Revenue model transparency

Basically: No hidden advertising, reselling of (training)data, dark upsell methods, etc.

Why: By committing to a revenue model free from hidden advertising and reselling of any data, EdTech founders can build trust with their customers, both institutions and learners alike. Transparent revenue practices establish credibility, enhance the reputation of the company, and foster long-term customer loyalty. By avoiding hidden advertising, EdTech founders can ensure that the focus remains on providing high-quality educational content and services. This approach maintains the integrity of the learning experience and prevents learners from being bombarded with intrusive advertisements that can distract from their educational goals.

Respecting the privacy and security of data is crucial. This commitment not only protects the privacy of learners but also safeguards the reputation of the EdTech company. Paying via non-monetary models is not prohibited, yet with such a model or part of the model transparency is key. When advertisement, time or review, and data are part of the revenue model this is openly communicated on the website or in the application before learners start using the tool. Furthermore, it is explained how the non-monetary value is converted into revenue.

Maturity levels

  1. Level zero: Free of costs in monitair methodes leading to paying with your data, usages, time spend or reviews, without the users being aware of this. Unclear or unreadable user terms of service

  2. Junior level: (0 - 10.000 active student/year (typically 1-10 FTE): At the start you explain your revenue in detail with your launching customers. You are open in how you think you will make revenue in the short term and long term. You are open to alter the revenue model based on feedback from the buying community

  3. Medior: (10.000 - 100..000 student/y (typically 11-34 FTE): Your revenue model is explained in contract detailing and clear with all stakeholders using your product. You explicitly stating not to use advertising or data reselling in any form.

  4. Senior: (>100.000 students/y & typically 35 > FTE): Your revenue model is transparent and clear to all your customers. You communicate your revenue model on your website for both institutions and learners before the application or produced is being used.

Good examples

Examples practical examples that help edtech founders build their understanding

  1. Khan Academy: Khan Academy is a non-profit organization that provides free educational resources and courses to learners worldwide. They are transparent about their revenue model, which relies on donations from individuals, foundations, and corporations. They clearly display their financial information on their website, allowing users to understand how their donations are utilized.

  2. Duolingo: Duolingo is a language learning platform that offers free language courses with the option to upgrade to a premium subscription called Duolingo Plus. Duolingo is transparent about its revenue model, openly stating that they generate revenue through Duolingo Plus subscriptions. They provide information about the features and benefits of the premium subscription to help users make informed decisions.

  3. Coursera: Coursera is an online learning platform that offers courses and programs from universities and institutions worldwide. Coursera adopts a freemium model, where learners can access most of the course content for free but have the option to pay for additional features and certification. They clearly outline the pricing structure and benefits of their paid offerings, ensuring transparency about their revenue model.

  4. Udacity: Udacity is an online learning platform that focuses on offering industry-relevant courses in collaboration with industry partners. They provide transparent information about their revenue model, which includes charging tuition fees for their Nanodegree programs. They clearly display the pricing and details of their programs, enabling learners to make informed decisions about their investment.

  5. Codecademy: Codecademy is an online platform that specializes in coding and programming education. They offer both free and paid plans for learners. While the free plan provides access to basic coding courses, they have a Pro subscription plan that offers additional features, content, and support. Codecademy openly communicates their revenue model and the benefits of their Pro subscription.