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Enjoying Exponential Cost Reductions Can Be as Easy as Learning a New Language

Jan 30, 2008
Many people don't believe you can reduce user costs by as much as 96 percent. Why? Well, they've never reduced any user costs.

Let's look at an example based on studies that many of my language school clients have employed.

Becoming fluent in a new language is an activity where user costs can be high in terms of time and money. At the extreme, the student could make a mistake and choose methods that are expensive and not terribly effective. An example might be traveling once a year to a country where that language is spoken and picking up a few words each time through casual interactions with native speakers there. With that approach alone, fluency might never be achieved.

We'll give the student credit for more intelligence and commitment than that. Let's now assume that the student selects a two week language immersion program that's provided in a developed country. Such programs often cost thousands of dollars for the instruction plus thousands more for meals, hotels, and transportation.

If the student isn't being paid by an employer to attend, there may also be lost income . . . or at least vacation time lost for recreational pursuits. Many students will emerge from such immersion programs tired, but with an active, if fractured, facility with a few hundred words. That's progress.

But without practice, the expensively gained facility can fade. Maintenance may require trips several times a year to a country with native speakers.

That solution works well for the wealthy leisure class, but what can a person with limited resources do instead? Assuming that the 10-year out-of-pocket cost for the just-described approach is over $70,000, reducing the financial cost by more than 95 percent allows a budget of less than $3,500 to cover all 10 years. While that much of a cost reduction may seem to be quite a trick, if you open your mind, you can quickly locate a high-profit entrepreneurial opportunity.

People do need to see and hear native speakers. But these days, they don't have to travel somewhere for that opportunity. All learners need is to have a computer with a high-speed connection and speakers.

Most daily conversations in any language employ fewer than 1,500 words. As soon as you have a working knowledge and comfort with the right 1,500 words, you can communicate pretty effectively with just about anyone.

When you start thinking about 1,500 words, it sounds like a lot. Right? I agree.

If, however, you break 1,500 words into 15 words a day for 100 days, it doesn't sound like so much. And it isn't. Most people can learn 15 new words a day in another language with less than 30 minutes of effort.

But on that first day, which words do you start with? Here's where an entrepreneur could help.

A native speaker of that language could pick a base vocabulary of 1,000 words that almost everyone needs and supplement that base vocabulary with several different sets of 100 to 200 words that people with specialized interests and needs could use (physicians, lawyers, engineers, tourists, etc.).

Then the native speaker could experiment with teaching the words and supplementary modules in different orders, employing different methods, and with fewer and more words per lesson. For instance, it might be that 15 words could be packed into one sentence. Anyone can learn one sentence, especially if the sentence is funny or otherwise memorable.

From this approach, the entrepreneur is likely to learn that people have many different language learning styles. That's an opportunity.

A brief diagnostic test can be designed to select the right teaching method for an individual student. Within say 10 different teaching styles, most people will probably be accommodated better than in an immersion program conducted abroad. The new student could then begin on the first day with just those easiest and most helpful words provided in the most learner-friendly style to make the process more inviting.

But what about review? If you don't practice, you will soon forget what you learned. The entrepreneur could provide brief daily online review sessions with links to more study aids for those words that prove hard to remember and speak correctly.

Accents are important too. Arrangements can be made for students to record their voices from time to time for review by native speakers. If this is done over a Web-enabled telephone line, there may be no additional cost for the telephone call.

But ultimately, all this speaking practice isn't going to do much good unless you have a reason to speak and listen. The entrepreneur can play a helpful role here, too, by matching native speakers in one country with other native speakers in another country who want to learn each other's language.

That means that someone who speaks American English could learn Portuguese Brazilian from someone who wants to learn American English. Properly done, the two native speakers should be matched based on backgrounds and interests so that they will find plenty to speak about that will be interesting to both of them.

If two speakers tire of practicing with one another, they can help each other find another partner or the entrepreneur can reappear to make another match.

Let's look first at this offering from the learner's point of view. The service is a better one than what the wealthy person can afford. You spend the same amount of time as the immersion course provides, but you can schedule the experience at any time you want. That scheduling makes learning more convenient.

You can also skip going to a foreign country until it suits your needs or plans. You're getting all the practice you require and enjoy the experience more in the meantime.

Because it's easier to learn when you do more frequent exercises, reviews, and conversations, facility should become better over the first few years than with the more intensive approach. Ten years from now, assuming equal language learning skills, whoever is more interested in learning the language will have done best. That ultimate result is pretty much independent of which method is used.

From the entrepreneur's perspective, the offering is a dream. There's some up-front work in course development, but the courses can be reused by millions with no additional development or instructional cost.

That approach eliminates a big chunk of the costs that the immersion course owner has to absorb. For example, if the instructional development costs are $1,000,000 and the entrepreneur teaches one million students, the development cost per student is only $1.00. With low delivery costs based on computer technology, the cost to assist a student in gaining 1,500 words of vocabulary may be less than $5.00 each.

Let's assume that the accent work takes a total time of five hours of someone whose full cost is $50 per hour. That would mean that the basic educational delivery cost is $256.00 before considering marketing and administrative costs.

Let's look at the native speaker matching program. That could be done with computer software at low cost. Let's assume that all costs of finding the speakers and matching them with one another total $100 per student over 10 years.

Could such a service be offered profitably for less than $3,500 over 10 years? You bet.

How can you use such analytical methods for business model innovation to reduce the costs of your potential customers by 96 percent while you gain a healthy profit?
About the Author
Donald Mitchell is an author of seven books including Adventures of an Optimist, The 2,000 Percent Squared Solution, The 2,000 Percent Solution, The 2,000 Percent Solution Workbook, The Irresistible Growth Enterprise, and The Ultimate Competitive Advantage. Read about creating breakthroughs through 2,000 percent solutions and receive tips by e-mail by registering for free at

http://www.2000percentsolution.com .
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