EdTech B2(B2)C Thesis in Indonesia (and SEA): Huge bets for high-touch Career Growth platforms
In this essay, I articulate why I believe through first principles that the high-touch Career Growth segment is well-positioned as a space to grow regionally (esp. in ID), and what it takes to win.
Overview of B2(B2)C EdTech Landscape in Indonesia
Over the course of the weekend, I took a crack for fun at building a micro-investment thesis for B2(B2)C EdTech in Indonesia. Through this, I believe that there is an empty space in Indonesia within EdTech that will undergo a surge. If I were to simply articulate what the EdTech progression chain (for learners) within Indonesia (serving as Southeast Asia’s largest market), it would look something like what’s below:
K-12 (“I want extra / supplementary learning”):
In this part of the EdTech chain, companies like Ruangguru, Zenius, Colearn, Pahamify, and others are mostly building learning platforms that provide content-based learning through in-house or partner means (e.g. Zenius partnering with Disney). The main target audience in this space are parents – as the beneficiaries of learning (the student) are not the ones paying for the services in most cases.
The challenge of the K-12 space lies in the reality that (1) learning is often commoditized and it’s an already crowded space even in EdTech, (2) trust and willingness to pay through learning platforms is not as high (the job to be done for especially wealthy audiences is satisfied through non-tech means such as private tutoring, a trend that we saw playing out in China as well; in a way, the job to be done of learning is also being fulfilled by schools themselves), and (3) urgency to pay often comes in certain periods such as examination times (rather than on a continuous basis)
As an investor, unless you can significantly differentiate on IP (e.g. Synthesis School), I’m not too keen on this space. There are interesting plays in B2B like Kipin that could be worthwhile, but winners in this space likely need to develop very hands-on GTM (I saw this when consulting a B2B SaaS called Innovare in EdTech – which faced this even in the US), likely need to target private schools who have a higher willingness to pay, and the “job to be done” can sometimes be done through general software that handles administration, payroll, and others (rather than education-focused ones) as well. There’s a cost to specialization.
Higher education (“I want to find an internship or a job”):
For this, companies like Kitalulus, Karirlab, and Kinobi aim to build the product and business infrastructure to support students in finding and/or preparing for their first job or internship. This problem space is tackled in different ways through various primary target customers. For instance, Kitalulus / Lumina are building marketplaces predominantly focused on SMK and blue-collar workers. Karirlab and Kinobi are building SaaS tooling for companies to connect with career centers and university students. And students predominantly rely on job marketplaces like Glints,LinkedIn, and sometimes even community WA / Line groups to find opportunities.
The challenge of this space is in the following: (1) it’s extremely difficult to monetize; students and universities can’t afford to pay (in the way a private sector school can in the United States with platforms like Handshake), while companies view early-stage talent as a commodity (even for the best graduates from your top-tier universities like University of Indonesia, Bandung Institute of Technology – companies don’t really seek to “pay a premium” for simply an identification layer, something I’ve seen running Cornerstone), (2) the space is too crowded with not only technology competitors, but also student organizations and other non-tech organizations (e.g. Young Leaders of Indonesia, XL Future Leaders) seeking to fulfill the same job to be done (even for free), and (3) the B2B play is difficult due to sheer limitations in human resources which are unlikely to change soon going forward (Indonesian universities only have a handful of people dedicated towards career services today).
As an investor and as a founder who has built in this space, I’m not too keen on this space unless it differentiates in terms of a viable niche (e.g. Glints pivoting to building a marketplace for technology talent in Southeast Asia). I’m not even keen on dedicated training platforms for prestige jobs like RocketBlocks or Management Consulted (if they were to attempt localizing to SEA) as the value-add of localization is low and the network effects of a global platform is higher (e.g prep casing with a US candidate).
Bootcamps (“I want to transition to a job”):
In this part of the EdTech chain, companies like Algoritma, Binar Academy, and Hactiv8 run bootcamps to train and connect “good-enough” early talent in specialized fields like data science to companies, monetizing primarily off of fixed fees to the student, potential salary sharing from the company.
