Turning Training into Profit
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From on boarding and compliance training to safety and job-specific education, employee training is a universal necessity. While compliance and on boarding training courses are widely available, companies often have to make a bigger investment into industry specific training – but what if those custom trainings could be turned into a revenue stream? Troy Gorostiza, CEO and President of Knowledge Stream, Inc. specializes in helping companies turn training into profit.
Troy is a startup founder and learning technology expert with 20+ years of hands‐on and management experience across multiple industries specializing in solution consulting, system selection and management, platform architecture, digital marketing and custom courseware development for ILT, eLearning, performance support, VR/AR and mobile. He has significant experience architecting extended enterprise and customer learning solutions that enable customers to realize new revenue streams and extend their digital strategy. In addition, he is adept at recognizing industry trends and counseling clients on the strategic direction for their learning, performance and talent initiatives.
Host – Steven Maggi: In the world of business, training and learning are an everyday event. It happens all the time. It’s very important. It’s also important to your bottom line, and with us today is Troy Gorostiza. He is the CEO and President of Knowledge Stream, Inc., and the Cofounder of Course Container. Well Troy, learning is a part of everyday work, but it’s really important to stay up because there is so much competition out there.
Troy Gorostiza: Steve, you’ve hit the nail on the head there with training. It’s something that’s been around since before obviously you and I were even around, but with any sort of organization, there’s always been a need to train people. And it’s mostly been focused internally with employees or any new hires and things of that sort.
Steven: You’ve been doing this for a long time, and you’ve seen this and so forth, and you’ve been working with learning technology. I can imagine the changes you’ve seen just over the last 20 years are probably unbelievable.
Troy: It’s amazing! I don’t want to date myself; I still consider myself relatively young, but I got my start in the late 90s in the space, and it was doing technical-based training up in the Silicon Valley. Actually, the Internet was completely in its infancy, so we were doing training on DVDs, laser disks, computer-based training. I remember my first job; we actually developed the technical-based training for some of your larger companies – Cisco, HP, Oracle. We had a dial-up modem – a 56K modem – that was our connection to the Internet, and there were 35 of us sharing that connection.
Steven: Wow! And at the time, you were on the cutting edge, right? I mean, that was cool, the best! And I used to always hear in those days, “Oh! You’ll never need anything else!”, and of course we know that isn’t true.
Troy: That’s true. I actually got to work on something called DHTML, and not getting too technical here, but that was the next evolution of HTML, the markup language for the Internet. I worked with what we call the “SME” in the industry – a subject matter expert. He was one of the engineers that helped write the algorithms and the specs for that, and I used him as my expert in writing these programs. So, when you talk about cutting edge, I absolutely felt like I was on the cutting edge. Now, we look at that and I don’t think that enters into anyone’s vocabulary these days.
Steven: And it’s funny, because now we are all into virtual learning and whole different things, and again, the changes are every week. How important is it for somebody in the business world to really stay on top of this when they think of training and learning, because I think a lot of people think it’s just a bunch of books or CDs or tapes or what have you, and to really do this right, it has to constantly be evolving.
Troy: It does, and what you were getting at earlier about the history of training and how long it’s been around and the advent of the Internet is if you look back 20+ years, there were very sophisticated training programs going on at that time, whether they were on the delivery format – as I mentioned, laser disks, computer-based training, CD-ROM – and then get into what we call a “client server” and ultimately the Internet. So, if you look back 20 years, there is a lot of valuable content that has been there and is in a domain trust, and that knowledge share needs to take place. So, if you correlate that and fast-forward, I’d say probably in the last 5 to 7 years is really where you’ve seen a lot of organizations – Fortune 500s down to small mom-and-pop shops – that have existing training or training is a component of their business today. They offer a face-to-face training. They do instructor-led training, some sort of regulatory or coaching. And those are very ripe organizations to kind of move into the next phase of moving that somewhat of an archaic way of offering that training, and moving into the 21st century with, whether it’s XR – which is virtual reality, mixed reality – or you get, obviously with the pandemic that we are all going through right now, everything has moved from instructor-led – that face-to-face training, because obviously we can’t conduct that nowadays – to the virtual training, the ZOOMs, the Go-to-meetings. You name the tools, everyone is migrating and getting to that. So, those are really what we kind of call is your training types and your training delivery mechanisms.
Steven: And at Knowledge Stream, Troy, what are some of the things you offer to people, because it’s really important to associate yourself with some sort of a company that really has their finger on the pulse of what’s going on?
