If you’re feeling college-age PTSD when you think about Chegg, I might have some good news for you. This company, known for its textbook rentals and homework help, is run on smoke. Chegg’s stock has fallen a whopping 99% from its 2021 high, wiping out $14.5 billion in value and costing the company 500,000 paying members. Revenue continues to decline every quarter, and there are doubts about whether the company will be able to continue paying its debts.
For most people who have attended college these days, Chegg should be familiar. It started with textbook rentals in the 2000s, then expanded into online study guides, and eventually became a platform offering pre-written answers to common homework questions.
Unfortunately, with the launch of ChatGPT, Chegg’s entire business model almost disappeared. For years, the company paid thousands of contractors to create answers to questions across every major subject, but this was a highly labor-intensive process, and they There’s no guarantee that we even have an answer to your question. On the other hand, as we all know, ChatGPT encompasses almost the entire internet and has probably seen every question asked by its users in history.
as wall street journal reportwith the launch of ChatGPT, students ditched their $20/month Chegg subscriptions in favor of chatbots.
Chegg has developed its own AI products, but has struggled to convince customers and investors that it still has value in a market that was upended by ChatGPT.
Jonah Tan, an MBA candidate at Point Loma Nazarene University in San Diego, says of the benefits of using ChatGPT for homework help: “It’s free, it’s ready to use, and you don’t have to worry about whether it’s going to have problems or not.” Ta. On Chegg.
A survey of college students conducted by investment bank Needham found that 30% plan to use Chegg this semester, down from 38% in the spring, and 62% plan to use ChatGPT. , up from 43%.
At this point, it’s unclear what Chegg can actually do to stop the bleeding. The company laid off 441 employees, a quarter of its workforce, over the summer. The company is targeting what its new CEO calls “curious learners” by offering more comprehensive AI-assisted answers and live counseling.
Perhaps the saddest thing is journalEmployees actually asked for resources in 2022 to develop AI tools to automate answers. The company saw a significant increase in demand during the pandemic as it learned when it needed to quickly provide answers to questions virtually.
Chegg leaders rejected requests to start building AI tools until ChatGPT was released, but internally they weren’t worried about chatbots having a tendency to fabricate inaccurate answers. Some people said that.
But as with any tool like Wikipedia, it’s clear that students are willing to accept some risk for convenience. Although students are told not to trust Wikipedia, most students use it anyway and go to the references section to get citations. Of course, chatbots like ChatGPT have no concept of subjects like math, they just guess at the words needed to form sentences that sound correct. They give answers like: deceptively That’s correct, but it’s not. It’s like having a calculator that’s correct 50% of the time. For other subjects, such as history, chatbots are slightly better, but you’ll need to double-check your answers.
Perhaps Chegg could try harder to make people understand this? But most students don’t seem to care, and Chegg’s time is running out.
