Just when I thought I was out, they pull me back in. Why are you always doing this to me? Honestly, I was perfectly OK to not write yet another flame and rant post about you but maybe, just maybe this will be the final one.
In an email to all teachers of the platform Marina Tognetti, founder and CEO of Myngle announced the new commission model that will be launched January 1st 2011. It will be topping at a whooping 35%, yes thirty five that is.
So here I am, back on the battlefield. Sure, I know from the past posts on that topic that it apparently takes a lot to get teachers so mad that they quit with the service and often I felt like talking to myself. But this time the Myngle team might have overtightened the screw.
Before I get to the commission disaster let me quickly tell you about to other interesting things. One is that Myngle finally buried the entrance to the caves or “the lower deck” as I used to call it. The forum is now officially closed and teachers are welcome to join the Ning network. Three years of discussion, moaning and groaning but also valuable input are gone. Well, not gone as you can still reach the forum via its direct link but I suppose that is only a matter of time.
Secondly, Myngle had the chance of getting an online deal on Groupon Netherlands. According to Myngle 1.4 million people receive the Groupon daily deal in the Netherlands. In my opinion they totally blew this chance as they set up an offer that even I could not understand. One month of language learning but only 3 live lessons included? I mean, even with Gaius Julius Cesar being Pontifex Maximus of the Roman Empire and screwing up the calendar so badly that no one knew which month it was, months still had more than three days. Anyway, long story short, in the end Myngle sold 125 units which is a conversion rate of 0,001%.
But now comes the best part. Starting from January 1st 2011 the revised commission structure of Myngle is as follows
I have a hunch why they are doing this but first let us put the new system to the test, shall we? According to Marina Tognetti’s email
[...] you will also be earning more per class.
Well, to me it is pretty obvious that the only way to earn more than before is to sell the 100 lesson package. The 50 lesson package has the same commission as before and with all other options the teachers will lose money if they don’t cut the reductions they offer for buying packages which is not really an option.
If I had to guess, Myngle is brushing up the service for a new funding round. Personally, I would be shocked if they were even close to being profitable and looking at that email again, we can read that the decision was taken based on
[...] the input of our teachers, our management team and investors [...]
Looking at the first comments in the Myngle Ning the teachers seem to be rather upset and not really the ones who said “raise the commission” and quite frankly, why on earth would they? To me, the decision is clearly coming from the investor side. None of the live teaching platforms has really outperformed until today and there is still the big question why Jon Bischke sold eduFire to CamelBack Education after only two and a half years. I think, he took the chance to get out of this niche. Remember, live lessons are FNACs. Maybe he will tell us one day.
This new commission structure is clearly built to get cash flow which is of course in the interest of investors. Remember, if a student buys a package upfront the money does not go directly to the teacher who sold it. The money is administered by Myngle and the teacher gets paid for the lessons he / she gave during the month. Therefore there is money on the Myngle bank account that can be spent for marketing or running costs. Works well for the platform as long as new students sign up for packages every month.
Don’t get me wrong, this is a totally normal business model but shaping the commission in a way that teachers are forced to sell 50 + lesson packages to students who are in most cases not interested in such a big number of lessons is like working for an insurance company and selling crappy, overpriced life insurance packages. Myngle wants its teachers to sell, teaching is just a by-product.
For me Myngle has finally hit solid rock bottom. This is a last, desperate move to get liquidity and / or prove the business model in general but looking at the rather small number of loyal teachers who are left teaching on the platform, I don’t see what this should lead to. Why not raise the commission to 75%, it doesn’t matter anyway.
Leaving you with the great Al Pacino, I really hope that this was my last post on this matter. I am tired and it is not good for my blood pressure.
One last thing.
“If you have the same problem for a long time, maybe it’s not a problem. Maybe it’s a fact.” - Yitzhak Rabin
If live online language teaching platforms don’t work… – Think about it.