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👋 I’m Zoe Chew, a product builder. I’ve built multiple apps using the rapid MVP method: sneaker app, personal FAQ, meal kit app, virtual event app, SaaS tracker, food delivery, content app +more
I’m on a quest to understand the future of the Internet. Each week at Venturescale, I analyze profitable industries, and how you can win and monetize—at the intersection of Internet platforms & consumer tech.
Today’s post is about EdTech. Read here if you’re interested in SaaS, Gaming creators, Web3 creators economy, future of social networks, FinTech & wellness tech, or online marketplaces.
In this analysis, we will unlock 3 market opportunities:
- Democratize higher education
- Monetize the knowledge business
- Profitable niche markets in e-learning
Universities, Unbundled
First, let’s unpack the jobs-to-be-done (JTBD) of attending universities. People don’t want a university degree. They “hire” universities to achieve an outcome or desire, i.e. to get recognitions, scholarships, financial aids, meet new (cool) friends, become smarter, secure high-paying jobs, increase earning potentials, and raise social status.
Universities aren’t getting more accessible as they evolve. They become more expensive, require a four-year commitment, are slow to adopt digitization, and incur student debts upon completion. These pain points have led to the “unbundling” of higher educations where companies reinvent the university offerings: degree, knowledge, learning experience, student’s life, and job placement.
Turning Students’ JTBD into Profitable Companies
In fact, most online courses, training programs, and e-learning platforms are unbundled from the university’s products. They verticalize certain functions within the campus such as:
- Codecademy, General Assembly, Flatiron School, Lambda School verticalized the tech and engineering education
- Udemy, Coursera, Khan Academy for continuing education
- Masterclass for lifelong education
- Cornerstone On Demand, Docebo, Degreed, EdCast for upskilling learning
- On Deck, altMBA, Y Combinator Startup School for MBA alternatives
- (📥 Full version) In total, there are 11 segments and business categories
- (📥 Full version) There are 76 more company examples across business categories. You can use this list to discover:
- What are the profitable niches in EdTech?
- How to differentiate educational products by comparing their landing page headlines?
- How to create a compelling one-liner by reading value propositions from other companies?
How Did We Get Here?
To understand the future of education, we can zoom in on the transition of unbundling university into three specific timelines:
- Unbundling University 1.0: Once upon a decade ago, massive open online courses (MOOCs) emerged as university experiments. Udacity and Coursera were founded at Stanford University. EdX was created by the Massachusetts Institute of Technology (MIT) & Harvard. Academic programs were made available online. Students began taking online courses.
- Unbundling University 2.0: Rise of Nexflix for education. Verticalized online learning platforms were created. MasterClass is e-learning for creative life; Duolingo for language schools. Curriculums were created to meet the demand of the digital workforce (i.e. freelancers, creators, creatives), lifelong learning, and personal growth, rather than purely job skills.
- Unbundling University 3.0: Rise of cohort-based courses. They are live-based, taught by industry experts, peer-to-peer learning experiences with a group of people who are going through the same journey. Online learning went from passive to active participation. Peer group accountability drives completion rates. Community is the moat. For example, Building A Second Brain
What Problems do They Solve?
- Democratize education. Access to academic programs, knowledge, upskilling, and certification should not be limited by your income level or where you live. Udemy, Coursera, and other institutional MOOCs (Harvard Free Online Courses, Standford Online) provide both free and also paid courses.
- Credentialing. Online certification programs help individuals earn professional certificates and become job-ready for in-demand careers across any field in less than one year.
- (📥 Full version) 4 more valid problems existing players are solving. Understanding these problems will help you build something people want. You’ll also learn:
- Problem definition 1: What specific problem innovative e-learning startups are solving?
- Problem definition 2: What kind of problem do you need to solve to become a successful cohort-based course?
- Problem definition 3: How On Deck generates additional revenues by solving this problem (most competitors missed!).
- Problem definition 4: Why solving this problem will create a new way to monetize your EdTech product?
Business Models
There are many ways to create multiple revenue streams for education businesses. For example:
- Freemium. Most common in MOOCs. Udemy, Skillshare, Udacity offers free course catalogs and upsell users to premium paid courses.
- Subscription. Udacity’s “nanodegree” program starts at $399/month. Masterclass Plus is $21.20/month with 100+ classes, offline viewing & members-only discussion. Udemy for Business costs $360/year for 5–20 users. Skillshare charges $8/month for unlimited access to thousands of online classes.
- (📥 Full version) 3 more strategies to help you layer different revenue streams and build a profitable business. You’ll also learn:
- Strategy 1: How Coursera made $293.5 million in 2020 using this business model?
- Strategy 2: Use this model to increase long-term liquidity for your business
- Strategy 3: If you’re just starting out, use this model for quick cashflow, then layer other revenue streams as you expand
Why Now?
There are massive opportunities for building in the e-learning space. This section explores the market evidence, what the future of education will look like, and answers the “why now” questions (most important slide in a pitch deck) for your investors:
- The workforce is shifting to the knowledge economy. More and more people will choose to work remotely, freelancing, and become independent professionals. They will rely on online certification for work opportunities on top of University degrees. Solutions that help people equip in-demand skills will become more common.
- User acquisition for EdTech products is becoming easier. Adoption is now built on consumers (students, teachers, parents) rather than institutions (colleges, universities, governments). Today, students can Google the best online course platforms and enroll in a class; teachers can search for teaching apps and download them from app stores.
- (📥 Full version) 5 more market evidence in detail to help you make smart entrepreneurial decisions. You’ll also learn:
- Evidence 1: People are willing to spend money on this type of online learning and what possible solutions will emerge?
- Evidence 2: New problems have started to emerge in the remote workforce and why new e-learning solutions are needed?
- Evidence 3: Competition in online education is rising and how to drive out competition and win?
- Evidence 4: One-size-fits-all curriculum is becoming irrelevant and what are the possible new solutions?
- Evidence 5: Why EdTech should cater their solutions to this user behavior shift?
Business Opportunities
- (📥 Full version) 4 more specific product ideas and business opportunities that are solving problems. You’ll unlock:
- Opportunity 1: Monetize by enriching campus life & students’ experience
- Opportunity 2: Monetize by helping professional researchers to succeed
- Opportunity 3: Monetize by helping educators to succeed
- Opportunity 4: Niche marketplace idea in the education industry
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