Back in 2014, when Sarah Blanchard became committed to landing her first CFO position, she kept a key criterion in mind: Her future company had to be mission-driven.
“I ended up in digital health before anyone really knew what digital health was,” explains Blanchard, who received her first CFO appointment from Omada Health, an early-stage health tech firm whose flagship product at the time was a diabetes prevention offering.Read More
“When you talk about a mission that can have a huge impact on the world and a huge impact on humanity and our economy, this was something that I felt lucky to be a part of,” comments Blanchard, who admits to having had limited experience prior to Omada when it came to raising capital and being face-to-face with investors.
“I had two choices: I could raise money from life sciences investors or I could raise money from tech investors, and they both tend to be creatures of habit—they like to see patterns,” observes Blanchard, who still seems to savor the dual challenge of opening the minds of two distinct groups of investors.
Notes Blanchard: “I would spend lots of my time in trying to help life sciences investors understand how and why we could scale a healthcare company so quickly and at the same time help technology investors understand why ARR was not a metric for us, even though we were selling into enterprises.”
Meanwhile, Blanchard’s tenure at Omada endowed her with a degree of extra vigilance when it comes to company pricing models.
“Omada had an outcomes-based pricing model—which was really novel at the time—meaning that we didn’t really make any revenue if we weren’t driving outcomes,” explains Blanchard, who adds that the model was flawed due in part to the firm’s assumption that the number of lessons completed by participants was a worthy “milestone” and indicator of positive outcomes.
“We were focusing on driving people to complete lessons, but lesson completion, while it’s correlated with weight loss, it is not weight loss, and it is not a reduction in the risk of getting diabetes, which is what we were all about,” recalls Blanchard, whose efforts to repair the model ultimately involved tasking the company’s data scientists with a mission to better expose the connection between participant weight loss and outcomes.
Says Blanchard: “After we switched over to a percent-weight-loss-per-month model, we began getting paid for real outcomes.” –Jack Sweeney
Made Possible By
CFOTL: Tell us about Udemy … was does this company do, and what are its offerings today?
Blanchard: The first thing to know is that we were founded as a marketplace, which means that anyone anywhere can share their knowledge with anybody anywhere in any language. We have a consumer offering and an enterprise offering. What we’re really all about is skilling and upskilling so that people can achieve the career goals that they want and businesses can achieve the business outcomes that they’re looking for. This marketplace is a unique model. When you think about where the world is going with digital transformation and with the pace of change in technology, you realize that a traditional publisher model really can’t keep up. We have over 60,000 instructors across the globe who are creating new content and upgrading their content.Read More
The reason that they’re willing and able to do this is that, number one, we provide a lot of feedback loops. There are ratings and reviews. There are Q&As so that the instructors can see and learn what their students are thinking: “Hey, where are people bookmarking things? So, I’ve really hit that point and they like it here. But where are they falling off? Where am I getting a lot of questions? I need to change my course a little bit so that they understand.”
On the incentive side, we have a revenue-share model with our instructors, and it’s uncapped. The better your courses and the better your ratings, the more your course is going to get marketed. Our marketplace is really this filtering mechanism that allows us to find the best courses, which we then package up for the enterprise. We have more than 5,000 courses being published a month, and we’re completely global because anyone anywhere can do this. We have content in over 75 languages. We’re able to support individuals and multinational corporations and foreign companies in a way that no one else can. It really is fundamentally a different business model.
“Aligning as a leadership team, setting clear priorities and expectations, and communicating these effectively are critical to unlocking the power of an organization. The team can only act with urgency effectively if they know what the goals are and how to measure them.” –Sarah Blanchard, CFO, Udemy
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