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Why the MOOC is redefining online education

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….

 

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.

 

EDU is ripe for disruption – SXSW – EDU 2012

The Education industry had a major presence at SXSW Interactive 2012. There were folks from the traditional schools, various technology providers, book publishers, and of course students.

The major themes from the show point to a potential tectonic shift in the fundamentals of how to deliver knowledge, how to measure knowledge and what today’s definition of knowledge is.

All of this was rooted in the following problems with Education these days:

  1. Education is too expensive, especially at the higher education levels
  2. Learning materials are outdated before they are printed
  3. School budgets are being cut
  4. Manufacturing jobs are expected to decline and the need for knowledge workers continues to expand
  5. New technologies allow for different types of engagement, does the concept of testing book knowledge still work?
  6. Attention spans of kids these days is becoming shorter
  7. Interest levels in key areas like Math and Science have been suffering especially in minorities and women
  8. Class sizes in the K-12 sector are too big, and many kids are slipping through the system
There is no doubt that Education has some issues. Did the SXSW 2012 conference fix any of those issues? Not at all. But it was highly effective in putting attention on the issues. I also think there are some exciting technology platforms which are helping reduce the cost and scale issues.

EDU has 3 Macro Level Issues:

  1. Cost
  2. Scale
  3. Jobs
Ultimately any form of education is intended to prepare you for a job or way to generate value for the economy. Some may argue against this but the reality is that we need to train people to keep our economy strong.
From a cost perspective, some of the most interesting models revolved around just flat out free courses.
  • Udacity.com – Spawned from the Stanford AI course, this follows the MOOC methodology and offers a certification at the end.
  • KhanAcademy.org  – this has become the darling of the industry especially within the math community. Delivering high quality lectures about complex topics.
  • MITx – MIT has been putting its courses online for a few years now, but more recently they re-focused and are now allowing for certification under these free courses.
From a scale perspective, there are a few approaches out there that were highlighted during SXSW.
  • Udemy.com – an online learning platform which allows regular people to teach others. You can either charge or host free courses. The courses can be broken up into chapters, you can host slides, videos and lecture notes in one place. You also get to see what other students are taking the class.
  • SkillShare.com – this site is focusing on local real life gatherings to teach any topic. For instance if you are Photography pro, you can find a class in Austin teaching you about digital flash photography. The course is taught in a local bar, church, outside, and for a fee usually. It is a great way to learn new things and usually focuses on passion topics. Consider this the Pinterest.com of education.
  • Virginia Tech’s – PlaidAvenger.com – Prof. Boyer teaches a physical class of 3000 students. He uses tools such as Twitter, Facebook and SpreeCast.com to interact with his students and assess them.
From a job perspective, there weren’t any platforms which allowed you to verify what you have learned. My guess is that most employers will take years to change their job requirements of “bachelor degree required” and realize that many students will not have degrees.
  • This is a major opportunity for anyone interested in building a verification system that employers will use. Consider this a Klout score for a highly dynamic education which may be drawn upon from a variety of sources.

What does this all mean for the For-Profit EDU sector and the future of the US Economy?

For the for-profit schools, there are some great opportunities to buy into these platforms. Why? Because they are amazing lead gen vehicles. People are already self identifying that they are life long learners and willing to commit to a schedule. These are key factors in creating high LTV students for schools.
Schools don’t want to give away free classes all the time. Why not let these sites help students get more accustomed to online learning and then sell them on your brand rather than jumping over the hurdle of teaching them about online learning?

The other benefit of these platforms versus the current online classes is that they help create long term communities based on interests. These platforms are built around social so they automatically pull from the social graph and help find new connections based on real world interests. As an on online student if I know more about the other people in my class, the more likely I am able to draw support from them. It is also a good way of learning when you can start to argue a point of view on a topic, which increases your critical thinking skills and knowledge retention.

From a technology perspective, these new platforms highlight that the new device formats are enabling much richer learning experiences. You can have a shared workspace while video chatting with other students on a iPad  these days. Why are our schools focusing on an one way old format of video lectures? The key is not just being social, but it is about convergence. How can we leverage video, the social graph, and instant communication to create higher knowledge retention and much higher levels of engagement. The focus must shift from learning to pass a test to learning because you are truly interested in a subject.

Another major point of the new technology platforms is that the courses are asynchronous. They allow people to learn when they have time. Most people drop out of school because they have a major life event which reduces their free time. Why not be able to pay for a course and learn it for a period of 2-3 years? Why can’t the online schools be more flexible for the reality of life?  Loyalty and brand in the Education space will be built upon not only the quality of education but it will also be based on the “realness” of the education. Does the school realize I might have a kid this year? Does the school realize I might lose my job this year? Does the school teach me what I really need to know for my dream job?

From a cost perspective, I think schools will start to offer a la carte degrees. The requirements of liberal arts classes in an economics degree are what upset people these days. You have to $50k a year to learn stuff you have no interest in. How about I spend $30k and learn exactly what I want and need? Online schools are capable of shifting resources from an operational perspective much faster than a traditional school. Why not take advantage of this “curated approach” to learning and create more students that stay in school.

The US economy has much to gain from these platforms. It will enable thousands to learn new skills necessary for non-manufacturing jobs. The learning platforms also preserve older trade skills which are quickly being lost, for instance how to make jelly at home.

None of these new platforms will drive major long term growth for the economy unless employers accept them as valid learning systems.  The term “life-experience credits” will be increasingly important. From a financial point of view, these new learning systems delivering value at scale and in a cost effective format will help reduce our dependence on student loans and allow for greater expendable income at a younger age. Imagine how many more 20 year olds may purchase long term assets instead of servicing their loan payment?  From a macro economic point of view will drive significant increases in wealth and lead to greater stability in the economy.

I think EDU is being targeted for a disruption, especially under the current Democratic administration. Will this top down approach yield a true revolution in EDU? It is too soon to tell, but November 2012 will be a good time to check in again….