18 minutes | Aug 25, 2020

Turning Training into Profit

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 pa
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