What strikes you as the most significant change in education that will endure in the post-COVID world?
Scott Galloway, NYU Professor, articulated the impact of COVID-19 really well in one of his quotes: “While other crises reshaped the future, COVID-19 is just making the future happen faster.” Specific to education, there is one such change that COVID-19 has accelerated for the good: the Digital-First, Digital-All, Digital-Only learning experience.
There is a well-understood 70-20-10 model for learning and development. 70% of learning happens on the job (experiential); 20% is from peer-to-peer interactions, and 10% is from formal educational programs. Pre COVID-19, most of education was focused on the 10% – formal, structured programs. And within that 10%, digital was considered one of many products or one of many channels.
With COVID-19, this is changing fast and this change will endure. Over the next 2-3 years, I expect digital learning to become the primary channel for delivering learning and training. Digital will cover all delivery methods, including peer-to-peer and experiential learning. All learning interactions will be closely integrated. We expect around $10B of training spend transition to digital over the next 5 years.
Learners have been demanding a better digital-first learning experience for a long time. Now learning organizations have to step up and deliver – they have no choice. This marks a clear trend of consumerization of professional learning.
What’s your (or your clients’) strategy for charging for products/services that you might have supplied for free during the crisis?
Our mission is to enable organizations to become great learning organizations in this new digital world order. We adopt a collaborative, partnership model with our customers. During this pandemic, several of our customers decided to offer their products and services for free to end users (learners). Our goal was to support them in all possible ways.
In some cases, we extended the access to the learning programs by a few months, without charging our customer or the end user. In a few other cases we made new products available for free on a trial basis. We offered our customers a six-month trial to leverage one of our new products, BenchPrep Engage, that provides microlearning cycles for learners. We were upfront with our six-month-only free model, and our customers were thankful and grateful for the opportunity to use a value-added product for free for a half a year.
Parents have become teachers while at home. Is this a fundamental – or perhaps only temporary – shift? Does this influence your marketing and product development plans?
From a macro perspective, this is a positive development. It is proven that more engaged parents lead to better learning outcomes. The Edtech industry has a responsibility to enable parents to stay involved post COVID. While BenchPrep doesn’t focus on the K-12 sector, we do believe this will be a fundamental shift. Parents becoming teachers at home means they have an even bigger need for asynchronous, self-paced, development opportunities. This certainly influences product strategy for K-12-focused companies.
In what ways has the crisis changed the way you lead your organization?
No leader was prepared for this crisis. I had to reinvent my leadership style to ensure that we come out of this stronger. From a responsibility perspective, we took care of our people first. I increased my communication frequency with the team so that everyone would be aligned. All decisions were made in a transparent way and we helped our people prioritize the most critical and important next actions.
Then, we took care of our customers. My message to the team was unequivocal: our customers are our partners. Their success depends on our ability to deliver outstanding results, especially during this crisis. Let’s act with integrity and transparency. We believe building trust with customers, especially during a crisis, means building a better company.
From an impact perspective, we helped ~530,000 learners achieve professional and academic success that could change their life trajectory.
The thing that I am most proud of is how my team worked together to navigate the COVID-19 situation. We did it collectively, with commitment, discipline, and empathy. We adapted to the new working environment. We all helped each other. We all did more than one person’s job. We all did more with less. We all stretched and stayed flexible – and, in the process, we strengthened the fabric of our culture and values.
What are you hearing from your customers?
The future of work and the future of education arrived early; COVID-19 has accelerated the transition to digital learning by at least 10 years. This crisis has highlighted that digital learning is still largely an unsolved problem. Most learning organizations were not ready to deliver learning digitally and they continue to struggle to transform their business models. Most employers are scrambling to develop skills needed for a distributed workforce in the digital-first economy. We are consistently hearing three considerations from our customers (learning organizations):
- Business in a box: Learning organizations need more than a point solution. They are realizing that they need a new business model – new digital-first product, new distribution model, new revenue model and new technology stack. Learning organizations need an out-of-the-box solution that first ensures business and revenue continuity and then enables them to grow fast.
