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.

Business Model Element	Analysis	Implications	Examples
Value Proposition	Skillshare’s value proposition centers around accessible and affordable online learning. For learners, Skillshare offers a vast library of courses on topics such as design, creativity, business, technology, and more. Learners can access these courses at their own pace and convenience. Skillshare encourages a sense of community and creativity, making learning engaging and enjoyable. For teachers, Skillshare provides a platform to share knowledge and earn money through teaching. The platform offers teachers a way to monetize their expertise and reach a global audience. Overall, Skillshare’s value proposition is built on democratizing education, fostering creativity, and empowering both learners and teachers.	Provides accessible and affordable online learning. Offers a wide range of courses on diverse topics. Allows self-paced learning at learners’ convenience. Fosters a sense of community and creativity in the learning process. Empowers teachers to monetize their expertise and reach a global audience. Appeals to learners seeking affordable and engaging online courses and teachers looking to share knowledge and earn income.	– Skillshare’s value proposition aligns with the growing demand for online education and lifelong learning. – Self-paced learning suits individuals with various schedules and commitments. – The platform’s community aspect enhances engagement and motivation. – Teachers benefit from monetizing their skills and expanding their reach.
Customer Segments	Skillshare serves two primary customer segments: 1. Learners: Individuals seeking online education and skill development across various fields. Skillshare appeals to lifelong learners, creative enthusiasts, and those looking to acquire new skills or enhance existing ones. 2. Teachers: Instructors, experts, and creatives who want to share their knowledge and earn income by creating and teaching courses on Skillshare. Skillshare tailors its services to meet the needs of these segments, providing learners with access to a vast library of courses and teachers with a platform to create and monetize their content.	Serves two main customer segments: 1. Learners: Individuals seeking online education and skill development. Appeals to lifelong learners, creative enthusiasts, and skill seekers. 2. Teachers: Instructors and experts wanting to share knowledge and earn income. Offers a diverse course library for learners and a platform for teachers to create and monetize courses. Supports diverse learning and teaching needs.	– Catering to both learners and teachers creates a thriving ecosystem of knowledge exchange. – A vast course library ensures learners have access to a wide range of subjects. – The platform’s monetization model motivates teachers to create high-quality content.
Distribution Strategy	Skillshare’s distribution strategy is digital and relies on its website and mobile app for course access and interaction. Learners use the Skillshare website or app to browse courses, enroll, and access learning materials. Teachers use the platform’s course creation tools to develop and publish their courses. Skillshare also offers offline viewing options for learners who want to access content without an internet connection. Additionally, Skillshare leverages social media, content marketing, and partnerships with influencers to promote the platform and attract new learners and teachers.	Relies on a digital distribution strategy through the website and mobile app. Learners use the platform to browse courses, enroll, and access learning materials. Teachers utilize course creation tools for content development and publication. Provides offline viewing options for learners without internet access. Promotes the platform through social media, content marketing, and influencer partnerships. Ensures accessibility and convenience for both learners and teachers.	– Digital distribution ensures easy access to Skillshare’s courses, eliminating the need for physical distribution channels. – Offline viewing options expand access to learners in areas with limited internet connectivity. – Leveraging social media and content marketing enhances brand visibility and user acquisition.
Revenue Streams	Skillshare generates revenue through a subscription-based model and a teacher payment model: 1. Premium Memberships: Learners can subscribe to Skillshare Premium, which offers unlimited access to the entire course library without ads. Premium memberships are available on a monthly or annual basis. 2. Teacher Payments: Teachers earn money based on the number of minutes watched by Premium members in their courses. Skillshare shares a portion of its subscription revenue with teachers. Additionally, Skillshare may offer free trials and promotional pricing to attract new Premium members.	Relies on revenue streams from: 1. Premium Memberships: Learners subscribe for unlimited access. 2. Teacher Payments: Teachers earn based on Premium member engagement. Offers free trials and promotional pricing for user acquisition. Shares a portion of subscription revenue with teachers. Diversifies income sources through subscriptions and teacher payments.	– Premium memberships provide a recurring revenue stream and incentivize course creation. – Sharing subscription revenue with teachers motivates them to create engaging content. – Free trials and promotional pricing attract new Premium members.
Marketing Strategy	Skillshare’s marketing strategy includes content marketing, social media advertising, partnerships, and referral programs. The platform creates and shares educational content, including blog articles, videos, and webinars, to showcase the value of its courses. Skillshare leverages social media platforms like Instagram, YouTube, and Twitter for targeted advertising campaigns to reach potential learners and teachers. Partnerships with influencers, bloggers, and educational institutions help promote the platform. Skillshare also encourages its users to refer friends and family through referral programs, offering incentives for successful referrals.	Utilizes content marketing, social media advertising, partnerships, and referral programs for marketing. Creates and shares educational content to showcase course value. Runs targeted advertising campaigns on social media platforms. Collaborates with influencers, bloggers, and educational institutions for promotion. Incentivizes user referrals through referral programs. Provides users with valuable resources and incentives to attract new users.	– Content marketing positions Skillshare as an educational authority and attracts organic traffic. – Social media advertising reaches a broad audience of potential learners and teachers. – Partnerships with influencers and educational institutions enhance brand credibility. – Referral programs leverage existing users to drive user acquisition.
Organization Structure	Skillshare operates with specialized teams dedicated to product development, content creation, marketing, partnerships, customer support, and teacher support. Product development and engineering teams focus on improving the platform’s functionality and user experience. Content creation teams collaborate with teachers to develop high-quality courses. Marketing teams promote Skillshare’s services. Partnership teams work with influencers and institutions. Customer support teams assist users with inquiries. Teacher support teams help instructors create and optimize their courses. Skillshare’s organizational structure supports the creation, promotion, and accessibility of online courses.	Employs specialized teams for product development, content creation, marketing, partnerships, customer support, and teacher support. Enhances platform functionality and user experience through product development and engineering. Collaborates with teachers for high-quality course creation. Promotes services through marketing efforts. Partners with influencers and institutions for broader reach. Assists users with inquiries and provides support for teachers. Supports course creation and optimization.	– Specialized teams contribute to a user-friendly platform and high-quality courses. – Marketing and partnership teams drive user acquisition and brand visibility. – Customer support and teacher support enhance the user and teacher experience.
Competitive Advantage	Skillshare’s competitive advantage lies in its vast course library, affordability, and strong community. The platform’s extensive course selection covers diverse subjects and caters to various learning needs. Affordable Premium memberships make high-quality education accessible to a wide audience. Skillshare’s emphasis on community and creativity fosters engagement and motivation among learners and teachers, creating a supportive environment. Additionally, its revenue-sharing model with teachers attracts top talent and motivates them to create engaging content.	Derives a competitive advantage from: – Vast course library covering diverse subjects. – Affordable Premium memberships for accessibility. – Strong sense of community and creativity. – Motivated teacher community through revenue sharing. – Fostering engagement and motivation among learners and teachers. – Attracting top talent to create high-quality courses.	– A wide range of course options caters to diverse learning interests. – Affordable pricing makes high-quality education accessible to many. – The community aspect enhances engagement and motivation. – Revenue sharing with teachers encourages the creation of engaging content.

