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Which types of startups are most often profitable?
Julian Shapiro is the founder of BellCurve.com, a growth marketing agency that trains you to become a marketing professional. He also writes at Julian.com.
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I co-run an agency that teaches a hundred startups per year how to do growth marketing. This gives me a unique vantage point: I know which types of startups most often reach profitability.
That’s an important metric, because startups that don’t reach this milestone typically fail to raise additional funding — then die.
Here’s what we’ll learn:
- Companies are increasingly living and dying by ads. Because it’s the startup’s approach to customer acquisition — not its business model or market — that most determines its early-stage profitability.
- E-commerce companies lend themselves best to ads, and SMB SaaS the worst. Meanwhile, most startup founders in 2019 are starting SaaS companies. They’d benefit from the data we share in this post.
- In fact, our agency has found that every other type of business reaches profitability quicker than SMB SaaS, including mobile apps, Chrome extensions and enterprise SaaS.
Our sampling of startups isn’t as biased as startup valuation leaderboards, because we also see those that failed. That’s the key.
You can use our experience to de-risk your startup. That’s what this post explores: How to change your product roadmap to pursue a path more likely to reach profitability.
The startups that frequently reach profitability
Here’s the data my agency is referencing for this post:
- We train 12+ venture-backed and bootstrapped startups every month. Half are Y Combinator graduates. This is how we study early-stage product-market fit trends.
- We run ads full-time for between 20 and 30 mature companies per year. On average, each spends $2.5 million annually on paid acquisition. And, on average, each has 30 employees. Our clients include Tovala.com, PerfectKeto.com, SPYSCAPE.com, ImperfectProduce.com, Clearbit.com and Woodpath.com.
- Our students and clients are roughly evenly distributed across D2C e-commerce, B2B, mobile apps and marketplaces.
When we try to control for founder skill and funds raised, the types of startups that first reach profitability do so in this order:
- E-commerce
- Chrome extensions
- Mobile apps
- Enterprise SaaS
- Small-to-medium business SaaS
On average, an e-commerce company is more likely to first reach profitability than an SMB SaaS company.
Before I explain why, let me explain how we’re differentiating startups: I use the word “type” instead of “business model” or “markets” because I’ve learned that business model and market are often not the best predictors of success. Instead, it’s your approach to customer acquisition. That’s what typically determines the likelihood of profitability.
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Tiger Global and Ant Financial lead $500M investment in China’s shared housing startup Danke
A Chinese startup that’s taking a dorm-like approach to urban housing just raised $500 million as its valuation jumped over $2 billion. Danke Apartment, whose name means “eggshell” in Chinese, closed the Series C round led by returning investor Tiger Global Management and newcomer Ant Financial, Alibaba’s e-payment and financial affiliate controlled by Jack Ma.
Four years ago, Beijing-based Danke set out with a mission to provide more affordable housing for young Chinese working in large urban centers. It applies the co-working concept to housing by renting apartments that come renovated and fully furnished, a model not unlike that of WeWork’s WeLive. The idea is by slicing up a flat designed for a family of three to four — the more common type of urban housing in China — into smaller units, young professionals can afford to live in nicer neighborhoods as Danke takes care of hassles like housekeeping and maintenance. To date, the startup has set foot in 10 major Chinese cities.
With the new funds, Danke plans to upgrade its data processing system that deals with rental transactions. Housing prices are set by AI-driven algorithms that take into account market forces such as locations rather than rely on the hunches of a real estate agent. The more data it gleans, the smarter the system becomes. That layout is the engine of the startup, which believes an internet platform play is a win-win for both homeowners and tenants because it provides greater transparency and efficiency while allowing the company to scale faster.
“We are focused on business intelligence from day one,” Danke’s angel investor and chairman Derek Shen told TechCrunch in an interview. Shen was the former president of LinkedIn China and was instrumental in helping the professional networking site enter the country. “By doing so we are eliminating the need to set up offline retail outlets and are able to speed up the decision-making process. What landlords normally care is who will be the first to rent out their property. The model is also copyable because it requires less manpower.”
“We’ve proven that the rental housing business can be decentralized and done online,” added Shen.
