Case study: OpenClassrooms' freemium model
How OpenClassroom’s cracked the freemium model to make education accessible.
OpenClassrooms are pioneers of accessible education. In this case study, their Senior Director of Strategy Guillaume Parrou explains how they turned their commitment to open education into an effective freemium model.
“It's not just a commitment to accessible education, it's also good business,” says Guillaume Parrou, OpenClassrooms Senior Director of Strategy.
“It helps with brand awareness tremendously,” he pauses. “Imagine several generation of engineers learn their trade through OpenClassrooms. And today that's the people who hire graduates.”
Guillaume is reflecting on the immense goodwill that OpenClassroom’s commitment to offering free short courses has gained them and how it plays a key role in the organisation’s mission to Make Education Accessible.
“Last year we helped 44,000 people change their careers in some way,” he says, citing OpenClassrooms primary measure of success: job outcomes.
They describe these as someone who started a new job, started their own business or gained a new title or pay rise. Their goal is to deliver 500,000 job outcomes in the next couple of years.
OpenClassrooms now offers over 600 free online courses as the free part of a freemium model that also includes over 50 accredited diplomas and apprenticeships.
But their commitment to making education accessible doesn’t stop at offering free short courses. Only 15% of learners on their accredited programmes fund themselves. 57% receive public funding, 13% are apprenticeships and another 5% are funded by their employer.
They also pioneered making their mission part of their French company articles, issuing an annual mission report authored by a Mission Committee and are a B-Corp.
So how, where so many have tried and failed, did they manage to build a successful commercial model that enables so many learners get a free education?
The foundations of freemium
The roots of OpenClassroom’s freemium model is in their founding story. “It's been part of our DNA forever,” say Guillaume, who joined the company in 2016. “The company was founded in 2013, but the project dates back to 1999.”
He tells the story of Mathieu Nebra and Pierre Dubuc, the two cofounders. They're 13 and 11 years old respectively. They want to learn how to code. They're frustrated with the accessibility of the resources available to them as teenagers. And so they decide to solve their own problem and build a website for learning how to code. It’s called Site Du Zero. And it’s free.
“They were 13 and 11. They weren't trying to build a business,” says Guillaume. “They were trying to help them and their friends learn how to code in the most efficient way possible.”
They start building a course editor where a growing community could create and publish courses under a Creative Commons license. Suddenly there are thousands of these open source courses. “And that's what the company was built upon - the huge adoption of those open online courses.”
Guillaume pauses to reflect on how innovate this was in 1999. “To put that in perspective, we're talking 12 years before Coursera. Eight years before the first mention of open education into any academic paper. And even three years before Wikipedia. So it was a cultural phenomenon.”
Like many of the MOOC platforms that emerged around them, from it’s relaunch as OpenClassrooms in 2013, they experimented with a range of business models. Printing books, selling certificates… “But it really took off when we launched degree programs and decided to become a school,” he says. “And with this background, this mission, this DNA, the natural move was to be a freemium school.”
He smiles. “You know the phrase, decide who you want to be and do it on purpose?” he’s quoting a Dolly Parton lyric. “Very early on the cofounders decided that the commitment to open source was non -negotiable. And that's who we've been ever since.”
Accredited pathways
OpenClassrooms now offers around 50 state accredited pathways to high demand jobs. Learners on pathways still work their way through the same courses that are accessible for free. But they apply what they have learned to guided projects with the support of a mentor and gain a qualification. Over 11,000 students followed a pathway in 2022.
“We do mostly reskilling and apprenticeships, historically in tech,” says Guillaume. “But now any job that is that is in high demand where employers can't find the talent is on the table for us.”
They develop the learning materials in house. They also have their own unique tech that allows them to match learners with employers. And to funding options.
“That's the secret sauce,” he grins. Initially, pathways needed to be self-funded. But over time OpenClassrooms have gained accreditation and the associated funding.
“A third party funding model is more complex to operate, but it offers an amazing value proposition means that the learner can access really high quality learning for low to no cost.”
He says that this forces them to align with the interest of the employers which is also beneficial. It means that for funding bodies and government, “we give them a turnkey solution against unemployment. It's as simple as that.”
