectly thought out. From the moment an educator starts using a solution, your company needs to have anticipated every question and presented the answer for them. In the classroom, teachers need the ability to simply stop using technology one way and have the flexibility to pivot the solution in a direction benefitting their unique classroom’s needs. The solution needs to be nimble enough to quickly pivot not on an annual basis, but on a week-by-week to not only foster experimentation but allow teachers to course-correct what their kids need at an exact moment during a lesson.

Measuring Success

The next part comes when education leaders start looking at adoption. There are two ways teachers measure success today. The first is by their gut feeling – which is extremely important. What is the look on the kids’ faces? What is the engagement in the classroom? Does it feel like the class is sticking with the lesson and they’re turned on to this learning technique, or not? All of these questions are asked during every lesson and can immensely impact what decisions teachers make during the annual review at the end of the year or the start of the new one.

The other is measurement. In other words, technology needs to present solutions teachers can use to collect data and create an analysis that’s easy to understand. Teachers shouldn’t need advanced degrees in data analysis to definitively tell whether this solution is helping their kids learn. That responsibility is on the EdTech company to pull, parse out what is truly important, and make information easily digestible and quickly available to educators. From there, teachers can decide whether to continue down their current path with the technology or mix things up based on performance.

Understanding K-12 is Unique

Interactivity is critical to learning at all ages, from kindergarten to college. But in comparison to its counterparts in higher education, K-12 faces the challenge of extremely fast adoption and experimentation. In the higher ed business model, many classes are chosen by the students as part of their major. This means professors can spend a longer amount of time on certain subjects, dig deeper and anchor into specific topics. The way to engage young adults is much different than the strategy for K-12.

For starters, there’s a greater number of subjects in K-12 that teachers are trying to push through in a smaller period. And though kids might learn faster than young adults, their attention spans are shorter. K-12 teachers need to hit higher levels of learning across a wide range of subjects every class and get kids interested in a large variety of subjects that are required of them to learn.

When you’re a teacher with a class that may or may not want to engage with the lesson, it’s imperative to find ways to pull the students in and edtech is a huge part of that effort. But regardless of their differences, technology and learning go hand in hand as kids and young adults prepare for an increasingly tech-driven world.

Trusting Education Will Follow the Market

Some people will say K-12 has a new “trend” every year. This year, it’ll be Turnitin. Next year it will be flipping the classroom. The next year it will be something else. But evolving technology trends are actually a requirement because the kids change that quickly too.

For example, if you were to chart the performance of EdTech solutions in K-12, you would likely find educators are very tethered to one functional thing like quizzes. Introducing the ability to do digital quizzes, like Quizlet, is now immensely popular – but really within the last few years. Teachers have been doing quizzes forever, it’s just the tool now exists to do it differently and more efficiently.

It’s as simple as going back and looking at what are the top asks year-over-year in K-12 and evaluating whether they maintain their adoption. Some technologies will be adopted for a few years and decline. Others enter the market at warp speed and stay there – teachers will swear by them for a long period of time. As a company, the second category is where you really want to try to focus. You want to end up being the company that creates long-term value, not just something that’s a flash in the pan of EdTech. And to do so, you need to build something that provides ongoing value to the educator and allows for customization to their goals for the classroom.

Best Practices for this Business Model

At the end of the year, when the annual class change is on the horizon, it’s important to consider just how different the K-12 business model is. There’s the opportunity to hit the pause button to dive into what’s been successful in the classroom, school or district. But the true key to success in this “business” is being aware of why it’s unique and how to best approach adding or subtracting new things to best serve the next group of students. Continuously listening to what teachers and students need is critical to evolving technology in the right direction, quickly followed by establishing a low barrier to entry and avenue to measure success. Fads will come and go, but to build or assimilate a product that will last the test of time is to create lasting value that will engage students for years to come.

About the Authors

Steve Halliwell is Chief Product Officer, Executive Vice President at Promethean. Prior to joining Promethean, Steve most recently held Executive Leadership roles at Amazon Web Services (AWS) since 2011. Steve started the Education and the Healthcare/Life Sciences verticals in addition to running the West Area commercial business. Prior to Amazon, Steve held progressive sales leadership roles in the technology sector with both Hewlett Packard and Microsoft.

Cheryl Miller is Chief Marketing Officer at Promethean. Cheryl has over 20 years in the tech industry and joined Promethean from Microsoft where she was the GM of the One Commercial Partner Team, leading the worldwide go-to-market efforts. Prior to Microsoft, Cheryl was VP of Marketing at F5 Networks and also spent 11 years at Symantec in various product teams including four years leading the Huawei Symantec Joint Venture program office and investment.

This  article  was originally published by  The Learning Counsel , a research institute and news media hub focused on providing context for the shift in education to digital curriculum.

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Applying the Business Model to Education: Current Failures, Future Possibilities

In recent years, there has been a growing trend to view educational institutions as businesses, assessing them in terms of business models and measures. Just as individuals seek guidance from a life coach and financial advisor to navigate their personal and financial goals, universities and schools are increasingly turning to specialized consultants and experts to optimize their operations and achieve their educational objectives. Consistent with such models, institutions are required to justify their existence based not on criteria such as quality of faculty or resources, but on whether they:

• satisfy a current demand,
• anticipate a future one,
• keep their clients happy,
• continuously increase product offerings (courses/programs) and sales (enrollment), and
• positively balance their books.

This trend arose partially from the need to move away from the subjective and over-emotional manner in which education has been traditionally approached (vague references to intellectual maturity and greater good) and was encouraged by the increasing reliance of educational institutions on state or private Online Broker “investors,” who demand increasingly measurable, objective, short-term “return on investment.” Also, in my experience, taking the guidance of a seasoned broker is indeed a prudent choice. For those seeking to make an informed decision, I would urge you to get expert advice now . The expertise that I encountered significantly influenced my journey, making it a rewarding and enriching experience.

Conceptual and Practical Problems with the Business Model in Education

In the business model of education, the institution is viewed as the “service provider” and the students are viewed as the “clients.” The only tangible and measurable components of the transactions between the two in the current version of the model are the fees the students pay to attend an institution and the degree (“product”) students receive at the end of their residency at the institution. Leverage the potential of free seo tools to fine-tune your website and propel it to new heights.

However, unlike any other business transaction in the US, payment of the fees does not guarantee that the “clients” will:

• always be right (by definition, the opposite is most often the case),
• receive the end product (the “provider” actually delivers the “product” based on criteria other than fee payment),
• be able to return the end product for a refund, exchange, or credit if it does not fulfill the expectations raised by the institution (there is no system in place to hold providers accountable for their products), or
• get a refund if they eventually change their minds and decide not to attend the institution.

