1Mby1M Virtual Accelerator Investor Forum: With Deborah Quazzo of GSV Ventures (Part 5)

Sramana Mitra: What are some other success criteria and failure criteria in your pattern matching? You talked extensively about teacher adoption and viral spread and then monetization through parents as one of the pieces of success versus the failure criteria of trying to spell one by one to professors or teachers or school administrations. Are there any other such patterns in either direction that you have synthesized?

Deborah Quazzo: Those are the two biggest pitfalls in the K-12 and higher education market. It is very difficult to have the capital and the bandwidth to roll out sales in a traditional sense in either of those markets.

Not to say we have an investment in a K-12 company and a second seed investment in a terrific company called Intellispark. It’s very early but we have the two founders of Naviance, which is the dominant college counseling software in high schools. They’re looking to sell into schools.

The idea there is that there’s a lot more to measure than grades and attendance. Schools are acutely aware of this, but there’s no organized way to do it. We think it’s a really important area – the idea of the whole child. It resonated strongly with schools and you’ve got two experienced entrepreneurs who’ve traditionally scaled a K-12 business selling into schools.

It’s not that we won’t ever do that, but we’ll see. We’re very early and COVID has slowed anyone who’s trying to sell directly into schools. It’s not ever going to work, but it’s a high hurdle. You have to have the right group of folks. In the corporate market, corporate learning historically was not highly prioritized.

I think that dynamic has changed a lot as the CEO now understands. We’re going to go through the test right now in a typical recession. Some of the first cuts that would be made at headquarters would be in the corporate learning area, which was emblematic of the fact that CEOs didn’t see it as a top-five priority when the rubber hits the road.

We’re not seeing those kinds of cuts this time around because CEOs have realized that even in a context of where they’re furloughing or laying people off, they still need to train and retrain you.

The term is skill, upskill, and reskill. Their existing employees, the employees that have job obsolescence, and other factors. Historically, the enterprise learning market had recessionary risk and the general prioritization of the area by companies.

I think that we’ve seen a sea change there that happened before COVID, but we’re going to test out the thesis during COVID as we wade through this COVID driven recession. That’s the other thing I can think of off at the top of my head. I think usually the failures are related to leadership.

Sramana Mitra: One thing that you did not mention, but your portfolio reflects it is a significant presence of user-generated content in the product strategy of some of the companies that we discuss – Course Hero being a prime example and even Pluralsight which we also covered from very early on.

They did up to $16 million in revenue before they raised any money. That was a bootstrapped company out of Utah. They also did a very interesting spin on user-generated content quiz letters. It seems like there is a very interesting trend going on in the education world where user-generated content is doing well. 

Deborah Quazzo: I would put Pluralsight a little differently. I’d say that it’s more like Udemy, Coursera, and others where expert-driven companies are not building huge content teams to create their content.

In the case of Coursera, you’re leveraging the hype of the high brand and the high quality of well-known global universities and leveraging that content into a whole host of different channels whether it’s consumer, enterprise, or actual degrees.

In the case of Pluralsight, Udemy, and a number of others, they’re leveraging experts in their field to then become teachers. You’re recruiting professional experts to become professional teachers on your platform and then having revenue shares with those professionals.

Lynda was an original there in doing that. Lynda and her husband Bruce bootstrapped that company. It’s taking personal IP and monetizing it. If you’ve got an ability today in a certain professional area that is in demand, the odds are you can hire yourself out to a learning platform.

It’s very wide-ranging from everything to arts, to vocational skills, to serious coding and serious technology skills like you see on the Pluralsight platform. It’s the elevation of superstar teachers.

This segment is part 5 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Deborah Quazzo of GSV Ventures
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