I have been meaning to write a brief blog post conveying my impressions on the minimal amount of information I found on this recently announced partnership. Let me provide you with some insights based on the framework of disruptive innovation theory.
First of all, I empathize with FLVS head Julie Young, because she was put in a very, very difficult situation. The Florida legislature has amazingly, been putting the squeeze on her budget and thus despite all of the value her disruptively innovative program has generated, she was in need of a capital infusion to cover the potential shortfall she was experiencing. I must confess that I do not have the exact figures in front of me, but I am sure that some of my colleagues have that information. So Ms. Young was forced to make a deal with the establishment who was probably willing to listen and explore the possibility of a deal. So FLVS gets a few things:
- Some level of revenue – but probably not the estimated $40M over three years that the press is disclosing to the public.
- A national footprint: Pearson offers FLVS the potential for immediate national distribution and thus widen its credibility and reach far beyond its geographic borders.
But FLVS may be overestimating the value here. Pearson will bundle this product with its current offerings and very likely offer FLVS pennies on the dollar, because they will not let these products cannabilize their core offerings that they wholly own.
Unfortunately, Pearson wins BIG here. They get the favorable optics of being perceived as a “leader in digital learning,” as well as being able to strategically monitor the impact that online learning programs such as FLVS are having on their growth trajectory. In a sense, they can now take efforts to “neutralize” some of their competition and mitigate the impact it will have on its business activities.
My colleagues at the Innosight Institute have written case studies on FLVS in the past, and one of the things they harp on constantly is the need to not only create disruptive innovative products, but the need to distribute them disruptively as well. Without knowing the intimate details on the arrangement, I am only speculating here; however, I am quite concerned that one of the most disruptively innovative digital learning organizations has just done a deal that may not be true to the tenets of what made it successful: being a disruptive innovator.
I hope I’m wrong, and I for one want to see FLVS continue to be successful. Lets just hope they didn’t pay too high a price for working with the 800 pound gorilla. Short -term revenue at the possible risk of long-term viability.