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Online Higher Education (4) – Online Degrees

Online Degrees Before MOOCs

While the previous posts (2) (3) summarized the birth and development (especially the model of fee-for-certificates) of MOOCs, online degrees, as a more “formal” segment of online higher educations, was actually born before 2011.

The boom can be attributed to the 1. advancement in technology infrastructure (higher internet speed, 4G, streaming, etc.) 2. people’s behavior changes such as the growing adoption of smart personal devices (smartphones, etc.) 3. increasingly burdensome higher education costs in the US and associated student debts 4. the incentives provided by the regulatory environment such as the re-authorized Higher Education (Opportunity) Act in 2008.

Distance education: US Department of Education shall not require an accreditor to have separate standards, procedures or policies for evaluation of distance education. Accreditors must, however, require institutions that offer distance education to establish that a student registered for a distance education course is the same student who completes and receives credit for it.

Then, there emerged a group of companies called Online Program Management (OPM) providers, with 2U being the current leader.

2U

The first of its kind was launched in 2008 – MAT@USC, Master of Arts in Teaching Program, developed by the USC Rossier School of Education in partnership with 2tor Inc. (the company later its changed name into 2U Inc. in 2012)

The basic idea is to replicate the degree offerings in the online format as much as possible. Private companies like 2tor will invest upfront and share the majority of future tuitions. The programs costs were a little cheaper (but at the similar level) than the traditional on-campus version.

The agreement of MAT@USC program provides a glimpse into the structure. As mentioned in the announcement, “tuition for MAT@USC is the same as the USC on-campus program at approximately $1,300 per credit.”

In 2012, when MOOCs were getting more attentions, 2tor also raised more capital and expanded the partnerships. It raised $26 million Series D in April and had 5 programs in agreement: USC’s Rossier School of Education for the MAT@USC mentioned before, USC’s Masters of Social Work Program (MSW@USC) added in 2010, Georgetown’s nursing program (Nursing@Georgetown) launched in Spring 2011, UNC’s MBA program (MBA@UNC) starting in July 2011, and announced the addition of UNC’s Master of Public Administration (MPA@UNC) right before this financing round. (See appendix for the current tuition of these five programs)

As we shall see in the next post that, as OPMs grew, at the same time, MOOCs were expanding into OPM’s fields, partnering with universities to offer degrees related programs.

At the same time, they are also trying to provide non-university based higher education, usually for/with companies in industries.

Born with different origins and offerings, MOOCs and OPMs are now coming to fight similar battles and creating full-service online higher education platforms:

1. fee-for-certificates
2. degrees-based programs
3. career-oriented continuing education

To be continued

Other more recent highly watched events for 2U included:

May 2017 2U to acquire GetSmarter for approximately $103 million, which provides online short courses in partnership with universities – just like what MOOCs did.

August 2017 HBS, SEAS and FAS partner with 2U, Inc., to offer the Harvard Business Analytics Program. The first cohort of students is expected start classes in March 2018. The total cost of the program—not including travel and lodging expenses—to be $51,500 based on current program fee rates.

January 2018 2U and WeWork announced a broad partnership: e.g. WeWork spaces are available to 2U students enrolled in graduate degree programs; WeWork members and employees can access $5 million in scholarships to enroll in 2U programs, etc.

April 2019 2U to Trilogy for $750 million in cash and shares, a large boot camp provider that partners with continuing education divisions at dozens of universities.

Appendix

MAT@USC current rate of tuition for the 2019–2020 academic year is $1,928 per credit.
MSW@USC 2019-2020 Unit Charges: $1,928 is the per-unit rate for students enrolled in 1-14 units. $28,628 is the flat rate for students enrolled in 15-18 units.
Nursing@Georgetown’s tuition is $2,139.00 per credit hour as of Academic Year 2019-2020.
MBA@UNC in 2011 said “tuition will be $89,000 for the two-year program and will include books, texts, student fees and lodging and food costs for four weekend immersions.” For students beginning in the July 2019 term, the tuition for the 2019-2020 academic year (July – June) is $125,589.06.
For MPA@UNC students enrolled in the program in academic year 2019–2020, tuition will be $1,209 per credit hour. Students who start the online MPA program in academic year 2019–2020 can expect to pay at least $54,405 for the entire program.

End of Decade Thoughts (1): An Increasingly Divided United States

This is a series about what we have seen in the past decade.

An Increasingly Divided United States

Three aspects:

1. The 2008 financial crisis provided a great opportunity for those who had equity while made many others in debt work years to recover. And the tax reform exacerbated the process.

