Why the MOOC is redefining online education

follow The MOOC for the past year or so has been evolving very quickly. It really took off when the Stanford AI class shot past 250,000 students.

Since then the model itself has been refined and several startups have aligned themselves around the methodology. A few months ago if you asked me who the leader would be in this space, I would have said Udacity. I thought they had the organic growth and quality that you need early on when building a brand.

Today, my answer would be Coursera. I think they have a few things that are really creating a competitive advantage over Udacity and even sites like EdX.

First, they have quite a bit of money behind them, $22 million to date. That amount is not that significant, but the people putting it in is. Kleiner Perkins and John Doer put in $16 million alone. John Doer is considered one of the most influential investors in the Valley. He is also a master of PR pushing his start ups to the front page of major news outlets and leveraging his connections for strategic deals.

Coursera announced that top schools like Duke and University of Virginia have signed on to be part of their offering. Not only are they attracting major traditional school brands but they are asking them to adapt their teaching to the MOOC model.

The ability to change their viewpoint on how online education should be delivered is a massive step forward. We are no longer just watching videos of a lecture, there is true interactivity, peer to peer learning and instantly updated materials to learn from.

Coursera is making the right moves, and getting rave reviews from students. If they keep the quality high they will make a massive dent into online education.  Some of the courses even offer a certificate. This is a huge step forward for employers. Now employers can verify completion and potentially create better HR paths based on this info.

Lastly, I think Coursera is engaging an audience who wants more education but doesn’t want a full degree. This a la carte option is attractive since it is low cost, but more importantly low commitment. Just a few weeks and you are done. No need to rework your whole life.  Now you have exposed a lot of new people to online education and I think this will potentially impact the for profit education sector faster than the publicly traded schools realize.

For profit EDU has been growing for the past 10 – 12 years, but has only scratched the surface of potential students. Coursera is exploding given the higher broadband penetration and higher number of connected devices. I can see their growth trajectory being much faster. Keep an eye on them, they could impact your stock portfolio very soon….

 

Edu Lead Gen Long Term

Often I write about how EDU lead gen is being battered by the current administration and the stock market. Today, I wanted to take a slightly different perspective which is more of a long term view.

For the past 10 years for-profit EDU companies have had to fight against some major issues to validate what they were doing was real. They had to fight against people not having broadband at home, no computers at home, and not understanding what studying online was. Why was I supposed to pay $30k for an education where I never got to meet the professor or my other classmates?

Broadband is almost in every home in the US, computers are everywhere and more importantly people are connected via mobile devices.

But people are still unsure about the quality of an education online and if the for-profit schools are “real.”

One of the greatest things to happen this year was a major initiative by the Obama Administration to actually spur more innovation in the Education sector. This has lead to a series of education start ups and new learning models which are introducing online education to gigantic numbers of people much quicker than any online school.

Sites like Udemy, Udacity, Coursera, KhanAcademy, and Skillshare are all introducing online learning to people who were not in the core demographic of for-profit schools.

What is this important?

First, mass acceptance is vital to legitimize any industry.

Second, these sites are attacking the spectrum of online learners from two ends, the young folks and the older folks who went to traditional schools in the past.

The fact that kids are getting more involved in online learning is great. The folks who are over 28-30 years old who are now trying online learning just happen to be the same people who are hiring these days.

The biggest outcome of the boom in online learning is that employers are now starting to see more of this in the workplace, see the quality of education and experience it for themselves.

This is a major boost for the for-profit sector. If more employers are willing to hire graduates of the online schools this will help them reduce their loan default rates and hopefully increase their graduation rates.

What happens now?

In the coming months you will see many of these free and pay for courses platforms continue to explode. This will lead to a short term erosion in the for-profit sector’s target pool of candidates. Long term there are many potential outcomes.

1) The for-profit schools use these platforms as lead gen tools. The people on these sites self identify that they are life long learners. Perfect candidates for long term degrees.

2) The for-profit schools offer lower cost single course offerings and make their degree a-la-carte oriented. This may face some accreditation issues but this maybe more in line with what the students/customers want.

3) The continued increase in technology penetration into the home will invariably increase the target market for the for-profit schools.

