Today, I’m really happy to have Ankur Nagpal on the show. I met Ankur after being introduced to him by my buddy Jeff Rose who recently started his own online course.
Anyway Ankur runs the company Teachable.com which is a platform that allows you to create your own digital courses online without any technical hassles whatsoever.
If you’re into ecommerce, you can think of them like a Shopify or a Big Commerce except for digital courses. Anyway, since I make a lot of money off of selling digital courses online, I thought that I’d bring in Ankur today to talk about the digital course landscape and why he created Teachable. Enjoy!
What You’ll Learn
- How Teachable works and what it does.
- How Ankur came up with the idea for this platform.
- What Teachable offers that the other platforms do not.
- How Ankur developed his unique value proposition.
- How Ankur generates recurring revenue.
- How he got his early customers
- How he markets his business.
Other Resources And Books
Now if you enjoy this podcast please leave me a review on iTunes, and if you want to learn how to start your own online business be sure to sign up for my free six-day mini course, where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email, now onto the show.
Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.
Steve: Welcome to the My Wife Quit Her Job Podcast. Today I’m really happy to have Ankur Nagpal on the show. Now I met Ankur after being introduced to him by my buddy Jeff Ross who recently started his own online course. Anyway Ankur runs the company teachable which is a platform that allows you to create your own digital courses online without any technical hustles whatsoever.
If you are into ecommerce you can kind of think of them like a Shopify or a Bigcommerce. Anyway since I make a lot of money off of selling digital courses online, I thought it would be interesting to bring in Ankur today to talk about the digital course landscape, and why he created teachable. And with that welcome to the show Ankur, how are you doing today man?
Ankur: Thanks man, I’m really excited to be here.
Steve: Yes so give us the quick background story regarding teachable and how you decided to get started with this, because it is a pretty competitive market.
Ankur: Yes, so it’s funny. I started this literally as a project for myself. I was doing a little bit of teaching on Udemy. For people that aren’t familiar, Udemy is a market place for online courses. I started doing a little bit of teaching on Udemy about two years ago and I liked a lot what I saw with Udemy, like I liked how easy it was to create a course that looked good.
It kind of made me believe in the power of online education, and how this could be something we could all do five years from now. What I didn’t like is as a teacher I had no control at all, like I couldn’t control the branding, I couldn’t get paid on my own terms. Every time I worked hard to bring a student to my Udemy course they would cross over to another course. So there is a lot of stuff I didn’t like.
So I ended up creating, at the time it was not called teachable, it was Fedora. But I ended up creating this platform to sell my own online course with my buddy Conrad, to create some platform just for ourselves. So it’s something that we did for ourselves first, and a few weeks into it we were like, okay if you find it useful chances are other people will find it useful too.
So it kind of organically evolved into a company which is something that I think is really funny because a lot of people talk about, oh I want to start a startup, I want to build this. For us it was almost incidental, it was just like a side project that then kind of became something much bigger.
Steve: Did you code that up from scratch then?
Ankur: Sadly I did, I say sadly because I’m a terrible, terrible developer. But it was enough to kind of validate the idea as soon as later in the year we ended up kind of becoming a real company and hiring developers. The first thing they did was throw out every line of code I wrote.
Steve: So just curious what year was this?
Ankur: So this was in the fall of 2013, fall of 2013 is when we started this, we kind of we incorporated it in May 2014 and that’s sort of when we became a real company.
Steve: So here is the thing, so I started my class in 2011 and there were still a whole bunch of plugins out there. So I’m just curious why did you decide to create your own platform as opposed to for example using WordPress and a membership plug-in?
Ankur: I hate WordPress man, what can I say.
Steve: Oh you do, okay.
Ankur: Honestly I looked into it right, and it seemed like WordPress plug-ins is where the market was today, but that’s not where the market is going to be five years from now. We want it to almost set the path for what is to come, and we looked deeply into a WordPress plug-in, we just found there is too many interdependencies we could not control.
It was definitely the path of least resistance. Like if you wanted to get set up quickly, WordPress plug-ins were the most logical choice. But thinking in a longer term time frame like thinking three years from now, five years from now, it was just never going to be where we wanted it to be.
So that’s why we made the decision like it is more painful, but let’s do this the right way, let’s remove all dependencies as you probably know with WordPress there is a lot of kind of madness trying to balance different plug-ins with each other. And like just hoping it doesn’t all go belly up, we wanted to make it just stupid, stupid simple, and didn’t want to — and that’s why we chose not to use WordPress.
Steve: Just curious so what were some of the things that were missing that you found?
Ankur: With word – honestly the…
Steve: Without the WordPress or any other platform?
Ankur: Just the fact that you couldn’t have one solution right, even the best WordPress plug-ins might need you to have a shopping cart, they might need you to have a video hosting platform. They might need you to have an email client. Like there are some people and granted these are– this is not the majority of users, but we have a substantial percentage of our users that only use Teachable. That means they don’t even use MailChimp, they often use anything for email delivery. So we wanted to provide something that of course we can plug in to more advanced tools as per needed, but it should be self contained if necessary.
