Online Growth Pangs: In the Winter 2000 Edition of EBF We Introduced Four Companies Newly Created by Alumni of the Community of European Management Schools (CEMS). Three Months Later (Spring 2001) Growth Pains Were Evident but All Four Remained Optimistic about the Future. Here Are Their Latest Reports from the Front Line
Going against the gurus
Samsari Education is an e-learning business based in Sweden
I remember a lecture at business school during which Kjell Nordstrom, a management guru, kept on repeating "No, no, no!". He talked about his role in the board of a fairly young company, and his point was that the founders wanted to grab every opportunity they saw, rather than sticking to their original idea. He constantly said "No" to all their ideas in order to help them focus on their core product and core business idea.
I also read an article recently in which Hans Rausing, one of the founders of Tetra Pak, gave his advice to young entrepreneurs. His two pieces of advice were: do not get listed, and make sure you stick to your original business idea, no matter what.
SamSari's original business idea is to create, produce and sell off-the-shelf, web-based courses to corporations. This strategy excludes customised courses or anything outside the area of business and leadership. In the long run we really believe in this strategy. There is much higher scalability in selling standardised products to a large number of customers, rather than selling "man-hours", which is what you do when you make customised courses. Customised courses are like consulting--sales volume is inevitably limited by the number of employees you have.
In the beginning we stuck to our business idea and turned down all proposals that did not fit into it. Now, however, we have started selling customised courses as well. Our thinking behind this is that a) we are good at taking any type of content and turning it into a learning solution. Why not do that with the content the customer has? b) we do still not sell enough standardised courses to break-even. Why say "No" to cash that someone is willing to pay for our work?
Is this right or wrong? Is it wiser to stick to your original idea, even if that means risking running out of money at a faster speed? Or should we take any job we can get, anything for the money? Or is there a golden middle way? We don't know, and spend a lot of time discussing this. On the one hand, moving into new areas will give us an even larger potential market, and there are many possible synergies and spin-offs between the two business areas. On the other hand, the risk is that we lose focus and control, thereby compromising our efficiency and success in the long run.
It would be interesting to get EBF readers' opinions on this! Meanwhile, we continue on our path to survival, i.e. we take in the jobs we can get and hope we will be able to turn this ship around. The good news is that April was the first month we made a profit!
Pia Engholm is co-founder of SamSari Education (www.samsari.com)
The executioner's snag
ExpertPlaza is an interactive Question & Answer platform based in the Netherlands
Our previous article reported on how we launched our website and made contacts with potential clients to license our technology. In doing so we entered the always tricky waters of online consumer marketing. How many customers will visit? How many will enlist and use our service? How many will come back? Our partnership with a large Dutch portal helped to draw traffic. Additionally, our story was published in several newspapers and magazines--a very useful way of getting new visitors, especially working without a large marketing budget. Unfortunately, we lost traffic at the beginning due to technical problems, learning the hard way that however good your pre-testing actual use will always generate new and unexpected bugs.
We are happy with the growth in experts and the seriousness with which most approach their new 'job' at our knowledge sharing platform. On the user side things will still have to improve. We see frequent use of email between users and experts but the expected high frequency of telephone calls has yet to materialise. In May several Dutch e-business experts and self-proclaimed gurus announced the 'End of Free on the Internet', stating that consumers were finally ready to start paying for interesting content and services. …