Archives For Small Business

After seeing massive open online courses (MOOCs) suck up all the oxygen in the higher-education room for the past year, I decided it was time to try out one of these things for myself. So I have jumped into the deep end of the pool: not just a MOOC, but a MOOC on finance. Yikes. I may own a business, but let’s just say my strengths are on the content and creative sides. No one will ever confuse me with the great corporate finance geniuses of this or any other age. This will represent my first schooling experience since graduating from college back in the ‘80s and attending the University of Denver Publishing Institute.

At the insistence of my friend Jonathan Rees, who blogged about his own MOOC experience last fall, I am going to share some of my thoughts about this MOOC as I proceed through the class. Today, in part 1, I share the basics about the class and focus on the Coursera experience.

Introducing Guatam

The course I am taking is “Introduction to Finance,” taught by Guatam Kaul from the Ross School of Business at the University of Michigan. It is a 15-week course with an expected workload of 6-8 hours per week. The fundamental elements of the course experience are twofold:

  1. Video lectures by Guatam: 2 hours’ worth of lectures each week, broken up into 10- to 20-minute chunks.
  2. Exercises and assessments: There are exercises built in to each of the video lectures and then formal assignments to complete every 3 weeks. Plus a final exam at the end.

There is no formal textbook for the class, but Guatam does suggest a couple of optional ones, including one that is available for free online. I chose this one, as I’m sure nearly all students do.

To date I have watched only the introductory videos from Guatam, in which he carefully and methodically lays out the structure of the course, how it will operate, and how best to approach it. Judging from these early videos, I would bet that Guatam is extremely popular with his “real” students at the University of Michigan. He comes across as warm, congenial, funny, and highly approachable. You never have to wait long for a smile from him. He earnestly admonishes us to focus on the learning experience, not grades or the final certificate, and he begs us to approach the course with an open mind, curiosity, and a love of learning. He states that he decided to teach the MOOC because he strongly believes that education—even an experience from a globally renowned institution like Michigan—should be accessible to everyone. His videos are shot in intimate close-ups, which is perfect for an instructor like him. I think the videos will fly by because he is so good in this format and so fun to watch.

The Coursera Experience

This course is offered through Coursera, which has probably gotten more ink than any other MOOC provider. My initial thoughts about Coursera are from a web design and UX (user experience) perspective, something that I think about a great deal with our Milestone Documents service. No doubt Coursera had access to the best design and UX talent that venture capital can buy, and it shows. The interface is clean, uncluttered, and very easy to navigate. This is no small thing: presenting a complex design in a simple way is exceedingly hard. In addition, the videos are crystal-clear. There is surprisingly little in the way of student analytics, but I would expect to see a greater use of these from Coursera as their service matures.

Next up for me in this class, now that I have made my way through the introductory material, are the first lectures and exercises from the meat of the course: dauntingly titled sections like “Time Value of Money” and “Simple Future Value.” I will discuss my initial experience with the class material in my next post.

The education content industry (textbooks and beyond) is a strange place these days. There are generally two kinds of companies operating in the space right now: large conglomerates (think Pearson, McGraw-Hill, Cengage, Macmillan) and startups with outside funding. We are one of the very few outliers: small, bootstrapped, and not a startup. Not infrequently, as I look around at our competitors, I am struck by how weird we are.

But weird can be good. In fact, almost every day I am thankful that my company is small, especially in an environment that is begging for innovation. Begging? That word is not too strong when you consider that one in four students opts out of using the assigned textbook. In other words, a quarter of users don’t find enough value in their text to rent or purchase it.

Far from being a hindrance, being small and independent in any industry can fuel innovation. Here are just a few reasons why it works for our company and for me as the owner:

  1. I am accountable to no one but myself, my employees, and our customers. There are no investors pressuring us to deliver results so that they can cash out and no shareholders demanding a higher stock price.
  2. We can build for the long term. Without shareholders or investors, we can operate on whatever calendar we choose. Is it going to take us 3 years to be profitable with a new product or service? 5 years? As long as we have the capital on hand to make that decision, we can do so.
  3. It’s easier to pivot. With so many industries in the midst of upheaval, businesses of all shapes and sizes have to be nimble. The fewer stakeholders you have to answer to you, the faster you can change direction.
  4. We can create marketing campaigns of verve and boldness. While large companies can obviously create jaw-dropping marketing and advertising campaigns, they also by necessity have to walk a fine line: Anything too bold can set off a firestorm and potentially turn off customers and investors. By contrast, a small and independent business can say what needs to be said without packaging it in gauze.
  5. I can still have a life. When I started my company, one of my goals was not “Work 90 hours per week.” I didn’t long for 7-day workweeks, no vacations, and no time to spend with loved ones. I purposefully created a business that didn’t require those kinds of sacrifices. A different entrepreneur might well make different choices; more power to him/her.

