Portland Business Journal
12/22/2003

English, baby! weathers storm with adroit shift

Aliza Earnshaw
Business Journal staff writer

As just about every entrepreneur knows, the economic atom bomb that hit the business world on Sept. 11, 2001, wounded a great many promising small businesses, some of them mortally.

Tech companies, already suffering declines from late 1990s peak revenues, were among the hardest hit. Portland educational software company English, baby! could have suffered the same fate, but the small company averted the crisis with an adroit shift in its business model.

The company switched from making an educational product for colleges to providing those same colleges with a recruiting tool. As a result, English, baby! will record its first profitable year in 2003 and expects to double revenue in 2004.

Founded in mid-2000, English, baby! began by selling its internet-based program for learning colloquial American English to colleges and language schools. The terrorist attacks put a sudden brake on those plans.

"We'd call in to schools, and they'd tell us, 'We're not getting any students in, we have no need for a curriculum product, and no budget for it,'" said John Hayden, CEO and co-founder of English, baby!

Colleges that relied on attracting students from outside of the United States--students who pay higher fees, and thus generate welcome extra revenue--were seeing enrollment of foreign students decline by 50 percent, said Hayden. These schools couldn't justify the expense of a new English curriculum program, especially one that is intended to work as a supplement to established academic programs.

English, baby!, with just eight clients at Sept. 11, 2001, had to quickly find another way to market its software.

"As the year went on, it became apparent that this wasn't a short-term bad spell," said Hayden. "It would be years before the ESL [English as a second language] industry would recover."

As Hayden talked to prospects, "a lightbulb went off in my head." What the colleges really needed was help in attracting more foreign students to their English programs: something that would capture prospective students' interest online, and give colleges a way to track those prospects and continue marketing to them.

After talking with a former director of the Language Academy at the University of Southern California, Hayden got his first order for the new English, baby! marketing product: a web page for alumni of USC's English-language program that would keep them actively involved with USC even after they returned home, and would encourage them to refer friends and family members to the program.

English, baby! developed the alumni page for USC's Language Academy, and included a mini English lesson that prospects could take online for free. The key is that a prospect must provide his or her name, country of residence and e-mail address in order to take the lesson, thus providing the university with a database of likely prospects for its English program.

Other university customers now use the same alumni web page, branded with their own identities, to track their own English-program alumni and attract new students.

The English-language programs at many universities are separate, non-credit-earning programs intended for people who would like to study at an American university, but need some coaching in order to pass the Teaching of English as a Foreign Language exam, a prerequisite for most international students seeking admission to U.S. universities.

USC's Language Academy, for example, consists of two 14-week terms during the school year, or two six-week sessions during the summer months. It enrolls about 500 students per year, and is "a revenue generator" for USC, according to Sylvia Smythe, director of the Language Academy.

English, baby! now has 45 university customers, and new prospects in the United States, Canada, the United Kingdom, Ireland and Australia.

"We love English, baby! and are most appreciative of what they've done for us," said USC's Smythe. Besides creating and maintaining the Language Academy's alumni web site, the English, baby! development team created a conversation lab for use in conjunction with the Language Academy's established English curriculum.

"We offer it as one of our workshops," said Smythe, "and students love it. It's lively and interactive, it changes every week, and they can do it at midnight, in their pajamas, if they want to."

ELS Language Centers, which operates 33 English language schools in the United States and one in the United Kingdom, has been an English, baby! customer for two and a half years, and is also very pleased with the seven-employee Portland company.

"I look at them as a partner, not just as a vendor," said Michele Kasian, director of internet marketing for ELS, which is headquartered in New Jersey. "They're like an extension of us; they can do things that we can't do."

In a way, English, baby!'s success with universities has posed a problem for ELS, one that Kasian is looking to English, baby! for some help in solving. The very university programs that use English, baby!'s marketing program compete with ELS's schools. Now that so many universities vie to attract new students online, "We need to go to the next level with our online marketing," said Kasian. "English, baby! will be part of that. We've started an e-mail marketing campaign in partnership with them."