Get access to Protocol
For Aaron Skonnard, the future of employee training at your company certainly isn't about teaching everyone to code.
Pluralsight, a Utah-based upskilling company, provides businesses with training services aimed at transforming a company's current workforce into one that's tech-enabled. Offering videos and courses to employees to develop hard skills may be at the core of their business model, but Skonnard sees the process as more holistic than that.
"When we're talking to customers, it's all about: What's your tech strategy? Where are you going? And what gap do you have today in terms of your skillset?" he explains. And while that can reveal that, say, some employees might need to be trained to code, it may equally reveal that plenty of others could simply do with learning the basics of what AI can be used for.
In an interview with Protocol, Skonnard spoke about the staying power of remote learning beyond the pandemic, the algorithms he's using to identify and close skills gaps, and the plans he has to further develop talent mobility as Big Tech players enter the space.
This interview has been edited for length and clarity.
Because you're focused on remote learning, Pluralsight would seem to be one of those companies that was set up well for the shift to remote work. How have things changed for your customers over the last six months?
I think of all of the CTOs I've talked to in the last 60 days, every single one of them has said, "We're not going back anytime soon, and we probably won't ever go all the way back to the way it was before." So I don't think 2021 looks like 2019. I think it looks like some hybrid of 2019 and 2020 combined, and there are some permanent changes that will be with us forever.
All of the best things that we've learned and gained from this will stay with us, and then some things will go back to the way they were, but not everything. I think that creates a permanent tailwind for us as a business that will work to our advantage over time, just given our business model, our focus, our strategy.
A huge part of the total addressable market for tech training in general is still done in the classroom, at least prior to 2019. There's over $100 billion in the TAM that's spent on any form of training. Some of that money has shifted to these permanent digital solutions over the last five years or so, but what we're seeing with COVID is a permanent rethinking of that.
Has that idea manifested itself in the user behavior data you're looking at?
One of the things we announced in our first earnings call after COVID hit was this sharp increase in user engagement, which highlights that, in a time of crisis, everyone refocuses on themselves, their skills, protecting their career, protecting their future. We saw anywhere from 2 to 3x increase across a variety of engagement metrics that we track.
We also saw businesses being more proactive than before in thinking creatively about how to deliver these digital enablement [and] digital training solutions at scale. And we saw some CTOs, CIOs thinking, "now that all my workforce is at home, we should take advantage of the fact that they're not commuting anymore." They're not wasting all this time moving around, so we should be creating ways for them to use that time to enable skills and rebuild our organizational fabric for the future so we can come out stronger on the other side.
I think that's human nature, survival instinct, right?
On that 2 to 3x number from the earnings call, have you seen that growth continue on that trajectory this quarter? Has there been a plateau?
I can't say too much about this, but it's stayed fairly steady. We expect that post-COVID, there are things that will renormalize again. There's always a bit of a spike whenever you have a crisis like this, but I think there will be a permanent uplift that is created from it.
But overall, I believe there's a strong tailwind behind us on the other side of this because more companies are realizing through this experience that they really don't need to be spending an order of magnitude more money for classroom training when they could be doing that through a pure digital solution.
In that vein, as states and businesses reopen to in-office work, how are you thinking about the staying power of that uptick?
The reason I call it a tailwind is because during the time of crisis like this, there are always these budget constraints, cash conservation efforts, and so you've got multiple forces. But on the other side of it, once a lot of those budget constraints are released and people have now reimagined their future, all of that is going to really work to our advantage.
For our customers, it's going to put them in a much more effective place to be able to leverage these digital solutions for building a skills transformation engine that's just constantly keeping up with the pace of change in the industry. Most companies still haven't cracked that nut.
In terms of picking up those new customers, can you take me inside the room on what your pitch looks like to enterprise clients? What's the crux of the sell?
We actually don't lead with the cost-savings ROI pitch; that's sort of implied. What we lead with is [the idea that] technologies like AI, machine learning, cloud, cyber, they're changing the way we work as a human race. And if your business is not evolving with those technologies, you will be disrupted.
There's never been a greater need in the history of my lifetime for tech-specific training and upskilling because those technologies are quickly changing the way everything works. That was happening before COVID, but with COVID it's like gas on the fire.
So when we're talking to customers, it's all about: What's your tech strategy? Where are you going? And what gap do you have today in terms of your skillset? We do this skills gap analysis for them: We build a skills inventory for them through our machine-learning-based assessment algorithms, and we benchmark the individual against the rest of the industry and give them what's almost like an SAT score for that skill. We can then show this skills gap analysis relative to the strategy they're embarking on. And then we can give them all the tools they need to close that gap by building very role-specific skill progression paths, to lead people to the skill level they need to have.
To give you an example, you wouldn't think of Home Depot as a tech company, but surprisingly Home Depot is embarking on a pretty significant tech evolution as a company. So they partnered with us to build a model that can actually take people with the highest proclivity, the most potential within the company to turn them into software engineers. And it happens to be the cashiers. So we crafted this program with them called the OrangeMethod that turns cashiers into software engineers over a 16-week period.
So are companies mostly approaching you with a desire to reskill, or are you running analyses preliminarily on companies to try to identify those gaps?
Once [companies] realize how big the gap is, they also realize and conclude that they can't hire [their] way out of this. One of the key jobs that we do for our customer[s] is we transform skills. A lot of people get stuck in these dead-end roles, and they just don't see the path forward, especially if they're not paying attention to all of the solutions that are out there. So companies are in a really strong position to be able to create that for their teams.
A big insurance company [we're working with], you probably wouldn't think of them as this leading tech company, but they're looking at trends in the automobile industry. They can see right now that there will not be as many people buying cars next decade … which also means not as many people are going to need car insurance. And that's the lion's share of [their] revenue, so they've got to innovate out of it.
We're working really closely with [that company] to build these core fabrics of digital literacy skills within the company so everyone in the business can be thinking differently about the future. It's not just about hiring people to get the next software engineer that you need to go build stuff. It's actually, we need to get everyone across [the organization] thinking differently about our future.
It doesn't mean everyone has to learn how to code, but everyone needs to understand, how does AI work? How should the accounting team be thinking about using machine learning to better predict future revenues in our revenue forecast model for the street? So not only are we helping them transform the talent in terms of some of these hard skills, we're also helping everyone in the business gain a new level of digital literacy.
On the employee level, there seems to be two prevailing ways that people think about reskilling or upskilling. Some see it as a perk companies can provide for professional growth. Others, as evidenced by Google's certification program, are seeing training through the lens of being the new requisite for employment. In designing your courses moving forward, do you fall more on one end of that spectrum than the other?
We believe that companies will hire by skill as opposed to degree in the future. A lot of innovative companies are already moving in that direction. You're going to see more and more examples [like Google], where companies are committing to a skills-oriented hiring model and internal talent mobility model.
That internal talent mobility is equally important, and more important in my opinion. We're more focused today in the enterprise and in B2B, where we're assuming you've already got a job and you're in there. Individuals do use our B2C platform to get a bunch of skills, and then they do end up getting jobs, but we're not as oriented around that as a company.