Follow the money

By Gregor Kiczales posted on September 20th, 2016

The “MOOCs are Dead” bloggers are wrong—again.

Today edX launched its Micromasters program. The launch includes 19 courses from 14 schools including MIT, Michigan and Columbia.

Micromasters are a series of about 4 graduate level courses taken from the first term of an existing professional Masters degree. Learners can take the Micromasters courses on edX at verified MOOC prices (about 150 USD each); if they complete all four they get the edX Micromasters credential. At that point, if they choose, they can apply to the full professional masters. If they are accepted their Micromasters converts to credit for the first part of the full Masters. Some learners will want to apply to other institutions where they will also hope to get credit conversion. But the expectation is that most Micromasters learners will instead use the certificate to improve their employment situation.

This move is part of the general pivot we have seen over the last 2 years as Coursera and edX move towards professional education. In the case of the Micromasters, each program has one or more employers (corporate, government or NGO) endorsing the program. Thus the Micromasters tries to hit a sweet spot of academic quality and market value. The quality is evidenced by the school’s willingness to convert it to credit for accepted students and the market value is evidenced by the employer endorsements.

Now it is true that much of the original MOOC hype was about first year courses, and how MOOCs would put universities out of the intro course business. These pivots seem to be a move away from that. But the crucial question to ask is why are the MOOC companies making the move? Two simple reasons: that’s where the money is and that’s where alternative credentials work.

It’s no secret that on education, universities make money on professional and community education, and large first year courses. They lose money on everything else. The math is simple—professional programs often charge a lot more. And 400 students in a room with one professor has significantly different economics than 20 students, even if the first scenario has to employ a number of TAs.

The credentialing issue is more interesting. The Micromasters program is based on market research showing that employers are willing to accept alternate credentials as indicating job readiness, as long as they are both high quality and represent a significant increment of learning and capability. Thus the Micromasters design—about four graduate level courses, that are clearly credit equivalent, and that major employers indicate they would like their employees to have taken.

In the professional (but non certified) space employers have significant say over the value of a credential. Simply saying they will recognize it makes the credential valuable. What edX is doing gives the employers a channel for rapidly influencing professional education offerings. Each school trying to launch a Micromasters program had to find one or more endorsements. The ensuing dialogue shaped the programs to better suit the market. Employers can now also go to edX and encourage them to find a school to launch a given program—perhaps even funding the development of the program.

So if when someone says “MOOCs are Dead” they mean that the original press hype about making money off of free courses didn’t pan out then sure, that’s right. That hype is dead.

But the MOOC companies are now figuring out where the money is, and have a mechanism that draws top schools into competing on that ground. That doesn’t sound dead to me. There won’t be room for 1000 Micromasters in a given topic. There won’t be room for 100 of them. There may be room for 10. So the schools get drawn into competing in this part of the professional education space. The winners will have a powerful recruiting tool and revenue stream. Everyone else runs a real risk of losing professional education revenue.

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