Coursera – Bolstering Consumer & Enterprise &
Continued Challenges for Degree Segment – 25 August
2021
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Specialist: Himanshu Singh (HS)
Title:
Moderator: Nyree Hinton (NH), Third Bridge Sector Analyst
Former Head, Operations, Content & Credentials at Coursera Inc
Agenda:
1. Complementary dynamics between Coursera's (NYSE: COUR) consumer, enterprise and degree
services
2. Edtech services competitive landscape – Coursera vs Udacity and others
3. Pricing, coronavirus-related trends and growth opportunities
4. Challenges for degree services segment
Contents
Q: Could you provide an overview of the education tech industry and how the competitive landscape has
changed over the years?
Q: Who are players such as Coursera and Udacity competing against through their enterprise or consumer
offerings, given that many universities are rolling out their own certificate programmes and upgrading their
own systems to be more competitive?
Q: How has coronavirus doubled demand within education tech and players such as Coursera? How
sustainable do you think this growth is?
Q: How have Coursera’s priorities changed throughout its consumer, enterprise and degrees segments?
Q: What value add does Coursera provide in the degree segment? Is it purely the company’s platform and
user base?
Q: How does Coursera’s approach compare to that of Udacity in the enterprise market? Which do you think
is the better approach?
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Q: What are the obstacles around retention of enterprise customers?
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Q: How would you assess the competitive dynamic within the enterprise segment? Who’s the real
competition to Coursera in this segment given large companies such as Walmart and Target have announced
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paid degree programmes?
Q: Where do you think the opportunity lies within the enterprise, consumer and degree segments? What are
your thoughts on the slowness around getting the degree segment off the ground?
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Q: What are your thoughts on Coursera’s ability to raise prices and how that compares to what the company
has done in the past?
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Q: What tactics can Coursera employ to onboard new consumers vs competitors? How penetrated is the
company in the market across the US or internationally? 87 million users is a large amount of the adult
population in the US. How many more subscribers can it gain on the consumer side?
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Q: Which markets do you think provide a good opportunity or easy synergies for Coursera to expand into?
Markets such as China are becoming very strict around education regulations. Do you consider this a hurdle
in that region?
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Q: You mentioned government contracts or business. Is that in the enterprise segment? If so, what is the
opportunity within that government scope to build a strong marketplace and leverage that knowledge on that
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connection to other governments ex-US?
Q: Do you think Coursera is really interested in the actual content part or is there too much of a capital-
intensive hurdle?
Q: Could you outline the types of degree or certificate trends around tech such as machine learning or
automation? What have you noticed in the data from those trends and how might they evolve? What areas
are people moving away from?
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Q: It seems the more consumers you have, the more the total cost of new acquisitions decreases. Things are
becoming more costly in the enterprise segment however, and although it is growing, margins are on a
downhill slope. Could this be the trend in the enterprise segment, that although sales volumes grow, it will be
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the inverse for margins because of the high acquisition cost?
Q: Could you elaborate on the partnership strategy in the consumer segment to expand professional
certificates? You mentioned the Airbnb example with Coursera. You said the company can post its house on
its wall and then it goes straight to the consumer. That’s true, though they may not get it, but when dealing
with large institutions, you have that brand recognition and you have the balance sheets to go directly for the
consumer because that’s traditionally the company’s business model. How sustainable is it for Coursera to
maintain its partnerships and licences agreements, given that it is competing with its partners?
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Q: Could you highlight any standout or flagship programmes that have taken off in the degree segment for
Coursera?
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Q: Is Coursera assisting consumers in the degree application process? Can you expand on the services aspect
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around onboarding students and leading them into the actual programme?
Q: How has Coursera taken advantage of the opportunities provided by coronavirus? Was the company able
to fully capitalise on this opportunity? Did it increase subscribed accounts or lower pricing to take market
share? Which is the right front for Coursera?
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Coursera – Bolstering Consumer & Enterprise &
Continued Challenges for Degree Segment
Transcription begins at 00:00:02 of the recorded material
NH: Welcome to Third Bridge Forum’s Interview entitled Coursera – Bolstering Consumer & Enterprise &
Continued Challenges for Degree Segment. I am Nyree Hinton and I’ll be facilitating today’s Interview with Mr
Himanshu Singh, former Head of Operations, Content and Credentials at Coursera.
Himanshu, before we get started with today’s Interview, please state I agree or I disagree to the following
statement: You understand the definition of material non-public information and agree not to disclose any
such information, or any other information which is confidential, during this Interview.
HS: I agree.
NH: Could you start by giving out an introduction of your background and various roles you’ve held in the
industry?
HS: I’ve been in education tech for seven-plus years. I was at Coursera for almost four-and-a-half years. I
wore a lot of hats in the company, starting to do business development, then moved to product and then
eventually leading operations for basically content and credentials organisation. We grew from a 100-people
company to 700-plus people by the time I left, and the company went public basically 7-8 months after I left
the company. I’ve also worked in the K-12 space, and I’m very familiar with the skills transformation
companies, higher ed, K-12 credentials and also the future of work initiatives. In this call, I will share my
thoughts on what it looks like to grow in that tech space like Coursera and what are actually customers looking
for in the space.
[00:01:36]
Q: Could you provide an overview of the education tech industry and how the competitive landscape has
changed over the years?
