Since Udacity is not exactly forthcoming on exactly what their business model will be, could you add some insight to exactly what the great business model is? Right now, I see the MITx and Stanford programs being a small loss per student compared to the normal amount universities spend on instruction, but a small loss a hundred thousand times over doesn't exactly turn a profit.
If you are going the freemium route (free content, pay for testing/credentialing) you have the classic freemium dilemma, what is your conversion percentage from free to paid and what is your margin on the paid version. If you anchor your product pricing at zero, you can't exactly charge hundreds or thousands for testing. Plus, the vast majority of students in the Stanford experiment were overseas which makes the paid option at a recognized testing center much more difficult.
It's all a percentage game. Revenue = Total Students * percent who complete the class * percent who can pay for testing * percent who do pay for testing * margin on testing. We ran the numbers in a number of different number of scenarios when we looked at going that exact same route and found time and time again that even if you can break even at a small number of very popular classes, the chances of being able to build out a broad curriculum of classes with less mass appeal was not good.
To use some realistic numbers, let's take the Intro to Databases class and make up some inputs:
Number of students: 90,000
Percent who completed the class: 7.2%
Percent who could take tests at approved centers: est 40%
Percent conversion from free to paid: Classic freemium less than 5%. Hugely optimistic: 20%
So, we have a probable range of $1,300 - $26,000 based on some real numbers and some educated guesses. $26,000 may sound like a lot, but that amount can easily be absorbed just in the professors time prepping and managing the class. Now add on the rest of the overhead of high paid SV engineers, offices, support, etc...
The end result, an enormous amount of things have to go just right in order to cover your base costs. Even if those things go just right, you still have a huge amount of pressure to create classes with the broadest possible appeal with the highest possible number of students completing the course (in order to have a chance of testing revenue). Those market pressures do not coexist well with academic integrity and high standards. They also don't support classes that might "only" have a few thousand students.
There other ways to get to free education for all (we're on that path ourselves), but starting out as free without the backing of a large university is a tough proposition.
Not to be too self promotional, but we're probably the closest to what you are describing. The biggest limitation is our course catalog is very small to start (bootstrapping). Over the next 12-18 months we should have a much more complete curriculum (Masters in CS/SE focused) as we prep for regional accreditation.
Flexibility? All classes are truly self paced (start immediately, work through the material as fast as you are capable) and include genuine interaction with the professor and real human grading.
Expensive? Basically, $50/$100 per credit depending on whether you need the credentialing and human grading portion. In your situation, our MSE program would end up being less than $4,000 plus books.
We're also Silicon Valley based, and are building the program to exceed the very high standards in the area.
Having done my fair share of laser marquetry, let me first tell you that I truly appreciate the amount of work that goes into the whole process, and really respect what you are doing. The intricacy of these types of patterns makes for a very high level of difficulty.
That being said, it appears to my somewhat trained eye that you are using Photoshop (or other CG) mockups on some of the product pages (http://woodcutmaps.com/146 for example), without saying explicitly that that's what they are. I know how difficult straight on photography is with these textures, but if those are indeed Photoshop generated, you run the risk of increasing expectations beyond what is technically possible with the process.
Excellent work either way, as I can tell from the genuine product shots. Like I said, not easy stuff.
Our first class definitely has practical application, but it is still taught by a PHD and covers more ground at a higher level than the current college or university standard.
If teaching applied material makes you a trade school, someone should tell Harvard: http://cs76.tv/2012/spring/
As for the use of the word "college", well, it's the most accurate descriptor of what we are building. We're not there yet, but we will be soon, and having to print a whole new batch of business cards is just too darn expensive. We could have chosen a more startup-ey name, but we hate startup-ey names. I could have named it after myself as well, maybe something like "Huffman Coding". We checked though, and that was taken.
