Stephen McCurry, Udemy's Director of Product Management, explains why traditional universities fail modern workers and how Udemy built a two-sided marketplace with 7 million students and 17,000 instructors. He details the mechanics: start with quality courses, manually drive early adoption, create success stories, then let network effects take over.
Chapters
So online education in general, traditional education is stagnant. There are a couple of fundamental issues with traditional education, and you guys, you know, more aware than most of the issues. You're in this Draper University program, which looks like an incredible opportunity to learn about entrepreneurship. But traditional education, as in traditional university education, has a number of fundamental issues. It's extremely expensive. The programs are not moving fast enough. So the world around us is changing, and the pace of change is increasing over time, and the universities find it hard to keep up with latest skill sets. Give you the example of social media marketing. If you're a marketing person and perhaps you took a degree in marketing, you know, Twitter, Facebook, they're relatively new concepts. And how do universities keep pace with those new skill sets? Likewise, data, big topic, hot topic in Silicon Valley. How do traditional education keep up with those new skill sets? So, a couple of statistics. 65% of grade school kids will eventually get jobs that don't exist today. You know, if you look around at the companies that exist today that didn't exist 10, 15 years ago, Silicon Valley is one of those engines of innovation where companies like Google, you know, come about, become huge companies, and we take it for granted that, you know, they exist and they've always existed. But, you know, 20 years ago, the market was extremely different. So, it's just another example of how, you know, the world around us is changing very quickly. And, you know, this is a statistic that relates to the skills that we need in our jobs. You know, increasingly, if you're, again, a social media marketing expert within a company, the number of different skills that you need to do your job is really high. You know, everything from the nuts and bolts of ad operations, running things through Facebook or Twitter, to data analysis, to creative kind of more content marketing. It's a really diverse range of skill sets. And where do you— how can you learn those skill sets? So, this statistic talks about, you know, half, under half of employers believe that recent graduates are actually ready for the world of work. Again, another fundamental issue with traditional university-based education, you know, you go through these academic courses, but when you enter the world of work, can you actually do the job? I've interviewed hundreds of people over the past 18 months for the positions that we have open, available at Udemy. We probably have 40 or 50 positions open today. And it's extremely difficult to find people who have the critical thinking, the practical skills to actually do the jobs that we're looking to fill. This gives you a sense of the size of the education industry. Early education, so the K-12 market, $670 billion. Higher education, universities, $460 billion. And lifelong learning, $100 billion. Lifelong learning is the segment that Udemy plays into. We don't do anything in the other segments. We're purely focused on lifelong learning. So really, we're about people who want to stay current in their job. You know, skills change. How do you stay current, stay at the cutting edge of your job? Or how do you get a new job if you've been in work and out of education for a while? So, here's some of our vanity metrics, I guess. We have today more than 7 million. It's about 7.2 million today. We have more than 17,000. It's about 17,500 today. We have more than 30,000 courses published on our marketplace. We have students from every single country in the world. Actually, our database tells me that we have people from more, more countries than actually countries exist. So it's pretty incredible. 80+ languages. That's the courses our content is taught in and more than 200% growth year on year. About half our revenue comes from international, and it's an interesting story. We really, in the early days, we did nothing around international. We didn't put any attempt to internationalize. We didn't do any marketing internationally. And yet, organically, 50% of our students came from international, and places like Singapore are particularly strong. So I wanted to talk a little bit about the marketplace. Udemy is a marketplace, and what does it take to create a marketplace? And there's a great speech on this in the appendices. Hopefully you have access to my presentation. Our founder, Aaron, did a speech at Echelon, a conference last year in Singapore. Where he spent a whole session talking about this. So I recommend that you check that out on YouTube. So, you know, marketplace— basically not all problems are technology problems. Some problems require more than technology. For example, they require a community, they require operations. And when you think about Udemy, you know, some of those metrics that I just showed How do we get people to create 30,000 courses? You know, the average time to create a course is 3 to 4 weeks. That's a lot of effort that our community is putting into our platform. How did we do that? And it really takes a lot of hard work. Marketplaces are a grind. When you create a marketplace and you say, this is going to be the destination for online education, you're really talking about doing things that don't scale initially. You're looking for one course. How do you get one course? If you get one course and the course is successful, how do you get 2 courses? And if you get 2 courses, how do you bring in a handful more customers? And that's really how Udemy started. They were really laser-focused on finding one or 2 very good courses and bringing in that initial group of students to get the ball rolling. Once you get to critical mass, things are completely different. Marketplaces are awesome. Network effects take over. Instructors come to us now and ask us to publish their content on our marketplace. But in the early days of marketplaces, it's really, really hard. So the first step is define the marketplace rules. If you think about other marketplaces, examples like Uber, Airbnb, Craigslist is a marketplace. Each of those marketplaces has a very different approach to what the marketplace is going to do, what the supplier is going to do, what the purchaser is going to do. So defining your marketplace clearly around who's doing what, what are the roles and responsibilities, That's really critical for the marketplace. Something like Craigslist is completely decentralized. Basically, you go on there, you say you're selling something, and the communication is completely up to you. The price is completely up to you. The marketplace does almost nothing. It's just a webpage. Marketplaces like Uber do everything except drive the car. They're matching you, they're taking your credit card, they're doing the payment, they're looking after trust and safety. They're really a more centralized marketplace. Udemy is somewhere in the middle of that continuum. Create success stories is really important in marketplaces. I'll show you some of our success stories from the instructor perspective. It's really important that at least some of the participants in the marketplace are really, really successful on the marketplace. And if you, if you don't have at least a few people who are extremely successful, it's difficult to convince other people to come into the marketplace. Thank you.