HS: That’s a good question. Education tech has been there for a while. People don’t remember. MIT launched
OpenCourseWare products in 2001, right after the bubble, and a lot of people were taking those OpenCourse
video courses from them, so we did not call them MOOCs at the time, but they actually just, some people used
them, but the internet was not as mature and it was a less structured way of learning. It was basically watching
video lectures from basically a classroom. As technology has matured and internet has become more and more
available to everybody, companies started coming up in basically education tech space, and especially
Coursera when they came in 2012, they had two founders from Stanford which put their online course
basically just on YouTube and people were just going crazy about it. It was a machine learning course by
Andrew Ng, and which a lot of people wanted to study from Stanford, a lot of people also wanted to study from
someone like Andrew Ng, who was very famous in basically the AI and machine learning space. That’s what
the idea of Coursera and many other players like this was, and they were seeing organic demand for their
product even before they had a product really ready, so Andrew and Daphne jumped in to build Coursera, on
the other side, there was Sebastian Thrun, who started Udacity to focus on especially tech jobs and then there
were founders from actually Turkey, who were in the Bay Area and they started Udemy, which was a slightly
different model as well, anybody can teach who has basically expertise, and they went for that route.
These three companies’ goal was to basically educate people by providing them with high-quality content and
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people can learn, and it will basically remove many barriers people have in learning, that they don’t have to
wait to go to a college or go to any other in-person area to actually learn, that’s how these companies started.
From there, ed tech has evolved into a lot of spaces. Now we have niche communities where people can learn,
we have boot camps now where people are going to places like Lambda School, and we have also in K-12 space,
players like Outschool which are using teachers outside of the classroom to help kids learn. The space is
maturing, customers are becoming more demanding because they have taste and long to add value, and
COVID has played its own role in making the adoption of ed tech more and more. To close this answer, the
internet has been there for almost 30 years now and people have solved many problems which are low-
hanging or require much more technology focus like search and social, now the harder problems that need to
be tackled are education, healthcare, and hence a lot of companies, you will be seeing coming up trying to
tackle these harder problems which have big incumbent players, but the problems that are related to more like
serotonin use rather than dopamine at long-term thinking problems. I’m very excited about education tech
and you will see a lot more big companies coming out in the space because education is actually very expensive
in America.
[00:05:13]
Q: Who are players such as Coursera and Udacity competing against through their enterprise or consumer
offerings, given that many universities are rolling out their own certificate programmes and upgrading their
own systems to be more competitive?
HS: That’s a good question. The Coursera being a platform, they do not produce their own content, they
partner with different universities and different companies now to actually produce content, so they are in
somewhat like Airbnb, that Airbnb does not have its own rental properties, they work with hosts to do that,
and a host can choose to put it on Airbnb or a host can try to put it on their own and get people directly. It’s
harder for those hosts to get people directly because they don’t have the distribution risk that basically
Coursera has. There is a similar dynamic here in education tech that Coursera has a reach, they have, I think
last thing what I saw the numbers on their, and this is public information, there are around 80 million users
they have on the platform, they said, which is a lot of people the company has, and so they can reach them and
they’re all around the world. It’s very hard for any one entity or any one player, be it a university or a company
to do that on their own, so that’s one of the reasons they also partner. Another reason these people partner
with Coursera is because they have the technology, they have a platform with a lot of people, a lot of these
universities and companies don’t want to invest in building their own learning management system and
managing it and updating it, tweaking it and making it better. It requires a lot of work. Engineering is very
expensive and having a product working and managing is a full-time job for someone, hence they rely on
players like Coursera to do that.
Third is that they can also build a brand reach with it and also they can get basically the services required to
produce a different kind of content, like basically the customer support work and all that stuff that Coursera
can provide to help them. That way, Coursera and Udemy and Udacity, they have similar ideas there in terms
of reach, in terms of technology, in terms of services. Some universities will do it on their own because they are
big and they have the brand name, and basically the reach and also the money to actually try to do this on their
own, but some will do both, that they will work, partner with different players, but they will also try to do some
programmes on their own because nobody needs to do every single programme on one platform, they can do it
on different platform. What that does is that enables them to try and also try to build their own competencies,
but I don’t see a world that it’s very easy for a lot of universities to go on their own because there are very few
with the brand reach to attract users on their own. Many others need help and support.
[00:08:30]
Q: How has coronavirus doubled demand within education tech and players such as Coursera? How
sustainable do you think this growth is?
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HS: That’s a very good question again. There are two parts of this growth. One growth is that people have
been staying at home, there’s not much to do, go outside, so what am I going to do? Am I going to watch
Netflix? For people who really care about development and growth, “This is perfect. I’m home. I should just
learn something,” so they will be learning. That’s one part of the growth, where a lot of people are learning.
Second part of the growth is basically the change in mindset of people, and that is more long term sustainable
and which is going to be part of how ed techs more adoption. I was not going to take an online course, for
example, before because I thought that, “You know what? I don’t know how good they are in X, Y and Z,” and
maybe I dabbled them somewhat, but I would prefer to learn at my workplace with my colleagues or take non-
campus classes or something, but now I took an online course, I really liked it. So now I have been converted
from somebody who didn’t like it, to somebody who likes it, so there will be a segment of people out of, say,
100 people who tried it for the first time and some of them will be like, “Wow, I like it.” Those are customers
gained by these companies for basically forever, and wherever they go, those customers will go and study
somewhere else and online and try that.
