How to supercharge your business with an online course. Interview with Eren Bali (Udemy)

Marco: Hello everyone. Marco Montemagno here,
The Tech Alchemist,, and today I’m here with
a great guest. Eren Bali, co- founder of Udemy. Hello Eren, how are you doing? Eren: Amazing, thanks for inviting me. Marco: Thanks to you. I have to say, before
we begin, that I’m absolutely a great fan of Udemy. I’m not affiliated in
any way, but I’ve been discovering, I think a few months ago, I was
looking for a tool, or a platform to promote some stuff, some material,
and I discovered Udemy. And I thought, in the beginning I was not so convinced,
I thought, it would be good, would be bad, then I started to try
it and I’m an enthusiast, really. I’ve done three courses, so I think you did
a great job honestly, and I am very happy. Very happy. So, with this confession
in the beginning I will try to be hard now, not to be too much in
love. Okay. So Eren, first of all, I want to understand-
where are you from? I was particularly interested, because on Tech
Alchemist, we have not only people from Silicon Valley but from all over
the world. So, you’re from Turkey? Eren: Yes. Marco: All right. Eren: Yeah, I grew and went to college in
Turkey and I moved to Silicon Valley four years ago. Marco: Okay. Eren: So, I haven’t been here for long. Marco: Okay. And Udemy, how many founders?
Are the founders of the company . . . Eren: We have two co-founders. I’m the CEO. Marco: Okay. Eren: And there’s another Turkish co-founder,
so we moved to the Silicon Valley together and launched Udemy. Marco: Okay. Eren: For while we had another American co-founder
who joined but is not [inaudible 01:47] Marco: Cool. By the way, how is it to go into
Silicon Valley, I mean, coming from Turkey and arriving in Silicon
Valley, I don’t think that people say, “Oh great.” Probably people say,
“Mm, who are those guys?” So how was the first impact. Eren: So, I’m just going to give you guys
a quick history of the company, and then it will come all together. So, we
first started Udemy in Turkey almost six years ago. Marco: Okay. Eren: It was the same vision. The vision was
very simple. There are millions of experts around the world, like
yourself, who had something to teach, but there was no easy way for them
to teach and share their expertise to the rest of the world. It’s a
pretty simple vision, just like any successful company, we wanted a very straightforward,
simple vision. So, the vision was the same. We launched our
first product in Turkey. It took us a little time to bring it to the market
and launch it, but the moment we launched it we realized it wouldn’t
work in Turkey. Marco: Right. Eren: So, we had this amazing engineering
team. We built a large classroom education, so experts could teach live classes
to the rest of the world and share it online. And if they wanted to make
it for free, everything would be free for them. Marco: Okay. Eren: And if they wanted to charge then we
would let them make some income from this teaching and we’d just be getting
a small cut. Marco: All right. Eren: But when we launched in Turkey, we had
a few small issues. First of all it was way to early. Right now Udemy is
really rising, getting amazing growth, but it’s 2012. So when we launched
in 2006 first. Most of the [inaudible 03:40] were extremely early, so
the technical infrastructure wasn’t good there. And people weren’t really
online nearly much as they are now. Just getting people to be online at the
same time was very hard. And also, the other thing we learned was, if you
want to start something like Udemy you need a huge amount of users and
experts in a dense environment. Marco: Yeah. Eren: One thing was [inaudible 04:10]. So,
we realized we had to move to the Silicon Valley. Marco: All right. Sorry to interrupt, but
this is one topic that is always interesting I think if you do an online business.
First, of all, Udemy can be a great tool for online business but I’ll
get back to that topic in one second. The other point is that if you are
doing something, I don’t know a platform, or whatever, where it’s a market
and on one side, in your case, you have instructors and on the other side
you have students. So, where do you start from? Because if you don’t have
instructors, you don’t have students, but if you don’t have students you
don’t have instructors. So, how did you handle this problem in the beginning? Eren: I will get into that in a second, I
just realized that I never told your viewers what Udemy is, so in case there
are people who don’t know what Udemy is. Udemy is a place for online courses.
