For a company whose primary line of business is in helping you find a job, LinkedIn's entry into education could be called backward integration. Or a brilliant move that's been a long time coming. Here's why the brand is well poised to own this space.

Create a new ecosystem for education players.
As of 2012, the global education market was worth USD 4.4 Trillion with the US alone constituting around 30%-roughly USD 1.4 Trillion - much larger than LinkedIn's addressable hiring market pegged at USD 27 billion (Source: LinkedIn via Forbes).  

A small percentage of these figures flowing through LinkedIn could be the best move by the company for its next stream of billion-dollar revenues. 

LinkedIn has been connecting job-seekers with companies. And now, it has the opportunity to connect learners with learning providers. 

Increase traffic to the site by leveraging the huge growth in edu-search.
Education search has been on a growth not just in the US, but in other markets as well. In 2008, India was at the 8th position in education search on Google. By 2012, it had risen to the second place with the US retaining the top position.

Not only is edu-related search growing by nearly 50% yoy in these markets, a Google-TNS 2012 survey revealed that 40% of the search queries in a market like India is for Higher Education - the segment that LinkedIn is targeting. LinkedIn can drive a large part of this burgeoning edu-search traffic to its site with its latest University Pages feature with over 200 Universities (including leading names such as Carnegie Mellon and Purdue) at launch - a move that creates a destination within LinkedIn  for these institutions and their potential customers. 

Combined with new sign-ups coming from the 13 year + group for whom the doors have just been opened up, this will have a significant impact on its user-growth in the near term.

Ride the current wave of disruption in education.
With the growing popularity of MOOCs and other online learning initiatives, education is at the crux of a potential disruption in delivery and consumption patterns. Online enrollment as a percentage of total Higher Education admissions in the US grew to over 6 million in 2012, around 32% of total enrollment, i.e. one in three college students takes at least one online course today. LinkedIn's new target group (13 years +) will be entering this segment in the next 5 years. 

By becoming a repository of learning providers - both offline and online - users can now use LinkedIn to research not just careers or companies, but institutions and courses across the spectrum, see reviews/feedback from people in their network and make informed decisions in tune with their career aspirations. 

The other side of the coin. 
For LinkedIn, the Education opportunity was in its backyard all the time. Giving users tools to discover the right learning providers, take relevant courses and connect with like-minded learners in order to achieve those career goals was a natural fit. 

Connecting people to meaningful careers by mapping skills to appropriate education opportunities will be key to the company's sustained growth. LinkedIn will no longer be just a place that helps people discover careers, but one that helps them maximize opportunities by guiding users through multiple jobs, linking opportunities to skill-sets and thereby relevant education/learning providers.  

Also, by expanding the age-bracket for joining the site to 13 years, LinkedIn will acquire users young-at a stage where discussions around college begins-effectively ensuring that it becomes the brand that stays from college to career. 

Create another powerful, yet diversified revenue portfolio.
Unlike Facebook which derives majority of its revenues from advertising, LinkedIn generates most of its money from Talent Solutions (>50%) and the balance split almost equally between marketing and premium profile solutions. 

The nature of the platform and its structure lends the new education business to similar revenue models. I have made a few obvious postulations.

However LinkedIn's larger opportunity in education could come from enabling Application/Enrollment and other related transactions around this activity.  This could be the scene in the near future - Learners signed up from the time they are 13 years old with their profile, academic records, online certifications and achievements along the way and Universities on the other side wanting to connect with these learners (most importantly, with those who are the best fit for them). Using data available, LinkedIn can enable transactions between these parties - be it a student applying to a University or a working professional enrolling in an online course; similar to how job-seekers use the platform today for applying to companies.

For instance, there are close to 4000 + Higher Education institutions in the US alone.  Over 750,000 students use the Common App to submit over 3 million applications every year paying USD 60 on an average per application.  As a USD 180 Mn dollar business opportunity, that might look chump change to LinkedIn. But when you expand that to multiple segments, multiple providers, multiple countries, the numbers are huge.  

If LinkedIn can make applying to a University or just about any course as simple as applying for a job, that's a game changer.