That’s a great recourse. Another thing is that a lot of institutions who were dragging their feet towards online
education and doing it slowly, now basically everything was upended on their end, students could not come to
the classroom, they were completely online, so they had to adapt technology, and once they adapted it, there
were people, stakeholders, and you can call them faculty, you can call them administrators, even students in
the classroom, they said, “It’s not that bad. I can do a lot of things with it, and I see a world where I can
combine both of these things together to educate the world and to the people.” You will see more adoption of
technology in schools and even in basically universities because of that because they have seen the good side of
it. Yes, obviously we need the human engagement and one on one conversations in classrooms for many of the
learning that happens and basically those formative years, but there is also a layer of work that could be done
through online courses, online classes and all, which makes it easier for teachers and faculty to focus on more
meaty discussions, more meaningful conversations. Definitely, a decent portion of the growth these companies
are seeing will stay, some of it will obviously because of COVID change, but in the long run, this is a very
strong boost for education tech, and overall, basically the ship will keep on rising because all boats will rise,
because people’s mindsets are changing.
[00:11:41]
Q: How have Coursera’s priorities changed throughout its consumer, enterprise and degrees segments?
HS: I think the priorities will be more of my opinion on how they’re changing in this sector because it’s
basically a public company now, so what I can give you is a sense of how the company started and what they
have been doing, and nobody really knows where they’re going to go long term, but I can give you my opinion
on that. The company started more as focused on basically the consumer space, B2C product, which is
basically, “We will have more massive open online courses, we’re going to educate the world with it.” They
launched courses with Stanford and they got more universities, they got other big names, and they added 150-
plus university partners, everybody started producing massive open online courses. They wanted to ramp up
to offer something even more bigger product, then they went for specialisations, which is basically full courses
combined into one packet. That went well, people thought it was adding a lot of value for their learning
experience, then as that was gaining traction, they were getting users, they realised that a lot of people wanted
to use Coursera within their companies to learn and they were using the product to learn while in offices, then
the thought was, “If this is working on the consumer side, why can’t we sell it to companies, and companies
can use it to train their workforce? As they’re training their workforce, this would generate another source of
revenue for the company and also help people.” That’s where the B2B business started. The third channel was
that while we’re offering these certificates and offering these MOOCs, massive open online courses, what is the
biggest credential out there in the market in terms of education?
That is basically a degree programme, be it undergrad degrees and master’s degrees. That’s where the
company focused on. “We should start a degrees business because our learners want to keep on growing, and
we can offer them a product which is highly valued, so highly intense, and it has a much more one on one
engagement scenario than we would do in the massive open online course,” and they had the perfect partners
for that, universities. That’s when the third business started, which was basically degrees business, and the
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degrees business kept on growing and also the MOOC business, basically consumer business is growing and
the enterprise B2B is also growing. B2B has expanded into governments and now they’re also doing B2U
where they’re helping universities use the content, buy the content and train their own people, flip the
classroom, if you may use the term. All three are very good and all three are very important for the company.
They do a very good job of supporting one another, and if one goes down, then the other would go up. For
example, if there is a recession that would happen, you might see a drop in enterprise business because
companies might not want to spend money, but the company has a really robust degrees business in the
consumer business because when that happens, people go back to learning, so those two businesses will
actually go up and get more and more people in. That’s the beauty of that model, and I think the company
understands all three are very important and will keep on investing in them.
[00:15:15]
Q: What value add does Coursera provide in the degree segment? Is it purely the company’s platform and user
base?
HS: That’s, again, a very good question. It’s not just the platform and the user base, it’s the whole design of
the company itself, because the company started with MOOCs, then to specialisations, then to graduate
certificates and then to degrees, what that does is, it allows a learner, you can call them a customer, an
opportunity to try before they buy any product. People can literally try a part of a degree programme before
they go and buy a degree programme. It’s a very big decision for somebody. You take degrees like two or three
times in your whole life, that’s it, and then you just go and work and learn on the job. You don’t take degrees
mostly because it’s a long-term commitment, hence the way they have the stackable model of one course
credential and the next course credential on top of it, that allows the user to try before they buy. I don’t think
many other institutions out there allow that, and it’s the opposite. They ask you to join or not, so that helps in
the case of Coursera, and because the company started that way, it’s like a bottom-up approach, and compared
to other players like 2U where it’s a top-down approach, you basically have a degree and now they have bought
EdX and they have also bought GetSmarter. That’s the opposite approach. That helps. Secondly, they have the
reach, obviously, they have the users, so because of that, they can reduce the cost of acquisition dramatically in
this work. If they reduce that cost, it means you can have a lower tuition because instead of putting money in
marketing and getting people, money should be, either the cost of education should be reduced or basically the
overall price of the programme and the money that goes to the university should be more focused on education
and creating better programmes.
The Coursera name will start with its model because they have a learner base and they can direct those
learners towards the programme, and when that happens, they can lower the tuition. If they lower the tuition,
it means more people can learn, which is the right thing to do, and then it creates a flywheel for the company,
lower the tuition, more people, more people, lower cost of acquisition, lower cost of acquisition, lower tuition,
and then the whole cycle continues. The traditional model of OPM models, online programme management
model, is different. They invest up to USD 15,000-plus on getting a degree programme through basically
promoting. As a student, would I want that to happen, USD 15,000 in just acquiring me as a person rather
than lower the tuition or invest it in making a better programme? It’s the right thing to do for education and
for the learner and for the university, and Coursera model enables that.