So there are all these experts around the world who have something
to share but there was no platform for them to do that so we created
those websites as a user who can go to and take an online course
from an expert, from a real world expert. That’s the simple idea. Back to the problem we discussed. This is
what people call a chicken and egg problem. You don’t have any instructors,
no students come to your website and if you don’t have any students
[inaudible 05:41] would bother taking courses. But this is a very common
problem that several companies go through this and it’s notoriously hard to… Marco: Hard to solve it. How did you make
it? Eren: The [inaudible 05:55] we made was we
launched Udemy in the US in 2010 and we realized that the easiest audience
for us was the tech audience. We were in Silicon Valley and we
got some of our investors and we asked them to join a panel for us so we created
a curriculum of start up related or technology related courses. The
executives told me what they should talk to me about and they went in front
of an audience and they videotaped us and converted it to a course.
We had organized this as a course. We had already structured it not as
a conference but as a course. We took the videos and launched the courses
and then we went to some distribution channels, some new start ups
with a lot of traffic with a lot of users were interested in technology and… Marco: Like or something like
that? Eren: This was before AppSumo. The first one
was started by Jazz. It was [inaudible 07:08] for entrepreneurs. So we
took our start up course and we made a deal with them to promote those courses
on [Stepped Up Digest] or their user base. We just gave a decent part
of the revenue to the Stepped Up Digest guys. The course did pretty well
in the sales, they were happy, our executives were happy, the distribution
channel was happy and then we started giving them more courses, launched
more courses. Marco: I stop you on this because I think
it’s very interesting. I try to recap what you just said. On one side you
focused on a niche, very specific, so the tech people because you were
in Silicon Valley. Then you produced some courses directly by filming
experts and creating a course out of it. By the way, Udemy has got all the paragraphs
and all the structure of the courses so I guess the platform was
very good to create a good story of the course. And then you find the right
partner to promote and they obviously were happy users and then you start
to build from it. We’ll come to this point, Eren, a little bit later because
I want to ask you about tips and advice about promotions. One thing
first about Udemy. You passed through a Founder’s Institute? Or am I wrong? Eren: Yes. When I first moved to Silicon Valley
I knew simply nobody so we attended the Founder Institute with [inaudible
08:47]. This was the first time I started building some network in the
Valley. Marco: By the way, I saw today they graduated
the start up number 650. I think it was on TechCrunch. They said great
start up to pass through Founders Institute was Udemy. I thought, okay.
I didn’t know that. For people who don’t know what Founders Institute
is it’s an accelerator program like YCombinator where there is a
program. I think Adeo Ressi is the founder, a very smart guy. Eren: [inaudible 09:28] are like YCombinator
but I would say it’s slightly different because it’s a little bit more early
stage. Anybody who has a good idea who wants to start a company can
go there. It also acts like an academy, almost like an MBA program for entrepreneurs. Marco: I think a good way to network if you
arrive in Silicon Valley and you want to launch a business. Eren: Exactly. It’s a lot larger in terms
of number of companies in it. Marco: Okay. Eren: [inaudible 10:00] more than 500 companies
around the world [inaudible 10:05]. This would be a larger [inaudible
10:06] versus [inaudible 00:10:07] is more like a very small, really
[inaudible 10:09]. Marco: Yeah. A [elite of] small… Okay. Eren: [inaudible 10:15]. Marco: Cool. Okay, Eren, I’ll go back to the
marketing strategy. For me, my mantra as a tech entrepreneur is marketing
is education. In 2012, there’s no way out. It’s easier to sell something
if you are perceived an authority and teaching something is one of the best
ways in my opinion to create your authority with your audience. So, Udemy can
be a great platform. That’s why I’m using it and that’s why I think a lot
of people are using it. It helps to teach in a better way with a lot of tools. So, can you tell me and can you explain to
us a little bit, what do you think are the most powerful tools in a platform
like Udemy for teaching? I mean, why people shouldn’t just use something
else or upload a video on YouTube and teach in there? Eren: I think the thing that was most unique
for Udemy was that it wasn’t just
[inaudible 11:12] people would watch and [grow]. We asked [inaudible
11:17] to create a curriculum, a set of lectures that will take somebody
from knowing nothing about the subject to a certain level. It’s closer to
how we go to school and most of the time you have no idea. First they teach
you what you should be learning and then every lecture you start [inaudible
11:37] on the thing we are learning versus [inaudible 11:38] very small. For example, for you to be the [teacher] [inaudible
11:47] to the certain type of fish. [inaudible 11:53] you want a
structure of curriculum. That was the biggest distinguishing point for us.
