Note: this is a repost of the original article, which you can find here.
The first article outlined innovations in the EdTech space and how they can improve learners' outcomes. However, this often requires a tradeoff between quality and affordability.
Ajay Prakash founded EntryLevel, a cohort based e-learning business in late 2020. Its unique approach is its scalability and focus on learner outcomes. An interest in learner outcomes has been a feature of Ajay’s journey since he as 15yrs old.
This approach allows for a combination of quality and affordability, which is the basis of EntryLevel’s ambitious mission to reskill 1 billion people by 2030. I recall the struggles I had getting my first job and would love to see EntryLevel make a difference for so many others.
In this article, I will discuss Ajay’s longstanding interest in education, the EntryLevel solution and its plans for the future.
1) Ajay’s Journey (link here)
2) The EntryLevel Solution (link here)
3) EntryLevel’s Unique Approach (link here)
4) Product Led Growth (link here)
5) EntryLevel and the Evolution of EdTech (link here)
Ajay has a longstanding interest in education, beginning as a high school tutor at 15. He was a teacher who wanted his students to get an outcome from his lessons. This meant taking the time to simplify complex topics.
Ajay saw his university education as a pathway to getting a job. However, he was disillusioned with his university experience. Like many young people, he was unable to make an informed decision when he decided on a 3-4 year Mechanical Engineering degree.
He attributes this to the following:
- Students at that age require a level of experimentation to decide which careers to pursue
- Students can find it hard to decide which degrees are relevant for in-demand roles in the marketplace, making it challenging to pick the right course.
Ajay feared that he would be unemployed post-graduation, especially when friends who completed their Mechanical Engineering degrees struggled to find jobs.
He attempted to get an internship in his first year of university. This was a daunting task, as those of us who can recall our first job application will empathise with.
It took 60 to 70 emails before he landed an internship at a mining company. He documented his experiences and during his second year, he co-founded Real Skills Education.
Real Skills Education is a not for profit focused on helping STEM/engineering students transition into the workplace through project-based learning. The key aspects of its program are:
- Students undertake projects to solve real-world problems designed in consultation with corporations such as Fujitsu.
- Large cohorts of students are grouped into smaller teams to work on these projects. This facilitates teamwork and community.
- Corporate partners like Fujitsu could then recruit from these teams. To date, Real Skills Education has helped 6,000 to 7,000 students find jobs.
After graduation, Ajay had several startup product and technology roles. He is also a serial entrepreneur whose startup experience spanned blockchain, quantum computing and international trade.
He continued to be drawn to education, lecturing in his free time and joining Draper Startup House to work on their education product. Draper has an ambitious global mission to help 1 million entrepreneurs by 2030.
Returning to Australia, Ajay wanted to use his entrepreneurial skills to solve the problems he faced earlier in his career – education and employment. After some experimentation, he founded EntryLevel in late 2020.
Segment Key Points
- Ajay has a longstanding interest in learner outcomes, starting when he was 15yrs old.
- He felt disillusioned by the university system, which didn’t focus on ensuring successful employment outcomes.
- Ajay co-founded Real Skills Education during university, which allows large groups of students to work on real-world projects designed by industry employers. These concepts would feature in EntryLevel
The EntryLevel Solution
EntryLevel provides 6-week online courses or ‘Programs’ to help learners reskill into in-demand roles such as Product Management, Growth Marketing etc.
Similar to Real Skills Education, its courses:
- are designed with industry practitioners and hiring managers
- have large cohorts of learners grouped into smaller teams to facilitate collaboration and community
- have students build a portfolio of work, including tasks that learners will undertake on the job
Like Draper Startup House, it has an ambitious mission to reskill 1 billion people by 2030. Reskilling provides learners with the skills to transition into a new job.
Such an ambitious goal requires both quality and affordability:
- Quality: Successfully reskilling people into jobs requires high completion rates and successful employment outcomes.
- Affordability: Targeting 1 billion customers requires the courses to be affordable, especially in emerging countries.
Recall from Part 1 of this series that EdTech businesses need to balance the following 3 factors:
There is typically a tradeoff between quality (completion rates, credential signalling) and affordability. This is because of the need to serve both the course instructor and learner.
The next section will explain how EntryLevel achieves a unique combination of affordability and quality.
Segment Key Points
- EntryLevel provides 6-week, practical courses that help learners reskill into entry level positions in popular areas such as Growth Marketing, Product Management etc.
- EntryLevel’s courses can be seen as an evolution of what Ajay achieved at his previous startup, Real Skills Education.
- Its ambitious mission to reskill 1 billion people by 2030 requires a unique combination of affordability and quality.
EntryLevel’s Unique Approach
EntryLevel’s affordability stems from its focus on the entry level segment. This enables EntryLevel to use mid-level instructors (rather than expensive faculty or experts) to create courses and pay them on an hourly basis (rather than a percentage of revenue).
This effectively makes content costs a fixed cost which EntryLevel can spread across the 6,000 learners per cohort.
As such, EntryLevel’s solution skews towards learner (rather than expensive instructor or institutional) outcomes. Course discounts of up to 95% enable it to attract learners from under-served emerging countries.
Despite this level of affordability, EntryLevel has completion rates of over 50% compared to the 3-6% typically achieved by MOOCs.
