We’ve all heard of the gig economy.  There are millions of people in today’s world who earn a living as a freelancer.  And a good portion of these freelancers are enabled through online platforms both in finding gigs as well as learning new skills.

In today’s episode we chat with Matt Cooper, the CEO of Skillshare, an online learning community for people working in the creative field from design to illustration to photography and beyond.  Over 9 million users are on Skillshare and according to Matt they are only beginning to scratch the surface of what the platform could become.  Some estimates place the global creative market at $2 trillion and in the U.S. alone $700 billion.

Matt has extensive experience in building and leading companies enabling the gig economy.  He shares with us his insights into the growing community on Skillshare as well as his keys to success in leading an organization.

We hope you enjoy the show.

(Hear the full conversation with Matt on iTunes or Listen Notes.)

RJ: Matt, thanks so much for taking the time.   You have great experience with companies that cater to the freelance community, maybe we could hear a bit about your background and then head into freelancers as well as what you’re doing with Skillshare.

Matt: Yeah, great, thanks, appreciate you having me.  So a quick background, I started out my career in investment banking services at JPMorgan for four years doing telecom, media, technology, banking, decided I had had enough of the 80/90 hour weeks and moved out to California with my then girlfriend, now wife.  I learned that being an unemployed telecom banker in Silicon Valley in 2002 was not a great position to be in.

And so my dreams of a private equity job died quickly and I ended up just through the course of networking, kind of getting into the whole startup scene.  So my first true startup, I went to work for a guy who was running an outsourced recruiting business, had a great run from 2003 then 2008 hit and all of a sudden selling recruiting services to venture backed startups is not such a great market.  So learned a lot on the way up and a lot on the way down, and then went to oDesk, which is now Upwork and my role there ran operations or customer service trust and safety.  But then kind of as an offshoot of customer service, ended up building out the enterprise business which started at zero, by the time I left was about 100 million dollar top line business.

So just had a phenomenal five year run at oDesk/Upwork, then left to be the CEO of Visual.ly which was a similar model to what we were doing on the enterprise side at oDesk, where we had a freelance backend, designers, animators, engineers that we would package together to do visual content work for big brands and agencies.  So kind of continuing on that, you know, gig economy, freelance economy theme.  That was a bit of a turnaround situation, so we got that … we had Visual.ly sort of cleaned up, sold in 2016 and then I joined Skillshare as the COO originally in November 2016 and then took on the CEO role about a year later.

This is a fascinating area.   The internet has really enabled both small and medium sized businesses, as well as large businesses to recruit talent from almost anywhere in the world. 

That is sort of a common thread running through all those businesses, just the access to talent that you can now have is pretty amazing.  And, you know, it doesn’t even have to be offshore, if your company is sitting in New York, you can hire someone in Memphis or in Salt Lake City, just not being bound to the talent that happens to be within commuting distance of your head office.  It’s changed a lot of businesses and particularly on the Upwork side of things, just seeing not only how it impacted the freelancers and their access to amazing job opportunities no matter where they happen to sit.

But also seeing the small businesses who were using that access to talent to do things that they just could never have done otherwise.  And sort of carrying through today at Skillshare seeing the teachers and the experts from all over the world, we’ve got about 8,000 teachers, 60% of them are outside of the US.  And seeing them share their expertise and be able to monetize that expertise, and similarly as a student, doesn’t matter where you’re sitting, you can now learn from experts wherever they happen to be.  So, you know, whether that talent is in kind of traditional employment relationship or it’s more of an information sharing, it’s a pretty amazing thing for both sides of the equation.

Focusing on Skillshare, you mentioned there’s teachers all over the world, who is the primary consumer or student or learner, I’m not sure the term you use, but who’s the target customer?

Most of our content focuses on creative skills, so design, illustration, photography, painting.  And so you can kind of think of our core users, about half of them are coming for professional reasons, so they are designers or illustrators or animators who are trying to stay current, learn new skills, learn the latest software or cross train in other areas of expertise.  Or it’s more of a passion project, so they like to do watercolor, they like to do digital photography, they like to sketch for fun.

