A guide on how to build a unicorn in workforce development

There has never been a better time and a greater need to build new companies in workforce development. This piece outlines the four areas where innovation will come from. It highlights opportunities and tactics for founders to leverage in building the next generation of workforce development unicorns.

1. Introduction

The potential and need for workforce development innovation

Enterprise technology is booming. Dozens of exciting generalist enterprise B2B technology startups are becoming unicorns every year, while enterprise software spend is the fastest growing IT spend category.

Technological progress is ‘labour-enabling’, creating opportunities for employees to become more productive and spend more time on tasks that they, as humans, are better at. It has also created an imperative for employees to learn new skills when whole careers are displaced by ‘labour-replacing’ technologies.

Unlike enterprise software counterparts, workforce development investment and solutions are nowhere near their required scale and potential impact. Our current labour education pace forecasts a $8.5tn skills gap globally by 2030, which is only exacerbated by Covid as technological transformation accelerates.

Industry is spending $430bn on enterprise software, while spending less than $20bn on tech-enabled workforce development solutions, in a much larger $240bn market dominated by often inadequate in-house training, with many external small-scale face-to-face providers.

We believe the next decade will see a new wave of much-needed workforce development technology startups. It is what the world acutely needs. In recognition of the value they produce and untapped markets they can serve, there is strong potential for some to go on to become unicorns.

What you will get from reading this

Our previous piece gave an overview of where the workforce development market is today and where it is heading. We outlined why now is the right time to innovate and highlighted key trends, barriers and leaders in the first real wave of innovation against six key jobs to be done by employers.

The industry is consolidating as incumbents realise that a small piece of the ecosystem (eg a standalone LMS or content solution) is not enough to generate genuine client impact. Examples include Degreed buying Adepto, and LTG buying PeopleFluent to move into the talent space, with Pluralsight already making 10 acquisitions. For the HR behemoths SAP, Oracle, Workday and LinkedIn, expansion into the skills space through building, buying and marketplace add-ons is already everyday practice.

While the industry had already started to change, Covid is increasing awareness of the importance of skills. Our recent conversations with dozens of leading learning and development (L&D) and talent leaders also reveal a growing sense of urgency around workforce development and an increased uptake in technology. There is an emerging view that workforce development should be a part of the whole organisation, rather than just a small separate team, the same way ‘digital’ has evolved to become an integral part of each organisation.

This piece is a deep dive into the future. Against the problems they are solving, we predict four areas to which companies will have to gravitate to become the next generation of workforce development unicorns:

• Skills assessors → Better understanding and evaluation of skills
• Applied collaboration platforms → Increasing uptake and engagement
• Tailored learning providers → Improving relevance and impact
• Career pathway navigators → Getting employees from A to B

Informed by corporate leaders and leading education entrepreneurs, the aim of this piece is to add clarity and inspire new and emerging founders to build great companies in this space. We share clarity, insights and advice on:

• What to be aware of: Key challenges and blockers in the industry that startups will need to address and navigate.
• What to build: Opportunities and types of solutions we would like to see more of and for which we believe there is demand.
• Who to look at: Inspirational early stage companies that are helping give shape to the future of workforce development.
• How to build: Common pitfalls to avoid as an early stage business and ideas to exploit.

If you are building something inspiring in this space, we would love to talk. Send us a deck here, follow us on LinkedIn or Medium, or email: mario.barosevcic@emerge.education.

2. The future categories of workforce development

The workforce development space needs to move from content consumption and learning to a focus on performance and business impact. Incumbents have begun this journey but many will be slow to move given inflexibilities of legacy tech stacks, challenges of growth through M&A and integrating new acquired technologies with historic ways of working. New entrants that ground their approach and technological capabilities in ‘engagement and impact’, focused on the end user, will have a great starting point.

