Category Archives: Reports & Analysis

Reports and Analysis in education.

EdTech Trends Myanmar

EdTech Trends: Myanmar

It is quite fascinating to follow Myanmar’s rise as a tech, edtech and thus startup destination in general these days given that the reign of the military junta only ended in 2011. As Myanmar is now slowly opening itself to new influences, the first telecommunications companies entered the country just about two and a half years ago.

Sure, all in all we should be careful in making assumptions too quickly as the country is still in the very early stages of its modern development. Nevertheless, there are a number of indicators that confirm how the country might leapfrog some of the stages developing countries usually go through when it comes to technology.

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Qualcomm

Qualcomm works on a Blueprint for Mobile Education to Offset Shrinking Smartphone Sales

Chipmaker Qualcomm announced the acquisition of mobile learning platform EmpoweredU for an undisclosed sum. Founded in 2011, EmpoweredU pivoted and changed names several times before settling on its current model, a mobile centered learning platform based upon the Canvas LMS. The EmpoweredU team will be integrated in Qualcomm’s other mobile focused education initiatives.

The company also announced that it has invested in Wowo, a mobile edtech startup through its new $150 million strategic fund for China which focuses on Internet, e-commerce, semiconductor, education and health. Wowo is targeting the pre-school English market.

At first glance these announcements seem to be a bit out of focus. Why does a hardware company want to be in the edtech space?

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EdTech Trends Remittance

EdTech Trends: The Multi Billion Dollar Remittance Market

For developing nations like the Philippines, remittances from oversea workers play an important economic role. According to data from the country’ central bank, remittances made through bank transfers surged 6.1 percent to $10.404 billion in the first five months of 2014 from $9.809 billion in the same period in 2013.

And while this is already an astonishing amount in itself, we must not forget that still a large part of the population is unbanked or underbanked and therefore uses other ways of sending and receiving cash.

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Pearson Global Scale of English

Will Pearson take the English Certification Crown from ETS?

Earlier this month Pearson launched its new Global Scale of English or short GSE. According to Pearson English

“there has never been a globally recognised standard in English – no single way of recognising and quantifying the level of an individual’s English”

which is, of course, something the company aims to change with its new product.

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Chegg Career Center

The Future is Digital: Chegg Quarter 1 2014 Results

Former textbook rental giant turned student hub Chegg reported its Quarter 1 2014 results, and according to CEO Dan Rosensweig

“The first quarter was a strong start to 2014 with Chegg digital revenue growing 66% year-over-year.”

The combined revenue is up 22% from Q1 2013 and now at $74.4 milllion. Although the company still has around 180,000 titles in its print library available for rent, Chegg has clearly moved on from textbook rentals to being a service provider that aims to cater to student needs in various different areas.

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Class Notes

Class Notes Marketplaces – From Buddy Business to Real Business

Editor’s Note: This post has first been published on edcetera – straight talk on edtech.


Class notes or study notes marketplaces really are a fascinating vertical within the education technology startup space. Of course, most of these ventures are too small to be called a startup. They are more of what is called a buddy business where two or three friends come together with the right skills and create a small business that pays enough for beer and parties. Most of these ventures die as soon as the buddies find a real job or are simply too busy to keep the service up and running.

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LinkedIn Direct-to-Profile Certifications

LinkedIn pilots Direct-to-Profile Certifications with Coursera, edX, Lynda, Udemy

Today LinkedIn adds another piece of the puzzle to its user profiles in order to make them the definite online resume with the Direct-to-Profile Certifications pilot program. As you might remember, back in August the professional network opened itself to students and universities, adding the prelude to your professional resume so to speak.

The partnerships that LinkedIn announced today on its company blog will fill in the blanks that currently exist on the lifelong learning and vocational levels. If you now complete a course on Coursera, edX, Udacity, Lynda.com, Pearson, Skillsoft and Udemy you are going to receive an email that lets you add this accomplishment under your certifications category on LinkedIn.

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Google Helpouts

Coursera, Rosetta Stone, Alliance Française among the first to offer Google Helpouts

On Tuesday Google officially announced the launch of their latest product Google Helpouts. I wrote about it back in August already, but now we can browse the categories and get a feeling of what people and companies are going to charge for their service.

Speaking of companies. Interestingly, language learning companies like Rosetta Stone, Alliance Française and Lingo Live are among the first adopters. So is MOOC behemoth Coursera offering a mix of free and paid tutoring sessions for its Machine Learning course.

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Udemy

Udemy’s new Commission Structure: 50% or Nothing

Udemy

Yesterday Udemy’s founder and CEO Eren Bali sent out an email to the instructors using the course marketplace to inform them about upcoming changes in the revenue share structure. From November 1st on the revenue share is going to be based on the source the student comes from. If Udemy brings a student to a course, the revenue share for instructors drops from currently 70% to 50%. If the student comes through the instructor, the revenue share increases from currently 85% to 100% for the instructor.

