CEO Spotlight Series: Exclusive Interview with Skillable CEO, Chris McCarthy

Thanks for having me! In October 2020, I communicated to the Degreed board that I’d like to step down and formally left the role in April 2021. After I stepped down, I embarked on a year-long process to fix a chronically bad back, including a life-changing procedure. After that, I spent the spring and summer of 2022 just having fun with my wife and kids and enjoying feeling 100%.

At the time, I was pretty keen on enjoying the rest of 2022, then starting my own business in 2023; I had no intention of going back to work prior. Then Mark Mangelson, current CRO of Skillable (and former colleague at Degreed), reached out and encouraged me to take a call with the Shamrock team and hear the Skillable story. Admittedly, my initial reaction was “thanks but no thanks,” but out of respect for Mark, I went ahead and set a time. About a week or so later, I had the call with the Shamrock team, hung up the phone, and told my wife that same morning, “I found something special—I’m going back to work.”

Broadly, the Skillable story matched up so clearly with everything I had been hearing and seeing for the last decade across the talent, enterprise learning, and recruiting sectors. The story struck multiple fundamental sector themes, such as hands-on learning, true skill validation, last mile learning (proving someone could actually do the job), digital transformation, AI, and the power of data. And every conversation I had with Corey and Chris, the founders, and with other members of the board continued to validate the uniqueness of the platform.

In addition, once I really understood what the team had built, I felt such clarity and conviction behind the sheer depth of the market opportunity and Skillable’s right to pioneer and own a newer space. Very few people outside of training companies really knew Skillable (including me, and I was running an adjacent business). Meanwhile, it was a growing, profitable business with tens of millions of dollars of revenue, recently backed by a fantastic investor group. I saw the role as a chance to open up a massive market with a product that was years ahead of its peer group, an experienced leadership team, and an investor ready to support long-term growth.

Six months into the job, I’m even more excited and view this as the next big thing in the enterprise learning and human capital space. 

Really exciting, Chris—let’s dig into the platform and start with some basic questions. What is a virtual lab? 

At a basic level, it’s pretty simple—a virtual lab is a configurable environment for someone to (a) practice what they've learned or (b) prove they can apply what they know. This can be as simple as building an Excel model in a controlled, pre-configured environment (no internet and no help key) or as complex as defending a cybersecurity attack on an enterprise’s servers. The concept is not a new one, and most of the market views very basic labs as sandboxes, or static environments, where individuals follow step-by-step instructions to learn or practice a concept (somewhat similar to the Excel example). 

Now, as you know, we’re really focused on redefining the market for virtual labs. So how exactly are we different? We bring a truly modern approach to the concept of a virtual lab, and here are five specific examples that set us apart.

1. Scoring. Our labs track progress, measure results, and, in basic terms, help quantify and assess understanding. We refer to all of this as scoring, and this concept is super critical—if you don’t have scoring, you cannot actually validate whether someone actually has (or has developed) the skill. Further, our labs have a robust scoring engine and help learners and admin assess how the learner is actually developing or progressing.

2. Personalization and customization. Our labs are personalized to the individual and bespoke to the organization. We work with customers so that the lab reflects “that specific job in that environment.” So, beyond just scoring a learner in an assessment or having them just watch videos and click through, we’re putting them in a real environment that enables the learner to practice and build a skill that is completely in line with their role, or potential role. The cybersecurity example above is an example of this.

3. Challenge centric. We create and present scenarios that reflect real challenges they will encounter on the job, with various levels of guidance based on whether the individual is trying to assess, develop, or validate skills. This is another core element that proves whether somebody can jump in and actually solve the problem or complete the assignment after the learning, helping our customers validate skills and drive last mile learning versus just delivering a generic walk-through/click-through.

4. Interactive and adaptable. Whether through AI or an instructor, learners can interact with a lab that adapts to their ability. One way to think about this is culinary school, for example. When learning to cook, you watch videos for a couple hours, then spend several hours preparing the dish with a chef over your shoulder. This environment is indeed a lab (everything from video to application), and our labs are delivering this type of interactive, hands-on application at scale. And one quick note, which I’ll come back to: Labs don’t need to be for digital or technical skills. Labs, which facilitate and enable learning, are applicable across functions, underscoring the sheer size of whitespace in front of us. I’ll come back to this point.

