Don't get Chegged

Originally published on LinkedIn

This is a story about a dramatic drop in a company’s valuation.

In Feb 2021, Chegg was worth $14.7B.

Today… well, just look at the chart.

Chegg is (was?) a platform for students looking for help with their homework.

It was great, until it wasn’t.

It was a great business… until ChatGPT came around and you could ask ChatGPT to solve your homework.

What went wrong?

It’s not like students no longer need help with their homework.

There’s still demand for that.

The problem is that students had to pay to get step-by-step explanations for their homework, and now they get that for free.

This is a cautionary tale.

For every entrepreneur.

You have to look at your business model and look at the value you deliver.

Maybe you’re safe (ish). Or maybe you’re at the LLM’s mercy.

If your business model is based on charging for access to information, it’s time to pivot. Readjust your business. Change the way you deliver value.

Don’t get Chegged!