e-Literate

Present is Prologue

Tag: MOOC

  • The MOOC-Courseware Convergence

    Now that Coursera for Campus—which I have occasionally erroneously referred to as “Coursera for Schools” in previous blog posts—has been launched, we have some more information about what it’s really about. (I’ll embed the launch video at the bottom of the post, but if you’d rather go straight to it, you can find it here.) I think it’s significant and portends significant trends in the sector.

    Before we get to that, let’s get one item of business out of the way related to my previous posts. As IBL Education notes, Coursera CEO Jeff Maggioncalda said, “Coursera for Campus is not a full-featured LMS. We expect many universities to stay on their LMSs.” IBL News further notes, “According to the company, Coursera for Campus’ LMS is designed to supplement the existing Canvas, Blackboard and Moodle systems.” [Emphasis in original.]

    So Coursera for Campus isn’t LMS play, at least for the foreseeable future. I was pretty harsh on Coursera’s SVP of Enterprise Leah Belsky for her disruption language, but as I’ll get into later in this post, this kind of category mistake is actually quite easy to make and one that other courseware providers have made.

    Because that is exactly what Coursera has explicitly become with their Courseware for Campus offering: a courseware provider. The less obvious part is that MOOC design and courseware design have been converging for some time now. Their increasing similarities in instructional affordances have been masked by the differences in the business models of their parent companies. And even less obvious is that the Venn diagram of courseware companies and OPM companies is starting to overlap significantly.

    “A 21st-Century textbook”

    In the launch presentation, Maggioncalda called Coursera for Campus, in part, a “21st-Century textbook.” Take that seriously. These are MOOCs repurposed as curricular materials. And it’s really not that big of a leap. Remember that the pedagogical model of the xMOOC course generally doesn’t require heavy participation from the instructor. Some instructors do participate heavily, while others, less so. A lot of instructor energy goes into course design and lecture video production. The actual live support could be from the instructor, but it also could be from TAs, or it could be self-study. Or, in the case of Coursera for Campus, it could be a different instructor. From its inception, the design model of xMOOCs began decoupling faculty course design from faculty course delivery.

    There is some messiness, of course. The biggest challenge in terms of textbook-like may be the lecture videos. Faculty may not love having some other personality featured as the star of the show. But there are two mitigating factors to that. First, Coursera’s design staff is likely guiding faculty toward authoring instructionally sound videos, which would tend to reduce the total amount of talking head content in any given course. Second, textbook-provided commercial courseware, which is still often written by star authors in their field, now also features talking heads. Here, for example, is the Cengage MindTap introductory video for Economics, by author Greg Mankiw:

    Greg Mankiw’s head, talking

    “But,” you may be thinking, “MOOCs are not designed like courseware.” One of my Twitter followers made a comment to the effect that at least courseware has an instructional design philosophy, unlike xMOOCs.

    That person is mistaken, and here is the proof:

    These analytics are only possible with backward design

    During the launch presentation, a Coursera executive made the statement that “any of the courses that have been authored on Coursera come with an out-of-the-box analytics platform.” If those analytics look anything like the picture above—and I would bet money that they do—then the courses have been built on a backward design philosophy like the one I have been describing in my recent post series on content as infrastructure.

    This shouldn’t be surprising. As I wrote repeatedly throughout that series, almost every professionally designed course uses that design pattern. And Coursera is known for having strong professional course design support.

    (I’m telling you, folks. That content pattern is the revolution of our time.)

    Update: Matthew Rascoff has reminded me to acknowledge that the professional course designers on campuses play large and critical roles in the design of these courses. The larger point is that, on both sides of the fence, there are trained, professional course designers who are applying this design pattern.

    While I haven’t looked at their catalog myself in quite some time, I would not be surprised at all if many of their offerings stack up pretty well against commercial courseware titles. For one thing, while xMOOCs have a bad reputation for anemic social interaction relative to other course models, they probably have more social interaction designed into them than many commercially published courseware titles.

    Courseware platforms vs LMSs

    It’s easy to get confused about the boundary between a courseware platform and an LMS. I know because I have worked on and consulted on both. The LMS companies inevitably start thinking, “Damn, there are so many courses that get delivered through our platform, and so much money made on selling them. And guess what? Everything that faculty build and deliver through our product is a course! The textbook publishers keep rebuilding what we’ve already built. Badly. I mean, have you seen their grade books? Why can’t we be the platform and get a cut of all that money?”

    So they try to displace the publishers. And they fail. Every time.

    The textbook publishers, meanwhile, start thinking, “Damn, our customers really hate their LMSs. We’ve built all these LMS features, and they keep asking for more. I mean, we’ve already built a grade book. Wow, that was painful. Why can’t we be the platform and get a cut of all that money?”

    So they try to displace the LMS companies. And they fail. Every time.

    Here’s the critical difference:

    LMS developers have to optimize for a wide range of faculty preferences, teaching styles, and teaching conditions. They have to accommodate every grading scheme imaginable. They have to handle huge classes and tiny classes. They have to deal with face-to-face, online, and blended. Constructivist, lecture, and whatever else. That’s why they spend so much time adding grade book micro-features and then optimizing the usability to handle all those micro-features without being totally overwhelming.

    Courseware developers, in contrast, have to optimize for the content. If the subject is software development, then you need an interactive code editor and test engine. If it’s accounting, then you need a test engine that looks like a spreadsheet. If it’s chemistry, then you need a molecule visualizer and manipulator.

    Which side of the divide do MOOC platforms land on? Here are a couple of slides from the Coursera on Campus launch:

    In-browser coding!
    Virtual labs!
    Data science notebooks!

    These subject-specific affordances, plus competency-based analytics, were the platform highlights of the Coursera for Campus presentation. Not the grade book that can do anything. Not the test engine that can provide any kind of feedback. Not announcements or an event feed. This was all about courseware.