To stay consistent with their current business model version, institutions would have to either:

• provide degrees upon payment (I do get several emails per day advertising just that), eliminating in the process the degrees’ value and therefore the institutions’ reason for existence or
• issue refunds to students that do not earn the degrees, permitting noncommittal students to take up resources and bankrupt their business.

If you find yourself in this position, Seeking Business Insolvency Guidance can provide the support and solutions needed to navigate these challenges and ensure the sustainability of your business.

Hypothetical Solution

One could envision a two-stage model in which the provider-client roles switch half way through the paying-fees-receiving-degree process.

Stage 1: Institutions as Service Providers, Students as Clients

In this stage, students pay a fee. In return they get access to resources that facilitate and structure learning, such as:

• qualified, accomplished, passionate instructors,
• comprehensive, manageable, and timely curricula, and
• physical and virtual facilities that promote retrieval and dissemination of high quality information related to the educational area they paid for.

These resources are clearly spelled out in the institution’s mission/advertising/contract with their “clients” (through admissions policies, for example). After the service has been provided (e.g. at the end of each quarter), clients have the right to evaluate the service they received and examine whether it fulfilled the admissions contract. If it has not, they should be able to request remedies such as:

• improvement in instruction/curricular resources and
• re-offering of a course for a reduced or waved fee.

If these requests are not satisfied, students should be entitled to a refund. This is where the first stage of the transaction ends.

Stage 2: Students as Service Providers, Institutions as Clients

In this stage, institutions “pay” students with a grade and/or degree. Degrees are the currencies of educational institutions. Their value has been earned through the universities’ work and, like all currencies, degrees carry a proof/promise of value and can be “handed over” in return for employment (among other things).

Once students have completed stage one and have accepted the educational service they received as fulfilling the admissions contract, the institution demands that students demonstrate that they deserve the grade/degree. Students do this in the form of:

• submitted projects, etc.

In stage one, it was up to the students to assess whether the institution provided them with what was promised in the admissions contract. In stage two, it is up to the institution to determine whether or not the students can provide the “service” necessary to earn the degree, which constitutes a certification that the recipient has demonstrated thorough knowledge of the topic the degree is for.

Staying within the business context, the reasons institutions would enter stage two and require proof that the students deserve the “payment” (degree) cannot be of the vague, education-for-the-greater-good kind. In other words, it cannot be about ensuring that the students have grown intellectually, are better and more knowledgeable and experienced individuals, and can better serve society, and they can also learn from the Nomad Offshore Academy if they want to start a business and travel offshore. Rather, the reasons for requiring proof before handing out degrees will be about ensuring that the promise this degree makes to the world is true (the promise that the recipient has demonstrated thorough knowledge of a topic and has acquired certain certified skills). The motivation is that ‘true’ degrees result in:

• happy employers of the degree recipients,
• trust in the institution,
• demand for recipients of the institution’s degrees, and, consequently
• increase in the institution’s business, the ultimate measure of any business’s success.

Such an approach to education-as-business and to the meaning of a degree would be more consistent with the scope of a true business model. The question that remains is, “Is this what we want education to be?”

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5 thoughts on “ Applying the Business Model to Education: Current Failures, Future Possibilities ”

• Pingback: Applying the Business Model to Education: Part II | Instructional Design and Development Blog

Too often when people look at business models and education they assume the student is the client. Not so. The community is the client.

Let’s look at public K-12. The entire community buys the product through taxes and has an expectation of the product. The product is the student graduating with a pre-determined set of skills: reading, writing, arithmetic, but also more elusive skills such as citizenship and responsibility. Think of students like a car that we expect to run, stop and do a pre-determined set of things like defrost the rear window.

When public school began that set of expectations was clear–the three Rs–and because schools were local and paid with local property taxes these service providers were pretty responsive to the needs of its clients (the community). Our world is more complex and global, and communities expect our schools to prepare students for every possibility. Public schools also need to be responsive to, and show respect for, the diversity our modern world demands. So, religions, race, gender and other roles, previously simple, are now making complex demands as well. Thus, the demands of the client/community is in flux and a bit muddled. No service provider can meet such vague and changing demands.

Enter NCLB. In defining outcome with clear standards the public schools are expected to teach towards that target. Each year schools are tested, and those results are released to the community at large. As payment has shifted from local taxes to state and federal, those larger entities now assume more of a client/community role and thus demand satisfaction, or withhold payment.

What does this mean for schools? In short, service providers (aka schools) are required to meet the needs of the client/community. The students are merely product. This means that the needs and wants of the students are immaterial other than what makes them meet the expectations of the community. Learning does not need to be fun, and teachers do not need to be liked other than how that succeeds in creating a better product (students will skills).

One problem with looking at students as cars, though, is that some people automatically turn to being “old school” and harsh. But that does not work for all. Let’s remember that NCLB stands for No Child Left Behind. Graduation rates in the past were horrible compared to today, but our economy allowed for students to drop out and still become productive members of the community. Students also graduated with skills far below the standards because they showed up. Now, our client/community expects all students to not only graduate, but to have the skills expected at each grade level. How to get there?

This is where free and reduced lunch, counseling, sports teams and fun come in. What motivates students? What provides the support and motivation required for students to learn? As each student/product is different, schools need to be flexible, but they also need to get the job done for each student. If they do not–if some children are being left behind–then they need to reexamine what they do and change accordingly.

The community as client is not new, but in examining what motivates students and supports them schools have mistaken students as clients, and not products. Our society used to look at students as the children they are, and do what was best for them as a matter of course. At some point schools began to ask them what they thought, and then catered to them. There is an always-moving but clear line between getting feedback and responding versus thinking they (and their parents) know best. Schools are, at best, partners in providing what the client/community deems worth paying for.

Much of the current frustration in education comes from these confused roles. Not all students respond to the traditional curriculum, yet students are clearly not self reflective nor honest enough to determine their own needs. Schools no longer teach, but facilitate, and the debate of what to do with those not meeting standard is complex and frustrating because what works for that shrinking under served product is hard to determine. Their failure also calls into question to experience of the service providers and the client/community that succeeded with past methods. And, unlike a car, we cannot reject it and sell it for scrap. We also cannot reject delivery of students for being defective, but have to work with what comes in the door; at best we can work with our suppliers through early education and nutrition.