While we're discussing it though, singularity university isn't a university, and clown college does not cover the theoretical aspect of clowning sufficiently. Also, University of Maryland College University is mildly redundant. And why do you park on the drive way and drive on the park way?
Sure, it's traditional if you are unable to meet accreditation standards on your own and have a spare $10mil in the bank. We can meet those standards on our own, however, we don't have a spare $10mil in the bank.
Thanks for the advice, We'll definitely work on making our guarantee more prominent.
I've been considering an AMA on Reddit, even though I actually had to quit the site three months ago to get to where we are. AMAs on HN are a little tricky as the commenting system is so...unique.
Either way, I'll add your email and keep you updated.
1) There have been a few different experiments with self pacing and retention at schools like Oxford (and a college in Iowa of all places). The typical result is a significant increase in retention with lower stress. The problem, and fundamental reason why this isn't the norm, is simple logistics. Trying to build a serial system of education that still uses classrooms is massively difficult. The closest you can get is a compromised 6 week class system that is still extremely difficult to pull off. Parallel is just easier and more cost effective to administer. It's also easier and more cost effective to administer on an online system which is why the push for MOOC. The difference for us is that we care more about optimizing the learning process itself and real evaluation and guidance, and are willing to bet that enough students also care about those points to give us a chance at proving it at a large scale. Our system costs a little more than free, sure, but the difference in results can be dramatic, as you are seeing with your masters program.
As for in-major hours, it may vary a bit by school (and MIT has a higher percentage than most), but here is the breakdown for UT. In-major credits required for a CS bachelors: 45. Average credits per class: 4. Weeks in a semester: 14. Average classes per week: 3. Total estimated lecture hours per class: 42ish. Total in major lecture hours for 45 credits: about 500. Subtract intro days, quiz and final days plus time for class to get settled, etc.. and you have somewhere around 400-450 hours left, or 100 per year, 2 per calendar year week or 3.5 per school year week. Some semesters you might not have any in major, some you might have 2 or 3, so remembering 8 hours in a week of classes is not outside of the data set.
2) A student should not have to know the exact set of skills necessary to build up to the higher level concepts. This is one of the problems with the self directed learning attempts in traditional schools. But, if the student has a clear end goal in mind (say, the goal of becoming a search engineer at Google), then a JIT system that can build a sequence of courses based on the concepts within the course is more effective and targeted than a standardized fire-hose curriculum. Speaking of fire-hose, I'm working on a post covering context switching in a parallel educational system that addresses exactly why this is such a problem.
3) This comes back around to the top down (or goal oriented) approach, and gets even more interesting with a mentor guided approach. Imagine a hybrid apprentice/mentor system where the mentor can define a sequence (or collection) of high level concepts which the learning system could then take and generate a path to master those concepts. All the while, the mentor could provide direct guidance and assistance where needed and help answer the tough questions that arise without having to dedicate all their time to the actual instruction. There are many, many, variations on this pattern that work extremely well with JIT systems but really don't work at all in JIC.
As soon as we have users, we'll have user testimonials and reviews. It's part chicken and egg, I know, but it's the same problem any new product has. Someone has to be the first.
Other than user reviews (and the free preview and money back guarantee), what could we do to convince you (or other prospective students in your position) that it's worth the risk? Would a google hangout with Dr. Ostrowski (something we have been talking about) make a difference ?
OU was a big inspiration for us. The bar we personally use is building a system designed for Silicon Valley. Pacing and availability are critical, as is maintaining a very high standard for classes. Right now, OU doesn't meet either requirement. (their SE program, for example, is little more than a few intro to Java classes and some SE theory)
I was hoping this comment would come up, actually. The real difference in just in time vs. just in case has to do with delivery, sequencing and retention. A broad, solid foundation sounds great on paper, but there are some hard realities that sink in shortly after graduating. First, within about 6 months the amount of actual knowledge you retain from this foundation is probably going to be between 5 and 7%. That's 5-7% of the total from a not very efficient 4 or 5 years of dedicated study. How not efficient? Well, if you look at the in major portion of your degree, you probably had about 450 hours in real classroom instruction, or a little under 2 hours a week. So, of those 450 hours, you will probably retain less than 30 or 40 hours worth of real useful knowledge. you may dismiss this as hyperbole, but trust me, all that work dissolves incredibly quickly. I remember Big O, a couple of formulas, and the ability to order a sandwich (or was it a donut) in German.