    “But wait,” you say. “Courseware for Campus lets faculty author their own courses. Isn’t that different?”

    Yes. And no.

    Way back the better part of a decade ago, when I was at Cengage working on the MindTap platform, the company debated whether to open it up to customers and license it without content. (“We can disrupt the LMS!”) In the end, there were two major barriers. First, as a print-centric company in the midst of a transition, the authoring tools were not remotely faculty-friendly. And second, as a publisher whose bread and butter came from royalties, there was a fear of cannibalization of the business.

    Coursera has neither of those problems. It was born as a two-sided market, which means that it never owned the content to begin with and always had an incentive to make authoring as easy as possible. It may have taken some time to fully realize that vision, but we were destined to arrive where we are now.

    Further, as textbook publishers increasingly move away from celebrity franchises and toward fee-for-service contracts with their authors, they will have motivation to make similar moves. McGraw-Hill Education doesn’t advertise it widely, but they have been licensing the authoring platform for SmartBooks for several years now. Authoring support can work with a courseware platform as long as the range of course expectations for delivery models can be constrained. And MOOC courseware fits the bill. It’s a genre.

    Coursera for Campus is a harbinger of the future, not for the LMS industry but for the textbook industry. And they are an early mover with certain advantages in their business model.

    The courseware/OPM convergence

    One critical element that I don’t want to lose in all of this is the implications for the OPM market. Let’s not forget that (a) Coursera has been pushing into that market aggressively and successfully and (b) that market has been under massive pressure and upheaval lately. 2U has been the canary in the coal mine, having lost roughly four fifths of its market value since the beginning of the year. ((Disclosure: 2U is a 2019 sponsor of EEP.))

    To be clear, I think there’s some noise obscuring the signal. Two of the reasons why 2U took such a big hit are that the stock got way ahead of itself and some self-interested players have been extraordinarily successful at generating FUD around the market category in general.

    That said, there is no question that the hype around selling an infinite number of $40K masters degrees has met its demise. There are two barriers to OPM growth, which is another way of saying that there are two barriers to conventional online degree growth, and they have both proven formidable barriers to crack. The obvious one is cost. The less obvious one is geography. It turns out that, even in an era when people can take courses from anywhere in the world, they will tend to take them from their local institution or not at all. For all the talk of “national universities” and “mega universities,” it’s not clear that such beasts really exist. For the most part, big universities have proven exceptionally good at soaking up every ounce of demand for education in their local areas. So the next sustainability play is not so much about reaching students far away as it is about serving students you already reach for 40 years rather than for four.

    And interestingly, that is essentially the pitch that the Coursera executives made about Coursera for Campus—even when they were pitching in India. They weren’t making the pitch that the American stereotype would have predicted, of reaching the rural millions. They were talking about lifelong learning. Skilling and reskilling. From an OPM perspective, this pitch gives the company with the large catalog of low-cost and constantly refreshed inventory a competitive advantage.

    That said, there was definitely a bit of hand waving going on regarding completion rate. The Coursera executives talked about University of Illinois’ degree program as having over a 90% completion rate as if that remarkable achievement could be solely attributed to the fact that it was a degree program. I suspect there are some hard-working support staff at the University of Illinois who might quibble with that clean of a causal analysis. I don’t think the Coursera folks are directionally wrong, and I don’t think they were intentionally misleading, either. But I do think that they oversimplified, and that running a highly successful program at scale with a 90%+ degree completion rate entails a lot more than just handing out a piece of sheep skin at the end. The reason I bring this up is not because I want to snark on Coursera but because the part that is being glossed over represents a number of support areas that OPMs compete on (and that more traditional OPMs and OPEs pride themselves on excelling at).

    The gap between “MOOC” the course model and “MOOC” the courseware model is very much an open question in terms of student success. The MOOC courseware model, particularly as implemented into affordable degrees at scale delivery models by pioneers like Georgia Tech and University of Illinois, are creating an alternative delivery model that could start putting pressure on OPMs supporting more traditional models. Coursera on Campus, in addition to creating an additional revenue stream for the company and putting pressure on courseware providers, potentially ups the ante in the OPM market. But we need to look to those universities which are pioneering affordable degrees at scale to understand the service gaps, marketing gaps, and cost differences between MOOC courseware and the totality of what they are doing in order to understand the what it would take to replicate their success.

    In the meantime, consider the implications of the Coursera on Campus model for the future of companies like Pearson and Wiley, which own both courseware and OPM divisions, or McGraw-Hill Education, which has begun experimenting with opening up its platform for content authoring by customers. ((Disclosure: Pearson is a 2019 sponsor of the Empirical Educator Project.)) It’s not necessarily all bad, but it is a potential accelerant to change that is already in the wind.

    It’s a wild, wild, wild, wild world, my friends.

    Here’s the full launch event for your viewing pleasure:

  • Why Higher Ed Hypes: The MOOC Example

    People are funny.

    My last post was called “Is Ed Tech Hype in Remission?” It was about—surprise!—the interesting phenomenon of ed tech hype seemingly fading for the moment. I started the post by apparently breaking a little news. Civitas, the learning analytics company, had announced a new round of investment. A close examination of the details, coupled with some information from our sources, indicated that the company likely took a hit in valuation in that round. Since student success analytics has been a hyped product category, I used that bit of news as a jumping off point. And I used the phrase “fire sale” to characterize the downward valuation, although I was fairly clear that I didn’t even have enough information to confirm that it is a downward valuation. In and of itself, this downward valuation, if true—I’m fairly confident that it is—is mainly of interest to investors. I brought it up as an indicator the hype cycle in action rather than a signal of Civitas’ impending doom.

    There were lots of interesting and nuanced reactions in the comments thread on the post, on Twitter, and on LinkedIn. Elsewhere, the reaction has been different. There was some press coverage, some of which was good, and some less so. These are pretty nuanced issues. The easy part of the story to cover is not about the hype cycle or how to think about solving education’s hard problems but about whether Civitas is doing awesome or terribly. Customers, ex-customers, and of course, competitors have plenty to say about that. Sales reps for Civitas’ competitors are already out on the streets, weaponizing that post.