So right from video hosting, payment processing, it’s a fully self search solution for someone that literally starts to use one tool, upload all their stuff and go. Which was not possible on WordPress, on WordPress there is MMS plug-ins, there is membership site plug-ins, there is a lot of different plug-ins that have parts of this functionality. But even then they generally have dependencies on using video for video hosting and just other tools.
Steve: Sure, no that totally makes sense, so does that imply that you guys do email marketing also then on your platform?
Ankur: We do it; we do the minimum viable version. What that means is you can’t do any automation without plugging into an automation provider. But you can do one off email marketing pretty easily, like you can easily say, hey I want to send a coupon to anyone that bought one course, not bought another, and is not logged in five days. You can do that super easily, you just can’t automate it.
Steve: Okay got it, okay and so how did you know that there was actually demand for this platform, because in 2013 still there was probably like a half a dozen plug-ins for WordPress, a bunch o other fully hosted platforms, so how did you kind of know that?
Ankur: Honestly, honestly this what’s funny is like we didn’t. The real truth is we got super lucky, we were being very reactive, we were taking what the market gave us. And the truth is what the market gave us for the first six to 12 months was mostly just Udemy and other market place instructors.
So it’s not people that even heard of WordPress or ever used a WordPress plug-in, or early on it was almost entirely people on Udemy, or Skillshare, or other platforms that had, had success, but realized that they were also being held back by Udemy, or being held back by Skillshare because they didn’t own their audience.
So our early audience was just people using kind of a self hosted — going self hosted route for the first time ever. I think the point at which we raised our seed round just yeah May 2014 about half the people — we had about half of Udemy’s top 20 instructors at the time. And that was all for a real attraction just like people on these other platforms that wanted to run their own business and own their own audience.
Steve: So does that imply that — so I’m just curious how did you get those people, did you poach those somehow, or did you take their class and contact them? Okay.
Ankur: So again I think we got so fortunate, I look back, what happened about a few weeks after we launched this platform and I hit up a few people, being like hey you want to try us out? No one replied like people just didn’t care at all. But then Udemy changed their revenue share structure midway through.
I don’t know if you remember this, there is a point and I want to say October and November 2013 where Udemy said, hey guys we’ve been paying you 70% so far, but guess what, we changed our mind you are now only going to get 50%. And that pissed a lot of people off. I think what all — and the other part that really pissed a lot of people off was not the fact that their revenue share was being reduced, the way Udemy tried to spin it with as a positive for them, it’s like guys you don’t know why this is better for you, and that just made people feel insulted.
And it just created this exodus of teachers or instructors that wanted to look for an alternative, and guess what we just happened to be there. So that was one of the very significant points early on when this wasn’t a company, this was my side project to kind of get us our first wave of instructors just disgruntled teachers from Udemy who just felt slighted by the system. Who felt that we’ve invested in building our business on this platform, but you just changed the terms right under us, that was the first realization that, okay I need to do this my own way.
Steve: How did you get these people?
Ankur: So it started off slowly. It started off with people that had never replied to my email starting to reply. But what happened is Udemy instructors always self congregate online, it might be Facebook groups that have discussion forums. Word started to spread that hey three of the top 10 instructors whatever are using us. And then it was all inbound. Our system was so bad then, for the first six months you couldn’t even sign up directly you had to email me and I had to create an account for you.
Steve: Okay. So you– it sounds like your strategy was to get the top guys who would then spread the word for you.
Ankur: Yup, and even then it was small. In the first, after 6 months, we maybe had 15 to 20 people making money every month. It was still tiny.
Steve: I’m just curious what the outreach kind of looked like. You would take their class and then reach out that way, or how did you get even amongst these people to actually email.
Ankur: Lots of different things. One was yes outreach wherever we could find an email address, we would reach out to them directly. The second thing was obviously inbound from people seeing what other teachers are doing, and the third thing is because they self congregated in Facebook groups which was not possible at the time, but by very targeted advertising to all Udemy instructors. There was just like– I mean we probably couldn’t spend more than literally $5 a day because it was such a small audience, but everyone who was in that small audience found out about us.
Steve: Interesting. Let’s talk about that. You targeted a Facebook ad to just like a handful of people and groups?
Ankur: Yup, which worked so well. It’s super sad that Facebook now has made it completely illegal. But yeah with $5 a day we could reach everyone we wanted to.
Steve: Can you just kind of describe that ad and like what the copy was like just…
Ankur: Yup, basically I think, I’m trying to think of what these ad copy was. It was predicated around the idea of like in very direct response like “Hey you know post your Udemy course here to control your audience.” That was– it was super, it was just super targeted and it was amazing because we were spending five bucks a day, and we tried to see like okay, can we spend 10 dollars a day, but there was no difference. Like at five dollars a day we were hitting absolutely everyone in our target group.
Steve: Interesting. Once you got those top guys, did you do anything special then like any special deals with them to kind of influence them to spread the word, or did it happen organically.
