Casino impresario Steve Wynn’s latest gamble is far afield from the Las Vegas Strip’s blazing lights.
It’s taking place in Brentwood, home of Yipinet LLC, a start-up that develops computerized education and training programs. After ramping up for the last 10 months, the company officially opened its doors for business last week.
Yipinet was conceived during a 1997 summer vacation at Lake Tahoe. While hiking in the mountains with his friends Robert Kotick, chief executive of Activision Inc., and Howard Marks, Activision’s co-founder, Wynn remarked about how expensive it was for his casinos to train new employees. By coincidence, Marks, who had just stepped down from Activision to pursue new opportunities, had begun researching the online learning market.
An idea was set in motion.
Several months later, Marks emerged with a business plan. Yipinet, an acronym for “Your Interactive Personal Instructor on the Net,” designs training courses for various professions. Marks, Wynn and Kotick divvied up ownership stakes (although Marks declined to state in what proportion).
When asked if Wynn intended to use the company’s software to train his casino employees, Marks was circumspect. “Let’s just say that every big business will use online training in the future,” Marks said.
Wynn, chairman and chief executive of Mirage Resorts Inc., is noted for cultivating superlative employees. According to the company’s annual report, employees undergo several weeks of extensive training when first hired. Analysts estimate that Wynn spends many millions of dollars every year on educating his 28,000 employees (9,000 of whom were hired recently to staff the new Bellagio hotel-casino).
Yipinet’s initial focus, however, is on professions such as accounting and law that require mandatory hours of continuing education every year. The company has hired top academics and industry experts to create the courses, which are then sold as software to a company, or accessed by individuals over the Internet. The tutorials feature eye-catching graphics and interactive quizzes intended to keep users attentive while shortening the time needed to effectively teach the material.
“The biggest benefit to computerized learning is that it is so much more personalized and consequently more effective than being in a lecture, where you’re just one of many in the audience,” Marks said. “For the user, it can be tailored to provide just the right amount and right type of information, in just the right amount of time. For employers, it’s cost-efficient.”
The corporate-training industry is estimated at $60 billion in 1998 by the trade publication Training Magazine. Training via computer constitutes about 20 percent of the industry, and that percentage is doubling every year, according to Suzanne Biegel, president of Marina del Rey-based Internal & External Communications Inc. By 2000, Biegel says, the online training industry will be a $1.5 billion market.
“Wall Street is very hot on this industry,” said Rick Miller, an analyst with International Data Corp. “There are huge cost savings involved for the clients, and healthy returns on investments.”
Yipinet already has announced two strategic partnerships. One is with the California CPA Education Foundation, one of the largest providers of continuing education for CPAs in the United States. Under the agreement, Yipinet will exclusively provide online education for the foundation’s 30,000 members. In return, Yipinet will help market the foundation’s traditional educational tools on its site.
It also announced a marketing partnership with Seattle-based Asymetrix Learning Systems Inc., a company founded by Microsoft Corp. legend Paul Allen, to create online learning software and technology.
Analysts warn that Yipinet is entering a fast-moving market with a significant amount of competition. Not only are other tech companies getting into the act, but businesses that run traditional training programs, such as Andersen Consulting, also are expected to take the plunge.
Biegel also warns that the field is becoming crowded to the point that it is undergoing consolidation. Her company was purchased last June by Dutch publishing company Wolters Kluwer NV.
Marks waves off this concern, saying that his management team has laid out an aggressive growth strategy. The plan is to see the company’s revenue double regularly, reaching $100 million within the next couple of years. The company would then raise more money, possibly through an initial public offering, in order to branch out into other areas of the computerized training market.
“We want to be a fast-growing company, and will be very aggressive to be so,” Marks said. “The main way for us to sustain this growth is likely through acquisition.”