Tutoring Industry – Ripe for Disruption
By Keith Rezendes, CEO/Co-founder, Avidbrain
What is the reason that tutoring industry is ripe for disruption? Have you an idea about of this industry’s TAM (Total Available Market)? Would it be a shock for you if I would disclose it to you that it was minimum 10 billion throughout the country? What if I would tell you that it was expected to become far more than 100 billion throughout the world?
Now, the other side of it is, if I would ask you to stop any passerby and ask her/him to name only one tutoring firm, can s/he? I bet, more than 90% of people cannot reply you. Doesn’t this industry desperately want a change? This industry has such a huge market and still nobody knows about its leader.
Approximately before two and a half years, I and my co-founder wished to form a tutoring firm. What surprised us was the fact that how ridiculously hard it was to bring a great company name as there are innumerable tutoring firms out there. And every day more and more of them seem to be popping up.
With this over-abundance of tutoring companies, the point every founder has to think upon is, “what can make our company different from the countless ones out there?” We might find lame reasons like fees, value, or services, but ultimately, we are bound to find many other firms doing nearly the same. If you seriously think that you can beat others in these factors, think twice.
I have worked for several tutoring firms for many years and therefore it left me thinking on the interview question in Peter Thiel’s book Zero to One, “What important truth do very few people agree with you on?” In my opinion, the answer is the real asset of a tutoring company is their tutors. My entire firm is based on this fact. Most people would say it is the clients, who in this case are students, but I wouldn’t agree.
Most people say that in every business, the customer is right always and that they are the real asset of a business and that without them, you cannot be in business. This logic is simple and seems to be true on the face of it for almost all businesses.
Now, let’s ponder a bit more upon why I don’t agree with the assumption that the true value is the customer. Possibly in businesses such as retail sales, where the sales executives make around $10-15 per hour, the staff is not as valued as customers.
Now, in the realm of tutoring, the average countrywide rate is from $40 to $60 per hour. That’s good, right? But, there are areas in New York where tutors commonly charge $200-300 per hour.
Most top tutors who charge more than $40 per hour understand how to deal with, appeal, and keep up great clients. The tutors are the true value because several top tutors would not only be able to deal with their clients properly, but also they would get a big success in drawing new clients all because of referrals.
So if you realize that tutors are the true value of your company, won’t your first priority be to ensure that they are paid well?
After having an experience in the tutoring industry for almost more than 30 years, I’ve observed that students are attached to their tutors and not the tutoring companies. So if a high-quality tutor are to change companies or go out by herself/himself, often students will follow them. In short, tutoring is concerned with relationship. No greater relationship exists in the process of learning than that of students with their mentor.
As far as I am concerned, several things I do focus on one question: how can it help my tutors? It’s that easy: keep your tutors pleased and they will manage everything else.
AvidBrain is a place which brings tutors and students together. As per the father of economics, Adam Smith, the unseen hand will offer stability to a market. Nevertheless, economic experts today normally decline this hypothesis because of two driving points: first, it is as per the faulty supposition that all humans are rational. Second is a little thing known as innovation. This is such a strong power that regardless of how well established a firm is, a shortage of innovation can translate into its decline.
If we observe any assumptions closely on which the present tutoring firms are built, we see the potential to disrupt the status quo. But, simply lower costs won’t achieve it for us, nor can we take it for granted that most tutors will visit our system till we have footing. So is there a way to perform disruption of the tutoring industry?
It’s simple: turn over the table and support the concept that tutors are the value of any tutoring firm. And there the innovation will come in.
The best educational marketplace should be beyond a place for connecting tutors to students. It should offer services to each party, a secure environment (background scrutiny, interviews, as well as safe financial transactions), handling our customers, services like integral reputation for the tutors through reviews and testimonials, and resources for tutors. We take back more from the middle-man and give it to the tutors, and the remaining profits are used for services for both parties.
Even though one day we are to get only a sliver of the pie in return, as far as all parties love our service since we are continuously innovating, we have the pie. As soon as it happens, we can apply extra revenue streams like advertising. As per the saying, that is simply icing on the cake, or should we call it Cool Whip on the pie?
Let’s get to work and have this pie.
