Here in a nutshell is how business adds up at Academy123. Take frustrated math students from around the country, at wit’s end, pulling their hair out because a cosine makes no sense and a + b does not equal c. Add an online homework help program recorded by math teachers based in Southern California straight onto a laptop computer. Multiply by $9.95 per month. Academy123 was founded only two years ago and launched its flagship Nutshell Math program last October yet created a lucrative enough product to catch the eye of Discovery Education leading to its acquisition of the Westlake Village company last month. Discovery Education is a subsidiary of Discovery Communications, owner of the eponymous cable channel. The buyout brings with it the global credibility of the Discovery brand, distribution channels into both homes and schools and access to content in other subject areas that Academy123 can build homework help programs around. “Their ambition is much bigger than we ever could have pursued on our own,” Acaemy123 President and CEO Johannes Larcher said. “As a small start up you have to focus on the sweet spot and we did that.” That sweet spot as the Austrian-born Larcher calls it was middle school and high school level math and the anxiety it causes for students unable to easily grasp the concepts applied to solve algebra and geometry problems. Academy123 provides nearly 1,900 hours worth of online material created by contracted math teachers and vetted by its own employees with math degrees. While Larcher wouldn’t disclose the exact number of Nutshell Math subscribers, he placed it in the tens of thousands. That’s just a fraction of the total number of U.S. students turning to high tech methods for that nudge needed to understand complexities of the classroom. Supplemental educational services are a growing industry and the use of technology gives a student a different approach to understanding a subject other than classroom teaching, said Don Knezek, chief executive officer of the International Society for Technology in Education. “Having to dial in and work in a slightly different delivery system improves the chances for success,” Knezek said. If the buyout by Discovery Education is any indication, Academy123 has been a business concept success. Whether its math homework help product has been an educational success remains unknown to Larcher and the management team. The company lacks quantitative data on whether Nutshell Math results in better grades, only anecdotal evidence from parents and teachers. There are plans, however, for marketing research to answer that question. What helps make Academy123 a success is not knowledge of math but of how to market a subscription service on the Internet and getting its product in front of the right audience at the right time. If there is a common denominator of the Academy123 management team it’s the lack of educational backgrounds. They are marketing people and tech people who honed their skills at companies such as Overture, Countrywide Bank, Bertelsmann Ventures and Akamai Technologies. But Larcher doesn’t see his and the team’s backgrounds as a drawback because Academy123 is foremost a consumer-based business. “It might be different if we were selling to schools directly, which we’re not doing at this point,” Larcher said. Oddly, despite marketing backgrounds the company does not have a huge marketing budget. So Nutshell Math gets promoted through direct e-mail campaign, search engine marketing, and increasingly through word of mouth. The company also appears at conferences and trade shows, such as the ISTE’s National Educational Computing Conference, which took place last month in San Diego. “At each of these the teachers come by the booth and see the product and hopefully we turn them into zealots,” said marketing director Barry Levenson.
