Tuesday, August 01, 2006

tutors get outsourced

(Business 2.0) August 1, 2006 -- IDEA NO. 6 Services that once required face time can be profitably handled online.

America's education crisis, along with the rise of online video, is turning into another big opportunity for India. Companies like New Delhi-based Educomp are tutoring U.S. high school students in math and science one-on-one via the Internet. Anyone with a PC and a webcam can use the service, and the Indian companies' combined annual revenue is an estimated $10 million. That's a small slice of the $2.3 billion tutoring business, but India's share is growing fast.

Indian companies charge as little as $100 a month for unlimited, real-time, interactive video tutoring. A private face-to-face session in the United States runs as much as $100 an hour. Plus, most of the Indian companies guarantee that their tutors have at least an undergraduate degree in the subject they teach. In the United States, nearly 30 percent of high school math teachers lack a major or minor in the field.

TutorVista, based in Bangalore, recently tapped $2 million from Sequoia Capital and anticipates $10 million more for acquisitions by next year. Chairman K. Ganesh compares the sector to mobile communications: When the right price point is reached, he says, "the market size will increase 10-fold."

But the real opportunity could lie in using online tutoring to leverage other educational services. New Delhi-based Career Launcher has already acquired a U.S. company and begun to roll out bricks-and-mortar tutoring centers just like the ones it operates in Dubai. Seems they have a thing or two to teach American educators.