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Coursera’s Big News

Posted on May 30, 2013

The announcement of Coursera’s new deal with nine state university systems and flagship campuses is interesting.  Coursera will provide a suite of services and products including its MOOC platform, complete courses, technical assistance consulting, and analytics – in short, bundled services.  I have an upcoming piece in Inside Higher Ed on the growing bundled services business, but for now a few thoughts on the Coursera announcement:

1.  “Wow, Coursera is everywhere and innovating aggressively.” OR  

2.  “Wow, Coursera is flailing in the search for revenue (remember, they do have investors to satisfy) and reverting to the means.”

3.   What do I mean by the latter? They are quickly abandoning their contractual obligations to the elites that got them a name (they’ll have a “lesser” section of schools), moving to monetize their platform (note the Blackboard and Canvas quotes in the Inside Higher Ed piece, and owning up to what they really provide: high branded content (“Koller said she now wants people to start thinking of Coursera content as a textbook.”).

4.  Good news for them is wider market (no real workable revenue model yet), but dilution of brand really driven by elite names will start to undercut their main appeal.

5.  Will be interesting to watch faculty backlash build as they go into heavily unionized systems that resent being told that elite profs teach better.  “We are just content really” is a defense against the fact that they are content with an ostensible faculty member attached (albeit a video), so some administrators think “Hey, we can do with fewer faculty.”  Note the SUNY administrator: “We hope to reach more students with the existing faculty that we have.” 

Coursera will have to eventually figure out how to compete with giants like Pearsons. 

It will be interesting to see how long they let two professors try and figure out the business side of things before they announce that they will take on “thought leadership” roles and bring in an actual business person to run it.  Daphne Koller and Andrew Ng are incredibly smart and every time I hear them speak about Coursera I am more fully convinced about their idealism and hopes for creating good.  But investors with tens of millions of dollars tied up in a new venture with no real workable business model will only have so much patience.  Founders are rarely builders.

One scenario: their burn rate gets higher and investors want to cash out and Pearsons (or someone like them) buys Coursera.  Pearsons (or like owner) will then say they are going to let Coursera operate largely autonomously so enamored schools don’t abandon them, but that will be less and less true as other functionalities and services and content get layered on.

That’s my five minute “take” or commentary on the latest developments.  I’ve always thought of Coursera as fundamentally high branded content.  Like other content providers it is now adding an LMS and other services/products to its suite of offerings and realizing that it’s “free to the world” model is not sustainable.  So it, like other content providers, is turning back to the conventional higher education market and it will now have to learn how to leverage its early advantages (elite brands, tons of media buzz, general setting aside of the fact that this is a for-profit venture, smart idealistic leadership) into a business that can compete with the Pearsons and McGraw-Hills of the world.

Of course, crystal balls are infamously flawed instruments…







One thought on “Coursera’s Big News

  1. Steven Mintz says:

    I can imagine an alternative business model: Going public. In this era of crowdfunding, it may well be that individuals might acquire Coursera stock if it were to announce an initial public offering. In that circumstance, the partner institutions would, I assume, share in the profits and elect to remain in Coursera, something that might not happen if Coursera were to be bought up by a corporation.

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