– When we entered the past decade, prices were cheap for a lot of equities, but only for those who can buy.

– Differences were then created when the economy recovered – those who held equities enjoyed it.

– On the other hand, those who can’t buy didn’t share the growth (in any bull markets like stock, housing, etc.)

– Thus, more wealth inequalities were created. Supporting evidences could be found for a graph

Online Higher Education (3) – MOOCs

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

Online Higher Education (2) – MOOCs

Developed from universities

The history of massive open online course (MOOC) dated back to 2008 (by Stephen Downes and George Siemens entitled Connectivism and Connectivity Knowledge). The intention was to exploit the possibility for interactions between a wide variety of participants made possible by online tools so as to provide a richer learning environment than traditional tools would allow.

MOOCs with an emphasis on interactions and connectivity are now called cMOOCS.

In the fall of 2011, Stanford offered three courses for free online. Peter Norvig and Sebastien Thrun offered their Introduction to Artificial Intelligence to an initial enrollment of over 160,000 students from around the world. Over 20,000 students completed the course. These xMOOCs focused less on interaction between students and more on exploiting the possibilities of reaching a massive audience.

Nowadays, through MOOCs, anyone with internet access can take some of the most famous courses taught by world-class professors for free, such as Harvard’s Justice. And courses on updated topics such as The Opioid Crisis in America by Harvard Medical School.

Transformed to independent organizations…

Seeing their success of MOOCs, Thrun founded a company called Udacity in February 2012 which began to develop and offer MOOCs for free. Udacity is funded by venture capital firm, Charles River Ventures, and $200,000 of Thrun’s personal money. In October 2012, the venture capital firm Andreessen Horowitz led the investment of another $15 million in Udacity.

Andrew Ng and Daphne Koller, two other Stanford CS professors started Coursera in April 2012 with three classes in fall 2011 from Stanford.

We will come back to these companies later. But let’s first take a look at a non-profit effort – edX.

edX

The establishment of edX was traced back to MIT’s effort – MITx platform. Announced in Dec 2011, MITx platform is led by Prof Anant Agarwal to offer MOOCs as a constituent program of MIT’s Office of Digital Learning.

Harvard joined forces with MIT in May 2012 when the two schools pooled $60 million in resources and renamed/spun-off the open platform component into edX, a non-profit organization. Open edX is the massively scalable learning software platform behind edX.

Since the origin of MOOCs, which are basically free for users, monetization methods are explored to make those platforms sustainable.

In Sep 2012, edX, partnering with Pearson, introduced “proctored exams” option, which would charge a small fee. edX learners have the option of taking a course final exam at one of over 450 Pearson VUE test centers.

Full fee-for-certificates models were introduced in 2013 following the industry trend.

Students can pay a fee to receive an ID-verified certificate upon successful completion of class requirements. Debuting in Fall 2013, three initial paid certificates would cost $25 for Stat2x: “Introduction to Statistics,” $50 for CS169x: “Software as a Service,” and $100 for 6x: “Circuits and Electronics.”

edX launched grouped-courses-based programs (XSeries) in Sep 2013, and MicroMasters programs in 2016, which may count as credits towards master degrees.

XSeries usually costs several hundred dollars with certificates and includes 3-5 courses. If taken separately, those courses usually can be access for free without certificates.

For MicroMasters, they are more linked with institutions and existing degrees.

As an example, the MicroMasters® Program in Supply Chain Management, can be used to apply to MIT’s SCM program which awards the Master of Engineering in Logistics (M.Eng. Logistics). The degree will also require another semester of on-campus study. The MicroMasters Program in SCM is also accepted in other universities worldwide.

The MicroMasters in SCM has five online courses. The cost to take each course is US$200. The cost to sit for the Comprehensive Final Exam is $200. The overall cost of the five course plus the final exam is US$1200. And the package can be purchased through edX with a 10% discount.

To be continued

「What’s News In China」

On Dec 17, Tencent Games and NVIDIA (NASDAQ: NVDA) announced a collaboration to bring PC gaming in the cloud to China. NVIDIA’s GPU technology will power Tencent Games’ START cloud gaming service, which began testing earlier this year. START gives gamers access to AAA games on underpowered devices anytime, anywhere. Tencent Games intends to scale the platform to millions of gamers, with an experience that is consistent with playing locally on a gaming rig. // nvidia

SoftBank Ventures Asia, a unit under Japanese conglomerate SoftBank, has led a CNY500 million (USD71.4 million) fundraising round in Chinese powerbank sharing provider Energy Monster. Energy Monster had over 200 million users in over 1,300 Chinese cities as of the end of November. Founded in 2017, Energy Monster has a 25 percent share of the domestic charger sharing market behind Jiedian with 28.6 percent and Xiaodian with 27 percent, according to figures from TrustData. // YiCai| Trustdata

Apple’s China iPhone shipments fall 35% in November and total iPhone shipments in the September-November period dropped 7.4% from a year earlier, according to Credit Suisse. // Reuters

「Video of the Week」David Rubenstein Conversation With BlackStone Chairman & CEO Stephen Schwarzman

MIT’s new college of computing was formed on Sep 11 2019, enabled by Schwarzman’s $350 million donation.

