E-COMMERCE BUSINESS MODELS: Rate the Startup

With all the dotcoms biting the dust lately, you’re probably getting a clearer picture of what makes a winner and a loser in the race to the Internet land of plenty. Take a look behind the curtain at LearningBrands, and decide whether this e-business model has what it takes to succeed. Form your own opinion, and see how it compares with the experts’ commentary and that of the motley crew weighing in on the Web at webbusiness.cio.com/startup.

After years of throwing silly gimmicks at customers, some websites are now trying to get sticky by offering something useful: “educational” content. Some of these sites create their own content, and some turn to third-party content providers such as Norwood, Mass.-based startup LearningBrands.

Here’s a typical scenario: Potential investors visit the website of financial services company Liberty Funds and sign up for Liberty’s free asset-allocation course to learn the ABCs of saving and investing. What these visitors don’t realize is that they have actually clicked through to a minisite that LearningBrands’ staff wrote and formatted for the Web. Another example: Cooks who want to learn how to make slow-rising pizza dough visit the website of Cook’s Illustrated magazine and click on the How to Make Pizza guide. In fact, these budding pizza pie people are browsing a site designed and hosted by LearningBrands.

The idea, says LearningBrands’ cofounder Seppy Basili, is to use interactive guides full of instructional text to help online companies extend their brand. This notion is not new. For years, brick-and-mortar retailers, such as The Home Depot and Christie’s auction house, have published instructional literature and courses intended to deepen the bonds between their customers and their merchandise. LearningBrands has taken the strategy online, and the young, 48-person company not only creates the editorial content, it also formats it in interactive webpages and hosts it on its servers.

“Companies spend millions to build a Web presence,” says Basili. “They’re all seeking deeper, stronger, better relations with customers. We think using learning across the Internet is the way to do it. Learning makes the relationship more personal, more intertwined.”

LearningBrands guides can be about anything, from how to build a small business to how to develop black and white pictures. Each guide is written for a single customer, so no two LearningBrands customers will ever offer the same content.

The guides are created by what the company calls an “experiential” design team composed of writers, curriculum developers and information designers who work with clients to establish the guides’ content and structure. The customized content strives to capture the tone and spirit of the company for which it is created, while solidifying its brand so that consumers who read it learn to recognize and trust the name. If a LearningBrands customer is an expert in its field, such as Cook’s Illustrated, LearningBrands simply repackages the customer’s own text into its delivery platform, SmartPlatform.

LearningBrands’ founders believe that their SmartPlatform technology is one advantage that distinguishes them from other e-learning companies, such as Powered (formerly NotHarvard) and DigitalThink. SmartPlatform, which is hosted on LearningBrands’ servers, is configured in such a way that users indicate their preferences before reading the guides. The SmartPlatform filter then delivers content that is relevant to each user’s situation. “If we create a course on salary negotiation,” explains Basili, “the guide needs to ask each user if he’s emotional or confrontational. We can then send him the appropriate tips on asking for a raise.”

According to the company, a customer can buy five LearningBrands courses for the price of two full-page ads in The New York Times. While reluctant to divulge current and projected revenues, Basili says each of LearningBrands’ 10 customers have bought at least five courses and that the company is in talks with “many more” potential customers.