How Codecademy Will Make Money

2 Replies

Codecademy is a service that lets people take free online coding classes, and has received $12.5M in institutional capital. It’s an awesome idea, but how will it make money if it’s billed as free (emphasis added)?

Learn to code interactively, for free.
codecademy

I became fascinated with code later in life than your typical self-taught developer. Part of my journey included using CodeYear and Codecademy to kick off my programming.

While, I didn’t continue on with CodeYear, it wasn’t because of a lack of interesting in programming or Codeacdemy material. In fact, I became more and more interested in learning web development. Codecademy was great material to kickoff my process, which sent me down a path of continued learning and interest. Codecademy appears to be committed to creating a great, engaging product first and then worry about developing Revenue Models later. However, I’m sure it’s on their (and their Investors) minds.

Here are the options, in decreasing likelihood:

1. VERY LIKELY – Digital Advertising/Sponsorship

The site has great traffic, visitor time on the site, and user engagement. Plus, the target audience is very niche, interested in Technology and Computer Programming. The team will have to be careful to deliver ads in a manner which won’t dilute the learning experience.

2. LIKELY – Affiliated Products/Services

All these new programmers are going to need the latest and greatest web development tools. Codecademy would be able to highlight products geared towards the lessons and could even create lessons or projects which interact directly with the software/tools for sale. What better to attract a lifelong user of your internet product then when they are first learning?

3. POSSIBLE – Freemium Content Model

While it is possible the team will sell additional content, such as lessons or products, it doesn’t seem to their advantage to place any barrier in front of an already interested participant. Most users who gain the basic knowledge, when faced with a pay model, would likely jump ship and find another source online to fulfill their needs.

4. UNLIKELY – Job Board

A job board would make for a great PR story. Imagine it now “Total noob acquires all knowledge from Codecademy and lands dream developer job at Google” or some other great company. But, the reality is that the typical user’s skills are going to be light years behind actual professional development talent. It’s difficult to believe the site would ever generate critical mass of qualified developers to justify a job board.

Codecademy will continue to grab the attention of those looking to dip their toes into programming. How do you think they will leverage the product to make money?

  • http://22ideastreet.com/ Anthony Panozzo

    It’s interesting to consider Codecademy’s strategy here, something I would not really have thought of before. It’s almost like they have a given business model (perhaps represented by a business model canvas) and then how could they monetize that business model. Could something like Codecademy be bootstrapped, for instance?

    I think your analysis is good about the likelihood of the different options. I wonder if partnering with a larger company / project to work on tutorials in their languages/frameworks of choice would be another method to get revenue. Thanks for posting!

    • http://andrewkkirk.com/ Andrew K Kirk

      It seems hard to imagine many consumer-facing apps bootstrapping to any significant scale. While the cost to support and deploy these applications has fallen, there’s been a simultaneous increase in end users’ expectations that apps and services be delivered without a direct cost to them.

      I agree that curated partnerships (vs. blatant ads) would be great. It would be like if Ford provided all the automobiles for drivers education; you can imagine the brand awareness and appeal.