Sergio Monsalve first met Udemy in 2014 and led Norwest’s investment shortly thereafter. Since then, he has been a board member for nearly five years. Over the years, Sergio and the team at Norwest have been impressed by the company’s growth as well as its impact on the lives of many instructors and students around the world.
Today, Udemy announced it closed $50M in financing at a $2B valuation led by Benesse Holdings, the leader in education in Japan. This financing, which signifies the overall progress Udemy has made, inspired Sergio to reflect on three key lessons we have learned from Udemy through our interactions with the team and its engaged community of instructors and learners.
Strong Culture: A Clear Vision and Mission are Crucial
When I first met Udemy’s leaders, Dennis Yang, and founder, Eren Bali, I was immediately struck by the clarity of their vision and their passion for the mission of improving lives through learning. As I started to meet early employees, instructors and learners during the diligence process in 2014, I noticed that everyone shared the same clear vision and a deep common commitment to the mission that Dennis and Eren emphasized in our first meeting. Creating strong alignment on vision and mission across the company usually takes time and can be incredibly difficult, however, Dennis and Eren had made it a priority to build a culture on these values and it showed. One engineer at Udemy I spoke to back then said it best, “I am here because Udemy has the potential to enable anybody to learn anything, anytime, anywhere. Udemy can unlock many new opportunities for people throughout the world who do not have easy access to education.”
Now that Udemy has expanded to more than 500 employees in six offices around the world, I am even more impressed by the continued clarity of purpose that its employees share. At Udemy, it is important for all employees to live the mission of creating the leader in life-long learning while helping customers achieve their career dreams. This clarity is essential to the healthy growth of a company’s culture and it is not surprising that despite the tremendous growth, Udemy has been ranked as the #1 Place to Work in the Bay Area by the San Francisco Business Journal.
Devoted Customers: Turn Your Customers into Evangelists
A few years ago, a friend introduced me to a Udemy customer from Mexico named David who was pursuing his BS in Engineering from one of the top engineering schools in the country. David told me that his goal was to become a software engineer at a large tech company like Google, Facebook, or Amazon. However, he told me that his university did not offer certain cutting-edge technical courses, which were essential for him to be able to pass the rigorous engineering tests, and interviews at those leading tech firms. So, in order to supplement his formal schooling, David turned to Udemy.
He took courses taught by leading instructors in cybersecurity, Python development, and other key technical disciplines, which would help him in his job interviews. David was able to ace his Google interview and received a job offer to work at Google in their YouTube division.
When I spoke to him recently, he mentioned that Udemy had been pivotal and that he was eternally grateful to Udemy for making education accessible and affordable. He is now a self-proclaimed “die-hard” Udemy fan, and said he will always turn to the platform to learn new subjects in the future. This customer story is one of the millions of similar stories, which speak to Udemy’s ability to enable life-long learners all over the world to learn from top instructors. The most successful startups and companies are the ones able to turn customers into life-long evangelists for their brand. At Udemy, the goal is not to only create a long Life-Time Value (LTV), but to generate Life-Time Evangelism (LTE).
Price to Value Aligns to Your Customer’s Own ROI
Like many startups, Udemy has experimented with pricing and promotions over the years which has resulted in many successes and failures. For example, the management team had to figure out how much and how often to promote courses with discounts or whether to price the courses differently based on geography or type of customer. To answer these questions, Udemy’s management and the board have always been led by one core belief: price the product commensurate to the value that your learners get.
Udemy goes the extra mile to fully understand that impact and value before making pricing decisions. In my experience, it’s common for startups to forget that a healthy relationship with customers starts with the notion that the price charged should be directly translated to a clear value exchange with the customers. For Udemy, this means that its instructors need to extract significant value from the platform. In fact, the best instructors at Udemy make over $1M in revenue per year. This supply-side success is a clear sign of the health of any marketplace. On the learner side (demand-side), Udemy also focuses on providing clear ROI and enables students to unlock their career goals, much like my friend David from México has done.
As we cross our fifth year anniversary as investors and board members at Udemy, my partner Jeff Crowe and I recently had a chance to talk candidly about Udemy’s trajectory. He put it very simply to me, “Udemy is a uniquely valuable business, both socially and financially. It is rare to see a company with such passionate employees and customers who believe so deeply in the mission. We are fortunate to be partnering with the Udemy team as it continues to scale its growing impact on lifelong learners around the globe.”
Personally, I couldn’t agree more and I cannot wait to see how many more careers, like David’s, Udemy can turbo-charge in the years to come.