Platzi: scaling an edtech in LATAM
Only 17% of the continent's adults have completed higher education. Freddy Vega is changing that.
Biography
Freddy Vega is the CEO and co-founder of Platzi, a Colombia-based edtech startup. Platzi sells online courses, in Spanish, on all things tech as well as other topics (English, personal finance, etc…)
Platzi teaches more than 5 million students. It has both a B2C and a B2B component. In 2021, the company raised a $62M Series B round. Platzi was the first LATAM-focused startup to go through Y-Combinator, in 2015.
Are you competing with local universities?
Universities are important and serve a different purpose. There are two types of education: inclusive and exclusive. The former incorporates high school for example, which is mandatory in many countries. Universities, on the other hand, are exclusive. Not everyone gets in but more importantly, not everyone has the luxury of postponing their working life by 4 years.
In our region, a mere 17% of adults have completed higher education. What happens to the remaining 83%? They hustle, scrape by with some technical education… The reality these people live is misunderstood by diploma-holders working in offices.
Platzi’s ethos is drastically different from a university’s. Everyone “gets in” so long as they pay the subscription. Classes are pre-recorded, for people to learn when it suits them and at their own pace. Half of Platzi’s students didn’t attend university.
Many Platzi students pay for a Platzi subscription once they already have a job. Our subscription isn’t cheap compared to our region’s average buying power. It can sometimes represent 30-40% of a student’s salary, but they still pay. This shows Platzi’s perceived utility: students know that by paying to learn, they’ll earn way more tomorrow. Jobs in tech pay more.
Platzi is a flexible method of self-actualization.
Do you have more info on your average student’s socio-economic status?
We haven’t dug deep into our students’ socio-economic makeup. What we have deciphered are personality trait similarities.
Platzi’s promise is that by learning valuable tech/soft skills, one will earn more money. Many people want that extra money without putting in the work to learn. It’s similar to everyone wanting to be fitter, but not wanting to go through painful gym sessions.
In that way, our paid subscription model acts as a filter. We enjoy higher course completion rates than other similar companies. Some of that has to do with the tacit commitment students make by paying a Platzi subscription. It’s a considerable expense and students want to make the most of it.
Platzi students are hungry to achieve the goals they’ve set for themselves and advance their careers. They’re willing to put in the painful gym sessions.
You sell bundled Platzi subscriptions to companies. What type of companies have been the most receptive?
I thought that our target B2B persona was fellow tech startups. I reasoned that startups’ incentive to keep their employees up to date on tech was obvious.
It turns out startups have two problems, from our perspective at least. First, they have little money. Startups are a bunch of people running a bunch of experiments to see if there’s a company worth building. The little money they have goes into funding those experiments, not into online courses. Second, startup employees tend to shun “structured” education. Trial and error is their preferred learning method.
You then have a large, diverse underbelly of middle-sized companies between startups and enterprise clients. This base is so vast that it’s confusing to decide who you’re selling to and whom you should adapt your product to.
Finally, you have enterprise clients, which I made the mistake of ignoring for too long. The lore about enterprise sales is that it’s tough, long, connection-dependent… All of these are true. They are also entirely worth it.
Once you figure out how to sell to enterprise clients, most of them are similar. Compared to buzzing startups and cash-strapped SMEs, enterprise clients have time to reflect on what they don’t know. Once it clicks, they start looking for solutions. If you can prove that your product solves something they don’t know how to do internally, they’ll have the humility to recognize it and purchase the product.
For a LATAM startup, expanding to Brazil (215 million people) is both attractive and treacherous. How has Platzi’s Brazilian experience been?