I need help in writing case study for below case :(mentioned are the questions to be answered first)

UBits: Feed Your Skills

1.How would you evaluate UBits's operation and performance at the beginning of 2020?

2.What aspects of the current operation may UBits leverage when continuing to grow?

3.What growth strategy would you recommend to Julian Melo at the beginning of 2020?

4.What would be the main challenges for UBits as it entered the next phrase of growth?

Case Study:

UBITS: FEED YOUR SKILLS (A)1

Guoliang Frank Jiang, Lorianne Dueck, and Johan Angulo wrote this case solely to provide material for class discussion. The authors do

not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names

and other identifying information to protect confidentiality

"We are Netflix in the corporate training business."

---- Julian Melo, the CEO and co-founder of UBits

In February 2020, Julian Melo just flew in from Mexico City to meet with Marta Forero and other

members of UBits's management team in Bogota, Colombia. Co-founded in 2014 by Forero and Melo

in Bogota, UBits was a leading provider of online corporate training programs in Latin America

(LATAM). The past eighteen months had witnessed rapid growth at UBits, averaging more than

twenty per cent monthly increase in revenue. The start-up's compact, high-quality online courses had

given thousands of workers, especially those without advanced degrees, an opportunity to upskill and

reskill. However, while UBits had gained strong foothold in Colombia, Mexico, and Peru, it had no

presence in Brazilthe largest economy in LATAMor other major regional economies including

Chile and Argentina. On the other hand, UBits currently only offered one type of subscription-based

service to corporate clients. The management team had contemplated directly targeting individual

users to leverage UBits's growing library of more than three hundred locally produced courses.

Although Melo was pleased with the recent performance of the young enterprise, it was not clear

what strategic direction the company should focus on to continue scaling the operation. He understood

that UBits was entering a new phase of growth and that there were some critical decisions to make.

CORPORATE TRAINING IN LATAM

Traditional school systems were often outdated and/or deficient in LATAM. Although the drop-out

rates in early education decreased from 15.6% in 2013 to 13.9% in 2017,2 the World Bank estimated

that approximately 2.3 million children and adolescents were not in school or had dropped out of school.3 The percentage of people in the 18 to 24 age group attending an institution of higher learning

rose from 21% in 2000 to 43% in 2013.4 However, only half of the students could graduate, and lax

regulations, insufficient funding, and uneven academic standards meant that many graduates were not

equipped with skills demanded by the labor market.5 According to a 2020 report by The Organisation

for Economic Co-operation and Development (OECD), over four in 10 firms in LATAM had

difficulty finding workers with the right skills and that the region had the widest skills gap in the

world.6 In addition, automation and artificial intelligence had heightened the need for workforce

reskilling and upskilling. A 2017 study estimated that 14 percent of the global workforce (approximately 375 million workers) would have to switch occupations or acquire new skills by

2030.7

To battle the skills gap, companies in LATAM increasingly viewed online training, or e-learning, as

a means to provide cost-effective education to the workforce. Improvement in communication

infrastructure, the wide use of smartphones, and changes to corporate practices, such as the adoption

of the Bring Your Own Device (BYOD) policy, paved the way for the growth of online training.

Some estimated that the market demand for online corporate training in major LATAM countries was

approximately US$16 billion in 2020.8

Unsurprisingly, there had been an influx of investment in educational technologies and online training

services in LATAM. Many start-ups were run by millennials who viewed the current time an ideal

period to disrupt the outdated educational systems and to help fill the critical skills gap by offering

new educational solutions. Entrepreneurs in this sector also benefited from the region's proximity to

the United States, which allowed them to access venture capital (VC) and the latest technologies and

best practices. UBits had been one of the recent success stories from Colombia.

UBITS'S EARLY DAYS

UBits, short for The University of the Bits, was founded by two Colombian nativesMarta Forero

and Julian Meloin 2014. A previous start-up founder and an experienced marketing executive in

the e-learning sector, Forero led expansion of a Mexican online university to Colombia. Melo, a

former college professor who studied knowledge management, founded a delivery start-up, and had

counseled local companies on corporate training. Forero and Melo believed that a business solution

that helped local companies upskill and reskill its workforce would also address a major societal

challenge in LATAM. They realized that there was a lack of high-quality, accessible programs in

LATAM. Most existing programs were developed and/or delivered by academics who had limited

experience with the industry. Users often found lengthy, theory-driven courses cumbersome and

wasteful.9 Moreover, originally produced in English, most online courses were based on North

American materials and were poorly dubbed or subtitled in Spanish. Since most workers in LATAM

were not proficient in English, there was a significant gap between the market needs and the existing

offerings.

