Even if they can find a preview that looks promising, it is extremely unlikely that they will spend the time at that very moment to figure out how to register *and* get their parents to put in a credit card.
Identifying precisely when to charge will remain a very difficult issue for these companies. At least in my limited experience, people are rarely in a "buying" frame of mind when they engage with educational content. It's usually very oblique - bake sales and book sales at the elementary level, annual campaigns and semi-annual tuition bills at the university level. Buying and consuming are pretty far removed, especially in many cases for the consumer of the content. These companies must therefore convince students and their parents to make the investment well in advance of the content need (a challenging marketing problem) or work on the general mindset that has separated education from commerce (at least at the surface) in order to bring about just-in-time educational purchases.
albert
· 2 months ago
Agree that this is a tough nut to crack. But my hypothesis is that a solution which really helps students will eventually attract payment. One trick might be to allow students to put in their parents email address. So I believe that you can lead with content and then eventually convert (as opposed to the "upfront" purchase model).
kidmercury
· 2 months ago
a blog post on my favorite subject, online education (well, my second favorite. favorite would of course be kookology, though the two are closely related). a few thoughts:
1. i'm still a believer in the potential of bootstrapping, though it is extremely difficult in my opinion -- i had no idea it was going to be this hard. but i'm doing it and while there is still the uncomfortable and excessively stressful feeling it could fall apart at any moment, there are plenty of things for me to be optimistic about, and i'm becoming increasingly confident the hardest part of my journey is in the rearview. at least i sure hope so! anyway, the internet is power to the people, and i think all the APIs and open source stuff will make bootstrapping more and more feasible.
2. more so than capital what is needed are connections and marketing help. without question the hardest part for me is marketing, and that is in spite of the fact that i had a managerial/directorial role in online marketing for four years when i was working for The Man. technology is increasingly becoming commoditized, but the marketing challenges are only growing, in my opinion.
3. i still strongly disagree with the "you need scale" argument, in my opinion the game will increasingly become local/niche. VCs need scale unless they can find a new model, which i believe they will have to as economic armageddon continues to advance. microfinance opportunities won't need the same type of scale, in my opinion.
4. free content, plus advertising. that's step one of the education business model, in my opinion.
5. there will be monetization opportunities via game play. i don't know exactly what they are or how they will play out, but i willing to bet on it and bet big (lol, well it's all relative...big for me, probably not so much for you and your peeps). this will be an enormous challenge because no one wants change, selling new types of advertising is going to be tough.
6. we have done some paid course type stuff and are in the process of doing more. the revenue opportunity here is big and could even be bigger than the free/ad funded side. i hope players in this space will show some respect to the basic principles of freeconomics and not try to charge for everything under the sun and use DRM and that type of crap, i think those strategies will increasingly fail. however the one thing about paid content is that it does lead to greater levels of engagement; people paid, so they want to get their money's worth. also, even though people use avatars and fake screen names and such, there is still a lot of shyness, and people are more inclined to participate in a closed environment. i find that annoying and stupid, but from what i've seen that seems to be the case.
my $.02 fwiw
albert
· 2 months ago
Lots of interesting thoughts here. I am glad to see that you haven't given up on the idea of bootstrapping. I don't think it's impossible, just very hard and opens you up to more competitive threats. My argument about scale has to do with getting a "content contribution" engine going. Education is just too broad to rely on having to create (and pay for) your own content.
kidmercury
· 2 months ago
yes, getting the content contribution engine going is a HUGE part. the strategy i've tried with two education oriented sites that has had some success is putting out a ton of free content, and then presenting it as "let's all build a university" and getting members to contribute -- sort of like wikipedia, but with game play and attention economy stuff. this has worked to a certain extent for us.
the one thing i wonder is how much scale is really needed for that? as you probably know a very small percentage of social media contributors do the bulk of the work. at times i think my trading site may already have the scale needed, because we have a core group that is publishing regularly. their primary motivation is social, which i think often gets hindered if a community is too big.
albert
· 2 months ago
I wish I knew what the critical mass for ignition is here. It is exactly because only a very small percentage do most of the contributing that you need a lot if you want to cover more than a tiny niche of knowledge.
Pascal-Emmanuel Gobry
· 2 months ago
I'm starting an education startup, so this is very interesting. We think along the same lines. I think disruption will be very hard, and will be a multi-decade affair.
David Semeria
· 2 months ago
Albert, I think the issues here can be generalized to include most non ad-funded services. There is always a trade-off between reach and revenues, which helps explain the success of the freemium model.
