What the MasterClass effect means for edtech – TechCrunch

by Jeremy

MasterClass, which sells a subscription to celebrity-taught classes, sits on the cusp of entertainment and education. It offers virtual yet aspirational learning: an online tennis class with Serena Williams and a cooking session with Gordon Ramsay. While there’s the off chance that an instructor might talk to you — it has happened before — the platform mostly offers paywalled documentary-style content.

The vision has received attention. MasterClass is raising funding that would value it at $2.5 billion, as scooped by Axios and confirmed independently by a source to TechCrunch. But while MasterClass has found a sweet spot, can the success be replicated?

Investors certainly think so. Outlier, founded by MasterClass’ co-founder, closed a $30 million Series C this week for affordable, digital college courses. The similarities between Outlier and its founder’s alma mater aren’t subtle: It’s trying to apply MasterClass’s high-quality videography to college classes. This comes a week after I wrote about a “MasterClass for Chess lovers” platform launched by former Chess World Champion Garry Kasparov.

Two back-to-back MasterClass copycats raising millions in venture capital make me wonder if the model can be verticalized and focused down into specific niches. After 2020 and the rise of Zoom University, we know edtech needs to be more engaging, but we don’t know the exact way to get there. Is it by creating micro-learning communities around shared love? Is it about gamification? Aspirational learning has different incentives than for-credit learning. To succeed, Outlier must prove to universities that it can use MasterClass magic for true outcomes that rival in-person lectures. It’s a harder and more ambitious promise.

My riff aside, I turned to two edtech founders to understand how they see the MasterClass effect panning out and to cross-check my gut reaction.

Taylor Nieman, the founder of language learning startup Toucan:

Although I love how these models try to lean into this “invisible learning” theme as we leverage Toucan, it faces the same issues as so many other consumer products that try to steal time from people’s very busy days. Constantly competing for time leads to terrible engagement metrics and very high churn. That leads me to question what true learning outcomes could occur from little to no product usage.

Amanda DoAmaral, the founder of Fiveable, a learning platform for high school students:

Masterclass is important for showing us why educational content should be treated more like entertainment. Our bars for content quality are much higher now than ever before, and I’m excited to see how that affects learning across the board.

For students, it’s about creating environments that support them holistically and giving them space to collaborate openly. It feels obvious that these spaces should exist for young people, but we’ve lost sight of what students need. At my school, we built policies that assumed the worst in students. I want to flip that. Assume the best, be proactive to keep them safe, and create ways to react when we need to.

Anyways, that’s just some nuance to chew on during this fine day. In the rest of this newsletter, we will focus on tactical advice for founders, from the money they raise to the peacock dance they might want to do one day. Make sure to follow me on Twitter @nmasc_ so we can talk during the week, too!

The peacock dance

Do you know when male peacocks fan their feathers to court a lover? That, but for startups trying to get acquired. As one of our many rabbit holes on Equity this week, we talk about Discord walking away from a Microsoft deal and if that deal ever existed in the first place or if it was just a way to drum up investor excitement in the audio gaming platform.

Here’s what to know: Discord is reportedly pursuing an IPO after walking away from talks with multiple companies looking to acquire the audio gaming giant.

Discord aside, the consolidation environment continues to be hot for some sectors.

Even venture capital knows that the future doesn’t simply venture capital

Clearbanc, a Toronto-based fintech startup that gives non-dilutive financing to businesses, has rebranded alongside a $100 million financing valued at $2 billion. Now rebranded as Clearco, the startup wants to be more than just a capital provider but a services provider.

Here’s what to know: The startup has been on a tear of product development for the past year, launching services such as valuation calculators or runway tools. It’s a step away from what Clearbanc originally flexed: the 20-minute term sheet and rapid-fire investment. I talk about some of the levers at play in my piece:

Many of Clearco’s newest products are still in their infancy. Still, the potential success of the startup could nearly be tied to the general growth of startups looking for alternatives to venture capital when financing their startups. Like AngelList’s growth is neatly tied to the development of emerging fund managers, Clearco’s growth is cleanly related to the development of founders who see financing as beyond a seed check from Y Combinator.

abstract human brain made out of dollar bills isolated on white background

Don’t market your opportunity away.

Let’s talk about marketing while keeping on the theme of tactical advice for founders. Tim Parkin, president of Parkin Consulting, explained how startup founders could use marketing to stand out in a noisy environment. Differentiation has never been harder but also more imperative.

Here’s what to know: Parkin outlines four ways that martech will shift in 2021, strapped with anecdotes and a nod to the importance of investing in influencers.

Around TechCrunch

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Thanks for reading along today and every day. I am sending love to my readers in India and everyone worldwide who is facing yet another deadly surge of this horrible disease. I’m rooting for you.

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