Tuesday, 26 June 2012

Another post about Udacity

I posted about Udacity previously. At the time, I couldn't understand how anybody was proposing to make any money out of the project, and I see that more eminent people than me still can't. This reflects our old-economy idea that a business has to have revenue. I have since come to understand that in the internet economy it is far from unusual for businesses to have no revenue, in fact it is normal. The value of a company in this case is the group of users that it can bring to a better-established internet company, or the defensive value that the better-established company can gain by buying an upstart before it becomes a rival. In this context, Udacity (or any other learning provider) can make a fortune for its owners if it establishes a large user base and then sells out to Google or Facebook, even if no-one ever works out a way to cover the costs of the business in the meantime.

Understanding this helps me to place some other things in context too. Drop-out from these kinds of programmes is truly catastrophic if your comparator is a traditional university programme. Inside Higher Ed says that 'generally between 10 and 20 percent' of students make it to the final exam in an individual course, roughly equivalent to a UK module. In currently-existing British universities, by contrast, 86.9% of (Undergraduate) students successfully complete their (3+year) programmes and get an award. If your comparison is other internet experiences, though, getting 10-20% of your users as deeply engaged as to complete an entire course of study probably seems like an outstanding metric.

It follows from this, of course, that the learner is not the customer in this case. That may not be an issue: I don't use Facebook myself, but I do use Google and (obviously) Blogger, so perhaps my choice of illustration for this post shows a certain double standard. Besides, it isn't always clear that the learner is the customer in traditional education models either: this is sharply contested by some.

It also follows from this that Udacity is a bit less interesting than I previously thought. In my last post on the subject I was impressed by the audacity of taking both teaching and assessment out of the University offer, but now that I understand this as just one of many approaches to putting engaging content online so as to grow a significant user community it seems a lot less exciting, and a lot less relevant to my day-to-day work. If the experience is engaging, it will literally never matter if the assessment and certification 'issues' go unresolved; if the experience is not engaging it is also unlikely to matter whether assessment and certification can be resolved. 

So to go back to Paul Greatrix, I think the 'confusion' was probably more in his mind (and mine) than in the minds at Udacity, Coursera and the others. 


  1. I believe Professor Thrun's loud statement will never come to pass. His reference to Kodak's demise is definitely not comparable to the deeply rooted trust that people have in Higher Education. I believe Audacityand all other MOOCs will not be around for too long!

    1. Thanks for your comment David. As I tried to say in the post, I don't think it is really necessary for private MOOCs like Udacity to replace (or even compete with) existing Higher Education institutions in order to make their founders very rich people. We'll see.