How Video Platform Craftsy Is Acquiring 1,600 Paying Students Per Day

Name: Craftsy

Quick Pitch: Online video tutorials for a range of crafts.

Genius Idea: A baked-in e-commerce offering for patterns and supplies.

---

In 2010, John Levisay realized that the "promise of online education was not being fulfilled." The former eBay and ServiceMagic executive went on later that year to found Craftsy, an online platform that teaches users a range of craft skills, from cake decorating to weaving, through paid video courses. The company raised an angel round of funding in May 2010 and launched a website one year later.

"We were seeing glorified PowerPoints with voiceovers, grainy video taken at the back of classrooms — it wasn't what online education pledged to be," Levisay recalls. "We wanted to create something that captured the magic of a live classroom, not only a great instructor but also interaction with that instructor as well as fellow students. We knew there were thousands of categories where people want to learn, and we remembered from our eBay days what a huge, underserved market crafts and hobbies instruction is."

Most of Craftsy's courses offer between four and six hours of lessons, and cost between $20 and $40 — expensive for some, but Levisay says some instructors charge as much as $500 for a live course. Viewers can pose questions to instructors at any point during the videos, and see answers to questions instructors have already answered. They can also go back and review course material they might later forget.

The most popular category is quilting, says Levisay. Cake decorating is the fastest-growing. Nearly 100% of customers are female, 80% are older than 40 and nearly a third are 61 years old or above. "We have what we consider to be an underserved demographic that are passionate and affluent, and who are fantastic and loyal customers," Levisay says.

Beyond video courses, Craftsy also offers step-by-step, photo-based Workshops, and a marketplace for materials and supplies as well as patterns created by other users. Craftsy does not take a cut of any pattern sales — "We think it helps indie designers, and it brings users to the site," Levisay says of the company's decision not to charge.

Instructors are usually flown in to Craftsy's Denver, Colo., headquarters to film courses. About 14 are filmed per month. So that instructors will promote their own courses, they are paid a percentage of total course revenue.

The company's customer acquisition strategy is centered on social media, namely Facebook. Craftsy operates a number of unbranded clubs, like this one for quilting, which has more than 230,000 fans. Through those clubs, Craftsy offers free content and special offers on courses. The company also posts excerpts on YouTube, and has done offers through Gilt City and LivingSocial to reach consumers who might once have been knitters or jewelry-makers and want to get back into crafting.

Paid search is not a major customer acquisition channel for Craftsy. "When it comes to education, there's not a ton of intent," says Levisay. "You don't wake up on a Sunday morning and say, 'I want to take a quilting class.'"

Scaling and production are the two main focuses for the rest of the year, Levisay says. In two weeks, Craftsy will also launch an iPad app.

By the end of 2012, Levisay estimates Craftsy will have about 600,000 enrolled students — 1,600 people are enrolling each day on average.

The company has raised $20 million in funding to date.

Image courtesy of Flickr, sexyninjamonkey