Commercialization Strategy Report
for
Spirit Lake Consulting Inc.
Prepared by Dr. Erich Longie
and
James Roberts
May 2009
Table of Contents
1. Executive Summary……………………………………………………………………………………………………………………………...3
2. Barriers to Commercialization…………………………………………………………………………………………………………………5
3. Competitive Matrix……………………………………………………………………………………………………………………………….9
4. Commercialization Roadmap Matrix………………………………………………………………………………………………………….10
Executive Summary
EXECUTIVE SUMMARY
Spirit Lake Consulting has identified an urgent need for ethical training on the Indian reservations to overcome extraordinary financial losses due to ethical lapses. These are not major events, but the accumulated results from ethical compromises both in the workplace and at home that filter into every facet of life on the reservation.
The scope of funds and organizations devoted to American Indian communities is staggering. Over $2 billion dollars are appropriated each year for the Operation of Indian Programs by the Department of the Interior alone. This figure does not include billions of dollars that come into each reservation through grant funds from other agencies, private philanthropy, or the $14.1 billion brought in from tribal gaming or other tribal enterprises. Much of this money never reaches its intended recipients, being lost through expense accounts being used for personal benefit and payment of individuals for hours they did not work. Ethical violations are costing tribal organizations hundreds of millions of dollars each year. Most of these costs are not in large-scale embezzlement or kick-backs on multi-million dollar contracts. Small violations on a voluminous scale are what bleed money from tribal and federal funds. Spirit Lake Consulting has developed and will implement a character education training program that will cause a significant decrease in funds lost through ethical violations.
Dr. Erich Longie, a highly experienced and qualified educator who is a Native American, and Dr. Ann Maria DeMars are the principals of Spirit Lake Consulting/Tribal Leaders Institute. They received both Phase I & II awards for developing computer-integrated training for direct-care staff for persons with disabilities. A training product for school districts, based on this model, was funded through a $99,000 contract from Southwest Educational Development Laboratories. A second contract was received from Spirit Lake Head Start, and negotiations are currently in progress with two other reservations. The title of the project is Caring for Our People: Computer-integrated Staff Training. Spirit Lake received a Phase I award for developing on-line ethics education for tribal employees and board members. The research conducted under that Phase I award provides a basis for this business plan.
Misuse of the Reservation government for personal gain takes place both through direct appropriation of funds, e.g., putting relatives on the payroll who perform no actual work, or from purchases of goods and services from political supporters for far in excess of market value. Creation of policies and rules that favor the governing bodies are another way that public funds are directed to individuals in a completely legal manner, e.g., an unrestricted budget for training allows for extraneous trips for school board members to attend conferences at expensive resort locations. The destructive effects of this pattern of unethical behavior extend beyond the monetary value lost. When government is the means to wealth and power, without regard for qualifications, tribal members spend their efforts jockeying for political positions rather than investing in economic development. Those who do have resources to invest, including private philanthropy, government agencies and corporations, are all reluctant to do so if they perceive a significant portion of their funds will be siphoned off through mismanagement and petty theft. As evidence of the significance of the problem, we have received letters of support from the Chair of Tribal Councils on two reservations, the largest tribal employer on the Spirit Lake Reservation and a tribal District representative.
A paradigm shift is needed in on-line education to integrate knowledge of content, pedagogy and technology. Educators are not fully aware of the technological capabilities of a virtual system and they certainly are not developing these systems for Indian reservations. Few educators are familiar with wikis and pod-casts, much less such back-end functions performed by SQL and CGI scripts. When they do use the technology it is too often a simple graft of classroom onto the web. Early web courses included nothing more than a home page with the syllabus and scanned lecture notes. Most existing podcasts are a modern repetition of those mistakes. Overwhelmingly, these podcasts consist of a PowerPoint presentation accompanied by an MP3 file of a lecture. Even well-researched on-line products such as the Hawkes Learning System are a collection of static pages based on the same methods of teaching documented a decade ago as less effective than other methods used internationally.
Spirit Lake/Tribal Leaders Institute is developing an integrated system of on-line courses, virtual library, media library and community features which will demonstrate a significant change not only in participants’ ethical knowledge and attitudes but far more importantly, in their behavior. Adding to the significance, this course will be tested on three American Indian reservations, serving a population that is seeing substantial economic loss due to failure to develop ethical systems of accountability. Every year, corporations attempt to sell new “innovative” solutions to reservation agencies, yet very few of those products have been tested and shown effective for the reservation population. Research and product development is often based on out-dated assumptions about the homogeneity of the Native American population. One result of these misperceptions is the dearth of computer-based products targeting Native American needs due to an assumption that a generally low-income, rural population would make limited use of electronic media. In fact, just as many reservation residents - four out of ten - read their email and surf the Internet on a daily basis as read a daily newspaper. Tribal Leaders Institute combines an unfulfilled need with an innovative and underused technology, a unique product for a viable niche market.