    Look, we have a sharp rhetorical style here on e-Literate. That isn’t going to change. We want to be clear, and we want to hold actors in this space accountable. But we also try to be nuanced. So here’s a tip for you: If you get a sales rep quoting us ripping one of their competitors, make sure you read the whole post. If it was primarily about holding that competitor accountable as a bad actor, that’s fair game. On the other hand, if it was an en passant observation made in the context of a larger discussion that wasn’t especially critical of the company—like my last post—then the use of our comment is more a reflection on the sales rep than of the company we were commenting on.

    Civitas has a lot of mindshare in the student success platform market category. That market category was overvalued, not mainly because of anything Civitas said or did but because higher education and ed tech investors alike have had a tendency to look for technological magic bullets. In fact, Civitas has sometimes actively resisted that hype trend, even to the point of choosing a name that can be interpreted to mean “community.” The only choice they made that I focused on in my post was their decision to market themselves as a software platform. Which was part of my point. One reason a company inclined to name itself “Civitas” might focus on selling itself as a platform company is because the market (and funders) can only make sense of them as a technological magic bullet. It’s a systemic problem.

    This wasn’t what I intended to write about, but it happens to fit perfectly with the main subject of the follow-up post I was planning to write. It was on my mind to say something about another sharp section of that post:

    One could argue that we hit peak ed tech hype in 2012. The Year of the MOOC. Remember how there were only going to be 10 universities in the world, and only one lecture for every subject, given by the very best lecturer in the world? Remember how everyone was going to get a Stanford education for free?

    Yeah. Good times.

    Since then, the hype cycles have been shorter and less intense. Sure, there was the whole adaptive learning bubble (or “personalized learning,” as it is inaccurately called), but a lot of that was the knock-on effect of a flood of Gates Foundation money. I never got the sense that there were many True Believers in adaptive learning as a magic bullet. There are still some True Believers in learning analytics, but it’s a small group. In fact, the OER True Believers club may now be larger than the learning analytics club.

    Mostly, people seem to be approaching all of these things—learning analytics, adaptive learning, OER, inclusive access, etc.—with a little more sobriety. These developments are all getting attention, but not a lot of hype (though not always for lack of trying). The general attitude among educators and institutions seems to be more like, “Huh. So that’s a thing now. Good to know. What can I do with it?”

    Gone are the days—at least for now—when provosts or presidents emerged from their offices all across the country and proclaimed, almost in unison, “Hear ye, people! I hath spake with the good people from Coursera, and they have shared with me the miracle of recording lectures in four-camera studios and giving away the courses for free. Huzzah! Huzzah! Let us be fruitful and make MOOCs with great haste!”

    Ouch.

    It’s true that some of the stuff that happened around MOOCs was objectively dumb. Phil has a good run-down of the research from both now and then. There were schools that rushed into projects and people—most infamously, Sebastian Thrun—who displayed astonishing hubris. Many of the people at the heart of MOOC mania, whether or not they were actively or intentionally participating in the hype, were really, really smart, and some of them had the best of intentions. I never got to know Thrun or Anant Agrawal—I’ve briefly met them both—but I’ve spent some significant time with Coursera’s Daphne Koller and Andre Ng. I like them both. A lot. In fact, I worried that the two of them, but especially Andrew, were too idealistic and too focused on doing good in the world to hold onto the reins of power in a VC-owned company with the kind of growth expectations that were put on Coursera. (I was probably right.)

    And the truth is that, in 2018, universities are still building, delivering, and experimenting with MOOCs. Students are still learning from the courses, and we are still learning from the form. There was and is nothing wrong with experimenting with MOOCs to see what we can learn about new ways to reach new students or better serve some of the students we reach today. Just as there is nothing wrong with experimenting with student success analytics to see what we can learn about new ways to identify students who need help sooner or find new ways to help them (or to enable them to help themselves).

    But why does experimentation come with the insanity so often? Why were MOOCs accompanied by MOOC madness?

    I don’t know for sure, and I suspect that the full answer is complex and related to pre-rational aspects of our thought processes as they evolved over millions of years. But here’s one simple and obvious part of the answer: 160,000. That’s roughly how many students took an early MOOC in artificial intelligence offered by Sebastian Thrun and Peter Norvig. It’s no coincidence, I think that the four founders of the pioneering MOOC organizations—Thrun, Agrawal, Koller, and Ng—are all computer scientists. For one thing, they all could do the math fairly quickly to recognize how long it would take them to reach that many students via more conventional means.

    You probably should be knocked a little bit off your axis by the notion of reaching 160,000 students all over the world with one class, particularly if you are an idealistic educator. We live at the first moment in history when it is conceivable to enable every human being to have access to education equal to their intellectual potential. That is what “160,000” represents. The possibility of a new mission for higher education and the potential dawn of a new era for humanity. So yeah, some people lost their minds for a while.

    It turns out that reaching all of those potential students effectively is not so simple, and doing so in a way that is organizationally sustainable is even harder. Heck, we haven’t even figured out how to fund educating all the people in our own states here in America. How are we going to fund educating everyone in the world? I’m not saying it can’t be done. I’m saying that we should have known it wouldn’t be so easy. And we should have known that video lectures wouldn’t be the answer. (Yes, yes, I know, many of us did. The point is, people lose perspective sometimes. I have over 15 years of blog posts on this site, so if anyone wants to point out times when I did, I’m sure they could find plenty of examples.)

    This is not a sufficient explanation for the ed tech hype cycle. I could list other subjects of hype that were…shall we say, not as understandably inspiring of irrational exuberance. But it’s a place to start. Educators typically want to do good. That includes educational professionals who happen to work for for-profit companies, by the way. In order to do so, they often have to deal with organizational psychology, business process management, budgets, politics, market forces, and a whole host of confusing and interacting systems that human minds are not very good at modeling. So we tend to latch onto simpler, and often shinier, explanations. Technology will save us. Evil companies are killing education. Education need to be disrupted.

