As Nelson Mandela once said, “Education is the most powerful weapon which you can use to change the world.” Coursera is attempting to do just that by providing “world-class learning for anyone, anywhere”1. The company the internet to revolutionize education by launching an online learning platform in 2012.
It is a two-sided platform connecting users to online content developed by more than 190+ universities and companies2. The platform currently has various product offerings (e.g. certificates, degree programs) with a wide array of pricing. Through its partnerships, Coursera has managed to build a large and diverse portfolio (e.g. Arts and Literature, Computer Science, Business) to cater to a large audience.
The company is increasing access to education, lowering costs and increasing flexibility.
With more than 45 million users3 and a valuation of over $1 billion4 in 2019, Coursera is perceived to be the “largest provider in the online education market”5. It achieved this by undertaking a variety of strategic business decisions, some of which are highlighted below.
Adapting Business Model and Growing Partnerships
Coursera started off by offering free online courses through partnerships with various universities, helping it grow its user base. Once the initial value proposition (online education) was validated, the company started monetizing the platform by identifying key revenue streams that would enable it to grow without losing its existing core users.
In order to do so, Coursera adopted a “freemium” model whereby users were still allowed to access course material for free but would need to pay a fee to get their assignments graded and to receive a certificate. This was labeled as “Signature Track”.
Also related to B2C, the company increased its offerings to include “Specializations”. In addition, the company revolutionized access to degrees by launching bachelor and degree programs that could be earned fully online.
To access new customers and more stable and consistent revenue streams, the company expanded to a B2B model and launched “Coursera for Business”. Under this model, the company partnered with businesses to offer courses on its platform and/or to provide them with an online platform to train their employees.
The company continues to innovate on its offerings and to expand its partnerships to keep growing its revenue. As an example, it is partnering with governments across the world (e.g. Singapore, Egypt) to support them in upskilling and reskilling their citizens.
Harnessing the Power of Network Effects
The company focused on reinforcing both the same-side and the cross-side network effects to keep growing. By keeping some aspects of the platform free and offering a wide variety of courses, the company managed to keep and continue growing its user base.
To reinforce the same-side network effects, the company focused on creating a social community amongst users through various initiatives such as online forums (Q&A, schedule online study-sessions, etc.) and peer grading This created a well-connected community among users which in turn increased engagement and allowed users to interact freely with each other and enhance their experience.
The platform also has cross-side network effects. On top of the large user base, partnerships with renowned universities (e.g. Stanford, Princeton) helped attract more institutions to partner with the platform. The move to partner with businesses also helped grow the supply-side.
Leveraging Data and Machine Learning
The company has focused on harnessing the power of data and leveraging machine learning to improve the platform. In fact, the company has a wealth of data at its disposal such as click rates, time it took to complete an exercise, when do learners drop-off, data from forum questions, etc.
An example of a use case that the company has implemented is focused on increasing user engagements through personalized targeted emails.6 Another use case focused on updating assignments based on the historical performance of students.7 A third example revolved around recommending the “next-best course” based on previous course selections.8
The company is determined to continue harnessing the power of data to help it across various use cases from increasing retention to developing content.9 Properly leveraging data can help the company improve various touchpoints across the learner journey.
In summary, Coursera has revolutionized the learning experience through its online platform. It revolutionized education for individuals looking to improve their knowledge or grow particular skillsets. It revolutionized education for businesses and governments looking to upskill and/ or reskill their employees and constituents, respectively. In addition, it started disrupting access to degrees by offering fully online bachelors and masters programs.
Yet, it is important to note that the online education market is comprised of multiple players and it will probably not be a winner-take-all market. Even though online education platforms do have strong network effects and the supply-side scale drives up barrier to entry, there is still a high multi-homing aspect given that it’s cheap to alternate between platforms (i.e. users pay per course) and given that players can differentiate their offerings (e.g. Codecademy for learning to code).
1 Coursera, Coursera, www.coursera.org.
4 “Online Education Provider Coursera Is Now Worth More Than $1 Billion”, Forbes, April 2019.
5 “How Coursera Makes Money”, Investopedia, July 2019.
6 “Coursera improves online education using — you guessed it — data”, VentureBeat, November 2013.
7 “AI in education: Can AI improve the way we teach and learn?”, Neoteric, June 2019.
8 “How is AI Improving the Education Industry?”, Ifthen.ai, June 2019.
9 “What’s Next for Coursera and FutureLearn? Insights Revealed at the EMOOCS Conference”, IBL News, May 2019.