Change ’formula for success’
Everyone wants success in life. Since there is no single path to success, people pursue it in many different ways. However, only a few choose the right one, stay on it, and eventually reach their destinations.
Ironically, even those who see success in their careers and businesses are not fully satisfied with what they have achieved. Even after they reach their destinations, they feel a void in their hearts in many cases. People wonder why?
To Son Ju-eun, founder and CEO of Megastudy, this is a simple question because he knows the answer. He believes that mismatches between professional success and happiness come from young people’s wrong beliefs about success. In Son’s view, people, particularly teenagers and college students, have the wrong formula for successful life.
“At classes, I often ask my students to prioritize three important things in life — how to live (values), jobs and success. Most of them pick success as the number one, followed by jobs and then how to live,” Son said in an interview with Business Focus at his office in Seocho-dong, southern Seoul, on Feb. 16.
“For example, they first set their own standards for financial success and then think about whether they should be a doctor or a lawyer to achieve that goal. In many cases, they don’t give a thought about what values they should pursue in life, which I believe is completely wrong.”
He emphasizes that if you take such an approach, you will reach success at one point but you will never achieve what you want in the long run. “You have to think about how you will live first and then choose a profession to be aligned with it. Success should be the last priority,” he said.
What drives Megastudy’s success
The 52-year-old chief executive said that what’s behind his success as a businessman is his ceaseless efforts to find an answer to the question — how should he live? In other words, such efforts were a starting point in his changing career from a star instructor to a businessman by opening Megastudy in 2000.
Megastudy is now the nation’s biggest and most successful cram school company offering both online and offline courses at its institute. Through video on demand (VOD) contents on its Internet portal site, www.megastudy.net, the company provides online classes mainly designed for those preparing for college entrance exams.
In 1990s, Son was one of the most popular figures among high school students. As a private tutor helping children from rich families in Seoul win admission to elite universities, he earned both money and fame. He then made more than 700 million won per year.
However, the social studies teacher-turned-CEO said that despite such financial success, he felt a void in his heart. He reflected on his life and realized that there was a fundamental problem with what he was doing.
“I asked myself what I was doing. I realized that private tutoring brought me wealth personally but it was deepening inequality socially between the rich and the poor by helping the rich lift their children to the top of the ladder, which snatches opportunities for others to climb up the ladder,” Son said.
“From then on, I started seriously thinking about how I should live. And as a teacher, I tried to find ways to ease inequality caused by private tutoring and concluded that cheap mass education was an answer.”
Interestingly, what helped Son hatch an idea of online lecture services was a home-shopping channel on television. He believed that given the nation’s broadband Internet, videotaped lectures would not only help ease education inequality but also change the way Korean students get educated.
“In 1998, I was watching a home-shopping channel on cable TV and I thought that it had an answer. I noticed a shift in market place. I thought that there would be an evolution in the education market. Student won’t go to schools. Schools will bring classes to students at home,” he added. “From that point, I started thinking about offering online lectures and opened Megastudy in 2000.”
Since it was launched, it has enjoyed rapid growth. Sales of the company, which went public in 2004, soared to 341.3 billion won in 2011 from 579 million won in 2000. Its net profit also jumped from 9 million won to 70.7 billion won during the same period.
The firm expects sales to grow 18.5 percent this year to 385 billion won. About 4.42 million students — 3.26 million for high schools and 1.16 million for middle schools — are members of Megastudy.
From high school-level courses, Megastudy has expanded into elementary school and opened courses for college students studying to get into medical and law school. The company now has six subsidiaries, including Mega MD and Mega Lawschool.
Paradigm shift underway
A native of Changwon, South Gyeongsang Province, Son hinted that he is seeking ways to change his business model to maintain the company’s leading position in the rapidly-changing education market. He said the company is now mapping out long-term plans.
In Son’s view, the online education market will undergo a major transformation with “sharing” and “participation” emerging as top issues of capitalism.
“In the future, I think that online education will be more influenced by the ‘copyleft’ movement. It is highly probable that online education resources will become free goods. I expect that mass lectures offered now will be free, while only customized services will be charged for,” he said.
Copyleft, opposite to copyright, refers to a general concept for making a program (or other work) free and requiring all modified and extended versions of the program to be free as well.
“Of late, this trend was being spotted on YouTube. Now is time to consider reinventing our business model. The online education market is now in the middle of a paradigm shift, which is making us rethink our strategies for the future,” he added. “I hope that we can seize the initiative in the newly-shaping market.”
Regarding his roadmap, he did not share details of what’s on his mind but explains the big picture. He said his ultimate goal is to turn Megastudy into a universal education group not only offering education services but also supporting those involved, such as a catering business for students.
“We plan to turn Megastudy into a universal education group from a college entrance exam-oriented institute within 10 years,” he said.
Tapping overseas markets
Together with the reinvention of the business model, expansion into overseas markets is another top agenda item for Son. The firm is now tapping some rapidly-growing Asian markets, such as Vietnam and China.
Son is very cautious about the move to go abroad because he is well aware that the successful Megastudy model here will not work well in overseas markets due to cultural and technological differences.
“We are now exploring Chinese and Vietnamese markets but it doesn’t look easy due to different business environments and cultures,” he said.
According to him, in Korea, education goods sell well online in the form of Business to Consumer (B2C) because of parents’ passion for children’s education, distrust of the public education system and high Internet penetration.
“In contrast, in countries like China and Vietnam, the credibility of online products among consumers remains low. Therefore, even if content is good, it is hard to sell online,” he said.
The company is now trying to develop a model fitting the unique Chinese market by combining Megastudy’s B2C model with China’s Business to Business (B2B) model. In Vietnam, it is mulling ways to build an offline-focused company considering Vietnam’s market environments
“It is very important to first understand that education is about content and culture, not commodities. So in overseas business, we need more time to understand their culture. In that regard, I think it will take time to develop a model that fits local markets before expanding there,” he said.