Edwise - exploiting the long tail of education

A business that leverages the long tail.

September 25, 2006

This is about a company called Edwise.It is good to see that the company is still doing well.

I recently finished reading Chris Anderson’s ‘The Long Tail’. It is one of the best business/economics/culture books I have read in recent times.In it Anderson talks about how the emphasis is shifting from blockbusters to niches and how infinite choice is creating unlimited demand.Anderson gives a lot of examples of companies exploiting the long tail of demand in various industries - e.g. Amazon(books), Google(advertising), Netflix(DVDs), iTunes(Music) etc. As I was reading the book I was trying to think of local companies trying to tap the demand in the long tail and players taking advantage of the long tail in other industries. The first company which came to my mind was this company called Edwise. Edwise provides educational consultancy (for free almost!) and value added services to students interested in studying abroad.

Unlike the big companies mentioned in the book which cater to the demand in he ‘head’ as well as the ‘tail’, Edwise caters to demand only in the ‘tail’. The business model of Edwise is pretty simple. It has tie ups with a large number of universities in countries like US,Canada,UK, Singapore, Australia, Switzerland, New Zealand and Hongkong. These institutes do not include the top rung universities which essentially makes them a part of the long tail of education in the respective countries. Consultancy here means helping the student choose a set of countries, courses and institutes.Value added services mean various services required by a student starting from couriering the application forms to the institutes the student has selected to finding accommodation in the place where the student has finally enrolled.

Ok now here is the interesting part about how Edwise makes money without charging the student a penny. Edwise gets a commission from the university(Edwise should have a tie-up with it of course!) for every student who joins it.It gets a commission from the value added services it provides.What about the costs??Almost all the costs involved are fixed costs.And the major costs I can think of are rents for decent sized rooms which can accommodate on an average 2-3 counsellors, a broad band connection at each of the places and man power costs. I leave it up to you to estimate the profits(at least I think its a profitable venture).

What I like most about this whole idea is the way it fits beautifully into the framework proposed by Anderson in the long tail.In ‘the long tail’ he says:

  1. Give people a lot of choice.
  2. Help them choose.

Thats exactly what Edwise has done. Edwise gives the student enormous choice using the power of the internet, hundreds of universities to choose from and it also helps them choose by recommending institutes and courses to students. Edwise can provide so much choice because the marginal cost of a tie-up with a new institute is negligible.The demand for each of the universities from a country like India will be very low but the cumulative demand for all the universities will be a sizeable number given that not all students can get into the blockbuster universities like MIT, Stanford, Harvard, LSE or other top rung universities and that different students have different preferences.

The student wins because he does not pay anything, the university wins because it gets more students and in a lot of cases foreign students are charged more than locals and Edwise wins too.

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