    But the thing about chasing the hype is that it is exhausting and expensive. After a while, it wears you down. That’s what I think we’re in now. A period of exhaustion. We have enough people who have been burned enough times in rapid succession, and who are trying to solve enough serious and immediate problems, that they just can’t afford to be burned chasing the next shiny thing right now. They have to focus on solving the hard problems, because those are the real problems that just might move the needle for their respective institutions. That’s good news for almost everyone, from the students, to the faculty, to the universities, to the ed tech companies that want to do the right thing.

  • MOOCs in Decline: Insights into multi-year data from MIT and Harvard

    MOOCs in Decline: Insights into multi-year data from MIT and Harvard

    It is no secret that the commercial Massive Open Online Courses (MOOCs) launched by Coursera, Udacity, and edX in 2011/12 are a different beast from the majority of for-credit online education offerings. One such difference is the pattern of quick drop-off of students within each course, particularly in the first 2 – 3 weeks, which we documented in 2013.

    We also know that the original disruption vision for these large MOOCs has not come to pass, with many MOOC providers moving into Online Program Management (OPM) business models and shutting off many of the free and open access that made MOOCs in the first place.

    Late last week two researchers at MIT, Justin Reich and José A. Ruipérez-Valiente, published an article in Science titled “The MOOC Pivot” that provides new multi-year insight into the trends based on edX usage at MIT and Harvard, the two founding schools for edX. In a nutshell, MOOC activity peaked in 2016 based on new individual learners, based on a dataset of “565 course iterations from 261 different courses, with a combined 12.67 million course registrations from 5.63 million learners”, leading the MOOC providers to look to the OPM market as a more-realistic method of sustainability. The researchers identify three insights from their data [emphasis added].

    To better understand the reasons for this shift, we highlight three patterns emerging from data on MOOCs provided by Harvard University and Massachusetts Institute of Technology (MIT) via the edX platform: The vast majority of MOOC learners never return after their first year, the growth in MOOC participation has been concentrated almost entirely in the world’s most affluent countries, and the bane of MOOCs—low completion rates—has not improved over 6 years.

    The highlighted conclusion makes sense, but to my knowledge we have previously not had any solid data to back this point up. The following chart in the article shows annual cohorts of learners and tracks them over time, showing that the decrease per year largely mirrors the course-level situation.

    MIT Harvard multi-year research on MOOCs

    Thus 38% of 2012-13 cohort enrolled in at least one course in year 2, and 24% of 2012-13 cohort enrolled in any course in year 3, etc. Over time, these year 2 / year 3 / year 4 retention numbers reduce significantly. Thankfully, Justin and José provided a GitHub repository of the data, and perhaps a transposition of Table S1 can make these trends more obvious.

    It took nearly six years for 10% or fewer of the 2012-13 cohort to remain active (enrolled in any courses), but just two years for 2016-17. And note that the cohort size has been dropping since 2015-16. Keep in mind that the MOOC providers counteract these institution-level trends by increasing the number of institutions that they partner with over time.

    There is more analysis in the full article at Science – it’s worth reading the whole thing.

  • Coursera CEO Interview: Betting on OPM market and shift to low-cost masters degrees

    Coursera CEO Interview: Betting on OPM market and shift to low-cost masters degrees

    In mid 2012 during the midst of MOOC mania, I wrote a post noting that we should pay attention to future generations of the concept and that there were four barriers that the MOOC vendors would have to overcome to have any long-lasting impact.

    Given this short timeline and the nature of investment-backed educational experiments, I think the real focus should be on whether and how MOOCs or successor models build on current scalability and openness while overcoming these four barriers.

    Six years later, it is becoming increasingly clear that the next-generation model for MOOCs in higher education is to become a form of Online Program Management (OPM) providers, including the near-term focus on master’s degrees. The OPM market has demonstrated revenue models (tuition revenue sharing mixed with fee-for-service), the end credential is the already-accepted degree, course completion rates are higher for paying and matriculated students, and degree programs have methods for student authentication. In other words, the MOOC-based OPM model is the next-generation designed to address these challenges.

    The shift into the OPM market has been documented in a series of posts in July of 2017, March, April, and May of 2018; and from Dhawal Shah from Class Central . In the May e-Literate post:

    The picture one gets is of a chaotic market that is not for the faint of heart, and one that will likely see further consolidations and category changes. 2U, for its part, has been successful partially due to a niche strategy where they go after elite master’s programs and mostly avoid direct competition or engagement with the rest of the market. And recently we have started to see the MOOC providers become OPM providers – where the primary revenue for Coursera and FutureLearn are based on revenue sharing with online programs, albeit with lower sharing rates and with very different marketing approaches. In other words, there seems to be several efforts to enter into the same OPM race, but if possible to avoid being in the mainline rev-share OPM market.

    Last week Julia Stiglitz from GSV Advisors, in their first podcast episode, interviewed Coursera CEO Jeff Maggioncalda who joined the company summer 2017. This interview gives the clearest view yet of Coursera’s emerging business model, and by extension it helps explain the new subset of MOOC-based OPM that includes FutureLearn, edX, and Udacity as vendors. ((Outside of Georgia Tech legacy contract, Udacity has moved to corporate professional development market, which is a different approach to same problem.)) I think that the media narrative of tuition revenue-sharing vs. fee-for-service OPM models is overblown, especially since there is a spectrum in that respect more than a binary choice of OPM vendor types. What the MOOC-based OPM entry introduces is a more fundamental characteristic of how traditional institutions develop online programs – namely low-cost vs. full-cost online degrees.