 

Being Small Enables the Best Kind of Growth Strategy

Don’t get me wrong: I’m not suggesting that growth is bad. After all, growing your business is a big part of the fun.

I’m just saying that being independent gives you freedom on many levels—to take risks, to innovate, to create the kind of company culture that you want. At the same time, there are significant downsides to taking another path. In his excellent “Thinking Entrepreneur” blog at the New York Times, Jay Goltz said it brilliantly:

“The words growing and business are often said together like soup and sandwich. Why would you want one without the other?… It makes sense — until it doesn’t make sense. It really comes down to priorities. Do you want to take outside capital and the ‘partners’ that come with it? Do you want to take on more risk? More employees? More travel? More stress? More potential aggravation?… I have learned one important lesson of entrepreneurship: Just because you can, doesn’t mean you should.”

Be in It for the Right Reasons

To my mind, the main reason to take a careful approach to growth and eschew investors if possible is that you can run your business according to your own guiding principles. What are the “right” reasons to be in business? Each owner has to answer that question for him- or herself. If one of those answers is “to become filthy rich,” that’s fine. But it might also be true that your reasons will include things other than money: freedom, flexibility, altruism, community, even sanity.

So I say: Be different. So what if your annual revenues would be the equivalent of a rounding error for your largest competitors? So what if Tom Peters is probably not going to write his next book about your company? Follow your own path. Let your freak flag fly high and proud.

iStock_000005832234XSmall

This is the final post in a series about the key pivots our company has made in the past few years. In part 1, I discussed our first major pivot: the decision to begin producing and owning our own content. That pivot led to the creation of our Milestone Documents series of reference books. In part 2, I explained our decision to wind down our reference publishing and focus instead on reaching educators and students directly via MilestoneDocuments.com. We spent the last half of 2010 redesigning the site, switching to a subscription model, and gearing up for a late 2010 launch. Alas, by the time of the launch, yet another pivot was practically begging to be made. This is the story of that pivot, which turned out to be critical.

The Adoption Model

Over the course of the fall of 2010, while working with our designers and developers on version 2.0 of our site, we began to mull over the possibility of marketing our site directly to college history professors as a textbook replacement. At first, it seemed a distant possibility. However, we decided to poll some of the scholars who had written our expert commentary to ask them whether they might use and assign a site such as ours to their classes.

To our surprise, a fair number of these historians responded positively to our inquiry. They loved the idea of having a large number of primary source documents to choose from, they liked the all-digital paradigm, and they were in favor of anything that might reduce their students’ textbook costs, which had soared to $100 apiece and beyond. We quickly settled on an approach in which we would give away the site to all students whose professors assigned it for the first semester. The idea was to let professors try it out with their students risk-free, and then—presuming the professors (and students) were pleased with the service—begin charging students a fee of $50/semester thereafter. At that level, we reasoned, the site would still offer a tremendous savings over a traditional textbook.

We quickly made plans to attend the American Historical Association annual convention in Boston in January 2011, where with very little notice we would attempt to launch our new adoption campaign to professors attending the conference. We had a large banner printed that said “Ditch the Textbook,” and we set up a couple of tables with computers on them.

Making a Splash

It’s hard to describe what an outlier our little booth was at that first convention. Amidst a sea of booths filled with books, ours was a spartan square devoid of “stuff”: no books, no brochures, just me and Andrea Betts with our computers and a cheeky, slightly outrageous banner that drew stares, guffaws, and occasionally even hostile responses from attendees (“I’m not ditching my textbook. I WROTE the textbook!”). However, more typical were the warm greetings, serious interest, and outright praise (“This is great. You are the future!”). We signed up a number of professors for semester trials that spring, and we made connections with many others who would later on become loyal customers.