5. Data. Without data, skills development is all just theory. While many players are trying to tackle the concept of upskilling and skills development with metrics such as “engagement” or “utilization,” our product provides a clear, clean, and data-driven view of an employee’s progress, validating skill attainment and, more broadly, identifying the “what” and the “how” behind skills development. There is a ton of data out there, in learning and in any segment frankly, but given what we’ve built, it’s hard to understate the size of this opportunity and how well positioned we are to action this opportunity and deliver real, targeted, and leverageable insights to customers.

So, bringing this all together, we help enterprises build customized environments, deliver hands-on application learning, and actually prove skill attainment and development, which, in a nutshell, fulfills a critical objective for enterprise learning.

Thanks, Chris. These points are pretty powerful, particularly in the context of where the broader enterprise learning segment is today. One follow-up here—can you help us understand a couple common use cases?

Most of our customers over the last ~10 years have been either (a) training companies who want to add a “hands-on” component to their offering or (b) enterprise software companies, including over half of the 20 largest in the world, who want to create tailored, hands-on experiences and credentialing around their software product. 

However, we’ve continued to expand the definition of the lab. For example, we won the Brandon Hall Award this year in partnership with MetaVRse for a “virtual reality enabled hardware lab,” where our lab created an environment for delivering maintenance on a healthcare machine. And this is just one of many examples outside of technical/digital skills training. 

Our goal, long term, is to be a complete platform for all of the hands-on skilling and virtual lab needs of enterprises. We have the capabilities in place, and we’re now shifting, aggressively, to educating the market and enlightening companies on the power of and need for our offering.

Got it and makes sense. One follow-up, then we’ll switch gears to the market. From a 35,000-foot view, what’s the value proposition for an enterprise customer? In addition, can you touch on common alternatives, if any?

Think about how much time and money companies are spending on learning, hiring, pre-hire assessments, and talent mobility without actually knowing the real efficacy of each program or ability of each candidate? How do you know if someone is actually capable of doing the job or if a team is actually learning and developing? Our platform brings certainty and clarity to these questions and does so in a scalable way—and this is a massive problem that nobody is solving with our level of depth and precision. 

Let’s think about any global business, all of which have thousands of use cases, and approach our value proposition with three examples.

1. The company has hundreds of new hires each year seeking ways to improve their Excel skills (low stakes) or coding skills (medium stakes). A lab (optional or mandated for new hires) can create an environment, at scale, to help (a) employees learn and test their knowledge and (b) prove the skills have been attained. Beyond skilling, this can help employers assess who is ready for a promotion or new project, or who is falling behind.

2. The IT team, as part of advanced training for experienced hires, wants to run a large-scale synchronous simultaneous attack and would like to leverage cybersecurity labs to test employees in a live environment.

3. The Human Capital team wants to deliver a targeted exercise to 100 potential candidates to really validate their ability in a specific, real-life function or environment.

Today, in most organizations, all of the above represent unmet needs and only a small portion of potential (and often needed) use cases. So, what are they using instead? It depends by organization, but you typically find a mix of videos, courses, knowledge-based assessments, peer evaluations, and exams with small apprenticeship programs on the side; there is no unity, no skills validation, and limited to no data sharing. Our labs, through customized and hands-on applications, provide enterprises with common and needed iterations of (1), (2), and (3) at scale.

It is worth mentioning that, from an effectiveness standpoint, the best comparable alternative is the apprenticeship model, which is probably the best training model ever created. Unfortunately, you bump into scale limitations pretty early. One way to think about Skillable, especially with our AI capabilities, is a digital, highly scalable version of the apprenticeship model. I’ll dig into this a little more later, but one thing that really stands out is the balance of personalization, adaptability, and scale.

Digging into customers a bit and the broader market opportunity, what does your typical customer look like today, and, long term, what are some segments you’re trying to tap into?

This is a key question, so let’s spend some time here. I break our customers into two segments.

1. The most complex and sophisticated tech and training companies out there. These customers, who have been our primary customer for the past 10 years, are buying based on what our platform can do in comparison to the traditional sandbox or generic solutions out there. They love our library of prebuilt labs (1,300+ today covering most technical skill domains), customization and lab authoring capabilities (Skillable Studio), powerful features such as scoring, and, of course, typical customer hot buttons such as security, adaptability, and scalability. These customers choose Skillable for platform sophistication and complexity—and, in all candor, our capabilities are still a few years ahead of our customers, with most customers only using a sliver of what we can offer.