So it’s roughly split between professional and passion.  So it is a global community, so again we’ve got the 8,000 teachers, we’ve got over nine million registered users on the platform.  62% of all new users coming onto platform are outside the US, so you can kind of think of the professional side, the stereotypical 28 year old freelance designer, about 80% of our teachers are freelancers, 50% of our students are freelancers.  And then on the personal side it doesn’t really matter what your day job is, you just happen to love to do watercolor or do digital photography.

Is the idea that these freelancers, maybe they’ve always been a freelancer or maybe they left their day job or maybe they’re doing this as a side hustle.  But they learn a new skill that they’re passionate about and then they perhaps go on a platform and sell their skills to another business?

That’s right, and what we hear when we talk to kind of the professional side of the equation, when you’re a freelancer, particularly if you’re working remotely or you’re working from home, you don’t have the same crosspollination that you would have in a traditional office.  So if you’re working in a big company and there are 30 other designers that are working and eating and hanging out around you, you pick things up through osmosis that you don’t have when you’re working in your basement.  So for us being able to provide a community of experts around those skills, it just gives them a way to pick up what’s hot, what’s new, what’s cutting edge, again, that normally they wouldn’t have access to in their particular geography.

Nine million users is a big number, how much more room is there to run?

We think it’s huge, I mean we’re just scratching the surface.  The demand for creative skills both, again, personally and professionally is massive and growing.  Some of the market research statistics that we have say the creative industry globally is a two trillion dollar market, just in the US alone the creative economy is more than 700 billion.  And something like 75% of all Americans have a creative hobby, so I think there’s just an overall shift in focus, again, both, professionally and just from a mental wellness and personal health on creative skills.  You know, when you think about all of the trends towards automation and, you know, ultimately creativity is going to be the hardest thing to automate.  So those skills and that expertise is going to be in demand in the years to come.

Are there one or two classes that have viral, so to speak, does there tend to be very popular segments or even one teacher in particular?

Overall the highest number of minutes watched is typically in design, illustration and then fine arts, particularly watercolor.  So one of our more popular teachers is Aaron Draplin, he’s a graphic designer that does a lot of great work around logos, he’s done logos for big companies and Nike, and he’s just done some amazing things, and he’s just a very funny entertaining personality.  I mean I say if we put up a class of Aaron Draplin brushing his teeth, people would watch it.

But then also we launched a second class with Thomas Frank who’s a productivity guru, has a big YouTube following, his class on Skillshare has been our single highest performing class of all time, so he’s done some amazing things.

And then there’s a woman named Jessica Hische, she specializes in illustration and particularly, hand lettering, and she’s extremely popular, does some amazing work.  So we definitely, you know, we have some teachers who had a following outside of Skillshare and have brought that community onto Skillshare.  And we have other teachers who have developed that following and that brand recognition because of their Skillshare work.  So it’s really interesting to see kind of people rise up through the ranks and build a following of 50,000 to 60,000 people on Skillshare.

Is there something unique in the way you frame out your classes where a viewer couldn’t get the same type of instruction from YouTube?

YouTube’s interesting because in theory it’s our biggest competition, but it’s also our number one source of new users.  So we do a lot of influence and marketing on YouTube and that is literally the number one source for us.  And I think what we hear, you know, YouTube has some great content but the signal and noise ratio is off, and it’s not optimized for online learning, it’s optimized for entertainment.  So (a) we have very strict quality control guidelines, so the content that you’re going to see on Skillshare is good, it’s high quality, the audio’s good, the video’s good.  It is structured specifically for online learning, so each class is broken into sort of 5-10 minute lessons.  And then there’s a project component to every class, so we want people to watch the class but then actually produce a project, upload it, get feedback from the teachers, get feedback from students.

Do the teachers have an incentive to recruit or attract more viewers, how does it work on both sides, I presume there’s a subscription component here?

Yeah, so on the student side it’s subscription-based, so it’s either … in the US it’s either $99 a year or $19 a month and then you get access to all 20,000 classes that we have.  On the teacher side, it’s a similar payout model to Spotify.  So we take a percentage of our revenue, it goes into a royalty pool, that gets divided across the teachers based on their share of the minutes watched in that month.  So if you have a hit class and you get a lot of minutes and a lot of eyeballs then you’re going to make a lot of money.  And then we also pay teachers when they refer students to the platform.  So our top teacher last month made about $57,000 just last month, so there are some teachers doing quite well on Skillshare.

