Coursera – Revolutionizing Education For Anyone, Anywhere
As Nelson Mandela once said, “Education is the most powerful weapon which you can use to change the world.”Coursera is attempting to do just that by providing “world-class learning for anyone, anywhere”.
#winning
As Nelson Mandela once said, “Education is the most powerful weapon which you can use to change the world.” Coursera is attempting to do just that by providing “world-class learning for anyone, anywhere”1. The company the internet to revolutionize education by launching an online learning platform in 2012.
It is a two-sided platform connecting users to online content developed by more than 190+ universities and companies2. The platform currently has various product offerings (e.g. certificates, degree programs) with a wide array of pricing. Through its partnerships, Coursera has managed to build a large and diverse portfolio (e.g. Arts and Literature, Computer Science, Business) to cater to a large audience.
The company is increasing access to education, lowering costs and increasing flexibility.
With more than 45 million users3 and a valuation of over $1 billion4 in 2019, Coursera is perceived to be the “largest provider in the online education market”5. It achieved this by undertaking a variety of strategic business decisions, some of which are highlighted below.
Adapting Business Model and Growing Partnerships
Coursera started off by offering free online courses through partnerships with various universities, helping it grow its user base. Once the initial value proposition (online education) was validated, the company started monetizing the platform by identifying key revenue streams that would enable it to grow without losing its existing core users.
In order to do so, Coursera adopted a “freemium” model whereby users were still allowed to access course material for free but would need to pay a fee to get their assignments graded and to receive a certificate. This was labeled as “Signature Track”.
Also related to B2C, the company increased its offerings to include “Specializations”. In addition, the company revolutionized access to degrees by launching bachelor and degree programs that could be earned fully online.
To access new customers and more stable and consistent revenue streams, the company expanded to a B2B model and launched “Coursera for Business”. Under this model, the company partnered with businesses to offer courses on its platform and/or to provide them with an online platform to train their employees.
The company continues to innovate on its offerings and to expand its partnerships to keep growing its revenue. As an example, it is partnering with governments across the world (e.g. Singapore, Egypt) to support them in upskilling and reskilling their citizens.
Harnessing the Power of Network Effects
The company focused on reinforcing both the same-side and the cross-side network effects to keep growing. By keeping some aspects of the platform free and offering a wide variety of courses, the company managed to keep and continue growing its user base.
To reinforce the same-side network effects, the company focused on creating a social community amongst users through various initiatives such as online forums (Q&A, schedule online study-sessions, etc.) and peer grading This created a well-connected community among users which in turn increased engagement and allowed users to interact freely with each other and enhance their experience.
The platform also has cross-side network effects. On top of the large user base, partnerships with renowned universities (e.g. Stanford, Princeton) helped attract more institutions to partner with the platform. The move to partner with businesses also helped grow the supply-side.
Leveraging Data and Machine Learning
The company has focused on harnessing the power of data and leveraging machine learning to improve the platform. In fact, the company has a wealth of data at its disposal such as click rates, time it took to complete an exercise, when do learners drop-off, data from forum questions, etc.
An example of a use case that the company has implemented is focused on increasing user engagements through personalized targeted emails.6 Another use case focused on updating assignments based on the historical performance of students.7 A third example revolved around recommending the “next-best course” based on previous course selections.8
The company is determined to continue harnessing the power of data to help it across various use cases from increasing retention to developing content.9 Properly leveraging data can help the company improve various touchpoints across the learner journey.
In summary, Coursera has revolutionized the learning experience through its online platform. It revolutionized education for individuals looking to improve their knowledge or grow particular skillsets. It revolutionized education for businesses and governments looking to upskill and/ or reskill their employees and constituents, respectively. In addition, it started disrupting access to degrees by offering fully online bachelors and masters programs.
Yet, it is important to note that the online education market is comprised of multiple players and it will probably not be a winner-take-all market. Even though online education platforms do have strong network effects and the supply-side scale drives up barrier to entry, there is still a high multi-homing aspect given that it’s cheap to alternate between platforms (i.e. users pay per course) and given that players can differentiate their offerings (e.g. Codecademy for learning to code).
Endnotes
1 Coursera, Coursera, www.coursera.org.
2 Ibid.
3 Ibid.
4 “Online Education Provider Coursera Is Now Worth More Than $1 Billion”, Forbes, April 2019.
5 “How Coursera Makes Money”, Investopedia, July 2019.
6 “Coursera improves online education using — you guessed it — data”, VentureBeat, November 2013.
7 “AI in education: Can AI improve the way we teach and learn?”, Neoteric, June 2019.
8 “How is AI Improving the Education Industry?”, Ifthen.ai, June 2019.
9 “What’s Next for Coursera and FutureLearn? Insights Revealed at the EMOOCS Conference”, IBL News, May 2019.
Great post! I am wondering what the risk from competition looks like in this space. Thinking about what HBS is doing with the HBX platform, I am wondering if more schools (like the aforementioned Stanford and Princeton) will end up trying to make their own independent online course platforms. This may impact the paid B2B portion of Coursera’s revenue, especially since the certificate or degree you get at the end might be considered more prestigious.
I agree, though what I’ve found with Coursera is that the courses are offered by a mix of both world-famous universities as well as lesser-known (at least internationally) universities. For the former, I think in-house online courses that are increasingly being offered by these universities could be a significant threat. However, for the latter, Coursera can continue being a platform through which they reach a global audience and enhance their brand value. Perhaps Coursera should focus on expanding its customers in emerging markets, where they are likely to find higher success due to these trends.