UBits's initial business model involved creating custom training modules for local companies and

working with universities in Columbia to create online courses.10 Initial courses focused on onboard

training, compliance, sales, marketing, and basic computer skills, such as how to use Microsoft Excel.

Course formats varied depending on subject matter and client preferences. UBits experimented with

various instructional approaches, such as animation, interactive presentation, gamification, and

podcasts, to enhance user engagement. It once created an online simulation to help workers at a call

center to improve customer service skills. UBits's in-house production team was responsible for

course design and it managed the entire production cycle. Content creation also relied on external

subject experts and media professionals such as professional narrators. Since the courses were tailormade

for each client, UBits often had to simultaneously manage dozens of production projects. Though chaotic at times, the first few years helped UBits learn to efficiently produce compact,

engaging courses that met the needs of local corporate clientele.

UBITS'S RAPID GROWTH: 2018-2020

Strategic Pivot

By early 2018, Forero and Melo realized that a business model based on producing custom content

was difficult to scale. Meanwhile, customers also started to express interest in off-the-shelf programs.

UBits created a few standard (i.e. non-custom) courses, which quickly gained traction on the market.

This initial success convinced Forero and Melo that the future of UBits lay in standard courses. Yet,

switching to standard courses meant that the company would terminate existing contracts that

accounted for over 90% of its revenue. Moreover, UBits had to invest heavily in information

technology (IT) infrastructure to support a reliable online platform,a sizable catalogue of

courses, and build an effective business development team. To raise funds to finance the transition,

the company started actively seeking investment in LATAM and the United States.

In June of 2018, UBits entered the Y Combinator accelerator programme for digital businesses, a

Silicon Valley start-up accelerator that provided seed funding and support to start-ups so that founders

could focus on building product and scaling up operation.11 Some of the well known companies

funded by the Y Combinator included Airbnb, Dropbox, DoorDash, and Rappi. UBits received a

funding of US $120 thousand from the Y Combinator in exchange for 7% equity of the company.12

The success with the Y Combinator and several other seed investments in 2018 enabled UBits to

execute the strategic pivot. Forero and Melo reduced the staff from 25 to 4-5 core members in the

third quarter of 2018 and then proceeded to rebuild the entire enterprise.

Forero and Melo were convinced that this change of business model was essential and aligned with

their personal and professional goals. Operating on a Business to Business (B2B), Software as a

Service (SaaS) model, the relaunched UBits would enable thousands of workers in the lower tiers of

the corporate pyramid to upskill and reskill using quality courses at their own pace. Like Netflix, the

new service adopted a subscription-based model, where companies paid a monthly fee for individual

employee licenses. The online learning solution was viewed as a win-win-win for UBits, the

company, and the employees. UBits shared this vision on its social media platforms where they

actively engaged with stakeholders and potential clientele (EXHIBIT 1).

Course Format

A UBits course (called a Bit) began with an outline and a short welcome video introducing the expert

and content. The user then followed the course through several "Microbits." A Microbit usually

contained a short 'lecture' (3-7 minutes), a summary of the main points in the 'lecture', an interactive

component, or an evaluative activity (EXHIBITS 2a and 2b). UBits 'lectures' usually combined

materials from the experts with short video clips, images, and music. Interactive activities, which

included anything from online forums and downloadable homework pages to short games and

meditation exercises, provided the student with an opportunity to digest and apply what they had

learned during the lecture. The evaluative activity took the form of a quiz. Microbits were

approximately 25-30 minutes long in total and could be viewed independently.