[00:18:31]
Q: How does Coursera’s approach compare to that of Udacity in the enterprise market? Which do you think is
the better approach?
HS: Udacity has been very focused on a specific segment. From the very beginning, they were focused on tech,
they stayed focused on tech, only tech jobs and they had nanodegrees and all, but they were not really, they
also actually used to offer degree programmes with Georgia Tech, and because they were focused on a very
specific area, they did not grow as fast as Coursera did because it was much more broader and wider, and that
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obviously takes a while to grow because once you have more scale, you can help more people. Udacity offers a
smaller catalogue than Coursera because Coursera is broader. Coursera has also gone public, so they have
more funds and also they have expanded dramatically by partnering with different universities and players,
Udacity chose not to do that. They either try to produce their own content or partner with specific companies.
Content production takes a lot of time, launching the right kind of content is a lot of work, and if you want to
do it on your own, you will have a slower throughput of content compared to someone like Coursera or Udemy
where their throughput of content is massive, and so it will be hard for you to compete with other players in
the market if you don’t have that kind of content play. You can compete in specific niches where, “I know
blockchain, I get it. I have people or I get cybersecurity and I have the best cybersecurity courses out there.
This is what you will learn, I got you.”
That could happen, but that only captures a specific small market, the rest of the thing goes in the direction of
broader players like Coursera which are much more compelling to employers because they’re not looking to
train people just in one specific thing, they’re looking for a wide range of things. It could be leadership, it could
be communication skills, it could be tech literacy, it could be data understanding, it could be analysis, it could
be negotiation. To do that, a player like Coursera comes in heavy and good rather than a player which is very
niche and specific in an area.
[00:20:58]
Q: What are the obstacles around retention of enterprise customers?
HS: That’s a good question. Again, this will be my opinion again. There is, in general, this is irrespective of
Coursera, in general, there’s one thing about signing an account and then there is a completely different thing
about increasing adoption and engagement with the product. I could sign five clients each with 500 people,
that gives me 2,500 users, and out of those 2,500 users, if only 500 are using the product and start using the
product and by the third, fourth week, fifth week, only 200 are left using the product, then my retention rate is
less than 10% for those people, that’s pretty low. However, if I’m able to create curated programmes for them,
bucket my 2,500 users into these tech-focused learners, these business-focused learners, these are leadership-
focused learners, and I could create learning pathways for them specific to their desires, then I could literally
increase the retention rate to even a higher number, and that’s where I would be able to once help my
customer to basically retain these accounts for the long term. To do something like that, any company needs a
decent and broad catalogue of courses. If you have a wide enough catalogue, it means you know what you can
offer to people to meet their specific learning needs, and that’s where you can have more engagement and
attention. On top of that, you can build customisation features so that you allow every company, company A, B
and C, to add their own content on top of the content that comes from universities or companies, which
basically allow companies to have more custom programmes.
You also offer a better dashboard where the chief learning officer can actually see what people are learning and
basically the managers can see what somebody is doing so that they can do the right intervention at the right
time. All that work leads to more retention, all that work leads to more engagement. This is not specific to
Coursera or one company, this is general, true across B2B learning content, selling companies, so this is how
they have to increase engagement. Make it more hands-on, offer content that is about application and doing
things rather than basically a talking head that talks to theory, because people lose engagement if they are just
listening to somebody, they want to do things. This and many of the tactics Coursera has deployed and many
other companies are working on it, but once you have a good account and you’re doing good work with it, you
can have that account for a significant amount of time and you can keep on renewing it, which is the beauty of
most B2B businesses.
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[00:24:11]
Q: How would you assess the competitive dynamic within the enterprise segment? Who’s the real competition
to Coursera in this segment given large companies such as Walmart and Target have announced paid degree
programmes?
HS: I think Guild Education does a pretty good job here, that they basically have a lot of degree programmes
that they can offer by partnering with different universities, and in return what they do is that, “Walmart, you
can pick from these programmes for your employees and we can help you do that,” which is a very good idea
and it’s a very nice thing to do for people who have to be upskilled and trained to the next level, but the thing is
that these are big commitment programmes. Online degrees take 2-3 years to complete, and if it’s a master’s
degree, bachelor’s, if it’s an associate degree or bachelor’s degree, it takes 2-3 years to complete anyway that
one, so because of that, this is an entirely different product from many B2B sales that Coursera, Udacity and
Udemy are doing. They’re doing short-form courses or courses that take 3-6 months to complete, that’s where
learners get immediate quick output, they’re trying to learn specific things so they can take these courses and
learn. They don’t necessarily need to get a degree, and most of the people that are working in many of the
companies where Coursera is selling and many of the players are selling, Udemy and others are selling, they’re
already working at companies, most of them have bachelor’s degrees or master’s degrees already, so many of
them are not looking to take degree programmes. What they’re looking to do is upscale in their own scales and
do micro-learning, you may call it, and not massive degrees, but as they partner with governments, which
Coursera has done, as they partner with non-profits and other areas, then you’re talking about people who do
not have degree programmes and they need to learn, and hence these degrees can be very helpful, and Guild
Education is in this place, and Coursera does that too.
