Coursera and edX Hire New Executives: What about online experience?

Today’s big news is the concurrent change in leadership at two of the big three MOOC providers. First, Coursera announced they had hired Richard Levin, former president of Yale University, to be the company’s new CEO. Besides being a big-name college executive, Levin also led (or at least was president during) the development of Open Yale Courses. As reported by the New York Times:

Mr. Levin, who has been an adviser to Coursera since January, has been experimenting with online education for years, beginning in 2000 in a partnership with Stanford and Oxford. In 2007, he started Open Yale Courses to make dozens of classes taught by Yale professors available without cost.

“The main thing we will work on is to establish this model so our partner universities feel that offering large-scale MOOCs is an important part of their mission that helps faculty expand their reach, and benefits the world,” Mr. Levin said.

Mr. Levin, who has extensive experience in China, will also work on expanding Coursera’s presence there. Already, he said, China is the second-biggest source of Coursera enrollment, after the United States.

Meanwhile, the Coursera founders and previous president are taking on new roles. Daphne Koller will become president, Andrew Ng will become chairman of the board of directors and chief evangelist, and Lila Ibrahim will become chief business officer.

On the same day, coincidentally, edX announced they had hired Wendy Cebula as the company’s new president and chief operating officer. According to the company’s web site: Continue reading

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Why VCs Usually Get Ed Tech Wrong

I don’t often get to write these words, but there is a new must-read blog post on educational technology by a venture capitalist. Rethink Education’s Matt Greenfield argues that there is no generalized bubble in ed tech investment; rather, the problem is that the venture community has a habit of systematically betting on the wrong horses.

It’s worth noting that Matt is not your typical VC. For starters, he doesn’t live in the Valley echo chamber. Perhaps more importantly, he has a background as an academic. He has a PhD in English from Yale, taught at Bowdoin and CUNY, and taught graduate classes in literature to teachers from the New York City public schools. As such, he has an unusual perspective for an ed tech venture capitalist.

Matt uses digital textbook platforms as his example of the problem he wants to highlight:

What type of ed tech have venture capitalists approached with the greatest enthusiasm and the largest piles of cash? The answer is new textbook solutions, including digital textbook platforms like Kno and renters of physical textbooks like Chegg, which just went public. Venture capitalists have put over $500 million into just the top ten companies in this sector….

I talked to the CEO of an academic bookstore company recently. How many digital textbook platforms would you guess that his stores handle? Five? No, more than that. Ten? Nope, guess again. Twenty? Still too low. The answer is forty-two different digital textbook platforms. Forty-two. Now try to imagine each of those textbook platform companies pitching a book store. Or an author. Or a publisher. Or a venture capitalist. “Choose my platform, choose me! Our platform is totally different!” How many of those platforms does the world really need? How many of those platforms can make money? What do you think the meaningful differences between those forty-two platforms might be?…Meanwhile, even the century-old publishing incumbents are moving away from book-like things to adaptive courseware: learning objects that simply will not fit into the wrappers being built by companies like Kno.

So there is a bubble in venture funding for education ventures that are obsolete at birth. Meanwhile, there are large opportunities in areas where few venture capitalists will invest.

This is a fascinating case study. Why would VCs, with their much vaunted drive for innovation, be so taken with the idea of rebuilding an aging instructional modality (i.e., the textbook) on a digital platform—particularly when, as Matt spells out in detail in his blog post, it’s clearly a bad bet for a lot of reasons? It’s worth unpacking this a bit to get at the underlying pathology.

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Proposed State Authorization: Dramatic increase in federal control of distance ed

The Department of Education (DOE) released their proposed State Authorization regulations this week as part of the negotiated rulemaking process that seeks to replace previous rules struck down by courts in 2011. While the new process is more transparent than before (which was the basis of the court rulings), the proposed rulings would represent a dramatic increase in federal control of distance education and compliance burden for institutions. Greg Ferenbach from Cooley LLP noted these changes in a listserv discussion at WCET [used by permission from author, emphasis added]:

What I don’t think many folks appreciate … is this proposal would be a huge change from the way things work today. From a quick read, it appears as though the proposal would require all states to authorize distance ed (with no exemptions for accreditation, etc.). Basically, this would be a mandate to either obtain specific state approval or participate in reciprocity as a condition for continuing to offer distance education with federal aid.

Note that this is quite different from the last rule, which only mandated that you need to meet state requirements, if any, and thus it appears to impose a huge new burden on states and institutions. Think at least double.

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MOOCs and Academic Exchanges Now Allowed for Iranian Students

One development covered here at e-Literate this year has been the US State Department and Treasury Department forcing the MOOC providers to block access for students in Iran, Sudan, Cuba and Syria. Kris Olds has also provided excellent coverage as well as Carl Straumsheim at Inside Higher Ed. In late January Coursera had to start blocking students in these four countries while edX continued working with these students. Then in early March edX had to start blocking students in Iran, Sudan and Cuba.

Today’s news is that OFAC has granted a General License G to allow academic exchanges such as MOOCs to operate within Iran.

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2U’s Upcoming IPO: Filing estimates $533 million company value

One month ago 2U filed its registration for an IPO in 2014. 2U is an online service provider that helps traditional universities develop fully-online programs, currently based on 9 customers at the master’s level (see here for summary of revenue per student and per customer). On Monday the company set the terms for the IPO, as described by Bill Flook in the Washington Business Journal.

2U Inc. on Monday set terms for its upcoming initial public offering. The Landover-based ed-tech company plans to sell 8 million shares at between $11 to $13 apiece. Selling stockholders plan to offload another 1.17 million shares in the offering.

Altogether, the IPO would raise a total $110 million, assuming the 2U prices at the mid-point of that range. The company plans to list on the Nasdaq under the ticker symbol “TWOU.”

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