What Sebastian Thrun Has Learned at Udacity

column | Entrepreneurship

What Sebastian Thrun Has Learned at Udacity

By Betsy Corcoran (Columnist)     Apr 25, 2016

What Sebastian Thrun Has Learned at Udacity

Sebastian Thrun electrified the world in late 2011 when 160,000 people from around the world signed up to take the free online class that he and colleague Peter Norvig offered at Stanford University on artificial intelligence. Before the end of the year, Thrun had laid the foundation for Udacity. MOOC mania ensued.

Since then Udacity has grown—and changed. The company, which has raised $163 million in funding, employs about 200 people. It currently has about 11,000 paying students for its nanodegree programs. Those offerings range from the basic nanodegree ($199 per month), to the Nanodegree Plus program ($299 a month), to its newest program, Udacity Connect, which enables students to make face-to-face connections with others in New York, San Francisco and Los Angeles. Udacity offers several “money back” pledges—say, for completing a program within a fixed time, or in some cases, if the student doesn’t find work. And Udacity still offers much of its curriculum online for free (but without the opportunity earn a credential).

Last week, Thrun wrote a blog post saying that he has moved from the role of Chief Executive Officer to that of chairman and president. The company’s new CEO is Vish Makhijani, who joined Udacity in May 2013 as Chief Operating Officer and had formerly served as Chief Operating Officer at Zynga (and was a senior vice president for search at Yahoo).

Thrun chatted with EdSurge to share some of his observations on MOOCs, Udacity and what giving up the CEO job will allow him to do.

On the change to a new CEO:

I don’t see it as a big change. In some ways, this has been a transition that’s been happening slowly. Vish has been de facto running the company for a while. Vish is perfect for this. I’ve never run a company this size. I’ll stay as involved as I’ve always been.

On what you cannot do when you’re CEO:

As CEO, it was hard for me to get involved in the gritty details of projects. A CEO has a megaphone. Once I said I wasn’t going to be CEO any longer, three separate teams came to me with ideas. They said, “When you were the CEO, we didn’t feel comfortable telling you these ideas.” Now I’ll have much more freedom to get involved with the work. And it’s fully understood that the buck stops with Vish.

On what he has learned about online education:

That first Stanford class was a pivotal moment. We all realized that there were great people out there, all around the world, who deserved a chance at places like Stanford. Ever since, our mission at Udacity has been to democratize education…. When we decided to partner not with a university but with a company [namely, AT&T and later others including Google] we made this clear that we were really thinking about not just getting people into college but getting them into jobs. One of the key outcomes of education is to give them leverage to find work, and to personally benefit, to earn income.

College was being criticized for being really, really expensive. And then, after you paid all that money, it still took you more than a year to find a job. So we created a program that gives people back their tuition if they don’t find a job in six months. I think that’s something everyone should do.

On whether going to college is about more than getting a job:

When the MOOC wave started, every journalist tied the story of MOOCs to changing college. But we attract different people than the people who are attending college. College students are younger—by more than six years.

We have almost no college students [as people who are earning Udacity nanodegrees]. The data shows that the typical Udacity student is post-college degree. They’re life-long learners. Their quest is different. They tend to be very busy people; many are employed. They want a focused skill. They come back to get a second credential. We take people from one career to the next. If they want to become a data analyst, they don’t want to spend four years studying.

On what attracts students to Udacity:

There’s a real shortage of technically skilled workers in places like Silicon Valley. For instance, McKinsey believes there are more than 100,000 openings for data scientists. Udacity [helps people move] from one place to an adjacent place. And we try to optimize for the shortest amount of time. Look at how college has evolved, over centuries! It’s not right for many people. The world is moving so fast that new skills have be acquired quickly and along the way.

On what Thrun and Udacity will do going forward:

We’re running experiments. The strategy for us is to do whatever it takes to give students extra experience and skills. And either these things will work out or not. For instance, we’re thinking about what motivates students. What helps them get “unstuck” when they get stuck. Most of us need help—from people. They need one-to-one support. So that means that Udacity moves from being a [pure] content company into being a content-and-services company.

The thing that makes us different from the early days when we just did content is that we’ve seen that people learn better through projects than through just listening to lectures. And they need feedback. And so that feedback involve us doing service. When students do their homework assignments, they get feedback in 1.5 hours. And that’s very very different from a “MOOC.”

So students are getting feedback. But feedback costs money. You can’t do it for free. So we charge for those one-to-one services [approximately $100 per month, in addition to taking a credit-based Udacity course].

Free students don’t get feedback from us. So free students are using the content like a MOOC. And the completion rate is like single digital percentages. When students are in the program where they pay to get feedback, completion rates are more than 60 percent.

On whether MOOCs—or Udacity’s program—will kill colleges:

All the rhetoric about how MOOCs are going to destroy college is all premature. The data shows the students are very, very different.

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