Thanks for sharing about Coursera! I have been familiar with them as they partnered with my college university, and some of my engineering classes were taught in person while simultaneously being offered online to people who didn’t go to my school. I think it’s very interesting to see how they have used their partnerships with universities to supercharge their credibility as a brand, but I wonder what the universities will think about Coursera competing with them by offering their own bachelor degrees. Do universities earn ongoing royalties for courses their professors create, even if they are used for these other degree programs? Is there an IP concern about who owns the courses that are developed?
Coursera has found success as a platform for hosting learning in the education, business, and government markets, but do they create their own content? To truly succeed, they must become more than a commodity and win going forward, they must become a brand which consumers think of on their own terms.
Thanks for sharing! I think one thing that’s interesting to consider is whether it’s helpful to learn from classmates in a discussion format and whether Coursera will be able to replicate that.
Of course, with the case method at HBS, a lot of the learning comes from learning from classmates. I have found this to be one of the most valuable parts of HBS, not just in the classroom, but also learning from their life experiences and perspectives outside the classroom. That is something that I don’t think Coursera can replicate and should keep traditional models like HBS alive and valuable.
However, I just enrolled in my first lecture-based class at HBS without a case discussions. The lectures are also filmed, so we can re-watch them online later. I must say that I both learn better and faster by watching the video recording of the lecture. I feel that I am not missing anything, because it is just a lecture and I therefore am not missing perspectives from classmates. Additionally, I am gaining because I can watch the lecture at 1.5x speed and pause or rewind if I am slow to understand something. I therefore do see value in the online model for lecture-based classes.
I agree that Coursera is a winner, and especially for taking courses in one-off topics, I think it is an option that I will consider in the future.
Thanks again for posting!
Great post, Danielle!
I agree with your analysis that the market for MOOC is large and multiple players catering to different segments of this market can operate together in harmony. But wonder how a for-profit organization like Coursera plans to keep its edge against an almost similar-segment player like Khan Academy which is non-profit and is free. Quality of content could be a differentiating factor. I wonder if Coursera been able to use technology to bring itself an advantage over Khan Academy?
Great post. I agree that there is room for multiple players to operate, however, this MOOC model (like many others) does not address the question of trust/credibility of qualifications- and when it does, the economics of scale lead the business to select options that benefit the business at the expense of the students. ‘Peer grading’ is an innovation that you’ve mentioned above- however before peer grading is effective, peer quality/qualification has to be considered. It’s cheaper for a platform like this to have students check each others’ work- however, how does a platform like this ensure that we don’t end up in a situation where the blind are leading the blind? There’s little or no control over which peers can access the platform.
In terms of the ‘weight’ of a digitally acquired learning qualification, it’s hard to imagine employers who think that the rigor of a Stanford online course will be equivalent to a degree from the institutions- thus universities are hesitant to put their logos on these course certificates and users struggle to share them with the market given the limitations in recognition. How do platforms like Coursera think about resolving this challenge to demonstrate meaningful learning?
Thank you for your reflections on Coursera! I did use the platform some years ago and had a great experience doing so!
Although I agree that Coursera is a multi-sided platform, I am not sure if all dynamics of a multi-sided platform completely apply to it, specifically the network effects on the side of the course providers. In regular platforms, network effects work because the number of one side of the platform increases the value of that platform to the other side, and vice-versa. In that sense, once a platform is big enough, if some individuals or organizations leave, there wont be a big effect in the overall value of the platform. However, in Coursera, brands like MIT, Stanford, Yale, etc., carry a lot of the value of the platform (I remember I only used Coursera because of such names). Given that such names are extremely important for Coursera, I would be afraid of the business model because if these few players leave the platform than much value is lost and there is little differentiation from other platforms (e.g. Udacity, Edx, etc.). In conclusion, I think Coursera has done a great job so far, but I fear that its position is more fragile that it looks like in a first glance.
Great article! Thanks for sharing! I wonder how Coursera and similar platforms will change the nature of higher education. I know institutions such as MIT are already posting all lectures for some courses on public forums for individuals to have greater access to quality education.
While it may be difficult to have MOOCs fully replace universities on their own, there are significant implications for public education, the rise of flipped classrooms, and the need to fundamentally rethink what it means to have higher education. Will employers begin recruiting individuals with certifications that never attended class in a physical university? Will these certificates carry the same weight as a diploma?
Furthermore, this could have major implications for the issue of student debt in America. With so many young people accruing loans which take decades to pay off for their higher education, something like Coursera’s offering becomes increasingly attractive.
Of course, this also leads to tradeoffs related to the university experience. Are there ways to mirror or replicate the social experience of college which enables personal growth? Is there a difference between liberal arts and STEM degrees on these platforms? How does performance change the nature of recruiting for employers? These questions highlight the disruptive nature of Coursera’s offering which may change education worldwide in the years to come.
Great article ! It seems Coursera has been able to capture value by partnering with many large players including big businesses and governments. Interesting to also hear about how they have leveraged data to try and gain a competitive advantage – I wonder if these initiatives have seen real impact from customers.
Great post and thank you so much for sharing this piece on online education.
Having worked in the space for the last 6 years, I am super excited to read this piece. I agree that Coursera has done a lot of good work in the education space in trying to revolutionize highere education.
They are one of the fews that have really cracked the B2B market – currently they’re doing around $150m of their $200m revenues in the B2B space. They’ve also been headed towards launching more and more degree programs i.e. iMBA with University of Illinois (they shut down their on campus program to do online only), Masters of Data Science with Imperial College etc., at lower cost than 2U i.e. $22k for the entire MBA degree.This degree-play can be a true differentiator for the firm going forward.
However, there are still many open questions left to be answered i.e.
– How does Coursera create a sustainable business model that, at the same time, allows for high engagement? A revenue share model with a university partner is not particularly beneficial from a unit economic perspective and yet needed in order to create degree programs.
– How can the firm establish its own brand that carries value?