Katheryn Kelly is not the typical homeschool mom. Besides the fact that she earned a bachelor’s from Stanford and a doctorate in biology from Chicago, Kelly decided last year that she could do more than homeschool her own teenagers, as she had been doing. In her small community on the Nevada side of Lake Tahoe, Kelly was not satisfied with the local public school options for the neighborhood kids. She wanted better for them.
Kelly had been using K12’s online courses to teach her own kids at home. She believed K12’s courses—and those of countless other online content providers—offered expanded opportunities for Lake Tahoe youth. But the local public schools did not make online courses available. And most students did not have a stay-at-home parent like her to supervise them if they wanted to take online courses from home.
Kelly faced a problem typical of many entrepreneurs who unknowingly arrive upon a disruptive solution. She recognized that while every student has access to a free public education, many are “nonconsumers” of certain education opportunities, such as taking advanced and non-core courses that their public schools do not offer, working one-on-one with capable adult tutors, and learning in a more comfortable environment than the typical public school. Some families opt to homeschool or pay for private schools to meet these needs. But for many households, homeschooling is too expensive; the adults in the home cannot afford to stay home from work. Likewise, tuition rates preclude most students from private schooling. So disaffected public school students lack a more convenient, less expensive way than homeschooling and private schooling to meet needs that the public school is not addressing.
In February 2011, Kelly opened eLearning Cafés, Inc. in a small building across the street from the local high school. Her value proposition is simple. Any student who wants to take an online course, but needs a nice place to do it, can walk across the street for a portion of the school day and take the course at her eLearning Café. A range of online curriculum providers supplies over 500 online courses. Meanwhile, the eLearning Café offers Internet access, face-to-face tutoring, an assortment of face-to-face clubs, and of course, good food.
Parents pay for online courses a la carte. Kelly prices courses based on the content provider’s fee plus a premium to fund her operations. Parents pay separately by the hour for face-to-face tutoring and other services. A few students are full-time, but most self-blend a course or two while attending traditional public school across the street.
Michael Horn makes the point here that true disruptions are not just about the simplifying technology (in this case the online courses), but also involve a business-model innovation wrapped around a new value network. Kelly’ s eLearning Café caught my attention because it’s a neat little example of how online learning can bring affordable, every-man access to previously out-of-reach learning opportunities, and at the same time enable business-model innovation surrounding the use of facilities and face-to-face adults. The “schools” of the future may look a lot more like Kelly’s cafés—comfortable, safe, wired environments with face-to-face mentors, good food, and socializing with friends.
Parents are taking notice. Ten months after opening, eLearning Cafes, Inc. already has 200 student enrollments—not a small feat for a small Lake Tahoe neighborhood. Meanwhile, without noticing it, Kelly has set up a disruptive play to both home and private schools in her town.
