Published on 2012/12/07

Finally, a Business Model for MOOCs

Massive Open Online Course providers have been grappling with the social good of providing free, high-quality education while trying to meet the realistic need to generate revenue. It seems as though headhunting is the answer.

Udacity has been running a job program for some time that has 350 partner companies. In effect, the MOOC provider goes through its database of students to find candidates who would be good matches for openings at these partner companies, who include Google, Amazon and Facebook among others. Udacity founder Sebastian Thrun was schtum on the fees charged to be a part of the job program.

“Significantly less than you’d pay for a headhunter, but significantly more than what you’d pay for access to LinkedIn,” he told Jeffrey Young of The Chronicle of Higher Education.

Tamir Duberstein, a student who found a job as a result of Udacity’s job service, said the competency-based elements of the MOOC model really helped him in the interview, which included a number of technical questions.

“The point here is not credentialing,” he told Young. “They quizzed me. They really were assessing what I know for themselves.”

This truly encapsulates the value of MOOCs for many students; while it may not lead to a degree or a diploma, it provides the necessary skills to succeed in the job market. Thrun said since MOOCs have the capacity to glean data about a student’s soft skills by their behaviors in class—for example whether they were consistently helping other students in discussion boards—it makes them better to assess whether a particular student would be a good fit for a corporation.

“Problems are never solved in isolation in the real world,” he told Young. “[The tendency to help other students] has been a better predictor of placement success than academic performance,” he added.

Coursera announced last Tuesday that they would begin a similar program, where companies would pay to be part of Coursera Career Services. Since the MOOC provider works with specific colleges, the college has to be on board with the program in order for students taking courses delivered by faculty from that school to be eligible.

In effect, companies will pay a flat flee for every introduction made between Coursera and their corporation. Then, between six-15 percent of that revenue is shared by Coursera with the institution offering that course.

“Some universities are still thinking it through, so not all have said yes,” Andrew Ng, the co-founder of Coursera, told Young. “I don’t think anyone said, ‘No now and no in the future. … This is a relatively uncontroversial business model that most of our university partners are excited about.”

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