Differentiation and Response to Intervention are two basic strategies that service providers are now using. They are a start. Along with programs like Head Start and free and reduced lunch schools are providing services clients demand. But, notice that every solution to schools has nothing to do with the student at that moment, but instead with what skills they walk in the door with (including attitude, tenacity and other elusive skills) and what teachers do with where they are. In looking at students as the product (the car) business models such as The Toyota Way, Lean Manufacturing and organization skills like Getting Things Done suddenly speak to the educational crisis in our country.

I suggest these models are our next step.

This article seems to be focused on the college level. In that case, the client is even more elusive, but I would argue it is the future student. What goals do they have? In ten years, what do they expect from their investment. A job that pays a certain amount? A career? Or simply to be well rounded? Assume the client is future-student, and present student becomes the product while the school remains the service provider. To this end, a survey of alumni might provide guidance.

Students are not the product the schools are selling. In reality, the teachers are the product. When you provide and pay for good teachers, the education increases, but as school continue to find the cheapest, most inexperienced teachers, the value of the education goes down. Young people looking at different careers reject education because they are witnessing the erosion of teachers being able to make a living. This article comes close, but fails miserably when truly identifying the product.

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Dear Prof. Vassilakis.

Your essay is the most thoughtful and constructive critical analysis of the “business model” of ed–ucation I have thus far found online. I have a sense that it is offered by a committed and thoughtful classroom educator.

(Just to introduce myself:” I hold a PhD. (philosophy) and a M.A. (philosophy of ed.). I have multiple peer review publications and conference presentations in both areas and have taught at the ABE/GED, high school, community college, and university levels, including for-profit institutions).

As I understand your more thoughtful and realistic proposal, it is offered as an approximation of the best outcome that is be reasonably “consistent with the scope of a true business model;” and that it is an open question for you whether such benefits are all we should expect from our educational institutions. But is it an open question whether any educational model can be acceptable that is conceived in terms of a commercial exchange and motivated, at least one side, by profit?

I oppose the business model because it would place the principal means of our intellectual and cultural development in the hands of people who do not understand or value them and who do not seem to be capable of reflecting on their own limitations. When used disingenuously by Wall Street, appeals to these values are, as you say, appeals to “sentimental idealism.” But the fact is that acceptance of business model would be a cultural catastrophe and massively profitable windfall for corporations. At best it would serve the perceived needs of children, older adolescents, and a general public whose beliefs and values have been shaped by these same commercial interests.

(1) You are obviously right in insisting that learning outcomes must be assessment ; but, it is equally obvious that the assessment must not be controlled by the for-profit-institutions themselves. It must be done by an independent agency through standardized tests of proven validity and reliability (including “hands on” assessment), with guidance from relevant professional organizations and oversight by Federal and State authorities, It should issue no grades, diplomas, or certificates of qualification — only an explanation of what was assessed, the evidence for the test’s validity and reliability (including correlations with related academic and employment goals), and guidance about how the results should be interpreted and applied, Of course, tests alone cannot measure everything that is educationally important, but they are the only means available to us of blocking inevitable — and highly profitable — institutional abuse. (Were such a validating resource available, there would also less need for formal educational institutions. One would be free to learn whatever one wishes, either independently through one’s own efforts or from someone able and willing to serve as a teacher; and there would be a credible, publically available, and realistically applicable measure of what was learned.)

(2) Unfortunately, the profits of post-secondary for-profit institution depend upon a pool of 700,000 fully qualified academic professionals working – if at all – as part-time “adjuncts” in traditional institutions where they are hired part-time by the semester, paid a small fraction of full-time faculty salary per course, receive no benefits, have no role in departmental or institutional governance, and are terminated at will without cause or appeal. These essentially jobless educators would provide additional for-profit institutions with a ready source of low-cost faculty. If the business model succeeds, the status of post-secondary faculty as “hired hands” will have been established, and higher education will no longer be our principle sources of intellectual and cultural leadership.

(3) Your “two step” plan would make honest bargaining and real learning at least possible; but, given grade inflation and the profit incentive, it is more likely to result in student demands for lower standards and administrative pressure on faculty to comply in order to maintain the high enrollment required for high profits, The same considerations would motivate strong corporate resistance to any rigorous, objective assessment. (The SAT is already being altered to permit lower admission standards and to reflect more popular, i.e., commercial, values.)

(4) Employer dissatisfaction with other businesses’ profitable but unsatisfactory “products” would in-pose some “quality control,” but this would take time; and if it has a serious effect on profits, the “pro-duct suppliers” will do what businesses do – cut their losses and invest their capital elsewhere.

(5) “Is this what we want education to be?” As the issue currently stands, it matters very little what “we” want. State funded educational institutions have already adopted the business model in principle and private non-profits are not far behind. All that is needed is for further cut-backs in government funding, together with continuing increases in tuition, administrative, and other, non-instructional costs, to create a financial crises. It will then be urged that the only solution is to be transfer control of curricula, standards, educational methods, revenues, and physical assets to the managerial “efficiency” of Wall Street.

(6) Growth is only valued in business if it leads to greater profits. This is not a trivial point. Growth in the number of individuals served may be assumed to be good, depending on the service actually provided; but growth for the sake of unlimited increase in wealth and power cannot. It is the latter which has led to the present problem. The business model scenarios we are being sold are produced by ad agencies; the real reasons for selling them to us are written on the “bottom line.”

As far as I can see, the only solution is for educators, K. through graduate school, to organize to block any further progress of the business model and to reverse the damage already done. (Who else will or can do it?) This can also be a first step toward permanent, responsible control by educators of their profession.

Best wishes,

816-937-5927

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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

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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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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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What Is a Business Model?

Understanding business models, evaluating successful business models, how to create a business model.

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Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

The term business model refers to a company's plan for making a profit . It identifies the products or services the business plans to sell, its identified target market , and any anticipated expenses . Business models are important for both new and established businesses. They help new, developing companies attract investment, recruit talent, and motivate management and staff.

Established businesses should regularly update their business model or they'll fail to anticipate trends and challenges ahead. Business models also help investors evaluate companies that interest them and employees understand the future of a company they may aspire to join.

Key Takeaways

• A business model is a company's core strategy for profitably doing business.
• Models generally include information like products or services the business plans to sell, target markets, and any anticipated expenses.
• There are dozens of types of business models including retailers, manufacturers, fee-for-service, or freemium providers.
• The two levers of a business model are pricing and costs.
• When evaluating a business model as an investor, consider whether the product being offered matches a true need in the market.