    The first note from the interview is that the Coursera of 2018 is not the Coursera of 2012. While Maggioncalda still shows aspects of that old-time MOOC belief system, his approaches are very much rooted in focusing Coursera on a solid business model. And the difference shows. The second note is that 2U’s success in the OPM market and a successful IPO had a big influence on Coursera’s shift. [Emphasis added in transcript]

    Julia: You know when you first joined. You spent some time looking at Coursera’s strategy, and really digging in and looking at the different businesses that Coursera had, and one of them that you were particularly attracted to, and you have put increased attention on here at Coursera is the online degrees business. What was it about online degrees that excited you?

    Jeff: Yeah. This is sort of I think another good example of what good entrepreneurs have to do, is you have to have feedback loops; you need to get information from multiple sources to understand the nature of a problem so that you can come up with solution. The nature of an opportunity so you can develop a strategy to go after it. It’s really actually pretty simple. I came in – you were on the team, too, we did a lot. We call them deep dives. We went all through the business model, and there’s a great book Business Model Generation that really, to me, gives a nice framework for saying this is what a business model is. It is a target customer. It is a value proposition and offering that solves their needs. It’s a set of channels of how you acquire those customers. It’s a servicing models of how you service the models. Internally it’s the key activities and resources you bring to bear on that. It’s the partners that you work with. It’s the financial revenues and costs, and is your competition. So and that’s the framework. And we stepped through every one of those. I wrote 250 questions across that business model that we as an executive team went through. You know step by step by step, so that everybody learned the nature of our business. And what became very obvious is we had a few things that nobody else really has.

    We had 36 million learners, at the time it was 25 million. 25 million learners from all around the world. That’s a pretty big asset. We had university partners. Now there are competitors out there like LinkedIn Learning, previously Lynda, like PluralSight, like SkillSoft. You know there’s YouTube, there’s Khan Academy – there’s a lot of content out there. You were one of the ones who told me in one of those early meetings, “Hey we’re worried that content, generic content, might become a commodity.” Well, we don’t want to play a commodity game. So what is it about my partners that’s super distinctive? Well our partners are universities, and they’re not just the universities, they’re the best universities in the world, and they’re spread around the world. So you say, well I’ve got a resource that almost no one has, which is this network of universities. Right now they’re publishing MOOCs, and there’s something special about MOOCS, but MOOCs are a little more susceptible to that commoditization just as MOOCs. But what was not very susceptible to commoditization are degrees. So that’s OK. We have an asset nobody else has, and what they do really well is degrees, and they still have market sizing. How big is the market for degrees? 1.5 trillion dollars. Okay, well that’s a pretty big opportunity. And then you say, what’s the likelihood that that industry could be transformed due to technology . . . You know, some industries it’s easier to transform, others, it’s harder. The provision of education is absolutely set up nicely to be enhanced, transformed by technology.

    I think Uber and Lyft were really smart when they said “you know on-demand transportation, called a taxi, it’s a big market, but it’s a broken product. And if we just do some sort of digital view of this kind of redesign what on-demand transportation looks like, it’ll be a much bigger market.” I’m looking at degrees, I’m not saying it’s broken altogether, but if you look at the student debt out there, you look at the the lack of access, and you look at how inconvenient it is for people to have to stop their lives – especially for master’s degrees – quit their job, move their family, pay hundreds of thousands of dollars, forfeit their income. That’s a broken product. So I thought we got partners who are really good, and a massive economic opportunity, and a product that is just ready to be dramatically improved by technology, and so I thought this is pretty good. We should go after this. By the way we also had 2U trading at like a 12 times forward multiple. So clearly Wall Street loved the idea of online degrees, and 2U’s been doing great. They’re growing really rapidly, so there’s a data point out that says, hey this company is doing really, really well; We should be able to do pretty well here, too.

    Julia: Could you share a little bit about what this redesign looks like? Because the online degrees aren’t new. You know 2U is doing them. And before 2U there were a whole set of online degree providers that were out there, so why is what Coursera is doing different?

    Jeff: Yeah I think it’s a few things. The number one, I would say, is quality. When I say quality, I mean the quality of the credential. So a lot of people have spent a lot of money on for-profit college degrees that just don’t have very good credential value, they’re not recognized in the job market. You pay a lot of money, you don’t get much back for it. One of the reasons that people pay so much for the top universities is that those types of degrees means something in the job market. There have been a lot of online degrees out there, from universities, that charge a lot and don’t get you very far. Our partners happen to be the best universities in the world, with the highest credential value in the world. When these degrees come online, and these degrees online are the same degrees as on campus, you’re getting something as a credential that’s extremely valuable. That should have a very high ROI. Because we’re doing it online the cost is often less than half. So it’s a top quality credential at half the price. Same credential you get on campus.

    Different Assumptions on Tuition

    There’s a lot of useful insight in the full interview, but I’d like to call out the fundamental question that gets raised about online education with this market view. Should online degrees from traditional universities cost the same as face-to-face offerings, or should they cost significantly less?

    For full-service revenue-sharing segment of the OPM market, some core assumptions are built on the assumption of high revenue share percentages and full-priced online degrees. 2U is probably the best-known and arguably the most successful OPM company, and like Coursera they target elite institutions as partners. In 2U’s website under “Our Approach” they describe how their online programs typically charge the same as on-campus programs.

    2U's approach for tuition - the same for online as for face-to-face

    Most of the full-service revenue-sharing segment of the OPM market is similar in its view, whether from Pearson, Wiley, Academic Partnerships, or others – relying on consistent tuition as for online programs, and if there are lower prices they tend to be marginally lower. ((Disclosure: 2U and Pearson are sponsoring participants in our Empirical Educator Project.)) The Coursera approach is in direct contrast with this view, based on the interview as well as several of their online degree programs. There are arguments for either approach. With full-cost tuition, the idea is that the online degree gives at least as much value to students as the face-to-face, or on-campus, degree, and therefore students will be willing to pay the same. With low-cost tuition, the idea is that while students get the same value, “because we’re doing it online” the costs should necessarily be lower. Online infrastructure and marginal costs are much lower than investment in physical facilities. The point here is that this is a fundamentally different set of assumptions.

