BetterUp: Personalized Career Coaching For All

How Better Up is Using AI

BetterUp is a platform for personalized career coaching that was founded in 2013. Using a subscription SaaS model, the company connects employees with coaches to work on leadership skills via video chat, phone and text (1). Noting that many companies currently apply a one-size-fits-all approach to learning and development – putting employees through the same workshops, lectures and seminars – BetterUp is very focused on developing personalized experiences (4). Their product is currently available in over 30 languages and in 66 countries and is used by companies such as Airbnb, Lyft and LinkedIn (2)(3).

Furthering their capabilities in this space, they have recently launched a new product called Identify AI which providers hyper-personalized leadership development programs (2). The company believes that the combination of the expertise of a human coach and technological advances in AI will allow them to deliver wide-spread personalization at scale (3).

Opportunities

Large, Non-Personalized industry

The U.S. personal coaching industry is valued at one billion dollars (3). However, it’s estimated that much of the $240B spent on learning and development at companies is not tailored to meet individual needs of employees (4). For instance, a company might put all their newly promoted mangers in the same training which doesn’t take into consideration the different backgrounds they have and gaps they need to fill (4). BetterUp has found that one of the main reasons companies don’t invest in more tailored training is cost and aims to solve this problem (4).

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Employers Benefit from Personalized Learning & Development Programs

Accessibility: Since BetterUp is using AI to customize career coaching, the product is more affordable than other options. This means that small businesses are now able to afford to offer their employees customized coaching when historically only large enterprises had these resources and large enterprises can offer this product more broadly(4).

Improved Job Performance: BetterUp has found that when employees are offered highly customized learning programs, they put in twice as much effort into their professional development. As a result, the employees see a 180% increase in effectiveness on the job (2). These finding present a huge opportunity for BetterUp to both help companies increase their ROI of learning and development investments and assist employees in building their professional skills.

Accounting for Organizational Objectives: One factor behind these results is BetterUp’s focus on the strategic priorities of the organization and subsequently evaluating the development needs of the entire employee population. This analysis considers what level an employee is, their mindsets and learning preferences (2). Next, Identify AI determines which employees an organization should invest training resources in. This can be done real time as the product considers key moments such as an employee taking on a new initiative, promotions or relocations (2).

Benchmarking: BetterUp uses data it has collected across companies to allow organizations to benchmark themselves across their industry and assess how their employees compare across a variety of factors (4).

Using AI to Predict and Provide Personalized Coaching Needs

Delivery Method: BetterUp can suggest the right medium – e.g. podcast, game or video – for a given user at a moment in time (4). This furthers the company’s goal of offering highly customized coaching solutions.

Assessing Big Changes: BetterUp has built algorithms to analyze data and behavior so that development needs can be identified at any moment (4). For example, BetterUp’s data shows that if managers go through a big change, like M&A, they are 30% more likely to want to develop stress management skills (4).

Matching Coaches with Employees: The algorithm matches employees to a coach that is best for them given their individual learning preferences and 150 factors (4). BetterUp is consistently monitoring the performance of their algorithms and notes that the more data they have the better their algorithms get (4). Notably, their coach matching algorithm is now at a 97% accuracy up from 80% two years ago (4).

Personalized Learnings: BetterUp uses its extensive data to predict what areas of professional development will be most relevant to an employee. For instance, the company has found that women in leadership positions are 25% more likely to focus on work-life balance than their male counterparts (4).

Challenges

Walking the line of developing innovative people analytics products and protecting the privacy of their end users will be an ongoing challenge for BetterUp as well as other companies in this space. It is likely that a tension will emerge between developing features that employers want and protecting the privacy of employees. For instance, what if an organization wants to see which of their employees has the least amount of leadership potential – is this something BetterUp should build?

BetterUp has taken steps to create a privacy compliant system that aggregates data to preserve confidentiality when sharing benchmarking data between companies and has ensured that their systems are GDPR compliant (4). However, it is still unclear how much employee level data is being shared with management and HR at a given company.

Citations

1. https://venturebeat.com/2019/06/12/betterup-a-career-and-life-coaching-platform-for-employees-raises-103-million/
2. https://www.businesswire.com/news/home/20200303005294/en/BetterUp-Launches-Identify-AI-Coaching-Clouds-Deliver
3. https://venturebeat.com/2019/06/12/betterup-a-career-and-life-coaching-platform-for-employees-raises-103-million/
4. https://www.betterup.com/en-us/blog/6-ways-to-leverage-ai-for-hyper-personalized-corporate-learning