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INDUSTRY ANALYSIS AND BASIS FOR ASSUMPTIONSWorld Skype Foreign Language Kids Lessons Industry: 504 billion TAM, 504 SAM (can potentiallyreach all customers because our service is only online service). Target market: 5% of innovators –2,5 billionHow we calculated TAM:7 bln (total amount of people on the Earth) x 20% (average amount of children in population) =1,4 blnInternet coverage of the world – at least 50%. 1,4 bln x 50% = 700 mlnIf every child takes 1 lesson every week at 15 USD – then the amount of market is: 700 mln X 15USD X 48 lessons/year = USD 504 billion per yearWe plan to cover all countries in the world. Did calculations for Russia only at this stageRussian market30 mln children, Internet coverage 30%TAM, SAM = 9 mln X 15 USD X 48 lessons per year = 6,5 bln per yearTarget market: 6,5 bln x 5 % (clients-innovators) = 325 mln per yearOur commission: 5%Potential revenue/year: 16 mln USD. 50% - goes to people who will develop study materials andguidelines for online lessons. We get 8 mln USD per year
TESTs. For Teachers’ Value• HypothesisWe suppose that teachers who specialize in childrens education canbe interested in creating an online profile and offering to parents fromall over the world online lessons with their children mainly aimed atteaching them foreign languages• ExperimentsWe talked to 5 teachers from kindergartens and they said that theypotentially would be interested. They do not currently offer anylessons online.• ResultsThe value to teachers confirmed
TESTs. For Child’s Value• HypothesisWe suggest that because children like computer, online lessons will be efficient for them. Wesuggest that children need foreign languages• ExperimentsWe talked to teachers, who said that online lessons have educational potential not as a solemeans of teaching foreign language, but in combination with other tools (ie educaitonal audioand video-CDs, real-world lessons).We talked to parents, we also made several polls through facebook and other social networks.Not many parents are 100% enthusiastic. Most parent say that they would try - but they do notsee a good product on the market. 25% say that computer is not good for children, so they aretotally against online education.• ResultsA) We need to persuade parents that online lessons are a GOOD IDEA: the way to do it is through getting endorsements from specialists in early education and doctorsB) B) We also need to show that we put interests of children on the 1st place - ie that our product is SAFE and can not harm children: we need to elaborate rules for online lessons (ie get medical recommendations for duration of lessons). We need to make partners with some institute that certifies teachers and ask them to certify out teachersC) We also need to prove that online lessons are EFFECTIVE: 1) we need to develop special know-how for such lessons (ie guidelines of lessons that all teachers will follow); 2) develop the whole chain, both online and offline (which books to use, which CDs - so that identical educational materials were on both sides of computer screen). Do it either independently or take smth already existing in the market (ie CDs with books for children).
Test. Studying CompetitorsHypothesisWe think that the idea is good. If so, it should be already implemented. Letssee what is already in place in order to do better/add smth newExperimentsBecause our business is online only, we searched the webResultsThere are offers of skype lessons to children, but at the bottom of the list as 1of many services. Most of companies that offer skype lessons of foreignlanguage include children in their audience. There are no details of suchlessons, no information about tutors, nothing that would be adjusted tochildrenWe need to make a product that reflects the difference: 1) between child andadult education; 2) adjusts to online environment. Also, we need to givedetails of teachers so that parents could make a confident choice
SUMMARY1. The Target world market for online lessons of foreign language for kids is big (2,5 billion USD per year)2. The market is almost undeveloped.3. Need to focus on the “Innovators” segment4. There is much skepticism around parents about efficiency and safety of online lessons for children.5. Need to give additional benefit in the form of special methodology for online education for children. Need to give away 50% to those who will develop such methodology for us6. Use English as a main language to be taught. Focus on countries where English is not a native language.
ConclusionThe idea has a potential as a growing marketshows. There is a chance to become a pioneer,but requires an effort in changing perception ofonline education as unsafe and ineffective forchildren.