Settling In for the Long Haul

By the end of that first semester, we knew we had a product that could succeed. Surveys of the professors and students using the site were almost uniformly positive. Most of our professors signed up to continue using the site in the fall term. At the same time, however, we realized that we had launched the site in a form that was not quite ready for prime time. It lacked any central organizing place where professors could interact with and direct their students. Our coverage in certain key areas was lackluster. The site didn’t offer professors enough flexibility in choosing which elements to assign to students.

And, very importantly, we realized that our price point was too high. Sure, $50 might be a bargain to students used to having to pay $100 or more for a textbook. But a number of our professors confessed that they preferred to assign our site not as a replacement to their traditional textbooks but as a companion to it. In those scenarios, we were making the crisis of expensive textbooks even worse.

Course Corrections

What has followed in the wake of that first semester more than a year ago is a series of course corrections. We added unique home pages for every class using the site. We added tons of new documents and new controls for professors. Finally, we dropped the price to $19.95 per semester.

These actions are not additional “pivots” in my mind but something less radical. Every business, especially an upstart like ours that is pioneering a new approach in a digital format, has to make constant improvements and enhancements to find the sweet spot where customers (professors) and users (students) alike are thrilled with the service and loyal to it. That’s exactly what we’ve done. And while we are still working hard to find our way to that elusive sweet spot, we are getting closer every day.

So what’s ahead for our service? Are there additional pivots in store? One should never say never, but my guess is that we have only just now joined the battle, and it took those 3 initial pivots to find the battlefield. Our service has matured to the point where it is a viable choice for a sizable and growing number of educators—not only at the college level but also at the high school level—and our challenge is to do the hard work of telling our story, reaching out to customers, and making our product ever better. First came the pivots, laying the foundation. Now comes the execution, building upward toward the sky.

 

This is the second post in a series about the key pivots our company has made in the past few years. In part 1, I discussed our first major pivot: the decision to begin producing and owning our own content. That pivot led to the creation of our Milestone Documents series of reference books. We had a great time producing those sets, and they were well received by critics and customers alike. And yet, a couple of years into that effort, some clouds began to appear on the horizon.

Hat tip to our managing editor Ben Painter for finding the video clip. I suppose I play the part of Ross, only shorter and with no hair.

Recession Times

In 2010, on a rainy evening in Ann Arbor, Michigan, Andrea Betts (our former vice president) and I convened a gathering of informal advisers and friends, all veterans of the reference industry, to help us brainstorm about the future of our Milestone Documents product line. The talk naturally settled on the troubled state of the library market. It had been hit hard by the recession, and many of us had begun to think that in an era of chronic public funding shortages, it might never recover. One person in the group made a startling pronouncement:

“If I were you, I would spend at least 10% of my time thinking what we would do if the library reference market disappeared altogether.”

As we had only just begun our drive to build a business as a full-fledged reference publisher, this was sobering indeed. And yet the notion struck a chord on a couple of levels. First, it was clear that the market WAS under severe pressure and that the trouble might be not merely long-lasting but indeed permanent. Second, we faced a practical dilemma familiar to many small businesses: Go big or go home. That is, in order to increase our profile in the marketplace and make a larger splash, we needed to invest substantial funds not just in new products but also in new marketing and advertising efforts.

What Do We Want Our Company to Be?

The issue of where to invest our limited funds dovetailed with another dilemma: Leaving aside the troubled market, did we even want to be a reference publisher in the long run? Having created a cohesive body of content around a topic that we excelled at and loved, not just collectively as a company but individually as well (my own college degree was in history), did we really want to reinvent the wheel repeatedly for new products on new topics? That, after all, is standard procedure for reference publishers.

The full answer revealed itself only much later. But even at that time, we made the conscious decision not to abandon the brand we had worked so hard to build (Milestone Documents) but instead to double-down on a side experiment we had begun in 2008, around the time our first reference set was published: selling our content directly to individual students and educators via the Web, as opposed to reaching them through an institutional middleman (the library).