EntryLevel achieves these completion rates through its cohort based approach. However, it has scaled its cohorts to 6,000 students compared to the circa 100 students typical in other cohort based course providers.
Within these large cohorts, EntryLevel automates the grouping of learners into teams of 20-30 based on familiarity with the topic and other factors. This maintains the community and engagement that cohort based courses are known for.
Additionally, EntryLevel has an innovative pricing structure where students are refunded their initial purchase on successfully completing the course.
Credential signalling is achieved by:
- collaborating with industry practitioners and hiring managers from popular companies like Atlassian on the design of courses
- including assessments that are based on real world problems
- making learners create a portfolio of these assessments that potential employers can evaluate
While it is too early to assess the level of employment outcomes, customer satisfaction is relatively high, with an NPS score of 70.
When taken together, EntryLevel’s unique focus on customer success, scalability and affordability allows it to approach the problem from a product and technology perspective. This makes it ideal for the Product Led Growth SaaS model.
Segment Key Points
- EntryLevel’s unique combination of affordability and quality is enabled by a focus on learner outcomes and automation.
- Affordability is helped by scalable content costs and automated cohort management that enables large cohorts while maintaining engagement and community standards.
- The combination of affordability, user engagement and automation is more akin to a technology company, making EntryLevel ideal for scalable SaaS models like product led growth.
Product Led Growth
See my previous article for a more detailed discussion on the Product Led Growth model.
In summary, this model allows technology businesses to grow faster and more efficiently by designing a product that sells itself.
The key is scalability and attracting a large volume of users whose feedback can be used to continuously improve the product.
The freemium model is a popular product led growth pricing strategy that provides a basic version for free and upsells premium features.
Ajay has designed a version of a freemium model with:
- Step 1: Commitment bonds enable learners to complete the courses for free. This perception of ‘free’ attracts a large number of users/learners.
- Step 2: Use surveys, data insights, and feedback-based iterations to improve the courses. This improves satisfaction and completion rates.
- Step 3: Satisfied learners are more likely to adopt premium features such as retaining access to the course material post-completion in exchange for EntryLevel keeping the commitment bonds.
At this stage, a significant portion of revenue comes from forfeited commitment bonds. However, learners forfeiting commitment bonds retain access to the content.
Continuous product improvement will increase completion rates and premium upsells over time, particularly if the courses result in positive employment outcomes.
Note that EntryLevel owns the course IP and content costs are paid back over just 1-2 cohorts. While it is still early, the progressive build out of course content could result in additional (e.g. recurring) revenue streams over time.
Additionally, attracting a large volume of learners will provide the data that EntryLevel can use to form a talent recruitment marketplace, as described in the next section.
Segment Key Points
- EntryLevel’s scalable offering allows it to adopt a version of the freemium model often seen in product led growth SaaS companies.
- The perception of free courses attracts a large number of customers providing feedback to improve courses and generate referrals.
- These learners and the progressive build out of course content may enable additional income streams over time.
EntryLevel and the Evolution of EdTech
The broad education industry trend towards improving learner ROI through employment outcomes could see higher education evolve in a similar way to SaaS businesses.
Instead of a large upfront payment (an expensive 4 year degree), a learner could potentially attend university for a much shorter period and add further accreditations or competencies as she/he needs them.
This trend will be powered by closer interaction with potential employers and technology.
Employers typically use Applicant Tracking Systems (ATS). These systems help employers filter candidate resumes based on keywords linked to skills listed on the job description.
With enough data, EdTech companies can connect learners with potential employers by linking learner credentials with the competencies or skills that employers require. EntryLevel's focus on affordability and scale positions it well to achieve this.
EntryLevel’s longer term strategy (when they scale to millions of learners) is to become a marketplace connecting learners with potential employers in exchange for employer recruitment fees. Employers have a greater ability to pay than students.
See my previous article on the evolution of Product Led Growth models, which A16z’s Chris Dixon calls ‘Come for the tools, stay for the network’.
In summary, this is a strategy where the business starts with a tool that attracts enough users to subsequently form a network. The network sustains growth and makes the business more resilient.
For EntryLevel, this could look like:
- start with a tool which in EntryLevel’s case are their courses. These courses are affordable enough to gain scale in the emerging country niche.
- graduating learners provide valuable data such as course feedback and competency data that matches with successful employment outcomes. More learners sign up due to improving course quality and word-of-mouth.
- a critical mass of learners and their competency data makes EntryLevel an attractive talent network for companies to recruit from.
Recruitment fees represent an additional income stream from corporate customers who have a greater willingness to pay. Learners also benefit from better employment outcomes.
EntryLevel’s mission of reskilling 1billion people by 2030 is ambitious. Its focus on accessibility and employment outcomes is also impactful. It has 30,000 learners to date.
I would have been eager to sign up for its courses as an immigrant coming to Australia for work years ago, and I hope it enables others to make their first steps into a fulfilling career.
Segment Key Points
- The broad industry trend of closer collaboration with industry employers will need to be enabled by data on the relevant skills obtained by learners.
- With enough data, EdTech companies can connect learners with employers by linking learner credentials with the competencies or skills that employers require.
- EntryLevel’s focus on scalability and affordability could allow it to obtain a critical mass of learners to form such a talent marketplace. This is an additional income stream from corporates while also providing learners with better outcomes.