And Schwarzman’s new book is out – What It Takes: Lessons in the Pursuit of Excellence

「What’s News In China」Alibaba + Vanguard, First Index Option In Mainland China, China’s Most Valuable Brand

Alibaba (NYSE: BABA) affiliate Ant Financial and Vanguard, the $5.9T U.S.-based asset manager, formed a joint venture to bring a streamlined and broadly available investment advisory service to retail consumers in China. // prnewswire

China’s first mainland stock index options will debut on China Financial Futures Exchange (CFFE) on Dec. 23. The options are tied to the Shanghai and Shenzhen stock exchange-based CSI 300 Index and the minimum account threshold is RMB500K. It is the fourth risk management hedging tool for the mainland stock market. Previous options included CSI 300 Stock Index futures, CSI Smallcap 500 Index futures and SSE 50 Index futures. // YiCai

Moutai/Maotai is the most valuable brand in China. Hurun released its Most Valuable Chinese Brands list on Dec 12 – Kweichow Moutai ranked top with RMB 640 billion brand value. It maintained the title for the second year running. Maotai /Moutai is a brand of baijiu; the company booked over RMB 22 billion revenue and RMB 10 billion net income in 2019Q3. // AsiaTimes

「What’s News In China」

Dinsey Shanghai began construction for the new Zootopia-themed (疯狂动物园主题) expansion. Zootopia will be Shanghai Disneyland’s eighth themed land. It will also be the first Zootopia-themed expansion at a Disney park worldwide. On Dec 9, the construction has officially started; the plan was first announced in January this year. In China, Zootopia is the 2nd best-selling movie in 2016 and the 2nd best-selling anime movie in history as of 2019. // YiCai

Bilibili (哔哩哔哩) just paid RMB 800 million (US$ 113 million) for e-sport broadcast right. Trying to capture the market potentials in e-sports and live-streaming in China, Bilibili (NASDAQ: BILI) has reportedly spent RMB 800 million (USD 113 million) on a three-year exclusive agreement to broadcast the Riot Games’ League of Legends (LoL) World Championship in China. The 2018 LoL World Championship has 99.6 million unique viewers. // KrAsia | 36Kr

BCG opened its Asia-Pacific center for digital services in Shenzhen. Opened on Dec 6, the new DigitalBCG Immersion Centers in Shenzhen is the firm’s fifth global center for digital transformation after Silicon Valley, Paris, New York and Bangalore. // prnasia

「News of the Week」A letter from Larry and Sergey

Google’s co-founders retired from management positions in Alphabet and wrote a blog to the public;

They will continue their involvement as co-founders, shareholders and members of Alphabet’s Board of Directors.

Sundar Pichai, CEO of Google, becomes CEO of both Google and Alphabet.

Alphabet’s press release on Dec 3.

WSJ – Google Management Shuffle Points to Retreat From Alphabet Experiment

Dots to connect: Waymo’s rollout, potential spin-off of independent assets, Alphabet’s bottom-line, more detailed reporting, internal control issues, etc.

Our very first founders’ letter in our 2004 S-1 began:

“Google is not a conventional company. We do not intend to become one. Throughout Google’s evolution as a privately held company, we have managed Google differently. We have also emphasized an atmosphere of creativity and challenge, which has helped us provide unbiased, accurate and free access to information for those who rely on us around the world.”

We believe those central tenets are still true today. The company is not conventional and continues to make ambitious bets on new technology, especially with our Alphabet structure. Creativity and challenge remain as ever-present as before, if not more so, and are increasingly applied to a variety of fields such as machine learning, energy efficiency and transportation. Nonetheless, Google’s core service—providing unbiased, accurate, and free access to information—remains at the heart of the company.

However, since we wrote our first founders’ letter, the company has evolved and matured. Within Google, there are all the popular consumer services that followed Search, such as Maps, Photos, and YouTube; a global ecosystem of devices powered by our Android and Chrome platforms, including our own Made by Google devices; Google Cloud, including GCP and G Suite; and of course a base of fundamental technologies around machine learning, cloud computing, and software engineering. It’s an honor that billions of people have chosen to make these products central to their lives—this is a trust and responsibility that Google will always work to live up to.