Spirit Lake/Tribal Leaders Institute has developed this commercialization plan to take the knowledge gained so far, the training modules developed and the feedback from our testing and turn this into a modest but profitable enterprise. While the market may appear small, there is a significant Native American population spread all over the United States, and this training program is universal to the needs of this society. It is important to note that Dr. Longie is totally committed to helping his people and by living and working on the reservation, does not need a huge budget and big enterprise to accomplish great things.
The immediate challenge is to gain the valuable input from local tribes and quantify the results of the training so that the system presented by Tribal Leaders Institute will be received openly and considered a highly valuable part of the business requirements on every Reservation throughout the country. Funding to date has been provide by Grant monies, and it is projected that after successful completion of the present SBIR Phase II project the company will be self-sufficient and self-funding through its own positive cash flow.
Barriers to Commercialization
REGULATORY BARRIERS:
1. Acceptance by Tribal Councils / Tribal Leaders / Tribal Members
a. No formal acceptance procedures exist, and there is no standard of acceptance
b. Create and nurture relationships with Tribal Council members
c. Show statistical and real results from beta testing
TECHNOLOGICAL BARRIERS:
1. Create an easily used and understood platform for web-based training
a. Dr. Longie has extensive experience in this field
b. Training modules are presently in development and in beta testing to establish efficacy and gain feedback as to student comfort level with materials and presentation
2. Design a platform that is harmonious with Native American cultural standards
a. Feedback is critical to development
b. First 2 of 5 modules are being tested and evaluated at this time
3. Develop a psychometrically-validated outcome measurement to quantify results
a. Create business case files based on pre- and post- testing data
b. Identify strengths and weaknesses of existing training modules from student and managerial feedback sessions
4. Specify/Maintain a server system for web-based training
a. Research potential server systems available for web based training
COMPETITIVE BARRIERS:
1. Competition comes not from direct “product” competitors, but from alternative ways of addressing or ignoring the ethics problem amongst Native Americans on the reservations
a. Marketing materials must STRONGLY emphasize the cost of ethical lapses and the need for returning to the roots of Native American civilizations’ basic respect for high ethical standards.
b. Stress the value of solving the problems at all levels of reservation society through the re-learning of the traditional Native American morals
c. Travel is one of the “perks” when working for the tribe. On-site training will not require travel.
2. Existing alternatives for training seminars and web-based training
a. Stress the ineffectiveness due the generic nature of materials not in tune to Native Americans’ specific value system
b. Spirit Lake offerings are designed and presented by a highly qualified Native American educator.
MARKET BARRIERS:
1. Tribal Councils/Leaders ambivalent to ethical problems
a. Presentation of the training program and potential results must be undertaken by a Native American who has lived and worked in this environment and speaks as a sympathetic participant, not an outsider
2. Ethical issues difficult to address to ethics violators
a. Need to appeal to the basic values indigenous to their heritage
3. Requires buy-in from Tribal Leadership and tribal membership who are unique to each Reservation population
a. Need strong marketing materials
b. Need proven results, data to back it up as benefiting these individuals as well as the society as a whole (forum)
c. Must be presented on a very personal level
MANAGEMENT BARRIERS:
1. Limited depth of management within Spirit Lake as a company
a. Essentially a one-man operation
2. Success is presently limited by the ability of just one person to be the presenter of this training
a. Explore the possibilities of bringing other educators on staff. Particularly those educators who come from different tribes than Dr. Longie
b. Privately owned company not susceptible to tribal politics
SUPPLY CHAIN BARRIERS:
(Not generally applicable)
FINANCIAL BARRIERS:
1. Funding is coming solely from Grant monies
2. Not an interesting investment to any VC’s or even Angel investors unless they have a sincere interest in Native Americans and helping Indian Reservations
a. Market is limited to Native American populations on Reservations
b. Over 500 federally recognized tribes scattered in the lower forty-eight states plus Alaska
Competitive Matrix
Commercialization Roadmap
Page 8 of 8 Spirit Lake Consulting Inc.—Commercialization Strategy Report