GLC and the ‘Bicycle Business Model’ (Blog Reader Post)

This situation reminds me of NOVA in Japan in October 26, 2007 when NOVA closed its doors to 1,000 schools without warning, throwing 5,000 English teachers on the street and hundreds of millions dollars in pre-paid tuition was gone. I worked for the doomed English school at that time and after years of bad publicity and a damaging court ruling in June 2007, which all but sealed NOVA’s fate, and the company simply ran out of money by October 2007…but there were plenty of warning signs along the way that NOVA was going under.

I also had the misfortune of being hired by GEOS after the NOVA collapse and suffered the same fate in early 2010 when GEOS closed without warning. GEOS went under during the damaging effects of the Great Recession in Japan and students simply stopped going to GEOS to save money, as well as there was a huge deluge of current students who asked for their tuition back as family members lost their jobs and economic uncertainty was very worrisome, and eventually the company went under. When I was hired by GEOS in April 2008, I had over 190 paying students assigned to me, by April 2010 when the doors closed…I had Iess than 30 paying students.

The doomed Global Language Centre in its heyday

What Global Language Centre, NOVA and GEOS have in common is that they use the “bicycle business model” to run their companies…they need a steady stream of new students every month who pay several months or years of tuition up front and currents students to renew their contracts in order to keep the doors open (the pedaling part), if they cannot maintain this, then they fail (the bicycle falls over)….it looks like GLC suffered the same fate as GEOS…as the economy in Indonesia (and the world) is souring, people are starting to prioritize their budgets and English classes are not a necessity.
Sad to see this situation happen.

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