Ankur: We just went out of our way to be amazing to them. For instance for a lot of people, I personally uploaded all of their course content. They would literally just send me like access for their course. I would manually download everything, re-upload it to ours because we were small, and we did this kind of stuff.
We just went above and beyond in just being incredibly responsive. I’m using the word we out of habit, at this point it was me. I was sales, I was customers support, I was developing, I was product. It was a one person– it was a one person shop that pretended to be this entire company.
Steve: Interesting, so you didn’t have your partner at that time.
Ankur: Conrad was my, so he and I were teaching together and he went on to become the first customer. Our relationship, he eventually joined the company full time, but only after funding. For the first nine months, our relationship was primarily of a customer and service provider.
Steve: Okay, interesting, then he just joined on. Actually before we go too much, I’m very curious why you decided to get funding as opposed to just continuing on. It sounded like you were tagging along in the beginning just fine.
Ankur: Yup. I think there was a point where I actually realized, for the first few months I was never sure like is this a real business or is this my side project? As soon as it became abundantly clear that this was a real business, we had to hire developers, we had to do things to make– because as I mentioned earlier, the code I wrote was terrible. I’m not an engineer. We had to hire real developers, get a team in place and that cost a lot of money.
We could have tried to bootstrap it because we were making some money from what I remember. I was not paying myself anything. When we raised money we were making I don’t know 5, 6K a month. It was just so painful to kind of– we actually could have hired contactor and help with that and eventually try to grow that up. But the fact is after a few meetings, we were offered money at terms that were completely reasonable. Bear in mind this was early 2014 when the fundraising market was about as good as it’s ever been.
Steve: I see. So did you hire people after funding or before funding?
Ankur: After funding.
Steve: Okay, got it.
Ankur: It was the right balance where before funding. But before funding we still had enough traction that this was more than an idea. Because I remember at the time we’d– the month before we raised the money, we processed close to 50 grand in core sales that month which bigger picture is nothing. For a seed company, it’s like okay, these guys still– there’s still some kind of dollars entering their account every single month.
Steve: Yeah, so basically that translates into the five or six K, right?
Ankur: Yup, correct.
Steve: You guys, okay. I’m just curious, how much upfront investment did it take for you guys to launch Teachable or Fedora I guess.
Ankur: Honestly, it’s a rounding error outside the fact that I didn’t pay myself anything. I don’t know I would have probably– on the assumption that I’m not paying myself and my time as working on it I would guess I don’t know, a thousand dollars. Nothing really– it was just the value of my time.
Steve: Wow, so this really was like a small scale project from the beginning. You literally were just trying to use it for yourself.
Ankur: Yeah, I had no idea this would become what it is today which is what’s super cool, because I just get annoyed with the Silicon Valley narrative of people that always wanted to build an education company. No, things happen and as they evolve your thinking evolves and then you finally crystallize the vision for the company.
Steve: Just curious, did they approach you, or did you go out specifically looking for funding.
Ankur: I went out specifically looking for funding.
Steve: Okay, and at what point, this was at your 50,000…
Ankur: In monthly sales. This was, I went out in May is when I think I went, I made the trip to San Francisco, May 2014 and we closed mostly around during 4th of July weekend is when– by 4th July weekend we had closed it around.
Steve: Just curious, how many customers did you have when you asked for funding, and how many do you have now?
Ankur: So in terms of– then it was interesting because people couldn’t pay for a plan. I guess we’ll define our customers by the percentage of– by the number people making money every month which at the time was mid ten, so I would say 40, somewhere in that range.
Steve: Wow, that’s not a whole lot. Okay.
Ankur: And right now we are at about 2000 paying customers. In addition we have some customers in the free plan that still pay our transaction fee, excluding them we are at about 2000.
Steve: Okay, and then I’m just curious how things had changed once you got the funding and then how do you market your business now?
Ankur: So for the first six months it was painful, because we were in technical debt. I had built this version of Fedora at the time that worked, but no other developer could be productive on it. As soon as we hired real developers is like we have to discard this now. Then, that was very painful because our customers are still using a version while our development team was building it from ground up.
From about July till December was an incredibly probably the most frustrating time in the history of the company, because yes we were marketing it, but there was no active work being done on the software we’re marketing. Our marketing was good and we still kept revenues growing slowly, very slowly but it was just frustrating because the entire team was working at something else. Most of 2014 kind of went in that. It was only starting in 2015 that we really started growing.
I want to say the end of 2014 we probably– we had gotten to making few hundred thousand dollars in monthly sales, but it was just driven by a couple of strong customers. We were still as the company making 15 to 25K a month. Starting 2015 is when things started growing. We finally rolled out this new version that was substantially better, and we actually had an active development team working on it.
Steve: Just curious, what was– so after you got your first couple of Udemy people to talk about you and word of mouth, what are some of the other advertising methods that you used?
Ankur: We never, we still like to date have not figured out how to spend money to grow, which is kind of our big project for 2016. Word of mouth was the big thing. The other thing was basically people would use us to sell courses. Their students would come to the site, some of their students in turn would be like, oh powered by Teachable, or powered by Fedora, come to our homepage and then sign up again.
