In the context of the above: Here's a question to the experienced entrepreneurs. If a startup wants to take on Blackboard. What would be a good way to go about doing it?
We offered it for free to individual teachers with the strategy of enlisting an evangelist group of dedicated and passionate teachers at institutions. The plan went that once a critical mass of teachers from a given institution where onboard and using it, we would trigger the enterprise sales approach and sell the product to the institution.
We had some uptake from teachers, who universally loved the product. They raved about it in fact. We were super excited. We thought we were onto a winner.
They told their friends and colleagues who in turn signed up, and they too loved it. And raved about it. And told their friends about it.
Unfortunately the vast majority of them never actually delivered a course on it with live students. We were stunned.
After prodding and asking, and eventually getting to the bottom of it, we found that whilst the vast majority of teachers loved the product, and loved the idea of using it for their courses, they wouldn't use a product that wasn't centrally supported by the institution (or even in quite a few cases, couldn't use a product that was specifically prohibited by their institution - they were only allowed to use the prescribed LMS, which in most cases was Blackboard or Moodle).
So my tip for entrepreneurs trying to break into the enterprise LMS space is appreciate your an enterprise sales company. Your users are not your buyers, and even if they love your product, if you aren't selling it to the buyer you'll die.
I don't believe this is a market in which you can offer a freemium product to the individual with the intent of penetration reaching the masses through viral or other growth strategies. It might be worthwhile to do this to help get exposure, but don't expect to get actual sales, or actual usage, off the back of it. This isn't an industry in which a Yammer approach works (IMHO).
Many companies think "let's build the best thing we can, and the users will love it and win over the IT department, who will write the checks." Microsoft's ongoing record revenues, in a time when the PC market has shrunk and WIndows 8 sales are tanking, proves that theory wrong.
Having lived through this myself, my advice to to come up with price points that middle managers can expense without institutional review. But if you don't plan for this from the start, it can be a frightening to go from a sales forecast of 20-odd $100,000 sales to one that forecasts 100,000 $20-ish sales...with the same sales team.
We called it the "credit card approval limit". If a divisional/departmental manager can approve a purchase on their credit card without seeking director or board level approval you'll have a much easier time getting past the penny gap with customers.
The reason I bring this up is because software is priced
three ways: free, cheap, and dear.
1) Free. Open source, etc. Not relevant to the current
discussion. Nothing to see here. Move along.
2) Cheap. $10 - $1000, sold to a very large number of
people at a low price without a salesforce. Most
shrinkwrapped consumer and small business software falls
into this category.
3) Dear. $75,000 - $1,000,000, sold to a handful of rich
big companies using a team of slick salespeople that do six
months of intense PowerPoint just to get one goddamn sale.
The Oracle model.I think most schools want to see something that's proven, low risk, and beneficial. If you can show them some of the top schools are using your software, and their faculty and students are raving about it, and how it's making their lives easier, reducing costs, and how the transition from BB was seamless.
The problem is obviously getting the first few schools. You need to eliminate as much risk as possible. You need a lot of credible sources backing you in this situation to make buyers more comfortable.
Universally loathed by people who know, but stacks up well on feature comparisons charts.
Players like Canvas[1] are sort of trying your idea. The front page of their website reads:
IS IT REALLY A LEAP OF FAITH WHEN YOU JUMP TO SOMETHING BETTER? “It just works.” “It’s easy to use.” “It lives up to high hopes.” “It’s the next generation of LMS.” These are just some of the reasons San Jose State University decided to switch to Canvas. And are glad they did.
They compete directly with Blackboard and seem to be doing ok.
1) Choose business or educational. Pick one and completely walk away from the other.
Businesses (Generally Speaking) don't care about classroom training. Educational Institutions (Again, see above) don't care about learner org charts.
2) Embrace (#@%!) SCORM.
It's a requirement. It just is. Just don't base your domain after it. Use SCORM as an old api, but not as a model for your database.
3) Be multi-tenant from day 1
This is really hard to get right, but I think it's really important. There's too many solutions out there that require installing the entire software suite and not enough SaaS offerings.
4) I guess at this point do standard startup stuff
Find companies (or universities) that are looking to create a learning platform and reduce their requirements down to something that resembles a platform
1) Go to a college you have some connection to (e.g. the one you graduated from), find a decision maker who has authority to BUY your BB killer. 2) Sit down with him/her - see if they are interested at all. If not - try a couple of more times and forget about it - it's easier to fulfill the market, not create it 3) Now if they are interested - create a product they are willing to pay for (very important), sign them up. 4) Ask that decision maker or any other professors who are happy with your product to introduce you to their friends at other colleges. 5) Repeat
I think the problem with most companies who tried an failed is that they assumed that if they build a better product - colleges will pay for that. In many cases it does not work this way.
I am not talking someone who is high in the food chain, I mean the one who is the final say and can move the entire organization. Sometimes there is no one at a specific org that can do that, and if so, don't even attempt it.
Online testing is probably going to be more important; video-delivery of lectures is going to be more important; mobile access (especially for instructors) is going to be more important; massive enrollment is going to be more important. It's hard to imagine that Blackboard will do any of those well.