Below we highlight a selection of pioneering companies that fit into our vision of the future of workforce development across four main categories. While new entrants in the space will likely have to start with more targeted value propositions to gain initial traction, to become competitive and successful (and avoid being early acquisition prey) they will ultimately have to adopt features and principles across multiple categories. Gone are the days when clients are happy with just an LMS.

Many of these companies are already showing characteristics across multiple quadrants and, while there are a lot of blurry lines, for ease of visualising we have grouped them against what we perceive to be their centre of gravity and most exciting early features. In understanding, evaluating and distinguishing the companies across the quadrants, we have asked the following sets of questions:

• Measuring better: Is the company helping define and measure employee skills with greater accuracy and ease, while helping managers better develop their staff? [Skills assessors]
• Acquiring skills more effectively: Is the company improving the relevance and applicability of the content [Tailored learning providers], while increasing employee engagement and unlocking employee potential [Applied collaborative platforms]?
• Progressing faster: Is the company helping individuals progress through their careers more effectively with their current employer? [Career pathway navigators]

We like to think of Pluralsight as a truly great role model in this space. It is a company that initially offered classroom training for developers in 2004. As it pivoted to fully online in 2010, it experienced rapid growth, and through fundraising made a series of excellent strategic decisions and purchases that expanded its remit, and defensibility, from a tailored content provider to a holistic solution across all four categories:

• Acquiring skills more effectively: The first acquisitions came in 2013 as Pluralsight strengthened its position as a tailored learning provider in the developer space and supplemented it with tech training for creative professionals, through PeepCode, Train Simple, Tekpub and Digital Tutors, followed by acquisitions of Code School, Hackhands in 2015 and GitPrime in 2019 to improve the applied and collaborative components to the platform.
• Measuring better: Right after its first acquisition in the content space, Pluralsight purchased Smarterer in 2014, a crowdsourced skills assessment engine, and subsequently in 2018 launched its own Role IQ, an accurate way to determine a technology professional’s expertise level.
• Progressing faster: The final pieces of the puzzle in Pluralsight’s completion of the four quadrants came through the 2016 launch of an Enterprise platform with learning pathways, a series of supported career pathway partnerships with Oracle, Microsoft, Adobe and StackOverflow from 2017–18 and, most recently, with the acquisition of DevelopIntelligence in 2020, a company supporting business end to end digital transformation

The subsequent sections represent a deep dive into each of our four categories, highlighting the current challenges, opportunities and types of companies we would like to see more of and invest in against our above market map.

Challenges: Learning and talent leaders still struggle to understand the granularity and breadth of their employee skills

You can’t improve what you can’t measure
Having a more robust way to better understand existing workforce skills is the number one ask we hear from L&D and corporate leaders. Yet it is the foundational block and biggest gap in the workforce development chain. Self-assessment and manager reviews are an important component, but they come with limitations and blind spots.

Skills are hard to measure and take time and effort to maintain
Creating and updating competency frameworks for each employer and situation is time consuming. Unlike financial metrics, skills are hard to define, measure and agree on and they get old and evolve quickly. Allowing employers to issue micro-credentials is a step in the right direction but creating and awarding badges has, to date, often been manual and time consuming.

Most assessments today are one-offs and new talent hiring focused
Testing today is largely non-granular, irregular and intrusive. Think of performance reviews, poor multiple choice tests (have a look at LinkedIn Skill Assessments) or long certification tests you need to study months and years for (eg CFA, ACCA). Many assessment companies are thriving but are still focused on evaluating new rather than existing talent.

Opportunities: Making it easier to more accurately, flexibly and frequently assess employee skills

Improving ease and robustness of skills measurement

There is a lot of potential to make skills assessment more robust to help managers not only understand employee starting points, but also how their skills have improved. This could be done using granular and authoritative skills taxonomies and higher order micro-credentials informed by employers. They could also be backed by external sources of authority (eg universities, accreditation and examination bodies, leading software businesses).

