Thread by @fortelabs

1/ Here's my investment thesis if I was going to invest in cohort-based courses:

TLDR: they are the best means available to monetize the high end of online audiences

2/ Social media and other platforms have made it easier than ever for many kinds of people to have sizable online audiences: influencers, thought leaders, YouTubers, bloggers, musicians, artists, podcasters, etc.

3/ But monetizing those audiences has depended until now on massive scale: ads, subscriptions (usually only $5-10/mo), Patreon, donations, merchandise, etc.

This limits the people who can make a living online to only the biggest, most mainstream online personalities

4/ For everyone else, they need higher price points from smaller, more niche but highly engaged and dedicated followers

What would allow an online influencer to charge $500-$5,000 for something?

5/ At first glance it would be online courses, broadly defined: virtual workshops, educational email series, paid podcasts, pre-recorded video courses, etc.

Let's call all these "self-paced courses" for short

6/ The problem with self-paced courses is they are just content at the end of the day, whatever word you use

Content always becomes a commodity over time, because it can be infinitely replicated, doesn't involve a human, and there's nothing stopping others from taking it

7/ And the biggest reason of all: there is now so much amazing content freely available everywhere that the bottleneck has become people's ability to pay attention, to stay motivated, and to put the knowledge into practice

8/ The price ceiling on self-paced online courses is low because the average amount of value that people get from them (with a 3-5% completion rate and little evidence of real world application) is low

9/ Cohort-based courses totally remove that ceiling, allowing followers to directly engage not only with the instructor, but with their fellow followers in an environment that provides accountability, feedback, emotional support, coaching, social learning

10/ They are not as scalable as pure software, but a hell of a lot more scalable than learning in a classroom: we had more than 1k students in our last cohort, and I recently attended Tony Robbins' Unleash the Power Within Virtual which had 12,500 live attendees over a weekend

11/ And the friction that remains makes it an excellent business: impossible to pirate (you can't duplicate an interconnected web of social interactions) and difficult for others to mimic (who don't have all the elements needed)

12/ Cohort-based courses are basically a way for online influencers to sell their time, which followers are willing to pay A LOT for, in a very highly leveraged way that can reach thousands of people at once

13/ They allow "creators" cross the chasm into "teachers," where their life experience is more than just entertainment, but principles and habits and lessons that anyone who admires them (incl. most of their followers) can learn from

Followers can actually follow, not just watch

14/ Most online thought leaders create content for ppl who have more time than money: videos to watch, writing to read, podcasts to listen to, etc.

But the high end of their audience has more money than time, and is willing to pay for active guidance to get results faster

15/ I continue to be astounded how much value is unlocked when ppl with a following start offering a cohort-based course. They activate a whole new segment of their audience they often had no idea existed because they don't leave comments on Youtube videos

16/ This isn't only about money, although that's important to make it sustainable. This high-end audience also has the connections, specialized knowledge, followings of their own, and case studies creators need to take their business to the next level

17/ Working with these people as peers provides SO MUCH amazing friendship, mutual understanding, examples and case studies, etc.

You actually gain at least as much from these more experienced, established followers as you give them

18/ Another part of my thesis is that this area is massively undervalued by investors because it doesn't fit into any one category

It's not just SaaS, a product business, consulting or coaching, or a "content business," though it draws on all those models and more

19/ It's best to think of cohort-based courses as the cash cow of a full spectrum media empire, which most thought leaders seem to be building these days: the way to turn followers on all other platforms into customers and evangelizers

20/ Eventually we will also see them reach truly astounding levels of profitability. Tony Robbins' event made around $9M in one weekend by my estimate, not including cross-promotions and upsells, which were extensive

There's no reason others with large followings can't do this

21/ It's also not just about ppl with huge followings. Blowing up the price ceiling paradoxically makes it far easier to make a living much earlier: you can actually follow the 1,000 true fans model when you're charging 5 figures per person

22/ With cohort-based courses, you actually don't even need to get big at all. Better to serve a specialized niche, which also will pay more

To make a six-figure living, you'd only need 100 customers a year at $1k price. Or 200 customers at $500

23/ If you're into this, we're launching the first cohort of our Keystone Accelerator in January focused on cohort-based, community-driven, premium online courses who already have some traction

Applications close next Friday: keystoneaccelerator.com