    Writing about the Illinois $22,000 iMBA program, Marc Ethier described this different approach to pricing:

    For most, the initial appeal of the program was certainly the price tag. Illinois’ iMBA costs a fraction of a degree from an elite school, where the median cost is roughly $171,000 and can break the $200,000 mark at the far end of the scale. Illinois’ own residential two-year MBA costs more than $100,000. Arshad Saiyed, executive director of online programs at the Gies College, acknowledges that the low cost brought the program to many prospective students’ attention — but says the iMBA has kept students around through a combination of high-quality instruction and successful community building.

    Different Assumptions on Student Recruiting

    For OPM full-service vendors, the largest expense is typically marketing and sales – i.e. recruiting potential qualified students. The predominant approach to OPM student recruitment has been based on digital marketing – advertising and outreach on social media platforms, search engine placement, digital advertisements in articles. With the MOOC-based OPM subset of the market, there is now an alternative approach based on having a multi-sided platform model. Coursera views their 36 million registered learners as an asset – a natural base of potential students for online degrees that can be reached without external advertising. In addition, the original aim and design of large-scale MOOCs is based on ability to easily sign up new learners for low- or no-cost, with the opportunity to move these students into higher-cost credentials and degrees over time, not requiring full financial commitments from students up front. While a Coursera or FutureLearn might use digital marketing for recruitment, that is not their primary method.

    Different Assumptions on Course Size

    Related to the above assumptions, in 2U’s case the class size is small – typically 10 – 20 students leveraging the platform’s design around small discussion groups, using both synchronous and asynchronous learning. This 2018 article about Washington University’s two programs partnering with 2U partially describes this approach.

    But what is it like for student to pursue a graduate degree in law fully online? How could a pre-recorded lecture support the active teaching that’s integral to discipline? After all, watching a video isn’t the same as participating in a conversation. To support such engagement, 2U created a new tool.

    “Through building an online LLM [master’s of law] program with Washington University in St. Louis, we learned how to design one of the most important tools we provide today: the bidirectional learning tool, or BLT,” said Chip Paucek, co-founder and CEO of 2U. “Socratic-style teaching is fundamental to all law curriculum and coursework. As such, it was imperative for us to design a way to conduct Socratic-style group discussions for Wash U once we signed their online LLM program.

    “What we didn’t realize is that while we were developing a software tool to help solve the challenge of teaching the Socratic method online, we were simultaneously creating a way to facilitate discussion-based learning in an asynchronous environment that would eventually be used in all of our future partner programs.”

    The approach that 2U and Wash U Law conceived relies upon the ingenious integration of asynchronous and synchronous course components. Instead of lecturing from a podium, faculty address small groups of student actors. At key points, the instructor breaks the fourth wall and addresses the online student, who is prompted to answer without the benefit of knowing how his or her peers have responded. In other words, students can’t piggyback like they might in an in-person class.

    After responding, online students can review one another’s answers. They might be prompted to answer follow-up questions, or they might be asked to come to the next live class prepared to defend whatever position they’ve chosen. The preparatory work that might otherwise happen during an in-person class is accomplished in advance through the pre-recorded sessions, enabling faculty to make better use of live, synchronous time.

    In contrast, consider a Class Central interview with Maggioncalda when talking about scaling and its challenges.

    I think about systems. As the system gets bigger, where would the bottlenecks emerge? My sense is that the bottlenecks will emerge in live sessions and in grading. That’s my guess. The grading, I’m actually not so concerned about because I think the ability to automate grading at scale will become pretty good. The live sessions get tricky. From a technology perspective, I’m not that worried about it. It’s the professor’s time and attention. My thought is it’s going to be a little bit like pyramid, where the number of hours that the main professor puts in won’t really change. If you think about how medical systems have worked, a doctor is in the system, but the number of minutes and hours that a doctor spends [with each patient] becomes an increasingly smaller portion of the total time [during which medical treatment is being delivered]. I think it will probably be somewhat similar for education. The size of the classes could be big, let’s say 10,000. But that will be broken into sections of say 50. And each of those sections has an expert who’s probably not the professor. Also, there will be a lot more collaborative learning among the peers in the class. If you think about it, a lot of learning does actually happen among the folks in a class. The expert just dispensing wisdom is not the way most learning happens. I call it “high engagement learning at scale.” A major piece of high engagement learning at scale is utilizing your classmates to provide a highly valuable learning experience.

    Coursera is pursuing a path to enable high enrollments in low-cost programs, and they view their challenge to balance scale and student engagement, with class sections of ~50 students.

    Good Enough vs. Better Enough

    In two posts recently, Michael described a battle in the digital curricular materials market. Focusing on Cengage Unlimited in the first one, he described this dynamic.

    Make no mistake; this is a potential inflection point in the curricular materials market. There is a war raging between curricular materials that are “good enough,” meaning that the lower price has a bigger impact on student outcomes than any differences in the quality of more expensive alternatives, versus “better enough,” meaning both instructors and students believe the product makes a sufficient difference in student outcomes that the more expensive product is worth the premium. Cengage is betting the farm on “good enough” beating out “better enough” and, win or lose, their bet could cause tectonic shifts in how curricular materials are developed, purchased, and used. It will have implications for inclusive access, adaptive courseware, textbook companies, textbook authors, and the landscape of options available to students and teachers.

    Elaborating in the second post:

    The distinction I’m trying to make between two strategies is a little tricky. I’m not arguing that Cengage, for example, thinks that their products aren’t great or that they think all anybody needs is the cheapest PDF possible. And on the other hand, “better enough” no longer means better editing or better production values, which is the way that textbook publishers used to position themselves against OER (and still do sometimes, although that reflex is beginning to fade). Rather, it’s about improving student outcomes.

