As some of you may have heard, Mathnasium has been experimenting with the online delivery of our program. By “online” we mean live delivery via a virtual classroom platform like Blackboard Collaborate or Adobe Connect. Over the last several months, we have taught test students and it’s been an interesting experiment. At this point, we have learned that online delivery is “technically” possible, but we need to learn much more.

Potential Benefits

Online delivery could have several benefits. For example it could enable us to teach children in less affluent neighborhoods—neighborhoods where it is not viable to build a learning center.

Online delivery could also be a first step to teaching children in countries that do not have a Mathnasium center presence.  Normally, it would take years to build a franchise infrastructure in major international markets, but if we can find a model that would enable us to move into these markets more quickly, we could reduce the risk of a competitor gaining strength in other countries… a competitor that could gain enough momentum to come to North America and substantially compromise the market advantage that we enjoy here.

And yes, online delivery could someday be an additional service for North America franchisees to offer to customers near their centers who can’t or won’t make the trip to the center.

Or it could act as a supplement to students who come in to the center some of the time and want to learn some of the time at home. However, such a possibility is likely years away.

Next Steps

Now that we feel comfortable with the technology component, the next and most important question to answer is whether or not the quality of online training would be worthy of our premium brand. Can we rise to the challenge of winning fans the way we do in our learning centers? This question—and many, many more—would need to be answered before we can seriously consider online as an additional delivery modality. The only way to find out is to further test online delivery and see what we can learn.

Starting this month we will begin a beta test of the service.  We will only conduct the test in states where no Mathnasium centers currently exist and no centers are scheduled to open. Customers in these states that search our website for a learning center only to discover that no learning center exists will be directed to a landing page dedicated to the Mathnasium beta test of online delivery. We’ll teach these students and see what we learn. It may be months before we reach conclusions we can be confident about. But when we do, we’ll share what we’ve learned!

Summary

As Andy Grove famously said, “only the paranoid survive.” In the near term, we don’t see on the horizon any serious risks to our franchisees from alternative models. We think parents will want to come to karate studios years from now and we also think they will come to math learning centers years from now. But our obligation is to be defensive and opportunistic. Pizza franchisors who realized years in advance that the market would shift from eat-at-restaurant to eat-at-home were able to manage a transition from local restaurant to local kitchen with delivery service.

We are committed to keeping you updated regarding our progress.

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