Non-invasive automated assessment and evaluation

After Google and our social networks, our employer is probably the organisation that knows us best, given the amount of time we spend with it and information we give and receive. In the future we expect to see integrations with workflow tools such as Slack and Microsoft teams that can prompt ‘micro-assessments’ in the flow of work. Datasets collected through platforms such as Salesforce, Github and Linkedin could be great starting points to non-invasively assess and evaluate skills and performance progress, perhaps starting with careers that are rich in data like coding or sales.

Human feedback on the go

We shouldn’t have to wait until year end review or ineffective 360 degree feedback sessions to speak to our manager and understand how we are doing. While automatic data-driven feedback still has a long way to go, humans will always play a role in employee development. Solutions should make it easy to seek and give feedback in the flow of work.

What we are excited about:

More robust, non-invasive assessment: In the absence of any notable companies exclusively focused on this space to date, we highlight hiring focused assessors and previously acquired companies, emphasising the existing gaps and acquisition appetite for these solutions.

• Codility, a leader in assessing and hiring top talent has introduced existing employee facing products to help employers better understand the coding abilities of their teams.
• Authess, a company acquired by Elsevier, puts people in real world scenarios that change based on actions and answers, to measure competency.
• Smarterer, acquired by Pluralsight, uses crowdsourcing and proprietary dynamic assessment to validate anyone’s skills in as few as 10 questions and 120 seconds, benchmarking skills against peers and industry trends.

Better evaluation on the go: The sales space is a pioneer in this category as a culture of constant feedback and metrics has drawn in solutions that help sales reps record their sales pitches, and get constant, automated and manager-driven feedback. We would love to see companies that have replicated this sales approach to other industries.

• Chorus.ai provides a simple, data-driven solution to measure and analyse the sales process, helping managers and employees identify areas of improvement, give feedback and measure progress
• Principles Dot Collector is a new solution driven by Ray Dalio from Bridgewater’s feedback centred culture that allows everyone to share, measure and analyse on-the-go feedback with peers during Zoom meetings.
• A google search for ‘employee monitoring software’ reveals dozens of companies like workpuls that allow employers to spy on employee internet browsing and software usage. We would like to see these kinds of data-hungry companies track and generate insights around much more meaningful and useful skills-focused data.

Challenges: Learning service provision is top-down driven with content-focused enterprise-level software solutions that struggle to engage the end user.

Learning is disconnected from company and employee needs

L&D leaders often focus on ensuring that employees have ticked all regulatory compliance training boxes. Learning targets and processes are set in isolation from real business needs and employee preferences. The department tends to focus on creating learning content which takes time to produce and has a short shelf life.

Technology is built for enterprises, not employees

Because most workforce development companies do B2B sales, the product is tailored to L&D and corporate leaders (purchasers) and their managerial requirements and perspectives. The focus on getting five-year enterprise deals signed often neglects the importance of employee (end user) satisfaction.

There is too much emphasis on formal structured learning

The relative importance of formal theoretical training and knowledge retention, needs rebalancing against enhancing learning that happens through peers and on the job.

There is a disconnect between ‘learning’ and ‘action’, ‘theory’ and ‘impact’

While learning today is more active and informed by examples, there is still a big divide between what employees are learning and what they need to do on a day to day basis. There are also limited opportunities to practice and apply new skills in real world or simulated settings and understand the impact of learning and actions as ‘learning’ is often seen as a metrics-poor black box.

Opportunities: Make solutions more bottom-up driven, unlocking the interest and wisdom of employees, while empowering them to apply what they learn and validate impact on the go.

Making learning more fun, granular and employee-centred

Creating employee-centric platforms isn’t about adding a comments feature in your LMS or ‘gamifying’ your learning journey by making people collect gems and diamonds. It’s about creating simple, accessible, intuitive, modular and employee-informed software that encourages people to come back for more and empowers them to ‘learn in the flow’. Engaged active usage is greater than the number of boxes ticked.

