For Outschool's group classes, should we optimize for larger class sizes to improve profitability or smaller, more intimate groups to enhance student engagement?

Introduction

The trade-off between optimizing for larger class sizes to improve profitability or smaller, more intimate groups to enhance student engagement is a critical decision for Outschool's group classes. This scenario touches on the core of Outschool's value proposition and business model. I'll analyze this trade-off by examining the product, stakeholders, metrics, and potential experiments to inform our decision-making process.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm thinking about the current market conditions for online education. Could you provide some insight into how the demand for Outschool's classes has been trending recently?

Why it matters: Helps understand if we're in a growth or optimization phase Expected answer: Steady growth with increasing competition Impact on approach: Would influence whether to focus on acquisition or retention strategies

• Business Context: Based on Outschool's business model, I assume there's a revenue share between the platform and instructors. What's our current revenue split, and how might it be affected by changes in class size?

Why it matters: Helps balance profitability with instructor incentives Expected answer: 70/30 split favoring instructors Impact on approach: Would inform how we structure incentives for larger classes

• User Impact: Considering our user segments, how do the preferences for class size differ between, say, K-5 and middle school students?

Why it matters: Allows for targeted optimization strategies Expected answer: Younger students prefer smaller classes, older ones are more flexible Impact on approach: Might lead to segment-specific class size recommendations

• Technical: Regarding our virtual classroom technology, what's our current capacity for handling larger class sizes without compromising video quality or interactivity?

Why it matters: Ensures technical feasibility of scaling class sizes Expected answer: Current system optimized for up to 20 students per class Impact on approach: Would determine if tech upgrades are needed for larger classes

• Resource: In terms of our product and engineering resources, how much bandwidth do we have to implement and monitor changes to class size structures?

Why it matters: Helps scope the implementation effort Expected answer: Limited resources available for Q3, more flexibility in Q4 Impact on approach: Would influence the timeline and scale of any proposed changes