On Challenge, Failure, and the Diffusion of Innovation (4 Course Building Mega-Trends)

A menacing thought sits in the back of every course builder’s mind.

For some, it lurks in the shadows and only rarely ventures to the forefront, where it sends shivers of doubt down their spines.

And for others, it is powerful and ever-present. It paralyzes them and keeps them from ever finishing their course, let alone launching it.

It taunts with questions that cut straight to the bone:

“Why would anyone pay money for this puny course of yours?”
“What will happen if you launch and there’s no interest whatsoever?”
“Don’t you know this online course thing is a fad, whose time has passed?”

And the worst part about these fears and questions?

They’re actually very well founded….

“The Cold, Hard Facts: 95% of Course Builders Fail”

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The Cold, Hard Facts: 95% of Course Builders Fail

While it’s true that there are many great examples of successful course builders, it’s also incontrovertible that most online course builders don’t achieve anything close to the success they’re after.

We’ve tracked this data thoroughly and extensively since 2015, and the numbers are clear:

• 73% of course builders fall short of their student enrollment goals.
• 74% of course builders charge less than they’d like for their courses.
• Course building challenges abound, with marketing, technology, and time being the front-runners.

Earlier this year, I conducted in-depth interviews with authorities in the course-building space, including course designers, learning platform creators, online education innovators, and thought leaders. They all agreed that the online courses opportunity is spectacular, but most course builders fall far short of their goals. Those who had access to industry data agreed that in many cases, as many as 19 out of every 20 course builders were falling short!

This isn’t just a snapshot; it’s part of a trend that creates great disillusionment with the very idea of building and selling online courses.

The whole endeavor seems to have gotten progressively harder and more challenging.

But why?

And even more importantly, what can we do about it?

Let’s begin at the root of what’s really happening.

Some say we’ve reached the beginning of the end of course building as a business opportunity.

They couldn’t be more wrong.

We’re just approaching…

The End of the Beginning and Moving to the Mainstream

In 1962, communications professor Everett Rogers published a book titled Diffusion of Innovations.

The book described the pattern through which innovations enter mainstream awareness: first, the innovators take a leap and give it a chance, then the early adopters jump in, followed by the early and then late majority, and finally, the laggards.

The ideas have withstood the test of time; today the book is in its fifth edition, and the big ideas have followed the very path they describe and have entered mainstream awareness themselves.

But what does this have to do with course building?

We’ll get there… but first, there’s more to the story.

In 1991, organizational theorist Geoffrey A. Moore published a book titled Crossing the Chasm about the process of moving an innovation past the innovators and early adopters and into the mainstream.

Put simply, it’s hard.

A “chasm” divides those two stages.

Innovations can languish in that chasm for substantial amounts of time, and many companies struggle and even die as a result.

And that’s where course building comes into the picture, because online courses are one such innovation: there was an early boom over the last decade or so, as innovators and early adopters took a chance and discovered the incredible opportunity for learning and growth provided by online courses, that were available on-demand and from the comfort of their living rooms.

Today, online courses are in the chasm en-route to the mainstream market—the first of four major trends that are changing the landscape for course builders everywhere….

“Four major trends that are changing the landscape for course builders everywhere...”

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Mega-Trend #1: Online Education is Going Mainstream

Imagine yourself in a crowded nightclub.

The room is filled with tightly packed bodies, dancing to the music of the super-sized speakers so close and powerful that you can feel the floor beneath your feet thumping to the beat.

From that vantage point, inside the club and only 10 feet away from the speakers, it’s hard to imagine that anyone could be unaware of the festivities… but of course, many people are.

Most of the world is blissfully unaware. Just a few blocks down the street, people don’t have the foggiest idea that a party is underway.

The same is true of course building, which is all the rage in our little pocket of the online world.

If you’re reading this, odds are you’ve seen dozens (if not hundreds) of online courses promoted, and you’ve probably bought your fair share—or maybe more than your fair share! What’s more, you’ve probably heard about the incredible opportunity to build and sell online courses from experts who seem to be popping up faster than mushrooms after a summer rain.

