The Scary Part of the Online Learning Industry That Nobody is Talking About
A few years ago, the online learning industry blasted off. First-to-market platforms reported revenues that proved skyrocket growth. Investors had a field day, opening their bank accounts to claim their stake in the next big platform.
In a traditional college classroom, skills that are taught have become more and more obsolete by the day. Thankfully, through online learning, startups jumped on the opportunity to improve the broken education system.
According to the Global Market Insights report, the online learning industry was valued at over $165 billion in 2015 and is projected to reach over $240 billion by 2023. Startups are still popping up every day focusing on a unique niche to tackle with their online learning approach. Don’t forget, LinkedIn acquired Lynda for $1.5 billion in 2015!
However, I recently came across a staggering statistic that has led me to question the sustainability of the EdTech industry as a whole:
Seth Godin analyzed the industry and shared his thoughts in his 2016 article, “Will this be on the test?”. He pointed out that even in the best online courses, there is a 99% dropout rate. As soon as the course gets a bit tough, students walk away. There are no teachers or TA’s to push you to keep going. There is no social pressure to do better than the kid sitting next to you.
What happens when platforms like Coursera and Lynda use up all of their first-time customers? What happens when 99% of their students don’t come back to enroll in a second course? I don’t think I need to highlight the importance of customer retention for tech companies…
This is an industry that has been impregnated with gigantic amounts of money because it proved exponential growth from the start. But, this industry is not built for long-term value. It is simply an industry made of sand. What happens when the tide rises?
Due to the 99% dropout rate, I do not believe that the online learning industry will reach $240 billion in 6 years.
Let’s take a step back and look at the industry on a macro level:
EdTech platforms are built out of the spirit of education, providing students with betterand more reliable ways to learn. Trust me — I believe in everything that EdTech stands for because I am the founder of an EdTech company. However, I think that the industry must refocus in order to truly reach our goals of improving the lives of students through a modern, relevant and affordable education.
Education analysts have found that many parts of a traditional education do not work. According to Godin, tests, lectures, and accreditation are the driving forces behind the failure of today’s common courses.
But, analysts have also found that many things do work, such as collaboration, community, mentorship, and a space to step outside of one’s comfort zone. These methods have proven to be successful through student interest and all of the alternative-education programs that are popping up left-and-right.
Luckily, there are a few startups that I believe are going to disrupt the industry with their revolutionary style of teaching.
MasterClass
If you haven’t heard of MasterClass yet, check them out immediately. Founded by David Rogier and Aaron Rasmussen, MasterClass teaches hobbies through the stories and lessons of world-class experts. For example, Steve Martin Teaches Comedy and Deadmau5 Teaches Music Production are two of their many courses. They raised $21.4 million from a myriad of investors, including Advancit Capital, Downey Ventures and Outlier Ventures. They have an enormous following, produce incredible content, and are doing things very differently. Each course costs $90.
Jumpcut
I came across this company last week. Jumpcut is carving out a similar path to MasterClass, though primarily teaching how to produce viral YouTube videos from experts who have succeeded in the past. As a YC graduate, founders Jesse Jhaj, Peter Lu, and Kong Pham raised $120K from Liquid 2 Ventures, Maveron, Struck Capital, Y Combinator, and ZhenFund.
For the investors who backed MasterClass or Jumpcut — good move. Not just financially, but ethically. These companies are onto something.
Eyesight Collective
My co-founder, Nathan, and I are doing something similar with Eyesight Collective. Just like MasterClass and Jumpcut, our courses feature industry leaders, people that students already admire. They teach real-world skills that are desperately needed in today’s competitive business environment, such as networking, e-mail etiquette, and overcoming failure. Eyesight is positioned to train a workforce of more competent and confident young professionals. Students trust our professors, as they are not PhD students who were assigned to a class for one semester. We do not have exams. We do not have lectures. Instead, Eyesight has a number of features that allow it to stand out from the giant industry leaders like Coursera and Lynda:
- We produce captivating content. Our videos are progressive, inspiring, and tell compelling stories. They are short. They are shareable. They are branded to the styles that millennials and Generation Z are drawn towards.
- We have a community of students and extremely successful mentors who are eager to connect and give back. In the future, our platform will automatically match students with like-minded peers and mentors whom they can meet in their community. Our network is our greatest asset.
- Our courses are designed to push the student into the real world. Sitting at a computer screen for twelve hours is ineffective. Instead, we inspire them to get out, ask questions, collect data, and form their own opinions. Our education system can no longer train students how to be a professional in a particular field. Instead, Eyesight teaches students how to ride the wave of life, while using critical thinking skills to develop the best career for themselves.
MasterClass is the hub for learning hobbies. Jumpcut is the hub for learning how to thrive on YouTube. Eyesight is the hub for learning professional skills. I am excited to see more startups jump on a similar market opportunity.
Students WANT to enroll in these progressive courses, but not because it will earn them class credit (it won’t). They enroll because they truly want to succeed. They truly want to have a quiver of skills — marketable skills — in their back pockets to whip out at any given time. They truly want to stand out.
If you believe in an education system that is more engaging, inspiring and effective, pay close attention to the startups like MasterClass, Jumpcut and Eyesight that are pushing the boundaries on how millennials and Gen Z learn the skills that they truly need to thrive in today’s competitive business environment.
Written by Jake Hurwitz, Founder and CEO at Eyesight Collective.