The entire Bit ended with a conclusion video, final evaluation, and an optional feedback

questionnaire, after which the user received a personalized certificate when obtaining a grade higher

than 80% in the final evaluation. Users regularly posted these certificates on their personal social media account as a validation of the skills they developed. One Bit could take between 30 - 90

minutes to complete, depending on the number of Microbits and time it took the user to complete the

activities. Most courses were designed to engage millennials, the generation described as

overwhelmed, distracted, and impatient but who would make up 75% of the global workforce by

2025.13 Social components, like a forum, in the Bits satisfied users' desire for interaction and

collaboration. Users were also encouraged to engage with UBits through feedback surveys, blog

posts, newsletters, and social media. This orientation towards community-based learning helped

increase the completion rate by mitigating the solitary aspect of online learning.14

Content Production

Drawing on their experience of creating custom corporate and university courses, UBits knew how

to create content that was attractive and ready to be consumed by local workers. New courses were

developed based on the needs of current customers and market trends. To create them, UBits relied

on its dedicated in-house production team and two production studios in Bogota and Mexico City.

Subject experts, including practicing professionals and professors, were scouted across local markets

using social media and personal networks and went through a standardized selection process. Experts

must be credible (had the required knowledge, expertise, and technical skills) and able to "connect"

with the student through expressiveness, eye contact, and intonation. Forero listed empathy with the

student as a critical component to a successful online course.15 Once selected, the expert would work

with a UBits Instructional Designer to create the course structure and video scripts. After the scripts

were finalized by a Scripter, the expert spent a day in the studio filming the lecture material. The

course content was then sent to the post-production team. The team added downloadable material,

readings, and other interactive activities to the Bit and ensured consistent user experience and

branding within the course. Quality assurance and control were vital to UBits's success; all content

was released and tested internally before being added to the online catalogue. Bits were listed under

six broad categories: Business, Marketing, Sales, Finance and Economics, Personal Development,

Innovation and Creativity. An average cost of producing one Bit was US $1,000 and a typical

production cycle was 30-45 days.

UBits understood that to serve the LATAM market, their content needed to be relevant and sensitive

to cultural and linguistic nuances. This meant choosing experts from different countries to showcase

a variety of accents and using local companies and events as the examples in the Bits. Courses from

other online education platforms usually were not as culturally embedded as UBits's. By early 2020,

UBits had a library of over 300 courses and was adding up to 30 new courses each month.

User Experience and Impact

The standard monthly subscription fee was USD $14 per user. The actual price varied depending on

the number of licenses purchased (Exhibit 3). In addition to access to UBits courses, corporate clients

could design their own training plans, upload their own content, and integrate UBits with other

Learning Management Systems (LMS). Moreover, UBits provided clients with user analytics and a

dedicated account manager to maximize user experience for all individuals involved.

In February 2020, UBits had about 180 corporate clients. 45% of these clients had signed a yearly

contract for over 1,500 licenses, spending $15,000 in annual subscription fees on average. A 2019

study found that massive open online courses (MOOCs) had a drop-out rate of about 96%.16 More optimistic analysts placed the average completion rate for MOOCs at approximately 15%.17 In

contrast, course completion rate was 80% at UBits (with over 91,000 courses started). An average

user completed 3-4 courses. Courses in the Leadership, Creativity, and Innovation category had the

highest number of completions. The number of daily users was over 300 in February 2020, with entrylevel

workers logging highest percentage of learning time (89%). According to self-reported user

surveys, majority of clients reported notable improvement in individual productivity and

organizational processes, such as new employees' onboarding process.

UBits had achieved a 97% customer retention rate since January 2019. Melo considered the locally

produced, highly relevant content an essential factor driving user experience and revenue growth.

Proprietary algorithms that made course recommendations were another way to increase completion

rate and user engagement. Data analytics allowed corporate clients to monitor the progress of

individual users, many of whom were rewarded for successfully completing a course. At the same

time, UBits continued to invest in its IT infrastructure to accommodate the increased number of users

and to ensure that users could intuitively navigate the online platform.

International Expansion

A major part of the 2018 strategic pivot was to scale up through international expansion. UBits

quickly expanded from Columbia to Mexico and Peru (EXHIBIT 4). Corporate clients were divided

into three categories: Enterprises (500 or more employees), Mid-market (150 to 500 employees), and

Small- and Medium-sized Businesses (SMB, less than 150). UBits's business development managers

primarily focused on the Enterprise and Mid-market categories and the company occasionally used

local partners to target clients in the Mid-market and SMB categories.

Despite the cultural, linguistic, and economic similarities between Colombia and other LATAM

countries, UBits found that the way of doing business varied significantly among these countries.