People weren’t really creating courses when we started. It was a completely
new idea for them. They were used to [inaudible 12:10], they were used
to going to seminars and [inaudible 12:13] and they were used to launching
small short video clips on [YouTube], but [inaudible 12:22] weren’t
very happy because they their margins were very small. There’s a very small chance that they’re [group]
would make it and even if it makes it, they actually get a very small
cut of the revenues and they don’t own the [inaudible 12:37]. Because [inaudible
12:39] create video clips on YouTube, it gets some views but they
don’t get a real strong audience. You can’t build a community with
the [inaudible 12:49] people that are strong [inaudible 12:51]. If you
go on seminars and if you do talks, it’s awesome you can make a decent
living but after some time you get sick of hearing the same talk a 100 times
in a row. You want to do it once in high quality manner and you want to
be able to share with a lot more people. As you know [inaudible 13:12]
users in terms of the location and [time]. If I want to attend your amazing
seminar and I’m not [Intel] right now, I have no way of attending it.
There is a very [inaudible 13:25] but it was just that people didn’t know they
should be [inaudible 13:29]. You said that [entrepreneurs] education and
teachers say that education is marketing [inaudible 13:36]. First you have
to educate experts around their [purposes] of teaching their [products] because
they have no idea. That’s how we earlier got the momentum. Marco: I just want to remember to do people
watching this video, you can use Udemy for free. Correct me, Eren, if I’m
wrong but you can use it for free if you just create a course for free
and that’s it. Or, anyway you use it for free as an instructor and you get all
the margin, the cut of you to me. I never remember if it’s 15% because it
changes your affiliation code or 30%. I think it changes based on the link.
You tell me Eren. Eren: We are very similar [inaudible 14:26]
If you create a course we don’t charge anything. Although it takes you
[inaudible 14:33]. If you have a paid first, then you get 30% of the revenue
and we pay you 70%. It’s very similar to [Apple] but we advance [inaudible
14:42]. If you bring your own users to the platform, then you only get 15%. Marco: All right. So I hope the next step
will be that you give me 100% and that’s it. What a [inaudible 14:56]. That’s
the dream of our instructors. All right. Cool. In my opinion,
as I think I told you, the promotion is a very interesting part so I
want to go a little bit deeper into your promotion marketing strategy in
the beginning and now. In the beginning you had to build your base and now
I would say Udemy is already a growing company so it’s probably changing
the user acquisition strategy. Can you explain this topic to us a little
bit? Eren: Yes. You guessed it very accurately.
When we first started and we had no traffic we were using four or five distribution
channels as a way of bringing [inaudible 15:42] to the market.
So we had existing versatile relationships with Amazon, Groupon, Living
Social, [inaudible 15:48] and six other distribution partners. So we had
all different sorts of set ups so when we wanted to run a deal with them
first we had a trust relationship between them and us so it doesn’t make sense
[inaudible 16:04] the same thing. Then we were launching the process
in all different channels [inaudible 16:10] own channel. Marco: Excuse me. Sorry to interrupt you.
Why did you say Amazon? Eren: Because Amazon has the Amazon has Amazon
Local Offering [inaudible 16:23] with some of our courses. Marco: Okay. I didn’t know that. Eren: They choose what courses they want but
we give them a catalog of different courses and they test the courses.
Then if the courses do very well with their audience then they run a national
deal on that. [inaudible 16:43]. It took us two years to be able to
get all this reselling relationship but now [inaudible 16:56] for
promotion. But now we’re at the point that Udemy’s own traffic and user base
is actually a lot bigger than our reselling channels. I think as of this
month 70% of [corporate] revenue’s coming from our own website. Because
increasing user base of students which first of all [shot] the Udemy.
When you [inaudible 17:24] online first, the biggest problem is we don’t
trust whether it will be, this course [inaudible 17:30] because [inaudible
17:32] expert and you may not know whether this would work well or not.
