The move to core…

Those of us in education know a secret that is pretty obvious once you hear it, but founders sometimes don’t understand how important it is. Here’s the secret:

‘People pay 10–100x more for their core learning experience vs. any supplemental expenses’

So for example, you might spend $4000 on a college class and $100 on a textbook. 40x difference in perceived value.

For a really long time, almost all online learning was supplemental. And the LTV reflected that. One of my companies, Kunduz, is a great company in Turkey which has built a supplemental test prep study solution. They will answer your questions as you study, ask you new questions, etc. Happily supplemental, making very good revenue at supplemental rates, $10-$20 per month.

Covid presents a golden opportunity for many education companies: how do you reposition what you are doing as the core learning experience?

For example, in Turkey, all of the physical test prep centers shut down. So now, how does Kunduz become the core way that students in Turkey study for their exams? How quickly and well can they fill that void? As live online instruction becomes standard behavior, I think online education has a good chance to eat what was considered sacred in-person only education.

Of course, as soon as it’s safe, many people will go back to the physical world of education. But my bet is that a lot of my companies and a lot of others in education will end up being core at the end of this. And I think that will be a very good thing, because they are all learning machines and live or die by how much they delight students and parents.