3 Graphs About Udemy Revenue

I admire Udemy for their unique approach to managing growth, and I regularly collect and analyze all and any data about them that I can get. The company is a peculiar business case in the growing edtech world because:

  • They are one of the fastest growing virtual training companies in the world
  • Their business model works
  • They can be profitable

My recent annual analysis of Udemy data has yielded interesting results. In short, Udemy is deliberately diversifying its content portfolio and breaking dependencies on particular course providers.

1. Udemy is no longer overly dependent on just one course provider. In January 2014 close to 50% of their cumulative revenues came from a single company in Canada: Infinite Skills. Our November 2014 data shows that Udemy saw that risk very clearly, and worked hard to diversify its course portfolio. This effort seems to have born fruit: 50% of the company’s cumulative revenues now comes from 27 providers. As this diversification took place in the past twelve months, it seems that Udemy’s content managers and the marketing team are making a deliberate effort to break away from dependence on Infinite Skills.

In November 2014, 27 course providers were responsible for 50% of Udemy's revenues.

In November 2014, 27 course providers were responsible for 50% of Udemy’s revenues.

2. Udemy is no longer an Excel training company it used to be twelve months ago. Back in January this year, seven out of ten top courses by enrollment and revenue on Udemy were about Excel. Although Microsoft Excel courses are still VERY important in Udemy’s portfolio, the company has made a successful shift into Software development and Business categories. The new course providers that Udemy has managed to bring in generate quite a bit of revenue in areas of marketing and mobile app development.

Software development and business dominate Udemy's portfolio in terms of revenue.

Software development and business dominate Udemy’s portfolio in terms of revenue.

3. 10% of enrollments drive 50% of cumulative revenues. Udemy remains in a tough spot in terms of pricing and market positioning, although this seems to be changing, albeit slowly. In the online education and training world, I place Udemy in “basic office skills and basic technology skills” content category where brand of course provider does not matter as much as the quality of content they produce. Based on our data, in 90% of cases Udemy’s value proposition is “commoditized knowledge at bargain prices”. 50% of cumulative revenue to date comes from 90% of all enrollments within the “$1-$100” price range. What’s amazing is that the other half of revenues to date has come from just 10% of all paid course enrollments that come from all other price segments ranging from $101 to $5000 per enrollment. Obviously, this is a completely different market segment and it is a least just as important for Udemy as its most popular price segment.

Udemy's difficulty next year would be in managing its polarized user base.

Udemy’s difficulty next year would be in managing its polarized user base.

If you need access to our database, please sign up to my live seminar: I will be doing a live review of Udemy data on January 15, 2015 at 12:00PM PST on Rukuku. During the event, I will present my findings and analysis of online trainig trends that can be glimplsed from comparing 2013 and 2014 data.

When you sign up, you will have access to the full raw database that contains most up-to-date information on Udemy’s courses, user and revenue growth, pricing strategies, etc. After the live event, you will also have access to Udemy January 2013 data as well as my analysis of changes that took place.

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Five Cool Rukuku Features That Everybody Loves

Our users often email us about features they find most useful in Rukuku so we decided to summarize the fan mail in this post. I will highlight five free features that contest the top position in the “What I love about Rukuku” list.

1. Unlimited participants

Whether you have 1 active customer or a thousand, we are happy to accommodate your needs. We do not impose any limitations on the number of participants in your courses, webinars, or conference calls. Compare this offer to various competing offers out there, and it will become clear that unlimited is hard to find.

2. Free conference calls

Our web conferencing solution is free. Speak for as long as you need, as often as you want – it is free regardless.

3. Free course composer

Create your courses and course materials using our Composer. The tool is absolutely free.

4. Free private classes

If you need a virtual meeting space for an impromptu private class, Rukuku offers that functionality for free. Go to Auditorium, click on Private Classes, and Start New Private Class. Invite other participants by sending them a unique access link using the green “Invite” button. Combined with point #1 above, this is a total winner.

5. Free Storefront

If you want to monetize your courses, we offer you an amazing tool – Storefront. It is a subset of the general Marketplace that resides on your website. You control what items you want to display in your Storefront via a management dashboard. See how it works here: http://malcolmedmonstone.com/online-courses-with-malcolm/

That’s all folks! Don’t be shy to drop us a line about your favorite Rukuku features.

Discussing Disruption and the Future of Edtech with Michael Horn, Part 2

Michael Horn is co-founder of the Clayton Christensen Institute and serves as the executive director of its education program. In 2008, he co-authored the award-winning book, Disrupting Class: How Innovation Will Change the Way the World Learns.

edtech, disruption, Michael Horn

Michael Horn is co-founder of the Clayton Christensen Institute and serves as the executive director of its education program.

Q: Looking at all the various levels of education, including corporate training, higher education, secondary and primary education, where do you see the most disruptive changes taking place?

