Just as one company’s success shouldn’t cast a halo on its vertical’s brethren, one company’s layoffs don’t quite mean that its competitors are equally screwed. Instead, I think that changes within a particular startup can be used as benchmark questions for their larger market; in other words, we can use the micro to better understand the macro.
MasterClass’ Decision to Lay Off 20% of Its Staff
In this article, I want to discuss MasterClass’ decision to lay off 20% of its staff, around 120 people, across all teams. The workforce reduction, per CEO David Rogier on Twitter, was made ‘to adapt to the worsening macro environment and get to self-sustainability faster.’ Put differently, the company — which sells subscriptions to celebrity-taught classes — is in search of operating discipline and needs to cut staff in order to get there.
The Premise Behind MasterClass
When I first covered the company in March 2020, I got stuck on its pitch of aspirational learning. [MasterClass] also touches on the public’s innate curiosity about how famous people think and work. MasterClass tugs on that idea a bit by also offering classes that fundamentally do not make sense to be ‘digitized.’ Think high-contact sports, like a tennis lesson from Serena Williams or a basketball lesson from Steph Curry. Or just general pontifications from RuPaul on self-expression and Neil deGrasse Tyson on scientific thinking and communication.
Despite its flashy lineup of stars, MasterClass doesn’t sell access but instead sells a window into someone’s work diary. Celebrities are not interacting with students on a day-to-day basis, and sometimes, not at all.
A Year Later: Extracting Insights from MasterClass’ Prominence
Around a year later, I returned to this idea while trying to extract what MasterClass’ prominence meant for edtech. Fiveable founder Amanda DoAmaral said at the time that MasterClass raises the bar for content quality across all of edtech, while Toucan founder Taylor Nieman pointed out that MasterClass faces the same issues ‘as so many other consumer products that try to steal time out of people’s very busy days.’
So What is MasterClass? A High Bar for Edtech Quality or a More Educational Netflix?
As part of the layoff, a company spokesperson pointed toward a focus on hiring for MasterClass for Work, an enterprise-focused operation that is meant to help with employee retention. Financially, it makes sense to focus on a sticky customer such as an employer — but that could also require a key pedagogical change if employees aren’t motivated by the platform’s pep talks.
The Edtech Industry: A Mirror of MasterClass’ Challenges
MasterClass’ struggles serve as a mirror for the edtech industry as a whole. With its focus on celebrity-driven content, it has managed to attract a significant following and raise the bar for content quality in the space. However, this approach also comes with its own set of challenges.
Lessons from MasterClass: Adaptation and Sustainability
MasterClass’ decision to lay off 20% of its staff serves as a benchmark for other edtech companies struggling to adapt to changing market conditions. As the industry continues to evolve, companies will need to focus on sustainability and operating discipline in order to stay ahead.
Conclusion
In conclusion, MasterClass’ layoffs serve as a reminder that even successful startups can struggle with adaptation and sustainability. The edtech industry would do well to pay attention to these challenges and learn from them.
Related Articles
- Venture – Ken Howery: the tech mogul at the center of Trump’s Greenland ambition
- Venture – Despite VCs investing $75B in Q4, it’s still hard for startups to raise money, data proves
- AI – Ex-Twitch CEO Emmett Shear is founding an AI startup backed by a16z
Newsletter
Stay up-to-date with the latest news and trends in the tech industry. Subscribe to TechCrunch’s newsletter for the industry’s biggest tech news.
- TechCrunch Daily News – Every weekday and Sunday, you can get the best of TechCrunch’s coverage.
- TechCrunch AI – TechCrunch’s AI experts cover the latest news in the fast-moving field.
- TechCrunch Space – Every Monday, gets you up to speed on the latest advances in aerospace.
- Startups Weekly – Startups are the core of TechCrunch, so get our best coverage delivered weekly.
