Virtual School of Languages

The Virtual School of Languages.

Objectives.

The objective of the enterprise is to build a web-based platform designed to offer language lessons of a quality and scheduling flexibility unmatched to date and a school of Spanish and English languages that will work on the platform. The quality of the didactic material offered will be the same used in language schools, the professors will be well trained and prepared and the interactivity of the lessons will be much closer to that achieved by most of the other online language teaching platforms. Moreover the possibility of changing times scheduled and professors while continuing with the didactic program will allow busy professionals, housewives and other people that, do not live in a big city and do not have access or cannot adapt to the classic language school system to attend the lessons and decide when to start and if they want to interrupt lessons taking them on where they were left.

Population target.

The typical language school student is of an age from 18 to 23/25 years. The typical customer of our web based school will be a person of an age from 23 years old to 45 interested in studying or improving the English or Spanish languages. Mainly young professionals with higher education. The main reasons why people study Spanish is because they like the culture, the language and they want to travel to Spain and, to some extent, interact with the local population (speaking to shop attendants, waiters or just communicating with people). With English the reasons to study are more related to work and travelling needs, so the amount of young professionals that would take online courses of high quality would be much higher than with Spanish. My years of experience as a Spanish teacher and that of my colleagues tell us that many people form 25 years old to up would prefer to have private lessons in a certain range of hours, from 17.00 to 21.00, what is usually impossible because teachers are at those times not available. Busy people find it difficult to adapt to normal group classes for several reasons. They dont feel well in a group where the average age is 20 years. The timetables are fixed and there is no possibility of changing the times It is not possible to interrupt lessons for a time and go back where it was left.

Appendix A (population of language students in Poland and inferences on the rest target populations). 1

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Market.

The markets that we are planning to target will depend on the success of the company. In an initial stage we will target Shangai 23 million, Hongkong 7 million and Tokio 14 million. The Spanish and English teachers will reside initially in Poland. The three Asian cities are the ones that posses the most dynamic economies of the region and where the offer of the school can be better welcomed because the offer will be comparatively cheaper than virtual schools based in Spain, Germany or else in the UE. (see Appendix B) In those cities it is possible to find Spanish teachers mainly coming from central and south America that offer cheap lessons, in Shanghai the lessons are from 60 to 80 PLN per hour, in Tokio the private lesson hour costs from 80 PLN the average cheapest teachers to 120, 150 or more.(1,2) About English lessons, the rates vary depending on the country of origin. There are many Indians, malasyans and Chinese or Japanese university graduates teaching poor standard English for low rates, the European or American teachers will charge at least 3000 yens (100 PLN) per hour in Tokio and very similar prices in Hongkong There are many different options available on the internet for Spanish online lessons. The most sophisticated are those that offer access to grammar, vocabulary and pronunciation exercices but they dont involve the presence of a teacher, but the contact with a tutor to solve punctual doubts, always depending on the availability of the tutors. (3,4,5) Many online lessons are based on the concept of exchange. A Spanish teacher finds an English teacher and they arrange the meetings for free (6). Busuu platform is an example of excahge lessons and it is said to have more than one million users. (7,8) A bit more professional lessons are offered via Skype. The didactic program depends on the teacher and the interactivity of the web based lessons is minimal. The prices for those lessons range from 30 to 40 PLN per hour for Spanish lessons (teachers from South and Central America)and 50 for English lessons (teachers are native speakers from Filipine islands, Jamaica or African countries). (9,10,11) If the online lessons are imparted by teachers from Europe or USA the prices are more than double but, usually the service provided is of higher quality and apart from Visual contact includes online exercises, prepared by the teachers.(12) Myngle is one of the most popular non free platforms. Their recruitment system is good, they interview the future teachers and provide them with many different teaching materials to use during their lessons. The English and Spanish teachers prices are of around 100PLN per hour. They say that they have around 30 000 registered students. (13,14) what is possible taking into accout their financial success. In March 2009, Myngle secured 950,000 ($1.25 million) in the form of a bank loan from Rabobank. The Dutch government, through an innovation program, backed the loan. This was Myngle 2nd round 2

