Nut: Skillsoft, you know, this big learning company, they bought Codecademy for more than— around half a billion dollars. Like, over five hundred million, something like that.
Poppy: Oh, yeah. So for the founders, that's it, then? Huge payday, job done, off they go into the sunset.
Nut: Yeah, but then, only a few years later, after they bought them, they just fired the entire curriculum team. The actual people who made all those courses, the stuff everyone loved. Just gone.
Poppy: Bloody hell, that's just… cold, isn't it? Firing everyone who actually made the thing. (beat) And then you think, this all started, didn't it, back in two thousand and eleven, with Zach Sims and Ryan Bubinski, these Columbia students. And they just… put one JavaScript lesson, like, on Hacker News.
Nut: Just one lesson.
Poppy: Yeah!
Nut: On Hacker News.
Poppy: Yeah! And within days, two hundred thousand people signed up to try it. Like, overnight sensation, really. And that was Codecademy, you know? Just exploded.
Nut: Two hundred thousand people, just from one post? That's… that's crazy good. Proper product-market fit, right there.
Poppy: It really is. And they just kept growing, reaching fifty million learners across the world, making like, fifty million quid a year, and they were even cash-flow positive, which is quite rare for a startup like that.
Nut: So this wasn't just some flash in the pan, then. This was, what, a proper, sustainable business?
Poppy: Exactly! They built something genuinely valuable. And I think that's the core of it, really. The article points out that an acquirer, like Skillsoft here, can totally mistake what they're actually buying. They see the brand, the fifty million users, the big numbers, right?
Nut: The assets.
Poppy: Yeah, the assets. But they miss the value. The actual human-led curriculum, the way it was taught, that's what attracted those users in the first place. It reminds me, you know, of this brilliant little local coffee shop near me that got bought by a huge chain.
Nut: Oh, no.
Poppy: Exactly! They kept the name, of course, because it was popular. But then they replaced the amazing, unique coffee beans with their standard corporate blend. And they fired all the really experienced baristas, who knew everyone and made the place special, just to 'cut costs'.
Nut: And the regulars?
Poppy: Gone within a year. Completely. Because the thing they loved about it, the soul of the place, was just... (beat) stripped away. And it feels very similar to what happened here with Codecademy.
Nut: So then... if you're a founder, right, and you're thinking about selling, it's like, what are you actually selling? Are you just... selling the numbers? The user base, the—
Poppy: Yeah, are you selling the idea of a coffee shop, or the specific magic that made your coffee shop special? Because you rarely get to do both, do you? (laughing) To cash out big and keep that mission alive in the same way.
Nut: I mean, but isn't this just... business, though? Skillsoft, they're a big enterprise learning company. They probably bought Codecademy for its brand, for the huge list of users they had.
Poppy: But that was the brand, wasn't it?
Nut: They didn't really need a big, expensive team of curriculum developers, right? That's not their model.
Poppy: But that's my point, isn't it? The brand was the curriculum. The reason fifty million people signed up was because of the quality of the teaching, the interactive lessons. If you strip that away, what exactly are you buying?
Nut: But from their side, maybe it's just... they bought the customers, right? For their own products. They integrated the assets they needed, like the user list, and then cut the costs they didn't. For them, it's probably just standard post-merger stuff. Companies... they do this all the time.
Poppy: But it feels like a tragedy for the product, doesn't it? For all those users who loved Codecademy for what it was. They loved that human touch, the carefully crafted lessons. And Skillsoft just said, 'Nope, we can do it cheaper, probably with AI soon, so those humans are redundant'.
Nut: Yeah, I guess... it's like they bought the car for the brand new engine, but then they threw out the mechanic who built it. And now they have to figure out how to keep it running with different parts. But, for Skillsoft, perhaps that was the plan, you know? Just... part of their process.
Poppy: A predictable tragedy, then. I'm Poppy.
Nut: I'm Nut. And this has been Startups RIP's Station.