The reasoning behind these changes are growth. Bali and the team at Udemy believe that through the new structure they are going to be able to invest more resources into marketing, the platform and an affiliate network.

Is 50% commission fair to instructors?

Coming from the instructor’s side of the table I had my fair share of ranting about high commissions on platforms in the past. On the other hand, I totally understand that a platform like Udemy needs to make enough revenue to not only cover cost but to grow, especially when it raised significant venture funding.

And Udemy did something really clever here. I think, it was in the first interview I ever did for EDUKWEST in which Jon Bischke, back then founder & CEO of eduFire, said that marketplaces are a shared effort. The marketplace and its sellers need to work together in order to get customers. And that’s OK as long as the marketplace is actually delivering its promise of promoting the courses / lessons of its instructors in the first place and not relying on their instructors to do all the work themselves.

Attracting top instructors

This led to a killer argument: if you are doing all the work anyway, you can also host and sell your courses on your own. And that’s what top instructors usually did – or they sold their courses to platforms like Lynda.com that offered cash in advance. Udemy’s new revenue structure leaves top instructors who do their own marketing with no good reason not to use Udemy, to the contrary.

Besides getting 100% of the revenue for every student they point to their own courses there is a good chance of winning new customers through the platform and still earning 50%. Instructors also don’t need to care about setting up and maintaining a LMS on their own, don’t need to worry about the payment methods and they get a customer care team for free, as well. Sounds like a pretty compelling offer to me.

The new revenue share also leaves additional percentage points that Udemy can use to attract more affiliates who are generally used to commission between 50% to 75%. But the problem is that at the moment the really interesting courses don’t seem to be on the affiliate list. I dug into the vast back catalog, which is a daunting task in itself due to the huge amount of courses offered on Udemy, yet wasn’t able to find the courses I would be interested to promote.

Issues to solve

Maybe more quality courses will show up in the affiliate section when the new revenue share kicks in but this brings us to the biggest problem Udemy is facing to my mind: quality control. There is a certain waypoint in a marketplace when crappy content outnumbers the good or great one. I feel Udemy is past that point and it gets harder and harder to find good courses via the platform itself. Sure, if the entry point is the website or social profile of an instructor, the way to purchase is pretty straight forward. But if they land on Udemy and have to skim through tons of courses on the same topic, read the ratings and compare the prices it’s a different situation.

But that’s what Udemy needs to achieve, especially under the new revenue share model. Students who buy one course through a lead coming from an instructor need to buy at least one more course from another instructor on the marketplace for Udemy to generate revenue. That’s the advantage of controlled platforms like Lynda.com. They have control over the inventory, all courses have a certain standard of quality and there are not dozens of courses about the same topic.

Other marketplaces like eBay had to deal with this problem and came up with intelligent filters that learn about your preferences and only show you relevant content at a glance from which you can dig deeper if you like. I feel Udemy either needs to implement quality guidelines and curation before courses go live or work on filters that trim down the noise and come up with the courses that are most relevant to a student or affiliate.

And then there is still the question whether Udemy will be able to break out of its core market and enter new verticals, another essential step in order to reach their goal of teaching 10 million students, let alone 100 million. I feel, the team needs to go back in the trenches and seed new verticals like they did in the early days of their marketplace, getting in touch with instructors outside of the tech / startup ecosystem.

Tutorspree shutdown

[UPDATED] Sunday Review Special: Lessons from the Tutorspree Shutdown

Tutorspree shutdown

Editor’s Note: Tutorspree co-founder and CEO Aaron Harris reached out to me to point out that PandoDaily’s report of the startup having problems to raise a follow-up round are inaccurate. I inserted Aaron’s comment below.

In today’s Sunday Review I will focus on one story only. Last Sunday we learned through PandoDaily, VentureBeat and others that jumped on the story that tutoring marketplace Tutorspree, a startup we covered on EDUKWEST early on, is shutting down.

Now, startups in the education space are of course in many aspects just like other startups, the vast majority fail. Unlike other news outlets the fact in itself doesn’t make me want to write up their story for EDUKWEST. The Tutorspree case, however, teaches us some lessons about the viability of online marketplaces and the direction tutoring takes in general.

The interesting part about the story is that Tutorspree did not run out of money and was also not lacking business model (as so often in edtech); the reasons seem to be more complex and the main issue probably was scale.

In a post published on the Tutorspree blog especially one paragraph stands out and got quoted in each article about the shutdown.