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of financing. On the 1st round Myngle was able to secure 800,000 seed investment from the HenQ fund and private individuals (excerpt from Wikipedia) The quality of the lessons in Myngle depends entirely on the work of the teacher. They probably control the quality of the lessons by promoting to the first positions in the list of teachers available the ones that have better results either in surveys to the students or by the number of students that buy additional hour packages. My experience is that the platform haves many didactic materials available to the teacher of good quality but the video conversation and the presentation of materials are done in different windows so one can see only one thing at the time either the teacher or the didactic materials. Our search through the internet offers have shown that no online course offers a the quality that we are considering to offer. No internet based school, except probably Berlitz, offers such a quality, they offer one program, the Berlitz method, and the teachers are coordinated, not through a database but by writing down in a paper the contents of the lesson imparted.(15). The price of a lesson is of 1750 PLN per 40 hours without a teacher and 6 hours with a tutor. Another field, out of my reach to quantify in what refers to possible earnings are other schools as clients of our web-based platform. In my experience as a Myngle and Busuu user I can say that those platforms, that have great presentations and are very attractive form the start are not well organized. There doesnt seem to be a any tool or database to coordinate the didactic work of the teachers so when one buys a pack of hours is not with Myngle but with a concrete teacher that works for Myngle. The platform that I propose to build would offer to teachers the possibility to be coordinated as in any normal school, so a student will be able to buy a pack of hours and have different teachers at flexible times, but it will also offer that possibility to schools. The platform should be offered to schools in different versions and with the possibility to introduce esthetic changes. The company Touk assures us that, once the platform is built the only thing necessary to offer that service is to copy the code and put it in a server under a different domain. None of the existing platforms seems to be working on the option of offering such a platform to schools and, usually schools are not internet oriented, although many teachers working for those schools and the schools themselves could profit from the possibility of teaching during the hours (form 10.00 to 17.00) when the potential students are either at the university or at work. The possible acceptation of the service by schools will depend at the beginning, mostly on the personal attitude of the school directors to new technologies. It is quite possible that the success of the sales to schools will depend on the possibility to show them that it is actually a good business and that will depend mainly on the success of our virtual school. Therefore I will not consider it an opportunity of business from the beginning but rather as something to implement as soon as the virtual school net earnings reach the breaking point of the investment.

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Advantages of the Virtual School.

The web-based school will be a very interactive environment, that will not require any special understanding of Information Technology neither from students nor teachers. The whole interface will be very intuitive and, since the control of the most important for the student functions will be shared if one side had any problems to understand how to use them, the other would know the way. The didactic materials will be those that the teachers have been using for years, that in our experience, are between the best and there will be a shared pool of interactive materials that will be organized by sub-levels and actualized by the teachers and its contents regularly checked by the didactics manager. All the data concerning each lesson like time of the lesson, contents of the lesson and comments of teacher and student will be stored in the schools database (that will require extraordinary protection against data theft as well as the possibility of being checked by the editorial that gives us the books). The database will allow each student to program their own timetable and change it according to their needs with a concrete limit of time to cancel or change lesson times (lets say 15 hours). The web-based school will use many didactic resources that will make possible to have a personal contact between teacher and student while using the most advanced multimedia didactics. There will be a whiteboard shared by both (You can see what I draw when I am drawing it), a text editor, the students book and exercise book and a multimedia space, all of it in a concrete area of the page that will be shared by both sides so student and teacher can decide the kind of activity to do next. The possibility to offer our product to private schools should be taken into account as a novelty in the market because, although there are products from the very sophisticated adobe acrobat connect suite to the very available openmeetings, that enable to create a web based platform for online language lessons, they do not offer any way to coordinate online the work of the teachers. By no means a group of completely uncoordinated teachers can be called a school. Our platform would be the first to provide such coordination online.