Empowering employees to learn from one another

For specific questions and situations colleagues will often be the best teacher and source of insights and motivation, being much closer to the problem than expensive external parties. There is an impact and business case for unlocking internal skills, advice, learning content and knowledge creation from the ground up, especially in larger companies.

Learning on the go and through applied work

True ‘learning in the flow of work’ should not mean stopping work to learn but ‘just in time learning while doing’. It entails solutions that offer opportunities to learn and get feedback while continuing existing work or applying learning in realistic simulated environments.

Helping better understand the impact of learning

Marketers improve products through constantly running A/B tests. C-suite leaders use clear metrics to measure business performance. Workforce development solutions should also empower clients to define the tangible granular outcomes they are hoping to achieve. The cause and effect equation will never be perfect, but the more smart experiments and quick feedback loops companies can run, the faster we can elevate the importance of learning and the influence of L&D leaders.

“L&D is the last great unmeasured spend in organisations. There is still a perception in the market that L&D is something where you just have to grit your teeth and spend a percentage of budget. However, through our annual surveys, we are seeing a change in appetite for measuring — in 2017 just 35% of those surveyed felt pressure from leadership to measure. In 2020 this number has gone up to 65%. Our customers are getting excited about what a significant strategic lever they have as it plays directly to the skills agenda as well as the competition for hiring and retaining good people.” — Piers Lea, Chief Strategy Officer at Learning Technologies Group

What are we excited about:

Collaborative and social learning: We are excited to see a wave of new founders building solutions that cater for enterprises but genuinely have high engagement and needs of employees uppermost in their minds.

• 360 Learning positions itself as ‘the world’s first collaborative learning platform’ that enables teams to create and improve courses together with easy authoring tools and feedback loops.
• Bloom learning is taking a mobile-first, learner-focused approach that breaks content down into its smallest pieces and facilitates note taking, learning pathways, sharing and collaboration.
• CoachHub is a digital coaching provider that offers holistic people development and empowers managers to take coaching into their own hands on the go.

Applying in the flow of work: Companies in this group allow users to practice and apply knowledge through realistic simulations or real-world projects and environments.

• Swimm.io empowers lead developers to create learning environments for new developers to get up to speed with code bases by practicing on existing code.
• Skiller Whale is a live problem-based online learning platform for tech teams, while Rhyme (recently acquired by Coursera) is a ‘learn by doing’ platform that creates custom learning environments, real-time visual instructions and just-in-time help from instructors.
• Big Spring is ‘the only platform that measures ROI from learning’ by enabling employees to get just-in-time learning and feedback and employers to define, test and track impact across key metrics.

Challenges: Third party learning platforms are tailored towards the mean and lack features and specificity to build strong impact, loyalty and pricing power, while organisations and L&D teams sit on a wealth of knowledge they are unable to efficiently leverage.

Most platforms prioritise breadth, while bespoke support is unscalable

No one ever goes to a shopping mall for the best meal of their life, yet most content platforms today are like shopping malls. They are generalist, prioritising breadth and mass market appeal, leaving many lacklustre and few ecstatic users. At the other extreme, many specific solution providers end up being victims of their clients’ bespoke needs and fail at rapidly scaling.

Mass market content and distribution is a race to the bottom

It is impossible to compete with LinkedIn Learning and Cornerstone OnDemand on price per user, starting at $6 per month and going down from there. Cheap, generic video content is an L&D manager box-ticking exercise pleaser with high entry barriers for anyone that wants to compete as a generalist content-based player. In parallel, partnering with big content providers and distributors too early, without having direct links with your customers, almost always downgrades your business ability to stand out, learn from customers, innovate and attract investors.

Corporations are not built to be great training institutions

While 70% of L&D spend is on in-house solutions, L&D teams don’t have the capacity (there is one L&D FTE per 300 employee FTEs), authority, skills and resources to create meaningful, structured ongoing learning initiatives over and above one-off training and compliance exercises.

