skillshare-business-model

How Does Skillshare Make Money? The Skillshare Business Model In A Nutshell

  • Skillshare is an online learning community platform offering educational videos through subscriptions. The idea for the platform came from Michael Karnjanaprakorn, who lamented that his college degrees had no real-world application. 
  • Skillshare employs a marketplace model of revenue generation. The bulk of its revenue comes from monthly, annual, and enterprise subscriptions.
  • Skillshare also earns referral fees from the related products it shows to consumers on annual subscriptions. Some of these products are high-margin and subscription-based, which represents a lucrative source of income.

History of Skillshare

Skillshare is an online learning community platform offering educational videos through subscriptions.

The platform was created by Michael Karnjanaprakorn and Malcolm Ong in 2010. Karnjanaprakorn got the idea for Skillshare after earning two college degrees and realizing that most of what he learned did not apply to the real world.

This idea was strengthened after he visited a school in New Orleans after Hurricane Katrina. He saw that the education system failed disadvantaged children whose parents could not afford private tutoring.

After brief periods at Hot Potato and Behance, Karnjanaprakorn met Ong at an NYC-based meetup and invited him to be eventual CTO.

Skillshare was born soon after, with the first lessons about how to play poker taught by Karnjanaprakorn himself on Eventbrite.

Having validated their idea, seed round and subsequent investment funding were secured.

Although thousands of people started attending in-person classes, the co-founders noted the only way to scale the business was by shifting them online.

In 2013, Skillshare moved toward becoming an entirely online-based learning platform.

Three years later, the company had amassed over 3 million course enrolments with millions more in funding raised.

As people became stuck at home in lockdown, they found themselves investing spare time and money into education.

Skillshare benefitted greatly from the COVID-19 pandemic, now boasting over 12 million registered users.

Skillshare revenue generation

Skillshare utilizes a marketplace model of revenue generation as a facilitator of learning between teachers and students.

To explore this revenue model in more detail, continue reading below.

Subscriptions

Skillshare Premium membership gives students unlimited access to more than 27,000 classes taught by working creatives and industry experts.

In addition, the premium membership is an ad-free experience and can be accessed offline.

Each plan comes with a 7-day free trial. But for those who want to upgrade, there are three options:

  1. Annual – the most popular plan which is billed annually at $168. This equates to $13.99/month.
  2. Monthly – the monthly plan is $32/month or $384 annually.
  3. For teams – an option for enterprises billed annually where the cost is based on the number of users.

It’s important to note that 30% of all subscription revenue is paid into a royalty pool where it is then distributed to teachers. The share each teacher receives is based on the number of hours their courses have been watched.

Referrals

The company also makes money by recommending related products and earning a referral fee.

When a student subscribes to an annual membership, they are entitled to special offers.

For example, a photography student may receive a discounted price for Adobe Creative Cloud. A design student may receive a similar offer for Canva.

Skillshare does not claim to make any money through these recommendations, though it can be assumed it is collecting some sort of commission.

This is likely to be quite a lucrative arrangement for the company. Many of the related products are high-margin, while others are subscription-based meaning the company can earn a commission for months or even years.

Related EdTech Business Models

Coursera Business Model

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Coursera is an American massive open online course (MOOC) provider founded by Andrew Ng and Daphne Koller in 2012. Coursera revenue is categorized according to consumer, enterprise, and degrees. The consumer category accounts for the majority of revenue with multiple studies and course options for individual students looking to upskill.

Duolingo Business Model

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Duolingo is an EdTech platform leveraging gamification to enable millions of users to learn languages. Duolingo leverages a hybrid between ad-supported and freemium models. Indeed, the free app makes money through advertising. Free users are also channeled into premium subscriptions with an ad-free experience and more features.

Khan Academy Business Model

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Khan Academy is an EdTech non-profit organization whose mission is “to provide a free, world-class education to anyone, anywhere,” It runs thanks to the sponsors of various donors that keep the platform developing content at scale for its millions of students across the world.

Masterclass Business Model

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Started as an attempt to transform education, MasterClass finds top talents and turn them into instructors. With a straightforward membership model of $180 per year, the streaming online education platform gives access to all its courses and the new releases on the platform. In 2020, it got valued at over $800 million.

Udacity Business Model

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Udacity is a freemium EdTech platform, offering MOOCs (courses open to anyone for enrolment). Udacity partners up with companies and universities to offer nanodegrees (short-term online education programs focused on specialized skills in computer science). The user either pays a one-time or subscription fee to access one or all courses.

Udemy Business Model

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Udemy is an e-learning platform with two primary parts: the consumer-facing platform (B2C). And the enterprise platform (B2B). Udemy sells courses to anyone on its core marketplace, while it sells Udemy for Business only to B2B/Enterprise accounts. As such, Udemy has two key players: instructors on the marketplace, and business instructors for the B2B platform.

Skillshare Business Model

skillshare-business-model
Skillshare is an online learning community platform offering educational videos through subscriptions. The idea for the platform came from Michael Karnjanaprakorn, who lamented that his college degrees had no real-world application.  Skillshare employs a marketplace model of revenue generation. The bulk of its revenue comes from monthly, annual, and enterprise subscriptions. Skillshare also earns referral fees from the related products it shows to consumers on annual subscriptions. Some of these products are high-margin and subscription-based, representing a lucrative income source.

Kahoot Business Model

how-does-kahoot-make-money
ian game-based learning platform founded in 2012 by Johan Brand, Jamie Brooker, and Morten Versvik. It is based on a university-developed interactive learning game called Lecture Quiz. Kahoot is free to use for players. Instead, the company makes money by selling access to various adaptations of the game fit for educational or enterprise contexts. Prices depend on the number of game participants and the level of functionality. Kahoot also makes money by licensing its gaming platform to third-party publishers that want a grow an engaged audience.

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