Use data to create a Learning/Skills graph for the world.
The jury is still out on Facebook's Graph Search. But this could work very well for LinkedIn in the context of Education + Careers considering the strong linkage between the two.

LinkedIn has data on each of its 200 mn members - be it education, skills, certifications, and careers. Apart from having mined this data for creating a (sparingly-used) LinkedIn Skills page, imagine the possibilities of linking this data to education.  By combining the Learner Graph (the graph of learners connected to each other) with the Learning Graph (the graph of courses that are connected to each other), LinkedIn will be able to predict learning patterns, emerging skill-sets and meaningful data that helps the world learn better for gainful employment. 

A college student who uses LinkedIn search for "Courses required to become a Financial Analyst"  should be able to get the right set of courses and a recommended career path as well.

A new 'network within a network' is emerging.
Expect education to take a important two-digit percentage place within LinkedIn's financial reports in the next five years. Some news articles talked about how Facebook should have been the ideal platform for this market considering its history with campuses. But you are on Facebook for different reasons - take BranchOut's failure as a case in point. LinkedIn on the other hand is organically aligned to succeed with the education market. 

Finally, success in Ed Tech is not just about the product. It's about having the right sales organization in place. Unless you have millions in the bank to feed feet-on-street, breaking into educational institutions is tough. In the larger context, LinkedIn's ability to succeed in this new market might lie in just the fact that they have a large sales team in place. The company's sales and marketing spend at 33% of revenues is already the highest in its category (Facebook ~15%). Also, quarter on quarter, its offline sales shadows online sales (Source: LinkedIn annual report). Selling into education would now become an additional task in the hands of an experienced sales team with additional products contributing to their portfolio and incentives.

The question is whether the company will be able to pull it off? Education as a play is different considering the socio-cultural issues around it, be it reducing costs (can they make some part of the value-chain less expensive?) or offering higher quality of information (can they ensure unbiased recommendations?). 

If LinkedIn is able to position itself as a dependable brand for learners and educators offering relevant tools that address their needs meaningfully, the largest professional network could become the largest education network soon.

Last update: 16th September 2013.

Disruptions create a new wave of skills.

When I graduated, Google was still figuring out how to make money from search, Mark Zuckerberg was not yet in Harvard and Steve Jobs had just gone through his first round of comeback success with the iPod.

I am only talking about a little over 10 years. In that decade, Google went from zero to USD 37 Bn in revenues creating the world's most powerful information ecosystem, Zuckerberg created a new 'continent' with a valuation that peaked at USD 100 Bn and Jobs made iPhone the most successful consumer product to be launched in recent history. 

And in the process, through stakeholders of the large Google economy, Facebook innovators riding on its network, and Apple developers behind apps that have crossed the 25 billion download mark, they also created  thousands of successful entrepreneurs and millions of jobs riding on the wave of a new set of skills that emerged from these changes.

Skills build upon each other.

“Knowledge and even some skills have a shorter shelf life these days. The traditional 'K12 -> university -> career' linear education model needs to be transformed into a more iterative and on-demand model."                  
                                                                                                                                                                                              Forbes, 2012 

Not only are skills for the new world completely different from what a regular School or University curriculum offers, but they get augmented / updated / replaced with new ones at an alarming pace that the formal education system can never keep up with.                     
                         
 I believe our career-paths are like satellites. Formal education is this set of expensive multi-stage booster rockets that put us in a certain orbit. But the skills that we acquire are the little propulsions required to keep us moving ahead in the current orbit or help us move into new orbits. The moment we stop gathering these skills, we fall off. 

Some of these skills could fade away, but they never die. It's only their application and use which becomes transitory. 

Disruptions happen at the intersection of new skills and opportunities as shown through the Disruptions - Opportunities - Skills model below.

Each cycle spawns the next disruption, which in turn creates demand for a new set of skills. Apple's iPhone and the accompanying App Store model set the app development economy in motion. The 'app' as we know it today is a USD 20 Billion business - hard to believe it barely existed five years ago. This cycle is not restricted to any specific industries. New breakthroughs such as Tesla's Supercharger concept will set another economy in motion - one centred around skills in the electric vehicles industry. Successful entrepreneurs and employees are the ones who quickly adapt themselves to these new skills, fill the gap and put them to good use. This additive process will only get faster with people acquiring skills at a very early stage and adding value to the economy of continuous innovation that we see today. 

