Higher Education Strategy Associates

Udacity has Left the Building

There was a big story in MOOC-world last week, which the mainstream press has surprisingly yet to pick up on; namely, that Udacity, one of the three big corporate MOOC players, has just left the building.

Udacity, if you recall, was created by one Sebastian Thrun, a computer scientist at Stanford.  It was he who kicked off the current MOOC craze by opening up one of his computer science classes to the world, and then finding out that 160,000 people around the world had signed up.  Thrun left Stanford to start Udacity which, along with Coursera and EdX, has been part of the Holy Trinity of the MOOC revolution.

Last Thursday, Fast Company Magazine put out a story (hagiography?) on Thrun, which contained some staggering statements from the man himself, including:

(on looking at data on drop-outs) “We don’t educate people as others wished, or as I wished. We have a lousy product”.

(on providing remedial education) “These were students from difficult neighborhoods, without good access to computers, and with all kinds of challenges in their lives… it’s a group for which this medium is not a good fit”.

(on the value of Udacity courses) “We’re not doing anything as rich and powerful as what a traditional liberal-arts education would offer you”.

From a guy who cockily said he was on the verge of finding a “magic formula” for education, and that by 2060, thanks to MOOCs, there would only be 10 universities, this is some funny stuff.

There has already been much excellent commentary about this article: Bonnie Stewart, Mike Caulfield, and of course Audrey Watters.  They are all good (read them!), but George Siemens is the one I think who gets closest to the heart of the issue: Udacity’s switch from higher education to corporate training wasn’t due to the realization that their product wasn’t very good, it was caused by the fact that the company wasn’t making any money.

Like everything else, MOOCs need money to survive, and providing them for free is a really bad way to generate income.  The venture capitalists (VCs) supporting Udacity clearly came to the conclusion that the Udacity/Coursera strategy of losing money on every customer, and making it up on volume, wasn’t going to get them anywhere – hence the shift in strategy.

Strangely, no journalists seem yet to have had the cojones to call up various people who bought and amplified the story of MOOC-all-powerfulness for comment.  Nothing from Clayton Christensen, or Clay Shirky, or Tom Friedman, or Don Tapscott, or any of the other techno-fetishist windbags who tried to make us all believe that the VC-funded MOOCs were an unstoppable wave of the future.  This means that the techno-fetishists don’t get held to account (again), and we’ll soon all be chasing some other industry-disrupting deus ex machina.

Sad, no?

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21 Responses to Udacity has Left the Building

  1. C. says:

    Of course, Thrun has virtually no credibility at this point, but why not take his pedagogical critique of MOOC’s seriously as well? It’s not just the lack of a business model but also the sterility and clumsiness of the pedagogy that’s the problem. This stuff is suited to corporate training and not much more.

    • Alex Usher says:

      Hi there,

      I do take the pedagogical stuff seriously, but it’s quite a separate issue to that of the business model (and I try to keep these short). That said, I’d be careful about blanket condemnations of pedagogy because they do vary quite a bit (as does traditional teaching), and they are always going to be more appropriate for some students in some fields more than in others.

    • Do Not Give Up on MOOCs! I’m certainly not climbing on the bandwagon of everybody just railing against Thrun and/or gloating over the Udacity’s failure. As an entrepreneur and CEO in the MOOC arena I have something specific to say about Thrun, Udacity, and MOOCs and their future – read my thoughts here: http://www.huffingtonpost.com/idit-harel-caperton/dont-give-up-on-moocs_b_4297975.html — it includes learning theory and business model. NOT just for corporate training but also for K-12 and higher ed.

  2. Carrie Hunter says:

    I am hoping that someone in the know will tell us a bit more about what the funding model IS for MOOCs. All I know is that Coursera charges if you want to complete a course and receive a certificate for it. Could that be enough?

    • Alex Usher says:

      That’s tomorrow’s blog.

      • K. Beck says:

        We’ve got a working model for online tech education, established in 1997 and still going. We’re not a MOOC, and never will be because we know we must incorporate actual teachers for a school to exist and be effective. We issue certificates, and we charge for the courses (but they are much more cost effective than traditional universities).

        Duping investors and universities into thinking a MOOC could drive out teachers, save money, and end the costly university as we know it was disingenuous.

        MOOCs are good in the same way libraries are…massive repositories of information that is of interest in general, but none to effective at teaching students how to make and do stuff. Without great tools and mentors, you have a video library that you’re trying to pass off as cheap education. A MOOC is only one of those things.

        O’Reilly School of Education

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