Riccardo Sciascia

In a constantly evolving world, mediated by drastic improvements in technology, universities are falling behind in offering students skills that are in-demand by employers. In an attempt to bridge the educational gap, online learning platforms have appeared in the last 6 years each with the same goal: providing students with in-demand skills and knowledge that is sought by employers. In this article, we analysed Udemy, one of the many online-learning platforms that are available to consumers.

Udemy

Udemy is an online learning platform founded in 2009 with the goal of enriching people’s lives through learning. With its headquarters in San Francisco, California, Udemy boasts over 65,000 courses in an ample number of fields – from technology, graphic design, video production to self-branding and entrepreneurship. Rather than offering academic courses, Udemy offers skill-based courses from individuals. Udemy allows virtually anyone with a webcam to set up a course on their platform. What drove the steep increase in courses from 2009 up to 2018, are the monetisation opportunities offered on the platform.

The industry

Udemy operates in the online-learning market, characterised by multiple platforms offering massively open online courses (MOOCs). The online-learning industry has risen into prominence in 2012, with platforms like Coursera, EdX and Udacity all launching in this year. The online-learning industry is characterised by online platforms that provide educational content through multimedia tools, such as smartphones or laptops. A primary characteristic of online e-learning platforms, is exponential scalability. While conventional institutions are constrained by classroom sizes, online courses can host hundreds of thousands of students (Coursera for examples sees an average of 43,000 students enrolled in a given course), that can take the course from any location at any time. Another key identifying characteristic of the content offered in the e-learning industry is flexibility. Students follow the content at their own pace, allowing for a more customised learning experience.

The online learning industry can further be narrowed into more distinct sub-sections. Three of the most notable sub-markets are mobile learning (characterised by learning primarily on smartphone devices), Online Corporate Training (characterised by online resources offered by third-party instructors or experts) and MOOCs in Corporate Training (online resources created by a company’s employees to facilitate knowledge share across business units and functions).

Udemy’s Business Model

Udemy offers a wide array of courses taught by instructors. Virtually anyone with a webcam and a laptop can sign up as an instructor and create a course. As such, Udemy can be seen simultaneously as an online-learning platform and an online marketplace. This section will analyse Udemy’s business model as two separate entities – as an online-learning platform and as an online marketplace.

Udemy employs a pick-and-pay business model, whereby users view courses offered on the platform, make a decision and pay for the chosen course(s). In an attempt to facilitate the decision-making process of their users, platforms under this pricing model offer their users previews of the courses before they make the purchase. Pick-and-pay pricing models provide users with advantages over subscription-based models. Some users may only want to take a single course as opposed to having access to the whole bundle of courses under a given track. This allows the consumer’s investment to be considerably smaller for a given course. Additionally, once the single instalment for the course has been paid, users have access to the course’s content for an indefinite period of time, without having to pay additional fees.

Unlike other platforms, Udemy allows anyone with a webcam to set up a course on their platform. The platform is characterised by two actors:

Content creators, who create courses in a given topic and whose goal is to monetise said course,
Buyers/Students/Users, who buy courses offered on the platform.

As a result, Udemy acts a marketplace that connects content creators, who possess skills in a given topic, and buyers, who want to learn a given skill. The platform offers monetisation opportunities for their content creators, by allowing them to price their courses as they see fit.

Udemy is an interesting competitor in the online-learning market. Together with Lynda, they are the only platforms that act simultaneously as online-learning and online market platforms. Despite the relatively saturated market, the online-learning industry is set to reach over $300 billion in revenues by 2025. With traditional higher education establishments not being able to keep with the fast-changing skill requirements in the labour market, online learning platforms are well along the way of disrupting current notions of higher education.

References

Ferenstein, G. (2014). Study: Massive Online Courses Enroll An Average Of 43,000 Students, 10% Completion. [online] TechCrunch. Available at: https://techcrunch.com/2014/03/03/study-massive-online-courses-enroll-an-average-of-43000-students-10-completion/ [Accessed 8 Mar. 2018].

Ferriman, J. (2017). E-Learning Industry Worth $325 Billion by 2025 – LearnDash. [online] LearnDash. Available at: https://www.learndash.com/e-learning-industry-worth-325-billion-by-2025/ [Accessed 8 Mar. 2018].