More importantly, though, is the fact that since you only have 40 or so classroom hours in any class, and you have to teach to the average, it is extremely difficult to build up to a properly high level of skill in any particular subject. It feels hard while you are doing it, but after you graduate, you realize the people who have been focusing on the subject for a couple years are light years ahead of you. It's even more difficult to chain subject together to reach that high level. The closest thing we have is a generic 100,200,300 level system with some prerequisites.
How does this relate to just in time vs just in case? Even if you assume an identical breadth of knowledge, being able to sequence classes together in series instead of having semester and scheduling gaps means you go into the next class with more knowledge retained from the previous, which means you can build on your foundation in a more logical and efficient way and reach those higher levels that you just can't in a fragmented system. You can approach this from the ground up (building on higher and higher concepts), but the very nature of a JIT system means you can also approach it from the top down. That is, you can define the ends result or top level class, and then sequence each course to build up the fundamentals you need, just before you need them.
The point? If you are defining a broad base of skills, JIT allows you to master each one quicker and sequence them together to reach higher levels of mastery. If you need skills in the real world, JIT is the quickest and most efficient way to build those skills. The reason I consider disagreeing to be dangerously wrong, is that JIT is so much more effective at real education that those who bank on JIC for their future (students, schools, or countries) will find themselves left in the dustbin of history.
The best way we can attract our first users is with having a course that is so valuable for our students that accreditation concerns become secondary. In this case, if you are looking for a high level class in Web App for Mobile, you probably will never find it in the coursera, mitx, udacity or khan catalogs. They have no interest or incentive to put that sort of course together.
If you look at the value proposition for a student, our web app class is extremely high. The material covered in that class can have a direct impact on job prospects, billing rates, or internal promotion opportunities, and it is such a difficult area to self teach that saving tens or hundreds of hours fighting though online tutorials is well worth the $200 or $400 that the class costs.
Well, the courses start at $200, we have a generous refund policy, and you can actually try the system and class out for free right now with a guest account. We don't even require a real email.
Also, we have thought very seriously about the business model of offering classes for free (Udacity model) and charging for certification/one on one. The numbers we see for that model just don't work, even at a large scale. You have to focus in introductory classes with the broadest possible appeal, reduce the difficulty of the course so you don't get 10,000 complaint emails from students who can't keep up, use a MOOC structure that is more about cost control than maximizing learning. Plus, the conversion from free to paid user may or may not be enough to cover the cost of course development. Our model, on the other hand, allows us to pay our professors quite generously for classes that may not have 100,000 students attending and focus more on building our catalog instead of just building the user base.
We actually have to focus on results first and foremost. By the time we can even apply for accreditation (probably 3 years out) the issue of accreditation for reputation will be moot.
But, you have to look at what the larger impact can be with accreditation and Title IV. Even though we are strongly against student loans, being able to work with state and federal governments for grant and work study funds is the best and most direct way we have at hitting "free education for all" status. It's also the quickest way to move out of the relatively small group of students who don't care about accreditation to reach the much larger group that does. It's only by being a reasonable alternative to this group of students that we can apply real pressure to the current system. As long as we aren't accredited, the existing institutions can simply point to that fact and write us off and most people will listen to them.
Thanks for the feedback on the copy. It's always hard to find that balance between being informal and jokingly reference overused terms like "rockstar", and being unnecessarily stuffy. We'll definitely take your comments to heart though as we refine the general descriptions.
