How Skillshare CEO Matt Cooper grew Skillshare to $14.4M revenue and 100K customers in 2017.

hello everyone my guest today is Michael cartoon a popcorn he is the founder of a company called Skillshare which is a learning community for the new economy Michael are you ready to take us to the top yes for sure thanks for having me good you bet man so tell us first what is Skillshare doing what's your business model how do you make money yeah so Skillshare is a website where you can take online classes so kind of works similar Netflix where you can take go 17,000 online classes for about you know $10 a month and we really specialize in professional skills within creative business of tech so our business models description so we take a percentage of that which is how we make revenue and so is it a pure sass player can people buy one off courses sure SATs so the idea for us is as we add more classes the possibly becomes a much better value for students so you know the early days we're offering like hundred classes for ten dollars and now you have seventeen and I think the future will have hundreds of thousands of courses and what so what's the other constant man you per month would you say so you can it's either fifteen dollars a month or one hundred dollars a year so about half of our users often to one of those two points so we could say it's somewhere between well so what probably so looks a month something like that yeah yeah and what is the have you seen a direct before get more of your back strong curious have you seen a direct correlation to increase for attention have you have as you have like significantly grown your content base yeah for sure so every year we're seeing the amount of well we track four engagements like minutes watch so every year as we have more content we see that number to go up which also drives up engagement and rubs on bread and churn so we definitely see a correlation for sure so how many minutes does somebody have to watch per month where you're like I know for a fact they're sticky and they're paying again next month about an hour which is roughly maybe one in half classes okay interesting give us more about your back story when did you launch company yes my back sore I was born here in the US but our family goes to Korea so that's where I'm telemetry school move us back here to go to go to school go to the US and you know did everything you're supposed to do with TV Bridget Virginia which really no we I have to end this interview now man I'm a Hokie I'm a tech guy but the funny thing is it's like you know that's what gotten you really ensuring education because like my whole life was about getting to school and while had a great experience a graduates degree and you know kind of shot opportunities I wasn't really really interested in which is what led them to sort of thing about Skillshare and then from there it just worked in tech and I volunteer orleans for about a year where tennis term competes with the guy Bielski i got acquired by Adobe and worked in another star called hot potato which got acquired by Facebook so I liked it those two opportunities kind of like getting an MBA and startups and then started Skillshare with us and start working on in 2010 and then we launched in 2011 and the idea is to provide access to learn especially learning that you know which around real-world skills that were needed in the new economy and what is the like why go into it like you you're young how old were you in 2011 said maybe 27 28 so and are you single do you have kids no not single but don't have good okay so okay so yeah and a relationship and okay yeah so you you still generally have like almost complete freedom like why decide to go into a space where your moat is not gonna be a technical architecture it's gonna be how much quality content you can get yeah that's a good question I think you know you know I think when I when I was thinking about what to do next I had an excel file like over 100 different business ideas and I had a really hard time filtering those down because you know some of them were really good well your sounds very good I'll see this was one of them one of them's not tech related one I want to kind of start like a Soho House but New York there's like a private member's Club but like kind of like lunch that are on the world I realize have no experience no sleep whatsoever cells not a good idea and I think we hadn't remember the other one but you know to narrow that list down you know the filter I had was like would I be able to work on this for ten plus years and the narrowed it down to things are very impact a mission-driven and that's even better launched a for-profit forked company and that was also really passionate about education that's what led to the formation still chair as far as the defense ability so we do look at it as in two or three different ways one is two sided network effects so leveraging the internet you have to cider marketplace one side pulls the other now the tech side we do invest a lot to do science machine learning so as people use them we invest a lot it's personalization and so so those two things working in unison together is how we how we create our mode also we've got a strong brand and we have no great value and all those things but we really focus on the two sided network effects and do science give us an update where you are today how many folks do have paint in a platform every month we have about three three and a half million registered users seventeen thousand online course classes for about five thousand teachers we're pretty much half of our user base is international you know business is doing really well we're doubling your a year revenues and you know you know way about 10 million so it's doing really well I think the next stage of the company it's really run growth and scaling so I think you know the early days is around product market fit and then we started figuring out how to lay down the foundation to scale I'd say like we are we are in that you know scaling things right now and yeah there are phases of that are you over a hundred thousand folks paying yet yep you are okay great but can you put a cap on that like below three hundred thousand below five hundred thousand below one of those two numbers below and make it vague enough where your competitor will still be wondering yeah big enough where everyone's mind wander along what they take that number is that's good that's good that's good that's good no yeah congratulations on that so yeah I mean look at a minimum if you got a hundred thousand people at twelve bucks a month obviously people can do the math and and and kind of you know back a little bit into why it's easy for you to say you're well about ten million bucks and a are at this point tell me more about the data side of this so when you have video and audio content in your platform are you doing things like transcribing it and then actually using your search and recommendation algorithms tied to the actual text data or do you have something that ties directly into the voice data we do some of that but it really we really look for quality content right so we look at engagement with hand classes so let's say you upload a class and you know ten people watch it but they all watch the whole thing so we can signal notes that's pretty good and based on you know another user pads of you industry let's say you're really to a senior you know back when you have like psychology let's say you early into that we can pull that class out and recommend it to you because we we feel pretty confident real good if you like it you know that class funnels over to the top so that's one example on the class layer but our vision is to create what we call this an ecosystem for the new continent so we want to add clear layer where we serve recommend jobs other pieces of content for you other people you should interact with so the idea is that we can create this like personalized like school for you around everything you want to learn and who you want to interact with so that's kind of the vision and that's where a lot of the data and these kinds of companies content company specifically it's always a struggle I mean you've got a massive obviously content-based but churn is always a struggle I mean it's hard especially at this kind of price but I imagine you're mainly probably selling to consumers or people just out of school wanna get educated maybe not a ton of just you know income they can just throw away well what is your annual retention right now and what are some things you're doing them next year or two years or drive that debt up yes sir our trenches pretty high I think when we look at the retention curves they all kind of like you know they all start flat lighting at a certain point every year the region typically does it's pretty good I would say for b2c so I think when people you know think about subscription churn you know a lot of what's right out there is about SAS term so those are b2b you know especially Enterprise so you're looking at one or two percent annually which is really good consumers much different so I think a terrible turn for consumer subscription business would probably 15 plus you tend example Oh like people churning or the revenue that make up those people either so we track net subscription because we don't have a little time we don't have different price points we just have one so so we look at a subscription...