Inverse. (2016). The Online Education Gold Rush Is Drying Up as Amazon Approaches. [online] Available at: https://www.inverse.com/article/17307-growing-pains-at-online-education-startup-udemy-hit-as-amazon-rumors-swirl [Accessed 9 Mar. 2018].

Udemy About. (2018). Learn about Udemy culture, mission, and careers | About Us. [online] Available at: https://about.udemy.com/?locale=en-us [Accessed 8 Mar. 2018].

There have been many research developments in the field of crowdfunding, in the past decade. While the focus for IS practitioners has been on optimising crowdfunding efforts in order to reach a specific measure of success (usually financial success eg: target funding amount), less focus has been placed on identifying the psychological and motivational queues that lead individuals to contribute monetarily to campaigns.

What makes people want to contribute in the first place, to a crowdfunding campaign?

Zvilichovsky et al (2017) have devoted their research efforts on investigating the motivational factors that lead individuals to contribute to crowdfunding campaigns. Their research analyses how consumers increase their participations when they believe their contribution is pivotal to product creation. In crowdfunding platforms, consumers consciously and willingly fund a product that does yet no exist in the market. The essence of crowdfunding platforms is to involve individuals in early stages of the product development process. This context sparks consumer motivations that transcend traditional transactional interactions.

Rather than being motivated by a sense of generosity towards the laborious efforts of the entrepreneur, consumers are driven by the notion of seeing the product become a reality and become in possession of it. The authors conceptualise making-the-product-happen motivation as an attempt by consumers to contribute to the creation and commercialisation of a product by means of monetary funding and making-it-happen motivation as an attempt by consumers to contribute to the realisation of the campaign’s financial goal. When consumers feel that the existence of the product depends on the success of the crowdfunding campaigns and that their financial backing is pivotal to the creation of the product, making-the-product-happen motivation peaks.

The authors conducted a total of four studies controlling for future product availability, funding mechanism and funding stage target to provide empirically validated answers to the question above.

The first study, tests whether all-or-nothing funding mechanisms vs keep-it-all funding mechanisms see differences in the willingness to back propensity of consumers. The participants were provided information regarding an air cleaning system and asked using a 7-item likert scale how likely they would be to pay $50 to back the campaign. The result of the first study determined that all-or-nothing funding mechanisms drove the participants’ making-it-happen motivation and willingness to back the campaign.

The second study tested whether consumers were more willing to back a campaign that was closed to reaching its target vs one that had already reached it target. The results found that consumers’ perceived impact on making-the-product happen, led to a higher willingness to participate in a project whose financial target is close to its goal.

In the third and fourth study, the researchers tested whether future availability of the product would affect their willingness to contribute. They found that when future availability of the product depends exclusively on the success of the campaign (thus that the backer’s financial donations are pivotal in making-the-product happen) consumers are more willing to back the campaign.

To test for generalisability the authors of the study conducted a field experiment on 193,312 campaigns by analysing the average contribution per backer compared to the length of the campaign.

Apart from validating the results found in the lab study, they discovered that most of successful campaigns achieve their goal only by a slight margin above the target (computed to be $195 or three $65 donations) indicating the importance of communicating the importance of the backer’s role in product realisation process.

The authors found very interesting insights that serve as insights to campaign designers to optimise their probability of success. If entrepreneurs are able to effectively and sincerely communicate to consumers the importance of their role as backers in making-the-product happen then the results of the study indicate a positive correlation with financial success (for the entrepreneur) and future product availability for the consumer.

While the study did provide insights as to which motivational factors lead consumers to back campaigns, it is not short with its limitations. The data collected from Kickstarter does not report the amount contributed by backers, which had to be assumed by the authors. Furthermore, the results applied only to consumer products and not to public goods, who see crowdfunding as a viable source of funding.

The above limitation set a precedent in the direction that future research should take in further developing the crowdfunding literature. The researchers hint that studying the interactions that occur in the post-crowdfunding stage would provide a more complete portrait of crowdfunding literature.

Zvilichovsky, D., Danziger, S. and Steinhart, Y. (2018). Making-the-Product-Happen: A Driver of Crowdfunding Participation. Journal of Interactive Marketing, 41, pp.81-93.