Cornerstone Acquires Talespin: AI Meets Metaverse In Corporate Learning

I’ve written about the Immersive Learning market often, each time pointing out the astounding learning power within these platforms. Now that we have consumer VR headsets like the Meta Quest and Apple Vision-Pro, this market is ready to explode.

Today, Cornerstone, the $1 Billion+ leader in corporate learning platforms, is announcing the acquisition of Talespin, one of the leaders in tools and content for immersive learning.

What Is Immersive Learning?

Teachers and instructors know that the only way we truly learn is “learning by doing.” And this understanding has led to the development of simulations, role-plays, war games, and hundreds of other interactive learning experiences. In fact every “major learning” experience I’ve had in my life started with some memorable (or frightening) experience that taught me to “never let this happen again.”

In corporate training this is difficult. Companies like Shell and AT&T spend tens of millions of dollars on simulators, games, and interactive experiences to teach people things like oil drilling practices, telephone system repair, and even things like how to safely enter a manhole without falling or damaging equipment. Even companies like Starbucks, Disney, and Walmart need these solutions: nobody can really learn how to deal with an angry customer, a rush of traffic, or a lost child at the theme park without some experience.

The problem, of course, is that building these experiences is difficult. Immersive Learning, pioneered by companies like Talespin and STRIVR, have built tools and platforms to make this easy. So organizations like Walmart, Bank of America, Verizon, Sony, Accenture, MGM Resorts, and even Sprouts Stores use these platforms. The value is high: a PwC study found that employees who learn through VR are almost 300% more confident about their skills than those who learn in other ways.

These top vendors, Talespin and STRIVR, are different. STRIVR focuses on realistic 3D using glasses, similar to the experience in Meta Quest or Apple Vision Pro. Talespin is a software company, offering a wide range of tools and content to help companies build immersive experiences for many applications.

Talespin in particular offers the following features and tools:

  • Emotionally engaging, voice-driven learning experiences: Users can engage in lessons and scenarios that are designed to be emotionally engaging, with voice-driven interactions
  • Intuitive UX/UI for creating story-based learning narratives: The platform provides an intuitive interface for creating and refining story-based learning narratives with advanced logic
  • No animation or coding experience required: Users can create complex conversational simulations without the need for animation or coding skills
  • Extensive library of virtual characters, voices, gestures, and environments: Creators have access to a wide range of virtual elements to enhance the immersive learning content they develop
  • Content deployable via the Talespin App: Users can access all available immersive learning content through the Talespin App on various devices, including VR headsets like Oculus Quest, Vision Pro, and HTC Vive, as well as desktop application
  • CoPilot Designer: This no-code authoring tool allows authors to create dynamic conversational learning experiences where users can practice role play. It offers simplicity in customizing virtual poses, gestures, emotional nuances, and assembling complex narratives with ease.

While Talespin has been a smaller player, their impact on the market could now be huge. With Talespin you can use GenAI to build character-based content in minutes to hours, instead of days to weeks. Over time the Generative tools are getting better, enabling companies to build lifelike character-based learning at scale. (Other vendors in this space include Immerse, Osso VR, MAI, Warp Studio, and others.)

And the scale goes far beyond having a nice character and presence to interact with. Talespin’s latest development tools let you create characters that have almost unlimited scenarios for response, creating an environment that feels like a real person. This not only lets companies build content faster, it lets Talespin address more complex use cases: sales training, management training, negotiation, ethical situations, and more.

What Does This Mean For Cornerstone?

The big question is this: in the new rush toward what I call “Autonomous Learning Platforms,” does this bring Cornerstone into a leading position?

Well remember this: today Cornerstone is a private-equity owned company primarily operating as a profit engine. The company has acquired most of the legacy LMS vendors (SumTotal, Saba, EdCast) TM vendors (Halogen, Lumesse) and content provider Grovo. And along the way these companies each acquired other companies, so there are more than 20+ platforms operating within the Cornerstone business.

Since Cornerstone went private in 2021 the company has continued to grow its revenue (over $1 billion) and is probably one of the more profitable companies in HR Tech. So this is a large company with a massive sales, marketing, and engineering team (7,000 customers, more than 140 million end-users). So as a market maker, Cornerstone has relationships with most large companies around the world.

However as AI and VR has matured, the market has become competitive. Fast-growing vendors like Docebo, Sana Labs, 360 Learning, SAP Litmos, Adobe, Learnupon, Fuse Universal, Uplimit, and many others are winning business. These newer vendors may not have the industry depth of Cornerstone, but their systems are modern, easy to use, and often AI-enabled. So Cornerstone, as a growth-oriented business, wants to stay ahead.

They’ve done this in three big ways: first by building a skills system (they call it their Skills Fabric) that lets companies create a skills taxonomy, assess skills, and use skills-based tools for learning recommendations, performance and talent management, and career management. This is a very crowded market but for Cornerstone clients these tools add a lot of value.

Second, Cornerstone has built out a significant content business. The Grovo acquisition brought a content development team along with development tools, courses and customers, and this team has merged to create Cornerstone content unit. The group has become a reseller of corporate content and is probably generating more than $100M of top line business. That makes Cornerstone one of the top 10 content companies in the market.

Third, Cornerstone is now focusing on VR and AI. As I discussed in my podcast with Joel Hellermark from Sana, AI is going to flip L&D on its head. For the first time in 20+ years we now have corporate learning platforms that can ingest content, generate instructional programs, and personalize experiences for every employee in the company. While Cornerstone has not introduced anything as comprehensive as Sana, Uplimit, Docebo, Arist and the others, the Talespin acquisition gets us close.

And there’s more. Analysts (not me) estimate the VR market at $4 Billion, expected to grow at 31% CAGR over the next five years (including hardware). This is a big opportunity. With Talespin integrated into Cornerstone’s platform the company can become a leading end-to-end provider in this space.

I talked with a few clients about this and the opportunity is real. Accenture, for example, uses Talespin for its foundational management coaching program because it delivers real-world experiences to young leaders. And the characters and personalities of the agents can be customized and tuned for different audiences. As the designers of the offering told me, Talespin lets learning professionals use Dall-E or Midjourney to build characters and then use the Talespin’s development suite to build complex simulations and conversations for softskills training.

And there’s much more to come. Platforms like Talespin (and the others I mention above) can personalize the experience to each employee, dynamically create assessments based on your activity, and can provide almost infinite branching as you converse with a virtual character. Given the rapid evolution of AI, this is going to get better in short time.

Bottom Line: Huge Potential Growth

While VR training has been around for a while, most companies don’t know much about it. With Cornerstone’s sales muscle and all the new buzz about Apple and Meta’s headsets, this growth curve will accelerate. And the applications for this are everywhere: from operational training to leadership scenarios to safety and even first-person shooter safety. There’s nothing like a real-world scenario to teach you something you don’t really understand.

Can Cornerstone get focused and rapidly grow this market? That would be my only question: the company has a lot going on so let’s hope Talespin stays in tact and we see some amazing solutions to come. AI and VR is clearly the future of corporate learning.

Additional Information

Autonomous Corporate Learning Platforms: Arriving Now, Powered by AI

Interview With Joel Hellermark, CEO of Sana – AI-Powered Learning Arrives

Virtual Reality Has Now Gone Mainstream For Corporate Training