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Marketing the product Nowadays, the company that can reach the maximum number of customers anywhere in the world is Groupon. The conditions of cooperation are tough but, the experience of other language school directors is excellent, however, I personally know directors of physical not virtual schools. The experience of those directors that I have met, is that Groupon proposed them to offer a 70% discount on the courses, with a limit in the amount of courses to sell by Groupon. From the 30% that remains, half is for Groupon and half for the school. In this case I would start such a campaign in Japan, where the salaries are the highest in the region. Initially the lessons should be sold at 70 PLN (17,5 eur), of which 50 PLN netto (12,5 eur). The virtual school would offer an amount of 2500 lessons under the offer of a 70% price reduction. That would suppose that only 10 PLN (2.5 eur) per lesson will be earned by the school that will destined to be paid the teachers . I will try to convince the teachers to agree to earn less than 12,5 eur for the time of the promotion, but a priori I will assume that the teachers earn as much as it has been calculated. In this case 2500 lessons would cost 100000 PLN ( 25000 eur) I have calculated that if we start in September and all the students are achieved by the Groupon offer. If 2500 lessons are sold during that month I expect to continue the next month with 1000 what is not an optimistic prevision but the people that would carry on studying with our Virtual School would be the ones that better fit with the profile of our target market. As the Virtual school grows it will be necessary to contract more people to deal with the target population customer services. The customer services attendants will be recruited between the virtual school students after sending a mailing list to all the registered students. That recruiting strategy will have two goals, the first to contract people that knows the system very well, the second to improve the image of the company in which is based the virtual school between our customers, what could work better than any marketing campaign.

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Management structure Werner Deichmann: Administration. Taxes, payments, legal aspects of the company, bureaucracy, organizational matters, solving disputes between students and teachers related to payments or length of lessons. Itziar Lanas: Programming the didactic of the courses. Checking the preparation of the candidates to teacher and determining if the didactic material added by the teachers is appropriate. Solving disputes between teachers and students related to the contains or quality of the lessons. IT specialist: IT. Creation, maintenance and development of the web interface. Explaining the new teachers how to use the web interface and helping them to solve technical problems related to the proper functioning of the virtual school. (Administration relations with China: authorities, dealing with students problems or suggestions, organizing advertisement campaigns)

Virtual School

Teachers Teachers Teachers Teachers

IT
Didactics

ADMIN
Customer Service

Student

Student

Student

Student

Student

I suggest that the administrators and didactic manager work in Orenores offices what would allow us to use the server and then we would have to rent only one virtual server instead of two.

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The work method The payments will be done via paypal or to a Polish bank account . If a teacher cancels a lesson and the student doesnt accept the exchange for another teacher or if a conflict between the student and the teacher is resolved and the responsibility falls on the teacher then the student will either keep the credit with a compensation additional free hours or a % discount on the next package of hours . Eventually it will be possible to give back the complete amount paid for the lesson and the teacher will cover the transference expenses with his/her future salary. If the conflict is unsolvable the teacher will receive the normal salary for the lesson and the student will receive the money he/she paid that will be accounted as an economical loss for the Virtual School . Apart from the direction the company will contract from time to time accounting services Regular weekly meetings of about three hours will be held once a week. The relations between the students and the teachers will be established and maintained through the web page tools. According an hour for a meeting will open a position in the database. The program will remind (via SMS) teacher and student , an hour in advance, of the meeting. Fifteen minutes before the meeting the teacher will have to organize a minimal amount of didactic material like, the lesson of the book to use, a certain number of quizzes and a video clip. The teacher will be able to add more materials than the minimal established and during the lesson will be possible to move through the different materials with navigation bars like a with a power point presentation. When the lesson is closed, the materials included, all of them known by the database, and the comments written by the teacher at the end of the lesson will be kept together with the record of the lesson. In that way if the student wants to take a break of weeks or months the teacher will be able to start where it was left or review the last classes before continuing, as well the student will be able to carry on the lessons with another teacher without needing to waste time with an interview to assess students needs. So the relations between the teacher and the student will suppose that the web page is just an instrument for the student, in a similar way as when a student goes to a school. The direction is necessary only to solve problems. But the Web page will be for the teacher more than an interface with the students. The student will pay by Paypal to the school and the school will give the accorded portion as a salary to the teacher. TouK has also proposed to set a payment by telephone, method that is very popular in China where most people dont have a bank account. The didactic manager will also take care of the uniformity of the didactics used, that the student and exercises books are used as a basic didactic material and that the teachers possess the right qualification and personal disposition.

