By Emily Hubbell
As you read this article, 31.7 million small businesses are operating across the United States, delivering the goods and services that fuel a strong economy. The lifeblood of the nation, these small businesses employ 60.6 million workers; that’s nearly 50% of all U.S. employees. They create two-thirds of new jobs and represent 44% of our domestic economic activity.. Think those statistics are impressive? Get ready to watch them explode.
Before COVID-19, Bain & Company predicted that the number of entrepreneurs and small businesses in the U.S. would skyrocket to 70 million by 2030. Now, the number of Americans who own a company could eclipse 100 million in that same timeframe—a shift triggered more by necessity than opportunity. Artificial intelligence could eliminate more than 20% of current jobs by the end of the decade. And then there’s the recession, which has historically inspired high levels of entrepreneurship. But no matter the impetus for starting a business, there’s one common thread: More entrepreneurs than ever are entering the role unprepared—and unable to afford business school as a source of training.
Business owners are good for the economy. They fuel innovation, increase competition and create high-quality jobs. But as the number of entrepreneurs skyrockets, it raises a critical question: How can we educate small business owners affordably and at scale? For a growing group of innovators, the answer is “customer education:” a market segment that shifts small business training away from universities and toward the companies that entrepreneurs do business with. Among the leaders shaping this emerging space is Scott Duffy, whose Academy Builders, Inc., is launching as the race to disrupt entrepreneur education accelerates.
The Failings of Traditional Business Education
In 2016, Futurist Thomas Frey famously predicted, “The biggest online company in 10 years will be an education company, and we haven’t heard of it yet.” Although the COVID-19 pandemic exposed critical challenges in higher education, the sector has long been ripe for disruption. Nowhere is this more evident than among the nation’s business schools.
In 2005, deans from the country’s most prestigious business schools were already criticizing their institutions for “failing to impart useful skills, failing to prepare leaders, failing to instill norms of ethical behavior—and even failing to lead graduates to good corporate jobs.” Since then, tuition prices have increased drastically, despite few improvements to the “product” that students receive. Nearly 50% of MBA students borrow $100,000 or more to finance their degree, yet only 42% believe their degree was worth it.
Author and Business School Professor Scott Galloway makes a strong case for disruption in his new book, Post Corona: From Crisis to Opportunity. In the last four decades, he writes, college tuition has increased by a staggering 1400%—four times faster than the consumer price index. At the same time, the traditional admissions process is rooted in scarcity, limiting the number of students who gain admissions at the hands of often-questionable criteria. The students who are admitted and can afford to complete their MBA face the same challenge those deans cited in 2005: As the business world evolves, MBAs often leave aspiring entrepreneurs without the practical skills, or available cash, needed to build a successful business.
A quick Google search will pull up endless articles debating the value of an MBA. However, enrollment trends tell a compelling story. In 2019, a year before the pandemic was on the nation’s radar, MBA enrollment was already declining. Why? Higher-education researchers cited a combination of rising costs and specialized programs that are more relevant to the candidate’s needs. COVID-19 has only accelerated the need for specialized, affordable and accessible business training.
“We’re on the verge of a big shift in which people will look to companies, not universities, for their education,” says Duffy. “They need skills that will help them succeed today, obtained in a timely fashion, and at a price they can afford.”
The Growth of Distance Learning
For years, distance learning has been quietly gaining ground. Massive open online courses (MOOCs) and platforms like Udemy moved the space forward but never fully caught fire—that is, until COVID-19 accelerated online learning’s journey into the mainstream. The global market for MOOCs is expected to skyrocket from $5 billion to $40 billion in the next seven years, fueled by compound annual growth of 37.9%. The EdTech platform Coursera, which went public in March 2021, now has a $7 billion market cap. Meanwhile, companies across sectors are ramping up their investments in online training.
Despite these advancements in distance learning, higher education struggled with its first large-scale experiment. In one poll, a majority of college students said they were unsatisfied with online learning during the pandemic, and more than 90% felt that they should pay lower tuition because of the poor experience. With the rise of customer education, companies are proving that they train small business owners more effectively, more efficiently and for much less than traditional educational institutions.
“If I’m hiring a manager to develop a social media strategy, I’d much rather hire someone who just earned a certification from Facebook or Instagram on building social media campaigns than someone who just paid $200,000 to get an MBA,” Duffy said.
The Rise of Customer Education
Customer education used to mean education and training customers on a company’s products. But in the post-COVID-19 business landscape, customer education has taken on a whole new meaning. Leaders in the space are going far beyond product training, using digital learning to help their customers develop the skills needed to build a successful business. Many customer education programs include certification programs that highlight a person’s expertise and training in a specific area.
“When a customer can learn from you, it develops unshakeable loyalty to your products and services, with a return on investment in the form of increased revenue and product usage,” Duffy said. “The future of education is online. The future of marketing is online education.”
You can already see the groundwork for disruption beginning to emerge. HubSpot, a leading marketing automation software developer, provides a range of certifications, college credits and degrees touted as key credentials by professional marketers nationwide. Google Academy, which launched this year, now provides free training in engineering and a range of digital skills, paired with direct access to the tech giant’s hiring pipeline. Shortly after the rollout of Google Academy, the team-based work management app Asana launched its academy for project managers. Meanwhile, former Google CEO Eric Schmidt is reportedly developing a digital academy for coders. With demand for digital educational communities on the rise, Duffy’s Academy Builders is filling a critical capabilities gap in the marketplace: building online schools for companies eager to get in on the ground floor of customer education.
The Value for Brands Who Embrace Customer Education
Although the customer experience space is rapidly advancing, early adopters have already demonstrated the power of digital learning, Duffy said. In Thought Industries’ 2021 State of Customer Education, a major study on this emerging market, 40% of companies cited customer education as a critical tool for minimizing customer churn. Approximately 60% of programs increased their spending by 30% or more over the last 12 months. Overall, more than 9 in 10 customer education programs had expanded, with 45% reporting significant growth.
In that same study, 97% of companies said customer education impacts their overall revenue by increasing brand awareness, boosting product usage and decreasing churn. Yet 68% believe they could be using customer education to derive even more value—a gap that Academy Builders aims to fill.
“The race is on, with big companies jockeying to establish themselves as the education leaders in their space,” Duffy said. “Companies are great at what they do, but their core competency is not building and managing educational platforms and communities. That’s where we come in. We manage the technology and produce all the branded content, certifications and learning communities for them.”
A serial entrepreneur who began his career with Tony Robbins and sold a company to Richard Branson’s Virgin Group, Duffy brings dual experience in business training and technology to Academy Builders. Launched in May 2020, the company builds private-label online academies that include branded content, live events, community, certifications and other educational resources. As opposed to professors, the Academy Builders faculty is home to top-tier entrepreneurs who are actively building successful ventures and executives at the helm of global brands. The company’s clients use their academies to increase revenue, customer retention and brand loyalty, Duffy said.
As the number of entrepreneurs skyrockets and learning shifts toward digital academies, entrepreneurs like Duffy are accelerating the change that higher education has long resisted.
“Who is doing the best job of educating small business owners? Who is really teaching them to succeed? As more companies see this opportunity, they’re using customer education to create value for both the customer and their business,” Duffy said. “We’re experiencing the end of business school as we know it and the dawn of entrepreneur school.”