#12 Why Is Every Creator Creating A Course These Days?

It’s obviously to earn more money from a captive audience, but let’s examine this from a more tactical, business-first approach.

See, the reason why love I working in the creator/knowledge economy is that the COGS is very close to zero.

Cost of Goods Sold basically measures the direct cost incurred in the production of good and services.

Ok let’s take two types of businesses to elucidate this better:

1) A vada pav stall.

2) An online course.

Let’s go with the latter first.

If you want to build a course, you’ll need to probably rent out a studio, book some fancy lights, get a mic, hire a Sony a7S III camera.

Expensive stuff.

For the stall, you'll need to buy vegetables, oil, pav, cooking utensils etc.

But here’s where things start to get interesting.

For the stall to scale, you’d need to scale up your raw materials too.

So if, say, one kilo of potatoes fed 10 people, you’ll need 10 kilos of potato to feed 100 people.

Your customers are scaling, congratulations.

But so are your COGS. From an economics POV, the marginal cost is way higher in a traditional business.

(Sure, you might get a bulk discount but that’s out of syllabus.)

But in the case of the creators, this isn’t the case.

The cost of scaling the distribution + consumption of your content is barely anything.

You create it once, you can distribute as many times as you want.

But hold up, there’s a catch.

How did we assume that all of the creator’s audience are ‘paying customers’?

They aren’t. And creators realised this.

Social media itself wasn’t cutting it. Creators realised that only doing brand partnerships wasn’t the smartest way to go about their monetisation strategy, especially when the algorithms aren’t on your side.

Hence, content became an audience-pull machine. Distribution was always key. And free.

So this is the trajectory:

So, instead of lamenting how terrible the algorithm has become, the creator plays it to their advantage. Social media becomes a means to an end.

By creating below-average courses, at throwaway prices, which is buoyed by generic content that the janta will like. The algorithm is happy. So is Raj Shamani.

And let me be clear, the janta doesn’t just like these posts. There’s a certain amount of FOMO that these creators that tap into. So it's more of a damn-I-wish-my-life-was-as-sorted-as-yours-here-take-a-like.

Let’s look at our man with a plan, Raj Shamani, for a quick second.

So the money a Shamani or a Warikoo or even an Akshat Shrivastava makes, gets plugged back into those pesky YouTube ads + making more courses.

So very soon, there might be a course on 'How To Set Up A Telephonic Meeting' or 'How To Skin A Toothless Tiger', because the model is quite solid, at least for the time being. There are million-dollar startups like Seekho which are supporting creators create these courses.

It’s a machine. And content is an acquisition game.

Social media is a platform for them. The actual thing that they’re selling, the product is the course.

The price point is designed to be attractive (and always on sale, scroll back to Shamani's image to see what I mean). The course is designed to be average. The content is designed to be generic.

Because it sells.

So the reason why creating courses makes great business sense is this: You don’t have to buy more potatoes to sell more potatoes.

You just have to hustle porn your way through time management and public speaking, and hope that people will be gullible enough to buy your Rs. 1999 course for Rs. 299.

Hope you liked this analysis! Please share it with a close friend, I’m sure they’ll like this kind of stuff too.

I don't have a course.Yet.

But I’m @shreevz on all social media. Including YouTube.

See you there?

Best,

Shreevar