Gagan Biyani on Building Trust, Marketplace Dynamics, and the Future of Education

Introduction

Gagan Biyani, serial entrepreneur and co-founder of Udemy and Maven, recently sat down for an in-depth conversation on the Eric Ries Show. In this wide-ranging discussion, Gagan shared valuable insights on building trust with customers, the unique challenges of marketplace businesses, and his vision for the future of online education.

The Importance of Trust in Business

One of the key themes that emerged in the conversation was the critical importance of trust in business, especially for consumer-facing companies. Gagan shared a poignant story from his time as CEO of Sprig, a food delivery startup, to illustrate this point:

"One of the really brilliant innovations from our team early on was that when we were delivering meals we would offer a free truffle to every customer at the door. This truffle was honestly ridiculously good...it provided this sort of sweet treat at the end of a healthy meal which created a positive association for our brand."

However, in an effort to improve unit economics, Sprig eventually cut the free truffle. While this seemed like a small change, Gagan believes it was emblematic of larger issues:

"We certainly did not do ourselves any favors with that mistake. We misunderstood the core thing that Sprig was selling...In the food industry, I think what we were selling was delight, reliability, and an emotional connection with the brand."

By cutting the truffle, Sprig eroded some of the emotional trust and connection they had built with customers. This highlights how even small gestures can play an outsized role in building (or damaging) trust.

Gagan emphasized that different businesses require different types of trust:

"There's different types of trust. There's trust with McDonald's that every time you order a burger it's going to taste exactly the same...whereas if the food variant started to change a lot at Sprig you wouldn't be upset with Sprig at all because Sprig changes its menu every day."

The key is deeply understanding what type of trust is most critical for your specific business and customer base.

Lessons from Marketplace Startups

As a founder of multiple marketplace businesses (Udemy and Maven), Gagan has learned valuable lessons about the unique dynamics of these types of startups:

"In a marketplace, building a great product is largely irrelevant actually...Number one priority is liquidity. In a marketplace your product that you're selling to demand is the supply that you have and the product that you are offering supply is the demand that you have."

He emphasized that marketplace founders need to be obsessed with driving transactions and matches between buyers and sellers, rather than getting caught up in perfecting software features.

Gagan also highlighted the importance of focusing on the "atomic unit" when testing marketplace ideas:

"At Udemy and Maven what we're selling is a course so I tested one individual course. I wasn't just testing a marketplace of courses because before testing a marketplace of courses I have to find out whether people want one course."

By starting with the fundamental unit of value, founders can validate demand before trying to scale up to a full marketplace.

The Udemy Story

Gagan shared the origin story and early days of Udemy, providing a candid look at the challenges of building an online education marketplace:

"The first thing we did is that we built a massive cold emailing system...We reached out to anyone who was trying to teach online and just said hey do you want to teach on Udemy?"

While this initial outreach wasn't very successful, it led to valuable customer conversations that shaped Udemy's direction. A key insight was realizing that live online courses (which was their original plan) weren't what potential instructors wanted:

"I realized that people did not want to do live online courses at that time in 2009...It took six months of convincing [my co-founders] that we should do recorded content."

Even after pivoting to recorded courses, traction was slow at first. Gagan took matters into his own hands:

"I said screw this, I'm gonna go and create our first courses...We had to prove that people would take it and actually we had to prove that it was worth more than you going in person."

This hands-on approach to seeding the marketplace with content was critical to Udemy's early growth.

Maven and the Future of Online Education

Gagan's latest venture, Maven, represents his vision for the next evolution of online learning:

"What we decided to hang our hat on is not live education although that's a significant part of it, but what I call cohort-based education. It's this idea that it's really really hard to complete a course if you do not have some accountability and peer review mechanism built into it."

He contrasts this with traditional online courses that often have very low completion rates. Maven focuses on live, cohort-based courses led by industry experts:

"What we're really selling is access to incredibly talented people who are 10 years ahead of you in your career and to learn subjects from them that you would want to learn in order to grow in your own career."

Looking to the future, Gagan has an ambitious vision for Maven:

"The vision for Maven is that today we're building we have the best teachers in product and AI in the entire world. We are better than any MBA program for a product manager simply put...Eventually we'll have hundreds of thousands of courses and so if those courses are as high quality as I think they can be then we will have the best education in the world."

He believes Maven could eventually become a full alternative to traditional universities by bundling education, accreditation, and community.

The Impact of AI on Education

Given the recent advances in artificial intelligence, Gagan shared his perspective on how AI will impact education:

"AI is going to have a massive impact on education...but the impact it's going to have at different places is going to be very different."

He believes AI will have the biggest near-term impact in K-12 education, potentially allowing teachers to scale their reach. For higher education and professional learning, he sees AI as more of an enhancement than a replacement:

"College is still mostly about the in-person experience with the professor. I think it's going to be very very hard for AI to fully replace that but it might dramatically enhance it."

For Maven specifically, Gagan is confident that AI is not close to being able to replicate their expert-led courses:

"We sell a person who has a lot of deep knowledge, expert deep expertise in a very very narrow subject and AI is like the exact opposite. AI is not very good at highly highly specific use cases, it's good at generalized use cases."

Advice for Entrepreneurs

Throughout the conversation, Gagan offered several pieces of advice for fellow entrepreneurs:

1. Don't get overly focused on metrics at the expense of qualitative insights: "I'm far more affected by anecdotes. I am far more affected by you know someone who says 'hey I don't really trust Maven when they send this email' and even though our open rates and click-through rates might be staying the same...I'm willing to make a decision just based on what my qualitative understanding is of a situation rather than just my quantitative one."

2. Be willing to make conviction-based decisions: "Your intuition is sometimes more effective at understanding all the variables than what the numbers may say."

3. Take time for deep thinking and reflection: "Monk mode is when you're doing a lot of essentially not meeting with people...Real thinking doesn't occur in 30 minute chunks when talking to other people."

4. Maintain perspective during setbacks: "As long as you can still breathe the air and walk the planet, you will continue to have opportunities come your way...There was a world before this was the world to you and there is a world after it."

5. Cultivate a life outside of work: "Make maintain your world outside of work as you grow and operate because it really does help you touch grass and keep yourself sane and humble."

Conclusion

Gagan Biyani's journey as a serial entrepreneur in the education technology space offers valuable lessons for founders in any industry. His experiences highlight the critical importance of deeply understanding customer needs, the unique challenges of building marketplace businesses, and the value of maintaining perspective through the ups and downs of startup life. As online education continues to evolve, Gagan's vision for Maven and the future of learning will be fascinating to watch unfold.

Article created from: https://www.youtube.com/watch?v=HhMcCCnzqQo