Sunday, November 17, 2013

Udacity Enrollment

Udacity has announced that starting in January 2014, some courses will be offered with the option of proper "enrollment".  This is essentially an option to purchase personalized feedback and guidance for a monthly fee.  Enrolled students will also receive a "verified certificate" upon course completion.

It's fantastic that the model remains a freemium one (i.e. all the same course materials will still be available for free).  As long as Udacity remains committed to providing free courseware, it's in the interest of everyone using the platform to root for their success.

What sort of assumptions can we make about revenue potential?

Wikipedia reports 700,000 users on Udacity.  Let's say that 50% of them are periodically active -- maybe they browse one or two courses a year.  Of the 350,000 active users, let's say 1% are willing to pay for enrollment in any given month.

So that makes 3,500 students.  The current enrollment cost is $150 for most classes (ignoring the early adopters' discount), so that translates into revenues of roughly $500,000 a month, or $6 million a year.

Does that seem reasonable?

It's pretty hard to say without the ability to peek at some user data.  The one thing that strikes me is that 3,500 students is a pretty large number to support for personalized coaching.  The monthly fee model is brilliant, since some users will sign up without taking full advantage of the services offered.  Coupled with user demand that's naturally distributed over time, this means that coaching capacity can be "overbooked" to a certain extent.  Still, it seems like a challenge to find several dozen (if not more) coaches while maintaining high standards of education.

I'm curious to see what happens, and I hope it works!  I may try enrolling in a course for the experience.  It would be interesting to have discussion sections, too, on something like Google Hangouts.

Edit: I see that Peter Norvig's Design of Computer Programs did something like the above -- office hours on Google Hangouts for week 5 of the course.  Very cool!