Personally I think 2012 will be a flat year for the online schools but going into the next 24 months, I think you are going to see massive growth, acceptance and product offering changes from the for-profit sector.

I think this view point is further bolstered by the comments made by Mr. Andreesen of Andreesen Horowitz which can be found here and here.

 

 

The Rise of Micro-Education

Recently lots of folks have been talking about online education and where traditional schools will go long run with all the new technology available.

I personally struggle daily to keep up with all the new online learning platforms like MITx, OpenUniversity, iTunes University, KhanAcademy, Udacity, Udemy, Skillshare, Coursera etc. They are all evolving so rapidly, and all of them have great content in my opinion.

The fragmentation in the Education market is just part of the overall disruption that Peter Thiel called for last year.

If we look at the current technology market we see a major shift towards mobile as the primary interface. These new all in one devices like iPads are creating tons of new opportunities in how we consume information.

The list of sites above covers the following needs in the market:

  • Cost – most of the sites are free or low cost.
  • There are no entrance exams or exclusivity.
  • They are high quality original content.

What I don’t see in the current education disruption is the following:

  • A true mobile learning platform – are the sites above able to be viewed on a phone or tablet? Yes. But is the content optimized for a tablet’s features? No. There is no Path or Instagram in the Education industry.
  • A way for this education to turn into employer value.  Someone who can provide a standardized certification for employers will be a massive boost to the online learning industry.
  • The current crop of content quality is good, but there are no standards in place to keep quality high as people find ways to monetize this content.
  • There are no effective ways to test knowledge retention.
  • The formats are too long. Why does it take 10 weeks to learn something a particular subject? Can the content be on demand and still provide the same experience? Why are we sticking to the concept of credit hours in the online world?

With the steady decline of attention span in the US, wouldn’t it make sense to make education available on a mobile device, anytime and in tiny chunks?

Imagine for a moment if you could learn one function in excel as part of a larger curriculum in 2 minutes via mobile video. If you had questions you could ask the group or have someone walk you through it on your screen. Think of a mobile MOOC and Google hangouts. Now lets say that this 2 min course is part of a 2 hour block of curriculum that certifies you have learned the basic functions of excel. Once you get the certification it gets posted to your linked in profile so that employers know you have achieved a certain level of education.

Simple right? Digestable and best of all cheap. Here is the kicker, if you could charge 99 cents per 2 hour course, how many people would start to buy education? Especially if employers could verify that you completed each course?

The other version of this is actually broadcasting education on TV. Stations like PBS and Discovery were massively successful in the past for producing educational content. Imagine if there was a Harvard channel on-demand? Or a marketing class channel on TV? Ted Turner would support this. Why aren’t we able to produce content online and push it to TV? We are spending too much time trying to figure out how to get TV onto the computer.

The greatest thing about the TV format is that we are essentially sponges during the time we are watching. Education is the perfect thing to deliver via TV.

I am looking forward to the era of micro-education which employers can verify.

 

Education at SXSW 2012

SXSW Interactive 2012 is quickly wrapping up and it was an exciting show to say the least. The amount of information being shared and created was just tremendous.

There were some clear themes in the show that revolved around education, healthcare, curating social, mobile and government reform.

Given the rather upbeat tone in the economy these days, not much was said about flow of cash since it is assumed that the money is there and flowing.

Education specifically exhibited some extremely strong undertones of things changing very soon. The overall themes within education revolved around the following topics:

  1. Education is too expensive.
  2. Current schools and curriculums are not flexible enough to incorporate new technologies.
  3. Retention of information seems to be a new metric rather than focusing on the brand of the school. However the metric itself is measured in pro0longed engagement rather than a letter grade.
  4. Scale is a huge issue. How can you teach more people and keep costs manageable?
  5. With scale, the paradigm of one to many shifts to many to many teaching. The group itself starts to teach itself and automatically clusters at scale.
  6. Non-traditional learning tools may revamp the education system.

When observing the different tracks at SXSW, it is clear that the traditional schools are eager to change but do not know where to go. Sites like skillshare.com, udactiy.com, udemy.com and khanacademy.org are leading the way. They are creating new communities of people that want to learn and teach without the need to earn a degree or certification.

