Tech unicorn Thinkific moves to the head of the online learning class. That success didn’t happen overnight

Credit: Courtesy of Thinkific

Thinkific COO Miranda Lievers and CEO Greg Smith

Miranda Lievers and Greg Smith, co-founders of the Vancouver-based course creation platform, chat about building their business and the future of learning

The first time Greg Smith got the billion-dollar question was in 2015. That’s when the co-founder of Thinkific Labs had his first meeting with Fraser Hall and Jay Rhind of Rhino Ventures, which went on to become an investor in his online education business.

“Fraser and Jay asked me, Do you see this growing to a billion-dollar company?” Smith recalls. “It was the first time anybody had asked me that and the first time I’d even considered that possibility.”

Smith and his three co-founders at Thinkific, which lets entrepreneurs and organizations create their own digital courses, gave it some thought. “And I said, You know what? I think the market is big enough that that opportunity is there.”

He wasn’t wrong. As of April 27, Vancouver-based Thinkific was worth a cool $1.25 billion after raising $160 million in its Toronto Stock Exchange debut. Issued at $13, the company’s shares closed at $15.60.

Interviewed with Smith the day before Thinkific went public, co-founder and COO Miranda Lievers says she hasn’t been preoccupied with the IPO. “In many ways, I’m most excited about getting back to focusing on the team and looking forward,” Lievers says. “Certainly it’s an incredible milestone for us and for our company, and as a Vancouver tech story. I’m excited about all of those things, but we see this as the beginning of our life as a public company.”

We got in early

Thinkific’s roots date back to 2006, when CEO Smith, a former securities lawyer, was teaching an LSAT course. “I was struggling to put it online and started mashing together some of these different systems.”

For help, Smith turned to his brother, Matt, a software developer. As the two started to build what became Thinkific, they shared an apartment. “We placed a lot of bets on whether anything was going to work, and I remember he bet sometimes that it wouldn’t, I bet that it would, or vice versa,” Smith says.

When the Smiths launched Thinkific in 2012, they brought on Lievers and Matt Payne, now CTO, as co-founders. “The big thing for Matt and Miranda in the early days was they both just acted out of the gate like they owned the company and operated like a true founder would,” Smith says. His sibling, who spent three years as CTO, co-founded Vancouver-based Instagram marketing platform Later in 2014 and remained a director of Thinkific, becoming its chief strategy officer this March.

There were some pivots and false starts during the first few years, Smith admits. “But the idea from day one was very much what we’re doing now—helping course creators and businesses build and launch businesses to generate revenue and grow their business where they can deliver it on their website, under their brand.”

When it comes to online education, Thinkific had the good fortune to be ahead of the curve, Smith says. “There were hundreds or a few thousand potential customers when we were getting started, and we got in early. And I’d say even early market traction was a bit slower then because there weren’t that many people and businesses thinking about this. And the market has created itself and tidal-waved over the last decade, and we got really lucky to be in ahead of that massive wave. And now it’s to the point where I think any business can be considering courses and education as a way to grow and scale.”

The company’s white-label approach sets it apart from rivals like Coursera and Udemy. “We’re lucky in that there’s no big incumbent in the space,” says Smith, noting that Thinkific pegs the total addressable market (TAM) for course creators at US$28 billion to US$34 billion. “If you total up all the companies who are in this space right now, I don’t even think we collectively share a small percentage of that overall TAM. So it’s wide open in terms of opportunity for us.”

COVID just brought the future forward

The capital raised from going public will help Thinkific’s team of about 220 boost brand awareness, spend more on research and development, and build for the long term, Lievers says. “We serve 50,000 course creators today and believe that we can serve millions in the future, so it’s just investing toward that mission.”

The company is also doing significant hiring, adds Smith, who says it’s looking for engineers, software developers, product managers, designers and digital marketers. Thinkific, most of whose staff are based in Vancouver and across Canada, plans to keep building its partner ecosystem, too. “We’ve seen this really amazing organic network of partners who operate around Thinkific and bring their clients to it.”

Thinkific’s business expanded dramatically during COVID. For 2020, revenue surged 115 percent year-over-year, to about US$21 million, while the number of paying customers jumped 126 percent, reaching almost 25,000. The company posted a $1.29-million net loss last year.

As Lievers points out, Thinkific didn’t pivot to adapt to the pandemic. “COVID really drove the forces that were already fuelling the growth of our industry,” she says. “When you think about things like the rise of the creator economy and entrepreneurship in general, the mass adoption of learning and even teaching online—which everybody experienced in some form this year—all of that was already happening. COVID just brought the future forward.”

Tough circumstances bring out the best in entrepreneurs, argues Smith, who says that was the case with Thinkific’s clientele. “What we’ve seen over the last year is that entrepreneurs will not just pivot to survive in the difficult times, they’ll actually pivot to thrive,” he adds. “We saw many of our customers go from having a brick-and-mortar business that was struggling to creating an online course. And now doing better than they ever have before, with even higher profit margins, because it’s digital goods they’re selling.”

It’s not what your degree is, it’s what you can do

Asked about the future of education, Smith doesn’t says he doesn’t believe traditional academic institutions are on the way out. “I think there’s still a place for universities in the long run. Probably big parts of their business models need to change.”

Over the past decade, online has become the first place people go to learn something new, whether it’s how to paint or the skills to break into a new industry, Smith says. “I think university designations in the past were very much driven around the job market. If you went to UBC or UofT or Harvard, that would get you the right kind of job. And now when we’re hiring at Thinkific—and I know this for many companies—it’s not what your degree is, it’s what can you do. And you can pick that stuff up online.”

As part of the Vancouver tech ecosystem, Thinkific and other local businesses are successes long in the making, Smith stresses. “Around the time we were getting our start was when organizations like Launch Academy, where we first set up shop, and mentors like Jeff Booth and investors like Rhino Ventures were there to help companies get started,” he says.

“Now you’re seeing those companies that started a decade ago come to fruition,” Smith adds. “I think we’re going to see even more of it over the next decade because it’s only accelerated over the last 10 years—the investment of mentors, [capital] and resources in the tech scene.”