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Thinkific has been in the media a lot lately due to their massive IPO. But the company has been around for nearly a decade and grew primarily based on profits, not VC funding rounds. Speaking with SAAS NORTH, Thinkific co-founder Miranda Lievers shared the company’s early scaling story: how Thinkific shied away from building a marketplace and how it changed marketing tactics early on to enable growth.
Realizing the market opportunity
As a co-founder, Miranda considers herself a “zero to one” leader, building up functions (like marketing, customer support, and partnerships), then hiring competent leaders before moving onto the next thing. This operational mindset helped her see “three steps ahead” when it came to making plans. And every time she thought about Thinkific’s potential, it always looked good.
“I never saw a spot where this couldn’t work,” said Miranda. “I wouldn’t say we knew we’d become successful, but we knew the potential was always there.”
Like almost all startups, Miranda said that the early days of Thinkific were like “pushing a giant rock up a hill.” Each new customer was hard won - and celebrated - because it meant a lot. But as Miranda built up systems and her co-founders Greg Smith, Matt Payne, and Matt Smith focused on product and engineering, things inched along and got a tiny bit easier.
“Eventually, it started to feel like it wasn’t a rock being pushed uphill, but a boulder that was rolling down a hill,” said Miranda. “Customers were finding value, acquisition was getting easier, and product was getting easier. We still had to put in effort, but the company was moving so quickly it felt like we had to run to keep up with that boulder.”
Crowning the creator
Before things got easier, Miranda (COO) and Greg (CEO) had to make an incredibly tough decision: who is their true customer? Thinkific could have focused on the students (people taking courses) or creators (people making courses). Both models can be successful, but the question was more existential for Miranda. It was fundamentally asking what type of business they wanted to build.
After many long nights whiteboarding, talking, and putting up (and moving) sticky notes around, the team tried an experiment. Instead of talking about the potential for each audience, they talked about the ‘extreme cases.’ For example, if Thinkific focused on the student, they would need to build a marketplace that offered easy access to education, both in terms of price and volume. This would create fantastic access for students but it would drive prices down and commoditize education. Creators would need to compete on price, not quality, meaning revenue would be dependent on volume and gimmicky marketing tactics.
On the flip side of this analysis were the extremes of focusing on the creator, which meant Thinkific needed to be a platform versus a marketplace. In this model, things could easily go south with creators that don’t deliver on their promises and who don’t provide good learning experiences. But in this model, the onus would be entirely on the creator. If they didn’t deliver value, they would get few (or no) reviews and likely not sell very much. Great creators, however, could earn uncapped revenue.
In the end, the Thinkific team chose to “crown the creator,” as Miranda put it, and focus on providing the technology tools that businesses of all sizes could use to build and market an online course.
“We chose to build a business platform for business owners,” said Miranda. “We can’t run their businesses for them, but what we can do is create a powerful platform to enable their success. So our focus became supporting creators by developing software that would deliver a great student experience and give entrepreneurs the technical resources they may not otherwise have had access to.”
A marketing pivot
Early on in Thinkific’s journey, the company used fairly traditional advertising. They’d focus on compelling copy and creative, drawing people in and encouraging them to give the platform a try. This worked, but the company wasn’t scaling the way Miranda and Greg had hoped.
“Marketing is always iterative,” said Miranda. “You try a hundred experiments and figure out which are working better than the other ones, then double down.”
One of the experiments came from talking to early course creators on Thinkific’s platform. After hearing about customer successes, Miranda wanted to share those stories with the world in the hopes that it drew more customers to the platform.
Specifically they tried three different tactics:
Webinars were a hit. Miranda said Thinkific conducted well over 100 webinars, either with the creator joining in or just the Thinkific team telling the creator’s story to viewers. The experiment was so successful that the company went all-in on storytelling over traditional advertising, and it became a core tenet of the company’s growth.
“Nothing is more compelling than hearing about somebody like me, solving problems like mine, and hearing the stories of incredible course creators who found success with Thinkific,” said Miranda. “When we focused on amplifying their voices and working with them to share their stories, we were naturally able to attract the next customer.”
Ringing the gong
In any scaling business, there are as many downs as there are ups. For Miranda, that meant celebrating every win by ringing the gong in their office. But something began to happen as webinars helped the company scale: they were ringing the gong too often. That’s when Miranda and Greg really started to sense they were on their way to reaching their potential.
“Early on, we would celebrate every time a new free customer signed up,” said Miranda. “Then we got too many of those, so we would ring the gong with every paid customer, and eventually for every customer past a certain level. Then even that became too much, so now we only ring the gong for larger milestones. That’s when we started to feel we had something. That rapid acceleration - what used to take a week or even a month was starting to happen every day.”