“I thank my scooter for the idea. About three years ago, in 2007, I purchased a scooter. But in the U.S. you need to get certified to ride one, which means you either need to deal with the Department of Motor Vehicle’s bureaucracy or take classes from a certified driving school.  So when I asked the dealer for advice about a school he pointed me to a bulletin board at the back at the store. There had to be a better way, I thought, to match people like me with the providers of such classes. To put that in perspective, my career background is at Amazon, where I was responsible for building their marketplace for used and third-party goods. All I did was apply the lessons learned at Amazon to teaching services.  

 

It is a simple idea—an online marketplace for teachers and schools—but when I looked around I couldn’t find anything like it yet. I’m a class taker; whenever I want to learn something I tend to look for a class, whether for professional skills such as software development or for more personal interests such as piano playing or wine appreciation. It amazed me that there was no online marketplace or central hub for connecting experts and knowledge seekers. 

What is unique about TeachStreet is that we focus primarily on the needs of the teacher. Our customer is the teacher, and our goal is to provide tools and services for teachers so that they can focus on what they love doing: teaching. Therefore, we’re not an education company; we don’t create class materials or offer infrastructure for online learning like Sclipo, Udemy or Edufire.  

 

On the contrary, we’re primarily a marketing company. We help teachers market their services. Traditionally, teachers market their services via word of mouth or via directories and bulletin boards. But they have no way of tracking the effectiveness of those channels, or whether these are worth their while. At TeachStreet, teachers are offered low-cost web space, lead generation services and they have a way to track the value of that service. This also allows us to price our service fairly; we only charge for verifiable value. In a sense we’re trying to be the Switzerland of educational services. We’re a neutral party; a central hub or meeting place for all educational services and their customers.  

We started out locally in Seattle and only promoted physical, real world classes. Today we’re active in every major city in the U.S. and we’re also covering online classes. That obviously internationalises the model significantly. If you’re in Brussels you can take photography lessons from a teacher in Seattle. But the bulk of our inventory is still comprised of physical classes. That’s how we started and it allowed us to avoid the ‘ghost town’ trap that many online learning platforms fall into. Many of these companies went about their business in the wrong order: they first built the platform, without having a critical mass of classes. So when potential students come along they find no classes. We did it the other way round; we first looked for the inventory.  

 

Most people are really comfortable learning via a physical class. So we leveraged that installed base of learners and teachers. We hired a team in the Philippines to scour the internet to find all the teachers and schools in the Seattle area. We subsequently contacted all these schools and asked them to claim their online presence at TeachStreet. At the start we obviously still had many unclaimed classes but as the site got going most have come onboard. Today we’re almost at 100%--nearly all the entries are claimed and managed by their owners.  Along the way we also started growing organically—teachers started approaching us proactively—which allowed us to stop the data collection work. Obviously this is the better type of growth; but the initial data collection was essential in order to avoid ghost town. And that’s why we haven’t expanded to Europe yet.  We’ve got years of work to do to fully cover the U.S.  That said, we’re open to partnering with other players in Europe, and we’ve already partnered in some other countries, and those sites will be live in 2010.

We’re convinced that in the future this will be the primary way in which people find classes. You can use the general search engines such as Google to find classes but these tend not to deliver focused results. eBay and Amazon also are potential competitors but again they aren’t specialised. They’re mainly technical platforms. In a way, our goal is to become the eBay or Amazon of learning. Other competitors probably include Yelp, Craiglist and Yahoo Store Builder. But again, the difference is that we can build a dedicated platform for learning providers and learners, to really customise it to their needs. This is not to say that we’re there yet.  In all honesty, I give ourselves a 3 out of 10, even though we probably are the best available at present. We can do a lot more to personalise the site for individual learners, to help them find what they need, as opposed to relying on them to know what they’re looking for. Also, we could do more to help teachers develop and promote their online presence.   And obviously we need to up the game in traffic generation.  

 

I’m acutely aware of the fact that this could be a winner takes all market. That’s the scary truth. The benefits for our students and teachers grow as the main player in the market grows. But today the market is still very fragmented. An emergent player could probably destroy us all tomorrow. You never know where the next Facebook will come from. And what will be the trigger or key success criterion: a simpler and more elegant site? That’s probably why Facebook won it. I have a background at Amazon where we built stuff at scale, so this still feels a bit like ‘Day One’ to me. 

The impact of technological developments and the internet should have a tremendous impact on education. Think about it. I studied in the MBA program at Wharton and can only wonder why those excellent professors don’t sell their lectures online. Surely people will be willing to pay for such content? It doesn’t make any sense. The only explanation I have is that these schools rely on that exclusivity for their business model and hence will resist any attempt to open such content up. 

 

Change is unavoidable but I suspect that the transformation will not be uniform across the entire educational sector. Some will embrace change and some will resist it. When you talk about the future of education it is important to make a distinction between higher education, lifelong learning, and kindergarten to 12th grade (K-12 as it is called in the U.S.). Those are the three main subsectors in education. In the higher education space you have non-profit, private universities like Harvard and for-profit schools like the University of Phoenix.  I suspect that the for-profit schools will evolve rapidly because they’re so focused on marketing. But the non-profits will try to protect their premium pricing models. Their core cost driver is the teacher-student ratio which usually is limited to about 150 students per class. These schools are coming online in the sense that a lot of the learning material is being made available to their students via the internet, but they’re not opening it up; they want to keep charging the same prices for the full programmes. That’s probably why those professors aren’t selling their lectures online; they’re protecting that business model.

With TeachStreet we operate in the middle space: lifelong learning. That’s where I expect most of the transformation to happen. Our role is pretty specific in the sense that we’re a central hub connecting learners and schools, whether they’re online or real-world schools. It will be interesting to watch how the market for online learning platforms develops, although at present this market is still very fragmented. And at this stage I don’t think there are enough teachers out there looking for online learning capability. If I ran one of those emergent platforms I’d probably focus my energies on signing up rock star teachers and use them to attract people to the platform, to get them used to taking classes online.  

 

The worst part of the education sector is K-12. That’s the space controlled by government and where most of the bureaucracy is. There are many companies out there developing technology to make teaching more effective, but unfortunately there’s a lot of resistance to new ways of doing things. I prefer the lifelong learning and professional learning sector because that’s where the market functions. That’s where people pay for education themselves and hence where the top education will always win. Here the incentives are in place to experiment with new technologies and methods.