EdTech 101 Series : Inversion of selection

Imagine, you have a product or a service to sell. Would you select your customers or your customers would select your product or service? Employers select their employees because employees offer a service and employers are customers. Now, when this selection is outsourced to universities, it creates a situation where as service providers, universities have the power to select students who are in fact their customers.

Education is the only industry today perhaps, which selects its customers. This has implications on the nature of competition and in turn, quality of services offered, operational efficiency and value creation. I believe, educational technology has a potential to invert this and make this industry customer centric again.

Traditionally, universities have had constrained reach due to limited availability of physical resources for matching supply with multi-fold demand. Using technology, MOOC platform providers like edX, Coursera and Udacity have offered universities a solution to enhance their constrained reach and even provide open access to a set of services to anyone, anywhere and anytime.

Especially, a business model, that edX follows, of making courses available for free and provide verified certificates for a fee, with optional on-campus modules that use a selection process, when becomes mainstream, shall help catalyze inversion of selection in education. Free market forces would then apply and would lead to a rapid digital transformation with enhanced customer centricity.

There are challenges that prevent the edX model from being mainstream. Due to which, Coursera and Udacity who started with a similar model have had to partially deviate from it. I have addressed those in a separate post here. What do you think about the inversion of selection in education? Let me know.

EdTech 101 Series : Why only bundled pricing works in digital learning today?

On April 9, 2015, LinkedIn announced its purchase of lynda.com for $1.5 billion, a company that generates $100 million+ in revenue and has been profitable since 1997.

Pluralsight, another privately held, subscription-based, online education company is valued at $1 billion+ and has been ranked #42 by Forbes on America’s Most Promising Companies List. In 2013, author Scott Allen became the first of its authors to earn over US$1 million in royalties from his courses.

On the other hand, Coursera and edX that offer access to individual courses for free, but request a fee for verified certificates from rather reputed universities, have found it difficult to sustain this model. edX, being a non-profit, has been able to sustain this model through donations, whereas Coursera, has moved away from its initial promise of open access to content offered, by reserving parts of it only to paid users.

From the customer perspective, it is important to understand, what are the jobs that they want to get done. Learning is obviously a common objective, but apart from that, I would categorize them into two groups.

  • Industry users
  • Academic users

Industry users have a problem to solve and they prefer to have a subscription, to the entire offering, from which they could refer to any section of interest. A learning platform is then used as a reference and user switches back to work, without bothering about course completion.

Instead, academic users want to acquire a credential, which may be a stepping stone for their next career progression. Course completion and verified certificates are important to these users, but only if their industry values these certificates as well.

In digital learning, industry users are generating most of the revenue, either through personal subscriptions or business funding, because there’s no verification bottleneck, that forces a trust deficit like that between academic users and their target industries.

Recently, Coursera has started offering monthly subscriptions to various specializations. LinkedIn Learning is trying to combine subscriptions with credentials. This is just the beginning, but only bundled pricing will work till verification bottleneck is resolved and digital learning becomes mainstream.