Photo: Danke Apartment via Weibo
Danke doesn’t just want to digitize the market it’s after. Half of the company’s core members have hailed from Nuomi, the local services startup that Shen founded and was sold to Baidu for $3.2 billion back in 2015. Having worked for a business whose mission was to let users explore and hire offline services from their connected devices, these executives developed a propensity to digitize all business aspects, including Danke’s day-to-day operations, a scheme that will also take up some of the new funds. This will allow Danke to “boost operational efficiency and cut costs” as it “actively works with the government to stabilize rental prices in the housing market,” the company says.
The rest of the proceeds will go toward improving the quality of Danke’s apartment amenities and tenant experiences, a segment that Shen believes will see great revenue potential down the road, akin to how WeWork touts software services to enterprises. The money will also enable Danke, which currently zeroes in on office workers and recent college graduates, to explore the emerging housing market for blue-collar workers.
Other investors from the round include new backer Primavera Capital and existing investors CMC Capital, Gaorong Capital and Joy Capital.
China’s rental housing market has boomed in recent years as Beijing pledges to promote affordable apartments in a country where few have the money to buy property. As President Xi Jinping often stresses, “houses are for living in, not for speculation.” As such, investors and entrepreneurs have been piling into the rental flat market, but that fervor has also created unexpected risks.
One much-criticized byproduct is the development of so-called “rental loans.” It goes like this: Housing operators would obtain loans in tenants’ names from banks or other lending institutions allegedly by obscuring relevant details from contracts. So when a tenant signs an agreement that they think binds them to rents, they have in fact agreed to take on loans and their “rent” payments become monthly loan repayments.
Housing operators are keen to embrace such practices because the loans provide working capital for renovation and their pipeline of properties. On the other hand, the capital allows companies like Danke to lower deposits for cash-strapped young tenants. “There’s nothing wrong with the financial instrument itself,” suggested Shen. “The real issue is when the housing operator struggles to repay, so the key is to make sure the business is well-functioning.”
Danke, alongside competitors Ziroom and 5I5J, has drawn fire for not fully informing tenants when signing contracts. Shen said his company is actively working to increase transparency. “We will make it clear to customers that what they are signing are loans. As long as we give them enough notice, there should be little risk involved.”
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It’s a new era for fertility tech
Women’s health has long been devoid of technological innovation, but when it comes to fertility options, that’s starting to change. Startups in the space are securing hundreds of millions in venture capital investment, a significant increase to the dearth of funding collected in previous years.
Fertility entrepreneurs are focused on a growing market: couples are choosing to reproduce later in life, an increasing number of female breadwinners are able to make their own decisions about when and how to reproduce, and overall, around 10% of women in the US today have trouble conceiving, according to the Centers for Disease Control and Prevention.
Startups, as a result, are working to improve various pain points in a women’s fertility journey, whether that be with new-age brick-and-mortar clinics, information platforms, mobile applications, wearables, direct-to-consumer medical tests or otherwise.
Although the investment numbers are still relatively small (compared to, say, scooters), the trend is up — here’s the latest from founders and investors in the space.
VCs want to help you get pregnant
Clue, a period and ovulation-tracking app, co-founder and CEO Ida Tin talks at TechCrunch Disrupt Berlin 2017 (Photo by Noam Galai/Getty Images for TechCrunch)
This fall, TechCrunch received a tip that SoftBank, a prolific venture capital firm known for its nearly $100 billion Vision Fund, was investing in Glow, a period-tracking app meant to help women get pregnant. Max Levchin, Glow’s co-founder and a well-known member of the PayPal mafia, succinctly responded to a TechCrunch inquiry regarding the deal via e-mail: “Fairly sure you got this particular story wrong,” he wrote. Glow co-founder and chief executive officer Mike Huang did not respond to multiple requests for comment at the time.
Needless to say, some semblance of a SoftBank fertility deal got this reporter interested in a space that seldom populates tech blogs.
Femtech, a term coined by Ida Tin, the founder of another period and ovulation-tracking app Clue, is defined as any software, diagnostics, products and services that leverage technology to improve women’s health. Femtech, and more specifically the businesses in the fertility and contraception lanes, hasn’t made headlines as often as AI or blockchain technology has, for example. Probably because companies in the sector haven’t closed as many notable venture deals. That’s changing.