There’s an inherent kind of very small organic loop inside the product that were done really well. Then we also did a lot of like unscalable kind of outreach. I’ll give you a couple of examples. One is we went to Ryan Holiday who had a book launch, and we convinced him to put it– and we built an online– we helped him build an online course version off his book and ended up mailing out over a thousand copies of his book to anyone that bought the course.
We would go to people on YouTube with a large audience saying “Hey can we kind of re-factor your YouTube videos and make it into an online course?” We did a lot of these kind of very unsustainable outreach type of things to convince people who already have an audience to start selling courses. Very soon that we found all of those efforts kind of were rendered not– were rendered kind of useless relative to just the organic that started picking up.
Oh, another thing we did is we partnered with Y Combinator, they had a how to start a startup class. We hosted a version on Fedora and that in turn drove many thousands of students signed up. So it created a small trickle back effect for people like, oh what technology powers this, and then them signing up for the product.
Steve: You actually went out to I guess influencers and you offered to create a course for them based on the content that they had already put out.
Ankur: Yup. We also went to, even though it didn’t work out, we would literally go to conferences, and, “Hey can we take your conference and package it into an online course?” The other thing we did that worked out amazingly well is we had an automated import from Udemy button. That was a technological thing. So technological thing and that just helped us grow so fast. Well, because in the past what would happen is if someone’s interested in coming on board from Udemy it would take them days, maybe weeks to re-upload everything. This is a one click solution. They just pulled all your content over.
Steve: Wait, so Udemy lets you export everything in a nice format?
Ankur: I mean we had to be a little bit creative.
Steve: I mean are you scraping them or?
Ankur: Basically people entered their credentials then authorized us to act as their agent. So we effectively automate the process of downloading everything and re-uploading it to our server.
Steve: I see, yeah that’s ingenious. That was a huge driver then I would imagine.
Ankur: That was a huge driver. That was a definite very, very big driver. It helped a lot, it didn’t help with acquisition because it didn’t help us get new people, but it helped us activate people really fast.
Steve: Well, yeah, if I’m on Udemy and you are trying to get me into your platform, it has to be really awesome for me to go through the painstaking of transitioning, but with this one push button thing I might actually hedge my bed and sell on both platforms.
Ankur: Yup. And we always had a free plan too which made it easy for people to try us.
Steve: Let’s talk a little bit about that because I’m kind of curious. I was just looking at how you do your pricing. How did you decide– so first of all what are you pricing plans and how did you decide on those plans in first place.
Ankur: Yup. So right now we have a free plan where we charge 10% plus a dollar of every sale. Then we have three plans. Basic at $29 a month, professional at $99 a month and our kind of high volume plan at $299 a month. Each of them have varying transaction fees, the $299 a month having no transaction fees at all. In terms of how we came up with our pricing plans, I will be the first to admit like dude we don’t know.
We’ve literally– we modeled our original pricing plan a lot based on what Shopify had kind of their tiers, since then they’ve updated it. Right now one of my grievances is I think we are long overdue, some kind of intelligent test on our pricing. Like I’m not 100% happy with our pricing as it stands right now. I’m not sure which direction we’ll go in, so chances are when someone is listening to this our pricing might a little bit different. Whenever we do it we will obviously grandfather everyone in.
There’s a couple of things that concern me about our pricing right now as it stands. One of them is I think our free plan is almost too good to the duty that one of our biggest reasons, well our biggest reason for churn right now is people dropping down to our free plan, could use indefinitely. I also feel like, we also have a few people sensitive about the transactions fees on the $99 plan because they feel like $99 is still enough, I want to give up marginal kind of share which we get, but the other side is we also have a lot of fixed cost because we pay for unlimited hosting and video band.
Steve: And the video too, yeah.
Ankur: Unlimited band which is some people are technically losing money. There’s a lot of kind of weirdness on our pricing, but we decided very early on to try and keep it simple, so have people not worry about bandwidth, have people not worry about hosting. Don’t worry about number of students. We have no traditional limits. So no limits on students, courses, hosting, bandwidth whatever. That’s all unlimited in every single plan including the free plan.
Steve: Just curious what are the break even points from the free plan to the next highest plan?
Ankur: So, it depends on how much your average course price point is because the free plan is a dollar plus 10% on every sale. While in general a few hundred dollars and the basic plan makes sense. The basic plan is also where you get a custom domain. For most people for $29 bucks a month like it’s just worth it to have your own domain name.
Steve: I see, otherwise it’s what? Just something.teachable.com?
Ankur: Yup. The professional plan breakeven is about couple of a thousand dollars, a little less actually a few hundred dollars and the high volume breakeven point is $4,000.
Steve: So here’s kind of a complicated question that just popped up into my head. You mentioned that Udemy pissed a lot of people off when they switched around the pricing. Couldn’t that essentially happen with your platform as well? We were just talking about pricing and how things might change.