Ultimately, we learned about the challenges of willing a company into existence, of building an incredible and unique team to tackle constantly shifting challenges. And finally, we learned about how to make the toughest decision of all – to shut Tutorspree down, not because it was not a business, but because we could not make it the company we wanted.

I added the emphasis to mark the two points I want to focus on. Let’s start with the challenges.

Challenge 1: Playing in Google’s Sandbox

This is a lesson another education marketplace startup had to learn the hard way about two years ago. TeachStreet, still one of my favorite edtech startups, was essentially killed by the infamous Panda update. Just before the implementation TeachStreet was pretty close to profitability, but from one day to the other it’s traffic got cut by half. Not long thereafter founder Dave Schappell sold TeachStreet to Amazon.

The problem is that a marketplace needs to be found by its potential users in the first place. And how do you find stuff on the Internet? By looking it up in search engines. As Google is more and more moving into additional verticals that rely on search traffic, like restaurant reviews and other local information for instance, I assume Tutorspree was facing a similar problem like TeachStreet did two years ago.

Google is constantly adapting its search algorithm which can have a huge effect on the amount of traffic a marketplace like Tutorspree gets. Another indicator is Aaron Harris’ blog post “How Google is Killing Organic Search” in which he analyzed how Google is dominating the search pages with its own estate compared to the space it gives for organic search results in which Tutorspree accounts would eventually be displayed. The post got picked up by the major blogs, got some critique but I think it underlines the problems of running such a startup pretty well.

If you don’t get the visitors you won’t be able to scale your marketplace, something Aaron Harris also pointed out to TechCrunch when asked for further information on the decision to shut down Tutorspree.

“We built something we were incredibly proud of, but got to the point where we realized it would not scale in a way that would meet our goals.”

Challenge 2: Student Poaching

This is one of the issues I came across very early on in my career as an online teacher. Back in the days when I was offering language classes on platforms like Myngle, student poaching was a big deal for the startup. Most marketplaces rely on the tutor paying commission for each lesson that gets arranged via the platform.

“Clever” tutors find ways to save on that commission (usually between 15% to 18%) by offering the students a better deal when they book their next lesson directly with the tutor. Most students are open to such a deal as the personal connection has already been established and they don’t really care about the middleman.

As this already was common practice in an online setting with pretty low margins, I imagine in the high-priced tutoring environment of New York City it is even more interesting for parents and tutors to cut deals aside of the platform. And there is basically nothing Tutorspree or any other platform could do to prevent this from happening. The only option is to offer such a good service that no one in the triangle wants to screw the platform over.

Challenge 3: On Demand and Right Now Mentality

Another problem is that we tend to prefer solutions that fix a certain problem the moment it occurs. Tutoring seems to move towards two directions. One the one hand, you have the on demand tutoring provided via video lectures and other asynchronous, self paced content.

The other direction goes towards services like InstaEDU that offer a connection to a live tutor the moment the student needs an answer. According to the site the average waiting time is less than 30 seconds.

No need to arrange a meeting with a tutor a week or two in advance, no delays due to traffic, no cancellations due to illness, no need to buy a big package in advance. You only pay for what you need, when you need it.

Now that we have talked about some challenges, let’s get to the point that Tutorspree shuts down though it was a legit business.

Series A Crunch?

According to CrunchBase Tutorspree raised $1.8 million in total funding. As PandoDaily’s Erin Griffith points out one of the problems the startup ran into was the team’s inability to raise a new round early this year. Only Resulute.VC agreed to invest $800k with the option to add more if Tuturspree managed to get more investors on board. Apparently that did not happen.

Comment from Aaron Harris:

I won’t comment on the majority of it, which is mostly opinion, but did want to correct something factually innacurate – we had no trouble raising money, at any point. Pando got the story wrong, probably because they didn’t actually talk to us or any of our investors.

Now, there is the question whether Tutorspree needed the money to stay afloat or if it was raising money to grow. I think it is pretty telling that none of the excisting investors followed on their previous funding in Tutorspree.

Again, this does not mean that the startup was not generating revenue and not only could have survived but slowly grow based on its revenue. But there sure was no hockey stick growth that investors like to see at this stage of a startup.

I am pretty sure the Tutorspree users, especially the tutors and parents are going to miss the service and got some real value out of it. We saw the same when TeachStreet shut down without a real alternative for tutors and learners to move to.

In the end, we probably have to see marketplaces like Tutorspree and TeachStreet as features of bigger platforms like Google, Bing or Yahoo for instance. Search engines nowadays want to own more than the brief moment a user finds a result for her inquiry, they want to extend the reach to the next step and eventually the sale.

The last thing that I noticed is that there is apparently no acqui-hire for the team and data as this is usually the way “failed” edtech startups go these days. If not even the accumulated data of tutors and learners is worth something then the decision to shut down Tutorspree was probably the right one in the end.