Thursday, June 18, 2009

Scalable and Sustainable

With the huge dollars getting tossed around in education right now there is a lot of talk about “scale” and “sustainable” when Sec. Duncan and his staff talk about this opportunity. However, in most operations that are funded by the US DOE, I have never seen either scalable or sustainable as a part of their business model.

At ABCTE we were always careful to ensure that we did have a model that could be scalable. A venture capital site has a good definition that says that a business is scalable if it has two things:

  1. The cost of each incremental dollar in revenue must be going down
  2. The business must be able to grow — even if you throw mediocre resources at it

Next month ABCTE celebrate the end of our initial grant. In most non-profits, this is not reason to celebrate, but here we have made sure that we meet both of the two criteria above and are seeing our cost per revenue continue to drop dramatically. At the same time, we are throwing considerably less resources at our growth.

In two years when the ARRA funds dry up so will the programs that received funding. Education non-profits and government entities don’t build things that are scalable - they build things that expand to the amount of money available. ABCTE is that rare organization that is truly scalable and sustainable – and damn proud of it.