Product-based PBA
I’ve really enjoyed the PBA discussion so far.
One question investors always want to know about new ventures is where “recurring revenue” will come from. In short, if you do some work and get paid for it, that’s a ‘service business’, which means you have to perform the service again and again to get new revenue, which isn’t an easily scalable model. Whereas in a ‘product business’ you build the product once and lots of people can buy it independently. If they also buy the regular upgrades you’ve got a golden form of recurrent revenue.
While a number of PBA products have been discussed, their application typically seems to be a service business.
So (with unfortunately conflicting definitions of “product”) I believe the web offers a great future for product-based PBA.
And to help assuage the damaging impacts of the accountability movement, I’m somewhat hopeful that such product-based PBAs could provide significant benefit to the assessment of learners, educators, institutions and even education systems.
Thoughts?
Posted in: Week 10: Product-Based Assessments
kstooshnov 8:01 pm on November 11, 2011 Permalink | Log in to Reply
Hi David Vogt,
Thank you for making clear the distinction between ‘service business’ and ‘product business’ and I was thinking about an example I came across during research for assignment one. The woman who had designed the Globe Theatre on “Shakespeare Island” in the virtual world of Second Life probably intended her design to have recurring revenue. Supposedly, users would log in and pay to see live versions of the play acted out by Resident actors. It must have been a lot of work to get scenes (not even an entire act, let alone the play from beginning to end) ready for audiences each performance. Her last-ditch effort to make the island an educational resource failed, and by now all of her work has been deleted from Second Life.
In her final message as the Resident Ina Centaur, she blogs a story that could have been her way into a ‘service business’ for her virtual Globe: an anonymous benefactor mails her an iPhone 3G, suggesting that her Second Life project would have been more marketable through the iTunes store, as Steve Jobs (the supposed benefactor revealed) had “created iTunes so that independent creators could share their creations and even turn it into a viable business.” (Centaur, 2011 Oct, para. 5) App as product-based PBA may be the most lucrative way into the educational market.
Kyle
Centaur, I. (2011, Oct.) Our magic and our passing – Goodbye from the SL Shakespeare Company, Primtings, and sLiterary [blog] SL Shakespeare Company Blog 2009-2010. Retrieved on Nov 11, 2011 from http://twelfthnight.mshakespeare.com/blog/2011/10/22/our-magic-and-our-passing-–-goodbye-from-the-sl-shakespeare-company-primtings-and-sliterary
jarvise 5:55 am on November 12, 2011 Permalink | Log in to Reply
Hi Kyle,
Your observations here reflect what I have noticed as well. When ‘products’ emerge that are targeted specifically to educators (or students via educators), they often have big start-up work commitments for the developers, and are often then behind the times of what is emerging out of non-education specific social (peripheral) development. In other words: a lot of educational products require a lot of investment, and quickly become dated and duplicated. It seems that any emerging product – in order to be profitable -needs to emerge quickly, be very targeted to a specific element of the ‘need’ in the market, and be usable on the devices that are already in hand. It seems that App-based products would be lucrative right now.
Emily
verenanz 7:04 am on November 12, 2011 Permalink | Log in to Reply
“Hello David! I appreciated your distinction between product and service…..Having a “theory” as the foundation for an emerging market left our group really questioning what the “products” and “services” would be…..I can see how some of our PBA examples which we may have seen as “products” are actually services…..The few PBA Emerging products would probably be m-portfolios, books (as long as it was just updated), e-portfolio software like Mahara and possibly employee assessment software. All four offer possibilities……
Thanks again for your help with product/serviceclarification….
Verena:)
Doug Smith 9:00 am on November 12, 2011 Permalink | Log in to Reply
It’s an interesting idea David. Clearly some people are marketing PBA products as tools for accountability, and it makes sense that they would do this. It seems like most of the policy frameworks published these days are about accountability. Sadly, I feel that in many ways it is a thin veil that says we would like to track learning, when in reality if you look behind the veil it is about tracking spending and tax payer’s money. But I believe there is a huge market for products that want to do good, not evil. One thing we really looked for was PBA ventures that were tying themselves to SIS. There isn’t much (any?) out there right now, but this is an area where there is huge upside for both recurring and non-recurring sales along with easy accessible buyers.
cheers
Doug
khenry 8:54 pm on November 12, 2011 Permalink | Log in to Reply
Hi David and all,
David, I echo appreciation for the clarification.
Great example Kyle. I agree with Kyle and Emily that apps are the way to go to have that recurring revenue. However, the app must fill a need and as such will not become ‘outdated’. As more insights on learning and systems become available, or when changes are made to systems, then buyers/consumers can purchase upgrades. There can also be tiers and levels associated with different costing packages. For example, a progress tracking app would be a viable venture.
Kerry-Ann
David William Price 7:25 am on November 13, 2011 Permalink | Log in to Reply
Re product vs. service business…
The issue of scability is interesting when it comes to services, but it’s also an issue with products (consider how Amazon or Apple ran out of manufacturing capacity with initially popular products).
Perhaps you’re focusing on IP-related products… theoretically they can be distributed widely and cheaply after production. The problem is that ignores the required services of maintaining them, providing customer support, marketing to attract and maintain attention, etc.
While scalability is interesting, so is the issue of margins and value. IBM shifting to services from products, for instance, and HP’s desire to do the same, to pursue higher value transactions. As a lawyer, I can hand out precedents but the true value is in asking you questions to determine your goals and fashion a custom solution. Do I want to be a McDonald’s drive-thru lawyer who hands out pre-fab precedents, or do I want to be considered a valued member of the team who helps you see beyond your preconceptions?
In a way, this discussion highlights some of my problems with “product-based assessment” and constructivist learning practices. Sometimes the focus is too much on production of something, and the actual critical thinking and accountability for results to a client are completely lost. Consider group presentation seminars in grad school… if we’re relying on the groups to educate us and those groups spend all their time at the bottom of Bloom’s taxonomy and bore us to tears, how are we getting value for the thousands we’ve spent on our education?