With its free online courses, Coursera is bringing the world's top universities to the farthest corners of the world.
Headquarters: Mountain View, CA
Year Founded: 2012
Raised: $22 million
There are 195 countries in the world. Coursera has users in every one of them. Not bad for a start-up that's just one year old.
Founded by Andrew Ng and Daphne Koller, two computer science professors at Stanford University, Coursera is an online platform that lets people take free online courses from the world's top universities. It's a leader in the fast-growing industry centered around these so-called "massive open online courses" or MOOCs. The Mountain View, California-based company now has 40 employees and 3.2 million users. It has raised $22 million in funding from the likes of Kleiner Perkins and New Enterprise Associates. More than 60 universities, including Princeton, Columbia, and Stanford, are currently offering nearly 400 courses on the site. The goal, says Ng, is to exponentially expand the reach of higher education institutions and eliminate the biggest universal barrier of entry to gaining an education: the cost. Judging by the numbers, so far, so good.
Scaling the classroom
Ng first experimented with online education five years ago, when he started posting his course material on YouTube. Before long, each video had generated at least 100,000 views. His Stanford class, by contrast, had just 400 students a year. "To reach a comparable audience, I would have had to teach at Stanford for 250 years," says Ng. He knew he was onto something.
In 2011, Ng partnered with Koller and began working on the Coursera platform, which officially launched in April 2012. Stanford, the University of Michigan, the University of Pennsylvania, and Princeton were the first schools to launch courses on the platform, but unsurprisingly, other universities we tougher to convince. "Why on earth would anyone still pay $200,000 for a degree if they can take the classes for free?" says Ng of one of the most frequently asked questions. Teaching a MOOC is also a huge time commitment for professors, who have to develop full presentations to post online, separate from their in-class lectures. Gradually, however, universities have been coming around. "The real value of a Princeton education isn't just the content, and these universities know that," he says. "They could all admit five times as many students, but they don't because they can only fit so many people on campus."
The beginnings of a business model
With a solid stable of universities and users in place, the next obstacle Coursera faces is finding a revenue model that satisfies investors and doesn't alienate the users who need Coursera most. "It's probably not the decision of a normal company to spend so much time trying to figure out how to serve people with exactly zero dollars, but as an educational institution this is the only way I'm interested in operating," Ng says. "We're a for-profit, but if I had to choose between making money and changing millions of lives, I'd much rather change millions of lives."
That said, Coursera is now offering its students the option of buying a certificate of completion upon passing a course. A certificate will cost anywhere from $30 to $100 per course, and a fraction of that revenue will be split with the universities. Anyone who can't afford to pay can apply for financial aid and receive a certificate for free. In addition to certificates, Coursera is also toying with the concept of referring top-performing students to potential employers and charging those businesses for recruiting services. Finally, Coursera is also exploring the idea of licensing content to community colleges for a fee. Charging students directly, Ng says, will never be an option. "I want to live in a world where everyone has access to a great education for free," he says. "Imagine if your success in life is determined only by your guts, your hard work, and your willpower, and not by the wealth of your parents. I think it'll be a much more interesting world. I think this could change the way the planet is run."