Comparing the top edTech companies in the Russian internet market, I noticed an interesting scaling problem baked into their course economics — one they all seem to live with. I’m not talking about product-driven edTech platforms like Lingualeo, but companies that create educational courses for upskilling or career transitions.
Product EdTech Theorem #1
The absence of deadlines in an educational course leads to ↑ Revenue and ↓ Completion Rate (COR). Conversely, having deadlines leads to ↓ Revenue and ↑ Completion Rate.
It’s a simple theorem, easily derived intuitively and confirmed by edTech managers. The practical takeaway for prospective students: in a self-paced course, you’re less likely to finish and earn your certificate — and less likely to get a refund.
Which gives us a direct corollary:
In educational courses without deadlines, the number of refunds → 0.
Type «A» Companies
These companies build courses with a noble goal: to help as many students as possible reach their educational objectives — most often, landing a job.
The proven way to boost Completion Rate is through strong motivation: hard deadlines and an elimination-style structure. That’s exactly what Product EdTech Theorem #1 says. But «hard deadlines» can’t exist without a team of experts who coordinate students, answer questions quickly, and review assignments.
When students have a great experience, it shows up in high NPS scores (above 50%). That, in turn, drives a steady flow of new paying students through organic and referral channels — and strong Revenue (Revenue = avg. price × students). But it also means growing Costs tied to that expert team.
The result: as student numbers grow, Revenue grows linearly — and so do variable Costs. That’s not the economics of a product business, where revenue scales rapidly against fixed (or capped) costs.
Type «B» Companies
These companies treat courses as a product business: minimize variable costs, maximize revenue, and try to attract as many students as possible by any means necessary.
«Minimize costs» unravels like this: no student support team → no hard deadlines → minimal course completion → low NPS (0% on a good day) → very few new paying students coming in organically.
They set out to build a product business, even managed to drive variable costs to zero — but end up critically short on students to actually grow revenue.
The Dilemma
It comes down to choosing between path «A» and path «B.» Neither one lets you build a true product business around a single course. So companies find their optimal growth strategy elsewhere: launch as many courses as possible, across as many categories as possible. Scale the course catalog, not the course.
If both paths ultimately lead to scaling through more courses — and the profit margins end up roughly the same — the question becomes: why do so many companies choose path «B»? Especially when path «A» builds a strong market reputation, while path «B» leaves you stuck in a shrinking addressable market with rising customer acquisition costs.