Monthly Archives: June 2013

Georgia Tech takes a step towards the future, and answers a lot of questions

Georgia Tech announced last month that it will offer a Master’s Degree in Computer Science, delivered as a MOOC (Massive Open Online Course) via It is the most high profile institution to date to offer a full online curriculum for a degree. And it will cost under $7,000 per year, dropping to around $1,000 per year in the future.

Often, decisions that others say are “complicated” or “too long term” are determined when a first-mover says “f@*! it” and goes for it. Such is the case with Georgia Tech. This move answers a lot of the questions that have surrounded MOOCs from their inception. Here were some of my pressing ones below:

Will universities offer their content as MOOCs?
This question has been answered pretty convincingly. The rise of websites like Udacity, Coursera, Udemy offering content from Harvard, Stanford, MIT is solid proof of a popular idea. Now the business model needs to be able to sustain itself.

Why would a university offer credit through a MOOC course?
The answer here is simple. Businesses that can offer the right product, for the right price, to the right customers succeed. A university degree is a product, just like a bar of soap. There is an opportunity for Georgia Tech to make a highly demanded product available to a wider group of people, and likely make more money from the efficiences of online education. This is what the internet does for many products, and I see little difference with college degrees.

If a university offers a MOOC, why would students pay for the brick-and-mortar experience?
Brick-and-mortar will always have a place. There is still value in a true college experience, with equally intelligent and inquisitive people, and close proximity to professors and laboratories. But in the future this value will be reserved for those who are willing to pay for it.

What about exclusivity?
Georgia Tech has said that they aim to admit “all applying students who satisfy the basic admissions prerequisites and qualifications”. This is pretty radical, because I imagine that most people measure the value of an education with its exclusivity. But exclusivity is actually a fairly weak and artificial measure of value. It means there is a lack of supply. For a university, supply is limited by the space within their walls, the number of desks they have, faculty, etc. Businesses should be trying to increase their supply without sacrificing the objective value of their product, and only leaning on scarcity as a marketing tactic when that is no longer possible. Georgia Tech made the right move in not imposing an artificial exclusivity barrier.

How will they pay for it?
Once again, the first-mover didn’t overthink it in this case. In the first year, the course will be subsidized in the same way that most things on the web are paid for: by sponsors and advertising. After that, GA Tech is relying on the assumption that people are willing to spend $7,000 (or less) on a year of college credits. When an equivalent brick and mortar degree will cost closer to $50,000, I think this is a safe bet. 

Why Computer Science?
Computer Science lends itself well to online education. The answers are black and white. Tests and quizzes are easily graded for large groups of people. Computer science students are web-savvy. The content and the participants work well with online collaboration and forums. Computer Science is an easy choice for a pilot program. If successful, though, the model can still be applied to other degrees as well.

Now for some more academic questions…

Can a 12-year olds earn masters degrees?
Well not yet. GATech’s FAQ page states that all participants need to go through an application process and submit things like previous degrees. But looking towards the future, it is an interesting question. I see little reason why a 12-year old who graduates from a course like this wouldn’t be able to receive a degree.

Will it be successful?
A document exists that shows GATech’s expected revenue and expenses for the first three years. 
By some back of the napkin calculations:

  • GA Tech expects 208 students in year 1, 141 in year 2 and 2,907 in year 3. 
  • AT&T’s one-time $2,000,000 investment is marginal. By year two, the program will be self-sustainable and by year three costs will reach almost $14.5 million. Revenue will be $19 million, without any corporate sponsorship. 
  • According to the document, Georgia Tech will receive 60% of the revenue, but pay only 17% of the costs. The other 83% are paid by Udacity. If that is true, then Udacity is running at a $4.2 million deficit in year three. Either this is bad information, or Udacity is making a bold move to step out ahead of competitors like Coursera.