The global fertility services market is expected to exceed $21 billion by 2020, according to Technavio. Meanwhile, private investment in the femtech space surpassed $400 million in 2018 after reaching a high of $354 million the previous year, per data collected from PitchBook and Crunchbase. This year already several companies have inked venture deals, including men’s fertility business Dadi and Extend Fertility, which helps women freeze their eggs.
“In the last three to six months, it feels like investor interest has gone through the roof,” Jake Anderson-Bialis, co-founder of FertilityIQ and a former investor at Sequoia Capital, told TechCrunch. “It’s three to four emails a day; people are coming out of the woodwork. It feels like somebody shook the snow globe here and it just hasn’t stopped for months now.”
Dadi, Extend Fertility and FertilityIQ are among a growing list of startups in the fertility space to crop up in recent years. FertilityIQ, for its part, provides a digital platform for fertility patients to research and review doctors and clinics. The company also collects data and issues reports, like this one, which ranked businesses by fertility benefits. Anderson-Bialis launched the platform with his wife, co-founder Deborah Anderson-Bialis, in 2016 after the pair overcame their own set of infertility issues.
Anderson-Bialis said he has recently fielded requests from seed, Series A and growth-stage investors interested in exploring the growing fertility market. His company, however, has yet to raise any outside capital. Why? He doesn’t see FertilityIQ as a venture-scale business, but rather a passion project, and he’s skeptical of the true market opportunity for other businesses in the space.
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Podcasting startup WaitWhat raises $4.3M as interest in audio content explodes
WaitWhat, the digital content production engine behind LinkedIn co-founder Reid Hoffman’s Masters of Scale podcast, has secured a $4.3 million Series A investment led by Cue Ball Capital and Burda Principal Investments.
Launched in January 2017, WaitWhat will use the cash to create additional media properties across a variety of mediums, including podcasts.
Investors are gravitating toward podcast startups as consumer interest in original audio content skyrockets. Podcasting, though an infantile industry that hit just $314 million in revenue in 2017, is maturing, raking in venture capital rounds large and small and recording its first notable M&A transaction with Spotify’s acquisition of Gimlet and Anchor earlier this month. The music streaming giant shelled out a total of $340 million for the podcast production platform and the provider of a suite of podcast creation, distribution and monetization tools, respectively. It plans to spend an additional $500 million on audio storytelling platforms as part of a larger plan to become the Netflix of audio.
WaitWhat, for its part, dubs itself the “media invention company.” Founded by June Cohen and Deron Triff, a pair of former TED executives responsible for expanding the nonprofit’s digital media business, WaitWhat is today launching Should This Exist, a new podcast hosted by Flickr founder and tech investor Caterina Fake. Fake will interview entrepreneurs about the human side and the impact of technology in the show created in partnership with Quartz.
“People don’t just transact with content; they want to feel connected to it through a sense of wonder, awe, curiosity, and mastery,” Cohen said in a statement. “These are contagious emotions, and research shows they stimulate sharing. Where many media companies aim for volume — putting out lots of content with a short shelf life — we’re building a completely distinctive portfolio of premium properties that are continually increasing in value, inspiring deep audience engagement, and creating opportunities for format expansion.”
Other investors in the round include Reid Hoffman, MIT Media Lab director Joi Ito and Liminal Ventures. WaitWhat previously raised a $1.5 million round from Victress Capital, Human Ventures and Able Partners, all of which have joined the A round.
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Mixmax brings LinkedIn integration and better task automation to its Gmail tool
Mixmax today introduced version 2.0 of its Gmail-based tool and plugin for Chrome that promises to make your daily communications chores a bit easier to handle.
With version 2.0, Mixmax gets an updated editor that better integrates with the current Gmail interface and that gets out of the way of popular extensions like Grammarly. That’s table stakes, of course, but I’ve tested it for a bit and the new version does indeed do a better job of integrating itself into the current Gmail interface and feels a bit faster, too.
What’s more interesting is that the service now features a better integration with LinkedIn . There’s both an integration with the LinkedIn Sales Navigator, LinkedIn’s tool for generating sales leads and contacting them, and LinkedIn’s messaging tools for sending InMail and connection requests — and sees info about a recipient’s LinkedIn profile, including the LinkedIn Icebreakers section — right from the Mixmax interface.