I think more and more Coursera’s catalogue grows in terms of degree programmes, the more Coursera would
be able to actually reach out to companies like Walmart and other players and say, “Hey, we have got the
whole range of degrees right here. Look at this range, and you can just pick from us directly and use us, you
don’t need to go through the other route,” which makes it very good for a player like Coursera. However, the
partners that they have, basically those universities they work with, they should be willing to enrol, or should
have the capacity to enrol that many students at one time because Walmart is a massive company, and that
requires finding the right partner and the right scale. It will take time, but I don’t see any reason why Coursera
cannot do it, because essentially the platform is able to scale and they have 180-plus university partners.
[00:27:27]
Q: Where do you think the opportunity lies within the enterprise, consumer and degree segments? What are
your thoughts on the slowness around getting the degree segment off the ground?
HS: That’s a very good question again. I always think of it in terms of, on the sea, what is the size of the board.
Degrees business is like an oil tanker. It is massive, it has a lot of inertia. If you want to turn it, if you want to
move it, it’s going to take a while, but once it gets going, it’s like a juggernaut. It’s very hard to stop and it’s
massive. Every programme is worth USD 20,000-plus. Enterprise businesses is like a medium-sized
speedboat. It can go left, it can go right. Now obviously it’s gotten bigger and bigger, so it’s like a bigger and
bigger speedboat or maybe a yacht, but it’s bigger, but still it’s very nimble. It can move around and can go
fast. Consumer business is like a lot of small boats, a lot of small boats, but they’re very nifty, they move fast,
they go left and right faster because it’s like people are all around the world and you’re dealing with
individuals. When the wave comes or anything changes, it will be very hard to dislodge the oil tanker, harder
to dislodge the yacht which is big enough, but much more easier to dislodge the consumer business, it’s more
ephemeral. That’s how I see how this business plays out. However, it is about strength in numbers for basically
the consumer business because there are so many people learning online and coming online, that many of
them would jump, hop off that boat to the enterprise boat and to the oil tanker because it allows them to have
a credential which is much more valuable in the market. Also, many of these people go and work for
companies.
When they go work for companies, they automatically are basically on a yacht then, and they get vital of
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service from their company and they use it for free, they learn on it, and then they can hop off again on
basically the consumer boat when they leave the company or they can go and get degrees, which then they can
hop off on an oil tanker. That’s how I see these three businesses, and all three will have their own space for
their consumer that serve different purposes for different stages of someone’s life, and in different
environments. They do not eat into one another, which is the beauty of these businesses. They could become a
scenario where somebody starts from college until somebody retires. They can actually learn all of their time
on Coursera, which is a very powerful thing to do, and that takes a while to build and hence Coursera has three
businesses. It takes a while to build. It’s going to keep on doing it, and I’m very bullish then that they would be
able to actually do this, so this is again my opinion on this, but they would be willing to invest across all three
and grow it. Degrees is the hardest one to do because it takes a longer time, but once you have a programme,
then you can keep on making it do well, a bit like 100 users, 100 learners, 200 learners, 400 learners, 500
learners, 600 learners. Once you do that, then the revenue from it can be applied again to the business to keep
on growing faster.
[00:31:01]
Q: What are your thoughts on Coursera’s ability to raise prices and how that compares to what the company
has done in the past?
HS: The best way Coursera has handled, and this is all public information, is that they have gone for a
subscription model for the consumer business, and this is the age of subscriptions in tech. There are
newsletters people get on subscription, Netflix is on subscription, almost Uber has its own subscription model
too, and so we can look at all these models and see are they actually helping or not, but in Coursera’s case, the
numbers at their filings and all, it is helping because there are a segment of people who want to learn fully
every year and they want to commit X amount of money every year and they get access to the whole catalogue
to learn specific things, which is a very good thing for users. That helps with the subscription model, you retain
people. They keep on buying a product again and again and again and again and they don’t leave, and that’s
what Coursera has done at least on basically the consumer side. They also launched, they acquired this
company called Rhyme, and after acquiring Rhyme, they have these guided projects which people can use to
build things and see specific things, try to do things, so what that does for the company is it makes it more
applied rather than just theory, which is great for Coursera, and hence they have that model on basically the
consumer side. Enterprise side, they have different tiers for models. For bigger companies, they have all you
can eat model, you can buy a certain number of seats, for smaller companies, you can have specific clients that
you can buy and that have them retain people.
You can have a data science track, you can have a strategy track and all other tracks, you can have different
things, and for the degrees business, pricing is not necessarily controlled completely by Coursera in terms of
degrees business because it’s a degree offered by a university. A university has its own understanding of how
they want to price a programme. Coursera definitely provides guidance, but it’s ultimately a decision of a
university, how they want to price the degree programmes, how many users they want to reach and how they
want to get these learners, that’s how it works. Less control on pricing for degrees, but the subscription will
control for basically the consumer segment, and depending on the size of the company, decent control on
pricing for basically the enterprise deals because it’s like a bundled deal, it’s not selling one single course.
[00:34:01]
Q: What tactics can Coursera employ to onboard new consumers vs competitors? How penetrated is the
company in the market across the US or internationally? 87 million users is a large amount of the adult
population in the US. How many more subscribers can it gain on the consumer side?