Investopedia / Laura Porter

A business model is a high-level plan for profitably operating a business in a specific marketplace. A primary component of the business model is the value proposition . This is a description of the goods or services that a company offers and why they are desirable to customers or clients, ideally stated in a way that differentiates the product or service from its competitors.

A new enterprise's business model should also cover projected startup costs and financing sources, the target customer base for the business, marketing strategy , a review of the competition, and projections of revenues and expenses. The plan may also define opportunities in which the business can partner with other established companies. For example, the business model for an advertising business may identify benefits from an arrangement for referrals to and from a printing company.

Successful businesses have business models that allow them to fulfill client needs at a competitive price and a sustainable cost. Over time, many businesses revise their business models from time to time to reflect changing business environments and market demands .

When evaluating a company as a possible investment, the investor should find out exactly how it makes its money. This means looking through the company's business model. Admittedly, the business model may not tell you everything about a company's prospects. But the investor who understands the business model can make better sense of the financial data.

A common mistake many companies make when they create their business models is to underestimate the costs of funding the business until it becomes profitable. Counting costs to the introduction of a product is not enough. A company has to keep the business running until its revenues exceed its expenses.

One way analysts and investors evaluate the success of a business model is by looking at the company's gross profit . Gross profit is a company's total revenue minus the cost of goods sold (COGS). Comparing a company's gross profit to that of its main competitor or its industry sheds light on the efficiency and effectiveness of its business model. Gross profit alone can be misleading, however. Analysts also want to see cash flow or net income . That is gross profit minus operating expenses and is an indication of just how much real profit the business is generating.

The two primary levers of a company's business model are pricing and costs. A company can raise prices, and it can find inventory at reduced costs. Both actions increase gross profit. Many analysts consider gross profit to be more important in evaluating a business plan. A good gross profit suggests a sound business plan. If expenses are out of control, the management team could be at fault, and the problems are correctable. As this suggests, many analysts believe that companies that run on the best business models can run themselves.

When evaluating a company as a possible investment, find out exactly how it makes its money (not just what it sells but how it sells it). That's the company's business model.

Types of Business Models

There are as many types of business models as there are types of business. For instance, direct sales, franchising , advertising-based, and brick-and-mortar stores are all examples of traditional business models. There are hybrid models as well, such as businesses that combine internet retail with brick-and-mortar stores or with sporting organizations like the NBA .

Below are some common types of business models; note that the examples given may fall into multiple categories.

One of the more common business models most people interact with regularly is the retailer model. A retailer is the last entity along a supply chain. They often buy finished goods from manufacturers or distributors and interface directly with customers.

Example: Costco Wholesale

Manufacturer

A manufacturer is responsible for sourcing raw materials and producing finished products by leveraging internal labor, machinery, and equipment. A manufacturer may make custom goods or highly replicated, mass produced products. A manufacturer can also sell goods to distributors, retailers, or directly to customers.

Example: Ford Motor Company

Fee-for-Service

Instead of selling products, fee-for-service business models are centered around labor and providing services. A fee-for-service business model may charge by an hourly rate or a fixed cost for a specific agreement. Fee-for-service companies are often specialized, offering insight that may not be common knowledge or may require specific training.

Example: DLA Piper LLP

Subscription

Subscription-based business models strive to attract clients in the hopes of luring them into long-time, loyal patrons. This is done by offering a product that requires ongoing payment, usually in return for a fixed duration of benefit. Though largely offered by digital companies for access to software, subscription business models are also popular for physical goods such as monthly reoccurring agriculture/produce subscription box deliveries.

Example: Spotify

Freemium business models attract customers by introducing them to basic, limited-scope products. Then, with the client using their service, the company attempts to convert them to a more premium, advance product that requires payment. Although a customer may theoretically stay on freemium forever, a company tries to show the benefit of what becoming an upgraded member can hold.

Example: LinkedIn/LinkedIn Premium

Some companies can reside within multiple business model types at the same time for the same product. For example, Spotify (a subscription-based model) also offers a free version and a premium version.

If a company is concerned about the cost of attracting a single customer, it may attempt to bundle products to sell multiple goods to a single client. Bundling capitalizes on existing customers by attempting to sell them different products. This can be incentivized by offering pricing discounts for buying multiple products.

Example: AT&T

Marketplace

Marketplaces are somewhat straight-forward: in exchange for hosting a platform for business to be conducted, the marketplace receives compensation. Although transactions could occur without a marketplace, this business model attempts to make transacting easier, safer, and faster.

Example: eBay

Affiliate business models are based on marketing and the broad reach of a specific entity or person's platform. Companies pay an entity to promote a good, and that entity often receives compensation in exchange for their promotion. That compensation may be a fixed payment, a percentage of sales derived from their promotion, or both.

Example: social media influencers such as Lele Pons, Zach King, or Chiara Ferragni.

Razor Blade

Aptly named after the product that invented the model, this business model aims to sell a durable product below cost to then generate high-margin sales of a disposable component of that product. Also referred to as the "razor and blade model", razor blade companies may give away expensive blade handles with the premise that consumers need to continually buy razor blades in the long run.

Example: HP (printers and ink)

"Tying" is an illegal razor blade model strategy that requires the purchase of an unrelated good prior to being able to buy a different (and often required) good. For example, imagine Gillette released a line of lotion and required all customers to buy three bottles before they were allowed to purchase disposable razor blades.

Reverse Razor Blade

Instead of relying on high-margin companion products, a reverse razor blade business model tries to sell a high-margin product upfront. Then, to use the product, low or free companion products are provided. This model aims to promote that upfront sale, as further use of the product is not highly profitable.

Example: Apple (iPhones + applications)

The franchise business model leverages existing business plans to expand and reproduce a company at a different location. Often food, hardware, or fitness companies, franchisers work with incoming franchisees to finance the business, promote the new location, and oversee operations. In return, the franchisor receives a percentage of earnings from the franchisee.

Example: Domino's Pizza

Pay-As-You-Go

Instead of charging a fixed fee, some companies may implement a pay-as-you-go business model where the amount charged depends on how much of the product or service was used. The company may charge a fixed fee for offering the service in addition to an amount that changes each month based on what was consumed.

Example: Utility companies

A brokerage business model connects buyers and sellers without directly selling a good themselves. Brokerage companies often receive a percentage of the amount paid when a deal is finalized. Most common in real estate, brokers are also prominent in construction/development or freight.

