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The 32 million disruptive adult learning opportunity

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Jan 31, 2017

A great place to launch new products and services is often in places where there is no competition. Finding such an area of nonconsumption—where customers can be delighted by something that is infinitely better than their alternative (nothing at all)—is key to launching a disruptive innovation.

Spotting and sizing a nonconsumption opportunity is often challenging, however, because there is, by definition, no existing market.

These two factors are part of what makes the market for helping adults learn basic skills or develop workforce skills so intriguing.

Thanks to reports by Digital Promise, Tyton Partners, and others, we know that there is a significant number of adults—roughly 36 million—in the United States who are low skilled, in many cases lacking basic numeracy or literacy skills. Yet, only 11 percent—just shy of 4 million—adults who lack these skills are served by the public and private educational system today. In other words, some 32 million adults are nonconsumers of basic education that could help them gain critical skills to bolster their lives and society, according to Tyton Partners.

A new report being released at LearnLaunch’s Across Boundaries conference this week, titled Accelerating Change: A Guide to the Adult Learning Ed-Tech Market, from Digital Promise in partnership with Entangled Solutions (where I serve as a principal consultant) and the Joyce Foundation and written by Amber Laxton and Mike Berlin of Entangled Solutions and Patti Constantakis of Digital Promise, tackles how entrepreneurs can serve this market, which remains unknown to many.

As Vinod Lobo, CEO of Learning Upgrade, a company that serves the adult learning market with online courses, says in the report:

The best part of the adult learning market right now is a lack of a leading company. In K–12, there is just so much competition. You go to a conference, and there are 30 other products just like yours. In the adult market, it’s just not like that. People are waiting for something. They’re starved for some solutions. So, I think, there is more room for innovation and for small companies to do well and to be heard. That’s the excitement of it. A small company has an advantage because this is too small of a market or too fragmented of a market for the big companies.

That is the textbook foundation for disruption—a market that appears small and inconsequential to leading incumbents. And the new report illustrates that technology can play a critical role, another important ingredient for disruptive innovation.

Although the United States spends $10 billion each year on adult learning services, only $200 million of that is on digital materials, according to the report. Leveraging technology is a big opportunity to create disruptive innovations that would expand access, drive affordability, and create simpler solutions where the offerings today are inconvenient, unaffordable, or too complex to access for many learners.

The updated Workforce Innovation and Opportunity Act (WIOA) creates such an opportunity for entrepreneurs, as the federal government now mandates a focus on integrating technology into adult basic education. With state WIOA plans available publicly, entrepreneurs can dig in and focus their efforts—critical because so many entrepreneurs are unfamiliar with the systems that serve adult learners in comparison to an understanding of K–12 schools and higher education.

Channels to market

There are two primary channels to reach the market, according to the new report. The first is through existing learning providers—community colleges, K–12 school districts, community-based organizations, workforce development centers, libraries, and correctional institutions—that serve adult learners. One key in serving this market is to make sure that any solutions developed are tailored for the context in which they are reaching adult learners—whether that be in the correctional system serving adults transitioning back into society or in the workforce serving adults who need content specific to their industry.

Serving this market with technology is likely to be implemented as a sustaining innovation from the perspective of the providers—that is, to improve what they currently offer for their target audience. That’s important, but, as a result, is unlikely to expand dramatically the number of adults served. The reason is that most of these incumbent providers have established business models with set resources, processes, and cost structures that make it unlikely they will introduce radically more affordable or convenient models.

Although in some respects serving this existing market is clearer and more certain, it’s arguably riskier in other respects because it is hard to figure out how to enlarge the market and serve the massive number of nonconsumers.

That’s where a secondary channel enters—serving the independent learner directly. As the new report says, although the direct-to-learner model is unproven, “there are clear indicators that there is potential.” There is widespread consensus, according to the report, that any technology products should be mobile-first and simple—recipes for a disruptive play.

From my perspective, there could be a potential for a third, hybrid channel. Dual-generation, or two-generation, learning is growing in popularity. According to the report, “The cornerstone of this approach is to create learning opportunities for adults and their children simultaneously. Not only can traditional providers, like schools, more easily reach adult learners, but they do so in a way that allows them to share resources, reduce costs, and improve retention rates by having parents learn with their children.” In addition, U.S. employers invest significantly—up to $70 billion per year—in education and training for their employees and such companies as Walmart and the Walmart Foundation are helping frontline retail workers “gain foundational skills and move more quickly into middle-skill roles.” The hybrid play would be offering an online-learning solution to a retailer, like Walmart, to use a small part of its stores on providing education for adults and their children in the community for free, with the knowledge that it would boost foot traffic in the stores as well.

Finding success

Ultimately, disruptive innovation is not a theory of success. It is a theory of competition. To launch a successful disruptive innovation, understanding the “Job to be Done” for which a customer would hire your solution and designing accordingly is critical.

As Jessica Rothenbery Aslami, CEO of Cell-Ed, a mobile learning platform for adults, says in the report, “‘There is a massive market waiting.’ We just have yet to create that invaluable product or service that ‘actually gets the job done in a fraction of the time and authentically gets at the [main] pain point.’”

Our own early research on Jobs out of the Christensen Institute, where I am a distinguished fellow, suggests that, among other motivations, some adult learners pursue further education just to escape their current situation; others do it to step it up in their lives; and still others do it to fulfill society’s or someone else’s expectations of them. Entrepreneurs seeking to tackle this market should deeply understand these circumstances and the progress learners are trying to make and design accordingly.

In this vein, the report offers helpful recommendations for how to deeply understand the circumstances in which potential customers find themselves—lessons worth heeding to create real value for society and the adult learners who need to boost their fundamental skills.

For more, see:

Michael B. Horn

Michael is a co-founder and distinguished fellow at the Clayton Christensen Institute. He currently works as a principal consultant for Entangled Solutions.

  • Jacob S.

    Thanks. Your articles are always well thought through and follow Clayton’s thinking patterns.

  • Jennifer Gwatkin

    As always, well done!