The challenge of this space is that: (1) money-maker is in the enterprise pipeline, but maintaining key trust with companies especially in a rapidly-changing industry like technology (skillsets for early data scientists change fast) is difficult – forcing an operational model that doesn’t really scale as they have to constantly revise their curriculum to be relevant, (2) competing with universities as a pipeline, (3) there’s only so many “early career” jobs, with stigma of bootcamps from an employer perspective as being a weak signal of potential success
As an investor and as someone who previously helped technology bootcamps (General Assembly, Le Wagon), I’m not too keen on this space unless there is a high-demand job space that is left untackled (e.g. Web3 developers) and the founding team has the necessary knowledge to build something differentiated (vs. just localizing existing materials from global bootcamps – which is normally how I see it done).
What I believe will be a high-growth segment in B2(B2)C EdTech: Career Growth (“I want to grow my career”)
This part of the EdTech chain focuses on career growth – with the persona of the market being professionals already in jobs they like, but are seeking to develop further skills or expertise.
Peter Thiel’s most fundamental interview question is: “What important truth do very few people agree with you on?”. My answer to this is that the common belief that you “learn best through your job” is not entirely accurate. Especially in a rapidly-changing world, apprenticeship & mentorship based models at work are not sufficient to prepare a professional for continuous development (especially in roles that are still being defined broadly in roles such as Growth or Enterprise Sales, or in industries like Web3 or AI). The current set of alternatives in Southeast Asia are also not sufficient to tackle this problem space. This is where I believe EdTech is poised to grow in the long-term in Southeast Asia, with a few underlying factors:
The market is ready:
Technology roles – given the fundamental nature of them being on the cutting-edge – are probably the most well-positioned to be tackled by this EdTech segment. However, Southeast Asia’s technology wave has only come recently in the past decade. Given this “boom”, a sudden wave of demand for professionals to fill in roles for the sake of filling was needed to a degree in the past few years (even if those people did not necessarily meet the ideal criteria for the roles itself). An example of this is the field of Product Management. Technology companies needed PMs, but the understanding of the role itself and how to develop it within these companies was limited – leading to an influx of PM’s in Indonesia who are effectively “Project Managers” (not empowered or prepared to think strategically, and are focused solely on the delivery-aspect of product development).
However, things are changing. As the technology sector in Indonesia (and the broader Southeast Asia) has matured and competitive dynamics have elevated – specific knowledge and deeper levels of expertise are needed for the next wave of high-growth companies. Through speaking with product leaders in Indonesia, I am hearing that interview processes are starting to scout through specific skills (e.g. doing growth modeling, building a product-market fit hypothesis, setting up experiments) that require candidates to have more than just a prior title of Product Manager. This is indicative that the nature of how talent is sought in the market has matured, and that companies are demanding certain elevated skillsets.
Current alternatives do not fulfill the desire to develop deep expertise (also given that space benefits from high-degrees of localization):
Local players tackling this Career Growth segment are still working through very hands-off models. For instance, ADPList (probably the most well-known one raising $1.3M this year), is focused on building a scaled marketplace for expertise sharing and mentorship. However, most of the mentorship still happens at the lower level of the skills development pathway (e.g. mostly early-career advice, as shown through picture below). While there are pros to a scaled marketplace (many mentors and benefit of network effects), the cons are that (1) ADPList is not itself seen as the one holding differentiated knowledge, and (2) ADPList cannot control the skills development narrative (e.g. there are going to be many growth practitioners potentially preaching different things) – so who does one trust?
Globally, one of the most “accessible” ways people seek to develop skills is through accessing platforms like Udemy, Coursera, or edX (MOOCs). However, data has shown that completion rates are extremely low (an MIT study cities that the vast majority of MOOC learnings do not return after the first year with 3-6% completion rate), and many of these courses focus on the “Instagramification” of professional development (e.g. certificates) rather than full skills development which requires retention and intentional practice of information.
There are global players stepping up to serve this problem space that can serve as inspirations for regional SEA players. Reforge (who raised a $60B Series B this year) has built a cohort-based learning model for its own in-house designed courses focused on skillset development in the technology sector, starting in Growth roles then expanding to Product, Marketing, and others. It is incredibly selective in course development – only releasing 1-2 courses a semester. Its frameworks (from “growth loops” to “product strategy”) are highly cited in today’s technology landscape, and have become expected knowledge for US-based technologists. CoRise (raising a $8.5M round this year) is also playing on the same thesis (less courses, but more impact per course). They focus on engineering-heavy skillset development for niche skills (e.g. analytics engineering, DevOps), and develop courses in-house alongside experts. Their main target audience, as well as Reforge, is the enterprise.
