Maven reposted this
Social headlines make it seem cohort-based courses are in the toilet. Yet Maven’s instructors have 2x’ed their earnings in the last 12 months. What is going on? In the last year: The altMBA shut down. Building a Second Brain shut down. Write of Passage shut down. d/MBA announced a 2x price hike, which I am predicting will lead to a shutdown in 12-24 months. =/ These are OG course businesses run by charismatic creators who built fantastic products and brands. WTF happened? There are a few factors here: - Courses have lifespans. About 5-8 years, rarely longer. This is fine if you plan for it, because they are so damn profitable. Also, courses built from the creator’s audience will slowly exhaust that audience, which results in declining sales if you don't have another marketing channel. - Profit over Revenue. Some of these courses were revenue-maximizing instead of profit-maximizing. They invested in over-the-top value and had $1-2M/year in overhead (2-8 full-time staff). This became a burdensome fixed cost threshold that made these businesses unprofitable when sales slipped. FWIW plenty of creators did not make this mistake and did make significant profits. - External factors. The X algorithm has dramatically devalued “followership” and crushed engagement. Furthermore, the economy has come off its 2021 COVID high which reduced willingness to pay. Demand for creator-led courses declined while supply rose. - Creator’s energy. Creators enjoy freedom and control over their lives. When you hire staff for a course business that starts to change. Some creators partner with operators to manage their businesses (as Seth Godin did with altMBA), but ultimately you still have to manage the operators. By contrast, Maven’s instructors keep their overhead low: 80-90% margins are common for someone making $200K-$3M/year. They charge less, deliver more personalized attention, and don’t rely entirely on their own audience. Having less employees also means maintaining their creative freedom and reducing the “burden” of management. We are forever indebted to these trailblazers for their work. But with all things, times are changing and I thought it was worth talking about this massive trend in our budding industry. Funny enough, the same thing happened to me at Sprig (I’ll post about this another time) so I’ve had a similar trend hurt my own business in the past. Going forward, I believe bespoke course businesses with high overhead will continue to struggle, while experts/creators who build solopreneur course businesses will rake in profits. The industry will continue to grow because customers seem to love these programs and want more depth out of their professional learning.