Example: ReMax

There is no "one size fits all" when making a business model. Different professionals may suggest taking different steps when creating a business and planning your business model. Here are some broad steps one can take to create their plan:

• Identify your audience. Most business model plans will start with either defining the problem or identifying your audience and target market . A strong business model will understand who you are trying to target so you can craft your product, messaging, and approach to connecting with that audience.
• Define the problem. In addition to understanding your audience, you must know what problem you are trying to solve. A hardware company sells products for home repairs. A restaurant feeds the community. Without a problem or a need, your business may struggle to find its footing if there isn't a demand for your services or products.
• Understand your offerings. With your audience and problem in mind, consider what you are able to offer. What products are you interested in selling, and how does your expertise match that product? In this stage of the business model, the product is tweaked to adapt to what the market needs and what you're able to provide.
• Document your needs. With your product selected, consider the hurdles your company will face. This includes product-specific challenges as well as operational difficulties. Make sure to document each of these needs to assess whether you are ready to launch in the future.
• Find key partners. Most businesses will leverage other partners in driving company success. For example, a wedding planner may forge relationships with venues, caterers, florists, and tailors to enhance their offering. For manufacturers, consider who will provide your materials and how critical your relationship with that provider will be.
• Set monetization solutions. Until now, we haven't talked about how your company will make money. A business model isn't complete until it identifies how it will make money. This includes selecting the strategy or strategies above in determining your business model type. This might have been a type you had in mind but after reviewing your clients needs, a different type might now make more sense.
• Test your model. When your full plan is in place, perform test surveys or soft launches. Ask how people would feel paying your prices for your services. Offer discounts to new customers in exchange for reviews and feedback. You can always adjust your business model, but you should always consider leveraging direct feedback from the market when doing so.

Instead of reinventing the wheel, consider what competing companies are doing and how you can position yourself in the market. You may be able to easily spot gaps in the business model of others.

Criticism of Business Models

Joan Magretta, the former editor of the Harvard Business Review, suggests there are two critical factors in sizing up business models. When business models don't work, she states, it's because the story doesn't make sense and/or the numbers just don't add up to profits. The airline industry is a good place to look to find a business model that stopped making sense. It includes companies that have suffered heavy losses and even bankruptcy .

For years, major carriers such as American Airlines, Delta, and Continental built their businesses around a hub-and-spoke structure , in which all flights were routed through a handful of major airports. By ensuring that most seats were filled most of the time, the business model produced big profits.

However, a competing business model arose that made the strength of the major carriers a burden. Carriers like Southwest and JetBlue shuttled planes between smaller airports at a lower cost. They avoided some of the operational inefficiencies of the hub-and-spoke model while forcing labor costs down. That allowed them to cut prices, increasing demand for short flights between cities.

As these newer competitors drew more customers away, the old carriers were left to support their large, extended networks with fewer passengers. The problem became even worse when traffic fell sharply following the September 11 terrorist attacks in 2001 . To fill seats, these airlines had to offer more discounts at even deeper levels. The hub-and-spoke business model no longer made sense.

Example of Business Models

Consider the vast portfolio of Microsoft. Over the past several decades, the company has expanded its product line across digital services, software, gaming, and more. Various business models, all within Microsoft, include but are not limited to:

• Productivity and Business Processes: Microsoft offers subscriptions to Office products and LinkedIn. These subscriptions may be based off product usage (i.e. the amount of data being uploaded to SharePoint).
• Intelligent Cloud: Microsoft offers server products and cloud services for a subscription. This also provide services and consulting.
• More Personal Computing: Microsoft sells physically manufactured products such as Surface, PC components, and Xbox hardware. Residual Xbox sales include content, services, subscriptions, royalties, and advertising revenue.

A business model is a strategic plan of how a company will make money. The model describes the way a business will take its product, offer it to the market, and drive sales. A business model determines what products make sense for a company to sell, how it wants to promote its products, what type of people it should try to cater to, and what revenue streams it may expect.

What Is an Example of a Business Model?

Best Buy, Target, and Walmart are some of the largest examples of retail companies. These companies acquire goods from manufacturers or distributors to sell directly to the public. Retailers interface with their clients and sell goods, though retails may or may not make the actual goods they sell.

What Are the Main Types of Business Models?

Retailers and manufacturers are among the primary types of business models. Manufacturers product their own goods and may or may not sell them directly to the public. Meanwhile, retails buy goods to later resell to the public.

How Do I Build a Business Model?

There are many steps to building a business model, and there is no single consistent process among business experts. In general, a business model should identify your customers, understand the problem you are trying to solve, select a business model type to determine how your clients will buy your product, and determine the ways your company will make money. It is also important to periodically review your business model; once you've launched, feel free to evaluate your plan and adjust your target audience, product line, or pricing as needed.

A company isn't just an entity that sells goods. It's an ecosystem that must have a plan in plan on who to sell to, what to sell, what to charge, and what value it is creating. A business model describes what an organization does to systematically create long-term value for its customers. After building a business model, a company should have stronger direction on how it wants to operate and what its financial future appears to be.

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Open educational resources (OER) Edupreneurship business models for different stakeholders

• Published: 10 July 2019
• Volume 24 , pages 3855–3886, ( 2019 )

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• Hamda Darwish   ORCID: orcid.org/0000-0002-0554-2752 1  

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This paper contributes in establishing Open Educational Resources (OER)-based edupreneurship business models for different stakeholders. It restages the emergence of OER in higher education institutions (HEI) within educational entrepreneurship, hereafter edupreneurship. Then, it presents three analyses based on OER literature and environments. Finally, it introduces four edupreneurship business models for different stakeholders. First, it reviews the literature to identify and align existing OER business models to deduce a pattern linking OER provision, organizations’ investments and users. Second, it applies Osterwalder and Pigneur’s business canvas (Osterwalder and Pigneur 2010 ) to analyze value creation opportunities and activities within OER environments. Third, it examines OER environments to elicit the elements used for generating revenue streams. Consequently, four edupreneurship business models are provided to resolve some of the complexities found in OER environments and support stakeholders in deciding their ventures. The paper concludes that OER environments process unstable amalgamation of networks that continually changes to adapt to the complexity, multi-functioning and multi-processing of customers and providers’ motivations. OER projects disrupt the educational market worldwide. This is not due to the ÓER humanistic view of Openness as ‘free of charge’ and ‘for free use’ but to Openness being a premium business value that creates edupreneurship opportunities within the digital age.