R: In many ways the corporate training market had its first wave of disruption in the late 90’s and early 2000’s during the first dot com boom. We are now to the point where we are seeing a version 2.0 of that disruption in corporate learning markets with folks like Rukuku helping people create online courses quickly, take many courses, meet training needs internally, find employees or whatever it might be. Secondarily we are seeing activity in a lot of informal spaces, like the skill-based companies that are popping up. So, I think we are starting to see a second disruption take place in the corporate learning world.

Massive disruption is definitely happening in higher education, less in respect to MOOCS at this point and more from places like Southern New Hampshire University that has introduced competency-based online learning program. University Now has one of my favorite competency-based online learning programs, as well as Western Governor’s University. Players like that are creating a wave 2.0 of disruption in the higher ed space. In K12, a lot is going on but it is more at the classroom level and less at the whole school level. I don’t see a lot that leads me to believe that schools are going to get disrupted anytime soon.

Q: Personalization is a big selling point for Edtech. Each student can learn at his or her own pace. How does that fit with traditional idea of the classroom environment?

R:  I think the traditional classroom environment is going to struggle quite a bit.  It was built to batch up students, lecture to them in the same way at the same pace and so forth, and therefore it is inherently not suited for this personalizing learning world. Traditional institutions are adopting some of these innovations and layering them over the traditional classroom. I think we are going to struggle to see the dramatic leaps in personalization that we might from online learning simply because it’s not what those schools and colleges are trying to do or were built to do.

Q: Do we sacrifice anything in terms of social education, the general getting along with people sort of stuff?

R: In the K-12 arena and primary schools in particular, the majority of the growth in online learning is happening in blended learning environments. The reasons for that are straight-forward as opposed to higher education. Students at that age really need a safe place to go and learn. That’s a large part of the reason we are seeing this current blend of learning.

One of the surprises as I walk into blended learning schools is the amount of socialization taking place. Students might be working individually at their computers but they are constantly bouncing up to peer tutor each other and answer questions. It frees up the teacher to spend more time setting up projects with small group instructions for students to work on with each other.

In many ways, the traditional education system does the socialization job pretty poorly because if you remember back to the experiences a lot of us had in middle school, at least for me, a lot of the social stuff that was going on was pretty negative in nature, such as passing notes around, trying to get out of the lecture with other students, and destructive things like that. What I have been stunned by is how much the interactions I have seen in these blended learning environments are really positive social ones structured around learning. I think it’s enormously more productive.

Q; You’ve written much about the difficulties for universities to manage both research and teaching. Do you anticipate these two functions diverging?

R: Outside of the elite universities, I think that is correct. Those functions will really get unbundled and people will realize that the best researching places are not in fact the best teaching places. Activities can be done differently because information doesn’t have to be centralized and so closely bundled with research anymore.

It’s an open question on what will happen in the elite universities. The major question that people are not talking about as traditional institutions change is about research. What is the right model to incentivize really good research in a sustainable fashion going forward? It’s not clear to me that the current university model is right one. It’s a very serious question for the world because so many great advances come out of the basic research done in these places. How can we make that even better?

Q: Would that have implications for intellectual property rights?

R: Yes, absolutely. People have not given deep thought to what parts of university research should be able to be monetized. It is property that you really create and intellectual ownership gives great incentives. Other research may not rise to that level or may be in such an early stage that actually having a more open source look at it would be more useful.

Q: What people or profession do you see being most radically changed by technological changes?

R: I think it’s going to be difficult, to be candid. There will be lots of roles for teachers. In fact, the number of teachers may even increase. But as we have traditionally defined them, the mid-level professors that are really focused on research and view teaching as a convoluted part of the job, often having to make these weird tradeoffs between the two. That function may go away in the years ahead and I think it will be a difficult transition.

Q: What can students and parents do to take advantage of some of the opportunities offered by online learning?

R: It’s a huge opportunity for parents right now to really be able to drive their children’s education, to navigate all the low cost opportunities and be able to expose their children to so many opportunities that previously were limited by their zip codes.

My colleague Heather Staker has written a fair amount about this and about how parents can opt out of some of the traditional ways of doing education and think about this in much more expansive and exciting ways. I think it’s an unbridled opportunity for enterprising parents.

For students who are trying to excel in schools, MOOCs could be interesting also. For example, if I am a high school student, I suspect passing MIT physics would look more impressive to a college than getting a five on the AP exam. So, thinking about how to harness those opportunities is quite interesting.

Q:  Any other interesting trends that you feel like deserve more attention?

R:  I would add that, in K12, we are seeing tremendous growth in blended learning. The question is, how do we help districts manage this growth in smarter ways to incentivize a focus on student outcomes? At the higher ed levels I think lot of the oxygen has been taken out by what’s going to happen to traditional institutions or MOOCs that have been affiliated with traditional institutions. An interesting question is: how do we shed more light on what some of these alternative mechanisms are for creating programs that are useful for students? And lastly, how do we help people understand that in a lot of these contexts, employers really are the end customers? A lot of the work, like Rukuku does, in connecting those nodes is something that has been overlooked somewhat in the dialogue.

