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Massive open online courses (MOOCs) — distance-learning courses open to an unlimited number of people on the web — are estimated to become an $8.5 billion industry by 2020, up from almost $2 billion last year. Udacity is one of countless companies offering MOOCs and has raised more than $160 million in VC funding to date, including a $105 million round it closed seven months back. Competitors such as Coursera and Udemy have raised more than $300 million between them.
MOOCs, it is fair to say, are big business.
There are more than 11,000 people enrolled in Udacity’s nanodegree programs today, and in excess of four million people have enrolled in one of Udacity’s free courses. Last month, Udacity teamed up with Google yet again to launch an Android Basics Nanodegree aimed at those with little or no programming experience. To say that this course has proven popular is something of an understatement — it represented the company’s biggest ever nanodegree launch, with 1,500 students enrolling in the $200/month course in the first week alone.
“Part of this is natural for a fast-growing company,” said Udacity founder and president Sebastian Thrun, in an interview with VentureBeat on the eve of the company’s fifth anniversary. “Our brand awareness is increasing, so our launches have become larger and larger. But with the Android Basics Nanodegree, we are also addressing a huge market niche. There just wasn’t anything in the market before that would effectively teach people Android from scratch.”
Stanford, Google, Udacity
Thrun, if you didn’t know, is a Germany-born computer scientist who has served as research professor at Stanford University since 2003. In 2011, he moved to a part-time role at Stanford so he could head up Google’s “moonshot” program, Google X, which includes self-driving cars, Google Glass, and Project Loon, among other initiatives related to machine-learning and artificial intelligence (A.I.).
In the middle of all that, Thrun found the time to start a company of his own — Udacity was officially founded on July 5, 2011, as a continuation of a successful experiment operated through Stanford by Thrun and fellow computer scientist Peter Norvig — the duo launched the “Introduction to Artificial Intelligence” course online for anyone, a move that garnered 160,000 signups from 190 nations.
So, at that time, Thrun was still active at Stanford University while simultaneously leading Google X and his new edtech startup. “When 160,000 students signed up for the original Artificial Intelligence MOOC that Peter Norvig and I put up, it became clear I just had to run Udacity,” added Thrun. “This was too important for the future of the world. Unfortunately, I had a day job at the time, so I had to work twice as hard.”
Thrun left the Google X project in August 2014 to focus his attentions entirely on Udacity. But a few months ago, he announced he would be stepping down as CEO to become president, replaced by Vish Makhijani, who had been the company’s president and chief operating officer (COO). At the time of the announcement, Thrun said:
This will give me the ability to focus my time on what I am most passionate about — innovation and hitting our next moonshots at Udacity — as president and chairman of the company I founded.
I am humbled by what we have achieved at Udacity to date, but more excited for what lies ahead as I dig deeper into getting education right, one innovation after the other.
When pushed to elaborate on what Udacity has in store in terms of “moonshots,” Thrun wouldn’t say too much beyond a rough timescale of “the next few months.” But he did mention plans to introduce a new nanodegree course aimed at the burgeoning autonomous car realm. “We are working on a self-driving car nanodegree that will involve real cars, that’s one which could only be at Udacity,” he said.
It’s true that the self-driving car industry is beginning to heat up. Earlier this year, General Motors (GM) revealed its self-driving car aspirations with a $500 million investment in Lyft, which was followed by the $1 billion-plus acquisition of autonomous car startup Cruise Automation. Elsewhere, Chinese internet behemoth Baidu unveiled a new Silicon Valley division dedicated to self-driving cars, while Uber is testing out its own autonomous vehicles and Google is well on the way, too. And last Friday, BMW committed to pushing fully automated motors into production within the next five years.
It’s clear that self-driving cars will be a major industry in the years ahead. That will require more skilled personnel and is why Thrun — who, as noted, already has a track record in developing autonomous car technology himself at Google X — is looking to capitalize on this anticipated demand.
This also gives us a glimpse into the future of Udacity. Artificial intelligence has emerged as one of the key breakout trends of recent years, with A.I. now being used to enhance everything from drug discovery and customer service to cybersecurity and stock photography. Online education will benefit greatly from A.I. too, according to Thrun. “We are using A.I. heavily internally to understand how to best serve our students,” he said. “We have some A.I. courses in our offerings as well, so stay tuned in this area.”
The rise of the machines
One recurring concern about the rise of artificial intelligence is the impact it will have on jobs: if machines are capable of performing tasks faster and more efficiently than humans, where does that leave us? And specific to Udacity, where does that leave teachers? “I believe machines don’t replace people,” he said. “They give people super-powers. We use A.I. to make teachers stronger, and Udacity gives teachers unprecedented reach.”
Thrun actually cowrote an article recently with former Google CEO Eric Schmidt, essentially urging people to stop freaking out about artificial intelligence. Their collective conclusion was that the positives of A.I. outweigh the negatives, and ultimately it will improve human life. They said:
The history of technology shows that there’s often initial skepticism and fear-mongering before it ultimately improves human life. The original Kodak camera was seen as destroying art. Electricity was believed to be too dangerous when it was first introduced.
But once these technologies got into the hands of millions of people, and they were developed openly and collaboratively, those fears subsided. Just as the agricultural revolution has freed us from spending our waking hours picking crops by hand in the fields, the A.I. revolution could free us from menial, repetitive, and mindless work. A.I. will do those things we don’t want to — like driving in bumper-to-bumper traffic.
A.I. could indeed free us from “menial, repetitive, and mindless work,” and this is already being evidenced with the rise of chatbots through Facebook Messenger and other platforms. A couple of weeks ago, travel-planning search engine Hipmunk launched an A.I.-powered assistant that gives automated advice to would-be travelers. And American Express demoed a Facebook Messenger bot with purchase alerts and restaurant recommendations, among other tidbits.
So what does Thrun make of this chatbot trend? “I love this kind of stuff,” he said. “I think there is a future where machines will help us to do repetitive, mindless work more efficiently.”
Future of education
It’s clear that MOOCs are growing in popularity, but are they anywhere near becoming a replacement for traditional degrees? “No, this is not happening,” said Thrun, “at least not right now. What we see instead is that the typical MOOC student is a lifelong learner, past college degree.”
Much of the criticism centered on education today focuses on the fact that it largely hasn’t evolved alongside internet-based technology. And once a child leaves school, the cost of going to university can be prohibitively expensive. Companies such as Udacity, Udemy, and Coursera are thriving because of the resulting demand.
“Udacity opens education to everyone across all geographies, and all ages,” said Thrun. “Most willing learners can’t attend a Stanford or MIT. Udacity is fundamentally changing the access equation. As we grow, our goal is to reach enough people and teach them in-demand skills, so that we can have a notable impact on the world’s GDP.”
This is an interesting point to highlight the company’s longer-term mission. Looking to the next five years and beyond, Thrun harbors ambitions greater than something simple and obvious like “opening education to all.” So what is the ultimate end-goal for Udacity? “To double the world GDP,” he said. “And I am 100 percent convinced we can do this.”
In the shorter term, Thrun believes there are things everyone can be doing to improve education. Mojang, the Sweden-based game development studio best known for its work on Minecraft, was acquired by Microsoft for $2.5 billion back in 2014, and Microsoft has been making moves to monetize this acquisition through a new education edition aimed at schools. Thrun would love to see more of this across the education spectrum — not Minecraft specifically, but a more enjoyable and engaging experience for young learners. “I personally love Minecraft as a learning game,” he said. “It teaches my eight-year-old son so much — I dream that all education could be as fun and engaging as Minecraft.”
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