    What we are seeing in the OPM market, with the introduction of MOOC-based degrees, is a new battle. MOOC providers and its partner institutions, represented by Coursera, betting on “good enough”; and 2U and its partners betting on “better enough”. Like the curricular materials market, the product is based on student outcomes, which wraps in the value of the credential coming from the university along with the academic and administrative experience enabled by the company. Coursera obviously believes in the quality of their experience, and their partners have some programs that are not deeply discounted, but their market position is based on the program price being the compelling feature for students, including free or low-cost on-ramps. 2U understands that students are seeking more cost effective options, which was one driver behind creating the short-course segment with the acquisition of GetSmarter, but their market position is based on quality of experience and value of credential being the compelling feature for students. But the difference in approaches is stark and significant.

    While there is likely room in the market for both approaches, the Coursera of 2018 (and not the Coursera of 2012) deserves careful observation to understand future trends with online degrees. Win or lose, their bet on low-cost online degrees will have big implications in the market.

  • If At First You Don’t Succeed, Try To Be An OPM: Conversion of for-profits and MOOCs

    If At First You Don’t Succeed, Try To Be An OPM: Conversion of for-profits and MOOCs

    Two weeks into March, this has already been a busy month already for the transformation of for-profits and MOOCs. For-profit universities are in a race to become nonprofit by separating academic programs from behind-the-scenes services, and MOOCs are focused primarily on monetization and moving beyond free and open courses. The common thread tying these messy transitions together is the move to become new forms of Online Program Management (OPM) providers.

    Best Way to Make Money? Go Nonprofit

    Arguably the biggest news was March 5th when the Higher Learning Commission (HLC), the regional accreditor, approved the Kaplan University / Purdue University deal to create Purdue Global. This was the final approval step as Purdue acquires Kaplan, leaving Kaplan University, leaving Graham Holdings (Kaplan’s parent company) to serve as a single-client OPM provider.

    The following day Grand Canyon University announced that it had received approval from HLC to convert into a nonprofit institution. As described in their press release, the remaining for-profit company will become an OPM, even if they choose not to use that name [emphasis added]:

    As part of the transition, GCE will sell certain academic-related assets to a non-profit entity that will carry the Grand Canyon University name. Following the sale, GCE will operate as a third-party provider of educational and related services to GCU and potentially, in the future, to other universities. The structure is similar to that at hundreds of non-profit universities in the country that outsource services to third-party providers.

    And yesterday, Bridgepoint Education announced that they were formally seeking to convert Ashford University into a nonprofit in a similar deal as Grand Canyon. At least they are more direct about the OPM tie-in as described at Inside Higher Ed yesterday.

    Bridgepoint will continue on as an online program management (OPM) provider — a booming space in higher education. The company will negotiate with Ashford to enter into a shared services agreement, with Bridgepoint likely handling data management, course management software and services, technology, and financial aid processing for the nonprofit university.

    “As an OPM, Bridgepoint Education will bring years of technological and academic innovation and intellectual property development to other colleges and universities that desire to serve students through online education programs,” Schray said in a written statement.

    In an interview here at e-Literate when Purdue and Kaplan announced their acquisition plans last April, Trace Urdan (now at Tyton Partners) described the market forces involved in some of these moves.

    • Non-profit entities – both public institutions and private non-profit institutions – “wanting to get into the adult market and the online market”. This is the big push behind the Online Program Management (OPM) market, kick-starting these non-profits into online programs targeting adult education.
    • For-profit entities “feel like they are being burdened by being for-profit”. One part of this is the regulatory burden from the Department of Education and even accreditors. But there is also a marketplace burden as non-profits like Southern New Hampshire University keep growing enrollments while for-profits are dropping.
    • There is a “the investor enthusiasm for the services model” with OPMS, “and this is a model that investors love – it gives you access to the growth in online education, affiliation with strong brands, and it’s more or less free from the regulatory hostility” of the for-profit sector.

    Beyond the market forces, however, there is another underlying factor affecting these moves. As described by legal team at Cooley Education:

    So, why did this happen? First, and most obviously, we are in a different regulatory environment – at least as far as the federal Department of Education is concerned. In late 2017, the Department of Education dropped its opposition to for-profit conversions vehemently articulated by then-Secretary John King, most recently approving the sale of South and Argosy Universities and the Art Institutes owned by Education Management Corporation to a nonprofit created by the Dream Center Foundation. This change in federal policy shifted the emphasis on approvals back to the accreditors and the states.

    At the accreditor level, the politics may be less important in understanding the outcome than the process. At about the same time that Kaplan-Purdue was first announced, HLC began working on revising its policies and procedures to establish new benchmarks by which such transactions would be measured. HLC made two significant changes: it updated its procedures for review of Change of Control transactions and, in a politically astute move, also established a policy that Department of Education approval must be obtained before HLC acts on a change of control application, thus insulating itself from second-guessing in Washington. (HLC’s change was telegraphed in late 2016 when it deferred acting on the sale of the parent of the University of Phoenix to a private equity group pending prior ED approval.)

    Significantly, HLC now has relatively clear guidance governing what is needed for OPM relationships and for-profit conversions.

    How Do We Make Money? The Answer Is Simple – Volume

    Meanwhile Coursera announced their plans to further focus on the monetization of supporting online degrees, as described at EdSurge on March 5th.

    These days, though, many MOOC platforms are courting the traditional higher-ed market they once rebuked, often by hosting fully-online masters degrees for colleges and universities. And today, one of the largest MOOC providers, Coursera, announced it’s going one step further in that direction, with its first fully online bachelor’s degree.

    Coursera is not alone here – most notably Georgia Tech and Udacity launched an online master’s of computer science in 2013. In a related move, edX has begun its work supporting online master’s degrees through its MicroMasters program, and FutureLearn – spun out of the Open University of the UK – supports multiple degree programs.