Together with its existing Salesforce integration, this should make the service even more interesting to sales people. And the Salesforce integration, too, is getting a bit of a new feature that can now automatically create a new contact in the CRM tool when a prospect’s email address — maybe from LinkedIn — isn’t in your database yet.
Also new in Mixmax 2.0 is something the company calls “Beast Mode.” Not my favorite name, I have to admit, but it’s an interesting task automation tool that focuses on helping customer-facing users prioritize and complete batches of tasks quickly and that extends the service’s current automation tools.
Finally, Mixmax now also features a Salesforce-linked dialer widget for making calls right from the Chrome extension.
“We’ve always been focused on helping business people communicate better, and everything we’re rolling out for Mixmax 2.0 only underscores that focus,” said Mixmax CEO and co-founder Olof Mathé. “Many of our users live in Gmail and our integration with LinkedIn’s Sales Navigator ensures users can conveniently make richer connections and seamlessly expand their networks as part of their email workflow.”
Whether you get these new features depends on how much you pay, though. Everybody, including free users, gets access to the refreshed interface. Beast Mode and the dialer are available with the enterprise plan, the company’s highest-level plan which doesn’t have a published price. The dialer is also available for an extra $20/user/month on the $49/month/user Growth plan. LinkedIn Sales Navigator support is available with the growth and enterprise plans.
Sadly, that means that if you are on the cheaper Starter and Small Business plans ($9/user/month and $24/user/month respectively), you won’t see any of these new features anytime soon.
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Open-source leader Confluent raises $125M on $2.5B valuation
Confluent, the commercial company built on top of the open-source Apache Kafka project, announced a $125 million Series D round this morning on an enormous $2.5 billion valuation.
The round was led by existing investor Sequoia Capital, with participation from Index Ventures and Benchmark, which also participated in previous rounds. Today’s investment brings the total raised to $206 million, according to the company.
The valuation soared from the previous round when the company was valued at $500 million. What’s more, the company’s bookings have scaled along with the valuation.
Graph: Confluent
While CEO Jay Kreps wouldn’t comment directly on a future IPO, he hinted that it is something the company is looking to do at some point. “With our growth and momentum so far, and with the latest funding, we are in a very good position to and have a desire to build a strong, independent company,” Kreps told TechCrunch.
Confluent and Kafka have developed a streaming data technology that processes massive amounts of information in real time, something that comes in handy in today’s data-intensive environment. The base streaming database technology was developed at LinkedIn as a means of moving massive amounts of messages. The company decided to open-source that technology in 2011, and Confluent launched as the commercial arm in 2014.
Kreps, writing in a company blog post announcing the funding, said that the events concept encompasses the basic building blocks of businesses. “These events are the orders, sales and customer experiences, that constitute the operation of the business. Databases have long helped to store the current state of the world, but we think this is only half of the story. What is missing are the continually flowing stream of events that represents everything happening in a company, and that can act as the lifeblood of its operation,” he wrote.
Kreps pointed out that as an open-source project, Confluent depends on the community. “This is not something we’re doing alone. Apache Kafka has a massive community of contributors of which we’re just one part,” he wrote.
While the base open-source component remains available for free download, it doesn’t include the additional tooling the company has built to make it easier for enterprises to use Kafka. Recent additions include a managed cloud version of the product and a marketplace, Confluent Hub, for sharing extensions to the platform.
As we watch the company’s valuation soar, it does so against a backdrop of other companies based on open source selling for big bucks in 2018, including IBM buying Red Hat for $34 billion in October and Salesforce acquiring MuleSoft in June for $6.5 billion.
The company’s most recent round was $50 million in March, 2017.
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Report: Self-driving car startup Aurora is raising capital at a $2B valuation
Early last year, LinkedIn co-founder and prolific venture capital investor Reid Hoffman called Chris Urmson “the Henry Ford of autonomous vehicles (AV).” The vote of confidence and big check from Hoffman, coupled with a team of deeply knowledgable AV entrepreneurs, has catapulted his company, Aurora Innovation, squarely into “unicorn” territory.
Aurora, the developer of a full-stack self-driving software system for automobile manufacturers, is raising at least $500 million in equity funding at more than a $2 billion valuation in a round expected to be led by new investor Sequoia Capital, according to a Recode report. A $500 million financing would bring Aurora’s total raised to date to $596 million and would provide a 4x increase to its most recent valuation.
