Innovation in Education - Udacity is Changing the Model

Aug 19, 2015

You must have heard the age-old, sage advice that when the going gets tough, break down those big, unwieldy projects into small, achievable parts so that you feel a sense of accomplishment as you complete them.  More importantly, you feel inspired to keep going until you reach the finish line.

Udacity has had the audacity to do just that, in a good way. Stanford professor and Google X founder Sebastian Thrun created this education startup to offer free, online classes on technology topics such as artificial intelligence and data visualization.  By the way, Google X is responsible for innovative technologies such as self-driving cars, smart contact lenses, Google Glass, and internet bearing balloons.

While this was a great idea, the first results were disappointing, as Udacity was unable to get more than 10% of its students to complete their courses. As a result, the company developed an innovative strategy; by focusing on being in demand, it is now offering Nanodegrees. 

The company partnered with Google, Cloudera, Facebook, and Salesforce to offer six credentialed, project-focused programs. Because the courses are shorter and offer the specific skills they need to be in-demand at that moment in time,  students are more driven to complete these programs.

According the article in Business Insider, “Although all classes are still available individually for free, nanodegree students pay about $200 a month for between six to nine months to work through a program in which they'll get one-on-one project feedback (if they complete the program fully, they can get half of that tuition back). The change seems to be working. Thrun says that Udacity's new nanodegrees have twice the student engagement and retention as the former course-centric approach, and sign-ups are increasing 34% month-over-month. The company, which has raised $55 million, hit profitability for the first time in August.”

What does this mean for higher education? I am convinced that on-line education is going to change the way students learn. I don’t expect the brick and mortar universities to go away, but the high costs in this $400 billion business create the need for a change. In the next 5 to 10 years, you will see students mixing and matching these two types of schooling to make education not only cost effective, but meaningful in the real world. And who really wants to give up the quad? Social life is an important part of higher education, and by this I don't mean social networking like Facebook.

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Alpa Shah


This May marks my 22th year with Frost & Sullivan. Being part of a fast-growing company and dynamic industry, an entrepreneurial culture, and a fun environment is invigorating and worth every moment. My professional and volunteer experience includes business and strategy planning, product and vertical market analysis, growth consulting, event planning and execution, sales and marketing, web design, and most importantly, creating and inspiring teams to be best in class. Consulting projects have ranged from strategy development to white papers to end user analyses. My focus now is to guide visionary CXOs and IT leaders through the next era of digital transformation with the help of a IT experts and analysts across all industries. Prior to joining Frost and Sullivan, I worked for Smith Barney for 5 years in its accounting division handling incentive compensation plans. In this position I was responsible, from an accounting and payroll perspective, for the capital accumulation and deferred compensation plans of top management and account executives. Thereafter, I worked as an account executive at Edward Jones, a brokerage company for approximately one year. In these positions, I learned much about the operations of a financial company, financial instruments, and sales techniques.

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