So what’s stopping Southeast Asia talent and enterprises from utilizing these already existing platforms? This is where localization becomes highly relevant.
Firstly, the biggest limitation is price. Given the target audience of enterprise customers in the United States, Reforge and CoRise charge $1-2K per head, per year. For Southeast Asian companies that do not typically offer ancillary training as an employee benefit, it is a rarity to have this cost subsidized by employers. There are only ~20 Indonesian students currently learning on Reforge (I’m one of them). Given that $1-2K is between 0.5-1.25x of a typical mid-level Product Manager’s monthly salary in Indonesia, paying out of pocket is also a significant cost. “It’s just not worth it for me right now given the price” is what I often hear through connections who are considering Reforge.
Secondly, knowledge benefits from localization; context is not apple to apple: Reforge tends to use case studies from United States’ companies (e.g. Canva or Miro are used as examples of product-led growth loops, Uber is used as an example to showcase a vision narrative). However, these examples may not necessarily scale to Southeast Asian technology companies who operate under differing operational, skills, and cultural contexts. In addition, English language delivery may hinder accessible learning.
Finally, given the enterprise focus, GTM in Southeast Asia is not targeted: Since the money-maker is in enterprise, the GTM model needs to also cater to the unique needs of enterprises here – which may be different even beyond pricing. Customer support, community, tracking learning through LMS (like LinkedIn Learning), may all be “table stakes” in SEA while only nice-to-have in the United States.
This indicates that there is potential space for a regional player to tackle these gaps.
Customer LTV is naturally higher:
All of the other EdTech segments “stop” after their job to be done is completed (hence there is a natural limitation to customer LTV). However, given that the Career Growth segment targets a lifespan that is longer in nature (even up to later-stage career), it is possible to retain customers whether it’s consumers or enterprises for longer periods.
Benefits from long-term, lasting network / growth effects
Customer LTV is also strengthened by network effects that are generated if the learning imbues a “branding” that indicates the quality of the professional. You can visualize it like this:
The growth loop that companies like Reforge generate looks something akin to the following (which can cover both consumer or enterprise-led growth):
A learner learns on Reforge (let’s say they take a class on growth)
A learner applies these new skillsets to their jobs
A learner adds significant value to their team due to their new skillsets
Others (bosses, other coworkers) notice and are curious about how they learnt these skills (I’ve seen this myself) – potentially forging the pathway for them to join Reforge or for the boss to lock in an enterprise contract with Reforge for their other employees
The cycle continues, and the network effects potentially even extends to other companies. If companies notice that the employees of other companies are utilizing a Career Growth platform – they’ll also start to be curious (given that talent is a differentiating edge). This is how Reforge has grown tremendously. As their high-quality frameworks in Growth and Product have disseminated throughout US technology companies, they have become “expected knowledge” for practitioners and companies to adopt and imbue.
Large, growing addressable market:
The addressable market for a Career Growth platform on a high-level touches upon the elements above. The reasons I believe that this is a valuable segment to play in are:
The number of technology or technology-adjacent companies (who this segment is best positioned to serve) will grow rapidly over time. As the adage goes: “Every company will need to be a technology company”.
% of adoption and # of seats per company are beneficiaries of embedded network effects (as described in the section above)
Price per head is naturally high; if US-based companies like CoRise or Reforge charge roughly between $500-5000 for these products, playing in the $300-500 range is still very possible
# of years paid is a beneficiary of quality and impact (which we’ll cover in the following section)
With these facets in mind, the Career Growth segment is well-positioned to serve a large, growing addressable market that benefits from network effects and strong execution.
High barriers to entry
What does strong execution mean? The difference between building a high-touch Career Growth business vs. a low-touch one (e.g. operating a scaled marketplace) is that the operators of this segment have to themselves own specific, differentiated knowledge and have the capabilities to acquire this knowledge in the long-term continuously. Thus, founders who can truly execute well in this segment, especially given the nascency of the technology ecosystem in Southeast Asia, likely come from a smaller potential batch.
