Making Higher Education Accessible – Coursera

Challenges along the way in creating innovative higher education solutions.

To many people taking a class at one of the world’s most established and highly regarded higher education institutions was nothing but a dream up until recently, Coursera has changed that. Established in 2012 with a mission statement “envisioning a world where anyone, anywhere can transform their life by accessing the world’s best learning experience[i]”, Coursera set on a challenging path.

Beginning with high profile collaborations, starting with the founders’ Alma Mater, Stanford University, Coursera quickly positioned itself as a front runner in the MOOC (Massive Open Online Courses) space, fending charges by additional startups (Udacity, etc.) and efforts by established schools (Harvard and MIT’s edX). With great coverage, massivefunding (>$145MM[ii]) and a fast growing platform (students, courses offered, and courses providers) all seemed great, but what lagged to appear is a viable business model.

After struggling for a while, Coursera’s current business model leans on three channels of monetization[iii]:

  1. Course Certification – previously called “Signature Track”, this is Coursera’s first successful revenue generation tool, introduced in 2013. While most courses on Coursera are free of charge, this allows you to confirm your identity and receive a confirmed certificate that you completed course credit. After several iterations of different pricing, Coursera currently offers these certifications for a flat fee of $49 per course.
  2. Specializations – With an understanding that most courses provide limited value as a stand-alone product, Coursera went on to provide packages, called Specializations, providing a set list of classes and including a capstone project. Specializations are generally priced at $300-$600.
  3. Course Purchases – While classes are still free to ‘audit’, Coursera now provides the option to participate in classes that include require hand in assignments that are being graded and for which feedback is provided. Such courses are purchased for anywhere between $39-$119.

In addition, most recently (mid-2016) Coursera started offering Degrees in collaboration with the University of Illinois at Urbana-Champaign[iv]. Currently the degrees available are an MBA and a Masterof Computer Science in Data Science. The price point is considerably higher than that of courses and specializations but still lower than other physical attendance parallel degrees (~$20K).

With all these monetization channels in place and 18M+ learners[v], Coursera is set to take on its greatest challenges: Course Completion – while growing numbers of learners start courses on a regular basis, Coursera has learned that on demand classes considerably limits the percentage of completions, coming to well under 4% in mid-2015. This learning led to a change in class structure, pushing for fixed class schedules as well as group learning and projects. With greater collaboration baked into the plan, Coursera has seen a 4x increase in completion rates[vi]; Awareness – with a mission stating allowing higher education learning to anyone, anywhere, as of March 2016 awareness of Coursera was as low as 8%, even in the US[vii]; and Life Transformation – while the stated message is providing access to people who do not have access to higher education, currently 76% of Coursera learners are college graduates; Multi-Homing – historically, barriers to transfer between different platforms are extremely low, but with the formation of specializations as well as longer programs, Coursera is pushing for greater loyalty and more value created by staying for the program for longer.

Though challenges are plentiful, and competition is fierce, the Coursera team is consistently innovating to provide better solutions for their customers and partners’ pain points. With Coursera’s real conviction and belief in their mission, I believe their prime is still ahead.

 

[i] Coursera Partner Conference Presentation 2016 (https://www.flickr.com/photos/wfvanvalkenburg/25667471790/in/album-72157666181282926/)

[ii] Source: CB Insight

[iii] Online Learning Insights (https://onlinelearninginsights.wordpress.com/tag/coursera-business-model/)

[iv] Coursera Website (https://www.coursera.org/courses?languages=en&query=degree)

[v] Coursera Partner Conference Presentation 2016 (https://www.flickr.com/photos/wfvanvalkenburg/25847236862/in/album-72157666181282926/)

[vi] Coursera Partner Conference Presentation 2016 (https://www.flickr.com/photos/wfvanvalkenburg/25968028875/in/album-72157666181282926/)

[vii] Coursera Partner Conference Presentation 2016 (https://www.flickr.com/photos/wfvanvalkenburg/25847222862/in/album-72157666181282926/)

11 thoughts on “Making Higher Education Accessible – Coursera

  1. Hey, thanks for the post! This is a really interesting idea and potentially something that make education accessible to millions of people living in less developed countries of the world. I think one area that would really help an online educator such as courser demonstrate value is to do some sort of outcomes study with their graduates – do you know if they have any data that demonstrates the courses actually creating value in peoples lives? Like if they can demonstrate that people who take courses in X subjects get Y more $ of income at work or are Z times more likely to be employed in a given industry? Demonstrating value creation would definitely help incentivize people to pay as well as make employers take notice when people have the certificates of completion from these courses.

