Several years ago, the rush to elearning was driven by visions of profits. The long under-funded educational system was suddenly able to play in the business domain.

Photo credit: Lorelyn Medina

However, NYU Online, USOU, Fathom, and others discovered that the elearning market did not guarantee instant riches. The elearning market revealed itself as any other unique market - not easily unlocked by traditional business acumen or higher education administration.

A great product alone did not result in success. Neither did public awareness. Or superior instruction. Yet, people and organizations are making money in elearning.

The revenue models are emerging - many innovative approaches have resulted in profits and promising careers. A strong commitment to listening to the "customer", experimenting with new ideas, going with the stream of how things work in the online culture, and a willingness to fail and learn are all needed.

These are areas that I would explore if I were to focus on making money in elearning:

1. Offer a free product or service to the community in order to get known

   

   Reputation and perception of competency are critical.
   
   Keys to success: Getting known. Participate on public forums. Write articles. Consistency - once you start, stick with it. Make it something of real value by itself - not "for the full article you need a membership".
   
   Example: Interwise Live events, e-Learning Guru, any of these edu-bloggers.





2. Get into consulting
   

   This is a wide open field. Implementing elearning, standards, accessibility, design, full program design, and readiness assessment, are a few potential fields. The young, but quickly growing field of elearning offers many opportunities for consulting.
   Key to success: Reputation. Specialization.
   Example: Jay Cross





3. Software

   

   Organizations are making money with software. Some in proprietary software, others in providing services through the utilization of open source.
   Key to success: Market penetration and product usage. Proprietary products find success by "locking in" customers. Open source markets find success by providing a service or solving a problem.
   Examples: WebCT, Blackboard, Centra, Horizonlive, Desire2Learn.





4. Design and custom development

   

   Lately, I've noticed an increase in offers from off-shore elearning development firms. Like web development/interaction design web-shops, this market offers opportunities for small, specialized, reputable firms to custom develop elearning.
   Key to success: Creativity, diverse earnings base (web development, new product release marketing), finding customers who need your services - i.e. getting known.
   Example: Media1





5. Template games

   

   This is similar to software, but the focus here is on the creation of template games, where instructors can simply add their own content...and learners can interact with the content through a game-styled activity like Jeopardy, Solitaire, Who Wants to Be a Millionaire.
   Key to success: Getting users to understand the value of games, making an affordable product, understanding contexts and creating taxonomy-aware resources for various learning levels and situations.
   Example: Digital Game-Based Learning





6. Content creator

   

   Broad skill sets are needed in this area: media development - video, graphics, animations, writing, technical writing, simulations, games, etc.
   Keys to success: Broad skill base, or a community of specialized people developing content together. Quality of product. Understanding of the learning process.





7. Content publisher

   

   Digital publication is likely to be dominated by the big players in traditional publication markets (textbooks). Still, the openness and ease of sharing through digital technologies promises exciting opportunities for an innovative approach to publishing.
   Keys to success: Innovative thinking in response to the concern of high costs of educational materials, the need for instructors to have good, easy to implement content, and an easing of tight copyright restrictions that currently minimize educator's ability to customize.
   Examples: Thomson Learning, XanEdu





8. Create forums/associations

   

   In this model, revenue is earned through memberships fees (very difficult) or through publication subscriptions.
   Keys to success: Provide a real service for free, and advanced services for a price. Providing a reason for vendors and users to join and contribute.
   Example: eLearning Guild





9. Create partnerships

   

   Partner with fields that have high value of return in online learning, non-profits, and community colleges in developing and delivering specialized content. Often, professional organizations will be aware of elearning benefits, but unaware of where to begin. Content transitioning (classroom to online) opportunities exist.
   Keys to success: Patience. Decisions take a long time to make. Previous projects and experience are also important.





10. Hardware vendor

    

    Much of elearning has currently been built on the Internet. More advanced projects that rely on rich media require special software and hardware are emerging. Streaming media is an example of a specialized hardware/software opportunity.
    Keys to success: Must be extremely knowledgeable in the field. Competition is intense - look over your shoulder - it's HP, IBM, and Akamai.