With all that excitement, it’s easy to forget that most of the world has never even heard of the idea of an online course, let alone taken one.

Consider this: if you ask people in your “regular life” where they might take a course, they won’t talk about Udemy, Coursera, or your favorite online publishers. No, their minds will go straight to universities, colleges, and community centers.

But that’s finally starting to change.

This is partially thanks to major venture-backed online course companies like the aforementioned Udemy ($173M in venture backing) and Coursera ($210M), plus others like CreativeLive ($76M), Treehouse ($12M), Masterclass ($56M), and Lynda.com (acquired by LinkedIn for $1.5 billion)—all investing massive amounts of time and money to spread the word to the mainstream about the promise of online courses.

It’s also part of the larger trend of a Google search being the first port of call to find anything online—no matter what category it’s in—thanks to companies like Amazon and eBay.

This is exciting for course builders, because the mainstream market is an order of magnitude larger than the innovators and early adopters.

On the other hand, it’s also challenging, because it means course builders have to cater to very different buying and consumption behaviors. As compared with innovators and early adopters, mainstream buyers are…

…much more cautious and risk-averse…
…much less impulsive in their decision-making…
…more demanding of reassurance in the form of proof and credentials…

…and in general, they expect to receive a lot more, and pay a lot less.

Think of the first so-called smartphones; they were giant bricks that ran a handful of clunky and buggy apps. Oh, and they cost a fortune. That was fine for innovators and early adopters, but mainstream buyers have very different expectations: a library of apps that function perfectly, a slim and beautiful form factor, and a much more reasonable price.

(And this same pattern holds true for just about every new product innovation as it enters the mainstream.)

These are all reasons why the chasm separating the innovators and early adopters from the mainstream market can be so perilous. The implications of this shift are massive, and I’ll share more on that in a moment.

But first, let’s move on to the second trend that’s changing the landscape of online courses….

Mega-Trend #2: Lifelong Education = Explosion of Demand

Up until about 20 years ago, our lives and careers followed a linear path.

First, you go to school, then you specialize your education in university, then you move into a career until you retire.

Easy peasy.

But now, things look different.

Sure, we still start out in school and then university—though there are many reasons to believe these institutions are becoming obsolete—at least in their current forms.

But once in a job, we find that the learning isn’t done. On the contrary, it’s just begun, with our entire careers (and every other area of our lives) being a spin on the Lean Startup methodology of build, measure, and learn.

These days, learning is something that never really ends. We keep having to go back to the well to learn new things, stay current, and grow in our lives and careers.

This mega-trend exerts two big effects on the landscape of online courses.

First, it means the sheer volume of education we need is growing exponentially. Combining with the previous trend, it also means ever larger proportions of that education will be consumed online.

But it’s not just about volume. This also changes the way in which we need and consume education, leading to mega-trend number three….

Mega-Trend #3: Demand for Education in Bite-Sized Portions

Back in the days when education happened once, at the start of a career, it made sense to get it from one provider (usually an institution of higher learning) and in one giant package (usually a university degree).

But these days, our needs are very different.

We need to keep learning all the time, and that means we need our education to come “just enough, and just in time.”

We live in a much faster-paced era than those who came before us—what Thomas Friedman calls the Age of Acceleration. And who in the Age of Acceleration has time to wait three or four years to learn something they need in their life or career?

We need what we need now, as soon as possible. That means education on-demand, focused on specific and narrow topics.

(And of course, if we’re getting our education in much smaller chunks, we expect to pay for it in smaller chunks, too.)

All this presents massive challenges for educational institutions that are slow as molasses, constrained by tenure, and have a massive cost-base in place to support their infrastructure…

“This is music to the ears of online course creators...”

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…but it’s music to the ears of independent education entrepreneurs, a.k.a. online course creators like us, like you, and like our many successful students.

In fact, it’s so good as to make you wonder why so many course builders seem to be struggling at all.

The Challenge of Serving a Mainstream Demand

Yes, so far, things are looking very good.