A very interesting talk by the Plaid Avenger Prof. John Boyer of Virginia Tech emphasized that you can create engagement and knowledge retention even with classes of 3000 people. He creates environments for the students and allows them to develop them around current political topics. From his lecture you can easily see that his methods are un-orthodox but highly effective for some students. It allows the millenials to engage in technology that they know well and integrate learning into their daily routine rather than setting aside time to read an out of date book.

I personally see Prof. Boyer’s as a hybrid model which is a way for traditional schools to incorporate new ideas but it may have long term scale issues. Will his model have any effect on the for-profit sector? Probably not, he is still dealing with the traditional learner who is able to get into a school like Virginia Tech to begin with.

From the various discussions it is also clear that technologies like the iPad are being heavily integrated into the K-12 space. Book content for these devices is available but doesn’t take full advantage of the capabilities of the device. Many people in the audience also felt that just taping lectures and putting them online was not sufficient. Without the interactivity the concept of online delivery is faulted.

Is there a clear guide to online delivery? Not yet. I think the reason that people don’t understand what they want to deliver online is rooted in the fact that they are not sure if their core metrics around institution quality are still valid.

Is a person’s measure of knowledge based on his or her grades or his or her ability to digest a topic and effectively argue for or against it? Lastly, how does all this relate back to the brand? I don’t get a feeling that the Harvards of the world want everyone to be a Harvard alumni.

Even though the masses think that college is too expensive, there will always be a population that is willing and able to pay for a premium brand. The larger debate is that does everyone need or want a higher education? Without a clear consensus on this you will not see any major government reform in the near future for this sector.

One thing that was not really covered at SXSW was how employers will deal with all these new education platforms. If you were hiring a fresh college grad that only took classes with 3k people in them, would you be concerned about the quality of their education? If a person took relevant clases on a site like SkillShare.com how would you asses their knowledge within organization?

In the next 12 months, I strongly recommend trying out sites like SkillShare.com and Udemy.com. The educating sector is ripe for a massive restructuring.

The death of universities?

In a article by the CEO of 2Tor, John Katzman argued that some universities can not adapt to the upcoming changes in technology and economic conditions. This lack of flexibility will eventually lead to their demise.

The main points made are that costs at universities are rising too quick, mergers in the traditional school space dilute quality, traditional schools can only compete on a very specialized front.

Katzman goes on to say that Online education is the way to resolve many if not all of these issues and help keep the traditional schools alive.

He offers a model to help them scale their student base and increase revenues while keeping quality the same. The downside of this model is like taking a regular brick and mortar shop an just listing its catalog online. 10-15 years ago that worked, but today, people use technology in very different ways and have new devices all the time. Why not rethink education as a whole? The MOOC model offers multiple points of teaching, low cost and is completely online. One of the most impressive parts of the MOOC model is its ability to adapt.

Fact is that education will not be solved with one new model. It may be solved by a model that can adapt and learn by itself.

While bringing older schools into the current decade is a good business model, I personally think there are many thousands of students yearning for a new experience, a new way of learning which is not tied to one school or one teacher. Imagine being able to learn from many schools at once and learning from your fellow students, more than one teacher and being able to stay “in school” for your whole life? That is a true life long learner.

Apples iBooks2 impact on online education

Apple announced on January 18th that the are introducing iBooks2 for the iPad.

This announcement albeit small in nature has massive impacts for several reasons.

1) It attacks a traditional industry – book publishing head on. People have been reading books on e-readers for a while now but the content has just been migrated from paper. Very few books have taken advantage of the processor features which can play video, sound, and be interactive. The only books which have really taken advantage of this are children’s books and they have been massively successful as learning tools.

The impact on the publishing industry is going to be swift. You may see publishers go out of business within 2-5 years and some will try to refocus on other types of content. For the authors, I fear that their profits may suffer short term, but long term if books are cheaper, people should buy more of them, unless piracy comes into play.

2) The lines between “app” and web are starting to be blurred through the use of HTML5. I am excited to see how the use of iBooks will actually boost the usage of HTML5 on the web and make content faster, more interactive and easier to build. Once this starts bleeding over into the TV realm, you are going to see some amazingly interactive TV shows with a much higher level of stickiness. Overall, this should increase ad rates long term.