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Darwish, H. Open educational resources (OER) Edupreneurship business models for different stakeholders. Educ Inf Technol 24 , 3855–3886 (2019). https://doi.org/10.1007/s10639-019-09962-8

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Marketing91

Business Model of Education Explained

June 9, 2023 | By Hitesh Bhasin | Filed Under: Business

The business model of education revolves around different processes of facilitating learning or procuring skills , knowledge, beliefs, habits, or values. Education is indeed one of the basic needs of man. There is hardly any chance of earning a living without proper education.

A person is known by how educated he/she is. There are various stages of education. Starting from kids’ playschools, there are colleges and universities around the world.  Every region has its education system, which has the essence of that region.

These days, there is more focus on technical education and in-depth knowledge of the subjects you are learning.

Hence, education systems across most of the countries have evolved over the past few years. It has led to the emergence of educational institutes not just as a service but also as a business.

This post will take you deep into the Education Business Models and guide you about the key traits of successful education-related business models. So, let us get started-

Table of Contents

Introduction

Education is often held accountable for the success of students. The education systems aim at imparting good quality education to one and all.

Students are those who are seeking answers. They look at the educational systems with hope and believe that they will find those answers. That is why the business model of education should be drafted to cater to these needs of students.

Moral Value System associated with the Business Model of Education

Every business runs of profit. But, the motive behind the business of education is to impart pure and unbiased knowledge.

The customers of this system are the students or learners. Their satisfaction is the soul of this business model. There is no business that is intrinsically good or bad. The profits earned from these businesses determine their nature.

In an educational system, the profits are in two primary forms. One is the financial profit gained by the institution, and the other is the educational insights gained by the students.

If both of these profits are achieved in equal measure, both the parties are in a win-win situation. It helps the education business reach a neutral end.

Need for a Good Business Model of Education

In the initial school years, the students take education for teaching fundamental moral values. The education they receive is aimed at making them better as human beings.

High school education is aimed at professional expertise. Students learn the skills which can help them earn a living and be the breadwinners for their families. The technological and professional trends keep on changing. Concerning technology, there are constant changes and upgrades. These changes demand changes in the business model, as well.

The current business model should be efficient . The education imparted through this model should help the students sustain themselves in the professional world. The students gain technical competence as well as the ability to mitigate the risks of vulnerability.

Best Ways of Money-making via Trendy Educational Business Models

As mentioned above, every business wants to maximize its profits. They want the revenues they earn increase manifolds. So, here are some ways that can be used by an educational institution to make money.

1. Live Classes

There can be nothing as good as actual teaching. A teacher dedicating his/her precious time for her students and empowering them in almost every aspect of life is one of the greatest gifts for the pupils.

That is why live classes are hugely popular and form the surest way of earning money. Some institutions give face-to-face learning experiences to the students. Here the teacher can understand the grasping power of the student and amend the lectures accordingly.   

Also, in these times of the Covid19 pandemic, the live classes can be conducted on video calling platforms like Zoom and Google Meet.

2. Online Courses

Many people confuse between the live classes on video calling platforms and online courses. They misinterpret them to be the same. However, there is a small difference between them. The online courses are packages of audios, videos, and textual chapters that can be used by the student according to his/her convenience.

These courses are mostly self-paced. But, some of them do come with a deadline. The students need to complete the course within a specific amount of time. Then, they can get a certificate of completion.

3. Starting Institutions

Many education providers wish to start an institution like a school or a college. It encompasses a more extensive client base.

In today’s times, the institutions are also of the form of coaching classes or tuitions. They need less infrastructure and yet get all the due accountability and respect. The institutions get recognition from the government, and they also receive grants and funds for imparting knowledge to the students.

4. Consulting Services

Education is not just classroom teaching. It comprises many aspects of teaching, including consulting services.

Consulting is the process of counseling people and giving them appropriate solutions. We all need guidance at some of the other points in life. So, consulting is always in demand. There are various forms of consultation services provided by multiple educators. Some of them are given below-

• Curriculum Design
• Research Work
• Communication Skills
• Learning Experience Design

5. Professional Services

Apart from consulting services, there are professional services which are offered by some educational institutions.

These services come after the inception of consultation services. We can define the professional services as the services which fulfill the needs of the client. Some of the most popular professional services are given below.

• Translation
• Curriculum Development

Challenges While Planning a Business Model of Education

The business model for education should be adequately planned, considering many aspects that are important in education. However, there are some challenges which one faces while designing these models.

In private education sectors, there is a system for rewarding productivity . It enhances the efficiency and creativity of the people working in that association.

However, if people start working for rewards more than working towards excellence, it poses a threat to the business model. The vicious cycle of expectations begins there and meets no end.

Technical Flaws as Threats to the Business Model of Education

Along with the flaws in the moral and value system of the business model, there could be flaws in the technical aspects as well.

One of the most impactful technical flaws is the inefficiency of the teachers. Sometimes, the teachers themselves do not know the subjects they are teaching thoroughly. Also, the infrastructure of the classrooms in the case of institutions plays a vital role. The maintenance of these structures is an integral part of the business model.

Innovations in the Education

We all know and believe that change is the only constant thing in the world. Hence, innovation picks up the lion’s share in making a sustainable business model. Here are a few innovations that you can bring about:

1. Make the Doors Wider

The con of many educational institutions is that they keep the doors narrower. They don’t expand enough to provide newer opportunities to their students.

It can be eradicated by making the sea opportunities available for the students as well as the teachers. The new domains of education can be made available by making slight changes in the business models.

It will give the students more exposure to the newer world. It will encompass the learners from different streams and engulf them in the education system.        

2. Earning and Learning

Many people in the world cannot afford quality education. The costs of education have seen a tremendous rise in the past few years. Also, some people like to learn using their own hard-earned money.

Here, the concept of earning while learning comes into the picture. The business model of any education system should allow the students to take up internships and part-time jobs.

It will empower the students to learn on their own. This policy will get more students into the system of education. There will be lesser drop-outs, and lesser people will fall out of the educational system.

3. Employer as Payer

Many times students do not know what exactly to go for, whether to take up a job or stick to traditional higher education. Here, they can undertake a job or an internship whose profile they like and find suitable.

If they have the relevant skills, they will be approached by the employer.

The employer will take care that they complete the education they require. He/she will pay the fees for the educational course or program. It will facilitate career-specific training and promise better employment .

How to Make a More Sustainable Business Model of Education?

The essential form of stability that any educational institution needs is financial stability. If they get proper funding, they can improve their ways of teaching.

If they do not get enough money, they will not want to explore other avenues and streams of education. In the education system, it is essential to stay relevant and keep on changing the business model according to the need of the market .