Both the mainstreaming of online courses (trend #1) and the lifelong need for education (trend #2) make for an exponential explosion of demand, and the granularization of that demand (trend #3) means that independent experts and professionals (a.k.a. online education entrepreneurs) are by far the best positioned to fulfill that demand.

But there’s a big wrinkle in this changing landscape of opportunity: the chasm that separates the innovators and early adopters from the mainstream.

As I mentioned earlier, mainstream buyers are fundamentally different from innovators and early adopters.

Where innovators and early adopters are eager and excited to be the first to get their hands on something new, mainstream buyers want to know that others like them have tested it and seen good results.

Where innovators and early adopters are much more likely to make big investments on impulse, mainstream buyers are more likely to take their time, think it through, and buy when it makes the most sense for them.

And where innovators and early adopters are accustomed to paying a premium for being first (and may even see it as a badge of honor), mainstream buyers are far more measured in their expectations of legitimate value for their money.

All of this means you can’t serve or sell to mainstream buyers the way you did to innovators and early adopters.

And this last part especially means many online course business models are about to be disrupted, because it intersects with the fourth, and arguably biggest, trend….

Mega-Trend #4: Information Really Does Want to Be Free

“Information wants to be free,” Stewart Brand famously said to Steve Wozniak (co-founder of Apple) at a hackers conference in 1984.

That phrase has since become a rallying cry by technology activists and market theorists. They argue that, as Moore’s Law drives the cost and friction of getting information out to the world lower and lower, it’s inevitable for the cost of information to drop.

This sentiment is mirrored in most of the business world and Silicon Valley through movements of content marketing. The basic idea is that, if you leverage information, which doesn’t cost you anything to share, you can use it to then sell things that cost more, like software and services.

I’ve written at length about this in my book Teach and Grow Rich. In a nutshell, two competing paradigms of business are at play in the world of online courses.

“Two competing paradigms of business are at play in the world of online courses.”

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The first paradigm is an information paradigm, and the second is an education paradigm.

In an information business, your job is to produce and package the information customers want to buy, and then you’re done.

A book is a great archetype of information. When you go to a bookstore, you find the book that purports to have the information you’re looking for. You take it to the register, pay for it (not a lot, as information isn’t expensive), and the transaction is done. From that point on, nobody owes you anything—not the author, not the publisher, and not the bookstore owner.

Now contrast that with an education paradigm, exemplified by a university. You can’t just go to them and buy a diploma, because that’s not how it works. What you’re buying is the opportunity to earn that diploma and the expectation that you will be supported in the process of doing so. You have to do your part, and you assume the teacher and institution will do theirs.

Now, in part because of the willingness of innovators and early adopters to pay inflated prices, many of the so-called “courses” in the online world are just information sold at prices that only make sense for education.

This mega-trend is creating a big black cloud of disruption for many established entrepreneurs, but it comes with a silver lining: while information wants to be free, there will always be a place and a value for real premium education, both because of the transformation it creates, and the time and energy it takes to provide it (indeed, Wozniak’s retort to Brand in 1984 was that “information wants to be free, but your time should not!”).

Which means we’re entering…

A Heyday for the Creators of Premium Courses

So where have we landed?

We know the demand for online courses is growing exponentially… a demand that can only be served by independent experts and professionals.

All good news.

We also know the market is being taken over by mainstream buyers who will take their time weighing their options and won’t pay inflated rates for just information.

So what does this all mean?

Really, it depends on who you are. If you don’t know much that would be of value to others and are looking to turn a quick buck based on some internet money-making scheme, well, you’re out of luck.

But if you’re a real expert… an authority in your field… who has real value to share with others… who cares about building something real, impactful, and transformative… and are willing to play the long game of marketing that builds and cultivates relationships and trust…

…then in that case, my friend, the future looks bright indeed.

There will still be challenges to overcome, of course, and it’s more important than ever to follow the sort of strategies for planning, designing, launching, and delivering courses that lead to consistent, sustainable success.

But if you get that help, stay committed to your goals of value and service, and stay the course (no pun intended), there will be a world of difference to make, for a world that’s waiting for you to make that difference.