The whole concept of being able to mix real world (trade school) courses with heavy theory is a tricky question. We have traditional theory heavy courses in the pipeline, but realistically, it is extremely difficult to bootstrap with theoretical courses. It's been tried before and typically fails quickly. Oddly enough, you can give away theoretical classes, and you can charge $10,000 a class for them, but you can't really sell enough at our $200-$400 price point to pay for the cost of developing the class. We believe you can teach both, and should teach both, but I'm well aware that we'll always have people saying you can't or shouldn't even attempt to do so.
Oh, one note on the textbooks for the course. Of course there is an image issue when you use Oreilly and Apress texts, but honestly, for that subject there just aren't any traditional texts that come anywhere near the level needed to teach the subject. Even those three have serious holes that Dr. Ostrowski has worked with the authors to plug in this course. If you know of a better text that we somehow overlooked, please drop me a note and we'll see if we can integrate it as we create V2 of the course.
Excellent point, and a strategy we have built in the learning system part itself. As odd as it may sound though, I actually wouldn't want to go up against Stack Overflow. They are a much more dangerous competitor than Stanford.
No arguments on the long shot part, and you're right, focusing on accreditation does put some serious limitations on exactly how we can structure our business model. Not focusing on accreditation, however, means it is very easy to create a business model that is impossible to accredit. Udemy, for example, will never be able to achieve their original vision of being a real college or university because their business model relies so heavily on revenue sharing for the instructors, which is a big no no for accreditation boards.
Cost is actually the one area where we can compete very aggressively. Columbus state may be able to sneak under the $10k mark, but for an equivalent program we'll be just over $3k with a much more flexible and adaptable system. That number, btw, is with state and federal subsidies for the school, often upwards of $10,000 per student per year. We're coming in completely unsubsidized at a price that's less than a third of our cheapest competition with an offering that is significantly higher quality (we're competing with MIT for some of our professors).
Brand building really is the toughest nut to crack, and one what we have a couple different strategies for. Not really comfortable discussing those strategies on this forum, but let's just say we've thought a great deal about the problem.
If you are going the freemium route (free content, pay for testing/credentialing) you have the classic freemium dilemma, what is your conversion percentage from free to paid and what is your margin on the paid version. If you anchor your product pricing at zero, you can't exactly charge hundreds or thousands for testing. Plus, the vast majority of students in the Stanford experiment were overseas which makes the paid option at a recognized testing center much more difficult.
It's all a percentage game. Revenue = Total Students * percent who complete the class * percent who can pay for testing * percent who do pay for testing * margin on testing. We ran the numbers in a number of different number of scenarios when we looked at going that exact same route and found time and time again that even if you can break even at a small number of very popular classes, the chances of being able to build out a broad curriculum of classes with less mass appeal was not good.
To use some realistic numbers, let's take the Intro to Databases class and make up some inputs:
Number of students: 90,000
Percent who completed the class: 7.2%
Percent who could take tests at approved centers: est 40%
Percent conversion from free to paid: Classic freemium less than 5%. Hugely optimistic: 20%
Margin from a paid testing center: $10-$50 (est)
90,000 * .072 * .4 * .05/.2 = 130/520 estimated paid students
So, we have a probable range of $1,300 - $26,000 based on some real numbers and some educated guesses. $26,000 may sound like a lot, but that amount can easily be absorbed just in the professors time prepping and managing the class. Now add on the rest of the overhead of high paid SV engineers, offices, support, etc...
The end result, an enormous amount of things have to go just right in order to cover your base costs. Even if those things go just right, you still have a huge amount of pressure to create classes with the broadest possible appeal with the highest possible number of students completing the course (in order to have a chance of testing revenue). Those market pressures do not coexist well with academic integrity and high standards. They also don't support classes that might "only" have a few thousand students.
There other ways to get to free education for all (we're on that path ourselves), but starting out as free without the backing of a large university is a tough proposition.