The company, founded in 2016, raised a $90 million Series A last February from Hoffman’s Greylock Partners and Index Ventures . Hoffman and Index general partner Mike Volpi joined Aurora’s board as part of the deal. Greylock and Index are Aurora’s only existing investors, per PitchBook data. The young business has a lean cap table often characteristic of startup’s led by experienced entrepreneurs able to secure financing deals briskly from top VCs.
Aurora’s C-suite is chock-full of veteran AV workers. Urmson, for his part, formerly headed up the self-driving vehicles program at Google, now known as Waymo. Chief technology officer Drew Bagnell was head of perception and autonomy at Uber and Sterling Anderson, Aurora’s chief product officer, directed the autopilot program at Tesla from 2015 to 2016.
“Between these three co-founders, they have been thinking and working collectively in robotics, automation automotive products for over 40 years,” Hoffman wrote in a blog post announcing Aurora’s Series A funding.
In addition to the high-caliber of the founding team, Aurora’s collaborative approach to building self-driving cars has attracted investors, too. The company has partnered with a number of automotive retailers to integrate its technology into their vehicles and make self-driving cars a “practical reality.” Currently, Aurora counts Volkswagen, Hyundai and Chinese manufacturer Byton as partners.
2018 was a banner year for VC investment in U.S. autonomous vehicle startups. In total, investors poured $1.6 billion across 58 deals, nearly doubling 2017’s high of $893 million. Around the world, AV startups secured $3.41 billion, on par with the $3.48 billion invested in 2017, per PitchBook.
Though we are just days into 2019, LiDAR technology developer AEye has completed a previously announced $40 million Series B. The Pleasanton, Calif.-headquartered company raised the funds from Taiwania Capital, Kleiner Perkins, Intel Capital, Airbus Ventures and Tychee Partners. And last week, Sydney-based Baraja, another LiDAR startup, brought in a $32 million Series A from Sequoia China, Main Sequence Ventures’ CSIRO Innovation Fund and Blackbird Ventures.
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LinkedIn cuts off email address exports with new privacy setting
A win for privacy on LinkedIn could be a big loss for businesses, recruiters and anyone else expecting to be able to export the email addresses of their connections. LinkedIn just quietly introduced a new privacy setting that defaults to blocking other users from exporting your email address. That could prevent some spam, and protect users who didn’t realize anyone who they’re connected to could download their email address into a giant spreadsheet. But the launch of this new setting without warning or even a formal announcement could piss off users who’d invested tons of time into the professional networking site in hopes of contacting their connections outside of it.
TechCrunch was tipped off by a reader that emails were no longer coming through as part of LinkedIn’s Archive tool for exporting your data. Now LinkedIn confirms to TechCrunch that “This is a new setting that gives our members even more control of their email address on LinkedIn. If you take a look at the setting titled ‘Who can download your email’, you’ll see we’ve added a more detailed setting that defaults to the strongest privacy option. Members can choose to change that setting based on their preference. This gives our members control over who can download their email address via a data export.”
That new option can be found under Settings & Privacy -> Privacy -> Who Can See My Email Address? This “Allow your connections to download your email [address of user] in their data export?” toggle defaults to “No.” Most users don’t know it exists because LinkedIn didn’t announce it; there’s merely been a folded up section added to the Help center on email visibility, and few might voluntarily change it to “Yes” as there’s no explanation of why you’d want to. That means nearly no one’s email addresses will appear in LinkedIn Archive exports any more. Your connections will still be able to see your email address if they navigate to your profile, but they can’t grab those from their whole graph.
Facebook came to the same conclusion about restricting email exports back when it was in a data portability fight with Google in 2010. Facebook had been encouraging users to import their Gmail contacts, but refused to let users export their Friends’ email addresses. It argued that users own their own email addresses, but not those of their Friends, so they couldn’t be downloaded — though that stance conveniently prevented any other app from bootstrapping a competing social graph by importing your Facebook friend list in any usable way. I’ve argued that Facebook needs to make friend lists interoperable to give users choice about what apps they use, both because it’s the right thing to do but also because it could deter regulation.
