Udacity’s Pivot

While I wanted to first deal with some of the excess backlash that latched itself onto recent changes in direction from the MOOC pioneer Udacity, I also don’t want to pretend that their recent “pivot” means nothing with regard to both the reality and perception of online learning (massive, open or otherwise).

First off, it needs to be stressed that the company is not planning to erase courses from their servers or sell those machines for parts.  In fact, if you check their site you will see a new set of courses that will be released soon as well as some interesting features they plan to add to enhance the experience of people learning through their system.

But rather than looking to ever larger numbers of people signing up to take a course as a measure for success, they are now trying to find ways to ensure that more of the people who choose to enroll in a Udacity class are actually committed to finishing it.  So while they will continue to allow anyone to sign up for one of their publically available courses (and either complete them or not complete them as they like), they will also be targeting groups such as employees or job seekers who are ready to demonstrate commitment to a job-specific training program by paying cash or earning some kind of scholarship or corporate sponsorship.

In interpreting this change in strategy, you should keep in mind two phrases that have become part of the catechism for the start-up culture concentrated in Silicon Valley: “Hypothesis Testing,” and “The Pivot.”

You can learn about both in detail by taking Steve Blank’s Udacity class on how to build a startup, but the underlying notion is that those creating a business should approach such a project as a series of scientific experiments in which various hypotheses are developed regarding the viability of a product or the existence of a market with those hypotheses put to the test in the real world.  This might involve creating a “Minimally Viable Product” (or MVP) to show to potential customers, rather than following the more typical step – a favorite of engineers – of building something only to discover later that you got it wrong (or no one wants it).  Experiments might also involve interacting with people whose problems you are trying to solve to see if they actually have that problem and (crucially) would be willing to pay for your solution.

“The Pivot” involves changing your strategy based on what you learn during hypothesis testing, rather than blindly follow down a pre-defined, faith-based blind alley (potentially towards doom).  For startups, such pivoting might be frequent and wrenching, which is why it’s vital that it is the founders of the company who “get out of the building” to interact with people other than each other.  That’s because only the people at the top of the pyramid can ask an organization to perform the kind of two-step that might take a company in a wildly different direction than the one originally envisioned.

With these two concepts in mind, it becomes clear (or at least clearer) why Udacity was ready to engage in high-risk projects, such as that remedial math program at San Jose State or their MOOC-for-credit partnership with Colorado, both of which ended in failure.  More risk-averse companies would have avoided efforts that might lead to bad press (which San Diego and Colorado did – both for Udacity and for MOOCs in general).  But Udacity seems to have been committed to testing the hypotheses that MOOCs could be used to test masses of high-risk students or that a market in for-credit MOOCs existed in order to reality check their assumptions and pivot accordingly.

Now most companies try to do this kind of experimentation before they get millions in investment and announce to the world that their new disruptive technology will eventually reduce the institutions they plan to both disrupt and partner with to rubble.  But here we reach the part of the Udacity story where the nature company’s founder, Sebastian Thrun, might provide some insight.

For it’s not entirely clear if a professor less well known than Thrun would have generated the kind of precedent-setting numbers needed to jump-start the MOOC project by offering the first iteration of an untried online learning experiment.  And the drive needed to get Stanford to say “Yes” to letting his course go out under their name, coupled with the connections needed to start a company based on that success (within months, no less) are more likely to be found in a serial entrepreneur than a serial manager.

But if each of the major MOOC providers has its own character and tone, the nature of Udacity always reflected the vision of its founder.  For Thrun is an engineer, more Tony Stark than Harold Bloom (look it up), which is why the courses his company offers focus on subjects that are quantitative, measurable and objective (computer science, engineering and math vs. art history, French literature or *gasp* philosophy).  This choice fit in nicely with a teaching paradigm that leveraged assessment more than any other MOOC provider.  But it also made a pivot towards corporate (read computer) training and away from academia all the easier.

It needs to be pointed out again that Udacity is neither going away, nor ending it’s free course offerings to the world even as they pursue other ways to leverage their content.  Which kind of brings us back to an issue I mentioned a couple weeks back regarding how do you define what is and what is not a MOOC?  Does Udacity’s change of plans mean that I wasn’t MOOCing when I took three of their courses for my One Year BA?  Or perhaps I was, but anyone who starts the same course today is involved with something else.

You will invariably end up dealing with these kinds of absurdities if you base your decision on who’s in and who’s out of the MOOC club on empirical criteria like course components or vendor.  But if you reserve the MOOC label just for companies that have chosen to push the envelope with regard to online learning, few companies have taken more chances or involved themselves in more important experiments (including their latest one) than has Udacity.

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3 Responses to Udacity’s Pivot

  1. John Swope November 30, 2013 at 4:50 pm #

    I also don’t see this “pivot” as an admission of failure from Sebastian Thrun or the MOOC idea in general.
    As we’ve experimented with MOOCs over the past few years, we’ve seen a few different customer segments start to form. One of them is the “education-for-pleasure” group, who are already well educated and take MOOCs for the enjoyment of learning something new. For this group, I think the Coursera format works and the ability to explore courses without penalty is a great feature, albeit one that leads to high drop-outs and less monetization opportunities.
    Another group is students who really do want to advance their education and their career. These students will benefit from having tangible, project-based experience at the end of a Udacity course. I expect Udacity will attract fewer students, but more dedicated students. And I expect those students will have more luck leveraging their MOOC experience into some sort of career improvement.
    Two different groups, two different services to cater to those groups. It is the sign of a maturing market.


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