Table of Contents

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:

Annual – the most popular plan which is billed annually at $168. This equates to $13.99/month.
Monthly – the monthly plan is $32/month or $384 annually.
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.

Key Highlights

Online Learning Community Platform: Skillshare is an online learning community that offers educational videos through a subscription-based model.
Origin and Inspiration: Skillshare was founded in 2010 by Michael Karnjanaprakorn and Malcolm Ong. Karnjanaprakorn’s idea for Skillshare emerged from his realization that his college degrees lacked practical application.
Shift to Online Learning: Skillshare initially started with in-person classes but transitioned to an entirely online-based learning platform in 2013 to scale the business effectively.
Pandemic Impact: Skillshare experienced substantial growth during the COVID-19 pandemic as people turned to online education while spending more time at home. The platform’s user base expanded to over 12 million registered users.
Revenue Generation Model:
- Subscriptions: The bulk of Skillshare’s revenue comes from subscription plans:
  - Annual Plan: Billed annually at $168 ($13.99/month equivalent).
  - Monthly Plan: Billed at $32 per month or $384 annually.
  - Team Plan: Enterprise option billed annually based on the number of users.
- Royalty Pool: 30% of subscription revenue goes into a royalty pool, which is then distributed to teachers based on the number of hours their courses have been watched.
- Referral Fees: Skillshare earns referral fees by recommending related products to its subscribers. When students subscribe to an annual membership, they receive special offers on products like Adobe Creative Cloud or Canva. While Skillshare doesn’t explicitly state making money from these recommendations, it is assumed they earn some sort of commission, especially given the high-margin and subscription-based nature of these products.
Learning Platform Evolution: Skillshare evolved from offering in-person classes to becoming a major player in online learning, providing over 27,000 classes taught by industry experts.
Empowerment and Learning: Skillshare’s mission is to provide practical, real-world skills to learners, bridging the gap between traditional education and practical application.
Revenue Diversification: Skillshare’s revenue streams include subscription plans, royalty distribution to teachers, and referral fees from related products.
Monetization Strategies: The platform utilizes both subscription-based revenue from learners and partnerships/referrals with related products to generate income.
User-Centric Approach: Skillshare’s premium membership offers an ad-free experience and offline access, enhancing the learning experience for its subscribers.
Educator Compensation: Skillshare’s royalty pool system ensures that teachers are compensated based on the popularity and engagement of their courses.