On a social network like Facebook, barring email exports makes more sense. But on LinkedIn’s professional network, where people are purposefully connecting with those they don’t know, and where exporting has always been allowed, making the change silently seems surreptitious. Perhaps LinkedIn didn’t want to bring attention to the fact it was allowing your email address to be slurped up by anyone you’re connected with, given the current media climate of intense scrutiny regarding privacy in social tech. But trying to hide a change that’s massively impactful to businesses that rely on LinkedIn could erode the trust of its core users.
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LinkedIn launches its own Snapchat Stories: ‘Student Voices’
The social media singularity continues with the arrival of Snapchat Stories-style slideshows on LinkedIn as the app grasps for relevance with a younger audience. LinkedIn confirms to TechCrunch that it plans to build Stories for more sets of users, but first it’s launching “Student Voices” just for university students in the U.S. The feature appears atop the LinkedIn home screen and lets students post short videos to their Campus Playlist. The videos (no photos allowed) disappear from the playlist after a week while staying permanently visible on a user’s own profile in the Recent Activity section. Students can tap through their school’s own slideshow and watch the Campus Playlists of nearby universities.
LinkedIn now confirms the feature is in testing, with product manager Isha Patel telling TechCrunch “Campus playlists are a new video feature that we’re currently rolling out to college students in the US. As we know, students love to use video to capture moments so we’ve created this new product to help them connect with one another around shared experiences on campus to help create a sense of community.” Student Voices was first spotted by social consultant Carlos Gil, and tipped by Socially Contented’s Cathy Wassell to Matt Navarra.
A LinkedIn spokesperson tells us the motive behind the feature is to get students sharing their academic experiences like internships, career fairs and class projects that they’d want to show off to recruiters as part of their personal brand. “It’s a great way for students to build out their profile and have this authentic content that shows who they are and what their academic and professional experiences have been. Having these videos live on their profile can help students grow their network, prepare for life after graduation, and help potential employers learn more about them,” Patel says.
But unfortunately that ignores the fact that Stories were originally invented for broadcasting off-the-cuff moments that disappear so you DON’T have to worry about their impact on your reputation. That dissonance might confuse users, discourage them from posting to Student Voices or lead them to assume their clips will disappear from their profile too — which could leave embarrassing content exposed to hirers. “Authenticity” might not necessarily paint users in the best light to recruiters, so it seems more likely that students would post polished clips promoting their achievements… if they use it at all.
LinkedIn seems to be desperate to appeal to the next generation. Social app investigator and TechCrunch’s favorite tipster Jane Manchun Wong today spotted 10 minor new features LinkedIn is prototyping that include youth-centric options like GIF comments, location sharing in messages and Facebook Reactions-style buttons beyond “Like” such as “Clap,” “Insightful,” “Hmm,” and “Support.”
When users post to Student Stories, they’ll have their university’s logo overlaid as a sticker they can move around. LinkedIn will generate this plus a set of suggested hashtags like #OnCampus based on a user’s profile, including which school they say they attend, though users can also overlay their own text captions. Typically, users in the test phase were sharing videos of around 30 to 45 seconds. “Students are taking us to their school hackathons, showing us their group projects, sharing their student group activities and teaching us about causes they care about,” Patel explains. You can see an example video here, and watch a sizzle reel about the feature below.
For now, LinkedIn tells me it has no plans to insert ads between clips in Student Voices. But if the Stories content assists with discovering and vetting job candidates, it could make LinkedIn more unique and indispensable to recruiters who do pay for premium access. And if these Stories get a ton of views simply by being emblazoned atop the LinkedIn feed, users might return to the app more frequently to share them. As we’ve seen with the steady increase in popularity of Facebook Stories, if you give people a stage for narcissism, they will fill it.
LinkedIn’s start as a dry web tool for seeking jobs has made for a rocky transition as it tries to become a daily habit for users. Some tactical advice in its feed can be helpful, but much of LinkedIn’s content feels blatantly self-promotional, boring or transactional. Meanwhile, it’s encountering new competition as Facebook integrates career listings and job applications for blue-collar work into its social network that already sees over a billion people visit each day. It’s understandable why LinkedIn would try to latch on to the visual communication trend, as Facebook estimates Stories sharing will surpass feed sharing across all apps in 2019. But Student Voices nonetheless feels unabashedly “how do you do, fellow kids?”