Melo observed that when the upper echelon of a Colombian firm was convinced of the value of

UBits's service, a purchase agreement could be soon finalized. In contrast, lower levels of the

corporate hierarchy in a Mexican firm tended to have more influence on the purchase decision,

thereby often complicating and prolonging the sales cycle. Recruitment was also challenging: UBits

was suffering from the very skills gap it aimed to close. It typically took 1-1.5 months to find a

qualified business development manager in Bogota and 2-3 months in Mexico City.

UBits also learned a hard lesson about balancing the growth of revenue and that of the organization

when it first internationalized. Anticipating exponential growth in Mexico and Peru, UBits went on a

hiring spree and add more than sixty employees by November 2018. Melo noted that it was a mistake,

"there were too many things going on at once, trying to enter new markets, launching 20-30 courses

a month, and hiring new staff." Nearly half of the new workers were let go by February 2019. "Hiring

is much more effective now when recruitment processes and procedures have been put into place."

Melo stated, "Now that we know how to organize the company, the growing pains would be

minimal."

COMPETITION

UBits evaluated its competition along two main dimensions: first, whether a company provided good

learning experience; second, whether the content was oriented towards corporate needs. It viewed

Udemy, LinkedIn Learning, and Coursera as closest competitors that had leading market positions in

terms of content development and user experience. Coursera collaborated with more than 200 universities and other organizations to offer online

university-level courses in a wide range of subjects, such as sciences, engineering, humanities,

business and managerial skills, and others.18 The courses typically lasted four to twelve weeks, and

required two to six hours of work a week.19 Most of the 5,600 courses included quizzes, weekly

exercises, peer-graded assignments, and sometimes a final project or exam. In November 2018,

Coursera launched 100 new courses in Spanish, many of which were developed by leading Spanish

and LATAM universities.20 Spanish subtitles were available for some popular courses. Coursera

courses were free to audit, but the student needed to pay to access graded assignments or earn a

certificate (usually US $29-99 per certificate).21

Udemy claimed that some 50 million users had enrolled in its courses over its 10-year history. It was

an educational marketplace where instructors worldwide offered over 100,000 courses in various

fields for free or a fee (usually US $10-200 per course). Most courses were 2.5-3.5 hours long.22 Many

users took Udemy courses to improve job-related skills. Some courses generated credit toward

technical certification.23 The main instructional language was English, though the instructor could

a course in any language. Some courses included closed captioning in Spanish. 'Udemy for

Business' allowed companies to establish their own learning channels and create private courses with

Udemy's tools.24 For an annual fee of US $360, a 'Udemy for Business' user would have unlimited

access to over 4,000 courses on Udemy in 2020. Native courses in French, German, Spanish, Brazilian

Portuguese and Japanese were also available to enterprise accounts with more than 20 users.25 Udemy

opened an office in Sao Paulo, Brazil in 2018.26

A subsidiary of LinkedIn, LinkedIn Learning (LL) primarily targeted working professionals and

corporations and offered online courses taught by industry experts in business and technology. An

individual subscription to LL costed US $29.99 per month in early 2020 and the user would have

unlimited access to over 16,000 courses. In November 2016, LL announced an addition of 4,000

courses taught by industry experts who were native German, French, Spanish or Japanese speakers.27

Since then, LL had continued adding new courses in various foreign languages. LL oversaw its own

content production and actively recruited instructors to produce courses according its own guidelines.

The length of the courses ranged from 5 minutes to more than 30 hours. Most of the popular courses were more than 1-1.5 hour long.28 Users received personalized recommendations from LL based on

their profile. In late 2019, LL announced that it would open an office in Mexico City in 2020.29

LOOKING INTO THE FUTURE IN EARLY 2020

UBits had been in talks with VCs for raising series-A funding (the first round of significant VC

financing after the seed stage) and expected an initial public offering (IPO) in four to five years. In

addition to its market performance, many VCs found UBits appealing because of its positive societal

impact through providing upward mobility to less educated workers. Melo and Forero knew that the

next two and three years were critical for UBits and considered it a priority to maintain high rates of

revenue growth. While UBits was well positioned as a leading corporate training platform with the

largest library of locally produced Spanish content, its brand recognition was still low in LATAM.