Internal academies often fail to deliver intended impact

Even for those organisations with the resources and organisational buy-in to create their own academies (4,000 globally seven years ago), these academies are understaffed (three L&D FTEs per 10k company FTEs), mostly for company leadership and often fail to deliver intended impact as training ends up disconnected from the day to day corporate strategy.

Opportunities: Create specialist platforms and one-stop-shop learning destinations focused on specific skills, industries, roles, competencies and even large corporates.

Platforms made explicitly for skills and industries

For every Google (technology), Goldman (finance), Roche (pharma) or BP (oil and gas), there is potential for an equivalent gold-standard skill or industry focused learning platform. Learning to code or market products is a very different set of expectations depending on your industry. Industries and jobs with wide and growing knowledge remits, constantly changing skill and work requirements and high-impact decisions will likely have greater demand for such providers.

Platforms made explicitly for roles and competencies

The same way Pluralsight is the go-to place for developers (and commands a price premium, charging up to $779 per enterprise employee per year), focused learning providers can become destinations for other specific roles and competencies. This could, for example, be tech sales, as one of the hardest to fill roles with a huge skills gap or management skills where US companies alone spend $15bn on training (more here from our friends at Transcend Network).

Online Programme Managers (OPMs) for corporates

OPMs are a $7bn in revenue industry, where providers take the full university degree online. Using this same model, companies could work with employers to structure and take their collective expertise online to train employees or even to build their brand and attract new hires. This is not another LMS infrastructure provider for L&D teams, but a hands-on learning architect that can help large corporates create their own certificate programmes, like Google has. Why learn about leadership from an external consultant when you can learn from your CEO?

Earning a degree while you work

Most solutions in the employer university collaboration space today help employers to inform and help impact university education or employees to go back to university studies. But how about solutions helping universities inform and validate employee work for a credential or degree, like Hult Business School has for EY’s highly innovative ‘EY Tech MBA by Hult’? Universities can have degree awarding power flexibilities that don’t just have to be focused on formal in-classroom learning and employees can learn better and earn degrees while working.

What we are excited about:

Tailored external solutions: Companies that are building skills solutions around the needs of large and changing industries (eg finance, healthcare, retail, oil and gas, cybersecurity) and in demand roles and competencies (eg sales, product management, UX design, HR, leadership).

• Sales Impact Academy is becoming the go-to place for sales and marketing professionals to learn from seasoned industry leaders in an industry with a severe shortage of authoritative, real-world learning resources.
• Immersive Labs and Cybint are building go-to interactive learning platforms for cybersecurity where employees can learn how to defend against cyber threats.
• Strive combines people and technology to create targeted leadership training that lasts by transforming emerging managers into leaders

Company-centric solutions: Hands on providers that help create and credential quality learning environments that are made for and by your company.

• Capabilia works with big brand organisations, including football club Barcelona’s Innovation Hub, to unlock internal expertise and create digital knowledge hubs both for existing employees and the broader community.
• Skilled Education supports universities and corporations to co-create online and blended learning solutions that help transform engagement, measurably improve employee skills and enhance business performance.

Challenges: Untangling skills definitions and taxonomies and a greater availability of learning sources are not a guarantee of career progression.

There is a lot of learning out there and not a lot of results

Most solutions on the market are still about online or offline content. Employees don’t want to tick another box, read another article and finish another online course. They want to see their efforts translate into better work, new titles and higher income. Digital content alone is not the silver bullet and neither are performance management frameworks.

The wealth of skills and career data isn’t meaningfully connected yet

LinkedIn (hiring) and Oracle (CV screening) are leading HR behemoths that sit on a ton of skills data but have not done much yet to connect it. IBM Watson, Burning Glass and EMSI have done incredible work to demystify skills taxonomies and to understand macro skills trends to inform staffing plans, but gaps persist on a micro level in building employee-focused progression ladders.

