K12's initial focus will be on the competitive and traditionally conservative home school market, which comprises 1.5 - 2 million of the nation's 53 million school age children. But with capital for online ventures drying up faster than wet on a chalkboard, last month's announcement caused some observers to wonder if Bennett and company had done all their homework. And the market is crowded. Furthermore, religiously oriented families, which make up about half of all families teaching their children at home, are traditionally brand loyal, making market entry doubly tough for newcomers. Bennett's stature in the conservative community, however, may give K12 an edge, or at least a break.
Price sensitivity is also a big issue among home schoolers.
Parents are expected to play a large role in administering and monitoring young children's work, although online time may decrease as their kids grow. As K12 eventually expands to remedial and other supplemental learning markets, it will likely face competition from Sylvan Ventures' eSylvan, Kaplan's eScore, and Microsoft co-founder Paul Allen's Apex Learning, among others. These include students needing remedial education, as well as virtual school attendees, and students participating in after-school and summer school programs. Public, private, and charter schools are growing consumers of these online services, albeit the going is slow. Teachers are not comfortable enough with the Internet to integrate it into the curriculum.