Markets and Sub-Markets of Peer to Peer Learning

As MOOC platforms show signs of slowing, Peer to Peer Learning Marketplaces have the potential to obtain a wider and deeper market penetration for professional learning than their University driven peers.

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Peer to Peer learning is still in its infancy but the success of VIPKID, BYJU and more recently, YouTube with its recent boost to its Educational offering, hint at the huge potential for Peer to Peer within Edtech. What do we mean by Peer to Peer? Strictly speaking this is when two people of the same level e.g. student to student learn from each other. I’m using Peer to Peer in the broader sense that also includes Education marketplaces where students and tutors can find each other in non-formal environments.

VIPKID is the standout Peer to Peer platform. The platform was launched in 2013 by Cindy Mi to bring online English language education to China. It acts as a marketplace, for Chinese students seeking English language tutors. Since 2013, it’s valued over $1bn, has raised $850m and has 500,000 paying students and 60,000 teachers.

Peer to Peer platforms’ success can trace its origin to the same fundamental drivers of Edtech at large.

• Supply-demand shortage — China had a huge and chronic shortage of English language teachers. VIPKID’s wanted to create a marketplace to aid finding and increase provision of English Language learning
• Eliminates location as a barrier for teachers and students — VIPKID leverages digital to bring supply to where demand is. It’s teacher base is drawn predominantly from North America who teach students in China
• Growth relies on demographics with a propensity to pay for Education — Chinese households spend (on average) 15% household income on Education vs 2% for US households (in Beijing and Shanghai this rises to 30%)

The market is also defined by some of the same characteristics we see with Edtech in general:

• Scalability — Peer to peer scales perfectly, even where its a teacher-student model, digitisation allows a one to many scenario (while still keeping group size down)
• Focus on atomisable subjects — Many of the notable successes in Edtech have been on the K-12 market (i.e. Primary and Secondary School for UK audiences) and in particular languages (like Edtech). In some respects this is straightforward numbers, the Education market is roughly a pyramid that narrows (in supply and demand) with each additional year of Education

Why Peer to Peer can obtain much deeper market penetration

• Network effects — Peer to Peer also differs in some crucial respects to other Edtech platforms as it is subject to network effects,the more teachers the better student choice, the more students the greater the opportunity for students. Each additional person adds more value to the whole. This latter point is a crucial differentiator against the likes of other Edtech products — neither Coursera nor Duolingo becomes more valuable with each additional user. To some extent this is recognised — Coursera’s recent attempt to incorporate a social network is to try and capture more value from its user base to other users but fundamentally network effects are not at work
• Content adaptation and fit — Broadcaster models of education — in particular MOOCs — have a slow lead time (months for MOOCs , more for qualifications) from content creation, in some areas e.g. Humanities that hasn’t presented too much for a problem but in rapidly evolving skill markets — for which MOOC platforms disproportionately rely on for income, that slow lead time leaves them lagging behind nimbler competitors. Peer to peer platforms evade this both because the type of content tends to be shorter and easier (making lead time shorter) and because the sheer number of providers ensures someone is able to bring these skills to market

Peer to Peer is in a very strong position to reach much farther and much deeper than existing Edtech products. The underlying forces are already apparent via YouTube. While YouTube is not peer to peer, interactions are essentially broadcast i.e. one-way, its demonstrated the huge potential for people to find content that works for them, with 500m views of learning related content each day. In particular younger generations, growing up with YouTube are already using the platform as a go-to explain everything from rubik’s cubes to maths problems. As this generation goes through the Education system its highly likely peer to peer platforms will emerge and evolve to continue to service their Educational requirements.

The same logic ought also to extend to the sub-markets of Peer to Peer, Peer to Peer should also be able to extend into the vast and lucrative professional education market. In some respects it already has via Udemy but a peer to peer marketplace could go much farther as it allows people to commoditise exact skill matches, bankers learning cash flow modelling from each other, McKinsey consultants teaching strategy.

Why hasn’t it taken place already? Cultural adaptation to self-commoditisation. YouTube’s continual growth has emerged as a YouTube native generation are comfortable using and creating their own content in a way that non YouTube natives (like myself) are not used to — that driver of selling oneself and one’s skills online will also need to happen for Peer to Peer to take off — thus it won’t be the platforms that drive the deep market penetration, rather the permeation of people with that know-how into sectors that drive it via the platform

Is the accreditation a sticking point? A hundred lessons by a hundred excellent instructors won’t add up to a qualification. That’s true, I don’t think it particularly hinders the market growth because the professional education market is already deeply fragmented but — its not difficult to imagine more sophisticated learning badges emerging based on user feedback and peer review systems e.g. tutors rating each other and students rating teachers.

This article was designed just to be the first foray into Peer to Peer and help sketch the basically anatomy of the market, more will follow.

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