The Past, Present and Future of Learning & Development

My Lightbulb Moment

In the winter of 2010, as a 23 year old relatively new grad working at YouTube, I was asked to compile a list of the most popular channels by category for a year-end wrap up. Scouring YouTube’s internal database, I discovered a channel I’d never heard of that was somehow millions of views ahead of educational powerhouses like Harvard, Stanford and Yale: KhanAcademy.

US L&D Market Breakdown

What is Learning & Development (L&D)?

L&D is a complex category, covering a wide array of content, learning experiences and tools. The easiest way to classify the market is by thinking about the “jobs to be done” for HR teams and the content, experiences and tools they use to complete those goals.

Mapping the L&D Market

How is L&D Changing?

Historically it has been challenging to build large, fund-returning startups in L&D:

  1. Minimal executive buy-in and support — L&D has been a nice to have, not a need to have, so it’s hard to generate large contracts and renewing revenue
  2. Deceptive TAM — while companies spend a lot of $$ on L&D, most of it is not actually addressable for education technology startups as >50% of budgets are spent on payroll of employees, not tech products
  3. Bad LTV:CAC ratio because of long sales cycle, employee/L&D leader misalignment, L&D leader lack of buying authority and low margin

L&D is Increasingly Strategic

L&D Helps Companies Retain Millennials and Gen Zers

L&D is Increasingly Done Online and Integrated with Work, Increasing the Addressable Market for Startups

The L&D market has traditionally been dominated by training service providers, who would roll out personalized in-person programs for companies. Pre-COVID this market was already being displaced by learning products and platforms that are trackable and scalable, providing clearer engagement data and ROI for increasingly data-driven L&D teams. COVID accelerated this trend — 60% of L&D leaders say they spend more on online learning than last year.

  1. Platform proliferation with friendly APIs — every successful enterprise tool — Salesforce, Slack, Zoom — wants to be a platform, so they include APIs and hooks that allow learning providers to build learning into the experience.
  2. Rise of remote work — Remote work has pushed more work asynchronous and all meetings onto Zoom, which means that how we work together is truly trackable for the first time. This gives learning companies entirely new datasets to work with to build intelligent contextual learning.

It’s Easier to Market, Sell and Scale L&D Products

Bottom Up / Product-led Growth

  1. Better buyers — Given exec interest in L&D, L&D leaders now have more power and larger budgets for L&D generally and online learning specifically, meaning that deals happen faster and renewals and expansions are more likely.
  2. New Buyers — Learning isn’t exclusively purchased by L&D professionals now. Line of business buyers are investing in learning for their teams, whether it’s short term training for a product launch, or broader “Skill Academies” for upskilling. Skill Academies, internal bootcamps to upskill employees into their next role, need to be run by the line of business to really work — the CTO oversees the Cybersecurity Skill Academy or the Data Science Skill Academy, the CRO oversees the Sales Enablement Skill Academy, etc. Because of this, these Skill Academies will tap into even larger budgets (and with faster sales processes) than existing corporate training.

The Emerging L&D Opportunities

Companies Upskill en Masse with Modern Skill Academies

  1. Universities are out-of-date — Curriculum from executive education departments is behind the modern working world, and universities are unprepared to teach working learners.
  2. Internal L&D teams are neither innovative nor sufficiently resourced — Successful Skill Academies requires a unique combination of curriculum developers, instructional designers, program managers, instructors and learning engineers. Most companies don’t invest enough in L&D to bring these to fruition. Despite 77% of corporate execs saying upskilling is a top 10 strategic priority, only 18% of execs report making significant progress.
  3. Content libraries struggle to teach learners extended lessons — While people can learn specific photoshop skills from 3m clips, they won’t learn to be a product designer, let alone a Design Manager, from short videos alone. Completion rates on content libraries like Udemy, Coursera and LinkedIn Learning are low.

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Will Houghteling

Will Houghteling

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Bridging school and work @ Strive, x-Minerva, Google/YouTube, Harvard