Coursera CEO Interview: Mike Caulfield nailed it two months ago

Two months ago Mike Caulfield lamented the inability for many people in online education, especially massive online initiatives, to honestly learn from the past. In the post Mike referred to the failed AllLearn initiative and the seminal post-mortem written up in University Business.

How does that relate? A paragraph from the 2006 post-mortem of AllLearn really stuck out for me:

Oxford, Yale, and Stanford have kept quiet about the collapse of their joint e-learning venture…[h]owever, AllLearn’s closure could offer an unprecedented opportunity to step back and discuss the strengths and weaknesses of the business model… Further research into the series of collapsed online ventures may shed some light on what makes a successful distance education program, and enable some of the surviving online providers to redefine their business models and marketing strategies accordingly

Of course they don’t delve into these things honestly, and as a result most people in these institutions are unaware of them. Like Leonard, the institutions alter the record of the past. They wake up the next day with amnesia, consult a set of dramatically altered notes, and wonder why no one has tried massive Ivy League courses yet. The PR push to cover one’s tracks ends up erasing the institutional knowledge that could build a better initiative.

Little did Mike realize that he was writing a script.

One month later Coursera hired Richard Levin as its new CEO. As president of Yale, Levin was one of the key figures in the creation of All Learn in 2000, and after the 2006 collapse of the initiative Levin was one of the key figures directly responsible for the Open Yale Courses initiative.

The consensus view is that AllLearn failed to generate enough interest in its non-credit elite courses, and subsequently the program closed due to economics (by Levin’s own previous admission). In 2005 AllLearn attempted to address this challenge by branching beyond alumni as related in this Yale Daily News post [emphasis added in all quotes below].

“I think we’ve learned a lot form the experiment,” Levin said. “While I believe we’ve produced some very high quality courses, we’ve learned that it’s hard to generate large audiences sufficiently from these courses from just the alumni of the three partner schools. So we’ve reached out to attract broader audiences through affiliating with universities and through finding other organizations that might have an interest in making courses available to members.”

Fast forward a year, and it is clear that the effort had failed economically despite the broadening of audiences, again from the Yale Daily News.

Yale President Richard Levin, who served as AllLearn’s chairman, said he thinks that while the participating institutions learned what is necessary to manage a successful distance learning program, they were unable to make the project financially viable.

“We are disappointed that we weren’t able to find a way to make this successful economically,” Levin said. “[But] we learned a lot, and I think it will serve us well in the future.”

Open Yale Courses also provides non-credit elite courses. The problem? You might have guessed it, as described by this 2012 report for the Committee on Online Education.

Open Yale Courses has been supported by generous grants from the Hewlett Foundation, but those grants are ending this semester; and there is no provision yet for the continuation of this program. There has been extensive planning, however, to keep the 42 existing courses on the Yale site as well as the iTunes U and YouTube platforms. All of the courses are being stored and preserved for future study. New visitors are discovering Open Yale Courses daily and global media coverage, which has been constant and enthusiastic since the start of the project, continues unabated.

The initiative is now attempting direct solicitation as a method of funding.

I don’t mean to question Levin’s good intentions nor his considerable support of the mission of making education more accessible through online technology. However, I find it disingenuous to try and alter history. This week the New York Times interviewed Levin about his new role as Coursera CEO, and the reporter asked some good questions but lacked follow-up.

Q. Yale has not exactly been a mass institution.

A. No, but we were early in the on-line arena, with a venture back in 2000 called All-Learn.

Q. How much did you lose, and why didn’t that spoil this for you?

A. It was too early. Bandwidth wasn’t adequate to support the video. But we gained a lot of experience of how to create courses, and then we used it starting in 2007 to create very high quality videos, now supported by adequate bandwidth in many parts of the world, with the Open Yale courses. We’ve released over 40 of them, and they gained a wide audience.

So here we have yet another initiative offering non-credit elite courses, and one of the biggest challenges that Coursera faces is that it has yet to find a viable business model. The company is living on $85 million in venture capital investment and has not yet found revenue sources that go beyond a few million dollars per year (Signature Track). Levin called out this challenge in the same NYT interview.

Q. Doesn’t edX have an advantage in being not-for-profit, meaning they don’t have to worry about returning on investment so soon? Yesterday Andrew Ng said, “We’ve raised $85 million, so we’ve got some runway.” How much runway?

A. I think the principal investors in Coursera understand that this is a long term play. We’re fortunate to have patient investors; and as Andrew said, we’re quite adequately capitalized. I think we can become financially viable certainly within that five-year framework.

Q. You’re an economist. How do you get from here to there?

A. Right now courses are free and we’re charging for certification. We think that as the idea of using Coursera courses for professional advancement grows, the numbers seeking certificates will grow. And the price we charge probably can grow, too. A move from $50 or $60 for Signature Track to $100 is certainly imaginable. At $100 a pop, if you had two or three, or five million people. …

I would suggest that Coursera will not “get from here to there” by altering the record of the past. AllLearn failed to generate sufficient interest in its courses, and the proximate cause was not “insufficient bandwidth”. AllLearn in fact had several approaches that alleviated bandwidth concerns, including CD-ROM delivery and the ability to turn off high-bandwidth features. AllLearn’s average learner was a 47-year-old Yale alumni – hardly a case of low-income lack of access to sufficient bandwidth. Plenty of online ventures started in 2000 or prior have succeeded – Penn State’s World Campus, UMUC, most large for-profits, UMassOnline, University of Central Florida, etc. This was not a case of being “too early”.

Read the University Business post-mortem and the Yale article. The issue involved economics and insufficient revenue to offset expenses.

Coursera and all the xMOOC providers have this same long-term challenge of adequate business models. I called out this challenge as one of the four key barriers that MOOcs faced, based on a July 2012 post. I speak as someone who would like to see MOOCs succeed – not in their current form, but in a form that evolves to better meet learner needs. This healthy evolution won’t happen, however, unless the providers honestly evaluate the lessons of the past.

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