But if you already took a course on Udemy you have a certain [inaudible
17:43]. It’s just about whether this is actually a satisfactory courses
[inaudible 17:47]. They also know that we are very consumer friendly
so if any user is dissatisfied we [inaudible 17:56]. What we saw was the
conversion rates of people who are taking courses on Udemy were five times
higher than people who don’t know the Udemy brand. Marco: I think also about myself as a Udemy
buyer, obviously. When something is coming out and I think it’s cool
and I’m definitely going to buy it. The price, just to remember, on Udemy
goes from $19 or $5 to…I’m selling a course at $597 so a high price I
would say in comparison. All right. Cool. If you say today what works best
for you is the Udemy user base are you using any advertising? AdWords,
Facebook advertising or deal partnerships with AppSumo-like style? AppSumo
is a website I think with 650,000 subscribers so it’s a huge geek daily
deal website. Eren: To be honest, we are around the size
of AppSumo. AppSumo still [inaudible 19:10] a very small [inaudible
19:09] of our sales right now just because we grew…we grew almost ten
times this last year. What’s working best right now is that [inaudible
19:20] their own [inaudible 19:25] site and they see a lot higher conversion
rates [inaudible 19:30] Udemy than previously [inaudible 19:33] but
I think the majority of the sales on Udemy is coming organically from
people discovering courses. People just visit [inaudible 19:49] conversion
takes a while. It takes a month until [inaudible 19:54] but then you
start sharing with your friends. That happens pretty heavily on Udemy. We just made a survey: 70% of our users told
us that. they shared video with just one more [inaudible 20:08]. That’s
a huge number. All these network effects once we have more users, more
sectors create courses it brings out their user base, some of their
audience, then when those people start taking other people’s courses ,so then
5,000 instructors all bring their small audience and each of them take
each others’ courses [inaudible 20:33] everybody to take courses then. Marco: Right. Multiplying effect. About this
topic, I was curious. I’m thinking about people doing business online
and they not only have freelance or small to medium sized businesses
or solo entrepreneurs. You have so many people that want to do something
online, promote themselves or their companies or they’re digital managers
for a company and so on. There are so many people that can use online courses
to promote, teach and make a living or even improve their business. Whatever
they want. What are the hot topics? What are the hot sectors that you
would recommend to create a course at this moment? You are in a great
position, in my opinion, because you see what people want to learn. This is
great. You can understand the best and hottest areas where it’s good to
create courses because you know that there is market demand, a market request. Eren: We started with technology and business
so there were some very hot areas. When iPhones, Apple store, app store
starts growing it [inaudible 21:55] very hot topic. The first people who
made taught a course hundreds of thousands of dollars [inaudible 22:03].
Then all a sudden sometimes new markets emerge and then there’s a new opportunity
to make just the right course at the right time. If you’re a marketing
person, for example, Pinterest is a new growing marketing environment
channel. If you have an amazing Pinterest marketing course you will
probably making a lot of money on that. Outside the [niche] or marketing
areas things like photography are very hot because increasingly more and more
people are being semi- professional about photographing. They want
to go out one step beyond taking video portraits on their iPhone. Personal finance is a really big…there’s
a lot of demand around that. People like music, just playing musical instruments.
This a pretty interesting market because I had a harmonica
and I was able to find zero resources about learning to play it. If you
want to play the piano or guitar of course there’s something because
more people do it but the harmonica was almost non-existent. It’s a
very long tail subject. But if you think about the whole world how many people
want to play the harmonica? There’s still a very large audience. If I
can find all those niche long tail subjects, just because of the power of
the Internet, then you can [inaudible 23:35] pretty strong revenue [inaudible
23:37] find things that people really need and [inaudible 23:45] that
they’re not doing available on that. [inaudible 23:48] particular product. Marco: Is it right that a good approach can
be also to have a focus on what’s coming next, what are the hot news
and in the news and probably from there you can understand what people will
want? You say, iPhone 5 is coming out. People probably want to know the 100
best tips to use iPhone 5 to supercharge, to become a power user of iPhone
5, as an example. It also probably works like this with dancing; maybe
a new dance is coming out, a new dance or any music that people want to
learn. It can be a good approach in your opinion. I keep my eyes on the news
and then I try to create a course. Eren: That’s actually a very good point. That’s
one of the ways you can do it. People call this “trend jacking” Marco: Tell me again, the name. Eren: Trend jacking. It’s similar to groups
actually. If you get groups about trying video topics, some of them are
things that you could never guess and even though we say all this [inaudible
25:03] and all this merchandise, [inaudible 25:06] the course
is launched, it is not going to make anything but then, suddenly, it becomes
a huge success. There’s always this factor of using something really
neat, really interesting and new, and then you can make [inaudible 25:24] Marco: For people doing online business, would
you recommend to start with a free course just to make them visible, promote
themselves, and then try to convert on the product that they sell,
the service or whatever they want to do? Or, would you recommend to position
themselves with a paid course because free maybe is perceived not as professional?
