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Dissecting Online Tutoring

Posted on Monday, May 1st 2006

A number of businesses have cropped up that claim to provide online tutoring. It is a multi billion dollar market opportunity with incumbents such as eSylvan, and upstarts such as Growing Stars and Tutor Vista.

My thesis: the service is only effective in a one-on-one mode, and the P&L, then, is only interesting if off-shore tutors are used (i.e. tutors from India, China, Eastern Europe). India may the best solution, because language problems may be more of an issue elsewhere.

Here are some questions to ask in analyzing a tutoring business:

– How many students are they tutoring?
– How many hours on average do the students use the service?
– Who are these students? Public school students? Private school students?
– Any ethnic bias towards kids of Indian/Asian parents?
– Any geographical bias? Which school districts are adopting the service?
– Experience with home schoolers? Is that a segment they serve? What percentage of the business is home schoolers?
– What subjects do they receive the maximum number of tutoring requests for? Algebra I? Calculus? Biology? Physics?
– Do they ever have missed appointments, whereby students skip their scheduled session?
– What kinds of skill-gap assessments do they do? How do they zero in on what to focus on?
– What content/syllabus do they follow in tutoring the students?
– How do they reconcile state-to-state and school-to-school variations in course material?
– What is the user experience like? Hardware? Software?
– What is the pricing model?
– How much have they benefitted from NCLB certification?
– How do they market the service?
– Do they have experience with advertising using the MySpace/Facebook communities?
– Do teachers recommend/use the service to help their students?
– What are the primary drivers of the business? Test-preparation? Homework help? Other?
– Any issues dealing with teacher’s unions (NEA, etc.) due to off-shoring?

Here are some facts to keep in mind on this market:

While the tutoring TAM is very large ($5 billion), online tutoring TAM is likely to constitute of students who are quite motivated, and omit the ones who are not. This may limit the market substantially, and precise segmentation is necessary to tap into the right set of customers for efficient scalability. In my assessment, Growing Stars, one of the earlier entrants to this market, is doing a miserable job of strategic marketing, and hence will have difficulty gaining any traction whatsoever in terms of growth financing. The one thing they do right, however, is have a 1:1 service, which positions them well against the 1:2 and 1:3 offerings like eSylvan. Personalization is key. They understand that.

There are a number of VCs looking at deals in the area, gauging from the questions I get. It was not so two years ago; this is a good sign.

I haven’t seen the “right deal” yet, though, that warrants financing.

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[…] I have written extensively about Online Tutoring already. To synch up, pleas read Dissecting Online Tutoring. The current and sudden VC interest comes from the investment that Sequoia (WestBridge) made in TutorVista. […]

Sramana Mitra on Strategy » Blog Archive » Concept Arbitrage: Sylvan Monday, June 26, 2006 at 6:57 PM PT

[…] But Sramana Mitra raised few very interesting points : […]

Wake Up,Neo Saturday, October 21, 2006 at 2:13 AM PT

Sramana,
Is there another way to get to the Sylvan link in you post above? I would appreciate it.
Thanks

Aashish Sunday, February 18, 2007 at 2:02 PM PT

I’m not sure I understand what you’re looking for …

Sramana Mitra Sunday, February 18, 2007 at 2:21 PM PT

I have been using tutorNEXT – http://www.tutornext.com – an online tutoring firm, for my daughter for the past few months. They also definitely understand the personalization aspect. Every worksheet and lesson plan they do is obviously created for my daughter. She is already ahead of her class, but I thought she could do better. I couldn’t get this personalization from Kumon and Sylvan where she and I got frustrated earlier. I think this market wil definitely grwo as long as parents continue to receive the kind of service we receive from tutorNEXT tutors.

Nitu Tuesday, March 20, 2007 at 3:55 PM PT

lots of companies budding up in this arena. I stumbled upon http://www.tutorquick.com.
the best part was that i was connected to the tutor almost instantly without wasting much of my time.

the accent problem also wasnt there as i had experienced earlier in some other tutoring website. pricing was also affordable.

Jarret Saturday, December 1, 2007 at 7:42 PM PT

What is your take on online services focused specific areas say GMAT or GRE test prep or Math such as http://www.testclassroom.com.

My understanding is that these can provide more value since they bring in more depth and focus on that particular topic.

Sam Tuesday, December 18, 2007 at 4:14 AM PT

More value than what? Sure, Test Prep is one context in which online tutoring is/can be offered effectively. But it is not the only context.

Sramana Mitra Tuesday, December 18, 2007 at 11:42 AM PT

How good are these online tutoring websites I just want to try this for my kids. I heard http://www.tutorvista.com/ is a good one. Can you recommend any one who is good in online tutoring.

Thomson Saturday, October 23, 2010 at 9:49 PM PT

I know a few students who have had success with online tutoring. There are a lot of different options out there nowadays. It is really turning into a a big industry.

Jake a tutor Tuesday, February 15, 2011 at 10:26 AM PT

Hi, my name is Steven Gottlieb and as a college math professor I certainly can help you with any math course you are studying. I offer online tutoring that has yet to be matched. I have an electronic whiteboard on which I write on and this writing will instantly appear on your computer screen. We will talk by telephone and in the end you will be access to a video recording of the whole tutoring session-I'd like to see a face to face tutor do that!
I also sell math videos ranging from arithmetic thru calculus 3, statistics, probability theory, linear algebra and most test prep courses.
You can read more by going to one of my websites- -http://www.MathonDVDS.com and http://www.MathTutor1.com

MathonDVDs.com Wednesday, June 8, 2011 at 9:51 AM PT