Online education providers may very well disrupt the higher education  establishment, but, first, these for-profit companies need to find a way to finance the mammoth technical infrastructure needed to support millions of students. It’s a challenge that all mission-based businesses wrestle with, and why many have wondered whether Massively Open Online Course (MOOC) providers will ever become big business â€" or be around in five years â€" let alone “transform higher education,†as they’ve so often promised.
Today, one of the biggest MOOC providers on the Web, Coursera, showed skeptics that it has indeed found a way to monetize free educational content and may just be on the road to riches. In a blog post this afternoon, Coursera announced that it has raised over $1M [1] Â for paid certifications, which verify that students passed (an otherwise free) online college course.
For those unfamiliar, Coursera partners with top-tier universities â€" more than 83 institutions on board â€" to make their classes and lectures available online, for anyone in the world to consume. The company burst onto the scene with millions of dollars in backing from big names, and ever since its buzzy debut has been dogged by questions over whether or not MOOCs will ever be able to make enough money to justify $65 million-worth of venture capital.
In July, Coursera added a significant round of funding (bringing its total to $65 million), saying that it would use its new capital to develop mobile apps and increase its presence internationally (among other things). Of course, with so much capital and so many investors now on board, Coursera’s road to monetization and profitability became that much steeper.
The news today is reason enough for optimism, especially considering how quickly it has been able to turn a new feature into $1 million in revenue. The startup unveiled “Signature Track†back in January â€" a program that has been designed to allow students to earn “Verified Certificates†for a small fee.
Through Signature Track, students are able to verify the work they complete on Coursera, with the idea being to supplement the value of the work students do on the platform. While this represented Coursera’s first step (really, tiptoe) into credentialling and doesn’t include credit towards a degree program, it does give students something tangible to prove that they’ve completed the course and know the material.
While $1M every 9-months wouldn’t pay back their total $65 in investment, there’s every reason to believe that there’s orders of magnitude more students who would pay for this service. First, beyond being nine-months-old, Signature Track really hasn’t been aggressively promoted. Second, Coursera is quickly expanding to more universities , both in the U.S. and around the world.
Third, and perhaps most importantly, tech companies are exploring an alliance  that would weight these types of certificates as equal to a college to a degree in the hiring process . While this Alliance is still very much in the nascent stages of development, if MOOC providers like Coursera and Udacity are able to come together with the Googles and Apples of the world to develop some kind of standard, it could have big implications for higher education.
In the future, we could see these platforms (and others that are sure to launch in the interim, like MOOC.org , for example) allow students to mix and match classes from MOOC and traditional universities, with MOOC providers offering some kind of paid certificate to its students. There are many very valid concerns that need to be discussed as MOOCs, tech companies, startups and schools themselves rush to integrate technology and tear down the ivory walls around traditional higher education.
There’s the issue of quality, first and foremost. Coursera’s defense against claims of declining quality in MOOC (or MOOC-style) learning is that it only provides content and courses from the most elite and select institutions in the country. That’s well and good, and, of course, as more and more video-based education platform launch on the Web (and their libraries scale), high-quality content will abound. It will be tough to find, but amazing teachers and courses that may never have seen the light of the day will be exposed to millions who never would have seen it otherwise.
However, Coursera’s model for presenting content, which is essentially equivalent to a digital lecture hall, is not the best way to learn. It’s just the first step, and if MOOCs and other education technology companies are going to improve education, these educational models will have to continue to evolve. They can’t just port lectures to the Web, they will have to personalize the learning path, increase the opportunities for group-based learning and studying, make content more interactive and engaging, and, of course, make certificates actually mean something.
For now, they don’t mean much, even if students are willing to pay for them, and Coursera knows this. How successful they are won’t just depend on how much revenue they see from Signature Track, but how much they can lead the way towards a better educational system â€" the one that MOOCs and others have promised â€" but we really haven’t seen yet. If they can do that, and the skeptics still outnumber the Polyannas on this front, the conversation about profitability will disappear and morph into something much more meaningful.
Coursera is an education company that partners with the top universities and organizations in the world to offer courses online for anyone to take, for free. Our technology enables our partners to teach millions of students rather than hundreds. We envision a future where everyone has access to a world-class education that has so far been available to a select few. We aim to empower people with education that will improve their lives, the lives of their families, and the...
Links
- ^ that it has raised over $1M (blog.coursera.org)
- ^ â†' Learn more (www.crunchbase.com)
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