Data alone is not enough

Learning you are a 60% likely fit for a new job, with a few upskilling courses recommended to you, based on a data algorithm, isn’t going to get you far in life (take a look at the UK government’s ridiculed attempt at this). Every human has their own circumstances and preferences and automated career recommendation and guidance approaches in isolation, alongside data limitations, devalue the individual and fail to make a genuine impact.

Improved skills still don’t equate to outcomes

In the same way recruiting is still fundamentally biased and flawed, so is career progression, especially in large corporations. If you don’t know the right people and have opportunities to show your skills, you could encounter problems with internal mobility.

Opportunities: improving our understanding of relationships between skills and roles and supporting targeted career pathways and transitions.

Meaningfully connecting and unlocking the power of data

The next wave of big data solutions should help connect skills and create meaningful career progression pathway infrastructure. This means, for example, showing the exact progression of skills project managers need to acquire to become product managers. This will have to consider levels of competency (eg how does the progression change if I’m a level 2 vs 4 project manager), as well as industry and geography.

Guided career progression pathways

We need a human touch to help us navigate careers. Where needs are more defined and outcomes are clearer, structured B2B corporate bootcamps could help elevate employees to promotions. Where direction is less certain and hands-on support is less needed, a guided mentoring and career advising touch could prove impactful alongside data-informed pathway scaffolding.

Upwork for existing enterprise employees

Talent platforms are starting to pave the way for easier internal mobility by connecting employees with open positions. As they evolve, they could create modularised short tasks for existing employees, in the same way Upwork or Fiver help modularise tasks and work for remote and freelance talent, to help them prove skills, meet people on other teams and further expedite and democratise internal mobility.

What we are excited about:

Structured end-to-end skill acquisition programmes: The B2C bootcamp market is filled with 400+ companies aiming to get individuals into new jobs, some of which have recently pivoted into B2B. There are opportunities for such programmes, specifically set up for businesses in mind, to support employees acquire new, career progression focused skills. The key hurdle to overcome is building a scalable offer against the specificity of employer needs.

• Makers offers 12-month paid software engineering apprenticeships allowing individuals to learn part-time while they earn.
• Growth Tribe is a provider of digital marketing and product management courses that help employees and employers to digitally transform their careers and businesses.

Employee career navigation intermediaries: Alongside the above content-specific B2B offers, we believe there are even stronger opportunities for content-agnostic pathway intermediaries to support employees with wraparound tailored career support

• White Hat uses a combination of internal and external training resources and coaching to support employees to navigate their careers through apprenticeships.
• FutureFit.ai is an AI-powered career GPS that supports employees in progressing through their careers through a combination of curated resources and human support.

3. Advice for founders

Through conversations with dozens of corporate leaders and successful workforce development startups, key themes have emerged that founders should keep in mind.

Over and over again, we are seeing founders wasting time and talent on commodity products and making mistakes that limit scale and potential to be venture backed.

Leading early stage founders focus on simple ways to build brand credibility with an ecosystem focus, relentlessly focusing on early feedback and traction, while creatively navigating sales across varying stakeholders.

Top five things founders should do

Leverage external brand credibility: In a sea of self-recognised ‘award-winning’ startups, find ways to leverage external credibility to jump-start your brand.

The main sources of external credibility include: practitioners, influencers, academia and big name clients, with various levels of potential impact depending on your business. We would like to see more companies that leverage practitioners and influencers, which we believe is a highly relevant untapped source.

For example, while it’s enjoyable listening to a professor’s HBS social entrepreneurship Grameen bank case study, learning guerrilla tactics on setting up a challenger bank directly from Muhammed Yunus could be much more powerful. While there are a lot of great marketing content creators, many people would be better off learning growth hacking from growth hacking thought leaders like Andrew Chen.

Focus on ecosystem integrations: Make sure your product clearly fits within the broader HR and workforce development data and tool ecosystem and has an extended value chain vision.

