Rosetta Stone, MegaStudy and Educational Software in Korea

While in Korea studying the country’s education system on my Eisenhower Fellowship, I observed how little Korean society values educational software. The idea of paying for educational software with any basic instructional design, let alone adaptive, game- or simulation-based learning, was a largely foreign concept to Korean educators and the Korean public.

In talking to CEO and founder Son Joo Eun of MegaStudy, one of the most successful disruptive online educational companies worldwide that dramatically lowered the cost of and access to hagwons, or cram schools, in Korea, I was struck not only by how technologically simple the solution is in many respects, but even more so by how devoid it is of utilizing advances in the learning sciences. In essence, MegaStudy makes millionaires out of popular teachers by just having them broadcast their lectures online and then the teachers create workbooks or exercises around those lectures.

EBS, one of the large Korean television and radio networks, is now disrupting MegaStudy by offering students online lectures from teachers for free in essence. Companies that have sought to introduce adaptive, game- or simulation-based learning to disrupt cram schools—one of the few examples of a straightforward consumer marketplace in education—have struggled to gain traction.

According to Son, Koreans believe that real learning looks like the straightforward transmission of knowledge—me lecturing to you—even as KAIST Professor and Director of the Center for Excellence in Learning And Teaching Tae-Eog Lee makes the point that lecture is inefficient for learning. The idea of the power and authority of the teacher as the fountain of knowledge to pour forth into waiting student vessels looms large.

Even in the schools in Busan flipping their classrooms, as I wrote, the teachers created all of the online lectures. The notion of paying for outside software struck them as strange. When I asked why not use educational software that leveraged the minds and talents of hundreds of educators and technologists, many said they couldn’t possibly ask the students to pay for the software. I assured them it didn’t have to be this way; schools in the United States pay for the educational software, not the students. But even though Korean schools will pay for technological hardware, paying for educational software no matter the quality simply struck them as an odd idea. Part of the reason for this may be because historically speaking there has not been a competitive market for textbooks in many subjects in Korea, as the government has controlled tightly educational content to match the prescribed national curriculum.

Against this backdrop, I also met with leaders at Rosetta Stone Korea, President Steven Cho and Senior Director Jenna Shin. Along with its recent acquisition of Lexia Learning, a rigorous English reading product, Rosetta Stone brings some robust learning software products to the after-school Korean language learning market, which is large at roughly $9 billion, or 11 percent of the global language learning market. $8.1 billion of the market is for English language learning. Despite this, Rosetta Stone has—unsurprisingly given this context—struggled to gain traction.

But as of late, Rosetta Stone Korea is turning things around and growing. Its big insight seems to stem from a deeper understanding of the “job to be done” for which parents hire after-school learning solutions. Parents—mothers in particular in Korean society—often do not have the confidence or time to dedicate to manage their children’s extracurricular learning on their own, but they view doing so as a critical element of being a responsible parent. To handle the stress, they seek to hire a credible professional who will handle this responsibility for them. To deliver on this job, integrating beyond simply great learning software and including a trusted person is critical.

Many parents hire people in their local community to help do this job for them. These tutors or proctors have children come over to their house for after-school studying. Naturally there are many snake-oil salesmen, which has historically created more demand for both the high-end hagwons and trusted programs with human tutors like MegaStudy. Parents in the mass market—outside of the high end—are desperate for better solutions and good guidance.

Although most parents won’t hire self-study solutions like Rosetta Stone by themselves, digital products are slowly gaining acceptance. Rosetta Stone Korea is taking advantage of this to partner with these at-home proctors to create Rosetta Stone-branded, community-based solutions that offer sounder learning solutions with a trusted brand name that differentiates the proctors and leverages the word of mouth in the community. The offline proctors in essence “do what mom should be doing” and help manage a child’s learning by hiring Rosetta Stone.

The sweet spot for Rosetta Stone Korea is in serving students who are in Grades 1 to 4 because they are young enough that the parents are less focused on how the language learning will prepare students for the suneung, or the College Scholastic Aptitude Test. This allows Rosetta Stone to lean on its own strengths of natural language learning rather than focusing on narrow test preparation around English grammar and to leverage the fun and game-based aspects of Rosetta Stone’s product.

As Rosetta Stone Korea grows, this could educate the broader consumer market on the value of software-based learning solutions, especially if the company is successful in outperforming traditional solutions from a learning perspective. And if that happens, then that could create a bigger revolution in Korea focused on learning, not a notion of what learning should or traditionally has looked like. With Korea’s obsession over education, some pretty rapid educational advances could follow.

-Michael Horn

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