With the dotcom funding boom at its back a few years ago, e-learning seemed like easy pickings. Now, funding has dried up, and corporate training budgets have been slashed, says Trace Urdan, senior analyst of learning companies at ThinkEquity Partners Inc. His numbers show industry growth falling from 34 percent in 2001 to 7 percent in 2002. Does that mean a dour future for this once-bright market?
Not exactly. Online degree programs continue to grow, the government spends more on training in the 9/11 aftermath, and such corporations as GM are shifting their training budgets to e-learning, says Urdan. "If you've got the vision, this is an area that's going to be strong," he says.
The growth comes thanks to demand for professional development and vocational training, says Angela Lovett, founder of WorldWideLearn.com, a Calgary, Alberta-based e-learning directory. The future, she says, is bright.
But business training is where the market will lie early on. "It will take a few years for the mass consumer market to embrace it," Lovett says.
Beyond creating content, Urdan says, services will be a growth market. Help companies integrate training software or structure programs. Better yet, outsource it for them by running the software, finding talent and administering classes.
That's been the approach of Knowledge Anywhere, a Bellevue, Washington-based e-learning firm. CEO Charlie Gillette says providing a soup-to-nuts employee training solution makes his company attractive to corporate clients like AT&T and E&J Gallo Winery. The 30-employee company has been experiencing 50 percent year-over-year quarterly growth by producing educational content and delivering it via its software.
Skittish VCs are unlikely to fund an e-learning venture, so plan on self-financing--including customer funding, as Gillette did to bootstrap. "Go after a very specific vertical market," he advises. That doesn't make e-learning easy pickings. But there are still pickings to be had.