Coursera's CEO on the Evolving Meaning of 'MOOC'

When you can bring huge numbers of students together with lots of well-branded universities and global enterprises seeking a highly skilled workforce, could those linkages be strong enough to forge a new future for massive open online courses?

• By Dian Schaffhauser
• 09/12/18

Jeff Maggioncalda is chomping down French fries just before he's scheduled to go on stage during a recent Milken Institute California Policy Summit. Coursera CEO since June 2017, Maggioncalda will be speaking on a panel to discuss the state's business climate. Coursera, of course, is the Mountain View-based organization founded in 2012 by two Stanford University computer science professors who wanted to share their knowledge with the world. Prior to heading up the MOOC company, Maggioncalda served as the founding CEO at Financial Engines, which provides investment and retirement advising; he took that company public in 2010. Now, between bites of a sandwich, Maggioncalda is answering questions for Campus Technology about just what being a massive open online course provider means these days.

Campus Technology: Coursera used to be a MOOC operator, but now it's a tech company, an LMS company, a virtual bootcamp and more. So how are you describing Coursera these days?

Maggioncalda

Maggioncalda: As a learning platform. We like to say to our universities, "Coursera is a platform for your global campus."

You have [traditional universities] teaching with some of the world's best professors, with some of the most cutting-edge research, to a population of people who have sat right here in front of you, on a small parcel of land, and who pay a lot of money to do that. It's been very high quality that's been available to the very few.

What we're interested in doing is taking that quality of education and making it available to a vast group of people. When you think about our business model, I like to think about it as an ecosystem of learners, educators and employers. What we do is we link them together. We have 34 million learners from around the world. Our biggest country represented is the United States, followed by India, followed by China, followed by Mexico, followed by Brazil. A lot of the emerging markets and the learners there are coming to Coursera to learn and prosper.

Two years ago, we launched Coursera for Business because we had noticed two things. One is, learners around the world were logging in from their businesses. We had a lot of people at work taking these courses. Second, we started getting calls from companies saying, "I've been trying to author my own courses. If I could take your catalog and deliver it online to my employees, it could be much cheaper and much higher quality than what I could do myself." Essentially, we sell the Coursera catalog to companies who pick courses to scale certain employees on certain skills, whether programming in Python or global leadership or value chain management or project management. In two years we've had over 1,400 companies hire Coursera to deliver university courses at work to their employees.

Now we're starting to link the 34 million learners out there to the employers who are looking for people who have certain skills, saying, "Look, if you're on Coursera learning about this thing, there might be companies who want to hire people that know the thing that you just learned."

CT: Why don't those businesses tell their employees, "Go take a MOOC from Coursera"?

Maggioncalda: Some of them do. But when I talk to these companies, what they often say is, "I've got to keep up with the changes in my customer and the changes in my competitive space. And the only way I can do that is to have my people learn all the most recent technology and data science and business skills. We don't have the speed or scale of learning to keep up with how fast the world is changing."

That's why they don't really want to say, "Just go do it on Coursera." A lot of the employees won't; they'll be like, "Ahh, I'm busy. I don't want to pay for it."

Another thing too, with 2,800 courses [available on Coursera], it's easy to say, "Which course should I take?" The companies pick specific courses and they say, "We want you in this job to take this course and we will pay for it. If you get this credential, we'll reward you; we'll recognize it, it'll be in your performance review, it'll help you do better in your career here." That provides a little more incentive for employees to take these courses.

We've built tons of feedback and tracking mechanisms for the professors. Suddenly, you turn that into a dashboard for a [learning and development] specialist and they can see not only who's taking the course and if they finished, where they are in the course; how well they're doing, whether they need a little bit of a nudge.

Then we just launched a skills benchmarking service for companies, which I think is going to be a real game changer. These courses have assessment questions under all of them that the universities have put together — tens of thousands of assessment questions. And we've been using technology to identify for every question what the skill is if you get that question right and what the difficulty level is. All of our courses and questions are mapped to certain skills and competencies. And we watch millions of people going through them, so we have a pretty good idea of how hard a question is and how many people get it right and wrong. As you go through, we can give you a percentile ranking based on how well you know [the topic] match-compared to some population. You can say, "I want to measure my computer scientists against computer scientists at Google, Facebook and Amazon and see how my people do compared to those guys. You can do skills benchmarking of your population or sets of your population against an industry benchmark. It's not just what courses they're taking, but what competencies they have and how advanced they are in their mastery of those competencies. It's a little bit of a race to see who can stay skilled in the emerging technology.

CT: You keep using that word, "pay." Aren't MOOCs supposed to be free?

Maggioncalda: When we think about open, we think about a lot of things. Is there an admission process or is it open to everyone? There's also the question, is it free? Almost every one of our courses does offer an audit version so that you can just watch the lectures. You can't take the test and you don't get a certificate, but you can sit in class and hear the whole lecture and not pay anything. We have 2,800 courses. My guess would be that over 2,500 are available in audit.

Then among those who are paying for the certificate, it's like $49, $59 a course. It's really not too expensive. We offer about 40 percent of them financial aid — with our partners.

Now the degrees are obviously a different story. They're much more expensive, but less expensive than on campus. [Editor's note: Coursera currently hosts 10 online degree programs. And most recently, in July 2018, the University of Pennsylvania announced that it was launching its first fully online master's degree, delivered through Coursera and priced at about a third of the cost of its on-campus equivalent.]