How to win in the Career Growth segment (long-term differentiation and inspiration from global analogues)
If we are to believe that the high-touch Career Growth segment is one well-positioned to grow, I highlight a few important pillars that are table stakes for how a player can win:
Knowledge differentiation in founding team (creating a “brand”) and ability to scale this
Brian Balfour and Andrew Chen – the original co-founders of Reforge – started off building a class called the Reforge Growth Series released in 2017, which was the first of its programs. It benefited from two underlying currents:
The field of “Growth” was still extremely nascent, and its practices and mental models were still not fully set yet
Thus Brian and Andrew – who were Growth practitioners and executives at HubSpot and Uber – had the specific knowledge necessary to craft the practices of the role.
Then in 2019 (after developing Reforge fully in-house), they opened up an EIR program designed to get more practitioners developing practices within the Reforge ecosystem. This allowed us to branch out of only Growth, into Product, Engineering, and Marketing. Even then, this is still highly selective and Reforge only releases 1-2 programs per semester max (focusing on high-quality vs. quantity).
We can take inspiration from this model to see “what success looks like” for players touching upon this segment. They must have (1) the inherent specific knowledge to touch upon nascent fields that still require learning to be shaped, and (2) the ability to acquire new specific knowledge even if they don’t themselves own the expertise. This second point is important, as this is a differentiator between a “one hit wonder” and a continuous platform with high LTV.
Localized strategic and operational model
In order to differentiate away from global players like Reforge and CoRise in the long-term, it’s essential that localization is not only based on price (which can only last in the short-term), but that the operational model is also localized. This potentially means:
Knowledge is localized: Case studies and examples are contextual to the challenges of the region (e.g. product-led growth and applying machine learning in SEA might look very different than the US)
Language is localized: Able to serve various languages in SEA (given that the barrier of learning sometimes is about “feeling comfortable”
GTM and product development are localized: The way we serve enterprises and consumers who are learning could potentially be different, from customer support, product development (e.g. choosing to develop certain ancillary products like onboarding or LMS), to community-led growth (e.g. doing in-person meetups and trainings)
Effective growth model and execution
Given that the market benefits from high potential levels of network effects, it’s important to have a model that kickstarts and maintains growth effectively. To throw out some ideas (not exhaustive), this could mean:
Building a PLG foundation: Through branded templates or even in-house workflows inside the product itself, the learner could bring other learners into the ecosystem itself (even if they are not directly paying yet). This is how products like Miro or Canva grew.
Maintaining strong content stream: Even to non-paying customers, Reforge builds weekly newsletters that “give a taste” to what learners will get out of the programs while still adding deep value. Here’s an example of what could work.
Building enterprise cohorts of learners: The company could engage with cohorts of learners (from various target enterprises) for its first few batches – thus spinning the flywheel and ensuring high-touch feedback loops.
Community-based learning model
There is a nascent segment of online education pioneered by the likes of Maven and altMBA that focus on cohort/community-based learning, done in a synchronous way. While the first-generation of online learning done through MOOCs and scale marketplaces focused on accessibility and breadth – it wasn’t really successful in building deep learning and expertise (as indicated by the 3-6% completion rates for all MOOCs). In contrast, cohort-based programs embed deeper bidirectional accountability, stronger retention through active learning, and community building (getting perspectives from a peer group – which even for MOOCs has shown to increase scores). The “winner” in this high-touch Career Growth segment will deeply care about these nuances when building the learning model of their platform.
In summary
From this essay, I hope that you’ve been able to gain the following insights:
Why the broader field of Career Growth within the EdTech segment is likely the best positioned to succeed in Southeast Asia over the next 5-10+ years
Why the market is ready and why alternatives do not solve the “job to be done”
Why we should pay attention to it from an investor perspective
What it takes to win in this segment
Hope this was interesting and that you learned a thing or two! Please reach out to me if you’re either (1) someone building in this space, would love to get in touch, and (2) have thoughts or perspectives to challenge or refine this POV. As always, subscribe to this newsletter for a ton more on startups, advice for building, philosophy, and others.