Ankur: The reason that wouldn’t happen with our platform is we would always grandfather people in. When I say we’ll change our pricing, it would apply to people moving forward. Anyone who signs up before we change the pricing will always the choice of do I want the old pricing or the new pricing. No one is going to have their pricing changed. They will always have their original pricing. It’s more of what we do for people who come after.
Steve: What kind of influenced your decision? We chatted earlier but Udemy is like a market place. If you put something on Udemy they’ll find customers for you, but on your platform it’s not like that, right? What specifically kind of influenced your decision to do it that way because it seems like you could drive some customers to other people courses, right?
Ankur: Yup. The primary reason was the fact that as I said, we were teaching at Udemy and we didn’t want our customers to be driven to other people’s courses. Our goal is to allow people to make that choice. Technically every Teachable school comes with an inbuilt affiliate program. We do have people cross marketing courses, except now it’s something to think about versus something that happens automatically.
Steve: I see, I see. So I might not want like my customers to know that there’s a competing product out there. That’s kind of your rationale.
Ankur: Yup. And there’s well if you are building a premium brand selling a premium course, like you want it to be your brand. You don’t want them to be destructed with– like if you are selling a thousand dollar product and they see a five dollar product next to it, in the market place that might not be the best.
Steve: No, no that totally makes sense. So in Teachable when you have your own domain, no one even sees anything about Teachable at all, right?
Ankur: Yeah, Teachable does not have– any of the students we have no rights over them. We are just a technology provider. We can’t contact your students. We don’t even own the data. You own that data.
Steve: You mentioned these problems on the free plan people dropping out on the free plan not wanting to pay, can you just kind of comment on what your distribution looks like between free and paid?
Ankur: Right now in terms of the active customers, we have about a little over 5000 active customers. Off that, about– and we have like 2000 paying customers. Of course we have a segment of paying customers that are not monthly active, but in general on any given month about 75% of our active customers are not paying.
Across the entire lifetime of Teachable accounts created, there have been about 45,000 accounts created of which 2000 are paying us right now and about 2400 to 2500 have paid us at any given point. In general we convert about, hopefully we’re converting about 7% of people from free to paid.
Steve: So 2000, does that include like the free guys who’re actually selling stuff?
Ankur: That does not include them.
Steve: Okay, so 2000 on the monthly plans.
Ankur: Monthly or annual.
Steve: Okay so the remaining 3000 are just people that might occasionally sell something.
Ankur: Or they could be people in the process of setting stuff up. We also have a customer segment. It’s not super common, but from people that have no intention of ever charging money for their course, and also don’t care about a custom domain, for them they effectively have unlimited everything for free.
Steve: Yeah, except they have to pay a dollar, right?
Ankur: Yeah, but if you don’t want to sell anything, you don’t have to pay anything. If a course is given away free right now, you pay zero.
Steve: Okay, but meanwhile they are sucking up your video bandwidth, right?
Steve: Okay, so how is that sustainable in the long run?
Ankur: For now we just kind of let it be as the cost of doing business, but that’s what we are thinking about. Basically what it comes down to is we are not profitable on a per customer basis, but we are still profitable across the entire spectrum of customers, but yeah, so right now for instance, and it’s slowly starting to happen. Right now we don’t know, we’re spending $7000 a month on video bandwidth, and that’s already because our marginal bandwidth cost has become super cheap.
Still we’ll see how that goes up or down as a percentage of our monthly recurring and then decide what to do. For now, a lot of people do stay, just the fact they don’t even think about it is worth so much more than even if they were paying for what they were using. Just a fact it’s one less thing to think about.
Steve: Here’s something interesting. I offer a free course with my class, and it’s driven via email mainly, but you are saying that I could take this course, package it nicely in Teachable and offer for free and not have to pay anything?
Ankur: Correct. If you want to put it in your own brand and stuff, then you can do it on the basic plan, but that’s it.
Steve: That’s sounds very appealing.
Ankur: Yeah, and there’s a lot of people that do that. Bigger picture, I want more of that to happen. Like, as I said, we are venture bat. We are the only venture bat company in this space. If we lose a little bit of money because too many people use us, because our bandwidth costs are free, I think that’s a long-term battle, we are okay with it.
We are okay if we are marginally unprofitable on some customers, but say you– for instance you are a great example, imagine new users for your free course, I bet you someone in fact more than one person in your course is already targeted towards people wanting to make a side income. Some will be like, “Steve this is in Teachable, that’s kind of cool, I wonder if I should use Teachable and we’ll get paying customers through that.
Steve: How do you quantify those people?
Ankur: We have ads [inaudible 00:30:23] we have no great metrics on it right now.
Steve: Okay, so let me ask you this question, how many people who are on your free thing eventually go on to paying?
Ankur: Right now that is more of the bigger improvements is it used to be about 2, 2.5 % but of late we have gone up to about 7 %. We would love to get it to 10.
Steve: So what are specific things that you are doing to encourage that to happen?
Ankur: The biggest thing we have done so far is a weekly webinar where we kind of go over exactly what the platform entails and generally end with a time sensitive offer to upgrade to appeal to a paid tier.
Steve: Okay, so how do you get the word out? You just e-mail people?