Odds are your early stage product won’t (and shouldn’t) be solving the full value chain of your customers’ problems. As such, don’t expect your clients to replace their longstanding SaaS infrastructure and download new software. Integrate with existing systems and data through APIs, minimise friction and time to value, while maintaining an ambitious product vision that can deliver more value over time in the workforce development journey

Traction and case studies trump IP: Client impact case studies with rough and ready prototype products eat AI pending patents for breakfast.

We see too many founders over-academising the AI behind personalised learning and wasting time on indefensible patents, while waiting too long to get customer validation. Depending on your focus area, big data and AI can be an important piece of the puzzle, but alone they are unlikely to be a game changer, unless you are perhaps fortunate to have raised tens of millions as a seed company.

Focus on rough and ready prototypes and rapid feedback from early adopters, while improving technology as demand increases. A power-user case study showing how you have transformed a business can go a long way. Adding Fortune 100 company logos on your website for £5k trial contracts does not count.

Sell to employers, build for employees: You have two clients to satisfy: buyers are more important for the short run, end users for the long-run potential of your business

It is incredibly rare to come across a workforce development product that employees can’t get enough of. Unused learning budgets, products sitting on the shelf, and a lack of time are the norm for L&D. This will change once founders start building more products with end users uppermost.

Strong pitches to buyers can open up big markets, but even then only products that employees genuinely want to use will bring sustainable growth and help close the skills gap.

Be creative with selling: Workforce development is not just about selling to L&D leaders. Find ways to engage managers and the rest of the C-suite in the process.

We see too many companies banging their heads against the wall and complaining how selling to L&D/HR is impossible. Companies should find ways to speak HR leads’ language, and empower them to use the right language and questions to communicate benefits and understand priorities from C-suite colleagues.

In parallel, they should find ways to directly link with other leadership personas with a direct business interest in the product. This could mean selling a recruitment product as a foot in the door for HR or an indispensable tech tool for engineers. Research from BCG below shows that many C-suite roles are involved in a lot of purchasing decisions.

Top five things founders should avoid

Content is not king: Most learning content today is a commodity and while specialised quality content can attract audiences, it cannot be seen as an end in itself.

Unless you are in the ‘tailored learning’ category, it is hard to get excited by content, especially if you are directly producing the content. Most content is cheap, labour intensive and low margin.

Companies that find creative ways to unlock content using the expertise of existing employees, thought leaders, or even through celebrities, have an edge. However, in isolation, even the most specialised quality content providers will fail to produce big impact. Finding ways for incorporating assessment, applying learning and showing career progression is how strong defensibility is built at scale.

Do not build more LMSs: There are too many LMSs and the world doesn’t need any more.

Please don’t build more LMSs and say that you are not in fact another LMSs or LXP. There are 1,000 LMSs with 10–15 heavily funded ones. You can probably build a nice lifestyle business, but you will not be creating a unicorn business in 2020. Having LMS features or integrations are a good enabler and nothing more.

Avoid partnering with distributors: Partnerships with large distributors can be a short-term quick win but a major long-term obstacle in building a defensible unicorn business.

In the early days the best way to show your competencies and demand from the market is through direct sales. If you can’t find your first five customers, the odds are you won’t be able to find your 100th either.

Partnering with large distributors too early on puts your company on the back foot, distances you from your customers and feedback, squeezes out your margins and commoditises your business and brand.

Do not over tailor your product: Listen to your early adopters but, as you grow, beware of becoming a low margin consultancy.

Early adopter clients value innovators that are open to feedback and co-developing a curriculum or product. Listen to feedback but make sure you are finding the middle ground between tailoring to clients’ needs (eg white labelling, adding feature options, integrating with existing content and software) and building a highly scalable product.

The cheaper your product the less you can support your client and the more clients you have, the less hand holding you have time for.

ROI is not the silver bullet: Being better at impact is great, but proving causality and bottom line results is difficult and often not necessary.

