By André Ribeiro, executive coach and mentor coach at Extracoaching
Image Source: Brighteye Ventures
“Uberisation” is a term that describes how we are moving towards an economy based on services in marketplaces in several sectors.
Having been also involved for several years with international financial market platforms and the evolution of digital marketing into real time marketplaces with supply and demand bidding systems, I find very interesting what is happening with the digitisation of Executive Coaching.
Uberisation has introduced newer ways for buying and selling services and is making a tidal wave shifting also the executive coaching marketplace, allowing anyone with an online connection to be a digital provider or user of coaching services.
This article is focused on professional coaching platforms, there are other verticals that include AI, mentoring and training.
Democratisation of Coaching or Commoditisation ?
Uberisation has been criticised for its role in facilitating the decline of labour-intensive industries, and hence for threatening jobs.
Raised concerns have led to disputes over the extent to which the provider of services via an uberised platform should be held accountable to their working force. These coaching platforms are recruiting coaches as freelancers, getting paid by the hour and that’s it, with all the implications that it entails (coaches pay their own taxes, no paid holiday, no extra benefits, no sick leave, no bonus, no pension…).
Definitely coaching is becoming more democratic and gaining a wider reach than ever before via Digital Coaching. More companies and executives that have never accessed coaching before are being added to these platforms on a weekly basis. However a lot of coaches are observing their work getting more commoditised, by getting mixed in very large pools of coaches on the supply side and a large pool of clients on the demand side. Coaches are often offered a fixed fee.
Biggest Digital Coaching players sponsored by Venture Capital
The number 1 digital coaching platform and worldwide leader is BetterUp, with +450.000 coaching sessions delivered. Founded in 2013, has raised $145 million. It has a network of +2000 coaches. Clients include Airbnb, Salesforce, Mars, Siemens, Linkedin, Lyft, WB and Workday.
The leader in Europe CoachHub founded in 2018, based in Germany with a total raised by the end of 2020 of around $50 million. It has a network of +1000 coaches. Clients include Fujitsu, Braun, BNP Paribas, SoundCloud and GroupM.
The leader in France is MoovOne, founded in 2015 and raised 2M euros in 2019. It has +200 coaches. Clients include Axa, Lacoste, PSA Groupe and Kering.
Image Source: Brighteye Ventures Professional B2B Coaching & Mentoring solutions Market Map
A boom in startups with coaching solutions is happening, a lot of clones popping like mushrooms in the USA, Germany, France, England, India, etc. Also in 2021 and beyond new platforms will pop up, as several consulting companies and traditional coaching companies are preparing to enter this space.
Show me the Money
Several of these platforms offer a subscription model to clients, which pay a monthly fee. Clients are mostly large corporations and some platforms are starting to open to individual clients.
Monthly fees for the client average a couple of hundred dollars or euros per month. Fees sometimes vary according to the qualifications and experience of the coaches. Sessions often tend to be 30 minutes per week or 45 minutes bi-weekly.
Fees paid by several of these platforms to coaches tend to be a fraction (on average around 20% to 30%) of the $300 to $500 (or euros or pounds) per hour / session charged by executive coaches, except for the very few platforms that allow coaches to set their own fees or are targeted to a more premium service. Coaches fees tend to be connected to their experience and accreditation level with professional coaching associations, like the worldwide leader the International Coaching Federation (ICF). Some platforms only recruit ICF or EMCC accredited coaches.
Black Box in Fees and Matching
There is no transparency in what most of the platforms charge clients vs. what they pay coaches, except the platforms that have a business model of revenue share or pay per month for the coach (which are rare). It can be guesstimated by reverse engineering, based on what has been disclosed in the media about the monthly fees paid by clients to some of these coaching platforms are around $250 to $500 (or euros or pounds) per month and coaches are probably getting paid 30% to 50% of what the clients pays.
Also several companies say they use a special “algorithm” to do the matching between coaches and clients, however none of the companies contacted has revealed what’s behind their algorithm.
Pandemic accelerates Digital Coaching growth trend
In recent years digital coaching has been growing double digits per year, wish some of the companies growing by triple digits each year. Changes in technology available –namely ubiquitous cheap and quality online video — have made it possible to dramatically lower costs, widen access to coaching and improve the overall digital coaching experience.
Advantages of Digital Coaching are several, namely the savings in logistics for both coach and client and a global reach. The ongoing trend of companies to invest less face to face training and more in digital coaching is receiving a boost with Covid 19. In recent months several companies and individual professionals that based their businesses in face to face training and coaching have had their revenues slashed and are now looking for ways to reinvent, many of them jumping into the digital space.
Future of Coaching is also Digital
Uberisation of coaching is here to stay, independent of personal preferences. Mobile technology is becoming ubiquitous. Success of the uberisation of coaching is impacting traditionalist businesses, companies with decades in the market are being made to accept and resist or embrace uberisation the same way businesses like transportation, hospitality and retail are doing.
Another key revolution occurring is Blockchain, it will impact the current disruptors, by providing direct access to marketplaces, without the need for intermediaries, in which the current marketplaces will either provide clear added value or can be gone like their predecessors.
Will be fascinating to observe the next months and years as the market evolves fast.
André Ribeiro is an executive coach, mentor coach and supervisor.
Master Certified Coach with the International Coaching Federation and Senior Practitioner with the European Mentoring and Coaching Council