Marius Westhoff's Profile

Thanks for sharing – Masterclass is indeed a very interesting business combining elements of entertainment with actual learning. However, I do think the business will struggle in the long-run, because of several reasons:

1) Revenue share agreements with celebrities are expensive
2) Customer acquisition is high and churn rate is high
3) Willingness to pay for “edutainment” is not clear – as it’s neither a true entertainment spent nor a valuable degree

I think customers would consider masterclass a truly “discretionary spend” – people do these programs more for fun than for Return on Investment. Therefore, a recession will hit Masterclass much harder than Coursera or other education companies that help students not only upskill themselves but also gain advancements in their careers.

Thanks a lot for sharing this article, Nicholas. I agree, Disney is in big trouble with its cruise-ship business and parks, which are the most profitable segments in their income statement along with blockbuster movie production. I think Disney will have tough times ahead – if 50% of your revenues and 60% of your profits are tied to businesses that are no longer generating value during the pandemic that is a major issue. One thing we shouldn’t forget though is Disney’s strong balance sheet that will help them to weather this storm – the company has easy access to large sums of debt through its decades of moderate capital-structure. On top of that, many of the cost items that Disney has on their income statement can be foregone through furloughs and other cost sheding measures. But the question on the long-term answer remains.

Thanks a lot for sharing, great post! I agree, TAL has done an amazing job in adapting to the new normal at a phenomenal pace. I do think that the brand effects will be long-lasting. On the cannibalization issue – I think one opportunity that TAL may explore for the future is a hybrid online-offline model, where they leverage their offline centers for certain parts of the learning experience and the online component for other parts – that could be an opportunity for them to leverage both assets and strengths toothier advantage.

Very interesting article – thanks a lot for sharing, Danielle. I think it is great to see that traditional retail companies are starting to use more advanced artificial intelligence to improve their operations. One company that is really interesting to look at in this retail AI space is StockX – a marketplace for shoes that leverages data science in order to identify the right spot-price for shoes that are offered on their platform through a marketplace model. You may want to check them out.

Thanks a lot for sharing this article.

I think it is very interesting to see how Spotify leverages recommendations engines and particularly cluster-analytics in order to identify your music taste. I think it will be very interesting to see how artists can leverage those insights and I agree with Austen that we need to find ways that artists get access to these data-sets in order to create more targeted user experiences. The main issue that I am seeing here is thought that this may lead to a divergence to the mean taste of users e.g. what masses love, rather than self-produced content by inspiring artists.

Very interesting article, Krish. I really like that you picked education technology as the theme for the AI application. At my online education company, Upgrad, in India, we also played around a lot with AI to figure out how to create a better learning experience for users. I think we’re still in the early stages of AI application in education – I think it will become very interesting as soon as we’re able to create educational content in a faster manner – the main issue that we’re currently seeing RE individualized, AI-powered learning is that it requires up to 10x of content (given that there are so many different learning paths for users). I look forward to neural networks that can create assignments and lectures themselves basis the learner’s answers and inputs into the model.

Agree, the entire corporate market is very interesting and given the large content catalogue of teachable, they may have a significant advantage over other companies that create courses themselves and can only provide a smaller content catalogue – having said that, so far, teachable has predominantly focused on helping experts – it’s been a very expert-driven platform and the shift to being a B2C or B2B, consumer facing brand will only come with time.

Thanks a lot Chris!

I agree – there could be much more involvement of the students in actually grading/ providing feedback and the company could build communities around different skills that are taught – e.g. a community for the home gardeners, a community for the blacksmiths etc. …

Thanks a lot for sharing this.

Coursera is a super interesting business and one of the few online higher education companies that has reached a considerable scale over the last years. However, I am seeing a couple of challenges on the horizon:

1) Unit economics for university partnerships are difficult as up to 20-30% of revenues goes to universities – on top of customer acquisition costs
2) The company, over the years has tried to create multiple revenue streams – from initial certificates, to degrees, to B2B offerings and subscriptions – it doesn’t look like the solutions themselves have scaled sufficiently.
3) The market is getting very crowded and certain high-end brands such as Harvard/ MIT/ Stanford are considering creating their own universe of education programs in order to avoid brand dilution.

Overall, I do believe there’s a need for a change in higher education and with its new CEO and a strong growth in the B2B business, Coursera can play a significant role in upskilling of the workforce – that’s where I see most of the opportunity at this point – working with corporates who have a distinct need in talent/ skills and bridge their demand-supply gaps.

