Problems with The Englishcafe.com Model
To me, englishcafe.com was the best of the websites that provide English language classes via videochat. I especially like the way the site fostered a sense of community, containing many features in common with a social networks. It also provided ample opportunities for users to add content, in the form of blogs and lessons. Using today’s conventional wisdom, social networking and user created content are considered fundamental keys for website success. It appears that users embraced these features too. There are many conversations between all website members, whether student or teacher; a large number of blogs; and a wide selection of teacher-created lessons.
On the down side, income-generating activity, paid classes between students and teachers, seemed to be surprisingly low.
Overview of Teaching Activity
It’s easy to see how many paid classes, which englishcafe.com called ‘teacher time,’ individual teachers have given. Not only were there a surprisingly small number of teachers. Only 60 were officially ‘approved’ by the website. Teaching rates plummeted once you got outside of the top five.
The most active teacher taught 674 classes. A hefty amount for sure! The website had a 10% fee off what the teacher charged. That just seems too low. This teacher charged $35 and hour. So if we assume that all these classes were an hour long, Teacher #1, earned the website $2,359 over the course of her career with the website.
Not bad, customer lifetime value, but because of the very low 10% fee, englishcafe.com needed some serious user activity to get just over two thousand bucks. If this was done over a year, Teacher #1 would be teaching on the site for 13.5 hours a week (they get two weeks vacation of course). Now if you had a lot of teachers who were this active, you could have a business. But you’d need one thousand to get you $2.3 million in revenue. (I don’t even want to guess how many students that would be).
Unfortunately, teacher usage rates on the website declined precipitously after the leading two teachers. The chart below summarizes activity by the leading 15.
The numbers are enough to make a Venture Capitalist investor cry. And VCs have hearts of stone, it takes A LOT to make ‘em cry. Maybe the movie Beaches starring Bette Midler will do (VCs are generally Big Bette Midler fans) along with the chart below. The chart below really chokes me up too.
So you see, the number of classes taught just plummets. By the time you get to Teacher #15 we are looking at only 7 classes and $35 bucks for englishcafe.com. For the top 15, the website’s total earnings amount to an estimated $7,466. That ‘s a lot of labor and investment for $7,466.
I think the business idea had potential, but man, those numbers have me curled up on the floor, bawling my eyes out. That’s in part because I have Beaches playing on the TV—mainly for the music, I just love that soundtrack.
Please note: that these numbers are just guesses I’ve made from reviewing the englishcafe.com website. The columns number of classes and hourly rate come from the ‘find teachers’ part of the englishcafe.com website. I assume that each class is an hour (I’m sure many were for less) and that rate for all classes was for the teachers current rate). The 10% fee I got from reading the FAQS on how to teach. I apologize in advance for any possible mistakes.
–Jamie Penkethman