Airplane-Mode Startups ✈️ Transcend Newsletter #41
Future of learning and work startups that are quiet, but going places.
Hey! Alberto here. Welcome to the Transcend Newsletter.
The Transcend Newsletter explores the intersection of the future of education and the future work, and the founders building it around the world.
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Airplane-Mode Startups ✈️
When you think about edtech startups, what names come to mind?
Let me guess. Lambda School, Outschool, OnDeck, Kahoot, Maven...
What if I told you there are education/future of work startups that are 10 times larger but you have never heard about them?
Today I'm writing about airplane-mode startups: six startups in the education and future of work space of significant size, but very little recognition from the general public. Or as I like to say, startups that stay quiet, but are going places! Read on to learn about:
6 airplane-mode startups
Why you’ve never heard of them
What it means for early-stage founders in education and work
The world of learning and work is full of airplane-mode startups, and as I hope to explain today, it's no coincidence they are so prevalent in this specific industry.
I have selected 6 airplane-mode startups that are reaching millions of learners today. I hope you can learn some new names today!
1. ExecOnline 👔
ExecOnline provides online leadership training for executives by creating programs in partnerships with top business schools like Berkeley Haas, Chicago Booth, or Columbia.
It was founded in 2012, has 180+ employees (all job data from LinkedIn), and recently raised $45M in funding. I often find myself bringing up their work to many founders who have never heard of them, since they represent an interesting blend of higher education and corporate training. You’ll also find them highlighted in our Rethinking Management Training newsletter.
2. EVERFI 📚
I challenge you to take a look at their website and then tell me what they do.
It took some digging for me to fully understand it. EVERFI offers off-curriculum programs around key life skills and practices, like financial and digital literacy, substance abuse prevention or DEI. They make this content in partnership with companies like Facebook, Google, EA, and then distribute it to schools, universities and companies.
EVERFI was founded in 2008, has 500 employees, and has raised over $250M in funding – one of the best-funded startups in the sector - which it has used to acquire 4 companies. They are likely the largest edtech startup you have never heard about.
3. Franklin Covey 🏋️
Franklin Covey was founded in 1997, one of the founders being Stephen R Covey, author of "The 7 Habits of Highly Effective People".
It provides leadership and management training for companies in over 120 countries. It used to run old-school training programs (in-person, run by consultants), but it has transitioned towards fully online subscription models. They recently acquired Strive to double down on online training, which is one of my favorite startups in the space.
$FC is a publicly traded company with +1,200 employees, yearly revenues over $200M, and a market cap of $400M.
4. Campus Logic 💰
CampusLogic develops tools for university administrators to help students manage scholarships, loans, grants, and other resources that can help them finance university. This helps universities reduce dropout rates, which are a great concern for schools.
It was founded in 2011. Last year, it raised what was at the time the largest US edtech funding round ever ($120M). They were open about their intention to acquire more companies using this funding.
5. Nerdy 🙇♀️
Nerdy is the parent company of Varsity Tutors, a tutoring marketplace for students who need group or 1:1 support.
It was founded in 2014. When COVID hit, it transitioned to fully online tutoring and launched a homeschooling product. It went public via SPAC this year, right after we published 2021: SPAC Odyssey, and is currently valued at over $1B ($PACE).
According to its latest earnings report, its revenue for Q4 2020 was $33M. This is twice the revenue of Kahoot in that same time period, and yet it is valued at ¼ of Kahoot’s market cap.
6. Boxlight 👩🏫
Boxlight was founded in 1985, and it manufactures interactive classroom hardware (interactive whiteboards, projectors, clickers, and assessments) with some complementary collaborative software.
Boxlight is publicly traded and has a market value of $200M today. This is the most airplane-mode-y of them all, I had never heard of them before until I researched this post. It also shows the happiest students having a blast with their clickers (image below), which is maybe the content you need on this fine Tuesday.
Why have you never heard of these startups?
These airplane-mode startups are pretty big, eh?
You may have noticed a pattern here – most of these organizations don't really interact with the students or customers directly!
All of these businesses (other than Nerdy, which is a B2C business) sell to administrators, either within schools (CampusLogic, Everfi and Boxlight) or within companies (FranklinCovey and ExecOnline).
This has been the reality for most organizations in the education and work space over the last decade – founders needed to build a product designed for the needs of the administrator, since they were the main buyer. Then, time to hire a large sales team that can distribute it.
This came with many tradeoffs, as the needs of the end-user were often deprioritized (the student or the employee who actually uses these products). Friend of Transcend John Danner wrote about this recently.
While there were multi-billion dollar markets available to new founders to build solutions, they were hidden from the public, because of their opaque sales processes. That’s what has led to the proliferation of airplane-mode startups in the education and work space!
Founders: the Consumerization Opportunity
But the status quo is changing – the consumerization of education and work is real!
“Consumerization” means that products are increasingly being sold through individuals, rather than administrators of larger institutions as the buyer.
This process has taken place in many markets previously, such as in the enterprise tools market. Companies like Slack or Figma chose to distribute their product through individual users that loved the app and invited their colleagues (“product-led growth”), instead of through the traditional enterprise sales process (avoiding the long sales process and steak dinners).
Consumerization is a big threat to most airplane-mode startups in the space you have learned about today. The move towards consumerization is slow, but it is starting to trickle into space.
It’s the founders’ job to anticipate the changes market demands, to ask themselves “what will the space look like when consumers/employees at the core of the decision-making processes? Here are some potential directions:
Corporate learning products will be available as self-serve products so individual employees can start learning by themselves and invite other colleagues (e.g. Electives, Coursera for Business, MasterMeUp)
Curriculum-based products will feel like a game and create a strong following among students before making the jump to school sales (e.g. Minecraft)
Communities of practice will bring together stakeholders to learn from each other (K20 Educators, Aveo, Makelane)
Education and work have historically been late adopters of these trends, but all these changes will come with time.
It’s important to understand the massive size of these airplane-mode startups, and the markets they serve. Founders deserve to know what the landscape looks like outside of their Twitter feeds.
But the world is changing, and the consumerization of learning and work is creating opportunities for early-stage founders.
We are always on the lookout for great startup founders building the future at Transcend Network. Reply to this email if that’s you!
news roundup around the future of learning and work
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🚀 Hiring entry-level talent? Check out this list of Minervans looking for opportunities (students and graduates) – some of the most talented youth in the world!
🙌 Transcend Network was included in an awesome list of edtech investors and accelerators – check out the full list here!
🗺 EdSurge wrote about the ‘Credential As You Go’ movement in higher education
📚 The student recruitment platform Handshake published their Network Trends report on the importance of diversity and equity for Gen-Z talent.
exciting job opportunities we want to share with you!
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Many thanks to David Burt, Michael Jones, Ergest Xheblati, Yishi Zuo from Foster for the feedback and edits on this piece!
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