Why We Invested in Sketchy
by Jennifer Carolan
Reach is investing in Sketchy’s $30M round led by TCG. Sketchy fits neatly into our digital curriculum thesis: bottoms-up, freemium, digital curriculums based on timeless pedagogy that wins the hearts of users. Our investments in Mystery Science, Newsela, Nearpod, and Desmos are other examples of this thesis at work.
Sketchy was founded by medical students Saud Siddiqui, Andrew Berg, Bryan Lemieux and Aaron Lemieux who wanted a better way to learn the vast amount of content needed to prepare for their careers as physicians. Instead of flashcards and textbooks, they created sketches with humorous storylines and characters to make the information fun to learn and easy to recall.
As it turns out, their study approach was rooted in an ancient and proven pedagogy called method of loci (MOL, also known as the memory palace), a mnemonic device from Roman and Greek rhetoric that is used by modern-day memory masters like Dominic O’Brien, the eight-time world memory champion, who once memorized 54 decks of cards in sequence with only one glance at each card. Memory palaces gained mainstream popularity with the 2010 BBC TV series Sherlock and the 2011 book Moonwalking With Einstein.
Their funny sketches went viral and became so popular that medical students began dressing as Sketchy characters for Halloween (or SketchyWeen) and their Sketchy Holiday Ugly Sweater sold out in days. Today, about 25% of all US medical students are Sketchy customers.
Here’s how it works: The information to be memorized is associated with specific loci (i.e. locations) in a familiar, visualized spatial environment. Sketchy creators use symbols that represent discrete pieces of medical information introduced step-by-step in a narrated video. Examples of Sketchy videos can be seen here (salmonella) and here (sepsis). For example, the sketch below is used to explain a bacteria called Bartonella Henselae, how it manifests in bodily disease and its treatment (see footnote for full explanation of this sketch¹).
At Reach we seek out learning startups that bring a playfulness to learning. The best digital curriculums imprint the founders joy of learning into the company and curriculum. While K-12 curriculums often attempt to bring play and sometimes even humor into learning, adult learning tools rarely do so. Sketchy’s creative and hilarious sketches on serious topics remind us that adults appreciate tools that enhance the motivation to learn.
Sketchy is amongst a league of digital learning upstarts that share common characteristics and are challenging the print-first textbook incumbents. Few textbook publishers have successfully transitioned to the digital age. In fact, an enormous amount of economic value has shifted from these legacy textbook publishers to the upstart digital curriculums in the last five years. Based on stock value, the once multi-billion dollar publishers of the late 90’s/2000’s have lost between 50–85%² of their equity value.
The digital upstarts are notably different from the traditional textbook publishers. They are consumer-like in their quality and branding. They emerge through bottoms-up, freemium business models with strong organic word-of-mouth growth. Like the best consumer products, they have fanatical users who evangelize for their products on social media. For example, best in class digital K-12 tools get hundreds of positive mentions every day on Twitter³. Sketchy grew organically through Instagram and Youtube and has a combined following of over 100K+ subscribers.
All of this user love translates to lower customer acquisition costs. In fact, it’s not unusual for these companies to reach millions of free customers and tens of millions in revenue with zero spend on customer acquisition as Quizlet, Mystery Science, ClassDojo, Nearpod and Padlet have done. Similar to the enterprise freemium tools (i.e. SurveyMonkey, Dropbox) they start with individual consumer licenses. The growth of these consumer licenses is a strong signal because of the sea of free content and options available. As they continue to add individual customers paying out of pocket, they reach a tipping point density and catch the attention of the institutions who make bulk purchases for their students. Sketchy has followed this playbook with 20% of their revenue already coming from medical schools.
Better economics aside, the digital curriculum upstarts often have unique curriculums or features that are proven first by end-users before being adopted by colleges or schools. They start narrow in scope but do one thing really well. For this reason, they are often foolishly written-off by the incumbents as narrow point-solutions. But dig a little deeper and you will see these companies have figured out something important that the incumbents lack. And when they inevitably broaden their mandates, they often grow with less friction because they have such strong brand affinity with their customers. In the case of Sketchy, when you pull back the hood, the fundamental pedagogy is a step function better in both engagement and effectiveness.
Andrew and Saud have now completed their residencies, are full-time running Sketchy, and have capital to grow. We’re excited for the roadmap ahead. They will continue to build out the Sketchy learning platform within the medical school curriculum but have ambitions to bring their approach to other verticals that align with their pedagogical strengths.
We are thrilled to be joining Team Sketchy
¹Bacteria: This sketch details Bartonella henselae, a bacteria that causes Cat Scratch Disease. The scene takes place around the main character Bart the Leopard. Characteristics: Bart is sitting on a red pillow, which depicts the shape and color of Bartonella (a rod-shaped bacteria that stains red on Gram stain.). A special stain called the “Warthin Starry-Stain” is also important in identifying this bacteria, which is represented by Van Gogh’s “The Starry Night”. Disease:Patients with Cat Scratch Disease can develop swollen painful lymph nodes in the axilla, as portrayed by the ruffled sleeves worn by the princess. Immunocompromised patients, represented by the man with the cane, will present with more severe raised red skin lesions, depicted by the gentleman’s red spotted outfit. Treatment: The disease is treated with two classes of antibiotics, macrolides (represented by maCrolide crows) or doxycycline (represented by the doxyCYCLINe bicycle wheel).
² HMHC: https://finance.yahoo.com/quote/HMHC?p=HMHC&.tsrc=fin-srch and Pearson: https://finance.yahoo.com/quote/PSO?p=PSO&.tsrc=fin-srch
³ Last week in a 48hr twitter snapshot, Desmos received 362 positive mentions, Nearpod 280, Duolingo 182