Troy: It’s true, and honestly, it’s a bit difficult. Every organization that we work with, it’s really kind of a management consulting engagement that we start off with, and it’s really training/business consulting. Where we focus on – and I mentioned earlier, 5 to 7 years, but it’s probably been longer than that, maybe 10 years – is really turning the training content into revenue. One, you either have existing assets that you have been using to train your internal employees – maybe partners, retailers, new hires – or you are an organization that is an expert in an area and wants to build an online coaching program. So, we will work with them to one, identify what their business drivers are; two, any problems that they are having; three, identifying these training assets, whether they are new assets or they need to be revamped; and then four, ultimately looking at how do we create new revenue streams by turning this training into online solutions and selling it.
Steven: Do you run across companies that sometimes haven’t looked at training and learning that way, and kind of give them “there’s a lot more to this and you can really see it as a way to turn those numbers around”?
Troy: It’s huge, and I’ll give an example without naming names. In the job site safety space, in heavy equipment operator space – so you know boom lifts, forklifts, dirt diggers, things like that – there’s an organization that has 1500 locations across the US. They do rentals of these pieces of equipment, so they’re on job sites, they know the ins and outs. They are an industry leader on providing this equipment and doing maintenance on this equipment and doing what is called a kind of “walkaround tour”. So, it’s probably been 6, 7-8 years maybe, there was a thought leader that came in and saw this as a great opportunity to say “Listen, we can have a much better touchpoint, as well as we can effect change by – we want individuals that come to work, want to come home safe. We want them to come home the same way that they entered into work”. So, in working with that individual, we identified what the objectives were, the goals were, and then really it was building a new business. And that’s really where I have a lot of passion and work with the organizations because nowadays training is a business; it’s not just doing an internal training, a sexual-harassment training, it’s every component of this. You’ve got to look at it from a financial standpoint: What are your startup costs? What are your CapEx costs? What is my product? How am I going to deliver it? And then ultimately, what is the revenue stream for that?
And so, going back to the earlier example, it took us quite a bit of time and we really leveraged. We took existing instructor-led training for certain types of operator equipment – boom lift and forklift -and through various partners, developed a very comprehensive blended learning program, where individuals would go through this very interactive 3-D, game-based prerequisite training. Then, they would have a comprehensive exam and would actually do a face-to-face, get on the piece of equipment and certification program. So, that ended up starting in 2004, and I think by 2008, that company’s line of business – they were doing about 20 million a year in revenue on about 20 to 25 courses that represented about 90% of that actual revenue stream. So, they had a big infrastructure. They were not a training business provider, but they leveraged assets and they leveraged their footprint throughout the US and Canada to turn this into somewhat of a significant revenue stream to them, but ultimately as a huge value proposition to their end customers.
Steven: So as part of that process, do you get that lightbulb moment, where all of a sudden, they go “Hey, wait a minute! I see what this guy is saying! Holy cow!”?
Troy: Well, what I absolutely love is, for me, if you’re not learning, you’re dying. And so, my background is – I’m an instructional designer – so I help people write these training programs, but I really kind of morphed and evolved into more of a technologist that really loves business and the drivers of business. And so, when I get to work with someone like you, Steve, I am very enamored by broadcasting and radio and what it takes. So, I could work with you. You have a domain expertise, you can help coach people, you could build an online training program. We could develop the training for you, and you could have a digital store front, where you are selling direct to the B2C market – so business to consumers. Individuals that want to learn – they could come in their e-commerce and they buy the training, they get certification, they have a profile, they could leverage those assets. You can build a subscription package, an online coaching program.
In the same vein, you could do a B2B model, where you are leveraging those same training assets and now instead of selling to Troy as the individual consumer, you are selling to Troy at an organization or maybe a school that is a radio broadcasting school. And they buy hundreds or thousands of seats that their students are then going to take that training on, and then they can manage it and they can see those people’s certifications and training. So, you are really extending what’s kind of out there already today, but just from the closed focus internal employees or maybe internal college students. You are really expanding your footprint.
Steven: Is this a 21st-century thing now, where no longer do you bring somebody in to do the sexual-harassment training that everybody has to take and they kind of know what’s coming and they don’t really want to sit there, but they do anyway. And instead, really customize this for each and every industry and actually each and every company. I mean, I guess the opportunities are endless for that to really make it work for you in a way that wasn’t even conceivable back a few years ago?
Troy: And that’s very true. And the biggest thing with training – and I’m definitely not an expert in this area, I mean, that’s what my degree was in, but as I mentioned earlier, I focused more on the technology side or the business side – is you’ve really got to look at your end demographic. Who is your audience? And you should not overengineer or overcomplicate things for that end audience of what you’re trying to deliver. Especially when you are actually developing training for a profit outward-facing that we are talking about today. Because ultimately, you are doing this to make money. What you want to do is you want to have a repeatable behavior. So, you want to have upfront costs and expenditures that essentially, you’ll make X times over through additional people coming to take the training. Now, you want to make it adaptable or you want to make the learning environment – kind of the periphery around that training – to be customizable to me with a certain skill set versus you with a certain skill set, or someone from Company A or someone from Company B to have a different sort of forums or gamification or some of these other things that the learning world is already using today. It’s really kind of a blend of the two, but ultimately at the end of the day, it’s about an easy way to have a digital storefront and sell training and monetizing that training.