“You talk with the labour ministry and they're trying to plug some skills gap at a national level,” he says. “Because of the scalability of our model, we're able to offer something that's working at that scale.”
Freemium today
Nearly 300,000 learners take part in free courses each month.
I ask him how the company views freemium today. Is it, like most would now recommend, viewed as an acquisition model for their pathways? Or is it a form of cross subsidy?
“It's totally both,” he says. “In the organisation psyche, maybe it feels more like the paid piece subsidised the free offer… But in reality, it's a bit of both.”
He describes the motivations they see from different learners they need to keep in mind.
“We learnt quite early on that many of the people who take the free courses, are not in that target of a reskilling professional looking to have a profound transformation to their career. They're here because they love to learn.”
He says that they still like supporting people to explore or learn as a hobby. It builds awareness.
“And then there are the ones that need reassurance,” he says. “They want to try not just the service, but the actual job before committing to a programme.”
This is important for OpenClassrooms as it helps them to understand which learners are likely to successful on their programmes but it is also a big part of their value proposition for learners.
“Picking a new career, it's a very high stake decision. It's expensive financially, but it's also big time commitment,” he says. “And it’s going to deeply affect the trajectory of your life. It's really helpful for people to get a chance to get a feel for the job.”
Guillaume also describes how the team also use free courses as a way of market testing.
“Let's say you are preparing to launch a paid offer on a new vertical,” he explains. “You can start publishing free courses that are more designed for acquisition a bit in advance to start to build an audience and get a feel for the organic interest.”
Things to consider about the freemium model
I ask what advice he would offer to others considering a freemium model.
1. Consider the market
“If you are an online school, I would think about the state of free resources in the particular vertical,” he advises.
“Even free content competes with other free content for people's attention. It's not just because it's free that people will take it. It still has to be substantially better than are other free offerings.”
He says that if you think there is a lack of knowledge about what you want to teach and deficit in free resources which is a blocker to people wanting to learn it, then it’s definitely worth offering free content to help make it accessible.
He puts this into OpenClassroom’s terms: “Our free courses are a way to educate the learner about the career that they're interested in.”
2. Make introductory free
This leads to his second piece of advice.
With free content, typically a small number of courses will make up the majority of signups. The classic power curve and 80:20 rule rule of the internet. “The vast majority of these popular course are going to be introductory,” he says.
“We open source and publish all our courses whether they are introductory, intermediate or advanced. But I'd say be very intentional about the introductory ones and how they fit with more intermediate or advanced ones.”
3. Create clear water
Which in turn leads to his third piece of advice. There needs to be a very clear difference between what is free and what is paid. The contrast must be substantial.
“If your paid offer is just more of what you put out for free, the impetus for switching to paid and the sense of urgency will not be big,” he says. “We like to think of it as it's either totally free or it's something that could potentially cost a lot. It's very premium.”
For OpenClassrooms, that means adding a mentorship service, guided projects, a job placement, the accreditation and the funding options. “It allows you to make bigger promises and aim for more transformative outcomes,” says Guillaume.
4. Retain Control
I ask why he thinks that others have found it hard to make the freemium school model work.
He thinks the key difference is that for many others they were dependent on third parties. “It was university content that they were putting out for free. So maybe they didn't have the same amount of control over what the free offer looked like and how that led into some paid offer.”
He also reflects that Coursera is now builds much more of its own content. “We can see how this content is better positioned to be leading to a paid offer. So your free catalog has to be designed very intentionally as well.”
Summary
We recap his key pieces of advice for freemium:
Consider what is already free in the market: is there a deficit of content and will it help learners understand your offer?
Make the introductory content free: it is likely to get the biggest audience and starts to build the learning habit.
Create clear substantial differentiation between what is free and what is paid, otherwise not enough will convert.
Retain control over the content, so you can intentionally design the offer.
Know who you are and then do it on purpose.
As we finish, I ask him what is great about EdTech. “In most products, you'll get to either impact a few people massively or create a small impact for a lot of people,” he reflects.
“What's great about EdTech is that you can bring about a truly transformative, huge impact for a lot of people. Both the depth of impact and the reach. And I don't know about you, but it makes me sleep well at night when I know that I played a little part in helping a lot of people transform their lives.”
Find out more about how OpenClassrooms are delivering on their mission in their annual mission report.
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