The MOOCs are still very much there. And what we're finding in our degree programs is that over 50 percent of the people who go into the degree program actually were learners in previous courses. I like to say that MOOCs are the gateway to online degrees. It's a way you can come in, see the professor, take a course, see if you understand the material and if you like the material, and then we'll actually message you: "Hey, did you know that this course is part of a degree? Click here."

CT: Let's talk about the University of Pennsylvania deal. Do you think that's going to put some competitive pressure on the other Tier 1 schools to jump into the fray?

Maggioncalda: This is a very well-regarded program. The University of Pennsylvania is a very well-regarded university. I think it's causing a lot of people to re-evaluate what they were imagining their future might look like: Maybe learners really do want to have access that's more convenient and lower cost and they don't have to quit their jobs to take. And maybe there is literally a world of learners who can't come to campus, in India and Europe and Latin America and Russia and Asia Pacific and China. That's a compelling proposition. If you're a leading school in the world, and you're only teaching 100 students who happen to be on the acre you sit on, why wouldn't you think about expanding?

I think people are starting to recalibrate what's possible, and I suspect two things will become clearer looking back three years from now: I think that this will be the period where people say, "That's when top degrees started moving online. And it's the time when we realized that MOOCs are the gateway to online degrees." That model of using our MOOCs to bring people in, introduce them to our university, introduce our professors to online teaching and ultimately get to a point where people can either earn degrees or pieces of a degree with a master track redefines the audience of our degree and also the economics of our degree.

CT: What is the big picture for MOOCs right now?

Maggioncalda: I think there are many dichotomies that get created. Is it online or on campus? Is it a degree or a micro credential? Is it a MOOC or something expensive? Is it live or is it asynchronous? What we see is just a huge blending. Right now we offer MOOCs, we offer specializations (packages of those single courses), we offer master tracks, which are those modules that count towards a degree. We only have three right now, but we're going to be building up that library. And then we have degrees now.

I talk to people who take who take a MOOC on blockchain. All they wanted was about 10 hours of very high-quality instruction. They didn't need a degree. They literally just wanted to learn the material. Those kinds of people are not going to buy a degree. Then there are people who get a degree, and you're like, "Why didn't you take a bunch of MOOCs?" Because the degrees help them get a better job.

So long as we believe there will be a range of needs from very, very rigorous and that ends up in a high-pedigreed credential to smaller learning that nevertheless teaches you something that's really important, there's absolutely no reason that MOOCs won't exist and degrees won't exist with a link between them. I think it's going to be a continuum.

CT: Is that why investors keep investing in you?

Maggioncalda: Yeah.

CT: And yet, you don't talk about profits.

Maggioncalda: I think the investors look at this as a pretty long-term, big picture opportunity. Talent is going to have stay closer to the leading edge and new skills, and that's happening on a global basis. What you learned 30 years ago is not going to be enough in the jobs that are going to be moving and changing quickly. Having a low-cost, effective way to deliver a wealth of educational material to a globe of people sets up really nicely for a technology company.

If you think about the OPMs [online program management providers], their business models are much more conventional: Build a product and direct market it to somebody. Ours is a platform. We don't build the product. We build technology. But we enable people to author courses and we enable learners around the world to find those courses, and then we enable employers to get the right courses and get linked to the right learners. We're really all about connecting this ecosystem.

It's a lot like Airbnb. People have houses and people want to stay in houses and they have to find each other and have a platform that delivers that exchange of value. When I say platform, I think about it like that. I think Coursera will be one of the first higher education platforms that just links universities and the ability to author courses and degrees to learners who can come and learn at different levels. They can do a course or they can do a degree or something in between. And employers want to upskill using university content and are looking for more talent. We're the connectors.

Clearly, Wall Street thinks this is an enormous business opportunity.

CT: You've got this background in taking a company public. What signs might point to that happening for Coursera?

Maggioncalda: Well, I'll tell you what the signs are to me.

There are many private companies that stay private for a long time. It's ultimately the board's decision whether a company goes public. And they did not hire me just to take the company public, but I think that was a useful part of my experience. I think that being a public company does provide more visibility. And if you have global aspirations, having the visibility and access to the capital markets is valuable.

So I can see this being a path the board might choose to take. One of our investors summed it up really nicely: He said, "We should go public when we can perform well as a public company." And usually what that means is, you have revenues that are growing rapidly and predictably, so you can see multiple years of revenue growth. And you have a financial model that has what some people call operating leverage. In other words, as you get bigger, your revenues grow faster than your costs, so that you become more profitable as you get bigger. The piece would be, do you have the right team, the right systems, the right reporting, the right kind of compliance and risk management so you don't get distracted? Of course, the standards for a public company are much higher than for a private company.

It's those four things:

• Does the board want to go public?
• Do you feel like you can grow predictably and at a fast rate of revenue growth?
• Do you have a cost model that grows more slowly than revenue?
• And do you have the systems and people and processes in place so you can handle the professional expectations of organization maturity in the way you run the business?

CT: There's a lot of competition in the online space anymore. How is Coursera going to compete?

Maggioncalda: Any time I think about competition, I think about what the advantage is that we have that we can play to, that would make it very difficult for someone else to match us. Our biggest competitive advantages are a few things:

• The number of learners — 34 million — and the amount of data we have on how people learn. That's a huge advantage.
• Not only the number of universities and courses, but the fact that they're well regarded as the best universities in the world. You can go down the list of competitors. That rules out almost everybody except edX.
• The employers. In two years, 1,400 employers around the world have hired Coursera.
• And the ability to link learners to employment and employers is another big feature.

It's the scale of our learners, the quality of our universities, and the scale and speed of growth of our employers. But I think the real magic is the way we connect the three. [That] is going to be our biggest basis for competition.