11. Build a course library, charge per use

    

    In this model, content is created for a generic learner, and the course is sold as an "off-the-shelf" package. Particularly effective for compliance training.
    Keys to success: Deep pockets (high initial investment), marketing.
    Example: Element K





12. Government, Research Contracts

    

    These are ideal opportunities for colleges and established education providers. Through research contracts, organizations can build experience and reputation (as well as connections!) - critical requirements for engaging the corporate market.
    Keys to success: Finding funding organizations, patience on timelines and "jumping through hoops".





13. Full Service

    

    Small/large scale elearning project management... similar to a general contractor.
    Keys to success: Market is small - competition is fierce. The "big firms" have a significant advantage in reputation... but opportunities exist to begin with smaller contracts. Strong awareness of the industry is needed. Must be able to form relationships/connections from cross-section of industry.
    Example: Deloitte Consulting





14. Publications

    

    Newcomers to elearning need to find answers. White papers, books, reports, and newsletters fill this need.
    Keys to success: Reputation - Period.
    Examples: Jay Cross, Robin Good, Paid Content





15. Create a portal

    

    Sell advertising - the tried (but not always true) model.
    Keys to success: Awareness - site traffic is critical to drawing advertisers.
    Example: e-Learning Centre





16. Conferences

    

    Pretty simple - set up a conference on elearning and technology.
    Keys to success: Bundling the conference with existing publications/organizations. Reputation. Awareness - ability to get the target audience know you exist.
    Examples: VNU, TechLearn





17. Content translation and management services

    

    Provide services by assisting organizations in moving physical content to digital. Promotion and marketing are elearning-like activities. Self-help groups, special interest groups, non-profits - all have content to transition. If it's physical now, it'll be digital soon.
    Keys to success: Being willing to work on tight budgets (many organizations are member-funded and already function at a needs-deficit level). Ability to communicate value of digital content in comparison to physical (and increased effectiveness of group members).





18. Systems creation

    

    While this might seem like an obscure suggestion, it has value as organizations merge elearning with knowledge management and electronic performance support (EPS). Conceptual and technical systems creation are opportunities.
    Keys to success: Ability to translate integrate learning system vision into language "average" people can understand.





19. Research

    

    Provide research reports and services to corporate and academic markets.
    Keys to success: Identifying knowledge needs of each market. Getting known. Reputation.
    Examples: Masie Center, brandon-hall





20. Facilitator/Instructor

    

    Obvious career. As elearning grows...the need instructors will obviously grow as well. Some instructors will transition from traditional trainer/instructor roles, others will enter the field specifically to teach online. Facilitators are also needed in organizations or corporations that provide communities for customers and staff.
    Keys to success: Experience. Education. Ability to communicate digitally. Clear writing skills.





21. Instructional Designer

    

    Several years ago, this was described as the most in-demand skill in elearning. I'm not sure what the market looks like today, but career-sections of newspapers and bulletin boards indicate high demand.
    Keys to success: Education. Experience. Diverse skill sets. Ability to translate technical terms into language instructors can understand.

These are a few examples of ways in which businesses and individuals are generating revenue in learning. Four broad categories exist: selling an idea, product, service, or connection. Success is, as always, dependant on innovative thinking, awareness of end-user needs, consistency, and generating awareness.

Originally published on August 4, 2003 by George Siemens as "If I Wanted to Make Money in Elearning... Here's what I'd Do" on eLearnSpace

About the author

George Siemens is Founder and President of Complexive Systems Inc., a learning lab focused on assisting organizations develop integrated learning structures to meet the needs of global strategy execution. He recently authored a book - Knowing Knowledge - an exploration of how the context and characteristics of knowledge have changed, and what it means to organizations today. He is actively involved in research as a research associate with the Learning Technologies Centre at University of Manitoba.

Photo credits: madelaide, podius, matka_Wari, devon, latent, mjp, broker, photong, bluestock, surely.