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Long term goals and dangers. The IT team consulted werent able to confirm exactly the amount to be invested but they counted as very improbable a minimum of 200 000 PLN and very probable about 1 000 000 PLN, therefore I will suppose an initial investment of 900 000 PLN to develop the virtual school system. A five informatics specialists team will need a minimum of 6 months to develop the whole system. Taking all that into account I define the stages of the investment. 1St stage of investment: Shanghai, Hongkong, Tokio. The main danger at this stage is that the product, despite being very innovative in what refers to offering flexibility when contracting lessons and a well defined and high quality didactic program, will not be able to compete with the skype lessons that are nowadays the most popular online lessons offered. If the Virtual School is successful during this stage the company will recover the money invested reaching the breakpoint. 2nd stage: Poland-Germany-Russia, China, Japan. The economic surplus of the company will be invested in marketing campaigns. At this stage it will be clear if the product is commercially viable. In that case the internet system will be offered to be rented by other schools as a platform that they will use to impart their courses using our system for contracting lessons, keeping the didactic materials and managing the information about the lessons, the students and the teachers. In this stage the possibility to rent the virtual school platform to schools will become very real, since our success will be the main argument to convince them to adopt our web-based platform.

3rdstage Central and Northern Europe, Russia, Asia. At this stage the main danger will be that the different national language schools like Ghoete Institute, Instituto Cervantes, etc, that can count on public funds, will establish their own platforms using a similar built database. Since the database is the heart of this internet system for online lessons the best way to protect the project will be to design all the possible variants of that database and protect them by registering it as intellectual property of our company , that procedure should be brought to term during the second stage. Another possibility is to liberate the code of the virtual school, make it open source and to sell our assessment services to other schools that might want to use the platform related to design of the page, marketing, international accountancy, organization of the lessons, etc.

Financial targets. Our prevision were made taking into account that we will offer language teaching services that surpass by far in quality anything existing in the web. Still I have preferred to be moderately optimistic supposing that we might have more or less as many students as the Myngle school that counts with about 30 000 registered students and, if as average they could study 2 hours per month (there will be 1/3 of real students that will have from 4 to 8 hours per month) I have supposed that during the first two years we reach between 15 000 and 20 000 registered students. 8

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The financial target for the first stage will be to reach the breakpoint of the investment and pay the salaries of the people that integrates the direction of the virtual-school and the Japanese- Chinese collaborator. If that target is just fulfilled it will be clear that the long term functioning of the virtual school is feasible and for the next expansion of the school the company will need additional investment that will be dedicated to marketing the virtual school in all China, Japan, South Korea as well as Poland, Germany and Russia. The price of the lessons has been calculated for the Spanish students market. In Shanghai and Hongknog the competence of private teachers emigrating from South America is quite strong and they offer very low prices, though usually this kind of emigrants posses low qualifications and are busier at hours 17.00 to 21.00, so the reasons for our product to be competitive (hours at which is difficult to find available teachers, a product of high quality) are still applicable. The margin of profit for any other language taught should be the same, therefore I will treat all languages equally. The lessons will be sold at 70 PLN per hour and The teachers in Poland will initially earn 40 PLN per hour and the lessons . I havent calculated the possible financial earnings of renting the Virtual School platform because although there seems to be a growing interest in offering lessons by internet, the biggest schools are offering mostly internet based courses without a teacher. I consider it a very interesting business opportunity with no precedent in the market.

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Appendix A
The three major Spanish Language schools in Warsaw are Instituto Cervantes, Sinfronteras I Machina Edukacjina. Between the three of them each semester they have about 3200 students. Taking into account that there are many other schools that offer Spanish Lessons als Berlitz, Tower and many smaller ones, a pessimistig guess would be about 3500 students in Warsaw

rednia wieku osb uczeszczajcych na zajcia do prywatnych szk jzykowych to 22 lata: To 25 lat 54,2% 26 - 30 lat 25,1% 31 - 40 lat 19,2% 41 - 50 lat 6,1% Over 50 lat 3,4% Ministerstwo Edukacji Narodowej, Language Education Policy Profile, 2005
The reasons why people study Spanish are the same independently on the age, the only difference is that in the case of the people younger than 16 it is usually the parents who have that interest. If we consider that from about 2600 students with ages up to 30, 70% are students of A1 level (first two semesters) that could suppose, at least 1800 new students per year and 900 by semester only in Warsaw. The data has been obtained from the administration of Sinfronteras and it is of confidential nature. Number of private language schools teaching concrete languages. (Ministerstwo Edukacji Narodowej,
Language Education Policy Profile, 2005)