While most organisations list ROI of workforce development solutions as a top priority, what they really care about is finding ways to see and express progress. There are many ways companies can show positive impact, through defining and tracking of data and relevant metrics, without having to perform randomised controlled trials.

“Organisations are not really bothered by ROI — it is often used to kick ideas into long grass. What they really care about is performance, productivity and solving problems. Get a track record of helping companies solve problems — you don’t need to show the maths every time. People always listen to success and praise.” — Donald H Taylor, Chairman of the Learning and Performance Institute

4. The future of workforce development and our work

The future of workforce development is now. While Covid has thrown in new challenges, it has created many new opportunities, while expediting the awareness of and appetite for technology.

In collaboration with Future Learn and under the leadership of Donald H Taylor, Chairman of the Learning and Performance Institute, we have been fortunate to work with and speak to more than 50 corporate leaders who are innovating in this field. There is still a long way to go, but there is a shared sense of optimism in the space, coupled with broader acknowledgement of the role workforce development should have in organisations. Keep an eye out for our sector-informed green paper coming out later this year.

The future is not about learning, it is about performance. It is not about siloed L&D and talent departments, it is about workforce development that runs across the whole organisation. It is not about boxes ticked and hours studied, but progress made and results achieved.

The last five years of technology innovation have started moving the needle in this space. It has supported employers and employees by increasing access to better learning resources and placing a greater emphasis on skills and more flexible, personalised learning resources and opportunities. But we are still scratching the surface. The future is about better measurement of skills, more effective acquisition of skills through tailored learning and applied collaboration platforms, and solutions that help employees progress through their careers.

Lastly, we greatly appreciate the time we have been given with more than 30 amazing entrepreneurs who are leading this new wave of workforce development innovation. We look forward to speaking with many more and seeing the next generation of unicorn businesses that this innovation wave will produce. If you see yourself as one of these businesses, we would love to hear from you.

About Emerge

Emerge Education is a European seed fund investing in founders solving the $8.5tn skills gap. We provide founders with unrivalled education sector insights as the only fund backed by the world’s foremost education entrepreneurs and institutions.

Portfolio: www.emerge.education/portfolio

Acknowledgements

Ahmed Haque, former Chief Academic Officer at Trilogy Education Services; founder & CEO of Didactic Labs

Bhakti Vithalani, founder & CEO at Big Spring

Dan Sommer, former founder & CEO of Trilogy Education Services, co-founder & Managing Partner at 10XImpact

Don Spear, President & CEO at OpenSesame

Donald Taylor, Chairman at LPI (The Learning and Performance Institute)

Duncan Dunlop, Enterprise Account Executive at Coursera for Business

Hamoon Ekhtiari, CEO at FutureFit AI

Jason Rosenberg, Managing Director at Avathon Capital

John Leh, CEO Talented Learning

Joshua Wohle, founder & CEO at Bloom Learning

Justin Cooke, Chief Content & Partnerships Officer at Future Learn

Karl Mehta, founder & CEO at Edcast

Krishna Kumar, CEO at Simplilearn

Litzie Maarek, Managing Partner at Educapital

Mark Zao-Sanders, founder and CEO at Filtered.com

Matt Sigelman, CEO at Burning Glass Technologies

Matthew Mee, Director Workforce Intelligence at Emsi UK

Nick Hernandez, founder & CEO at 360 Learning

Pierre Dubuc, co-founder & CEO at OpenClassrooms

Piers Lea, Chief Strategy Officer at Learning Technologies Group

Riaz Shah, Partner, Global Learning at EY

Roger Gorman, CEO at ProFinda

Ruben Kostucki, former founding COO at Makers

Ryan Craig, Managing Director at Achieve Partners

Sean Gallagher, Executive Director, Center for the Future of Higher Education & Talent Strategy at Northeastern University

So-Young Kang, founder & CEO at Gnowbe

…and many more corporate and L&D leader acknowledgements to come in our upcoming green paper