Udacity
As mentioned in the previous blog, Udacity started in 2012, with roots from free computer science classes offered by Stanford in 2011. Its co-founder and CEO Thrun, known as one of the inventors of self-driving cars, has previously founded Google X and Google’s self-driving car team.
In June 2012, Udacity pioneered the on-site finals for MOOCs for a $89 fee, partnering with Pearson.
In Jan 2013, Udacity announced a partnership with San Jose State University (SJSU) to pilot three new courses, available for college credit at SJSU for the Spring 2013 semester and offered entirely online. The courses, if taken for college credits, have a price of $150 per course.
However, six months after it launched, San Jose State was suspending the Udacity partnership as more than half the students in the first batch of online courses failed their final exams.
Udacity has focused more on the vocational courses and create materials from non-universities sources, especially in tech.
In June 2014, Udacity and AT&T announced the “Nanodegree” program, designed to teach programming skills needed to qualify for an entry-level IT position at AT&T. The coursework is said to take less than a year to complete, and cost about US$200/month.
In Nov 2015, Udacity raised a $105 million Series D valued at $1 billion, led by Bertelsmann, with Scotland’s Baillie Gifford, Emerson Collective and Google Ventures joining as new investors. Existing investors Andreessen Horowitz, Charles River Ventures, and Drive Capital also participated in the round. The announcement came as the company celebrated the one-year anniversary of its nanodegree program. Udacity reported 11,000 students are currently enrolled in nanodegree programs in 168 countries.
Coursera
In Apr 2012, Coursera raised $16 million in venture funding from KPCB and NEA. At the beginning, the company has partnered with Stanford, Princeton, University of California at Berkeley, University of Michigan, and University of Pennsylvania to bring professor-created classes online.
Aside from offering free courses to the masses, Coursera’s learning management service (LMS) platform can be used internally by universities to revamp their online course programs.
In Sep 2012, Coursera announced that it is working with the American Council on Education (ACE) to initiate a credit-equivalence evaluation of a subset of the MOOCs.
In Jan 2013, Coursera announced that students would be offered the opportunity to earn Verified Certificates – called Signature Track, priced from $30 to $100 on a course-by-course basis. Students will create a Signature Profile by first taking two photographs with their webcam: one of themselves and another of an acceptable photo ID document. Next, students will create a biometric profile of their unique typing patterns by typing a short phrase. When a student submits work in the course, they authenticate their identity by typing the same short phrase, which is then matched to their recorded samples. Upon successful completion of their course, students will receive a Verified Certificate issued by both the participating university and Coursera.
According to InsideHighEd, revenue from the fee-based path will be split with partner universities. A Coursera spokeswoman said universities would keep 6-15 percent of revenue from courses taught by their professors, as well as 20 percent of profits.
Some other statistics shared by Coursera in May 2013: almost 70% of the students who joined the Signature Track went on to successfully complete their course; 9,000+ students from all around the world have joined the Signature Track for their course; over 2,000 students are taking Gamification from University of Pennsylvania with Signature Track.
Coursera brought in $220,000 in the first quarter of 2013.
More recently, in Apr 2019, Coursera raised $103 million Series E, led by a strategic investor, the Australian online recruitment and course directory provider SEEK Group, with participation from Future Fund and NEA.
A summary so far for MOOCs and fee-for-certificates
As of 2019, we could see fee-for-certificates has become a mainstream business model to monetize on a subset of MOOCs users. Certificates are issued for single-courses or programs (grouped courses).
Certificates could be issued/recognized by the platform (e.g. Udacity, Coursera, edX) and/or by the organizations (companies or universities). Letting users put those certificates on social medias such as LinkedIn do provide an incentive to purchase.
At the same time, part of the materials/courses can still be accessed for free if users don’t need the certificates.
To be continued
cost of goods sold: 24.4%
cost of goods sold: 23.4%
cost of goods sold: 37.3%
cost of goods sold: 52.3%