K12 Open Ed

Open business models, part 3: some options

There are multiple ways an OER core curriculum product could generate revenue streams.

One is through some kind of membership model through which states, districts, or other partners participate financially in the project in exchange for product development input, review privileges, and piloting support, as well as possible discounts on fee-based products or services after the product is released. NROC has followed such a model to supplement its stream of philanthropic funding.

Another model is to charge adopting districts in a way that is similar to how they pay for other products. Here are some options for that:

Option 1 – Free digital curriculum plus fee-based services, which could include:

Curriculum customization – This could be a customization for particular state standards, to “fill out” the product offering, or to customize for district needs based on assessment data.
Electronic product customization – This would involve reformatting of content for whatever LMS and/or devices a district might want to use, such as Moodle, Blackboard, Edmodo, etc., as well as for mobile devices or other uses.
Professional development and support – This could include face-to-face workshops, video-based workshops, membership in a support community, etc.
Ongoing product support
Summative and formative assessments – This is not included in most OER offerings and is often offered as an additional sales item (either by the basal publisher or by another organization) even for traditional curriculum.

The pros and cons for this model are as follows:

	Pros	Cons
For the district customer	Provides important services Modular choices Price flexibility Significantly lower cost than commercial offerings	May not fit existing budget models
For the publisher	Provides services critical to successful implementation Leverages existing expertise Partnership opportunities	“Free” plus not free may be confusing Less predictable revenue stream Additional costs of additional services Wide choice may result in uneven implementation

Option 2 – Complete product bundle sold at a package price*, which might include some combination of the services listed in option 1 above, as well as any of the following:

Print on demand – Core curriculum, teacher materials, and/or ancillaries delivered in a print format. [Printed books are still required by many districts, including not only those that don’t have sufficient technology infrastructure, but also those for whom equity in home use is a concern. There have been lawsuits around this issue that make this a necessity in many places.]
Ancillaries – Additional “all rights reserved” support products, which could come from a variety of sources. [Commercial core curriculum products are typically bundled with a large assortment of ancillaries, while OER often does not include these.]
Hardware and software – Curriculum reformatted if necessary and pre-installed on student mobile devices, which could be included in the overall price.

*It is understood that the curriculum would also be available digitally for free.

	Pros	Cons
For the district customer	Provides important products and services Modular choices Price flexibility Better fit with existing budget models “Apples to apples” comparison with other commercial offerings Significantly lower cost than commercial offerings depending on configuration	Possible higher cost than option 1
For the publisher	More revenue Provides additional products and services critical to successful implementation More uniform implementation quality Leverages existing expertise Partnership opportunities	More complex sales and implementation process Requires additional staffing (or partnerships) Additional costs of goods sold Inventory costs

Option 3 – Per student fee for all materials and services for duration of contract

This is similar to Options 1 or 2 but is positioned in a different way. (It is understood that the curriculum would also be available digitally for free.)

Pros

Cons

For the district customer

Same as Option 2, plus:

May be more cost effective for some schools
Spreads cost over time

Same as Option 2, plus:

May not fit existing budget models (depends on state/district)

For the publisher

Same as Option 2, plus:

Spreads revenue over time

Same as Option 2, plus:

Possible funding instability

Option 4 – Membership

This model involves states or districts purchasing a yearly membership priced on a per student basis. As a part of this membership, customers could receive premium services such as input into the development process, video-based professional development, priority support, and/or a discount off other product and service offerings.

This model might fit best if there are significant ongoing and growing service components to the product, such as an online learning community that is a “members only” benefit.

Pros

Cons

For the district customer

Same as Option 2, plus:

Purchase flexibility from year-to-year

Same as Option 2, plus:

May not fit existing budget models

For the publisher

Same as Option 2, plus:

Increases customer buy-in and loyalty indefinitely

Same as Option 2, plus:

Requires repeated sales efforts each year
Perceived decline in value over time could result in attrition

Option 5 – Some combination of the above

An important point to emphasize with all of these models is that there is still a significant overall cost savings over commercial product.

Next post: Who does all this?

(This is a part of a series on business models for OER K-12 core curriculum.)

Values and my work: part 1

As I’ve gotten older, my values have become more important to me, and they’ve had a bigger influence on my work.

For example, I’ve chosen not to do some projects that don’t reflect values that are important with me. On the one hand, that’s sometimes a difficult choice when you’re freelance and your paycheck depends on getting work; on the other, it’s led me to some incredibly gratifying work.

Among my values are openness and equity.

A dilemma I face often, whether it is in my education work or my other community building work, is what to do when those values conflict.

To me, a part of equity is making sure that everyone or at least a broad and representative group has access and genuine opportunity. I think that is not only desirable and just, but broadly socially beneficial. Inclusivity is a goal that we seem to be getting away from in these days of rampant partisanship. Full participation where all community members, not just those who are like minded, can participate and engage seems important to me.

In many of the spaces I work in, community values are important and carefully arrived at. And yet, sometimes those values seem less than inclusive or even elitist.

How do we balance our values with the desire to be inclusive and equitable? How do we act when these things come into conflict?

A few examples might help to define this. My career started in traditional curriculum and print publishing. I then moved into more technology-enabled work and gradually came to embrace a less structured, more flexible, more learner- and choice-driven sort of learning style. As I moved along this continuum, the applicability of my interests and work to “mainstream” audiences narrowed.

I believe deeply in work that gives learners choice to follow their passions, but I also understand that this approach doesn’t currently have a perceived importance or place in many educational systems.

This dilemma extends to a wide variety of other choices, including strangely enough technical platforms (which brings in the openness element) and leadership approaches. Those will be the subjects of parts 2 and 3 of this series.

