I have worked for 3 ‘internet startups’ over the past 14 years (my first .com was in 1999) and the two that relied on ‘free’ models (even with ‘freemium services’) did not survive. The one with a simple, clear business model that demanded payment up front is alive and pretty profitable (not Google, but a nice business that employees 25 people and provides value to customers). From DeSantis:
Coursera, the online-education outfit founded by Stanford professors Andrew Ng and Daphne Koller, will grow its course platform through official partnerships with three more top-tier institutions, the company announced today. Princeton University, the University of Pennsylvania, the University of Michigan at Ann Arbor, and Stanford will use Coursera’s technology to offer a mix of classes including computer science, business, and literature. The young company already serves seven courses, and about 30 more will be rolled out later this week and through the summer.The courses are offered free to anyone online, though students cannot earn university credit. Ms. Koller said Coursera will leave the choice to award unofficial credentials like certificates of accomplishment up to its partner institutions. And students cannot interact with the professors directly—for feedback, they can use an online forum to ask and rank questions, where popular submissions rise to the top. Quizzes embedded in the course videos test students’ understanding of the material as they go along.Ms. Koller said that in addition to opening courses to the entire world, Coursera’s platform could allow professors to build a better face-to-face experience by “flipping” their classrooms. Under this model, interactive classroom instruction replaces the traditional lecture, which is presented in other formats for students to absorb outside of class.“Our vision is that this kind of technology is going to improve the experience for both populations,” she said.Ms. Koller pointed to her own experience using the flipped classroom to explain why students would choose to pay top dollar to attend institutions like Stanford and Penn instead of simply getting their education free using Coursera’s platform. She said one of her classes has long been recorded and televised, partly because of Stanford’s need to support students who take courses through a continuing-education program at the university. Attendance would typically drop to about 30 percent of enrollment by the third or fourth week, she said.
Later on some more interesting information from DeSantis:
Other emerging providers of huge open online courses, such as Udacity and MITx, have so far limited their offerings to computer-science courses because the assignments can be automatically graded by computers, making it easier to teach hundreds of thousands of students at once. Coursera, meanwhile, plans to power classes in computer science, as well as courses in the humanities—though the company is still developing plans for the humanities classes. Ms. Koller said those courses could use a peer-assessment model in which some of the grading gets outsourced to students, who would use rubrics as guides to judge their peers’ work.
“They didn’t want this to be an engineering-centric effort,” Ms. Koller said of her company’s partner institutions.
The company’s founders said they have limited their partnerships for now because Coursera is a small company, with about a dozen employees. They plan to focus on teaming up with top institutions, because those colleges have the highest concentration of talented faculty members working across disciplines—though they added that discussions with other potential partners are continuing. (Two of the classes listed on Coursera’s Web site, “Computer Vision” and “Software as a Service,” are taught by professors from the University of California at Berkeley, but Ms. Koller described Coursera’s relationship with that institution as “experimental.”)
To keep growing, Coursera will pull from a rich venture-capital investment provided by two prominent firms. Kleiner Perkins Caufield & Byers and New Enterprise Associates have invested $16-million in the company.