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Online learning pioneer offers new student model

IN this week's SME Focus, an entrepreneur specialising in online learning highlights the kind of challenges companies can face when dealing with some potential customers overseas and banks in the UK.

VISIONARY: Michael Stewart recognised a need to change the provision of tertiary education in order to meet the changing demands of consumers. Picture: Steve Cox
VISIONARY: Michael Stewart recognised a need to change the provision of tertiary education in order to meet the changing demands of consumers. Picture: Steve Cox

Name: Michael Stewart.

Age: 56.

What is your business called?

The Interactive Design Institute (IDI).

Where is it based? Eskmills, Musselburgh.

What does it produce, what services does it offer?

As a collaborative partner of the University of Hertfordshire, The Interactive Design Institute provides degree level, design-based courses entirely online. We also offer a range of City & Guilds courses and a Foundation course for those who are aiming to undertake a university degree in the future.

To whom does it sell?

We currently have students from 44 countries, with people of all ages and at all stages of their careers, from recent school leavers to graduates. Our students tend to be highly motivated individuals who want to take control of their education by deciding how, when and where they study. This year 95% have graduated with honours. A UK degree is recognised across the world, and attracts huge diversity of students to our website.

What is its turnover?

This year it was £1.5 million.

How many employees?

We have 15 staff in our main office with 20 tutors and six course developers working remotely across the UK.

When was it formed?

It was formed in 2004 as the Studio Art School, and rebranded as The Interactive Design Institute in 2008.

Why did you take the plunge?

It was becoming obvious to us that the provision of tertiary education had to change to address the changing needs and demands of consumers. The traditional model involving face-to-face delivery in large buildings with an equally large number of staff that require infrastructure to support them needed radical review. I'd done some work on resourced based learning as part of my job and saw the emerging technologies as an ideal means of providing a high quality educational experience at a fraction of the cost. Fortunately, I was working with three like-minded people and together we resigned our posts and started the company. The structure and remit was planned by pinning pieces of paper to an A3 cork board.

The decision to start our own business was influenced by the desire to take control of our working lives. Working as part of a large organisation can be very restrictive and essentially frustrating. Although leaving steady employment is always going to be a difficult step, once you've made the initial move it is incredibly energising.

However, turning the idea to reality proved more difficult than we'd imagined. Devising and developing a customised learning management system capable of delivering course materials and enabling student/tutor interaction took a full 12 months. Equally, the learning materials themselves had to be written and presented as a methodology appropriate to the online learner.

Initially, we developed a full Foundation course for online delivery and gained accreditation through further education sector-owned ABC Awards, but even before we enrolled our first student, it became obvious that simply uploading instructional text and attractive visuals wasn't going to work. We had to rip the lot up and start again. Now we employ a number of industry professionals to write our courses. This can take up to two years per course.

In our third year of business, we were approached by the University of Hertfordshire who asked us to develop a BA in graphic design; a significant point in our development.

What were you doing before you took the plunge?

I was working as a curriculum manager within one of Scotland's biggest further education colleges. Prior to that I'd been a principal teacher in secondary education. I began experimenting with alternative modes of delivery as a student in the 1970s and had graduated through video toward the internet over time.

How did you raise the start-up funding?

Having been refused bank funding, the four directors extended their mortgages and took out director's loans. After 12 months we raised additional funding through investment and equity release. This brought us into contact with key figures from the business world who continue to provide advice and guidance as non-executive directors and board members.

What was your biggest break?

Becoming the first company in the UK to be accredited to deliver the Graphic Design BA (hons) entirely online is probably our biggest break to date. This, and seeing our first student graduate with first class honours.

We are very grateful for the financial support we have received from Scottish Enterprise and East Lothian Council. This has been used to support ongoing business development and staff training.

What was your worst moment?

Over 18 months across 2007/2008 we made 12 fairly arduous trips to Tatarstan in Russia to meet with various ministers and representatives from several prestigious institutions, to set up a variety of partnerships.

We committed a lot to the project in terms of resources, both financially and in time developing course materials. Then the Russian economy collapsed and we lost the lot.

What do you most enjoy about running the business?

Having the freedom to react quickly and flexibly to any set of circumstances. Working in a large organisation is often like trying to herd cats. With your own company, you have the power to make decisions and implement them immediately. Meetings can be efficient and tailored to include only those who can contribute.

What do you least enjoy?

I find it particularly frustrating not being able to commit the level of resource to marketing that would enable us to grow the business significantly.

What are your ambitions?

To become recognised as the UK's premier provider of high quality degree level courses in design based subjects; to increase our portfolio of degree level courses and ultimately, to become a university with degree awarding powers.

What are your five top priorities?

Increasing our portfolio of courses, increasing our student numbers, ensuring the student experience is of the highest quality, ensuring our teaching materials are of the highest quality, ensuring we recruit the best staff in all areas.

What could the Westminster and/or Scottish governments do that would help?

Both could assist SMEs by allowing them to free up cash through tax breaks and a reduction in business rates. Additionally, no matter how many schemes are advertised in the media, the banks are not lending to SMEs – at least not to us – and this is a real problem in terms of expansion of our existing provision. If we are to get ourselves out of recession, finance for growth must be made available – cheaply.

What was the most valuable lesson that you learned?

Have confidence in yourself and your ideas. Just because it hasn't been done before doesn't mean that it can't be done, it shouldn't be done or that what has gone before is the only way to do something. No matter which sector you work in, there are always those who seek to preserve the status quo and actively seek to prevent change by rubbishing initiative. Accept this, ignore them and move on.

How do you relax?

All four directors run. We participate annually in the Glasgow Half-Marathon and in several local, Edinburgh based events. Beyond that my interests are reading and photography and taking my youngest daughter climbing.

Contextual targeting label: 
Education

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