Re: Business Model Reality Check

[David Neeley <dbneeley -at- oddpost -dot- com>]

Kate, 
  
First of all, several times you mention as if it were a mantra that it "...takes five years to see a profit." I have no earthly idea why this seems such a fixation. In today's business, a much shorter timeframe is common. 
  
For example, in determining whether to make an investment in equipment or software, the yardstick is often twelve to eighteen months to be worthwhile--in most cases, under a year. 
  
For new ventures such as you outlined, I believe it is entirely wrong to think of a five-year timeframe *if you are expecting to make a living* at the same time you're building such a business. 
  
Next, I seriously question the "no editing, no oversight" of the SME materials for these "courses" you speak of. It would only take a single bad quality example to turn off a large number of people...and, as hard as it is to generate a "good buzz" about a company, it is SIMPLE to spread trash about it. 
  
As for the low-cost approach...I believe you can become too low-ball in price. People simply are not likely to take your service seriously if they don't have to pay as much as a McDonald's breakfast for a course. I think you'll be climbing a very high wall to overcome that you don't need to climb. 
  
There are existing businesses in many markets that offer informal courses. Before I bet the farm on the online version, I'd do a fairly careful review of others in the non-credit education business to see if you offer a competitive advantage to what's out there already. There are many ideas that should fall out of such a study. For example, what if you packaged a system you could license to the existing informal class outfits to sell with their existing folks? If you can offer them fresh programming for less than they figure it'd cost them to develop it, you may find a worthwhile means of having others do your marketing for you. 
  
All of that said, so long as your checks don't start turning to rubber and you are getting something out of the experience, why not continue as you are? Whether the company will exist in another three years seems to be a problem that need not concern you for now beyond doing what you can in the areas of your responsibility. 
  
David 

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