Some of the best-known “unicorns” — privately held companies with a valuation of $1bn or more — to go public have been based in the US (including Slack and Uber) or China (such as Meituan).
India may be next. Mumbai is home to Eruditus, a start-up that its co-founder hopes will earn unicorn status. Venture capitalist Sequoia India and Bertelsmann India Investments have invested in the company, which is shaking up executive education by delivering courses across the world in partnership with leading business schools.
“The executive education market in regions outside the US and Europe have traditionally been underserved by elite US and European business schools,” says co-founder and director Ashwin Damera, who earned an MBA from Harvard Business School in 2005.
He estimates that the online professional education market is worth $280bn globally, of which 15 per cent is for high-level executive education. Mr Damera believes there is potential in markets such as India, the Middle East, Africa, China and Latin America which have large populations of ambitious working professionals and fast-growing employers that can afford to help them develop. In 2018, Eruditus enrolled 10,000 students and wants to triple that figure this year.
While many unicorns are “disrupters”, Eruditus says it is collaborative. It partners with schools, including Harvard, MIT Sloan, Columbia and Berkeley Haas, to deliver small private online courses (Spocs). This is in contrast to other start-ups, such as Coursera and edX, which offer free or low-cost massive open online courses (Moocs).
The reputation of Moocs has been dented by low completion rates — one study found that these courses have a dropout rate of about 96 per cent. Eruditus claims an 80% completion rate, however, partly because enrolling on one of its programmes requires significant commitment. For example, the 15-week online certificate in leadership effectiveness, run with Insead, costs about $3,500. The eight-month executive course in management, offered with Columbia, costs $33,000, and the application fees alone are as much as $1,800.
Mr Damera believes the partnerships between start-ups and schools are symbiotic. While universities “are fantastic at research and teaching”, he says, “Edtech providers provide complementary capabilities such as marketing and enrolment, global delivery models and technology investments.”
But Mr Damera also cautions business schools against complacency. They must develop their own online capabilities, he adds, to serve other niche audiences outside of executive education.
Eruditus is not alone in collaborating with schools to design programmes for senior executives. GetSmarter, which claims completion rates of 90 per cent, has partnered with Oxford university’s Saïd Business School to launch short programmes in fintech, blockchain, digital marketing, artificial intelligence (AI) and algorithmic trading. It also partners with the Graduate School of Business at the University of Cape Town on a values-based leadership programme.
“The opportunity is vast and is only going to get bigger, as we find more people seeking to retrain or reskill as they go through their careers,” says Andrew Crisp, co-founder of education marketing specialists Carrington Crisp.
But, he warns, edtech start-ups pose a risk to schools as they can deliver courses across the world, without incurring costs such as buildings and faculty salaries. “Business schools still have an advantage in terms of talent, knowledge creation and pedagogy,” he says. But a lot of professors will freelance for other organisations, he adds, so the “people advantage” is smaller than it appears.
The executive education market is particularly attractive to start-ups with backgrounds in delivering technology programmes: offering courses around digital disruption and transformation is a stepping stone to more general business, management and human skills.
The origins of French start-up OpenClassrooms, for example, is in Le site du Zéro, a website that taught young people programming languages and coding. It now offers master’s level programmes in entrepreneurship, strategy, product management and digital marketing.
OpenClassrooms partners with schools, such as HEC and Paris Business School, as well as employers. This summer it is working with Microsoft on an AI master’s level certificate that will train 1,000 students for AI-related jobs in the UK, US and France.
“Our programmes are online but all geared around developing actual competence,” explains co-founder and chief executive Pierre Dubuc. The company uses project-based learning and each student is supported by a mentor who is “a practising expert”.
Mr Dubuc even goes so far as to describe OpenClassrooms as a higher education institution. “We have a slightly different pedagogical model, but with the same demands in terms of quality and excellence.”
This reflects broader moves towards corporate learning in the executive education market. London-based Fuse Universal works with companies, such as EY, Spotify and Vodafone. It is taking a slightly different tack, delivering bite-sized training to employees on their smartphones and tablets.
Mooc providers, such as Coursera, Udacity and edX, are also evolving their business models to focus more on corporate learning, while LinkedIn announced that content from other platforms, including Harvard Business Publishing, will be available on the social network’s learning platform.
Tanya Staples, vice-president of learning content at LinkedIn says the social network’s platform “complements higher education with a diverse range of courses to help people throughout their career journey”.
Neil Bearden, an associate professor at Insead, was an early investor in Eruditus. He says edtech can help schools and others access people who otherwise would be hard to reach. He also thinks there is “tremendous opportunity” for one-on-one coaching. “There are a lot of executives . . . who need more than the latest framework or a refresher on some topic matter,” says Prof Bearden. “They need specific help with their idea or business model. Someone will find a way to deliver coaching in a way that scales well, and make a lot of money.”