Money & Finance Opinion

Following For-Profit Providers (III): Individual Firms

September 29, 2007 3 min read

A brief intense research effort before purchasing a for-profit firm’s offerings, entering into some kind partnering arrangement, or investing in it, is basic due diligence. While it’s very hard to develop a coherent picture of the school improvement industry and then follow it on your own, it’s quite a bit easier to track individual firms. With a little bit of work up front, the monitoring process becomes almost automatic.All but the smallest school improvement providers have a website with a news page. In many cases you can subscribe to an RSS feed, assuring that you will get updated news items. Publicly traded firms are under some obligation to disclose finances and projections and other information material to investors decisions about the stock, so they tend to have more detailed business data and analysis than privately owned firms. There is often quite a bit of useful information in reports that relate to the issuance of new stock or future projections in general. Reading these press releases and corporate documents for their deeper meaning involves a certain logic anyone can learn.

My firm publishes a monthly report of news announcements from roughly 1000 school improvement providers. Based on that experience, I argue you can learn three things from any firm’s news page: 1) If the firm is doing well, signing up new clients, increasing revenues, generating profits, getting good product reviews, making acquisitions,etc., etc., you will be told about it. 2) If there is no news on the site, nothing good is happening, which at least means stagnation. 3) A publicly traded company has to say something about bad news with a material impact on profitability. A privately held firm is far more likely to remain silent about bad news or controversy rather than help to spread the story by responding.

General business information on individual public and private firms can often be found for free on sites like www.hoovers.com. Program reviews may be available on sites like the What Works Clearinghouse. (For more on becoming a good consumer of education programs, listen here.) Any study, report or announcement with the name of the firm, its products or staff that makes its way to the internet will be revealed by Googling the same. To the extent the company, its products or people make the press, you can find the stories by searching on Google News, where you can also request future news alerts.

Where you are planning to invest serious time, money or other resources in a for-profit provider, there’s no excuse for neglecting the above actions. But they take up too much time to use as a strategy for following the industry as a whole, or even a segment, as a matter of general interest unrelated to a specific decision.

On the other hand, if you are engaged in education policy research, you ought to be as conversant in the for-profit aspect of supply as you are with the various strands of philanthropic and nonprofit work in school reform. The time invested to comprehend the for-profit firms in the school improvement industry ought to be considered the price of any claim to expertise in the supply side of public education.

In my view, the knowledge required lies at the level of the admittedly overlapping industry segments; e.g., school management, Supplemental Educational Services, Comprehensive School Reform, Reading, Math, Information Services, charter Online Infrastructure, Online Course Content, etc. etc, When the school improvement market is broken down by segment, it becomes possible to see how education policy researchers can build a collective understanding of supply.

Next: Following a school improvement industry segment.

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