This is where MOOCs like Coursera and Vertical Education providers like Codeacademy come in. These emerging non-formal learning systems help people acquire these skills on-the-fly, at low-costs so that the process becomes a way of life and not an out-of-reach, aspirational, expensive proposition.

Education 2.0 is changing how we look at learning. 

All over the world, people are constantly 'thinking' of ways to move ahead. Education 2.0 fills this gap by providing several ready-made platforms to choose from and pushing people towards 'doing' something about it. They provide the sensors that pick up signals from the D-O-S cycle, collate the information and guide us on the skill-matrix path required to stay competitive. They offer us the chance to gain skills on-demand without worrying about costs, and the bureaucracy/walled-gardens of a large, hierarchical formal education system.

From learning HTML5 to Social Media marketing, or doing a course from Stanford to learning a new foreign language, these platforms truly empower people to 'live life in permanent beta' (courtesy Reid Hoffman) by responding with agility and at low risk.

The new environment forces people to learn (in a good way) through available, proven systems and re-skill themselves. In turn, an individual continuously develops a web of new skills accelerating the pace of innovation and the quality of output in terms of better products and services.

The cycle is shifting.

We can visualize this shift in the Learning Cycle from a 'Learning for life' (to survive and get by) to a 'Learners for life' (the only way to survive and evolve) state of mind. Uncertain times, fluid and evolving skill sets and changing passions means that career paths are no longer linear.

For this new system to succeed, it demands a new mind-set for self-directed learning, not one constrained by degrees and diplomas. 

The good part? This is already happening.

Non-formal learning is not just about transcending space and time.

It goes far beyond the obvious advantages of huge-scale, high-quality of teachers and being location-agnostic. The key factor driving this democratization is the intrinsic motivation in people to learn. We are beginning to realize that its important to invest in ourselves.

I am a student of Coursera. Well over a million people have signed up on the site within just four months of its launch with thousands of participants attempting quizzes, grown-ups worrying about submitting assignments within the deadline, working professionals taking time out to evaluate peers, young enthusiasts organizing local meet-ups in community halls and coffee shops to help each other - all this, mostly without the promise of a recognized certification. 

Going by the early adoption of these platforms, I gained three important insights into non-formal learning and what it means to an individual:

1. Learning models, without the pressure or fear of a rigid system, seem to work.
   
2. Focus is on acquiring specific skills and not a degree.
   
3. People value inputs from an expert even without the lure of a certification

Baseline: people understand the importance in investing in themselves without much external motivation. 

This is a win-win model. 

Everything adds up. While formal education channels (schools, universities) provide the foundation for thinking and a structure to build upon, the non-formal players take care of our requirements for continuous progress by helping navigate disruptions and opportunities profitably both professionally (developing skills) and personally (pursuing interests). The formal system also empowers a large part of the non-formal education. Be it Coursera hosting 200 courses from 33 schools or EdX hosting courses from MIT, Harvard and Berkley, this is not a competitive, but a co-operative relationship between all stakeholders in the system. It's a win-win for the platform providers and the Universities. 

There are several challenges, but none insurmountable.

Controversies about plagiarism, concerns about peer grading and the lack of accreditation are a few, but prominent issues that get reported about non-formal learning platforms. There will be several learnings, changes, burn-outs, pivots and consolidations along the way. 

But the day is not far when continuous learning and re-skilling will become a part of consumer behavior on the internet, just as we got used to buying, selling and sharing online. 

The goal of all stakeholders in the industry should be to help grow user adoption. As consumers, we should help ourselves move forward leveraging these new platforms and becoming part of new disruption cycles without missing out. This is a skills-driven economy powered by a new form of education and learning experiences. And the start looks very promising.

In my next post, I attempt to put forward a framework for understanding education and learning models.

Below: Remember this video and it's story?