2. Enterprises—our newer segment. These customers, which, for simplicity, are large enterprises that sit outside of the tech and learning segments, really appreciate the following: (a) the option to start with a library of skill challenges or off-the-shelf labs that you can plug into existing upskilling initiatives, whether it's preassessment, development, or post assessment; and (b) the ability to tailor everything to their exact technical environment and job roles—this is unique to the market and largely does not exist in enterprise learning today. Eventually, these customers will start building their own labs and experiences, but, for now, just having a hands-on modality, interactive learning, and skills validation and data, which feeds the rest of their ecosystem, addresses a massive need. And we feel like we’re just scratching the surface here, both from a sheer number of customers (logos) and penetration within customers (use cases and upsells).

Let’s discuss the market opportunity using an illustrative scale of zero to 10. A zero reflects a market that’s entirely whitespace, where education and adoption represent the core levers for growth, while 10 reflects a highly competitive market, where share gain represents the primary growth opportunity. How would you describe the enterprise segment (as defined above) market opportunity?

Market and customer education is absolutely one of our top priorities right now. To be fair, there is decent penetration of sandboxes, as we discussed above (one-size-fits-all, linear, instructional labs). However, when contemplating a truly modern solution, as discussed above, the market for enterprise falls in the 1 to 2 range, which sets a backdrop that we’re very well positioned to action. 

Here’s a quick story—I was at a conference a few weeks ago and spent time with 100+ potential customers, educating them on our capabilities and platform. Toward the end of the day, a senior executive at a large bank, after spending about 30 minutes with me, came up to me and said, “How are you NOT working with every single one of us?”That’s a great question to get, and the answer is clear—nobody knew who we were; we were working with training and software companies but not enterprises. 

We definitely have strides to take on the education and awareness front, but we are very focused right now on matching our product’s image in the market with the needs we’re hearing from enterprise customers to help us tap into this market. The good news is the market consistently affirms that demand is out there in massive, non “tech” segments; we just need to action it. 

To name a few quick anecdotes of support, I spoke with an oil and gas company that was focused on creating a low-stakes practice environment for training on wells and working with industry-specific hardware. In addition, we’re hearing from multiple professional services/consulting companies that they’d like to assess skills before they staff employees on specific projects, and our labs can help add precision to staffing and, ultimately, improve performance for clients. 

So, how are we actually attacking this market? Well, one of my first initiatives was to triple the marketing budget. Of course, we did so in a thoughtful way, but we're going to change our perception fast. In addition, I’m all over the conference circuit this spring and summer to get the word out. Admittedly, a virtual lab takes a little more finesse and time to position than some basic HCM software solutions, but we believe that we best address a clear and unserved gap that’s present across global enterprises.

Thanks, Chris. And many of the leaders in the more mature spaces mentioned above (banking, O&G) already have their own customized (and sometimes stale) learning content, so I can see a lab really enhancing a likely antiquated learning environment. Speaking of enhancements to stale tech, Digital Transformation (DX) is a mega trend that we haven’t yet mentioned in detail. How do you think about your offering and its attachment to DX?

This is something we’re seeing at almost every company. However, every company goes about DX differently—every transformation is different, and, consequently, the accompanying learning needs to be contextualized. Despite this, we often see many companies deploying the same, one-size-fits-all content package to support their DX learning needs. Hitting on a point I made earlier, this does not address the last mile of learning (proving skill attainment) or, going back to the culinary school analogy, cooking and tasting the dish. Our role, in the broader DX trend, is to provide that customized last mile of learning (hands-on application) to support a broader DX process and help serve as a learning partner as a customer, and its needs, evolve and mature with the transformation. 

Touching on the customization point more broadly, how do you think about the balancing act between scale and customization? Customization is often critical to landing and retaining enterprise customers—how do you maintain these capabilities while preserving scale?

I really believe that this is one of the big things that both sets us apart today and gives us a leg up on our peers. When dealing with larger enterprises, both traditional and new customers, our response has to be “YES, AND.” If you really want to be the one-stop shop that supports an organization across all of its hands-on learning and skill validation needs, you have to have a platform that can be customized and configured but also deployed seamlessly from one to many across an organization.