Discussing Disruption and the Future of Edtech with Michael Horn, Part 1

Michael Horn is co-founder of the Clayton Christensen Institute and serves as the executive director of its education program. In 2008, he co-authored the award-winning book, Disrupting Class: How Innovation Will Change the Way the World Learns.

edtech, disruption, Michael Horn

Michael Horn is co-founder of the Clayton Christensen Institute and serves as the executive director of its education program.

Q: You’ve said many times that the current online learning structures, especially Massive Open Online Classes (MOOCs), don’t have quite what it takes to disrupt traditional education. Why not? What’s lacking?

R: A couple of things are missing so far from the innovations that we have been seeing in the higher education space to make them truly disruptive. One of them is finding a real business model that allows sustainable growth and activity in the space instead of simply putting something out for free and hoping that a business model will eventually come together.

The second thing we’re seeing is that for these disruptions to ultimately be successful they have to solve a really important job to be done in the lives of employers or students or someone along the chain that is involved in education. A lot of them haven’t focused on solving that important job, one that’s really pressing. My sense is that those that are moving toward working with employers are starting to understand this better than others right now.

Q: Student assessment is one of the big challenges with MOOCs and digital learning in general. How do you see this issue being addressed, currently and in the future?

R: I think a couple of things could happen. First, to the extent that entities are partnering directly with the institutions themselves, they can together build specifications that, if the student passes and shows mastery, then employers will say, ‘yes, that looks like student success.’ That’s one way that might get solved. Second, I think you will simultaneously see independent assessments or consortia pop up whose purpose is to verify learning in an independent and objective way to help further competency-based learning. That’s the second thing that we will see coming out more and more.

Q: The college accreditation system is an obstacle for many online learning companies. Do you see that system evolving and/or a new system emerging?

R: In the short term, the college accreditation system is a barrier for a lot of this. The system is trying to evolve, but more likely we are going to see a new entity go around that accreditation system. That system was built for what it does today and it was quite successful in many ways in solving the set of problems that it did. But it’s antiquated for many of the problems we are talking about now, and the lessons from disruptions are pretty clear. It will be difficult to transform it into something that we want to solve these new, modern problems.

Q: How important is government policy in this process of disrupting education?

R: Disruption will happen regardless of what policy does or doesn’t do, but whether that disruption is positive or not, whether it really transforms the factory model of education into a student-centered one, that’s the huge question. Policy will shape and dictate that, to some degree, because policy incentivizes what sorts of programs are put in place, whether they in fact focus on student learning outcomes, and what the student learning outcomes that we care about are. Historically policies have been very focused on input-based ways of thinking about that, and accordingly we have very input-driven programs as opposed to ones that really prioritize learning outcomes.

In the higher education space, it will have a lot to do with how fast this disruption takes place. Policy could slow it down or could speed it up and make it focused on quality, if the right incentives are put in place.

Q: Do you see any signs of progress?

R: The Department of Education is starting to create waivers for competency-based learning programs that almost run around the accreditation organizations that are in place. Also, the dialogue has improved quite a bit around the potential of online learning. I think those are positive signs.

On the negative side, we have a fractured way of looking at the for-profit universities that have come before this wave, the innovation of the space over the past 20 years. The dialogue has broken down into for-profit equals good or bad, rather than a more nuanced look at the way the government’s policies actually incentivized poor behavior from some of these for-profits. Looking at the good behavior that they actually did do, I think the question ought to be not good or bad, but how do we take the innovation that happened there and is now happening elsewhere and marshal it toward a higher good and not repeat mistakes, rather than create a polarized debate.

Q: In the past, you’ve mentioned overseas markets as areas where large, open classes can really have impact. What do education companies need to go to properly realize that potential?

R: I think MOOCs can be helpful for emerging markets where there is lots of non-consumption, where lots of people need college education, where a liberal arts education is still in demand. MOOCs can help from the content point of view. The dangers are companies just assuming that the US-based courses will naturally be the things that help in those contexts, rather than really embedding themselves or working with partners who deeply understand those contexts to create things that are relevant and useful for those people. It’s going to be really important and challenging for folks in the US to create platforms that solve those problems in those contexts. There is huge opportunity but it will be very difficult as well.

In the second part of this interview, to be posted tomorrow, Michael looks more closely at how technology is influencing education at all levels, from primary school to corporate training. Stay Tuned! 

Rukuku Mediaboard for iPad: speak, draw, collaborate in groups

 

Rukuku Mediaboard is awesome

Rukuku Mediaboard For The iPad enables voice and image collaboration for groups. Free!

Our first iPad App is now available in the App Store!

Rukuku Mediaboard is awesome: speaking and sketching in groups has never been easier. When you download and install the app, make sure to allow the App to access your iPad’s microphone and contacts when you first fire it up.

Once you are registered with Rukuku, invite your friends, students and colleagues using the Invite icon in your media board. Enjoy the conversation when they join.

For comments and questions, please email 54321@rukuku.com