Ankur: Yup, these are people already in our funnel, so this is someone after…
Steve: Oh, I see.
Ankur: Just to our own free users.
Steve: Okay, so you this weekly and…
Steve: Is it the same exact webinar each time?
Ankur: Yup, it is slightly customized based on what the questions are because the first 40 minutes are like “Hey here” – it’s just a technical walkthrough, it’s not content based. It’s all technical like here’s how you set things up, this is what you do and then the last 20 minutes content is different based on where people got stuck or what specific questions they have, but it’s the same template. We occasionally experiment with what the offer to upgrade now is, and that’s not– there we always try different things, but it’s all around the same presentation.
Steve: Is this a human giving it or is it a recording?
Steve: Human, okay because there is Q&A I would imagine at the end.
Ankur: Yup, and I mean we could do an automated thing, but it’s so high leverage, the leverage on this is we convert 2% more people than normal or whatever, from a lifetime value perspective it’s worth having someone do it– doing it themselves.
Steve: Interesting, I am just curious what your conversion rate is for a webinar to upgrade people?
Ankur: It’s like it’s dropped now and we are trying to figure out why, but we would at one point get almost a third of people to convert.
Steve: That’s amazing, okay.
Ankur: Yeah, it was bizarre but then again you’ve also to remember this is a webinar at a $29 price point at its base level.
Steve: Sure, but it’s recurring.
Ankur: Yup, it’s recurring. Our conversion rates are incredibly high and then there is a lot of people kind of the marketing space that would say, “Don’t do a webinar for a $29 price point,” but for us one it’s recurring and two it’s also gets people activated and gets people excited.
Steve: I imagine your lifetime value on those guys is at least like $300 or something, right?
Ankur: It’s a little bit under…
Steve: Little bit under okay.
Ankur: Then again, that’s lifetime value as measured by monthly billings only, does not include the transaction fee.
Steve: Sure, which is the huge chuck, right?
Ankur: We don’t have a good blended LTV number yet.
Steve: Okay, so let us talk about– we talked about churn like 20 minutes ago, so what are some things that you do to kind of reduce churn?
Ankur: Honestly not enough, like now our best bets to reduce churn are one, provide value, two try and identify what makes people less likely to churn. So far the biggest take away is as soon as people have their first sale, they become absurdly less likely to churn, which follows common sense.
Steve: Sure, sure.
Ankur: So internally we are trying to see what can we do to take people to their first sale as first as possible. So we are trying to surface the right information at the right time. One of the challenges that we are struggling with is there is still a lot of people that don’t succeed at getting to their first sale. I guess it’s true, I’m sure you have seen the same thing with people trying the e-commerce stores as well.
Steve: Absolutely, yes.
Ankur: So that is something that we are struggling with, if you have any suggestions let me know.
Steve: We have an e-mail sequence that kind of walks people through, and I know a bunch of other course people that use intercom.io.
Steve: Like triggered e-mails, are you guys doing any of that stuff?
Ankur: We used to use Intercom, we just move to HubSpot. We have the right e-mail automation set up, obviously it can always be better, but yeah that’s one of the challenges we are having is like we are investing a lot into education, but we’ve personally found a higher ROI from finding people that do education well, and partnering with them. For instance, anyone in [inaudible 00:34:25] online courses program gets a few months at Teachable. Mariah of course has a signature course on launching course. Partner with people that are doing that training and giving them the software and kind of figuring out how we get paid on the back end has traditionally led to better outcomes because there’s people that are just so laser focused on the training that they are just going to do a better job than we can because our focus is going to be on the product.
Steve: So how do you convince these big guys like the [inaudible 00:34:54] to actually use your platform in the first place?
Ankur: Honestly there is a [inaudible 00:34:58] it’s actually pretty easy; I think we have the best technology and most people that do their due diligence land up there as a logical conclusion. The only people that don’t are those that want a really large kick back, or they want something in addition to the best product for their students, but at the risk of sounding super arrogant it’s not been very hard, it’s often very hard.
Steve: Because they don’t want to deal with any– but I would imagine those guys already probably have something that has been working for a long time.
Ankur: Most people are immensely frustrated though with whatever solution they have set up right now which is the other interesting thing that’s it’s not been that hard to get people to switch. No one wants to switch on a random day of the month, but whenever they are launching a new product I found that people are surprisingly open to switch especially if you ingrate with their current marketing set up. Most of them are pretty set on how they do their marketing, they don’t really– they are not set on what tool they use for fulfillment yet. They are still not 100% convinced.
Steve: Just curious then, what is your kind of on boarding process like? Let’s say I have signed up, do you kind of hand hold me through everything?
Ankur: No, in general for us to be a successful company, as I said we have 2000 paying customers, we try and add about 100 paying customers a week. We don’t have the skill to on board everyone personally. So we try and do as much in-product as possible so everything from kind of contextual pop ups and videos trying to make it as absurdly simple to set up a course as possible. With that said that’s our biggest challenge and will continue to our biggest challenge is how do we do that.
