Validating the Idea Part 1 (post #2)
You might not believe it, but none of us looked at our phones that night in Seattle to see if what we had dreamt up already existed. We were just having too much fun playing the “what if we did this this” game. When I eventually took a look in the iOS app store, I didn’t see anything that looked like what we were talking about. As I looked at a few different exams, there wasn’t really a lot in the app store. Furthermore, the apps tended to be from companies that I had never heard of before. A company called Higher Learning Technologies had some apps. I looked them up. They were just a startup. Not the brainchild of Pearson or Kaplan or one of the big publishers.
The apps that I looked at were basically just books that were converted into an app. Mostly focused on multiple-choice questions. Because they were mobile apps, they also had the learn anytime, anywhere concept. But they had not broken down the content into small chunks. It was just like 200 questions on quantitative reasoning. And there was no interesting technology like the GPS or hands free idea. Why were the big publishers not interested in apps?
Luckily for me, very luckily as it turned out, a friend of a friend was this guy Rob who was the former VP of Technology for McGraw-Hill. He had been retired for I think two years or so. I had met Rob and knew that he was super smart. I kind of expected him to tear the idea apart, but what I was hoping is that he could tell me why bigger companies were not doing something like our idea.
So I emailed him. Told him the basics of the idea. Wondered what he thought about it as well as any information he could provide about the industry. To my complete shock, he said he had not heard of this idea and did not think it existed. He suggested we talk on the phone later that week.
Rob felt that the big publishers were focused on legacy products. Legacy products were books. They were gigantic companies that were mostly unprepared for the preferences of millennials and gen z students. Mobile apps represented a problem for their product line, Rob said. Say a book goes for fifty bucks. Or a hundred. And the app only sells for ten. Something like what we were proposing might be quite a bit better than an app. So if they built it then their cheaper product (the app) would be better than the more expensive product (book). Revenues would drop. Executives would not get their bonuses. People would get fired. It was a fairly easy business decision.
But aren’t they being disrupted by technology already, I asked. Google, YouTube, Quizlet, Kahn Academy, and even social media. Yes, no question, he said. But big companies have a hard time pivoting. But if a big publisher sees what you are doing and it is successful and it is disrupting their business enough, then they will either copy you or just buy you.
Rob liked the idea and offered to help us out. He said I needed to do some research on market size, competition, and the target market. Send that to him.