English language schools German language schools French language schools Russian language schools Spanish language schools Other languages schools

6328 3477 1692 3852 463 1481

If we take a city like Warsaw with a population of about 3 million http://www.skyscrapercity.com/showthread.php?t=148894 and we calculate that number of Spanish language students over 23 years old 960, since the number of English students is (calculated from the number of schools) 14 times bigger, the number of English students will be 13440 In a target population of about 40 million people (Tokio, Hongkong, Shanghai) that makes a possible student population (pessimistic preview) of Spanish 12 800 students English 179 200 students 10

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Appendix B
Richest cities and/or their metropolitan areas in the world by GDP
according to PricewaterhouseCoopers and other sources.

These rankings show the top 5 per region (if available).

Asia, East
Rank City 1 Tokyo 2 Osaka 3 Hong Kong 4 Seoul 5 Shanghai Country/Region GDP in $ID BN Population (MIL)[15] Japan $ 1479 36.669 Japan $ 417 11.337 Hong Kong $ 320 7.069 South Korea $ 291 9.773 People's Republic of China $ 233 16.575

Asia, Southeast
Rank City 1 Singapore 2 Manila 3 Bangkok 4 Jakarta 5 Ho Chi Minh City Country GDP in $ID BN Population (MIL)[15] Singapore $ 215 4.837 Philippines $ 149 11.628 Thailand $ 119 6.976 Indonesia $ 92 9.210 Vietnam $ 58 6.167

Europe, Eastern
Rank City Country GDP in $ID BN Population (MIL)[15] 1 Moscow Russia $ 321 10.550 2 Istanbul Turkey $ 187 10.525 3 St Petersburg Russia $ 91 4.575 4 Warsaw Poland $ 68 1.712 5 Ankara Turkey $ 58 3.906
Source: Wikipedia, List of cities by GDP (16)

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Most expensive cities in the world

The world's most expensive big cities in 2010
(The index is based on cost of living expressed in US dollars. Therefore, if the dollar weakens against the local currency of a city, the city becomes more expensive and moves up the index, even if prices expressed in local currency remain the same or go down.)

Rank 2010
1 2 3 4 5 6 7 =8 =8 10 =11 =11 13 14 15 16 =17 =17 =19 =19 21 22 23 24 25 26 27 28 29 30

Rank 2009*
1 3 4 2 6 5 7 10 14 11 9 16 13 17 12 18 8 21 46 Luanda Tokyo

City

Country
Angola Japan Chad Russia Switzerland Japan Gabon Switzerland Hong Kong Denmark Singapore Norway Seychelles South Korea Italy China UK France Israel Japan Brazil Switzerland Niger Australia China Italy USA Austria Brazil Russia

Ndjamena Moscow Geneva Osaka Libreville Zurich Hong Kong Copenhagen Singapore Oslo Victoria Seoul Milan Beijing London Paris Tel Aviv Nagoya Sao Paulo Bern Niamey Sydney Shanghai Rome New York City Vienna Rio de Janeir St Petersburg

Source: City Mayors Foundation (17)

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Appendix C
Links
1- http://www.findateacher.net/cgi-bin/tsearchJSE.cgi 2- http://teach.berlitz.co.jp/requirements/contract.html 3- http://www.spanishprograms.com/learn_spanish.htm 4- http://ave.cervantes.es/ing.htm 5- http://www.churchillhouse.com/en/online-english/ 6- http://www.languageexchange.org/ 7- www.busuu.com 8- http://www.langology.org/?p=1170 9- http://www.121spanish.com/prices 10- http://www.onlinespanish.org/private-lessons.html 11- http://www.online-english-lessons.net/ 12- http://www.angielski.co.uk/online.htm 13- http://www.kirstenwinkler.com/myngle-introduces-waiting-lists-for-teachers/ 14- http://www.myngle.com 15- http://www.berlitz.pl/pl/kupuj_online/przeglad_produktow/wynik_wyszukiwania/product_d etail.html?detailid=507&number_of_lessons= 16- http://en.wikipedia.org/wiki/List_of_cities_by_GDP 17- http://www.citymayors.com/features/cost_survey.html 18- http://www.tokyoenglishteacher.com/rates 19- http://www.transitionsabroad.com/publications/magazine/0401/teach_english_hong_kong. shtml

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