Udacity—premature claims of demise?

By Gregor Kiczales posted on November 27th, 2013

There have been lots of responses to the Fast Company article about Sebastian Thrun and the Coursera ‘pivot to corporate education.’

Some of the responses display emotion nothing short of anger. People who have been in education research for years are angry with the attention Thrun has gotten and angry with the inflated claims Udacity and Coursera have been making. But that’s to be expected when innovators enter a long-established space. Now the old-timers are fairly gleeful about what they would like to paint as Udacity’s downfall.

My read is that many of them are so busy celebrating Udacity’s apparent downfall that they miss what’s actually happening.

The first question is whether this represents a true failure. I think not. Did anyone really believe that the initial MOOC story was going to be the end result? Did anyone really believe their business plan was to educate third world children for free? That giving away product was going to be a moneymaker? Webvan anyone? Free online newspapers? Of course free education wasn’t going to work as a revenue model. There was always going to have to be something else. Remember that it took Google two years to discover ads as a revenue model. During that time we all knew they had to find a revenue stream of some sort — or rather we all hoped they would, because it was already really useful. You can have a significant innovation in advance of a revenue plan. (I’m not suggesting Udacity will grow to the size of Google, and of course it’s possible to never find a viable source of revenue.)

During the last year Udacity and Coursera’s approach has generated a lot of publicity and innovation. A lot of people not on their payroll are working very hard to explore the space of what makes for good MOOCs. Talented faculty around the world are expending blood, sweat (and tears) doing innovation that may interfere with their long-term paycheck! So it’s been a very successful development period for the MOOC platforms and production skills. It’s more than free press, it’s also free product development.

If they switch to corporate education now, start generating revenue and spend time getting better at what they do then that’s hardly failure.

The second question is whether this really changes anything for universities. I think not. The danger to universities was never MOOCs. It was the confluence of a number of macro forces — none of which are changed by this event.

  • Increasing costs of education (especially in the U.S.).
  • Breakdown of the meme that getting a university degree guarantees a better career.
  • Internet emerging as a channel for delivering higher education content and services.
  • The scaling power of the Internet — the ability for high-volume online courses to attract considerably more development resources than an on-campus course ever could. As in other areas, this phenomenon can lead to huge first mover advantages.
  • Increasing learner demand for flexibility in numerous senses of the word: not just what, when and where to learn, but also how, with whom, from whom, etc.
  • Aggressive investment by top schools in developing a beachhead in the digital learning space (edX).

Disruptive innovation is still headed our way. It was always going to change form many times along the way. The Udacity pivot is just one of those changes.


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Gregor Kiczales is a Professor of Computer Science and Provost’s Fellow for Flexible Learning Strategy.

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