    While the Coursera news focused on the new bachelor’s program, the bigger news was the expansion its graduate programs as described at Inside Higher Ed.

    Online education platform Coursera has set a goal of offering 15 to 20 degree programs by the end of 2019. The company took another step toward that goal Wednesday, announcing new degree offerings from the University of Illinois at Urbana-Champaign and France’s HEC Paris.

    “This is our coming-out party for online degrees on Coursera,” Nikhil Sinha, Coursera’s chief business officer, said in an interview.

    FutureLearn announced their own expansion of online degrees last month.

    For the MOOC providers, their move into the OPM space seems to be driven by their leverage of current registered learners as a marketing channel, as described in a separate IHE article.

    Roughly half of the students in Coursera’s current degree programs took one of the open online courses first, essentially enabling students to “try these degrees before they buy them,” Maggioncalda says. So not only do students have a chance to see how they like a professor, or how well they perform, before enrolling in the for-credit program, but Coursera also asserts that it can drive down the cost of acquisition of students by tapping into its 31 million users.

    Coursera’s institutional partners “share a certain percentage of the learner fee with us in exchange for distribution to our world of learners, and the whole delivery of the system on our platform,” Maggioncalda says.

    New OPM Models

    Two years ago we described how the OPM market has evolved beyond its full-service tuition revenue-sharing origins to add unbundled service offerings – not to replace the previous model but to augment it. What we are now seeing are two new models within the OPM market becoming much more clear: the remnants of for-profit conversions into nonprofit status, and MOOCs supporting online degree programs. Both of these models are driven by markets that need to move beyond their origins as well. A lot of changes happening in the education space.

  • MOOCs Now Focused on Paid Certificates and OPM Market

    MOOCs Now Focused on Paid Certificates and OPM Market

    Writing in EdSurge, Dhawal Shah from Class Central describes the mostly-complete transformation of the large MOOC providers – Coursera, Udacity, edX, FutureLearn – away from lifelong learners and towards paid certificates and a form of Online Program Management for Master’s degrees. No one still claims that MOOCs will disrupt the university as previously hyped. Referring to these previous claims:

    Now, more that five years later, we know this [disruption of universities] is not the case. I started Class Central at the end of Nov 2011 as a side project to keep track of free online courses, so I’ve followed the space closely right from the beginning. MOOC providers have learned a lot in the last five years, and they’re now more certain about who their real audience is—and they’re not the dabblers and lifelong learners who take courses just for curiosity’s sake.

    Paid Certificates

    The description of the current MOOC target audience is a twist on an old term. Shah paraphrases Coursera’s previous CEO Rick Levin and then clarifies:

    The real audience is not the traditional university student but what [Levin] calls the “lifelong career learner,” someone who might be well beyond their college years and takes these online courses with the goal of achieving professional and career growth. [snip]

    Traditional lifelong learners might learn due to their love of learning, but in the case of lifelong career learners, the “lifelong” part is driven by the necessity of constantly adapting to the changing job market. Learning for the sake of learning sounds appealing, but, at least anecdotally, I hear from many people find they are more likely to make significant progress or even complete a course when they are tied to professional outcomes (that’s certainly my experience).

    Typical paid programs lead to certificates and may be sponsored by the employer and may be tied to a monthly subscription.

    Shah also describes how the MOOC providers have dramatically reduced the offerings and features available for free, lamenting at the end:

    But if you are true lifelong learner—the ones that helped start all the hype in the first place—the MOOC experience has largely been reduced to basically a YouTube playlist with a cumbersome user interface.

    Unless, of course, you are willing to pay.

    OPM Progress

    Shah also linked to a previous post of his at Class Central describing the progress made by the MOOC providers in creating an Online Program Management (OPM) business model. Udacity started this movement with their Master’s of Computer Science degree at Georgia Tech, but now the other vendors are following suit. Coursera announced their fourth program in March (three of them at the University of Illinois), edX added one at Georgia Tech, and FutureLearn announced three programs at Deakin University in Australia. All told, there are now 10 programs identified where the MOOC providers are acting as OPM providers, albeit from four universities. From the April post:

    In a post describing the OPM market last year I noted:

    The OPM market is interesting and dynamic. Here we see strong arguments for both bundled revenue-sharing models and for unbundled fee-for-service models. I personally do not believe that the market is moving away from revenue sharing as much as there is pressure for additional models. There are a growing number of choices available to schools, but there is also a crowded marketplace that is becoming more difficult to understand and compare vendors.

    The 10 programs mentioned above now represent one of these “additional models” in the crowded marketplace.

    For those wanting to understand where the large, commercial MOOC market stands in 2017, I recommend reading both of Dhawal Shah’s posts – from April at Class Central and July at EdSurge.

  • Recommended Reading: Realistic Hopes for a Genuine Science of Learning

    Recommended Reading: Realistic Hopes for a Genuine Science of Learning

    Keith Devlin is a professor of mathematics at Stanford who has taken a keen interest in mathematics education. He is particularly interested in how people learn and what constitutes effective teaching. As a side note, e-Literate interviewed Keith as part of the MOOC Research Initiative in 2013. ((Disclosure: Our e-Literate TV series of video case studies and explainer videos is funded by a grant from the Bill & Melinda Gates Foundation.)) In his response to a question posed by the Edge last year, “2016: What do you consider the most interesting (recent) scientific news? What makes it important?”, Devlin argues that learning researchers are in the early, but momentous, stages of establishing a genuine science of learning. What has made this possible now is the application new research techniques enabled by the internet and online learning technologies:

    “The problem that has traditionally beset learning research has been its essential dependence on the individual teacher, which makes it near impossible to run the kinds of large scale, control group, intervention studies that are par-for-the-course in medicine. Classroom studies invariably end up as studies of the teacher as much as of the students, and often measure the effect of the students’ home environment rather than what goes on in the classroom.”

    (more…)