HS: This will be my opinion on this part, and it is the way to acquire consumers around the world is get the
content relevant to them in their region and get the content from brands which the people in those regions
know, so if you want to expand in India, you go to partner with universities in India, if you want to expand in
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China, you go to partner with basically content producers in China, big universities or companies. Singapore,
the same thing, because education is very regional, and you have to go in specific countries and get people. You
can try to get people from those countries to the US and all, but there are only certain universities which have
that brand reach, otherwise people want to learn from brand known in their own regions. That’s one. That’s
very important. Second is that, offer more micro-learning opportunities. Learning is hard, it takes a lot of
time. A lot of people don’t have time to invest a lot of hours into learning. If they do, then they pay for it in
form of a degree programmes or graduate certificates, but that’s a smaller number, so offer them micro-
learning, hence their guided certificates and guided projects which they have, it’s basically micro-learning, 30-
50 minutes, you will learn something new which helps them a lot as a company. Those are the two ways they
do it. In terms of penetration, my opinion is that this is still early days. People learn over the course of their
career, and the 80 million population is not in the US, it’s around the world, and I think they have more
people, they definitely have more people outside the US than in the US, but there are other regions also where
there are people who are coming in from places like India and others, where they just started to scrape the
surface, and there will be so many people.
Even in the US, they’re going into universities, they’re going into companies, so you will get a lot more people
in, and then it’s not just about registrations, it’s also about engagement. I think the ball, there will be two
levels of growth. The top line growth of getting more users, but there will be a second layer of growth where it
will be about converting those users more into highly engaged users, and which is the harder part, because
people can sign up but don’t do much, so I think there is a lot of scope for work there and I won’t even consider
thinking that Coursera cannot grow in the future. There is a lot to grow.
[00:37:32]
Q: Which markets do you think provide a good opportunity or easy synergies for Coursera to expand into?
Markets such as China are becoming very strict around education regulations. Do you consider this a hurdle in
that region?
HS: This is across the board, it’s not just about Coursera in this way. Any company operating in the space and
the problems across the board, it seems that India is much more open for business from people all around the
world, companies around the world, it’s less restrictions, only thing that I see is that India’s start-up scene is
hot and is really ramping up. Think of it like China’s scene 10 years ago, and a lot of money has been pumped
into India, because of that, you will see a lot more home-grown companies coming in, because of that, there
will be a lot of competition for Indian companies and for basically US companies in India, so they will have to
find a way to do well in this market. That’s one. India is but still a massive market, just five, 10, 15 million is
basically a drop in a bucket in a company like India, it’s nothing, so they have to do, there’s a lot more work
there that can be done. Latin America is another example where it’s open, people want to learn, people are
hungry about learning and growth, so that’s where Coursera would do well. Eastern Europe and Russia is
another one, there is a lot of demand. Southeast Asia, you can talk about Singapore, Thailand, Cambodia,
Vietnam, and those areas, there’s a significant interest. In terms of Africa, I’ve seen a lot of interest in South
Africa, Egypt, Nigeria, basically countries with a lot of population and decent internet connection, so
everybody wants to learn and educate, and Middle East is also there. Only thing that, and not just Coursera,
any company will have to look at is desire to learn and propensity to pay, how to balance those two together so
that they sustainably grow in this business while doing good in the world and also helping people.
Churn is always a concern, and a concern in the sense it’s harder to break in, they have their regulations and
they have these intellectual property restrictions too like, you have to partner with a local company and there
are the IP issues, and so I’m not an expert on China, but my own experience has been it’s very hard to enter the
market in a way which gives you decent control over your own business.
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[00:40:31]
Q: You mentioned government contracts or business. Is that in the enterprise segment? If so, what is the
opportunity within that government scope to build a strong marketplace and leverage that knowledge on that
connection to other governments ex-US?
HS: The basic premise there is that technology is changing fast, and governments have to train their people to
changing trends and many of them in tech-related roles or jobs of the future, because of that, what happens is
these governments look for organisations or companies which have a wide range of content they can help train
their people. If that happens, then these companies are like, these governments say, “We want to work with
something like you.” That happened in Colombia and that happened in basically Germany and some other
countries, and in that region, where the governments are like, “I want to train people in my country, I want to
offer them these courses at a discounted price so that you can have a reach in my country and also my people
can learn.” That doesn’t start immediately with, “Everybody should get a degree.” No, that’s not where it starts.
It starts with, “Let them have access to massive open online courses, let them learn through those, and if they
have shown progress, then we can talk about higher-level courses, degree programmes for them, otherwise
they should just do courses and some specialisations.” That’s where Coursera’s enterprise team comes into
play because the enterprise product is ready to offer more curated learning. You may also say that many of
these people can go directly to the consumer business. They can learn directly there. Yes, they can, but that
does not require that white-level model, you can call it, when the government helps them and provides a
service.
It’s more like me going on my own, and hence this model is gaining more traction, and so they’re also gaining
traction in the Middle East, so any of the developing countries or any country where they’re focusing on
helping specific segment of population and feel like basically the refugees that came from Syria to basically
Germany, they were offered these courses, and government was involved in buying these courses. They said
that, “We want to help these people, and this seems like a good way to teach them.”
[00:43:03]
Q: Do you think Coursera is really interested in the actual content part or is there too much of a capital-
intensive hurdle?