MilestoneDocuments.com

From the beginning of our Milestone Documents content effort, we knew we wanted to dip our toes into the direct-to-consumer market. Thus, in early 2008, we hired a web developer to create a simple e-commerce site where students and teachers could purchase our content by the article for a few dollars each. We thought we might see incremental revenue from this effort, and we wanted to experiment with a paradigm that others in our industry were talking about but hardly anyone was doing. For our part, we had nothing to lose by experimenting.

By 2010, when we were seriously questioning whether to continue as a reference publisher, we knew there was a market for our content via the direct-consumer model. But we didn’t really know how big that market was. Our Web sales had been extremely modest, but at the same time our site was very rudimentary, and we had done no outreach whatsoever. Also, most of our content was not yet on the site; we hadn’t yet added the content from our other sets that had subsequently been published. We felt that we hadn’t really given the direct model a fair shake.

In the end, faced with investing in a new reference set or giving our direct model a more serious chance to succeed, we decided on the latter route. It was perhaps a riskier move, but we were increasingly convinced that it was the only viable long-term strategy. If the library market was in permanent decline, we obviously had to move quickly into another market.

In the last half of 2010, we hired a new design firm to overhaul the look and functionality of the site and a new development firm to beef up the back end. And we made another crucial decision: We would switch the site from a per-article sales model to a subscription one built around monthly or annual plans.

MilestoneDocuments.com 2.0 was launched in December 2010. And the rest, as they say, is history. Right?

Not so fast. By the time of the 2.0 launch, we had yet another pivot staring us in the face, daring us to reconsider our strategy yet again. Did we have the energy to pivot once more? Did we have the resources? In the next installment, I’ll tell the story of pivot #3.

The concept of the “pivot” is trendy these days in the business world. According to Fast Company, Eric Ries (author of The Lean Startup) was the one who “made the term ‘pivot’ part of the business vernacular.” While the buzzword is a fairly recent phenomenon, the concept behind it of course is nothing new. Businesses have been changing directions to better succeed as long as there have been businesses.

In looking back at our own history, I can pinpoint three key moments at which we changed course. In some cases these actions don’t fulfill Ries’s strict definition of a “pivot” (“a change in strategy without a change in vision”), but nonetheless I think they form part of our overall trajectory as a business. Since I always enjoy reading the histories of other small businesses, I thought I would tell our story and provide one more model for other entrepreneurs out there to consider. Herewith, the original pivot of my company.

The Early Years

In our first decade as a company, we did one thing and did it well: we produced books and database projects for other publishers. When I founded the company in 1997, outsourcing was just coming into vogue in our part of the industry (reference publishing). Our timing was right, and in the ensuing 10 years we built a nice little business. Publishers hired us because they knew we would produce work of high quality, on time and on budget and with a minimum of fuss. For several years I operated solo, seeking help among freelancers and scholars on a project-by-project basis as needed. In 2002 I hired my first full-time employee, and by 2007 we had grown to a staff of six.

Own What You Do

As gratifying as it was to see my company grow and thrive in this arena, as the years passed I gradually felt more uncomfortable and anxious about our future. The reason was simple: when you are a hired gun, your future is not in your hands. I knew that the same publishers who had hired us—and who had been pleased with the work we created for them—could at any point stop calling us. They could hire other firms, they could bring the work in house, they could go out of business. It became clear that we had to find some way to start creating our own content—something that we would own and control. Only then could we hope to one day control our own destiny. Thus, we began to sketch out some possibilities for the kind of content we might develop.

The real pivot was made possible by a somewhat lucky turn of events. A publisher approached us about any ideas we might have for new projects, and we realized that here was our chance. In short order, we reached an agreement for a series of reference sets to be developed and published under our own imprint but distributed and marketed by this new partner—one that had an existing sales and marketing infrastructure and an existing customer base of libraries around the country. For the first time, we would be responsible for creating and producing our own books, and in return we would own the copyright and a substantial portion of the revenues.

Thus was born our Milestone Documents series of reference sets. Over the next 4 years, we would publish 5 multivolume sets in this series, each set garnering rave reviews and awards. And yet, as you’ll see in my next post, our journey was only beginning. As tends to happen in any journey, we encountered bumps in the road. Unforeseen market forces complicated our plans, and that nagging and anxious feeling returned. It was soon time for another pivot.