Out of the West: Galway entrepreneur takes online business to global heights
Galway's Mike Feerick has built up one of Ireland's most successful tech exports Alison.com. With a billion-dollar outfit now on the cards, he spoke to Adrian Weckler
As internet access and professional certification requirements expand around the world, online education is proving to be an explosive market.
From corporate qualifications to the wider e-learning industry, the industry is booming.
One recent analysis, from India-based Market Research Future, claims that the wider online learning business is set to grow from €145bn today to €340bn by 2024.
Multinational companies, from McGraw Hill, Pearson and Lynda.com to Udemy and Coursera, are carving up different parts of the market.
But one Galway firm is making serious inroads into the global sector, largely without fanfare.
Alison.com has been going almost 11 years. It was started by entrepreneur Mike Feerick, who still runs it today. Having made a small sum of money from the sale of his previous messaging startup (Yac.com), Feerick has bootstrapped the company into a position of competition with industry leaders such as Udemy and Coursera.
An ex-Harvard graduate and associate of the Irish-American multibillionaire philanthropist Chuck Feeney, Feerick has brought Alison.com to almost 50 employees and millions of global users. He is now considering how to take his education and certification platform to the next level, which would place it in the same billion-dollar category as some of the firm's rivals. He is also wondering whether that might require a massive funding round.
He sat down to talk to technology editor Adrian Weckler.
Adrian Weckler (AW): You said that you want to reach 100 million users by 2020. Is that still on track?
Mike Feerick (MF): Yes. We're at around 12 million now. We've grown organically. All of our top competitors, like Coursera or Udacity or Udemy, have billion-dollar evaluations. But when you look at the numbers, we're not that far behind them. We're signing up about 250,000 to 300,000 people a month.
AW: What about funding?
MF: We've been self-funded for the last seven years.
AW: Do you still own the business?
MF: Yes. That's important to me because if we had out-and-out financial investors I mightn't be able to continue the social agenda that I have. We have a couple of small investors, though. We're getting to the stage where I'm building out the management team. Once we have the majority of that done, we'll probably go out and raise significant money.
AW: Having grown organically up to now, what do you need the extra funding for?
MF: We may be profitable and growing organically, but it's slow. We also have some natural challenges being located in Galway. If I need to hire 30 people in particular roles, most of them are abroad. In London or Berlin or Romania or wherever. This is where we have to go to find the leading edge of talent. So I'm kind of stuck in Galway. Galway is brilliant and I love it there. But to grow to the next level, I know that we're going to have to hire the type of people who live in the big publishing centres, like London or New York. Dublin wouldn't work either.
AW: So are you looking for a big round, in Irish terms? Like €50m or €60m?
MF: I know that our figures are comparable with Udacity and Udemy and all of them. And they have billion-dollar valuations. I'm not suggesting a billion-dollar valuation. But is it worth a decent amount of money and have we a really good position to be one of the top three worldwide? Yes, absolutely.
AW: Clearly you don't want to undersell yourself.
MF: No. What I've wanted to do is to bring it so far that we can raise money at a valuation where I'm not worried about control. That's important to me. It's not a material thing, as my wife and I are pretty frugal.
AW: You're doing all this from a position of strength, though?
MF: Yes. We're a profitable company. We're unusual in the sense that we're proven, one of the very few in the industry, actually. Many of the others are still trying to figure out a successful model.
We have a thousand courses now but I want to have tens of thousands of courses. That requires an organisation that's going to be able to engage with subject matter experts on every vertical, from elementary, beginners and intermediate to advanced proficiency. You name a subject, I want to have courses on it. So if you're into beekeeping I want to have 101 beekeeping and I want to go all the way to advanced proficiency in it.
AW: Doesn't that require getting expert teachers on beekeeping?
MF: Yes and also the administration of it and creating systems to handle all of that. You want to automate everything. We've just developed a self-publishing tool. You're going to be able to go into that and, if you're a subject matter expert, we will funnel the information in your head to create a course the way we want it.
AW: Isn't there still a snobbery online about 'buying your own cert'? What's your perspective on that?
MF: That's a big issue, sure. But the traditional accreditation system that we have right now is way too slow, too costly and too narrow. What's happening is that even for colleges in Ireland you have certain subjects being taught, but it's limited because of economic demand and the business model those colleges have.
We should have courses on everything. But in universities they're very slow. If you try to get a new course into one of the main colleges, you'd better start planning three years beforehand.
We can have a course within days. What you're moving from is traditional industry association accreditation to the accreditation of the crowd. Years ago, a B&B would be accredited by Bord Fáilte. But now Tripadvisor is way more important. There's no question that the accreditation of the crowd is far more powerful.
AW: Okay, but what about quality control?
MF: Yes, that has been a big concern for self-accreditation. But a lot has changed in the last 10 to 15 years in how people measure quality-control mechanisms. Take systems like Airbnb and Uber, where the Uber guy credits you and you credit them. It's not so different with learning. When we have a subject matter expert that puts a course out, we have a small pool of peers around that subject matter expert that will help that person make sure that they're spot on. Then it goes live. Because we have millions of learners online, within 10 minutes of that course being out there are comments coming in on it. If there's something wrong, we can change the course immediately.
So what I'm saying is that the power of the crowd is the future of accreditation. And of course you're going to get the old traditionalists saying 'It's not good enough'. It is snobbery. It's also defensive and it's slightly ignorant. But most of them kind of know that it's actually the future of learning and that it will affect them. Universities are going to have an awful hard time charging for the stuff that they charge for today.
AW: Where are Alison's biggest markets?
MF: It's still the US and UK.
AW: Those people providing this course information, are they professionals?
MF: I see it as anyone from an organisation that is providing a product or service and that can create certification around it. It could be a restaurant. A restaurant may have huge turnover. So it wants people to be able to be trained when they come in, in the stuff they need their workers to be trained in.
It might be someone from a company like Siemens which develops electrical power stations. If you run an electricity authority like the ESB, who would you like to hire to run your generating station? Someone with a classic electrical engineering degree out of college? Or someone who has all of the certifications provided by Siemens on how to run that generator?
AW: But you need more than companies providing courses. Other than trying to generate future skills in a potential workforce, why would an expert publish a course on Alison?
MF: A few reasons. One is to make money. We share the advertising and certification revenue that we make. That can be substantial. Last year, we would have paid our top publishers tens of thousands. There are also verticals that companies want to own. For instance, we're talking to a technology company that sees an opportunity to create learning around their service and to certify it.
AW: Is there really an appetite among companies to develop their own certified courses in that way?
MF: Massively. They have to become brand leaders in the sector they're in, If there's somebody else out there teaching people about what the industry is or how to engage in it efficiently, they're missing out and not in that conversation.
AW: How much did you sell your previous company, Yac.com for?
MF: It got sold for marginally more than the money that went into it, about €15m or €16m. We made a little bit of money on it but I didn't hit it out of the park. I probably could have if I was wiser at the time. But I've no regrets on it.
AW: You were ahead.
MF: We were ahead. I considered it a plus for me. It was my first time at the bat, to use a baseball thing. I came out ahead in it. I learned a lot. And for having done what I did in the West of Ireland, an awful lot of people came out of Yac. A lot of people went on to create their own businesses.
I've always seen at least part of my role to give people an opportunity in the west of Ireland to work at a place like Alison.