Wednesday, April 18, 2012

The Next Wave of EdTech: 12 Years After the Last Bubble, Have Investors Figured Out the Market As We Enter the Next One?

Over the past few weeks, the technology press has focused on a new wave of investments in online learning.  (It's interesting, those of us in the field moved from using the term online learning to e-learning in 2000; investors have remained with the term online learning.  But that's another discussion.)

For example, the Chronicle of HIgher Education has been running a series on new educational technology startups and the New York Times has run a series of similar features. Its series highlights a variety of startups, including one that helps professors manage e-mail from students.  (See Students Endlessly E-Mail Professors for Help. A New Service Hopes to Organize the Answers at

Many of the features in the Times focus on services providing online courses, like a feature on a series of online services that provide training on various languages for writing Internet applications (see A Surge in Learning the Language of the Internet at  

In today's edition, the New York Times reports on a large investment in Coursera, a company founded by some professors at Stanford and that provides university-based courses for free online (see Online Education Venture Lures Cash Infusion and Deals With 5 Top Universities at

Nestled between the enthusiastic reporting for these new ventures are some troubling details:
  • The founder of the e-mail company has
"no plans to generate revenue—the service is free and does not carry advertisements. Ms. Sankar said that she didn't write a business plan for the site, because she doesn't believe in them, and that she believes that once a critical mass of students and professors are signed up, revenue models can emerges" (quote from the article from the Chronicle cited above).  
Isn't that how the tech bubble burst the last time?
  • The quality of the free and low-cost courses for writing Internet applications mentioned in the New York Times article sounds pretty poor. An expert acknowledged that most students who complete these courses still cannot write applications.  One company quoted in the article admitted publicly that its courses could be improved.  
  • If one reads the fine print, the free university courses offered by Coursera and its competitors don't fully compete with those from universities. If students want feedback, they only receive it from other students. Sounds like a good plan but the article never explores the participation rates of students in these students-evaluate-students programs. Avoiding teaching assistants reduces costs, but if participation rates of students in evaluating one another are low, then many students might go wanting for feedback. (This is a real concern; the courses are voluntary, after all.)
Students also do not receive university credit; they receive certificates of completion.
The courses have no measures to protect against cheating.
And, most significantly, when the article cites the impact of courses on students, they have no figures to report. They provide qualitative data.  That's fine, because it provides insights into whom and how the courses affect students.  But both of the students mentioned are working professionals, rather than degree-seeking students.

Perhaps, then, these services are not really meant to replace universities; they're the beginnings of an online system for continuing professional education.  The only problem is, it doesn't sound like the founders of these companies have figured that out yet and, even if they have, the courses might need extensive rework before they can help workers really develop the skills and knowledge they need to succeed on the job.  

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