That’s phenomenal, I guess you could draw a comparison to how Netflix works.  If you have a bunch of users that are paying that monthly fee, and if you can continually load good content onto the platform then they’ll stay on.  Do you look at it that way at all?

Yeah, absolutely.  And that’s one of the sort of clear signals of retention is when your favorite teacher launches a new class, you’re going to stick around to watch that class.  So as we see, yeah, we have a virtuous cycle now on the supply side where the teachers who create good content has, because our revenue growth has been so significant, our teacher earnings are then rising, they’re earning more money, which incentivizes them to produce more and better content.  It provides a better incentive for new teachers to come on and teach, so we actually, we get all the content we can handle coming in organically through our teacher community.  And the best teachers do quite well so it’s a really … it’s a very healthy platform dynamic which is always what you’re looking for in these types of businesses.

Yeah, it’s fantastic.  I know this is geared more towards the creative side, but say there’s an art teacher out there working at an elementary school, could they try to supplement their income by learning how to become a productive teacher on your platform?

Absolutely, and we see a lot of that, a lot of our teachers are, again, either consultants or they’re professors or they’re local teachers.  For many of them we sort of are taking the place of that, you know, teaching job at the local community college, we’re just now giving them a global audience to pursue.

Do you think you’re going to be expanding beyond the types of classes you have currently or do you go deeper into sub segments?

It’s a little bit of both, you know, the beauty of the open platform and having 8,000 teachers out there is they are constantly looking at what’s hot, what’s new, the new software that’s coming up, the new technologies, the new techniques.  And you also get some interesting geographic crosspollination, you know, the styles that’s hot in Japan may be very different than what’s going on in Croatia.  So I think the … having that broad swath of experts out there constantly thinking about what’s hot and new and what our audience might be interested in.  We get to see a lot of the trends that are coming out of that community and that keeps our content fresh and interesting, and gives us a depth and breadth of content that would be really hard for us to keep up with if we were just purely producing it ourselves.

We touched on this earlier, with regards to how much room you have to run, but are there parallels you could draw to maybe other companies who’ve been in a similar space of how they’ve been able to expand? 

There are some really large and interesting businesses that have been built based on a creative focus, Adobe immediately comes to mind, about 30% of the classes on the platform are either about the Adobe product or an Adobe product is used in the class.  So a lot of overlap with their audience, you know, have done very well, Canva is another, still private, but they’ve done quite well, just raised money, had a massive valuation, Shutterstock.  So there’s a pretty long list, I mean, Apple, you know, Apple was originally focused on creative.  So I think there’s a pretty long list of companies that have been both, you know, amazing markets and technologies and user bases around a creative focus.

Got it.  And then switching gears a little bit here to the leadership side, noticed that the company is growing nicely, I think you’re about 100 employees now, is that right?

Yeah, just coming up on 100, yeah.

And so you’re able produce quite a bit from this core team of about 100.  How do you think about, motivating your team and ensuring that you’re on the right path and everyone’s producing?

Yeah.  I mean we obviously talked and evolved kind of our corporate values and how we approach that day-to-day.  It really does come from the top down and I’ve worked very hard over the last couple of years to get an executive team in place that not only does their job well but does it the right way.  And I had to make some hard decisions on some people who were very effective in their roles, but didn’t represent the culture that I wanted to build and how I wanted the company to run.  And so our values, transparency, community, curiosity and impact, and for me, I’ll just highlight the two that I think are probably most relevant to this conversation.  Transparency is just very important, I think what you see is what you get, no politics, no BS, we share as much information with the company because we can.  And that comes with an expectation that our employees have the understanding and maturity to handle that information.

It’s not fair for me to expect them to grab a bucket when something’s on fire, if I don’t tell them where it is and what to do about it.  And then the impact is something we really focus on, not just in your day job but we think that this is one of the rare businesses that is both a really strong sort of … there’s a really strong economic engine that drives our business.  I think it’s one of the better business models I’ve seen, but then when you look at the actual user stories and you look at what people are able to do with what they learn or with the money that they earn, and again whether that’s a profession or passion.  Like there’s just a very tangible impact on people’s lives and the anecdotes and the stories that we … I talk to two students and two teachers every week.  And the things that I hear back are just unbelievable, and that’s … I think that’s hard to find.  And so we try to keep those stories and those anecdotes of how we’ve impacted someone’s life, you know, day-to-day, we try to keep those stories front and center.