3) A new audience for learning will be opened up. iPads and tablets have a certain magic about them with older adults and young kids. They are easy to approach and use. As tablet sales go up, you will see more and more seniors online and more baby boomers come online.  This new audience will open up a whole new realm of teachers and learners for both the traditional schools and for profit universities.  In reality everyone loves to learn things they are passionate about. I can see millions of life long learners coming online and sharing their learnings with other learners via the iPad or any tablet for that matter.  Think of it like a socially interactive Wikipedia or the laymens version of a MOOC.

From a marketing perspective, this new platform will be a massive lead generation environment. Imagine a user reading a book about psychology and all of a sudden, you have the ability to show them that there are 2 schools teaching this exact book within 25 miles and 1 school teaching this book online. If I were the reader, I would be pretty interested in finding out if I should make my interest a real degree.

However, as much as I would like to see this as a marketing platform, there is reason to believe that people will have voracious appetites for free content but stay away from environments that require testing or loans. Time will tell…

4) Keep an eye out for the mad rush to create books – even if they are 5 pages long, as teasers.

5) Now this iBooks platform may have a negative impact on online schools in the short term. Even though most of the schools offer a curriculum that is designed to be taken on a computer, few have optimized their learning for iPads and the on-the-go lifestyle of many folks. I would love to see schools start to create tablet based learning environments and use that as a marketing tool. EG – Learn Psychology on your iPad and get a degree from X school. That would have an awesome Click Through Rate.

If I had to make a recommendation to folks reading this, I would say do the following:

a) Try a children’s iBook to understand the potential of this platform.  Give it to a kid and see how effortlessly they adapt and interact with it. Then give the same kid a newspaper and see what happens. Key thing to measure is how much time they interact with each and the amount they retain from each.

b) Learn more about HTML5! It is tremendously important! Just knowing what it is capable of helps you understand how vast this platform can be.

c) Take a look at your own content – what can be made into an iBook? Remember, books are not books anymore. They are full on 3 sense experiences. Seeing, hearing, touching.

SkillShare – Why Brands clutter the value prop

SkillShare was named one of 6 startups to watch in 2012 by Mashable. Mashable is notorious for making lists but one site on there interested me quite a bit.

SkillShare is like a mashup of KhanAcademy and meetup.com. It intends to help teach people a variety of skills in local live settings by “experts.”  The interesting thing is that the experts are not vetted in any way, but I could see this model becoming huge. People are hungry to learn, especially things they are passionate about.

But what happens if you needed to learn something for your job like advanced excel functions. Lets say there is a course on SkillShare in your city. You take the course, learn the material and master it. Now how do you prove this to your employer or potential employer?

Skillshare will spread like wildfire since it has a large social component which I think will mimic Spotify. EG – it is always posting to your Facebook profile saying what courses are following, subscribed to and will allow you to invite friends.

The manifesto on the skillshare site takes direct aim at the higher education market saying it is broken because it costs too much and just gives them a piece of paper.  They never seem to answer how skillshare can help you get a job in a more efficient manner than a college degree.

I am digressing from my main point, people love these simple models of learning. The value of learning a tangible and/or passionately oriented skill is apparently more valuable than getting a formal degree to many. Maybe I should revise that statement. I don’t think anyone would discount the value of a Harvard degree, but people may not see as much value in a for profit education degree. Why is that?

I think it is partially due to the fact that people falsely associate an image to a brand which they have no experience with. Their brand impressions are usually derived from popular media and friend circles. How many of us have actually compared a course at Harvard versus a course at a school like University of Phoenix? We have no basis for our judgement. However, when we get something that is unbranded and immediately delivered like a SkillShare course we find satisfaction much quicker.

In the case of SkillShare the lack of a brand teaching you something apparently helps the people choose courses just based on convenience and level of interest. I can see in the near future people opening “channels” on SkillShare and trying to develop a brand. This might be the wrong way to go. Keeping things generic allows people to judge quality just based on the content, not the teacher, not the tests, not the alumni network. And most importantly the judgement comes from personal experience.

It will be interesting to see how SkillShare evolves, but let this be a reminder that providing high quality services and products is more important than any social strategy or branding statement.