They should take proper and reasonable fees from the students and then invest these funds in the correct manner, which will get the maximum financial benefits.

How to Translate a Small Scale School to a Larger Educational Institution?

There are many small scale schools and educators in the world.

Sometimes, what they lack to translate themselves into larger educational institutions is a proper business model and vision for the next few years.  They should study the market well and recruit only those professionals who can add value to their already existing system.

Final Thoughts!

Starting an education institution is not a cakewalk. You need proper resources and a well-drafted plan. For that, you have some experts on board who can guide you through that.

In addition to that, the tips mentioned above will help you design the best business model for your educational institution.

Are you also thinking of starting an education-related business? Then feel free to share with us about your expertise and niche so that we can suggest the right business model of education for your target audiences.

Liked this post? Check out the complete series on Business Models

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The 2 Most Profitable Types Of eLearning Business Models

Learn More about Video Monetization

• "Night School" eLearning Business Model
• "Academy" eLearning Business Model

Which eLearning Business Model Should You Choose?

Tell me if this sounds like you.

You’ve got an idea for an online school or eLearning business .

You’ve outlined the skills you want to teach, and you’ve even got an idea of who your ideal student is. But, you’ve hit one major roadblock…

You don’t know how to make money from it .

Sound about right?

If so, you’re in the right place. Today you’re going to learn how to change all of that.

In this article, I want to show you the two best online education business models you can follow. So, no matter who or what you want to teach, you’ll have a clear idea of how to turn your idea into income.

Here’s what we’ll cover…

What You’ll Learn

• The “ night school ” and “ academy ” eLearning business models
• The major pros and cons of each
• How much you can earn with each model
• How to choose the right one for your business

The “Night School” eLearning Business Model

Night School is a classic eLearning business model.

Its name is rooted in the night classes you can take at your local community college. You know, where you go to learn languages or pick up skills to help in your job.  The simple business model which drives these traditional courses can provide a profitable blueprint to sell courses online.

This style of business model is all over websites like Udemy, where customers pay for access to a course which teaches them a specific skill.

Let’s say you’re going on holiday to Germany and you want to be able to understand the basics before you go so that you can blend in like these two cheeky chaps here:

You could head over to Udemy, search for “learn German” and find a course which teaches you the basics you need.

From there the process you saw earlier kicks in:

You log in. Watch your video lessons. Take tests. Contact your tutor when you have trouble. And, by the time you get to Berlin, you’ll hopefully be able to order a Schnitzel without offending anybody.

It’s pretty simple. But what kind of eLearning business is this model best suited to?

Who Is The “Night School” eLearning Business Model For?

This type of eLearning business model is flexible and can be adapted by any type of online school or teaching business.

It’s been the default model for the majority of online eLearning businesses over the last few decades, but it’s the best fit for:

• New businesses: If you’re testing products and your audience’s reaction to them, this can be a great way to generate cash flow and get feedback.
• High-ticket businesses: If you want to sell one-off products at a $2000+ value
• Online course-only businesses: If you only want to sell one-off courses, without all of the frills and support of a “school” environment

Basically, if you like to go deep into a specific skill or ability, this type of eLearning business model is for you. Which can be done across multiple topics in one niche, as you’ll see in the next section.

How Do You Make Money With It (And How Much)?

The key to making money with the night school eLearning business model is to create standalone courses which solve your customer’s major problems.

These courses can differ in value and depth, but they guide your customer to a specific endpoint. Let me show you what I mean.

One business who does this brilliantly is Ramit Sethi’s; I Will Teach You To Be Rich .

The business is grounded in one “umbrella” niche, which is financial success. But for each of the barriers his customers have to getting there, he has a course to help them get through it.

This includes topics like mental frameworks and having better conversations:

The starting retail cost of these courses is around $350 and work there way up to $2000-$2500 range. Which, as you can imagine, is really lucrative.

This is easily adaptable to any business niche, too. Let’s say you’re going to start a business around videography; you could focus on pain points like:

• How to create the perfect YouTube video
• How to edit videos in Final Cut Pro
• How to sell your videos to a TV channel
• How to find, source and add music to your videos

Each of these would become a standalone course and retail at a different value, depending on the depth and demand for the course content.

With this business model, you could be looking at the $2,000+ range a month with a brand new business.

The 5 Pros And 5 Cons Of The Night School Model

Before you make your decision to choose this online learning business model, I want to break down the five pros and cons of choosing it.

• Lucrative: You can create a broad spectrum of products and retail them at high-ticket prices
• Specific: You can create products which solve problems and cause transformation.
• Low overheads: You can create courses in cheap (or free) formats like PDFs.
• Outsourceable: You can easily build teams to help you manage your workload.
• Evergreen: When you create a course you can sell it for years to come.
• Time-intensive: You’ll need to invest lots of time and effort into creating high-quality courses which generate results.
• Complicated: Each course requires its own unique sales funnel.
• Launching: You’ll have to consistently launch (and relaunch) your products to make sales.
• Non-recurring income: You have to sell people multiple times to keep your cash flow high.
• Marketing: Requires a constant stream of new leads to make sales.

The “Academy” eLearning Business Model

The academy business model has been part of a renaissance for eLearning.

Instead of creating an online course business model, as you saw with night school a second ago, you create a comprehensive school where students learn all of the skills they need to achieve their desired goal.

Let’s look at this in real-world terms first.

When a student enrolls into an academy – say, a soccer school – they don’t focus just on one aspect or skill. Instead, they come away with a well-rounded education in:

• How to pass, dribble and shoot the ball
• How to eat the right foods and how much water to drink
• How to recover from a tough game
• How to communicate with teammates
• How to apply for college scholarships

If it sounds like I have an overly intimate knowledge of soccer academies it’s because, a) I’m British and, b) I spent a year coaching in an American one. (Did somebody ask for blue steel?)

But, I digress…

In the online world, the Academy eLearning business model works a little like a Netflix subscription .

For a monthly recurring fee, students get access to your entire library of lessons and courses. They can pick and choose what they learn, and when they learn it, and build their education.

The academy can also come with lots of different community features, like:

• Live Q&As
• Coaching calls
• Facebook groups

Depending on how you choose to run your business. As long as they pay their monthly subscription, they can have access to all of it. When they cancel, they lose it.

Because this eLearning business model relies on a subscription system, it has the potential to be profitable, scalable and much more manageable than the night school option.

But, who does this business model work for, and is it the right choice for you?