Steven: And the interesting thing about your career – as I was looking through your resume and so forth – the different types of projects you’ve done is really fascinating. A couple that kind of stood out to me, one of them was a comprehensive nursing certification program. So that’s really important, and that’s some outside influences that you are going to have to be knowledgeable about and so forth. So, I guess each time you do these things, there’s sort of a learning experience even for you.
Troy: Oh, it’s huge! And that’s one of the things that I love, is that every client that I work with – and I’ve worked with in healthcare, financial, mortgage, government, automotive, job site safety, you name it, phlebotomy training – it’s that you do not become an expert in that industry, but as talking with you, you learn quite a bit about one, that business; two, what the training is that you are actually going to develop; and then what the drivers are and what makes yourself unique with that organization unique in that industry. So, you really do learn a lot.
And so, going back to that example with the nursing program – and that’s definitely one of probably the favorite projects that I’ve worked on – it was basically about a 16-week long traditional instructor-led training program and this was a large nursing association that supports the nursing industry. They were pretty much the first in this industry to do this, because it’s been quite a bit of time now. That got converted into about 45 hours of interactive online training and testing certification that I think granted about 67 to 70 CEUs. It ultimately got translated into 35 – 40 different languages, and I don’t remember the percentages, but that single program in and of itself was 70 to 80% of the revenue that came into that association. And so, they put in the time – it was a couple year-long effort to get that off the ground, because it was all customized at the time and it was very specific – but they’re an industry leader with their content. It’s great to work with folks like that, because they know what they’re doing in that domain, but they may not understand how to market this and how to have the technology infrastructure to sell it and manage moving forward, and that’s where we’ll come in and help them.
Steven: And contrast that to – you also work with the mom-and-pop-type small businesses and so forth. Working on some things, you mentioned phlebotomy, and I think that’s really kind of interesting. So, you don’t have to be a big giant to do these kinds of things.
Troy: No and being an entrepreneur and having my own consulting company and obviously also a partner in this software startup, I truly gravitate to folks like that. And going back to the phlebotomy, this was an individual, a sole proprietor, that had been doing standup training for phlebotomy, which is blood withdrawal – so somebody basically that is not a degreed or a licensed nurse, someone that would take blood. So, a lot of the folks, when you go to the hospital, if you went to Lap Corp and stuff, you were a phlebotomist. So up until probably the early 2000s, you didn’t need a licensure to do that. Well, at some point there were some things that required the state of California to put in a licensure program. So, this was a client that had been doing it by instructor-led training forever – even before there was a true licensure program – but when the state of California put that in, we helped lobby and got him to be the first approved online training provider for phlebotomy. So, we took that – I forgot how many – 40 hour-long instructor-led training course, modified it, we helped lobby the state, we got them to approve it online, and then he was the first to market in being able to recognize the revenue. So, all of that hard work that he’d done in advance, he was able to monetize that very easily by doing an online program.
Steven: Troy, I am thinking it must be fun to always do different subjects. You know a little about everything. It makes you real popular at cocktail parties, right?
Troy: It does, but what’s that saying, Steve, “I know a little about a lot but not a lot about a little” or “not enough about anything to do something with it”. But you are right, I can talk about quite a bit at these cocktail parties.
Steven: Well finally, the question I ask everybody, I am going to ask you. Take a look into your crystal ball. You’ve been in this business a long time. You’ve seen a lot of change, we talked about that earlier. What do you think is coming up on the horizon that is kind of exciting in the new world of training and learning?
Troy: That’s a great question. I was pretty reinvigorated by training really taking an outward focus about 10 years ago from the internal direction that it was earlier, that I was talking about. And I think building upon that, it’s really that technology is moving at warp speed, and it’s the incorporation, I think, of these virtual environments; whether it be virtual reality, mixed reality, or artificial intelligence; it’s all going to bleed together, and we are really going to be using devices that we are not even using today. Telepathically, things like that, and so I really can’t put my finger on how that’s going to affect the training industry and the mechanisms, but more so than ever, training is ubiquitous. We will be able to leverage this technology to train more and more folks – the future of work, people in rural areas, people in impoverished areas. I’m kind of looking at projects now that anything that has a focus on that is something that I just absolutely will gravitate towards.
Steven: As the years go on, Knowledge Stream will be there, I’m sure. Hey Troy, thanks so much. I’ve really enjoyed chatting with you today.
Troy: Steve, thank you so much for having me on. It was a blast!