- Speed over efficiency: Learners need a better digital learning experience today. They are not waiting anymore. If learning organizations don’t solve this problem, they will become obsolete quickly. They don’t have the patience for long implementation cycles, and they don’t have budgets and capabilities to build custom digital learning solutions themselves.
- Learning Experience: Modern learners are different. They are untethered, distracted, impatient and are singularly focused on learning outcomes. Learning organizations are asking for a modern learning environment that engages the learners and leverages data to enable real-time, data-driven personalization.
What changes do you anticipate in the sales process and pipeline during the upcoming selling season?
We have signed more customers in the first six months of 2020 than in all of FY 2019. And this happened despite the COVID-19 adversity and work-from-home challenges or possibly because of these challenges. This indicates a rapid transformation in the professional learning space as more and more learning organizations need to go digital.
We are seeing two key changes in our pipeline. First, many more smaller learning organizations want to launch new digital learning programs. For these organizations, digital learning has become a matter of business continuity. These deals are coming in high volume and closing rapidly. Second, we are seeing more for-profit training companies in our pipeline.
From a sales process perspective, we are focused on attending to prospects as soon as possible. We launched a new program called Quick Start Program (QSP). QSP is a program intended to assist learning organizations focused on in-person training to confidently and quickly move their learning programs to a digital-first model with a modern learning platform that allows for fast and easy onboarding, has straightforward contracts, and reduced pricing.
What is your long-term outlook for your business and industry — for 2021 and beyond?
COVID-19 has accelerated the transition to digital learning by at least 10 years. The pandemic does not inherently mean we will arrive at a better education and training system for modern learners, but the conditions are right to make it so.
As our nation’s economy opens up, every publication/blog is beginning to write about the impact of COVID-19 on education. There are several opinions ranging from “College closings, economic upheaval make a case for blockchain adoption” to “COVID-19 Is Accelerating the Digital Blending of Working and Learning.” While these hypotheses are interesting, we choose to look at what the learners are telling us.
Four key macro themes are emerging:
- Modern learners are driving consumerization of professional learning
- Lifelong learning has become an absolute economic reality
- Verified credentials remain the currency in the labor market
- Digital-First, Digital-All, Digital-Only learning delivery is a must
The world of education and training is only beginning to wake up to the realities of the modern digital world. The 160 million working professionals in the US and the more than a billion working professionals worldwide need a better learning experience that is better aligned with the labor marketplace than what traditional education models have provided.
I am bullish on the ability of the industry to pivot to elevate the potential of our society in this new world order.
Please contact us to discuss your Company and also hear what is happening in EdTech M&A!
Oaklins | DESILVA+PHILLIPS is an investment bank for clients that operate at the intersection of content, technology and services. This includes enterprises operating within the media, advertising & marketing, education, healthcare, information services and technology sectors. Over 24 years, clients have included Advance Publications/Condé Nast, Deutsche Börse Group, Elsevier, Hachette, JP Morgan Partners, Microsoft, The New York Times, Time Inc., TPG and Wasserstein & Co., among others. The firm is the TMT practice co-head and industry specialist in Oaklins, the world’s most experienced mid-market M&A advisor, with over 850 professionals globally and dedicated industry teams in more than 45 countries. We have closed 1,700 transactions in the past five years.At Oaklins, we are passionate about M&A. It’s what we do, every day. We give nothing but our very best to do justice to the extraordinary effort our clients put into their businesses. Our partnership with our clients works because we both believe in never settling until we deliver excellence. Coming from every corner of the world and with a diverse range of backgrounds, together we are one global team. The world’s most experienced advisor on mid-market deals.Oaklins is the collective trade name of independent member firms affiliated with Oaklins International Inc. For details of the nature of the affiliation, please refer to www.oaklins.com/legal.
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