We also offer something; we are experimenting with offering something called [inaudible 00:36:42] on boarding where anyone on a professional plan gets a 2 hour on boarding session. What’s interesting is that it is largely peer to peer. We are trying to identify people that are suited to use our platform and paying them to conduct these sessions. It’s something we used to ourselves in-house and just got like stupidly unscalable.
Ankur: So we are trying to see if we can do this in a scalable way. The jury is allowed, I’m not sure how it will turn out, but if it works out well it’s going to be super promising, because then we can theoretically start offering this to more and more people, and it is the community kind of providing these on boarding sessions.
Steve: Just curious, for a company your size, how do you distribute the resources versus ease of on boarding, versus like a conversion script like the Udemy to your platform, versus just getting more customers. How big is your company?
Ankur: Absolutely, we are 16 people right now.
Ankur: Our growth and marketing team is 6 people, our operations team is 4 people, and our product team is 6 people. Operation support is owned by operations, all growth related activities. Since we don’t have a sales team, it’s right now shared between operations and kind of our growth/marketing team, and 6 people on product.
In terms of how we would like to scale the company moving forward, I think we always want to maintain a similar kind of ratio, and we are going to be probably looking to hire about 2 positions a month for the next 3 to 6 months.
Steve: That is crazy, okay.
Ankur: Yeah, right now it can be argued we are not deploying our capital efficiently, because we’re– we raised 2 million dollars, we still have well over 1 million dollars in the bank and on a per month bases we are– on a good month we are losing less than 20 to 30K, we are almost at brake even with a ton of capital right now, and potentially there is a little bit more. We have room to spend money faster; we just haven’t found smart ways of doing so yet.
Steve: Yes, so on the market, what have you tried? So you mentioned Facebook ads, and those worked out for you, before they didn’t allow you to target groups, what else? Have you tried Adwords?
Ankur: Influencer marketing has been huge, so going to people’s audiences, doing webinars has been massive.
Steve: What’s your pitch for that? Like what’s…
Ankur: We have a webinar that converts roughly on—I mean it’s actually crazy, we’ve actually had times when it’s converted at close to 100 dollars in attendee, but in general it converts about 50 bucks in attendee. Including one time when we had a 6 figure webinar, which was super fun.
Steve: Is this like an affiliate arrangement with the audience?
Ankur: Yeah, it’s an affiliate arrangement, so basically for instance, with Mariah Coz from Femtrepreneur. We had a six figure webinar where she brought me to her audience. We ended up selling a year of software as well as some kind of content from her; we split that 50-50. So it’s a tried and tested webinar that we have done plenty of times, it just works; it’s almost kind of an elite pages play book that works really well.
That’s something we try and do about anywhere from 2 to 5 times a month. The biggest thing for me over the course of the next couple of months is removing myself as a limiting factor, because until now all of these events I do myself which is just not sustainable. The other thing that has worked really well is we had a summit last November where we sold 500 annual plans over a 2 week period, which was super fun.
Steve: Nice, how did that work? So you just had your own conference or?
Ankur: Effectively an online conference brought in a bunch of people we really respect in the online course space, they all taught a free– they offered a free workshop. At the end of the summit we had an offer where each of these people that taught a free workshop gave a piece of premium content to the offers. The overall offer is that if you bought a year of Teachable, you got a piece of premium content from each of these 8 people.
So it was actually an amazing offer too, because for a lot of that just the training itself is worth thousands of dollars, but with an annual plan of Teachable you get all of that included.
Steve: And the people contributing the content, they would get an a affiliate cut of whatever you sell?
Ankur: They would get an affiliate cut to their audience.
Steve: Okay right.
Ankur: If we drove the sale, we pay them a small bounty just for being on the webinar or whatever, but in general they got a real 50% commission of everything that they sold as well as– most of these workshops like the good ones, we got like 700, 800 people live. One of them over a 1000 people live, so it also really helped enhance– it helped grow their audience pretty considerably too.
Steve: That is pretty ingenious. What about the YouTubers, have you had any luck with those guys?
Ankur: Not as much luck as we would like.
Ankur: The big challenge seems to be they want it to be completely done as a service, they want it to be done for them, and we are effectively a self serve platform. So anyone listening, I think there is a big business opportunity if you are willing to work with these YouTubers and do the work for them.
That’s literally the only thing, they are happy to experiment, they are happy to send traffic and a few of them are succeeding, but at large they want you to take care of everything. They are like “I want to send content and tell me where to link, and you do all the work,” which doesn’t work for our model, but it could well work with an intermediary kind of acting in between us.
Steve: Is there like famebit.com is a sponsor of this show, and they provide you guys with– people with access to influencers.
Steve: Just curious if you– do you guys use any services for anything like that, or is it just all outreach and legwork?
Ankur: It’s all outreach and legwork, also what helps is like the space that influencers want in general are incredibly nice and helpful people, and once you know– it’s a small world at the end of the day. So it has not proved to be especially challenging.
Steve: It just so happens that online course are exploding right now, so it sounds like it’s a really good time for a service like yours.
