Hi there! Alberto here, joining from Madrid this week.
The Transcend Newsletter explores the intersection of the future of education and the future work, and the founders building it around the world.
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Are you a founder building in the K-12 space? Are you struggling with loooong sales cycles?
Then you need to join us this Wednesday for this Open Discussion on Product-led Growth with Graham Forman, Managing Director of Edovate Capital and investor in Pear Deck, BookNook or ClassWallet among many others. He’s a friend of Transcend, and our go-to person for all things K-12 GTM!
If you are a founder and want more of these, you should sign up for our weekly founder emails! We host weekly events like this one, and share operational articles for early-stage founders in edtech.
Last week, edtech made it back into the headlines, but for the wrong reasons:
ChatGPT had claimed its first victim, and it was the edtech unicorn Chegg.
In a disappointing Q1 earnings call, Dan Rosensweig (Chegg’s CEO) admitted that ChatGPT was having a significant impact on its ability to bring on new students to its service. By the end of the day, its stock was down by 50%, cutting down billions from its market cap.
“Since March we saw a significant spike in student interest in ChatGPT. We now believe it’s having an impact on our new customer growth rate.”
College students are going to ChatGPT to answer its homework and study questions, rather than signing up to Chegg. That’s having a real impact on Chegg’s growth: its quarterly revenue was down 7% year-over-year (down to $187.6 million) as it became the first publicly-traded company to admit the direct negative impact ChatGPT had on its product.
But first, what exactly does Chegg do?
Chegg is an edtech OG – it’s been a publicly traded unicorn for a decade now, and saw its popularity rise through COVID as university students went fully online.