HS: To be very honest, I don’t know what they want to do now. Historically, what I have seen is that the
company has not intentionally gone into producing content on its own, content is always produced by people
outside, and that helps the company go ahead and do things and basically scale it faster and do it. Again, my
opinion is that it’s very hard for anybody to produce content on their own because you need to have subject
matter experts within the company, those people should have enough credibility in that space. Those people
should have prior experience in producing content, and then you take it out in the market then you see how it
does and then you trade on it. That’s a significant amount of work. Imagine Airbnb tomorrow starts to buy its
own homes and put them on the market and then get people in, that I could actually see it’s a more sustainable
model because it’s a house. It’s not as complex as producing a content because once you buy a house, your
house, nobody is asking you about the credibility of the house if it’s on Airbnb and all because it’s there, it’s a
house. When you’re learning, you have to put a person behind that learning, like who’s teaching? You need to
have that credibility of the person, so that becomes a very different model for a company like Coursera, it’s not
as easy to do. Also, when you’re partnering with other institutions, you have to figure out, how do you partner
with them and also how you add value to them if you’re trying to do their own, your own content and you have
to find balance between the two. I don’t know how they’re going to do it in the future, but historically, they
have stayed away because they have so many partners to work with and support, and they would rather do that
than produce their own content.
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[00:45:14]
Q: Could you outline the types of degree or certificate trends around tech such as machine learning or
automation? What have you noticed in the data from those trends and how might they evolve? What areas are
people moving away from?
HS: It’s pretty simple. Most of the people want to learn to get a better job and make more money, simple.
There are very few people in the world who learn just for the sake of learning to enjoy themselves, that’s a very
small population. Most people learn to make more money, so you can literally list all the jobs and you can list
the salary that somebody can make on the job, and then you can basically make a very strong assumption right
there that highest-paying jobs, the courses related to the highest-paying jobs will have the highest number of
people, and it seems like most of the highest-paying jobs are in tech and medicine and health, right now. If
you’re in the healthcare space, there’s a good amount of money there. If you’re in the tech space, there’s good
amount of money there. Business has money definitely, historically, but tech is even more now, and data has a
lot of money, then it is fintech, and talk about programming and basically computer science. Then you have
data science that has a lot of money, so when that happens, then people are like, “Wow, this is what I need to
learn more,” so people are shifting more and more towards those courses than doing courses which are not
related to tech, and that is just human nature, and if tomorrow there is, for example, if blockchain has become
bigger and bigger, then you will have people doing blockchain courses are doing well because of what it
becomes and there is a market for it and people want to signal their skills in this market and they will take
those courses.
[00:47:27]
Q: It seems the more consumers you have, the more the total cost of new acquisitions decreases. Things are
becoming more costly in the enterprise segment however, and although it is growing, margins are on a
downhill slope. Could this be the trend in the enterprise segment, that although sales volumes grow, it will be
the inverse for margins because of the high acquisition cost?
HS: That’s a good question, and I think it’s a mix of, I think your high cost of acquisition also happens because
when you have a lot of other players in the market, and here is my opinion on this. Enterprise, historically, not
just for education, in any segment, enterprise is basically where you get some of the big whales, big accounts,
and you convince them, you work with them. Microsoft is basically the king of this, and to do that, because it’s
so attractive, there are a lot of players that come in the market. Udemy is very good at this, Udacity has it,
Pluralsight has it. Codecademy has its own system of helping companies, so because of that, there is a lot of
competition, there are a lot of players and a lot of companies have more options to clients, basically, more
options to which they go for. It becomes harder to get them, but the key here is that once you have them, what
is the retention rate of that client with me? Is it three years, is it one year, is it seven years? Once you have that
number going, then that for me is a bigger metric to look at rather than to look at basically acquisition costs
and the big name because if I can retain them, I can sell them more later on. I can convince them to buy more
services and then offer degree programmes in the end. Coursera has those kind of products available which
complement the initial sale, hence I think it is bullish, and I want to look at the whole catalogue a company
offers, not just enterprise courses when I’m deciding whether this is a good business or not, and hence I think
Coursera is in a stronger position than somebody like Udemy or Pluralsight which have a one-track product
and they offer that and they can’t really step up to something, a bigger product if the client wants it.
[00:50:13]
Q: Could you elaborate on the partnership strategy in the consumer segment to expand professional
certificates? You mentioned the Airbnb example with Coursera. You said the company can post its house on its
wall and then it goes straight to the consumer. That’s true, though they may not get it, but when dealing with
large institutions, you have that brand recognition and you have the balance sheets to go directly for the
consumer because that’s traditionally the company’s business model. How sustainable is it for Coursera to
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maintain its partnerships and licences agreements, given that it is competing with its partners?
HS: I think that’s a fair point. I actually also think that as a company, and this is my opinion again, that why
would you try to reinvent the wheel when you’re partnering with some of the biggest names in this field who
know how to teach? Buying a house and renting it on your own is a completely different ballgame than
teaching something and competing with somebody who has been teaching this for years or centuries actually,
in many cases, so it’s not the same scenario. Airbnb has a very different product than what Coursera does and
it’s more about trust and branding and others than, like if I go out for a weekend in Tahoe, one house, big deal
if it’s not good, I can find something else. That’s different by me, instead of me taking a degree, which basically
defines my career. It’s a very high-stake product compared to travelling for three weekends in Tahoe, so that’s
a very different thing. In terms of maintaining those partnerships and keeping them aligned, it’s by doing
exactly this, by focusing on what you’re good at and adding value to your partners by increasing the reach, by
building products which help partners, and also eventually building products which help learners. If I am
getting good jobs out of what Coursera is building, it would help me a lot rather than not do it, so that’s where
Coursera would stand out, that if they can help universities produce better courses, help them understand
what users are learning and help them create better learning products by partnering with basically Coursera
and understanding the data, then they are adding value for their university partners, apart from obviously the
marketing side of things, and partners have stayed.