Ankur: My bet and I could be wrong is like this is still so early in terms of what online courses will become. It seems like exploding now, but my overall kind of bigger bet– maybe you disagree because a lot of what you talk about is predicated on selling physical items, but I think 5 years from now or ten years from now more people are going to be selling information in some from online rather than physical products.
Steve: I believe that.
Ankur: That’s kind of the big bet, big long term bet behind this company that, it’s like we were facilitating the sales information and that is only going to keep growing, and the number of self supported entrepreneurs that sell information for a living will only keep growing.
Steve: Can you just kind of comment along those lines about some of the bigger guys out there, and kind of how you guys are each targeting something different. Like Udemy, Coursera, Lynda.
Ankur: Absolutely. So, Udemy I think is going to be very successful, I don’t agree with their way of doing business because you they have effectively built you know they came out of foreign education, they are like the place to go to get commoditized like $10 courses on any topic.
Steve: Yeah, exactly.
Ankur: I still think they are going to be very successful, because they are solving a problem we are not, which is if you are a student that wants to learn– like if a student wants to learn X topic, we do not help that at all, our platform is not for students. Udemy has cut a nice little niche for themselves kind of being the skill based version to get cheap thrills and like buy 10 courses, watch one, but that’s still a big market and it’s still something they’ll be successful with.
Coursera has gone the interesting route of taking college level courses, so Coursera is different from Udemy because Coursera is very academic focused, not really focused on skill based stuff and making that accessible to everyone, and that’s what we try to monetize at, it’s again a completely different kind of field to play in.
Lynda.com is interesting because I guess Pluralsight and Lynda are about– I can talk about them together, because they are both doing effectively the same thing where you build a really large content library, so you have a content company and then you sell it. Most of Lynda’s business and Pluralsight is driven by enterprise sales versus– they are a sales driven company rather than a marketing driven company.
Ankur: It is interesting because, personally in the data we’ve seen whenever people are selling courses monthly to consumers; it’s really, really hard. Almost always they churn through consumers too fast. Lynda and Prularsight are the only companies I know that are successfully selling courses on a monthly model, and it is because they are selling to enterprises and larger companies where if you sell to someone on a monthly contract, chances are that will never expire.
When people sell month courses monthly from what I’ve seen, so no payment plans but this course is $10 a month indefinitely, you are better– the data just doesn’t back out, you’re better off generally charging a lump sum upfront or doing payment plans the traditional way.
Steve: That’s an interesting model because once they have one of these customers, it seems like the money isn’t that big of a factor either right, it just keeps coming.
Ankur: And we’re not pricing, it absolutely is not, like Lynda has many 7 figure annual contracts and they even have 8 figure annual contracts.
Steve: Interesting, what about Skillshare?
Ankur: Skillshare is interesting. I think they have definitely missed a couple of tricks in the book, because they first started off as offline classes that were doing really well. Then they moved to online classes except the online classes were less than an hour long, and sold for $120. They would sell one off classes. That created a little bit of early success, one of my friends [inaudible 00:46:32] was a top selling Skillshare instructor.
But what happened there was the same thing as Udemy is all the top guys stated kind of going their own way. Then Skillshare decided, “Okay let’s just try the Netflix model,” where it’s like I don’t know $8, $9 for all of these courses. I’m personally pessimistic on that, but we’ll see how it plays out. I do know for a fact just based on traffic according to any estimate we have, we are substantially bigger than Skillshare, and bigger picture you know, we are not that big .
Steve: Yeah, in the grand scheme of things, because they are also still young.
Ankur: Yup, so yeah, so I think I don’t personally with a lot of decisions Skillshare has made, and I would have made them differently, but I also don’t know what they know.
Steve: Okay, hey Ankur this is really enlightening. I actually did not know that much about just the entire landscape even though I sell my own digital course. Thanks a lot for coming on the show and being so open with your numbers and everything.
Ankur: Yes, it’s been a blast.
Steve: I’m sure everyone is going to find this valuable.
Ankur: Yup, it’s been a blast. It will be fun to see how this year turns out. Thank you so much for having me, and for anyone listening at all. I would love– I just love if more people started creating courses, because I’m such a believer in the future of online education.
Steve: Where can they find you Akur in your platform?
Ankur: Platform is at teachable.com, the best way of finding me is probably on Twitter, I’m at twitter.com/ankurnagpal.
Steve: You’re a Cal [ph] grad right? Is that…
Ankur: Yes, sir, class of 2010.
Steve: So, I wouldn’t hold that against him guys, but yeah, all right. Take care.
Ankur: Have a good one Steve.
Steve: Hope you enjoyed that episode. When I developed my course way back in 2011, platforms like Teachable actually were not available, but similar to e-commerce, putting up a course for sale today is actually a whole lot easier, so there is no excuse not to give it a try.
For more information about this episode, go to my mywifequitherjob.com/episode 115. If you enjoyed this episode please go to iTunes and leave me a review. It is by far the best way to support the show, and please tell your friends because the greatest compliment that you can give me is to refer this podcast to someone else either in person or to share it on the web.
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Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.