Build a product for GPT-6 - Nick Hernandez (360Learning)

In this episode, get advice from a unicorn EdTech founder. Do you articulate your differentiation? Do you create momentum for your funding round? Are you building for GPT-6?

The Guest

Nick Hernandez - CEO 360Learning

We're living through fantastic times. It's time to build, take risks, imagine the future. There are some risks and we can be worried about the future, but we also have a lot of opportunities to build it. So, let's focus on building.

We have an early-Christmas gift for all subscribers today from a unicorn founder! Meet Nick Hernandez who is the CEO and Founder of 360Learning, a leading advisor and investor in the SaaS technology industry, and the author of Collaborative Learning: How to Upskill from Within and Turn L&D into Your Competitive Advantage.

So, Nick isn’t the typical early-stage founder we have on the podcast. He has been running 360Learning now for 10 years and has grown it into one of the leading LMS platforms for corporate education. In late 2021, Nick and his team secured $200m in funding from Sumeru, SoftBank, and Silverlake to continue their mission of championing upskilling from within through collaborative learning. He is based in Paris, France.

Company profile

• Segment: Corporate education

• Business model: B2B

• Markets: Global

• Year started: 2013

• Funding: Series C (raised $242m)

• Location: Paris, France

Listen to the story

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👓 Can’t listen? Read the full transcript here or see more below

Episode summary

• Nick describes his background and passion for education, sparked by his parents' love for learning. He explains the company's pivot from kids education to corporate training due to better market opportunities.

• He highlights the unique aspect of 360Learning which is its focus on collaborative learning, contrasting with the 'top-down' approach of many competitors.

• He shares his experience with fundraising, advising startups to run a structured process where all potential VC investors are approached within a very short period to create momentum and competition.

• He discusses 360Learning's acquisition strategy, citing the recent purchase of skills mapping company, eLamp, as an example of synergistic expansion.

• He dives into the emerging field of generative AI, explaining how it can automate and revolutionize learning interfaces and interactions.

• He advises startup founders to think about the future of their products, planning for the advancements in AI technology.

Book recommendation:

• Crossing the Chasm (the VC bible)

Extracts

Building products for the future

 Something that's challenging with AI right now is to build a product that's not completely going to work right now, but you're building a product for GPT-5. You're building a product for GPT-6. You're not building a product for GPT-4. And I see a lot of people thinking like if the technology was static.

And they think of some limitations that the LLM systems have right now, when instead, I think you should build for what they're going to be two years from now. In my experience, I've invested in some startups, it takes two years to find product market fit. But two years from now, technology is going to be nothing like what it is today.

If you don't want to lose product market fit during the course of these two years, you really need to build something. And I would be really excited if someone shows me an interface that doesn't look like anything I've seen and tells me about the use case it's addressing and tells me that it doesn't really work right now, but it's going to work really well for GPT-6.

And already better for GPT-5. I would say, wow, that's brilliant.

Raising funding, acquisitions and partnerships

 I see a lot of entrepreneurs, a lot of companies going to market to raise money without any structure or process. So typically, first they're talking to VCs all the time, like they're constantly raising money. It's not the best way. The best way is to say, Hey, I'm going to raise money now and to run a proper process where you're going to talk to the whole market during a period, a very short period of two weeks. You're doing that because you want the market to be talking about you and you want to create competition. You want to create momentum.

I'm not sure I've done anything differently. I've tried to go buy the book. But to do really good on all dimensions of the playbook and one of them is being able to very clearly articulate your differentiation. And say, we're in a market where everybody is doing A, but we're doing B and it doesn't have to be better. It has to be different. And to Apple, I don't know if you remember, but Steve Jobs had that tagline, think different. And it doesn't say think better, and I think he was on point. Think different, the word is big enough that you can find your own niche. You can find your market. And later on, once you've owned a niche, you're going to expand and you can own the whole market if that's what you want.

 Because when a strategic buys a company, meaning there's a company like 360Learning buying a smaller company, it's very rarely out of FOMO in a two week process. Some companies hire a banker, they run a two week process like that. I don't think it's the best way to sell your company. I think the best way is to build a relationship, build a partnership, and after one year or two, the synergies are so obvious that the deal closes itself.

Startups should focus on building user experiences

What should people building startups do right now? I think they should think of how generative AI is useful to reinvent user experience and interactions with the end user in a very simplified way.

 So I believe that software is going to be changed at not just at the infra level, but that AI opens an opportunity to reinvent the user interface and user interactions.  I think the question is, what does the future of software look like? And the future of learning specifically.

These are the two questions I'm asking myself, but I don't have definitive answers. I start with the use case. The use case I know; it's onboarding people in a company and I think that's not going to change.

Why collaborative learning

What makes 360Learning unique? It is very simple. It's that we believe that people learn from people. We believe in peer learning, collaboration. All these learning management systems (LMS), they are all very top down. And by top down, it means as a learner, your experience is that you're going to be alone in the tool and it will feel lonely.

You're reading a text, you're watching a video. For instance, you're being onboarded at a new company and you receive that invitation. Email invite to a tool, the LMS. You connect to the tool and you know, most people they join a company because they want to join a team. They want to work with peers. They want to build connections. They want to meet their new team. That's what you're excited with when you are switching jobs. And, surprise, you're invited to that learning platform that is entirely top down and lonely. We thought that is not motivating and be it for the onboarding use case, or for training sales, or for training partners, or even for compliance training.

For all these use cases you have in corporate learning, we believe that learning from someone and not in a cold lonely environment was going to be pivotal for the efficiency of that learning and for the user engagement. So we built a platform that is entirely collaborative, meaning you clearly see who has created the course you're taking.

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