Our solution, at its core, can really address any type of hands-on learning need. Our library is deep enough to quickly inject solutions into existing learning environments, and our studio enables a completely custom solution for a more complex buyer. And, in the middle, you can tailor off-the-shelf labs to meet a specific need. From there, and given the nature of the offering, the lab (or labs) can then be delivered at scale throughout an organization.

Looking ahead, here’s an important concept for growth—the above spectrum of configurability allows companies to pick a lab and partner with us in a format that’s best suited for their needs. As we continue to deepen awareness and gain traction with the new enterprise market, customers can jump in headfirst (customized from day 1) or start with the library. We’ve built out the full buffet and are ready for the uptick in demand, and this, in and of itself, adds additional scale. Many SaaS businesses gain traction in a narrow market, then expand to a 2.0 and 3.0. Our solution is, frankly, years ahead on the capabilities side, so our focus continues to be matching, awareness, and education vs. “what else can we build?”

That’s an interesting point. Building on that, it seems like you’re really well positioned to not only evolve with the marketplace but also champion its evolution. Can you talk a little bit about how you envision customers’ use cases and partnership with Skillable evolving over time?

For starters, the team has really done an amazing job over the past decade. I really dug into the platform before I joined, and that included watching a lot of videos and demos; this team continued to reinvent not only the company and the product but also the types of skills the platform supported. We’ve always been at the cutting edge of the market, and now we’re strategically expanding our footprint to simply better connect with a larger portion of the market.

To answer your question, let’s talk about three use cases that I really see evolving over time.

1. Today, our platform is interactive and leverages AI—and this is pretty profound. To be clear, we have the ability to create an environment where the learner can ask theory and knowledge-based questions in the lab and get a response as if there were an instructor supporting you. The concept of an interactive, adaptable lab is really cutting edge and, fundamentally, such a big step forward from a video or linear course while preserving all the scale associated with pure-play async learning. That's where we are today, and we’re just getting started with how we think about really introducing this to a wider range of customers, both new and existing.

2. From a topical environment, right now cloud, AI, cybersecurity, programming, and DevOps are all in high demand, and we have extensive coverage in these segments—but there are so many other platform and environment opportunities. For example, every time we work with the software company, we're building more capabilities to do proprietary labs around proprietary software. In addition, we’re just scratching the surface on really bespoke hardware labs (like the healthcare one I mentioned above) and haven’t even dipped our toe in labs for softer skills and assessments, another massive market opportunity that will come with time. Again, we have the platform and capability for all of these—we just need to help educate the market so demand catches up.

3. Finally, and perhaps the biggest opportunity, is to become more “mass market” and simply focus on scalable use and growth for a wider range of customers—and this is right in front of us. This includes making it easier to build the lab, offering more templates so customers can build them faster, adding more (and easier) scoring, and enabling more seamless data sharing between our labs and customer ecosystems. All of these concepts, in a nutshell, will make our offering more attractive to potential customers and, perhaps more importantly, help customers unlock the real depth and applicability of our offering. Said differently, this is about ease and accessibility for enterprises and, with education, helping customers understand the vast number of use cases and how we can really, on the most basic level, drive value for organizations.

Last question. Over the past 10 years, we’ve seen a pretty dramatic increase in enterprise adoption and, candidly, the sheer number of training providers out there. How do you think about Skillable’s position, broadly, in the learning ecosystem, both near term and long term?

Great question and something we think about a lot. To start, many of these companies are Skillable customers and have been with us for a long time. We absolutely view ourselves as a long-term partner to training content providers and as a piece of a broader offering or ecosystem, where we think the gap is hands-on experiences and validated skills. If a third-party provider has this as part of its offering, we’re happy to play that role, or, if an enterprise wants Skillable as part of its learning stack, we can play that role, too. What’s special about our business is that we address a clear gap and need that persists across enterprises in various forms, and our offering can transform into a solution that hits each unique iteration of the gap head-on. We are sharp and targeted enough to directly address a problem but fluid and configurable enough to fit in just about any situation.

Long-term, we’re very focused on doing something uniquely well. As you mentioned, there are hundreds, if not thousands, of training companies out there, yet, in my opinion, they still haven’t cracked the code on (a) hands-on learning experiences and (b) validated skills. We believe these two concepts address critical needs for organizations and we’re the best solution out there, by a pretty wide margin, to fill these gaps.