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2.9 – Venture Genesis

Business Models

A learning technology venture can adopt so many forms that categorizing them all is a daunting task. Within the scope of ETEC 522 there are companies, societies, foundations, institutions, associations, programs, and projects, to name a few. The remarkable thing is that the “business” concepts that we explore in this course generally apply to all of them. The primary differences occur in their operating philosophies: how and for whom original value is being generated by this venture, and what kind of value.

In the case of for-profit ventures, the primary value generated is money, either for the owners in a private company or the shareholders when the company is publicly traded. To earn revenue any company has to sell products or services – it has to market propositions about learning that education-based customers will find valuable. Therefore it isn’t surprising that successful learning technology companies are often filled with educators or ex-educators who believe passionately about learning and the educational value of their products. Test this hypothesis for yourself: select any profit-driven learning technology enterprise and review the learning credentials of their executive team – it is usually impressive.

Another common form of incorporation in the learning technology world is as a not-for-profit society, where the value generated is some form of social wealth. This form of venture includes institutions, foundations, museums, and a host of other organizations integrated into communities. The investors and customers of these ventures tend to be governments, philanthropists and representatives of the communities the organization serves.

As mentioned earlier, there’s also a hybrid form of venture called a social enterprise. These are specifically designed to earn cash profits to enable public good. A great example is “Newman’s Own” salad dressings, where the corporate profits are entirely directed to charity. The advantage of this model is to bridge across operational cultures. For example, a not-for-profit institution can establish a for-profit satellite specifically to fund (become an investing customer) for the mission of the institution. As well, a for-profit corporation can establish a not-for-profit subsidiary or extension as a means of ‘giving back’ to society. A common phrase in corporate domains is the “double-bottom-line” (cash profit and social value) or “triple-bottom-line” (cash profit, social value and environmental sustainability) vision for a company.

While such a vision might sound altruistic, it comes down to good business: marketing a company as a good corporate citizen is a great way to build “brand” (the image and profile of a company to the external world) and solidify value propositions to enhance product sales.   Microsoft’s Partners in Learning program is a good example of a significant corporate activity in the not-for-profit side of global education that is also a strategic investment in future sales for the company.  Thinner marketing ploys in education include when companies provide “free” professional development programs for teachers as a front to marketing their products.

A broader business model arising in both developing and developed countries, as well as many large companies, is learning technologies as an economic strategy.  This phenomenon opens a large field of partnership and alliance opportunities for ventures to establish proving grounds for their products and services.  A useful resource for exploring country development strategies is Zunia (look in their Education menu).  And for an alternative look at marketing theory as its applies to the developing world, the summary article (you will need to register for a free account on the Strategy + Business website in order to view the full text of the article.) that spawned the book The Fortune at the Bottom of Pyramid (Prahalad, CK. & Hart, S.L., 2002) worth reviewing.

Here are some additional resources that you might find relevant to the issues raised in this section. You will need to be logged into UBC’s VPN server in order to view these articles.

Ghemawat, P. (2007, March). Managing differences: The central challenge of global strategy. Harvard Business Review. March 2007. Retrieved September 17, 2008.

Elberse, A. (2008, July-August). Should you invest in the long tail? Harvard Business Review. July-August 2008. Retrieved September 17, 2008.

De Coster, R & Butler, C. (2005). Assessment of proposals for new technology ventures in the UK: Characteristics of university spin-off companies. Technovation 25 (2005) 535-543. Retrieved September 17, 2008. (To read the Coster and Butler article, click on the following link: doi:10.1016/j.technovation.2003.10.002)

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