    1. Hi!

      I agree completely that providing such information can greatly improve people’s interest and motivation to follow through with their coursera classes. While researching for the post I did run into the following:
      https://www.flickr.com/photos/wfvanvalkenburg/25339304613/in/album-72157666181282926/

      Where Coursera shows survey responses by participants who completed courses, seems like there’s obvious benefit but they have not quantified it well enough yet.

  2. Very interesting post! I’m excited to see what Coursera is able to achieve over the next few years. Originally they positioned themselves as trying to fundamentally disrupt traditional higher education delivery, but they have evolved to focus more on on-going learning and development, primarily for people who already have degrees. Because Coursera does not own the original content (schools develop the curriculum), it will be interesting to see if they have a content supply issue down the road as universities develop their own capacities to develop, market, and monetize online content. I can envision a world in which universities eventually go directly to customers (students) while coursera moves to focus more on consumer or enterprise learning and development (a competitive but high margin space).

    1. While I see the potential of universities going direct, I believe some universities are actually getting the benefits of network effects when using a platform like coursera. Building an independent monetized platform will require a great deal of marketing and a way to differentiate themselves from other schools providing such content, and considering the fact that it’s not a selective process on the universities side, why would a student go to a site by any university but the top one in that field? Now that coursera consolidates multiple universities, a potential learner can browse and find the course that fits him best out of a wide selection by multiple universities, and will create greater visibility to universities that said learner may not have had as top of mind when looking.

      You can, however, argue that the top universities in terms of pull to the platform (Stanford in this case) are actually giving value away to universities that are not creating traffic to the platform. Not sure what I would say to that…

  3. Great post – thank you! I have started Coursera courses before, but not finished them, so glad to see I’m in good company with 96% of students haha. I think that Coursera is going to have a problem down the line as higher-level institutions (with interesting courses in high demand) realize that there is money to be made in this space, and thus offer these programs on their own platforms. I think there is an opportunity for Coursera to white label its platform for schools (so they are completely university-branded) to combat against this. It will be interesting to see how much this space matures over the next decade. Perhaps my kids won’t even attend a physical college!

  4. Thanks for the post. This reminded me of an article I read earlier this year on how MOOCs were experimenting with using employers to provide additional credibility to their courses. A course that equips its students with skills that are attractive to reputable firms would in turn become more attractive to students, and may help justify some of the prices platforms like Coursera are now trying to charge.

    1. That’s interesting. They previously tried and failed to become a placement platform, so it is interesting to show value the other way around to close sales.

      Thanks for sharing!

  5. Great post! Have you come across any data to suggest that the platform actually benefits from network effects, given that it is not an open platform for providing educational content? Has the use of course purchases increased stickiness?

    1. Don’t have concrete data, but I can say that their completion numbers have been going considerably up (2x from 2014 to 2015) and the see growth in paying members (10k new ones a month at the beginning of 2016)

      Not sure about the stickiness, though…

  6. Enjoyed the post! I actually wrote about Coursera as well and am eager to see where they go. Would be curious, like Noorin, to hear your thoughts on network effects and multihoming effects in this business. During my research for the post, I had a hard time parsing out much this business actually benefits from strong NE. You could argue that as long as each MOOC has the core set of courses that most people look for, amassing new content might not actually benefit users that much more. And no MOOC has really yet differentiated itself in terms of offering more content. I also struggled with high user multihoming would be in this world. Now that MOOCs are experimenting with pricing models, perhaps multihoming will decrease, but as of now I hear about many people jumping from one MOOC to another fairly easily. I’m curious to hear which quadrant in the “network effects / multihoming effects” matrix you’d put Coursera.

  7. Great post, Gil, thanks. It seems to me that success for coursera and other MOOCs will be determined over a reasonably long time frame – very much a marathon game and not a sprint. The reason I say this is because it takes time for businesses, institutions, and people to get used to the idea and accept education credentials from an online source. I would suspect this is going to take a while, but coursera has some great university partners and course offerings with a I believe a low-cost model, so it appears pretty positive for them in my view…as long as they can be patient…

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