Online Ed Startup Platzi Succeeding with Freemium Model

platzi

Platzi, a Colombia-based start up, is making strides in online learning with content that focuses on practical skill development for today’s technical market, primarily with speakers who are successful professionals instead of educators.

The cornerstone of Platzi’s education model is the live video classes which include a sidebar for collaborative note-taking. Students can constantly share notes with each other (as if live tweeting) and pin comments from the feed to their own notes in addition to having questions answered by the instructor.

Far from being a distraction, the feature seems to increase student engagement. Classes usually have 1,000 to 3,000 participants, but those who miss out on a lecture can watch it later with the notes included.

Courses mainly focus on programming, design, and marketing, but they have also expanded into other topics like video production. Their current course homepage features courses on start-ups, web app development, databases, online communities, and interface design.

Platzi, originally named Mejorando.la, was founded by Freddy Vega and Christian Van Der Henst two years ago. Now, it has 80,000 users and English classes as well as Spanish. Anna Heim of The Next Web writes that 10,000 of these users are English speakers. According to Vega, these classes have a 70% completion rate as opposed to the 10-20% rate of most online education services.

Vega said in an interview with TechCrunch that:

Today, people upgrade themselves constantly to update their knowledge. They’re no longer looking for academic knowledge; they want real experience. People are hired for their portfolios and projects. That’s why we focus on the design, marketing, and programming disciplines that are not well served by current online learning services.

Platzi is one of few tech start-ups to make a profit without raising capital. Its business model is freemium: that is, there is free content (like the founders’ weekly podcast and some basic courses in both English and Spanish) but some content is only available through a paid premium membership. In January 2014, they changed from charging $99 for a single class to charging $29 per month for total access to their content.

However, they later joined with Y Combinator even though they didn’t need investors. Vega said:

We assumed we could never raise and made the company profitable… when we arrived here [at Y Combinator], we discovered that it is the exception instead of the rule.

YC is the perfect gateway to get into Silicon Valley and kickstart our English service. We want to get connected to talent, we still have healthy savings and will reinvest most of it to keep our growth.

The president of Y Combinator, Sam Altman, is teaching Platzi’s first English class. The Y Combinator website states that it provides seed funding for start ups to help them in the first phases of business development and aid them in making it to the next steps.

Vega’s blog post defends the unique approach:

There is no need to be in Silicon Valley to create a great company. But here live the most important inventors of technology. Our mission is to connect those people who are creating the future of the Internet to you.