And structurally, the company evolved into Alphabet in 2015. As we said in the Alphabet founding letter in 2015:

“Alphabet is about businesses prospering through strong leaders and independence.”

Since we wrote that, hundreds of Phoenix residents are now being driven around in Waymo cars—many without drivers! Wing became the first drone company to make commercial deliveries to consumers in the U.S. And Verily and Calico are doing important work, through a number of great partnerships with other healthcare companies. Some of our “Other Bets” have their own boards with independent members, and outside investors.

Those are just a few examples of technology companies that we have formed within Alphabet, in addition to investment subsidiaries GV and Capital G, which have supported hundreds more. Together with all of Google’s services, this forms a colorful tapestry of bets in technology across a range of industries—all with the goal of helping people and tackling major challenges.

Our second founders’ letter began:

“Google was born in 1998. If it were a person, it would have started elementary school late last summer (around August 19), and today it would have just about finished the first grade.”

Today, in 2019, if the company was a person, it would be a young adult of 21 and it would be time to leave the roost. While it has been a tremendous privilege to be deeply involved in the day-to-day management of the company for so long, we believe it’s time to assume the role of proud parents—offering advice and love, but not daily nagging!

With Alphabet now well-established, and Google and the Other Bets operating effectively as independent companies, it’s the natural time to simplify our management structure. We’ve never been ones to hold on to management roles when we think there’s a better way to run the company. And Alphabet and Google no longer need two CEOs and a President. Going forward, Sundar will be the CEO of both Google and Alphabet. He will be the executive responsible and accountable for leading Google, and managing Alphabet’s investment in our portfolio of Other Bets. We are deeply committed to Google and Alphabet for the long term, and will remain actively involved as Board members, shareholders and co-founders. In addition, we plan to continue talking with Sundar regularly, especially on topics we’re passionate about!

Sundar brings humility and a deep passion for technology to our users, partners and our employees every day. He’s worked closely with us for 15 years, through the formation of Alphabet, as CEO of Google, and a member of the Alphabet Board of Directors. He shares our confidence in the value of the Alphabet structure, and the ability it provides us to tackle big challenges through technology. There is no one that we have relied on more since Alphabet was founded, and no better person to lead Google and Alphabet into the future.

We are deeply humbled to have seen a small research project develop into a source of knowledge and empowerment for billions—a bet we made as two Stanford students that led to a multitude of other technology bets. We could not have imagined, back in 1998 when we moved our servers from a dorm room to a garage, the journey that would follow.

Sundar sent the following email to Googlers on Tuesday, December 3:

Hi everyone,

When I was visiting Googlers in Tokyo a few weeks ago I talked about how Google has changed over the years. In fact, in my 15+ years with Google, the only constant I’ve seen is change. This process of continuous evolution — which the founders often refer to as “uncomfortably exciting” — is part of who we are. That statement will feel particularly true today as you read the news Larry and Sergey have just posted to our blog.

The key message Larry and Sergey shared is this:

While it has been a tremendous privilege to be deeply involved in the day-to-day management of the company for so long, we believe it’s time to assume the role of proud parents—offering advice and love, but not daily nagging!

I first met Larry and Sergey back in 2004 and have been benefiting from their guidance and insights ever since. The good news is I’ll continue to work with them — although in different roles for them and me. They’ll still be around to advise as board members and co-founders.

I want to be clear that this transition won’t affect the Alphabet structure or the work we do day to day. I will continue to be very focused on Google and the deep work we’re doing to push the boundaries of computing and build a more helpful Google for everyone. At the same time, I’m excited about Alphabet and its long term focus on tackling big challenges through technology.

The founders have given all of us an incredible chance to have an impact on the world. Thanks to them, we have a timeless mission, enduring values, and a culture of collaboration and exploration that makes it exciting to come to work every day. It’s a strong foundation on which we will continue to build. Can’t wait to see where we go next and look forward to continuing the journey with all of you.

– Sundar

CB Insights: Everything You Need To Know About What Amazon Is Doing In Financial Services

A 2018 report by CB Insights.

A good reading as I was thinking about future payment industry (also you can find a previous post on How Card Networks May Fail: Top Merchants With Gift Cards + Mobile Wallet)

Full report here; table of contents below

Amazon’s product strategy
Payments
Cash
Lending
Amazon’s Next Financial Pillar
Market strategy outside the US
India
Mexico
Rumors: What will Amazon do next?
Closing thoughts