I don’t know of any single partner of Coursera that there have been significant bad experiences and all, which
is a very good thing that company does, so I won’t be worried about that. I would be concerned more about,
and not in a bad way, in a good way, that how can I keep on serving my partners by finding the right learners
and helping them teach in a much better way through the data we have?
[00:53:36]
Q: Could you highlight any standout or flagship programmes that have taken off in the degree segment for
Coursera?
HS: They have this iMBA from University of Illinois at Urbana-Champaign, it’s a very big programme. It’s
probably one of the biggest MBA programmes in America and probably in the world. It is very good. It is only
USD 20,000, around that, compared to a programme that you go online to pay, what? USD 150,000 for it, and
you learn from really good faculty, very well done, they teach properly, they educate you a lot. One of my
friends is taking it recently and we were talking about it, and he thinks it’s outstanding for the value of money,
it’s amazing, and they have a bachelor’s in computer science from the University of London, that is only for
USD 15,000 for a bachelor’s degree. In the US, I believe you pay USD 200,000 plus for basically a bachelor’s
degree. Look at the difference in the money, and you’re learning from the University of London. It’s a known
institution with really high-quality people. There are people out there at universities who want to increase
access and teach and do really good programmes and lower the cost of education, and that’s what Coursera has
done with these players. They have launched many other programmes. They have launched programmes in
public health, they have launched data science degree with Imperial College London, and also with the
University of Michigan, and there are many others. University of North Texas has launched a bachelor’s in arts
and sciences, except it’s a degree completion programme for people, and it is a very affordable programme,
again, so the idea is the same.
Why do I need to (1) be on campus when I can learn online? (2) Why do I need to pay that massive amount of
money when an institution can actually generate revenue and I can have good education at a lower price?
Those two things come in together, and Coursera, they have been innovating in the space, and I think that’s
one of the reasons 2U acquired EdX because they were like, “Wow, we might not be able to compete with
Coursera in the long run because Coursera has this learner base and the degree business. We have the degrees
business, but we don’t have the learner base, so we need to get the learner base.” That’s why they acquired
EdX.
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[00:56:15]
Q: Is Coursera assisting consumers in the degree application process? Can you expand on the services aspect
around onboarding students and leading them into the actual programme?
HS: That’s a good question. Most of it is, and this is based on what I have seen historically happen in
programmes, but I think that most of it is done by universities, they do it on their own because they want to
maintain the conversation. Coursera helps out with obviously lead generation and getting the users and
passing on the leads to the partners. Some work Coursera does on the high-end fees, but many times,
universities do this on their own and they interact with the learners, because remember that it’s not like a
house that I have rented and I can just go in and everything happens. It’s that I go and live and then I never
see the owner of the house or anything, I just go and live in there and come out in many cases. This is like, “I’m
going to learn in a degree programme, I’m going to see the faculty every week, I’m going to interact with them
and I’m going to talk to them. I’m going to talk to the career development centre and all those things.” That is
happening. It means a university will make sure that they’re engaging with the learner, building a relationship
directly with the learner and taking care of them, because eventually, it’s their product. It is not Coursera’s
product, and that’s why many of the services are managed by the university, some are managed by Coursera,
and it varies based on what role a university wants Coursera to play.
[00:58:13]
Q: How has Coursera taken advantage of the opportunities provided by coronavirus? Was the company able to
fully capitalise on this opportunity? Did it increase subscribed accounts or lower pricing to take market share?
Which is the right front for Coursera?
HS: They did a very good job when COVID hit, they basically made Coursera for universities free for
everybody, literally. Any university in the world can use Coursera for university for free and they were simple.
“You are under pressure right now, COVID is once in 100 years, kind of a black swan event. You have to help
your people, we have the content on the platform which you can use to train your people, and basically educate
your students and leverage some of the content and help and basically have the platform.” A lot of universities
signed up. I don’t know the exact number, but it’s a massive number, and because of that, they got free leads
on some of the biggest education institutions in the world, and these are massive enterprise accounts on the
B2B side, and they did an amazing job in that space, so they’re going to keep on doing it and helping them and
now they’re going to nurture many of them. Some of them would come back and become long-term customers.
That’s what they did immediately. You can call it they’re offering it for free model, where they let them in and
use it, and now they’re going to retain these users and generate content from them, generate B2B sales from
them, and also potentially degrees for them, so the more universities Coursera gets, the more the ecosystem
gets stronger, the more people they get in and the more they grow the company. I think that was a brilliant
move by them, and beyond that, I’ve not heard anything bad about the platform breaking up or about users
having bad experience once they go to Coursera during COVID because they had a surge of users, so their tech
stacking and infrastructure is really good and they were able to retain users that way, so they have done well. I
have not heard of them lowering prices at all, in terms of courses and all, but in terms of partnerships, getting
universities and all, they did the right thing by opening up the window for anybody to come in and then
offering them services and hoping that many of them will retain.
[01:01:14]
NH: I think that’s a good place to end the Interview, let me just close by saying, thank you, Himanshu, for
your time today, we’ve covered a lot, able to get through a lot of content, and thank you, clients, for joining
Third Bridge Forum’s Interview. If any clients would like to arrange a private meeting or consultation, please
contact your relationship manager. Have a good one.
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HS: Take care, man. Take care. Bye-bye.
Transcription ends at 01:01:29 of the recorded material.
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