Education site Udemy doubles down on poker

Vator Splash winner plays a cool hand before VCs from Lightspeed, August Cap, and SoftTech VC

Udemy claimed overall Vator Splash winner, after going through three rounds, including an online competition against more than 100 companies, a judges' round, and then an audience vote at Vator Splash. 

As the overall winner, Udemy founder Gagan Biyani got a chance to present once again before a panel of judges - Jeremy Liew of Lightspeed Ventures, Howard Hartenbaum of August Capital and Jeff Clavier of SoftTech VC. As part of the Splash Box show, Gagan was only allowed to give a 90-second presentation, essentially a fast pitch. 

On background, Udemy hopes to bring teachers and students together by empowering anyone who's an expert with tools to teach online classes. It's an enhanced version of iAmplify.com, which had ambitions to get classes online, but appears to only today be a platform for teachers/experts to sell their video or audio kits. 

Udemy, on the other hand, helps teachers create online courses and Webinars. Udemy allows teachers to upload PPTs and videos for students, or import content from other sites. Students can see both the teacher and presentation at the same time. Check out Udemy's company profile for a deeper explanation. 

Here's some highlights from the judges' feedback and Gagan's responses (slightly edited). As you will be able to tell from watching the video or reading these highlights, the VCs were extremely excited about the opportunity to get online poker instructions from some of the top poker players. And, Udemy sounded like a good platform. On the other hand, would poker be a big enough vertical to get them excited to invest?

Read or watch on.

Jeremy Liew: What is your go-to-market strategy?

Gagan: We went out to angel investors, and they asked, 'How are you going to get traction?' Pretty soon, we realized that the most important thing is “brands” – if we partner with teachers who have brand recognition… we make money because they make money."

Jeremy Liew:  You’re in a classic-customer acquisition, life-time value business. Do you think of the life-time value of the student or teacher? And do you have a sense whether you have to rely on paid-acquisition or just be viral or rely on PR and the brands of the teachers.

Gagan: It's too early to tell. But my team is good at optimizing user funnels. But, I will say that the product sells itself, whenever you give the users the ability to market for you, it has a natural viral loop. Our teachers have a strong economic incentive.

Jeremy Liew: Getting PR/branding and the following of your teachers will be wonderful. But if you could do paid acquisition on a cost-effective basis then you control your own destiny.  If you can get customer acquisition to a fifth or a third of life-time value, then you’ve got a business that’s going to be quite interesting.

Gagan: Again, the short answer is I don’t know yet. But my team is good at optimizing user funnels. And, the product sells itself… When the teachers are marketing for you, it's a natural viral loop. It’s different from a lot of other content plays.

Howard Hartenbaum: Poker is a great idea. A lot of investors are poker players. There's a public Korean company, Megastudy (Where a teacher can make millions) that's worth some $1.5 billion. If you can get the flywheel going, this can be a big business. The market is proven, we know that. Now, you have some investors here. If you were going to raise money, how much would it be and when that money is gone, what’s the status of your company?

Gagan: We would raise $500k. But we’re not raising money right now, we’re focused entirely on user acquisition. We would have a proven way to turn the flywheel and open up multiple markets. 

Jeff Clavier: I’m very impressed with what these guys have achieved after bootstrapping. How did you come up with poker? Have you partnered with any famous poker players?

Gagan: We started thinking about poker when we brought on Nick, when he came on as marketing position. The economics became clear, big brands on poker make a lot of money. So we partnered with a famous, well-connected poker player, Chris "Fox" Wallace. We're launching Grinder University with him, which is essentially a joint 50/50 venture using Udemy in the back-end. 

Watch the video for more detailed insight!