Fall 2017 — Week 10 Process Journal
Kellogg Business Case: Study Smart Tutors: A Case of Entrepreneurial Dilemmas and Opportunities to Break Through Unique Growth Barriers
In this case study, the founding of Study Smart Tutors (SST) is presented from the time when the founder, Jack Freidman was a college student that had a small income helping college friends by tutoring them. Eventually Jack decided to start a company that focused on one-on-one tutoring. As SST grew, they reached a point where the individual tutoring was restricting the company growth, so Jack decided to pivot and change to a group-format. The change to group tutoring allowed SST to scale, through the use of contractors. After some time, and towards the end of the case, Jack is presented with more decisions to make: should the company expand its footprint to online education? Should the company aggressively expand by hiring more contractors, or should it expand by hiring more full-time employees? These questions are extremely challenging, because it is essential to consider quality of the tutoring, the expense of investing in marketing outside their home area (California and Arizona), as well as the added overhead of managing full time employees.
Jack’s pivoting to group-based tutoring was the right decision given that the costs of having 1:1 tutoring would eventually be too high for them, and there would be a limit as to how many students they could help with that model. Being in Jack’s role, I’d consider a way to “train the trainers” as to have a consistent quality — and hire only for essential full-time positions, such as regional sales/operations roles.
One of the dependencies that he’ll always have is government education policy — this will always present itself as a risk every change of major, governor, and even president.
- What is the best way to protect a core business model from external regulatory factors without diverting too many resources to this effort?
- How can Jack scale the tutoring services while keeping the company’s value prop and reduce attrition?
As Amazon acquired Wholefoods, the five-year contract that they had with Instacart has helped the delivery service to be positioned in a way that lets it build a solid userbase before Amazon takes over with their own delivery services. Amazon has on their side a massive amount of resources, including a vast amount of consumer shopping data, plus their own Amazon Fresh delivery service directly competes with Instacart. The small window of time that Instacart has to operate within WholeFoods is crucial for Instacart, as they have been able to collect customer order data, they need to use every resource they have now to present themselves a better solution than Amazon at the last mile groceries/food delivery. Also, Instacart should partner with other supermarket chains so that they can keep on building their brand and collecting user data, which will prove useful to their strategic plans.