In the early years, small and midsized private institutions faced a unique competitive environment when it came to revenue-share agreements for degree-completion programs and, increasingly, full master’s programs. There was an entirely different ecosystem among larger institutions, but that is not the focus of this post.
The market I knew was primarily small to midsized institutions. I experienced it first through Synergistics, Inc., with an emphasis on on-ground implementation, and later through Education Strategy, LLC, working across both on-ground and online programs.
Two competitors stood out: the University of Phoenix’s Institute for Professional Development (IPD) and Regis New Ventures, which emerged from Regis College in Denver.
The Early Competitors
IPD actually predates the University of Phoenix by several years. Founded in 1973, it initially served as a kind of think tank for John Sperling as he developed the concepts that would eventually become the University of Phoenix.
By the time I began interacting with IPD, however, it had become a subsidiary of the University of Phoenix. During the 1980s and 1990s, IPD took curriculum and operating practices developed by the University of Phoenix and licensed them to other institutions. At its height, it worked with roughly 20 institutions and served more than 12,000 students through its partner colleges and universities.
IPD was selective about its partners, and its contracts often had a significant “tail”—long-term financial obligations that made changing providers difficult and switching costs high.
I know this firsthand. I received calls from more than a few institutions looking for a way out.
Regis New Ventures was a different kind of competitor. Founded in 2000, it was highly mission-driven and worked primarily with other small Catholic institutions. Its approach was rooted in Regis’s own experience with adult education and the andragogical methodologies that had been central to the model since the early 1970s, including the work of Malcolm Knowles.
In many respects, both organizations demonstrated that the model we had been working with was becoming an established category rather than simply an innovative approach used by a handful of institutions.
Taking the Model Direct to the Consumer
We also wanted to extend the model beyond institutional partnerships and explore direct-to-consumer opportunities.
Beginning with Advance Consulting Network and continuing with Synergistics, we worked with the American Council on Education (ACE) to have our entire Organizational Management degree-completion curriculum evaluated for college-credit recommendations.
At the time, ACE’s program was known as PONSI—Programs on Non-Collegiate Sponsored Instruction. It was not exactly a name designed for the long term.
Each module in our program received a recommendation for three college credits. We then developed relationships with Charter Oak State College and Thomas Edison College to incorporate those recommendations into formal degree pathways.
Charter Oak went a step further. They created a degree pathway that essentially matched our curriculum.
This opened another interesting opportunity: working directly with corporations.
We partnered with companies such as Mobil Oil and recruited instructors to teach cohorts of employees on site. The concept was relatively simple: bring the curriculum and faculty directly to the workplace and provide employees with a pathway to a college degree.
It was a novel idea.
Unfortunately, we did not have the infrastructure or capital to scale it effectively. By the time Synergistics closed, the economics of the model simply did not work, and we shut down that part of the business.
It was an early lesson in the difference between having a good idea and having a scalable business model.
Education Strategy: Building on the Installed Base
At Education Strategy, our business model had two primary areas of focus.
First, we wanted to acquire new institutional clients. We were reasonably successful at that.
But the second opportunity was arguably even more important: our existing client base.
We went back to institutions with which we already had relationships and offered additional programs, including Healthcare Management, Criminal Justice, and eventually full master’s programs.
We also created what we called a virtual curriculum center.
For an annual licensing fee, institutions could access a centralized Moodle environment where we maintained the most current versions of the curriculum. When textbooks changed or content needed to be updated, we made those changes centrally. Institutions could then download the updated materials rather than having to manage curriculum maintenance themselves.
It was essentially a curriculum-as-a-service model before that phrase became fashionable.
Our legacy clients responded very positively. It created recurring revenue for us while providing institutions with a relatively simple way to keep their programs current.
For a while, the model worked extremely well.
But markets rarely remain static.
Enter Learning House
As would happen in any niche market, new competitors began to emerge.
The first one that really caught our attention was a company called Learning House.
Learning House was founded in 2001 and, initially, was not a major competitive threat. Like us, they were self-funded, and when we found ourselves in direct competition for an institutional client, we almost always won.
That was about to change—and change quickly.
Learning House was acquired by Weld North in 2011 and subsequently acquired by Wiley in 2018 for approximately $200 million. With those transactions came something we did not have: significant access to capital.
And this is where I made one of the most consequential mistakes of my career.
The Mistake I Made
I did not have a significant mentor who could help me see around the corner.
I understood the business I was in. I understood our clients. I understood curriculum, adult learning, institutional partnerships, and the economics of revenue share.
What I didn’t fully appreciate was that the economics of the market itself were changing.
I held on to the old model. Partly because I believed in it, and partly because I didn’t want to “lose my soul” to investors.
In retrospect, I confused independence with strategy.
Learning House began showing up at negotiating tables with something we could not match: capital.
They could put money into a new partnership to help launch a program, accelerate enrollment, or bridge the period between signing an agreement and generating meaningful revenue.
Suddenly, the company that had once been an almost automatic winner in competitive situations began losing.
And then we began losing consistently.
It was a hard lesson. We had reached the end of what I think of as the “golden string” of the original revenue-share model.
The rules had changed, and I was still playing by the old ones.
The End of an Era
By 2012, Education Strategy was down to three active university partnerships.
Then one of those institutions exited its agreement.
At that point, the economics no longer supported continuing the business, and we made the decision to wind down that portion of the company.
It was disappointing, but it was also an important moment of perspective.
The model that had begun with photocopied curriculum, three-ring binders, satellite campuses, and revenue-sharing agreements had evolved considerably. The internet had transformed delivery. Capital was transforming competition. And a new generation of companies were beginning to build something much larger around the basic premise of helping colleges expand access and enrollment.
What I didn’t know at the time was that this was not the end of the revenue-share story.
It was the beginning of something much bigger.
The next chapter would bring venture capital, online program management, unprecedented institutional partnerships—and a dramatically different version of the model I had known since 1996.
The Lesson
Looking back, the business lesson is obvious, although it wasn’t obvious to me at the time:
Find a mentor early who can help you see around the corner.
Experience teaches you how to operate the business you are in. A good mentor can help you recognize when the business itself is changing.
Don’t walk alone.
I learned that lesson the hard way.