What’s your experience and tips about? Eren: I think the more successful way has
been [you first create] a paid course, you make it really affordable and
then you make a free version of it, maybe the first chapter, first four lectures
and maybe you create a new free course about that. Just because [distribution]
product, your free course gets a lot of response, people will
take it first. And then you promote your paid course through the free
course as improved version. On App Store there are light versions of the
game and the pro games, which you pay for. What happens is, you service if you are actually
giving a service, let’s say you are giving a consulting service. It’s
probably significantly more expensive than your paid products. What happens
is that [from you paid products] then you can upsell your services.
[inaudible 26:58] make this in a very gentle way. Because people hate
[direct promotions]. I can tell you if you’re not paid first and if you make
your contact information visible, people will already come back for
just direct [help]. Let’s say you are a person whose an expert
on pricing, that is like pricing consultancy practice. You can teach a course
in pricing and people usually get benefit from that and you probably [inaudible
27:33] profitable and they will call you. And there may be a small
part of [those] people who wants to work for a large company and they’ll
actually call you [inaudible 27:46]. Think about it, when I was in college,
most of our best professors were also pretty wealthy consultants. They
would come to the school and say, “Okay, I have this consultant service,”
and they will promote [inaudible 28:04] but people would quote them
as the expert which they make a lot more money from the direct service if
people call you versus you try to sell [inaudible 28:13] Marco: On that, it’s not dangerous, but I’m
always afraid that if I have a lot of free users, they will never buy from
me because they are free [category], they just want the free stuff
and then they will never buy from me. Do you see this risk, or not, or maybe
people that go to learn free stuff when they trust you then they conversion
rate can be better? I never understood this. Eren: That’s a [inaudible 28:53] really because
getting free stuff is one of the best marketing techniques [inaudible
29:00] but then if you do too much free offers then you [cannibalize] your
potential paid users. So there’s a fine balance. You have to give a
few things free but not too much so that they will ignore you [main] products.
[inaudible 29:17] most businesses have [premium models] which work
very well but then some companies do something like everything’s free
but you only pay for just not seen advertising and then they don’t get any
conversion; it’s because this is not such a big addition. Marco: It’s not a big deal. Eren: Yes, it’s not a big deal. You have to
layer this [inaudible 29:40] so [inaudible 29:43] just let your name [inaudible
29:45] people can watch them but they can get the full experience
but maybe one of the upload kind of ideal access [inaudible 29:54] Marco: Right. That’s interesting. Just a couple
of questions more and then I’ll let you go because I know you’re super
busy. Are there particular tools that you use or that you would recommend
for online business to improve, to support your online business maybe,
or marketing tools, or production tools, or website to improve your
video or whatever? If you should say your top three websites that you
would recommend to a friend or [hero] for improving his online business,
what would you recommend? Eren: It won’t sound like a new idea but I
can still say that having a central blog where you constantly share information
is very valuable, but you need some [patience]. You don’t get a
huge success overnight. Blogging or just constantly giving out information
is a slow process. It’s nice if you can get momentum, you don’t move yet.
It just always goes up and up, right? Just having your blog, sharing and
shifting ideas of [inaudible 31:11] and constantly building this [inaudible
31:16] that is very good. [inaudible 31:18]. Wed don’t try to sell directly,
you just have [people come here]. Teaching a Udemy course is [inaudible 31:27]
businesses, especially businesses which sell expertise in that [inaudible
31:33]. Consulting businesses, teaching businesses [inaudible
31:38]. I don’t know, music companies. Directing video is actually pretty
[inaudible 31:45] video and [images]. So very shareable images or videos.
Sometimes [inaudible 31:50] they bring together some insight about the
market. They do some research, and then you can hire graphic designer on
all [inaudible 32:01] pretty affordable way and then you also [inaudible
32:06] from the research it makes. So that’s [in close] kind of images.