In the meantime, I’d be interested in hearing if you feel conflicts amongst your values. Does equity mean to you what I’ve suggested here? Is maximizing inclusiveness the same as equity? And does that goal conflict with other values you have?

Open business models, part 2: a price

My main premise for an assortment of forthcoming business models is to position OER core curriculum product package as having a greatly reduced cost as opposed to being “free” and to use the proceeds to fund the work needed to make sure that these valuable, high quality instructional materials are adopted and used effectively.

I realize that this rubs some the wrong way, but bear with me.

My reasons for suggesting this are several:

Without some revenue flow, business models are fundamentally unsustainable.
Most school districts do not buy primarily on price (and even where this is an issue, this would still be the clear low price option).
Price can indicate value, and “free” can be a negative.
Paying something tends to establish buy-in and commitment.
Without some revenue flow, business models are fundamentally unsustainable. (It’s not a mistake that I list that twice.)

Also, note that the main digital assets would still be available for free, but the marketing focus would be on a package with an associated price.

The next post will be about different ways that the product and related package price might be configured.

(This is a part of a series on business models for OER K-12 core curriculum.)

Open business models, part 1: the dilemma

I have been thinking about potential business models for OER core curriculum, in light of the fact that such curriculum is costly both to develop and to sell, implement, and maintain, and, as discussed, elsewhere there really is no “free.”

Of course, it is a given that the main open licensed digital instructional materials will in fact be available free of charge. But still those materials have a cost that must be covered.

To get there, it seems to me that there are at least two main areas to fund:

Initial materials development
Everything else, including sales, implementation, professional development, related non-free products (e.g. technology, print versions, ancillaries, premium products), support, maintenance and upgrades, etc.

Regarding initial development, most K-12 OER that I am aware of has relied on philanthropic support. I question whether this is a sustainable model long term, but for now, I’ll take that as the standard though I’ll offer a possible alternative later in this series of posts.

The “everything else” parts of the package are often ignored by OER publishers. I think that failing to consider these is indicative of a “build it and they will come” attitude. In K-12, just because materials are “free,” there is no guarantee that they will be adopted or used, especially for basal curriculum. In fact, the “sales” process is just as complex and costly for “free” products as for commercial ones. The result of failing to account for these things has often been a lack of adoption and/or underuse of high quality materials.

The dilemma then is how to fund a costly sales and implementation process for a product that is free.

(This is a part of a series on business models for OER K-12 core curriculum.)

Selling core curriculum

I’ve been thinking a lot about how K-12 districts adopt core math or ELA curricula and how this relates to OER. In this context, I’m not thinking about the product itself (though I may write separately about that), but more the sales and support process.

I know how large traditional publishers do it — with lots of marketing, beautiful collateral, big sales forces, lots of hand-holding, lots of promises.

What I’m trying to tease out is how much of this is essential and how much is not. Particularly in the case of an open-licensed (“free“) curriculum that is not likely to have the financial resources to sell in the same way as the big ~~boys (and yes, they are mostly boys; it is an old boys network)~~ players.

There are other models for selling to schools — some involve viral marketing, community building, and stimulating grass roots demand. In my mind though, those models work better for supplemental products that are more driven by teacher (and even parent or learner) demand. Core curriculum adoptions on the other hand are made by committees with a keen attention to high stakes accountability. In this risk adverse environment, a “build it and they will come” approach to sales and marketing is insufficient.

Another option to consider could be to cultivate in-district “champions” who are enthusiastic about the product and might take on some of the tasks described below, especially advocating for the project in face to face meetings. I’m not sure about the feasibility of this, but if it were to work, it would require careful cultivation.

[Note: For the purpose of this post, I am presupposing the goal to be district adoption of OER as the primary core curriculum. If your goal is to have your curriculum used in any fashion, e.g. “downloads,” then the options are much more numerous. And yes, it is true that schools are using more resources in a piecemeal basis, which I think is a good thing, but the context of this discussion is adoption as primary core curriculum.]

So then, here is a list of possible sales related tasks to be considered (Note: This relates to both adoption state and open territory districts, but obviously for adoption states, there is another whole set of hurdles before this):

Initial awareness building (e.g. trade shows, press, direct mail, telemarketing)
Getting on the list to be considered by district adoption committees (in-person sales calls, direct mail, telemarketing, sampling)
Correlations
Sampling (digital vs. print; this is a big issue for OER.)
Committee presentations (in-person)
Lots of paperwork (vendor approvals, bonds, etc.)
Piloting (not always required but often required in larger districts)
Research on “effectiveness” (This is getting to be a bigger and bigger issue.)
Follow-up; repeat, repeat, repeat

The question is which of these are essential and which are not, especially for “free” OER curriculum. My initial estimation is that many/most of these are critical regardless of the price of the curriculum. I’m going to be testing this supposition out by getting district input though and would love to hear your thoughts.

(Note: I’ve left out of this post the sales dimension involving personal relationships, which can be as straightforward as building personal trust or as unsavory as quid pro quo favors. While I suspect that these relationships have a sizable impact on some purchase decisions, and I have certainly heard stories of such, whether completely on the up-and-up and less so, I don’t have a broad enough base of factual evidence to support that.)

One possible answer to this dilemma is a business model that includes some flow of revenue to the OER publisher in order to fund the sales process (and also pays for follow-up support services like professional development and customization, which I don’t discuss here but will in a future post). The price, of course, still would be MUCH lower than traditional curriculum. To me, that’s a pretty good trade-off for everyone involved (especially considering that in some cases, it’s not clear who exactly benefits from free or lower-cost core curriculum). Future posts coming with more details on possible business models as well.