A New Lesson for eLearning Programs:

The recent state of the economy has led to some challenging times in higher education. The turbulence of the stock market coupled with challenges of student recruitment and increased competition have some colleges and universities actively seeking ways to increase revenue. Those programs with an online presence have the option of exploring untapped markets online. How much entrepreneurship should there be in eLearning?

While the idea of opening new programs might seem like taking your chances in an already up-and-down economy, consider that from June 2001 to June 2002 the S&P Index dropped 19 percent while the online programs tracked by the Chronicle Index of For-Profit Higher Education rose 16 percent. And today more people are going online. More homes have Internet access than ever before, with a potential growth area in home networks. Given these trends, there are benefits to be gained by taking some controlled risks.

Thinking Entrepreneurially
Entrepreneurship is not the same as throwing darts and hoping for the best. It is about planning and taking calculated risks based upon knowledge of the market, the available resources or products in a usable or close-to-usable form, and a pre-determined measure of the potential for success.

It would be financially risky for a program with no experience in online learning to suddenly decide there is money to be made and jump into the market with little planning or product. Conversely, established programs that can repurpose existing online materials to capture a small market segment as yet untapped can reap legitimate benefits. A specific example of this would be a program offering online degrees or degree completion to repurpose its content into smaller components in order to remediate students online for other colleges or universities. While this might not be a large financial gain, it provides increased revenue for minimal work, with nothing being developed from scratch.

Being entrepreneurial is about capitalizing on the strength or expertise of an organization and leveraging that to some gain. The gain usually is financial, although other advantages exist as well. Take the above example of a program that is remediating students online for other institutions. This could bring attention, research opportunities, and recognition to the entrepreneurial program due to its innovative applications of technology and online content that might previously have gone unnoticed. Thus the act of entrepreneurialism may lead to both direct and indirect benefits, neither of which would have occurred if the organization had not considered trying something outside of its normal business practices.

Considerations for Entrepreneurial Initiatives

  • Take chances when warranted and do not be risk averse
  • Know the market before you act
  • Plan first, act second, but definitely act
  • Be prudent, practical, and use common sense
  • Measure gains versus predetermined projections
  • Utilize existing online resources for another purpose to minimize the work involved
  • Think outside of the box and be creative
  • Keep a portion of the revenue where the initiative began to generate future entrepreneurial spirit
  • Realize that there are non-financial gains to entrepreneurial activities

Another strategy is to consider new audiences outside of the original scope of the offering, such as using online materials developed for synchronous instruction for one audience, and broadening the market to include others. For example, an online program for pharmacists could partner with a provider of continuing medical education to offer content to physicians as well.

As one might guess, these ideas suggest that outside-of-the-box thinking needs to take place, as opposed to the normal progression through the traditional academic model that can sometimes be slow to change. This means being risk willing as opposed to risk averse. While it is unwise to enter the eLearning marketplace recklessly, it is appropriate to be aggressive where warranted—and to not sit back and have a lengthy debate on what to do and how to do it. The “best of intentions” d'es not move the process any faster, and can cause an organization to miss a unique opportunity.

Measuring ROI
It is important to understand that being risk willing d'es not override being prudent, practical, and exercising common sense. For example, it might make sense to enter a new market in which your institution can capitalize on minimal competition and generate good, if not substantial proceeds. That way, the program is generating revenue that can be used for other purposes, and doing so via minimal changes to its existing eLearning content.

Something that might hamper program development is the amount of funds retained after the revenue is distributed across the university. Consider the example of a department generating roughly $50,000 in revenue via its entrepreneurial venture but then having to turn back a percentage or overhead of 30 percent to the central administration. Now, instead of $50,000 in revenue, the venture has generated only $35,000, out of which the operating expenses must still be covered.

In both of these examples, the potential bottom line could be small enough that the prudent decision would be not to create the work for such a small return on investment. That by no means suggests that supporting the campus collective should be avoided. On the contrary, each program is part of—and contributes to—the university community. But in some cases, the final numbers may simply not support the initiative.

Reaping the Benefits
First and foremost is the opportunity to raise alternative sources of revenue for departments or programs that might have otherwise settled for less than optimal budgets. While not every institution of higher education may be experiencing a tightening of the financial belt, it is safe to say that few colleges or universities would turn away from the chance to raise additional funds that are ready to use as they come in.

The challenge is that this revenue, if based on short-term contracts or episodic content sales, is difficult to plan into revenue projections. That in itself limits the usefulness of the funds generated, though there are some very good and useful ways the funds might be used. It is important to remember that the revenue should be used, to some degree, to benefit the personnel or program that put forth the time, the effort, and took the risk for an entrepreneurial venture. The rewards serve as an incentive for future entrepreneurial initiatives, both in that department and on other parts of campus once others see what took place. For example, the additional revenue could be used to supplement cuts to institution-sponsored research, faculty or graduate student travel, student help, or purchases of software or hardware. Another way to achieve this is to start the entrepreneurial venture with a particular goal in mind, such as software upgrades or a new server.

Taking the initiative and being entrepreneurial is not without some inherent risks, but if done with due consideration, then success should result. Taking a chance is truly only a chance if no thought or planning is involved.

comments powered by Disqus