Infographics are very shareable items. They get [inaudible 32:15] sharing
social media [inaudible 02:19] and those kinds of things are making you look
like the real expert about those subjects. Marco: Okay. Eren: And if people join you then you have
a very active community of instructors so we have actual [T] people on
the team because on the job is helping instructors with these kinds of opportunists. Marco: Okay. I remember for people watching
this video [] or 99 designs There are several crowdsourcing platforms
where you can find coders and designers to create images or software,
or mobile app, or whatever you want for you. Last question, is there any, have you seen
any topics areas of business where you wouldn’t recommend to create a course?
Or you think an online course can be sweet spot in any way a good
edition for any kind of business? Or is there some one particular
that you say, “No, this one better not.” What do you think? Eren: I would think there’s not too much too
many [inaudible 33:29] I wouldn’t suggest but I think a good way of
looking it is if there are enough [fictional] groups about the particular
subject that are successful and that means that’s a good chance that the
client will also be successful. Because when you think about it
people used to read books to learn different subjects. But it’s just the
old world of thinking. It’s not attractive. There’s no way you can actually
communicate around [inaudible 34:00] that you are learning. Reading text
is a lot more boring than watching media, media lectures. So they can
actually look at books and [inaudible 34:09] a certain subject, the books
[inaudible 34:11] maybe [inaudible 34:14] a course may not work as
well. But this is not a perfect[method]. There’s always a chance to
do something which most people don’t do and have a huge success because it’s
[needed]. Marco: Right. By the way Udemy has got a great
feature. Congrats for it, Eren, which is the mash up feature where you
can easily sync your video and your slides. I’ve been using it really. I
think that will be a website by itself. A really cool feature and it helps
to maybe create a video and not be boring but you add the slide in sync with
your [special]. This is a good tool, I think. What’s next for Udemy, Eren? What’s coming
next? Are you going international? What will happen for Udemy
in the next six months? Eren: We have huge plans. If you could see
what has been going on inside the company, you’d be really surprised. There
are a few things I can share and there are other things that I can’t share.
[inaudible 35:15] launching the new version of our course creation platform.
It makes it even easier than what is right now. [inaudible 35:24].
We put a lot of time into making it very seamless. We made it so that my mom
could easily do that. Marco: Okay. That’s good. Tell me the not
shareable ones. Eren: [inaudible 35:40] private because we
haven’t really launched it and told the press about it but we [inaudible
35:47] education so people can take courses on their iPads. Yeah, a little
bit of iPad application. You can also download the lectures so when you
are flying somewhere and don’t have the Internet you can still take your
courses. That’s pretty neat. We’re actually launching on several different
platforms in the near future. iPad was the first one. iPhone, Android, even
TVs. Udemy courses will be everywhere that users want them to be. You
will even be able to watch your courses on your TV. We’re really thinking
hard about the course platform. This will be for us. What else is really soon.
I think the assessment and [inaudible 36:43] can be a bit more interactive
courses than just about watching the lectures. It will be more interactive.
We have some really strong engagement tools that I can’t say.
[inaudible 36:54] when I say it, in the next month you will see what this is. Marco: Okay. Eren, thank you so much sharing
some tips and advice. I really appreciate it. Congrats to Udemy. For
people watching this video I hope you will give it a try. I also think
of Udemy as an excellent ecosystem, I would say. As an instructor,
I’m sharing tips and I get tips from other instructors so you’re not alone
in creating your online course. That often is the reason that you say, “Why
should I create an online course and stay there alone?” This way you
have a little bit of a family feeling is good also that I have and I think
is another thing. The tools are easy so you just create your video, or
PowerPoint, or notes, slides, and then you upload it so it’s easy and the
platform is doing the rest. I really appreciate it. Once again, Eren. We
met here for the first time on this video but I’m in love with Udemy so I
hope other people will use this platform for their online business and [inaudible
38:05]. Eren: Thanks a lot. This was a great conversation
for me. Marco: Thanks so much. Bye. Next time we’ll
meet in San Francisco and I’ll be there. Eren: Totally. Just give me a call and we
should [inaudible 38:19] Marco: Absolutely. Good luck with everything.
Bye. Eren: Have a good day.

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