The management had been contemplating several alternatives that may help UBits continue scaling

its operation.

Entry to Brazil

Although several Brazilians were among the first angel investors to invest in UBits in 2018, UBits

had not entered the Brazilian market. Brazil's market potential was nearly as large as the rest of

LATAM combined, and there were no obvious market leaders in the B2B online training segment

(Exhibit 5). Melo believed that transferring the knowhows about IT infrastructure and content

production process would not be major obstacles to UBits. However, he understood that Brazil

consisted of 26 federated states, each with its own laws and cultural nuances. Corporate culture could

be different within the country and from other LATAM countries. UBits may need a local partner,

who could aid it in navigating the diverse, unfamiliar market. Moreover, Melo believed that to

successfully launch their service in Brazil, UBits would need to build a catalogue of at least 100

courses in Portuguese. This needed to be done before approaching their first clients. More

importantly, like the current courses in Spanish, the courses for the Brazilian market must be designed

and produced by local staff who understood local market trends and culture. Melo estimated that it

could be at least one year before they were ready to sell in Brazil.

Targeting Individual Users

UBits had considered making the course content available to individuals, i.e. adopting a Business-to-

Consumer (B2C) model. Entering the B2C market would require UBits to significantly increase

advertising expenditure on social media. Acquiring individual users could lead to an increase in

corporate contracts if workers spoke to their employers or when small business owners, who had

positive experience with the product, purchased the UBits subscriptions for their business. It was also

believed that most VCs found a B2C model attractive because it signified great growth potential.

Entry to Other Countries in LATAM

The successful entry to Mexico and Peru led Melo to believe that UBits could further expand its

operation to other Spanish-speaking countries in LATAM, especially Argentina and Chile (Exhibit

5). Engaging these countries would require investment in new office space and, possibly, production

studios. More importantly, UBits would need to build local business development teams. However,

the existing catalogue would enable UBits to quickly implement its go-to-market strategy in those

countries.

Deep Market Penetration

Melo believed that UBits was still in the early stage of market penetration in Mexico, Peru, and

Colombia. Since he relocated to Mexico City in 2019 to oversee UBit's expansion in Mexico, this

important market had grown to account for nearly a quarter of total users at UBits (Exhibit 4).

Meanwhile, the company had gained a deeper understanding of local corporate culture and

increasingly relied on Mexican experts in course production. UBits's growth in Peru was following a

similar trajectory. Melo wondered if UBits should simply concentrate on deepening its penetration in

the existing markets.

DECISION TIME

As he reviewed the UBits's latest performance metrics for the upcoming meeting with Forero, Melo

could not help but feel a sense of accomplishment. Within less than two years UBits had become a

leading provider of online corporate training in LATAM. Yet, he knew that the online training market

was highly dynamic with strong competitors introducing new content daily. Also, it was uncertain

how successful UBits would be in raising series-A funding. Would UBits's business model continue

delivering high-rate growth? What should Forero and he do to lead the company into the next chapter?

EXHIBIT 1: UBits on Social Media

Facebook, @ubitscol, Since 2014

https://www.facebook.com/ubitscol

Misin: Revolucionar el entrenamiento corporativo, hacien accesible conocimiento de expertos de

industria a profesionales en LATAM

Mission: Revolutionizing corporate training, making the knowledge of industry experts and professionals

accessible in LATAM

Can you tell me more about this educational institution: UBits is a contentbased library of microlearning

that uses machine learning to recommend adequate content and creates personalized training programs

to employees. UBits measures the behavior of each user and provides a company dashboard with global

and individual learning analytics

LinkedIn, UBits Learning Solutions, Since 2013

https://www.linkedin.com/school/ubitslearning/

Somos la biblioteca en espaol de aprendizaje virtual corporativo ms grande de Latinoamrica.

We are the largest Spanish library of corporate virtual learning in Latin America

Twitter, @ubitsco, Since 2013

https://twitter.com/ubitsco?lang=en

Transformamos la capacitacin corporativa con una experiencia nica de aprendizaje.

We transform your corporate capacity through a unique learning experience.

Instagram, @ubitsco, Since 2016

https://www.instagram.com/ubitsco/?hl=en

Construimos lderes que transformen el futuro

We are building leaders who will transform the future