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LinkedIn Learning now includes 3rd party content and Q&A interactive features
LinkedIn, the Microsoft-owned social network for the working world with some 580 million users, took a big step into professional development and education when it acquired Lynda.com for $1.5 billion and used it as the anchor for LinkedIn Learning. Now, with 13,000 courses on the platform, LinkedIn is announcing two new developments to get more people using the service. It will now offer videos, tutorials and courses from third-parties such as Treehouse and the publishing division of Harvard Business School. And in a social twist, people who use LinkedIn Learning — the students and teachers — will now be able to ask and answer questions around LinkedIn Learning sessions, as well as follow instructors on LinkedIn, and see others’ feedback on courses.
Unlimited access to LinkedIn Learning comes when a person pays for LinkedIn’s Premium Career tier, which costs around $30/month, or when a company takes an enterprise team subscription for the Learning service. Today, LinkedIn tells me that it has around 11,000 enterprise customers; it doesn’t break out how much traffic it has overall on LinkedIn, but says that there has been a 64 percent growth in paid learners since the start of 2017 — a number that it’s clearly looking to boost with these new features.
James Raybould, the director of product for LinkedIn Learning, said that the third-party expansion will come slowly at first, with a handful of partners getting access to integrate with LinkedIn Learning. Over time, this could expand to be a public API for anyone to integrate content, he added, but for now, LinkedIn is doing the curating.
Notably, he also said that LinkedIn itself is not planning on curtailing the amount of content it will continue to produce for Learning: it’s currently adding more than 70 new courses each week on average, he said.
The content in this first wave of third-party providers feels like a natural extension of the influencer-based content that LinkedIn has been running in its main newsfeed: it runs the gamut from actual courses to learn new skills in specific disciplines, to the more nebulous area of professional development.
The first group includes Harvard Business Publishing (e.g. leadership development courses from Harvard Business School’s publishing arm); getAbstract (a Blinkist-style service that provides 10,000+ non-fiction book summaries plus TED talks); Big Think: 500 short-form videos on topics of the day (these are not so much “courses” as they are “life lessons” — subjects include organizing activism and an explainer on how to end bi-partisan politics); Treehouse, with courses on coding and product design skills; and Creative Live, with courses and tutorials for professionals in the creative industries to improve their skills and business acumen.
The fact that LinkedIn is adding more learning material that’s a natural extension of the kind of content it already offers to users in their timelines is not the only parallel between main LinkedIn and LinkedIn Learning. Raybould said that to help users discover content that might be most interesting to them, it uses data about what users browse and click on in the regular site.
“We have rich information about the network, including on engagement,” he said, and that helps LinkedIn’s algorithms suggest what to populate in individual learning libraries.
This is also, presumably, one of the reasons why third-parties will want to integrate: to get new audiences that are more targeted to the kind of content they are producing.
“At Harvard Business Publishing, we work to create the world’s best learning experiences to help organizations discover new ways to solve their most pressing leadership development challenges,” said Rich Gravelin, director of Partnerships and Alliances at Harvard Business Publishing, in a statement. “As an inaugural partner in the LinkedIn Learning Content Partner Program, we are bringing rich leadership development content to professionals across the globe, helping them navigate today’s complex business landscape. Thanks to the robust platform that LinkedIn Learning has built, we’re able to meet learners where they are and provide them with the unique and personalized learning experiences they need to succeed in their organizations.”
The social features also follow this model. Last year, LinkedIn rolled out a mentorship product across selected markets to pair users with people who steer them on their career development. That product set a precedent for how LinkedIn might use its wider social network and communication features to engage users in different ways, in the name of professional development.
The addition of Q&A features follows on from that, giving those taking courses or watching videos a way of interacting and following up with those who are doing the teaching. Adding that it could see more engagement across the whole of the Learning product.
It’s a surprise, in a way, that it’s taken this long for LinkedIn to add an interactive Q&A feature, considering that direct messaging and users interacting with each other has been a cornerstone of the product. On the other hand, it will be interesting to see if it proves to be a compelling enough feature to bring in more users to LinkedIn, luring them away from the Udemys and Skillsofts of the world.
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