I ended yesterday’s piece with two options for making a million dollars, drawn from the wisdom of a 1963 cartoon based on the 1919 Snuffy Smith comic strip. This advice includes:
- Find someone with two-million dollars and ask him for half; and
- Enter and win a contest with a million dollar prize
And just as I drew from other gags in that same cartoon when making decisions as to where to put sales resources (back in the day when my job involved allocation of sales resources), the two bits of wisdom above helped guide me when making choices regarding what elephants I should be hunting.
“Elephant hunting” or “Whale fishing” are metaphors for going after big, high-priced deals which, unlike deals in the three or four figure range, can’t be closed in 30 minutes over the phone. Rather, they usually require proposal writing, strategizing, formal presentations, negotiations and battles over contracts, all work that needs to get done before you actually get down to doing the work your client is paying big bucks to have you perform.
While certain types of companies (such as defense contractors) are hard wired to compete for big, complex deals with long lead times, other companies (large and small) often have a choice as to how many major clients/projects they want to pursue. Larger businesses will often chase after as many big deals as they can, even if they lack the resources needed to succeed in delivering what they promise, based on the assumption that major “anchor clients” will provide them the resources they need to grow into an entity capable of fulfilling their obligations.
But smaller business have less margin for error, which is why they may base most or all of their business on servicing just a single big client (and suffer if that client ever goes away), or avoid getting entangled in demanding relationships that might bring in big dollars but also come with high costs (including the costs of lost opportunities due to the time required to keep current 1-2 huge customers happy).
Getting back to Barney Google’s two pillars of wisdom, I translate asking someone with two million dollars to give you half as finding someone with lots of money and asking them for a sizable portion of it – which is what big deal hunting basically boils down to.
And who has two million or ten million or hundreds of millions of dollars to potentially share with others? Well generally, it’s for-profit corporations (think General Motors), major corporations that happen to be non-profit (think Harvard), and governments.
I’m going to ignore government for now and focus on corporations (both profit and non-profit) which tend to spend money in order to either make more or save more money than they are spending on you. In the consumer world, you’ll find individuals ready to part with significant amounts of cash based on motivations like prestige or comfort. But in the business world, utility and financial logic tend to drive those “millionaires” that sales people are endlessly pursuing in order to “ask for half.”
In the MOOC space, it might seem like there are only a few big players capable of signing six and seven figure deals (such as the major MOOC providers, each of whom have war chests in the $50-$60 million range). But if you draw back further and think of online education more broadly, then all of the major colleges and universities trying to create their own online presence represent a much larger set of big spenders who have been writing checks for over a decade in order to grab some land in the online learning world.
For these customers, new innovative technologies (even expensive ones) will always be of interest. For example, MIT’s Sloane School has been experimenting with remote learning tools that allow live students and virtual students (represented as avatars) to interact (a technology that proved useful during recent weather emergencies in Boston where it allowed the show to go on regardless of who could make it onto campus).
Now this technology was not provided by some recently minted startup, but by Avaya, a large networking and telecommunications business that was bringing products and services it created to serve other industries into the world of education. And it demonstrates how one established entity (MIT) was willing to spend serious resources on something that could only be offered by another established entity (Avaya) for innovation that had the potential to extend the school’s reach and thus its long-term financial success.
So for those hoping to make millions in the promising MOOC space, I would recommend looking beyond MOOCs themselves to the wider world of distance learning for promising big-ticket opportunities (presuming you’ve got the resources and stomach to handle such deals if you win them).
As for Barney’s second bit of advice (entering and winning a contest with a big prize – a strategy more commonly referred to as “gambling”), you can see this alternative play out whenever an investor plunks thousands or millions of dollars into a venture that can’t explain just how it ever plans to make a dime, much less turn a profit.
Interestingly, what was a throwaway gag in 1963 has become a cornerstone 21st century business model, one that has paid big dividends for those who backed horses like Microsoft, Google and Facebook. But a gamble is still a gamble, and big gambles can only be made by those with big bucks behind them.
Which is why your average entrepreneur looking to make a killing (or just a living) off of free learning should focus on the basics of (1) discovering who is willing to pay for something and why; (2) creating and selling something that’s worth what you charge for it; and (3) investing in whatever marketing and sales resources are required to get the people willing to spend money to buy what you’re selling.
I know this final advice is not that much more profound than what Snuffy Smith’s book offered. So for anyone who wants to go more in-depth with how a Startup should be thinking, there’s a MOOC for you!