My issue with freemium is not the marketing model, but the revenue model: subscriptions suck. People just don't like them - which helps explain the very low conversion rates.
I think educational products can be supplied (like many other services) on a usage basis. After an amount of free access, people can be charged (a small amount) on a per-use basis. If they stop using the product then they stop paying - no lock-in.
This is not the same a micro-transactions, and reflects a model that everyone inherently understands (drink ten cans of Coke, pay for ten; drink none, pay for none).
albert
· 2 months ago
Agree that this is a generic issue, but have been struck by how many education startups I have seen with angels that have pushed for early revenues (several in the States as well). I am not sure that subscriptions are really such a big turnoff in education once someone is hooked.
brycemaddock
· 2 months ago
This is a very exciting space, with huge potential for residual revenues once established. I disagree that the bootstrap approach won't work. While, I think there is a clear need for VC funding at a certain point, I think that we will see online education platforms get to a traditoinal Series A round without any angel capital. Competition maybe more intense now then ever, but technology costs are so much less than they were in the Craigslist days.
albert
· 2 months ago
If you can bootstrap more power to you! Agree that technology has gotten a lot cheaper, but it has gotten cheaper for competitors as well.
All Comments
Identifying precisely when to charge will remain a very difficult issue for these companies. At least in my limited experience, people are rarely in a "buying" frame of mind when they engage with educational content. It's usually very oblique - bake sales and book sales at the elementary level, annual campaigns and semi-annual tuition bills at the university level. Buying and consuming are pretty far removed, especially in many cases for the consumer of the content. These companies must therefore convince students and their parents to make the investment well in advance of the content need (a challenging marketing problem) or work on the general mindset that has separated education from commerce (at least at the surface) in order to bring about just-in-time educational purchases.
1. i'm still a believer in the potential of bootstrapping, though it is extremely difficult in my opinion -- i had no idea it was going to be this hard. but i'm doing it and while there is still the uncomfortable and excessively stressful feeling it could fall apart at any moment, there are plenty of things for me to be optimistic about, and i'm becoming increasingly confident the hardest part of my journey is in the rearview. at least i sure hope so! anyway, the internet is power to the people, and i think all the APIs and open source stuff will make bootstrapping more and more feasible.
2. more so than capital what is needed are connections and marketing help. without question the hardest part for me is marketing, and that is in spite of the fact that i had a managerial/directorial role in online marketing for four years when i was working for The Man. technology is increasingly becoming commoditized, but the marketing challenges are only growing, in my opinion.
3. i still strongly disagree with the "you need scale" argument, in my opinion the game will increasingly become local/niche. VCs need scale unless they can find a new model, which i believe they will have to as economic armageddon continues to advance. microfinance opportunities won't need the same type of scale, in my opinion.
4. free content, plus advertising. that's step one of the education business model, in my opinion.
5. there will be monetization opportunities via game play. i don't know exactly what they are or how they will play out, but i willing to bet on it and bet big (lol, well it's all relative...big for me, probably not so much for you and your peeps). this will be an enormous challenge because no one wants change, selling new types of advertising is going to be tough.
6. we have done some paid course type stuff and are in the process of doing more. the revenue opportunity here is big and could even be bigger than the free/ad funded side. i hope players in this space will show some respect to the basic principles of freeconomics and not try to charge for everything under the sun and use DRM and that type of crap, i think those strategies will increasingly fail. however the one thing about paid content is that it does lead to greater levels of engagement; people paid, so they want to get their money's worth. also, even though people use avatars and fake screen names and such, there is still a lot of shyness, and people are more inclined to participate in a closed environment. i find that annoying and stupid, but from what i've seen that seems to be the case.
my $.02 fwiw
the one thing i wonder is how much scale is really needed for that? as you probably know a very small percentage of social media contributors do the bulk of the work. at times i think my trading site may already have the scale needed, because we have a core group that is publishing regularly. their primary motivation is social, which i think often gets hindered if a community is too big.
My issue with freemium is not the marketing model, but the revenue model: subscriptions suck. People just don't like them - which helps explain the very low conversion rates.
I think educational products can be supplied (like many other services) on a usage basis. After an amount of free access, people can be charged (a small amount) on a per-use basis. If they stop using the product then they stop paying - no lock-in.
This is not the same a micro-transactions, and reflects a model that everyone inherently understands (drink ten cans of Coke, pay for ten; drink none, pay for none).