Thanks a lot for sharing this article, Sneha – very interesting. Sounds a lot like an Indian version of Alibaba.

I wonder though if there’s not some additional risks in the business e.g. Multi-Homing? What prohibits wholesalers to also list their products Flipkart and other platforms?

Additionally – I wonder how much money the company needs to deploy for logistics/ the creation of warehouses in order to build a smooth supply chain a la amazon?

Thanks a lot for sharing this article – very interesting.

I particularly like the fact that StockX is not distinguishing between experienced sellers and new sellers – because StockX takes care of the authentication of shoes and the delivery and most of the service elements, a buyer is not concerned to purchase a shoes from a new seller. That, in the past for other platforms such as eBay was a major issue – sellers who were new did not have a chance to stand against experienced sellers who have a lot of positive reviews.

I wonder though, whether there is space for multi-homing and whether the network effects for this platform are very strong? I do see some indirect/ cross-side network effects, but I am not sure if the same-side network effects are strong? What do you think?

Agree – looking at the current stats and user growth numbers, it looks like user numbers are actually contracting and not expanding. On top of that, the lack of International expansion will cause a major friction for Pandora shareholders in the long run.

Thanks, @TFD – That’s a great question.

I believe that Pandora is somewhat “stuck” in its business model – being an online radio rather than a streaming service, the way the business functions is significantly different from Spotify and Apple, who strike deals with the music publishers and labels directly. When Pandora took off in 2005, the music industry was still extremely apprehensive of digital music purchases – yet alone subscriptions. Apple had launched its iPod in 2001 for the first time and revolutionized the industry by offering songs at 99 cents, thereby deboundling the highly profitable “album”. It would have been tough for Pandora at this time to adopt the play-every-song model.

Thanks, Anuj, for sharing this great article on PayPal.

I find it very interesting that PayPal has been able to stay relevant in the FinTech space over so long – and I wasn’t aware of the many partnerships that they entered over the years.

I wonder, however, how the company can create new product offerings internally and grow revenues organically? After all, acquisitions and partnerships are often costly. Did you see product features the company launched internally, organically, over the last years? I wonder if they invest sufficiently in internal talent and internal R&D in order to stay relevant in a fast-changing digital payments world.

I believe that there’ll always be a space for a high-end consumer brand that provides superior quality. Given that everything across the digital initiatives is strongly branded, I think that users will see value actually purchasing the “real deal” and not rely on amazon.

I see Amazon’s basics programs rather problematic for horizontal, low-cost fashion companies i.e. H&M, Uniqlo and others, that provide non-branded basics to consumers.

I think it’s actually not an either-or … I think Sephora is simply trying to create a more sticky brand and a more loyal customer base that shops either online or offline. These digital innovations seem to be meeting consumer demands and create a great example of a brick-and-mortar company that stay’s relevant in a digital age.

Thanks for sharing this piece, Joe!

It’s very interesting to see these digital innovations by the Louvre. Especially in an increasingly digital world, it is hard to stay relevant as an offline institution. Despite these efforts, however, I am not convinced that the Louvre is pushing the boundary enough in order to stay relevant.

I believe the museum could create digital experiences around some of the art pieces that it exhibits – for example, why doesn’t the museum consider digital documentaries around the life of Leonardo Da Vinci? Those additional contextual information pieces could be integrated into its website.

Additionally, the Louvre could leverage its incredibly global brand to educate visitors and potential visitors on the arts e.g. by establishing a digital Art Institute that provides short courses or videos around the history of the arts.

What’s your take? Do you think the Louvre is doing enough to stay relevant or are there additional opportunities that the museum should consider employing?

Great post and thank you so much for sharing this piece on online education.

Having worked in the space for the last 6 years, I am super excited to read this piece. I agree that Coursera has done a lot of good work in the education space in trying to revolutionize highere education.

They are one of the fews that have really cracked the B2B market – currently they’re doing around $150m of their $200m revenues in the B2B space. They’ve also been headed towards launching more and more degree programs i.e. iMBA with University of Illinois (they shut down their on campus program to do online only), Masters of Data Science with Imperial College etc., at lower cost than 2U i.e. $22k for the entire MBA degree.This degree-play can be a true differentiator for the firm going forward.

However, there are still many open questions left to be answered i.e.

– How does Coursera create a sustainable business model that, at the same time, allows for high engagement? A revenue share model with a university partner is not particularly beneficial from a unit economic perspective and yet needed in order to create degree programs.

– How can the firm establish its own brand that carries value?

This is an example of a “Loser”.