And I believe you have a portion of your employee base that works remotely, is there a difference in the way you manage your remote team versus your onsite team?

There’s definitely some nuance in what you have to do day-to-day to make sure they feel included and communicated with and they can communicate with us.  And, yeah, this is some of the muscle memory that I bring from working at Upwork, where we had roughly three times the number of remote employees as we had working onsite in our San Francisco office.  So those infrastructure things, just having good telecom equipment, having good video equipment, being able to hear, if you can’t hear it’s going to be hard to feel included.  So we’ve done a lot there to make it just easier for us to work with a distributed team.

But then there’s little things of we do our weekly town hall meetings, they’ve got video access, they can see everybody.  Sometimes we’ll do lunch in one of the conference rooms and anybody who’s remote can login to the video conference and everybody sits and has lunch together.  And then we fly people in at least twice a year so they can attend big meetings or our quarterly kick off meetings or holiday party.  So, it does take more work to have a distributed team, and there’s some routines and habits that you have to build to make that effective.  But it’s definitely worth it because you end up with just a much more diverse team, a lot of different viewpoints, different ways of looking at the world.  If we’re trying to build a global business for global users, we can’t have everybody living in a one mile radius of Williamsburg in Brooklyn.

Do you have some idea of what the right proportion is, do you generally like to keep the onsite segment at a certain percentage range?

No.  I mean we have shifted over time, and when I started we had zero distributed team, maybe one or two and now we’re up to 25% of the team is distributed.  And then, you know, there are companies that have done very, very well, that are 100% distributed.  So I think you just have to adapt your style, depending on what your mix is.  In some ways I think it’s harder to have a mix, if everybody’s distributed it kind of levels the playing field, if everybody’s local, then you don’t have to worry about discrepancies.  So when you’re somewhere in between I think you just have to be hyper vigilant that those remote team members feel like they’re just as much a part of the team as everyone else.

What are a couple of key tenets that you like to keep in mind as you lead an organization?  Are there some overriding concepts that help guide you on a day-to-day basis?

Yeah, we’ve really tried to align all of those things around the values.  And, you know, getting values right is hard and it’s not an exact science and there’s always a combination of, you know, these guys, we absolutely deliver on every day and then sometimes it’s a little more aspirational and there are things you need to work on and you don’t always get it right.  But I think the, just keeping those front and center, you know, for us, it’s the transparency, community, curiosity, impact.

You know, the community, that’s our version of teamwork, having a one team mindset, the company’s goals come before the departmental goals, which come before the individual goals.  And if we’re all aligned that every now and then one team is going to have to scrap the plans that they had laid out, because we need to shift resources to something that’s more important for the company’s success, we’re going to do that without hesitation and it’s great, it’s a good thing.

The curiosity, you look at our business, we need lifelong learners, we need people who are open-minded who are not just open to feedback but actively seeking it.  And they’re proactively walking in other people’s and other team’s shoes and then really honing in on that impact of what we’re doing every day.  And particularly in startup land, you know, we are … you never have enough time, money or people, you’re always strapped for resources, there’s always more that people want to do than you can get to.  So we have to think really hard about where we’re putting our time, where we’re putting our resources and we just, as a company we try to run very lean and run very efficient.

And we don’t want to be cheap, nobody wants to work for a cheap company, but we just want to be very deliberate about where we put our time and money and, you know, there are times we’re going to be scrappy.  And the running joke is that I’m the AV guy because I know how to fix all the audiovisual equipment.  But, you know, obviously that’s not always going to be best and highest use of my time, but you know, sometimes things have just got to get done.  So I think we try to find the right balance between being scrappy and lean but then being willing to make investments in the right areas, take bets when we feel like it’s the right thing for the business.  And, you know, you win some, you lose some, you learn from it and you move on.

Well, Matt, I really appreciate you taking the time here, you’ve been generous with your time, spending it with us, so appreciate it and congrats on all the success to date.

Thank you, I really appreciate you having me.