Who Is The Academy eLearning Model For?

The academy business model can work in any broad niche with multiple skills to teach. But it works best for:

• Niche experts: Who want to teach a wide range of skills in a specific niche
• Health and Fitness pros: Who want to share up-to-date advice to their clients
• Creatives: Who want to teach different artistic practices or disciplines
• Enterprise experts: Who want to provide training to corporations

If you want to cover a broad topic and provide depth in the areas, you think matter, without creating multiple standalone courses, this is for you.

The academy eLearning business model is based on a subscription service to get access to both short and long-from training videos on a topic.

The price point is usually affordable – between $9.99 and $49.99 per month – and on a recurring basis. These prices can vary depending on the package someone signs up for.

Let’s look at this online education business model in action so you can see what I mean.

Magic Stream teach people how to perform incredible magic tricks with their online academy.

For $12.99 a month students get access to hundreds of hours of training material covering lots of different topics.

Behind each of these thumbnails is an intense training video which teaches you a specific skill. Instead of a “course” style, this is individual sessions or walkthroughs.

Running the business this way allows them to create a comprehensive library of content to help magicians learn a wide range of skills.

This is an attractive offer for a would-be magician who finds their product. For a small investment, they can get lots of value.

But that may be causing you a few worries right now. Because $12.99 per sale doesn’t sound anywhere near as lucrative as the $350 courses you saw in the last section, does it?

Well in the short term you probably could make more money with the Night School model. Over the long term, however, the academy model wins. Why?

Because you have a constant source of recurring passive income which has the potential to grow infinitely .

Let me explain…

Let’s say you launch your academy and you make ten sales of $13.00. That’s a pretty modest $130 for your troubles, right?

Well, that’s $130 which you will get paid every month from those customers. And, if you pick up an average of 10 new customers (absolute worst-case scenario) every month, here’s how your income will look over a year.

• Month #1: $130 (10 subscribers)
• Month #2: $260 (20 subscribers)
• Month #3: $390 (30 subscribers)
• Month #4: $520 (40 subscribers)
• Month #5: $650 (50 subscribers)
• Month #6: $780 (60 subscribers)
• Month #7: $910 (70 subscribers)
• Month #8: $1,040 (80 subscribers)
• Month #9: $1,170 (90 subscribers)
• Month #10: $1,300 (100 subscribers)
• Month #11: $1,430 (110 subscribers)
• Month #12: $1,560 (120 subscribers)

That’s a pretty quick increase in recurring income. This is what you’re guaranteed each month, save for a complete mutiny or catastrophe. And that’s before you look at the compound effect, where you’ve earned a total of $10,140 over the year .

At the point of launch, those $350 courses look deceptively lucrative. But over the long game, you can earn more money for less work with the academy model. In fact, the Uscreen customers who apply this business model earn an average of $5,700 per month!

The 5 Pros And Cons Of The Academy eLearning Business Model

Before you decide to choose this model, let’s take a look at the major advantages and disadvantages of using it:

• High-retention: Customers are “hooked” to your service because they want the new content you release
• Attractive pricing: You can bring new customers in with a low-cost but high-value offer
• Passive income: You can make money without being there at the point of sale
• Scaleable: Easy to grow or shrink to your desired business size
• Simplicity: You only need one sales funnel leading to one offer
• Content creation: You need to periodically create new content
• Lower initial earnings: It can take time to build momentum
• Hosting: You’ll need a more expensive platform to run this
• Innovation: Your content needs to hit a broad range of topics to keep people hooked
• Zombie-accounts: The ethical question of people paying who aren’t using your service

By now you should have a clearer image of the two major online education business models, and which one is going to be a better fit for your business.

If you’re still not sure, here’s a little recap:

You should choose the Night School model if you want to go to depth on topics and create high-ticket offers for your customers. Launching products doesn’t phase you, and you prefer the big payout they provide.

You should choose the Academy model if you want a long-term profitable online course business which is easy to manage and has high levels of customer retention. You want to create one offer and deliver as much value to people as possible, and you’d prefer to keep customers for the long-term.

Now before you go, it’s important to note you can change business models whenever you want. It’s not uncommon for people to create three or four courses and then bundle them together into an academy-style product.

But an academy model should probably be the overall end goal for your business, if not now, then in three to five years.

Wrapping This Up …

Phew! That was a lot of information. Well done for making it to the end!

You can sign up for our video business school, where we’ll share even more about how to start a profitable online learning business!

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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• 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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Business Models and Strategic Management: A New Integration is a seven-chapter book published by the Business Expert Press in 2012 and written by Francine Newth, associate professor of strategy at…

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Business Models and Strategic Management: A New Integration is a seven-chapter book published by the Business Expert Press in 2012 and written by Francine Newth, associate professor of strategy at the School of Business at Providence College. The author says that an effective strategy derives from a fundamental understanding of how a company operates, which is defined by its business model. She explains the elements of a business model and how to integrate it with strategic decision making, providing what the she calls a more "real-world" guide to effective management. She provides practical insight for managers and conceptual models grounded in research and current business examples. Each chapter includes discussion guides and a practical exercise based on real-world companies. Chapter 6, Business Model and Innovation (14 pages), explores the nature of innovation and its importance in a sustainable business model. The author explains the types of innovation and characteristics that drive innovation. Her model outlines the innovation process through five components: product (new ideas), process (cost structure), experiments (trials), strategies (innovation capabilities), and teams (employees). There are three discussion guides for innovation, based on RIM, Zynga, and Hewlett-Packard, and an exercise on innovation analysis at Groupon.

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6 Common Leadership Styles — and How to Decide Which to Use When

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Being a great leader means recognizing that different circumstances call for different approaches.

Research suggests that the most effective leaders adapt their style to different circumstances — be it a change in setting, a shift in organizational dynamics, or a turn in the business cycle. But what if you feel like you’re not equipped to take on a new and different leadership style — let alone more than one? In this article, the author outlines the six leadership styles Daniel Goleman first introduced in his 2000 HBR article, “Leadership That Gets Results,” and explains when to use each one. The good news is that personality is not destiny. Even if you’re naturally introverted or you tend to be driven by data and analysis rather than emotion, you can still learn how to adapt different leadership styles to organize, motivate, and direct your team.

Much has been written about common leadership styles and how to identify the right style for you, whether it’s transactional or transformational, bureaucratic or laissez-faire. But according to Daniel Goleman, a psychologist best known for his work on emotional intelligence, “Being a great leader means recognizing that different circumstances may call for different approaches.”

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